Patent protection and threat of litigation in oligopoly

Carlo Capuano, Iacopo Grassi () and Riccardo Martina ()
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Iacopo Grassi: University of Naples Federico II
Riccardo Martina: University of Naples Federico II - Complesso Universitario di Monte S.Angelo

Journal of Economics, 2020, vol. 130, issue 2, No 1, 109-131

Abstract: Abstract In a context of imperfect patent protection, this paper analyses the strategic use of patents from a novel perspective; patents are seen as a means available to the incumbent firm to control entry and, more importantly, to influence the post-entry market interaction process effectively, by creating the conditions that favour collusion. The level of patent protection chosen by the incumbent affects the likelihood that a potential entrant will be found guilty of patent infringement. This mechanism can operate as a punishment device that eases the conditions for collusion sustainability. Therefore, in a sense, patent protection can be regarded as an instrument allowing replication of the monopoly outcome in the context of a contestable market.

Keywords: Patents; Patent portfolio; Litigation; Collusion; Foreclosing; Entry game (search for similar items in EconPapers)
JEL-codes: D43 K21 L13 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://link.springer.com/10.1007/s00712-019-00685-5 Abstract (text/html)

Related works:
Working Paper: Patent Protection and Threat of Litigation in Oligopoly (2019)
Working Paper: Patent Protection and Threat of Litigation in Oligopoly (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:130:y:2020:i:2:d:10.1007_s00712-019-00685-5

DOI: 10.1007/s00712-019-00685-5

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