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How Valuable are Patent Blocking Strategies?

Dirk Czarnitzki, Katrin Hussinger () and Bart Leten ()
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Bart Leten: KU Leuven

Review of Industrial Organization, 2020, vol. 56, issue 3, No 1, 409-434

Abstract: Abstract Firms use patents for blocking competitors’ innovation activities. Offensive blocking is a practice whereby firms patent alternatives of a focal invention preempting technological substitutes produced by competitors. Defensive blocking entails the creation of patent portfolios that block technologies in order to increase competitors’ willingness to trade patents. This paper examines the private value of both patent blocking strategies with the use of a novel measure of the offensive and defensive “blocking power” of patent portfolios. We show that both strategies increase firms’ market value. In discrete (complex) product industries, however, only offensive (defensive) patent blocking is associated with higher value.

Keywords: Patents; Patent blocking; Patent strategies; Offensive blocking; Defensive blocking; Market value (search for similar items in EconPapers)
JEL-codes: O31 O34 O38 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s11151-019-09710-9

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