Patent Suits: Do They Distort Research Incentives?

Jean Lanjouw and Mark Schankerman

No 2042, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper shows that the process of enforcing patent rights both dilutes and distorts Research and Development (R&D) incentives. We examine the characteristics of litigated patents by combining, for the first time, information about patent case filings from the US district courts with detailed data from the US Patent and Trademark Office. By comparing filed cases to a random sample of US patents from the same cohorts and technology areas, we show that case filings are much more common in some technology areas than in others, and also when (i) innovations are more valuable, (ii) they appear to form the basis of a sequence of technologically-linked innovations held by the patentee, (iii) there is domestic ownership, and (iv) they are owned by individuals, except in cases where others are active in the same technology area making reputation important. We use this empirical evidence to examine hypotheses about the determinants of patent suits.

Keywords: Litigation; Patents; R&D incentives (search for similar items in EconPapers)
JEL-codes: K41 O31 O34 (search for similar items in EconPapers)
Date: 1998-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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