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Enforcing intellectual property rights

Lanjouw, Peter and Schankerman, Mark (2001) Enforcing intellectual property rights. 3093. Centre for Economic Policy Research, London, UK.

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Abstract

We study the determinants of patent suits and their outcomes over the period 1978−99 by linking detailed information from the US patent office, the federal court system, and industry sources. The probability of being involved in a suit is very heterogeneous, being much higher for valuable patents and for patents owned by individuals and smaller firms. Thus the patent system generates incentives, net of expected enforcement costs, that differ across inventors. Patentees with a large portfolio of patents to trade, or having other characteristics that encourage ‘cooperative’ interaction with disputants, more successfully avoid court actions. At the same time, key post-suit outcomes do not depend on observed characteristics. This is good news: advantages in settlement are exercised quickly, before extensive legal proceedings consume both court and firm resources. But it is bad news in that the more frequent involvement of smaller patentees in court actions is not offset by a more rapid resolution of their suits. Our estimates of the heterogeneity in litigation risk can, however, facilitate development of private patent litigation insurance to mitigate this adverse affect of high enforcement costs.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.cepr.org
Additional Information: © 2001 Jean O Lanjouw and Mark Schankerman
Library of Congress subject classification: K Law > K Law (General)
Journal of Economic Literature Classification System: K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K41 - Litigation Process
Sets: Collections > Economists Online
Departments > Economics
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 3093
Date Deposited: 27 May 2008 13:16
URL: http://eprints.lse.ac.uk/5082/

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