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Trading and enforcing patent rights

Galasso, Alberto, Schankerman, Mark and Serrano, Carlos J. (2013) Trading and enforcing patent rights. RAND Journal of Economics, 44 (2). pp. 275-312. ISSN 0741-6261

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Identification Number: 10.1111/1756-2171.12020


We study how the market for innovation affects enforcement of patent rights. We show that patent transactions arising from comparative advantages in commercialization increase litigation, but trades driven by advantages in patent enforcement reduce it. Using data on trade and litigation of individually owned patents in the United States, we exploit variation in capital gains tax rates across states as an instrument to identify the causal effect of trade on litigation. We find that taxes strongly affect patent transactions, and that trade reduces litigation on average, but the impact is heterogeneous. Patents with larger potential gains from trade are more likely to change ownership, and the impact depends critically on transaction characteristics.

Item Type: Article
Official URL:
Additional Information: © 2013 RAND.
Divisions: Economics
Subjects: H Social Sciences > HF Commerce
H Social Sciences > HJ Public Finance
K Law > K Law (General)
T Technology > T Technology (General) > T201 Patents. Trademarks
Date Deposited: 19 Jul 2013 15:02
Last Modified: 20 Oct 2021 00:47
Funders: Centre for Economic Performance, Humanities Research Council

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