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Discussion Paper Details

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Title: Patent Suits: Do They Distort Research Incentives?

Author(s): Jenny Lanjouw and Mark Schankerman

Publication Date: December 1998

Keyword(s): Litigation, Patents and R&D incentives

Programme Area(s): Industrial Organization

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.

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Bibliographic Reference

Lanjouw, J and Schankerman, M. 1998. 'Patent Suits: Do They Distort Research Incentives?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2042