Can Small Firms Mitigate their Disadvantages in Patent Litigation?

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Can Small Firms Mitigate their Disadvantages in Patent Litigation?
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Abstract

The Little Guy Academic Paper will focus on the disproportionate patent litigation of small firms. The paper will also explore the disadvantages small firms may face in patent litigation. By using the patent data provided by the USPTO and Harvard Dataverse, micro and small entities will be identified based on maintenance fees paid to the USPTO. Patent portfolios of all firms contained in both datasets will be constructed. By making the distinction between micro, small, and large, comparisons will be draw between frequency and outcomes of litigation. Data on patent litigation will be acquired through the Lex Machina database.

Introduction

The `Little Guy' paper will try to investigate potential asymmetries in patent litigations involving `small' firms. The asymmetries could arise in pre-judgment settlements or post-judgement outcomes. Our hypothesis is that `small' patent holders are at a disadvantage in protecting their patent rights.

The only other major work we are aware of which looks into this is (\cite{lanjouw2004protecting}). The authors try to show that small patentees are at a significant disadvantage in protecting their patent rights since their greater litigation risk is not offset by more rapid resolution of their suit. They identify main empirical factors that determine which patents are litigated and try to understand whether small firms with a small patent portfolio are handicapped in the process of protecting their intellectual property rights.

Our study would distinguish itself from the already existing literature by providing a new definition of small firm which in (\cite{lanjouw2004protecting})is defined to be those firms with an employment below the median of 5,245 and using of a richer data set which would in turn provide us with a richer universe of patents.

Our data set is gathered from multiple sources including Harvard Dataverse, USPTO Bulk Data, VentureXpert, and possibly the relevant litigation data for all the patent suits.

The USPTO Bulk Data and Harvard Dataverse provide us with data on assignment, citation, payment of maintenance fees. We are also working on processing a rich data set on historical patent assignment events.

Introduction of the America Invents Acts provides the small companies which qualify for a Micro Entity status to pay a discounted fee for maintenance of their patents. The maintenance fee code recorded in data would be used to identify the little guys. We believe micro entity status would better fit the definition of a small entity used in our paper. Relying on maintenance fee codes would enable us to identify a small subset of micro entities, however, we are trying to retroactively identify other companies which may qualify for micro entity status but were not captured through the maintenance fee data.

Our analysis would heavily rely on the litigation data available through Pacer or Lex Machina data set. Ideally, we would like to have the following variables for the time frame of 2000-01-01 to present for all the patent cases (code 830) litigated in district courts.