Lanjouw Schankerman (2004) - Protecting Intellectual Property Rights

Reference(s)

Lanjouw, Jean O., and Mark Schankerman. "Protecting intellectual property rights: are small firms handicapped?." Journal of Law and Economics 47.1 (2004): 45-74.

@article{lanjouw2004protecting,
 title={Protecting Intellectual Property Rights: Are Small Firms Handicapped?*},
 author={Lanjouw, Jean O and Schankerman, Mark},
 journal={Journal of Law and Economics},
 volume={47},
 number={1},
 pages={45--74},
 year={2004},
 publisher={JSTOR},
 filename={Protecting Intellectual Property Rights}
}

Abstract

This paper studies the determinants of patent suits and settlements during 1978–99 by linking information from the U.S. patent office, the federal courts, and industry sources. We find that litigation risk is much higher for patents that are owned by individuals and firms with small patent portfolios. Patentees with a large portfolio of patents to trade, or other characteristics that facilitate “cooperative” resolution of disputes, are much less likely to prosecute infringement suits. However, postsuit outcomes do not depend on these characteristics. These findings show that small patentees are at a significant disadvantage in protecting their patent rights because their greater litigation risk is not offset by more rapid resolution of their suits. Our empirical estimates of the heterogeneity in litigation risk can help in developing private patent litigation insurance to mitigate the adverse affects of high enforcement costs.

Research question

Research question: Litigation risk is much higher for patents that are owned by individuals and firms with small patent portfolio. 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.