Abstract
Patent litigation reveals important information about the validity of the contested patent to other potential entrants. This paper explores the implications of such informational externalities for entry dynamics in the presence of multiple potential entrants. The nature of the entry game can be one of either waiting or preemption depending on the degree of patent protection. Therefore, the payoffs for the patentee and the initial imitator are discontinuous in the degree of patent protection. Furthermore, strengthening intellectual property rights is not necessarily desirable for the patentee. The analysis may also help explain the apparently puzzling practice of delaying patent suits. (JEL L13, O34, K41).
| Original language | English |
|---|---|
| Pages (from-to) | 1249-1263 |
| Number of pages | 15 |
| Journal | American Economic Review |
| Volume | 88 |
| Issue number | 5 |
| Publication status | Published - 1998 Dec 1 |
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All Science Journal Classification (ASJC) codes
- Economics and Econometrics
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Patent Litigation as an Information-Transmission Mechanism. / Choi, Jay Pil.
In: American Economic Review, Vol. 88, No. 5, 01.12.1998, p. 1249-1263.Research output: Contribution to journal › Article
TY - JOUR
T1 - Patent Litigation as an Information-Transmission Mechanism
AU - Choi, Jay Pil
PY - 1998/12/1
Y1 - 1998/12/1
N2 - Patent litigation reveals important information about the validity of the contested patent to other potential entrants. This paper explores the implications of such informational externalities for entry dynamics in the presence of multiple potential entrants. The nature of the entry game can be one of either waiting or preemption depending on the degree of patent protection. Therefore, the payoffs for the patentee and the initial imitator are discontinuous in the degree of patent protection. Furthermore, strengthening intellectual property rights is not necessarily desirable for the patentee. The analysis may also help explain the apparently puzzling practice of delaying patent suits. (JEL L13, O34, K41).
AB - Patent litigation reveals important information about the validity of the contested patent to other potential entrants. This paper explores the implications of such informational externalities for entry dynamics in the presence of multiple potential entrants. The nature of the entry game can be one of either waiting or preemption depending on the degree of patent protection. Therefore, the payoffs for the patentee and the initial imitator are discontinuous in the degree of patent protection. Furthermore, strengthening intellectual property rights is not necessarily desirable for the patentee. The analysis may also help explain the apparently puzzling practice of delaying patent suits. (JEL L13, O34, K41).
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M3 - Article
VL - 88
SP - 1249
EP - 1263
JO - American Economic Review
JF - American Economic Review
SN - 0002-8282
IS - 5
ER -