TY  - JOUR
AU  - Lanjouw,Jean Olson
AU  - Schankerman,Mark
TI  - Enforcing Intellectual Property Rights
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8656
PY  - 2001
Y2  - December 2001
UR  - http://www.nber.org/papers/w8656
L1  - http://www.nber.org/papers/w8656.pdf
N1  - Author contact info:
Jenny Lanjouw
Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC  20036
Tel: 202/797-6275
Fax: 202/797-2968
E-Mail: jlanjouw@brook.edu

Mark Schankerman
Department of Economics, R.516
London School of Economics
Houghton Street
London WC2A 2AE
UK
Tel: 442079557518
E-Mail: M.Schankerman@lse.ac.uk
AB  - We study the determinants of patent suits and their outcomes over the period 1978-1999 by linking detailed information from the U.S. patent office, the federal court system, and industry sources. The probability of being involved in a suit is very heterogeneous, being much higher for valuable patents and for patents owned by individuals and smaller firms. Thus the patent system generates incentives, net of expected enforcement costs, that differ across inventors. Patentees with a large portfolio of patents to trade, or having other characteristics that encourage 'cooperative' interaction with disputants, more successfully avoid court actions. At the same time, key post-suit outcomes do not depend on observed characteristics. This is good news: advantages in settlement are exercised quickly, before extensive legal proceedings consume both court and firm resources. But it is bad news in that the more frequent involvement of smaller patentees in court actions is not offset by a more rapid resolution of their suits. However, our estimates of the heterogeneity in litigation risk can facilitate development of private patent litigation insurance to mitigate this adverse affect of high enforcement costs.
ER  -