Specialized Trial Courts in Patent Litigation: A Review of the Patent Pilot Program's Impact on Appellate Reversal Rates at the Five-Year Mark

A spiral of patent infringement litigation among rival firms is a phenomenon often observed in complex product industries, where products comprise numerous separately patentable elements. Theoretically grounded in the awareness–motivation–capability framework of competitive dynamics, this article contributes to the literature on patent strategy and international market entry by looking at how, in a complex product industry, the intensity of patent litigation in a country affects a firm’s decision to enter that country. Our results show that the intensity of patent litigation in a country is a deterrent for potential entrants and has a negative effect on a firm’s likelihood of entering that country. We also show that a firm’s previous experience with patent litigation ( awareness component), the share of a firm’s current patent applications in a target country ( motivation component), and the size of a firm’s patent stock ( capability component) moderate the relationship between a country’s patent litigation intensity and a firm’s likelihood of entering that country. We thus shed light on the joint effect of macro- and micro-level patent-related variables on a firm’s market entry decisions. We test our hypotheses with a comprehensive panel of patenting and entry strategies of 84 mobile phone vendors and their patent litigation battles in 45 countries, from 2003 to 2015.

Download Full-text

Optimal Incentives for Patent Challenges in the Pharmaceutical Industry

Review of Industrial Organization ◽

10.1007/s11151-021-09815-0 ◽

2021 ◽

Author(s):

Enrico Böhme ◽

Jonas Severin Frank ◽

Wolfgang Kerber

Keyword(s):

Pharmaceutical Industry ◽

Market Entry ◽

Consumer Welfare ◽

Antitrust Law ◽

Patent Litigation ◽

Weak Patents ◽

Optimal Incentives

AbstractIn this paper, we show that a provision in antitrust law to allow patent settlements with a later market entry of generics than the date that is expected under patent litigation can increase consumer welfare. We introduce a policy parameter for determining the optimal additional period for collusion that would incentivize the challenging of weak patents and maximize consumer welfare. While in principle, later market entry leads to higher profits and lower consumer welfare, this can be more than compensated for if more patents are challenged as a result.

Download Full-text