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Getting Away with Robbery? Patenting Behavior with the Threat of Infringement

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  • Amalia Yiannaka
  • Murray Fulton

Abstract

The paper examines how an innovator's ability to enforce her patent rights affects (and is affected by) her decision to patent her innovation and her patent breadth decision. Specifically, the paper shows that the innovator may find it optimal to patent her innovation even if litigation is not pursued in the event of patent imitation. The patent is valuable because it can be used to influence the entrant's location decision in a way that is profitable for the incumbent. In addition to showing that a patent need not be legally enforced to be valuable, the paper shows that the lower is the entrant's R&D cost, the smaller is the innovator's incentive to patent her product. If patenting occurs, however, the lower is the R&D cost, the greater is the patent breadth that could be chosen without triggering imitation.

Suggested Citation

  • Amalia Yiannaka & Murray Fulton, 2011. "Getting Away with Robbery? Patenting Behavior with the Threat of Infringement," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(2), pages 625-648, June.
    • Handle: RePEc:bla:jemstr:v:20:y:2011:i:2:p:625-648
    DOI: 10.1111/j.1530-9134.2011.00299.x
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    References listed on IDEAS

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    Cited by:

    1. Carlo Capuano & Iacopo Grassi & Riccardo Martina, 2020. "Patent protection and threat of litigation in oligopoly," Journal of Economics, Springer, vol. 130(2), pages 109-131, July.
    2. Zhang, Gupeng & Lv, Xiaofeng & Zhou, Jianghua, 2014. "Private value of patent right and patent infringement: An empirical study based on patent renewal data of China," China Economic Review, Elsevier, vol. 28(C), pages 37-54.

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