IDEAS home Printed from https://ideas.repec.org/a/eee/irlaec/v50y2017icp25-35.html
   My bibliography  Save this article

Dispute the patent, short the stock: Empirical analysis of a new hedge fund strategy

Author

Listed:
  • Kruppert, Rabea

Abstract

A new US patent legislation, called the America Invents Act, became effective in 2011. The reform strived toward facilitating the patent system. But soon it was also blamed for facilitating immoral third party profits. Urges for revision of the America Invents Act became even louder since hedge fund manager Kyle Bass had publicly outlined his questionable investment strategy: he challenges the validity of important drug patents, while shorting the owner's shares in order to eventually cash out on negative stock movements.

Suggested Citation

  • Kruppert, Rabea, 2017. "Dispute the patent, short the stock: Empirical analysis of a new hedge fund strategy," International Review of Law and Economics, Elsevier, vol. 50(C), pages 25-35.
    • Handle: RePEc:eee:irlaec:v:50:y:2017:i:c:p:25-35
    DOI: 10.1016/j.irle.2017.04.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0144818817300054
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.irle.2017.04.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fama, Eugene F & French, Kenneth R, 1992. "The Cross-Section of Expected Stock Returns," Journal of Finance, American Finance Association, vol. 47(2), pages 427-465, June.
    2. Graham, Stuart J.H. & Harhoff, Dietmar, 2014. "Separating patent wheat from chaff: Would the US benefit from adopting patent post-grant review?," Research Policy, Elsevier, vol. 43(9), pages 1649-1659.
    3. Paula M. Schliessler, 2015. "Patent litigation and firm performance: the role of the enforcement system," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 24(2), pages 307-343.
    4. Patell, Jm, 1976. "Corporate Forecasts Of Earnings Per Share And Stock-Price Behavior - Empirical Tests," Journal of Accounting Research, Wiley Blackwell, vol. 14(2), pages 246-276.
    5. Bronwyn H. Hall & Adam Jaffe & Manuel Trajtenberg, 2005. "Market Value and Patent Citations," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 16-38, Spring.
    6. Hall, B. & Jaffe, A. & Trajtenberg, M., 2001. "The NBER Patent Citations Data File: Lessons, Insights and Methodological Tools," Papers 2001-29, Tel Aviv.
    7. Bronwyn H. Hall & Stuart Graham & Dietmar Harhoff & David C. Mowery, 2004. "Prospects for Improving US Patent Quality via Postgrant Opposition," NBER Chapters, in: Innovation Policy and the Economy, Volume 4, pages 115-144, National Bureau of Economic Research, Inc.
    8. T. S. Raghu & Wonseok Woo & S. B. Mohan & H. Raghav Rao, 2008. "Market reaction to patent infringement litigations in the information technology industry," Information Systems Frontiers, Springer, vol. 10(1), pages 61-75, March.
    9. Joseph Farrell & Carl Shapiro, 2008. "How Strong Are Weak Patents?," American Economic Review, American Economic Association, vol. 98(4), pages 1347-1369, September.
    10. Sanjai Bhagat & John Bizjak & Jeffrey L. Coles, 1998. "The Shareholder Wealth Implications of Corporate Lawsuits," Financial Management, Financial Management Association, vol. 27(4), Winter.
    11. Brown, Stephen J. & Warner, Jerold B., 1980. "Measuring security price performance," Journal of Financial Economics, Elsevier, vol. 8(3), pages 205-258, September.
    12. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
    13. Lerner, Josh, 1995. "Patenting in the Shadow of Competitors," Journal of Law and Economics, University of Chicago Press, vol. 38(2), pages 463-495, October.
    14. A. Craig MacKinlay, 1997. "Event Studies in Economics and Finance," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 13-39, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vahidin Jeleskovic & Yinan Wan, 2024. "The impact of Facebook-Cambridge Analytica data scandal on the USA tech stock market: An event study based on clustering method," Papers 2402.14206, arXiv.org.
    2. Ahmad H. Juma’h & Yazan Alnsour, 2018. "Using Social Media Analytics: The Effect of President Trump’s Tweets On Companies’ Performance," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 17(1), pages 100-121, March.
    3. Mohit Gupta & Navdeep Aggarwal, 2018. "Signaling Effect of Shifts in Dividend Policy: Evidence from Indian Capital Markets," Business Perspectives and Research, , vol. 6(2), pages 142-153, July.
    4. Andrew Eckert & Corinne Langinier, 2014. "A Survey Of The Economics Of Patent Systems And Procedures," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 996-1015, December.
    5. Nicolau, Juan Luis & Sharma, Abhinav, 2022. "A review of research into drivers of firm value through event studies in tourism and hospitality: Launching the Annals of Tourism Research curated collection on drivers of firm value through event stu," Annals of Tourism Research, Elsevier, vol. 95(C).
    6. Truzaar Dordi & Olaf Weber, 2019. "The Impact of Divestment Announcements on the Share Price of Fossil Fuel Stocks," Sustainability, MDPI, vol. 11(11), pages 1-20, June.
    7. Pushpanjali Kaul & Sangeeta Arora, 2022. "Reinventing a brand’s identity: effect of name and logo announcements on the stock price of Indian banks," Journal of Brand Management, Palgrave Macmillan, vol. 29(3), pages 258-270, May.
    8. Ili, Dragan & Mollet, Janick Christian, 2015. "Voluntary Corporate Climate Initiatives and Regulatory Loom: Batten Down the Hatches," Working papers 2015/06, Faculty of Business and Economics - University of Basel.
    9. Lee, Jong-Seon & Kim, Nami & Bae, Zong-Tae, 2019. "The effects of patent litigation involving NPEs on firms’ patent strategies," Technological Forecasting and Social Change, Elsevier, vol. 149(C).
    10. Andrieș, Alin Marius & Nistor, Simona & Ongena, Steven & Sprincean, Nicu, 2020. "On Becoming an O-SII (“Other Systemically Important Institution”)," Journal of Banking & Finance, Elsevier, vol. 111(C).
    11. Yu-Shan Chen & Yu-Hsien Lin & Tai-Hsi Wu & Shu-Tzu Hung & Pei-Ju Lucy Ting & Chen-Han Hsieh, 2019. "Re-examine the determinants of market value from the perspectives of patent analysis and patent litigation," Scientometrics, Springer;Akadémiai Kiadó, vol. 120(1), pages 1-17, July.
    12. Marco Stringa & Allan Monks, 2007. "Inter-industry contagion between UK life insurers and UK banks: an event study," Bank of England working papers 325, Bank of England.
    13. Alina Sorescu & Nooshin L. Warren & Larisa Ertekin, 2017. "Event study methodology in the marketing literature: an overview," Journal of the Academy of Marketing Science, Springer, vol. 45(2), pages 186-207, March.
    14. Kimberlee Weatherall & Elizabeth Webster, 2014. "Patent Enforcement: A Review Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 28(2), pages 312-343, April.
    15. Chondrakis, George, 2016. "Unique synergies in technology acquisitions," Research Policy, Elsevier, vol. 45(9), pages 1873-1889.
    16. S. P. Kothari & Charles Wasley, 2019. "Commemorating the 50‐Year Anniversary of Ball and Brown (1968): The Evolution of Capital Market Research over the Past 50 Years," Journal of Accounting Research, Wiley Blackwell, vol. 57(5), pages 1117-1159, December.
    17. Shawn M. Riley & Steven C. Michael & Joseph T. Mahoney, 2017. "Human capital matters: Market valuation of firm investments in training and the role of complementary assets," Strategic Management Journal, Wiley Blackwell, vol. 38(9), pages 1895-1914, September.
    18. Konchitchki, Yaniv & O'Leary, Daniel E., 2011. "Event study methodologies in information systems research," International Journal of Accounting Information Systems, Elsevier, vol. 12(2), pages 99-115.
    19. Wang, Ling & Zhang, Yujia & Yan, Yushan, 2023. "Offensive patent litigation strategic choice: An organizational routine perspective," Technovation, Elsevier, vol. 122(C).
    20. Bessen, James & Neuhäusler, Peter & Turner, John L. & Williams, Jonathan, 2018. "Trends in private patent costs and rents for publicly-traded United States firms," International Review of Law and Economics, Elsevier, vol. 56(C), pages 53-69.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:irlaec:v:50:y:2017:i:c:p:25-35. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/irle .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.