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Impact of patent litigation on the subsequent patenting behavior of the plaintiff small and medium enterprises in Japan

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  • Hu, Wei
  • Yoshioka-Kobayashi, Tohru
  • Watanabe, Toshiya

Abstract

This paper examines the impact of patent litigation on the subsequent patenting behavior of the plaintiff small and medium enterprises (SMEs) in Japan. The results show that plaintiff SMEs tend to reduce patent applications after patent litigation. Although there are several possible interpretations for this finding, we argue that it is most likely due to the negative effects of the high cost of patent litigation on the R&D activities of the plaintiff SMEs during the period of patent litigation. Moreover, we also find that the strength of patent rights applied for by the plaintiff SMEs after patent litigation increases. We argue that this is because the plaintiff SMEs realize the importance of the quality of patent rights and learn how to apply for stronger patent rights after experiencing patent litigation as plaintiffs. However, this learning effect only lasts until the fourth year after litigation and then disappears or starts to reverse beginning with the fifth year after litigation.

Suggested Citation

  • Hu, Wei & Yoshioka-Kobayashi, Tohru & Watanabe, Toshiya, 2017. "Impact of patent litigation on the subsequent patenting behavior of the plaintiff small and medium enterprises in Japan," International Review of Law and Economics, Elsevier, vol. 51(C), pages 23-28.
    • Handle: RePEc:eee:irlaec:v:51:y:2017:i:c:p:23-28
    DOI: 10.1016/j.irle.2017.06.002
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    References listed on IDEAS

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    1. 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.
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    Citations

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    Cited by:

    1. Zhang, Ya-Feng & Li, Li-Ming & Xu, Ke, 2022. "Do specialized intellectual property courts show a pro-patent propensity? Evidence from China," International Review of Law and Economics, Elsevier, vol. 70(C).
    2. Tang, Xudong & Wang, Lin, 2024. "When your friend takes a fall: Spillovers of patent infringement lawsuits on firm innovation via cross-owners," Economic Modelling, Elsevier, vol. 131(C).
    3. Papageorgiadis, Nikolaos & Procopiou, Andreas & Sofka, Wolfgang, 2023. "Unintended consequences of outcome based compensation – How CEO bonuses, stocks and stock options affect their firms' patent litigation," Research Policy, Elsevier, vol. 52(8).

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    More about this item

    Keywords

    K41; K42; O31; O32; O34; C01; learning effect; patenting behavior; patent litigation; patent strategy; patent insurance;
    All these keywords.

    JEL classification:

    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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