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Time Factors of Patent Litigation and Licensing

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  • Reiko Aoki
  • Jin-Li Hu

Abstract

This study incorporates the concept of time into an analysis of patent litigation and licensing. We show that increasing imitation or litigation costs with a longer imitation lag or litigation time may have effects on licensing, settlement, and fees other than increasing the pecuniary costs. A higher pecuniary imitation cost always benefits the patentee and hurts the imitator. However, the patentee may prefer faster imitation to induce ex ante licensing, while the imitator may prefer slower imitation to reduce the settlement fee. We also show that both parties may find longer litigation beneficial, unlike higher legal costs.

Suggested Citation

  • Reiko Aoki & Jin-Li Hu, 2003. "Time Factors of Patent Litigation and Licensing," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 159(2), pages 280-301, June.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200306)159:2_280:tfopla_2.0.tx_2-e
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    References listed on IDEAS

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    1. Hause, John C, 1989. "Indemnity, Settlement, and Litigation, or I'll Be Suing You," The Journal of Legal Studies, University of Chicago Press, vol. 18(1), pages 157-179, January.
    2. Reiko Aoki & Jin‐Li Hu, 1999. "Licensing vs. Litigation: The Effect of the Legal System on Incentives to Innovate," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 8(1), pages 133-160, March.
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    7. Gilbert, Richard J & Newbery, David M G, 1982. "Preemptive Patenting and the Persistence of Monopoly," American Economic Review, American Economic Association, vol. 72(3), pages 514-526, June.
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    Citations

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    Cited by:

    1. Philipp N. Baecker, 2007. "Real Options and Intellectual Property," Lecture Notes in Economics and Mathematical Systems, Springer, number 978-3-540-48264-2, February.
    2. Reiko Aoki & Jin‐Li Hu, 1999. "Licensing vs. Litigation: The Effect of the Legal System on Incentives to Innovate," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 8(1), pages 133-160, March.
    3. Lindblom Ted & Mallios Aineas & Sjögren Stefan, 2024. "A Theoretical Analysis of Collusion Involving Technology Licensing Under Diseconomies of Scale," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 24(1), pages 263-297, January.
    4. Barrenechea, Martin, 2015. "Process innovations, patent litigation and time effects," MPRA Paper 65842, University Library of Munich, Germany.
    5. John R. Boyce & Aidan Hollis, 2007. "Preliminary Injunctions and Damage Rules in Patent Law," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(2), pages 385-405, June.
    6. Aineas Kostas Mallios, 2024. "Licensing and secrecy under imperfect intellectual property protection," Theory and Decision, Springer, vol. 97(3), pages 527-552, November.

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    More about this item

    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
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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