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Patent Trolls, Litigation, and the Market for Innovation

Author

Listed:
  • Haus, Axel

    (Dept. of Management and Microeconomics, Goethe University Frankfurt)

  • Juranek, Steffen

    (Dept. of Business and Management Science, Norwegian School of Economics)

Abstract

We examine the role of non-practicing entities (NPEs), often called patent trolls, in patent litigation. We present a theoretical model that predicts that cases with NPE patentees resolve faster. We test this prediction using a hand-collected data set of US patent litigation cases. We find that NPEs challenge larger and more technology intensive firms, and use more valuable patents from technology areas that have a less fragmented ownership base compared to the control group. Controlling for these factors, we find that NPE cases are indeed resolved faster. NPEs help to increase the speed of diffusion of technology into the economy; therefore, increasing the effectiveness of the market for innovation.

Suggested Citation

  • Haus, Axel & Juranek, Steffen, 2014. "Patent Trolls, Litigation, and the Market for Innovation," Discussion Papers 2014/24, Norwegian School of Economics, Department of Business and Management Science.
    • Handle: RePEc:hhs:nhhfms:2014_024
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    File URL: http://hdl.handle.net/11250/217632
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    Cited by:

    1. Stefano Comino & Fabio Maria Manenti, 2015. "Intellectual Property and Innovation in Information and Communication Technology (ICT)," JRC Research Reports JRC97541, Joint Research Centre.
    2. Stefano Comino & Fabio M. Manenti & NIkolaus Thumm, 2017. "The Role of Patents in Information and Communication Technologies (ICTs). A survey of the Literature," "Marco Fanno" Working Papers 0212, Dipartimento di Scienze Economiche "Marco Fanno".

    More about this item

    Keywords

    Litigation; patents; patent trolls; technology diffusion;
    All these keywords.

    JEL classification:

    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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