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Invalid but infringed? An analysis of Germany's bifurcated patent litigation system

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  • Cremers, Katrin
  • Gaessler, Fabian
  • Harhoff, Dietmar
  • Helmers, Christian

Abstract

We analyze the impact of the probabilistic nature of patents on the functioning of Germany's bifurcated patent litigation system where infringement and validity of a patent are decided independently by different courts. We show that bifurcation creates situations in which a patent is held infringed that is subsequently invalidated. Our conservative estimates indicate that 12% of infringement cases in which the patent's validity is challenged produce such 'invalid but infringed' decisions. We also show that having to challenge a patent's validity in separate court proceedings means that more resource-constrained alleged infringers are less likely to do so. We find evidence that 'invalid but infringed' decisions create uncertainty which firms that were found to infringe an invalid patent attempt to reduce by filing more oppositions against newly granted patents immediately afterwards.

Suggested Citation

  • Cremers, Katrin & Gaessler, Fabian & Harhoff, Dietmar & Helmers, Christian, 2014. "Invalid but infringed? An analysis of Germany's bifurcated patent litigation system," ZEW Discussion Papers 14-072, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:14072
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    References listed on IDEAS

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    1. Mark A. Lemley & Carl Shapiro, 2005. "Probabilistic Patents," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 75-98, Spring.
    2. 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.
    3. Malwina Mejer & Bruno van Pottelsberghe de la Potterie, 2012. "Economic incongruities in the European patent system," European Journal of Law and Economics, Springer, vol. 34(1), pages 215-234, August.
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    6. Malwina Mejer & Bruno van Pottelsberghe de la Potterie, 2012. "Economic incongruities in the European patent system," European Journal of Law and Economics, Springer, vol. 34(1), pages 215-234, August.
    7. Claude Crampes & Corinne Langinier, 2002. "Litigation and Settlement in Patent Infringement Cases," RAND Journal of Economics, The RAND Corporation, vol. 33(2), pages 258-274, Summer.
    8. Katrin Cremers & Max Ernicke & Fabian Gaessler & Dietmar Harhoff & Christian Helmers & Luke McDonagh & Paula Schliessler & Nicolas Zeebroeck, 2017. "Patent litigation in Europe," European Journal of Law and Economics, Springer, vol. 44(1), pages 1-44, August.
      • Cremers, Katrin & Ernicke, Max & Gaessler, Fabian & Harhoff, Dietmar & Helmers, Christian & McDonagh, Luke & Schliessler, Paula & Van Zeebroeck, Nicolas, 2013. "Patent litigation in Europe," ZEW Discussion Papers 13-072, ZEW - Leibniz Centre for European Economic Research.
      • Katrin Cremers & Max Ernicke & Fabian Gaessler & Dietmar Harhoff & Christian Helmers & Luke Mc Donagh & Paula Schliessler & Nicolas van Zeebroeck, 2017. "Patent litigation in Europe," ULB Institutional Repository 2013/226239, ULB -- Universite Libre de Bruxelles.
    9. 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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    1. Katrin Cremers & Max Ernicke & Fabian Gaessler & Dietmar Harhoff & Christian Helmers & Luke McDonagh & Paula Schliessler & Nicolas Zeebroeck, 2017. "Patent litigation in Europe," European Journal of Law and Economics, Springer, vol. 44(1), pages 1-44, August.
      • Cremers, Katrin & Ernicke, Max & Gaessler, Fabian & Harhoff, Dietmar & Helmers, Christian & McDonagh, Luke & Schliessler, Paula & Van Zeebroeck, Nicolas, 2013. "Patent litigation in Europe," ZEW Discussion Papers 13-072, ZEW - Leibniz Centre for European Economic Research.
      • Katrin Cremers & Max Ernicke & Fabian Gaessler & Dietmar Harhoff & Christian Helmers & Luke Mc Donagh & Paula Schliessler & Nicolas van Zeebroeck, 2017. "Patent litigation in Europe," ULB Institutional Repository 2013/226239, ULB -- Universite Libre de Bruxelles.

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    Keywords

    Litigation; innovation; patents; bifurcation; Germany;
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