Time factors of patent litigation and licensing

Reiko Aoki*, Jin-Li Hu

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

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.

Original languageEnglish
Pages (from-to)280-301
Number of pages22
JournalJournal of Institutional and Theoretical Economics
Volume159
Issue number2
DOIs
StatePublished - Jun 2003

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