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http://ssrn.com/abstract=1677785
 
 

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Patent Quality and Settlement among Repeat Patent Litigants


John R. Allison


University of Texas - McCombs School of Busniess

Joshua H. Walker


Simpson Thacher & Bartlett LLP; Stanford Law School

Mark A. Lemley


Stanford Law School

September 16, 2010

Stanford Law and Economics Olin Working Paper No. 398

Abstract:     
Repeat patent plaintiffs - those who sue eight or more times on the same patents - have a disproportionate effect on the patent system. They are responsible for a sizeable fraction of all patent lawsuits. Their patents should be among the strongest, according to all economic measures of patent quality. And logic suggests that repeat patent plaintiffs should be risk averse, settling more of their cases and taking only the very best to trial to avoid having their patents invalidated. In this paper, we test those hypotheses. We find that repeat patent plaintiffs are somewhat more likely to settle their cases. But, to our surprise, we find that when they do go to trial or judgment, overwhelmingly they lose. This result seems to be driven by two parallel findings: both software patents and patents owned by non-practicing entities (so-called "patent trolls") fare extremely poorly in court. We offer some possible explanations for why a group of apparently weak patents nonetheless have so much influence over the patent system, and some preliminary thoughts about how these findings should shape the patent reform debate.

Number of Pages in PDF File: 31

Keywords: patent, settlement, empirical, trolls, NPEs, litigation studies

JEL Classification: O34

working papers series


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Date posted: September 20, 2010 ; Last revised: September 30, 2012

Suggested Citation

Allison, John R. and Walker, Joshua H. and Lemley, Mark A., Patent Quality and Settlement among Repeat Patent Litigants (September 16, 2010). Stanford Law and Economics Olin Working Paper No. 398. Available at SSRN: http://ssrn.com/abstract=1677785 or http://dx.doi.org/10.2139/ssrn.1677785

Contact Information

John R. Allison (Contact Author)
University of Texas - McCombs School of Busniess ( email )
CBA 5.202
University of Texas at Austin
Austin, TX 78712
United States
Joshua H. Walker
Simpson Thacher & Bartlett LLP
2550 Hanover Street
Palo Alto, CA 94304
United States
Stanford Law School ( email )
Stanford, CA
United States
Mark A. Lemley
Stanford Law School ( email )
559 Nathan Abbott Way
Stanford, CA 94305-8610
United States
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