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The Private Costs of Patent Litigation

James E. Bessen
Research on Innovation; Boston University - School of Law

Michael J. Meurer
Boston University - School of Law


February 1, 2008

Boston University School of Law Working Paper No. 07-08
2nd Annual Conference on Empirical Legal Studies Paper

Abstract:     
This paper estimates the total cost of patent litigation to alleged infringers. We use a large sample of stock market event studies around the date of lawsuit filings for US public firms from 1984-99. We find that the total costs of litigation are much greater than legal fees and costs are large even for lawsuits that settle. Lawsuits cost alleged infringers about $28.7 million ($92) in the mean and $2.9 million in the median. Moreover, infringement risk rose sharply during the late 1990s to over 14% of R&D spending. Small firms have lower risk relative to R&D.

Keywords: patent, litigation, litigation cost, property rights

JEL Classifications: O31, O34, K41

Working Paper Series

Date posted: May 02, 2007 ; Last revised: July 01, 2008

Suggested Citation

Bessen, James E. and Meurer, Michael J., The Private Costs of Patent Litigation (February 1, 2008). Boston University School of Law Working Paper No. 07-08; 2nd Annual Conference on Empirical Legal Studies Paper. Available at SSRN: http://ssrn.com/abstract=983736


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Contact Information

James E. Bessen (Contact Author)
Research on Innovation ( email )
202 High Head Rd.
Harpswell, ME 04079
United States
617-531-2092 (Phone)
Boston University - School of Law ( email )
765 Commonwealth Avenue
Boston, MA 02215
United States
Michael J. Meurer
Boston University - School of Law ( email )
765 Commonwealth Avenue
Boston, MA 02215
United States
617-353-6292 (Phone)
617-353-3077 (Fax)
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