Patent Trolls and Technology Diffusion: The Case of Medical Imaging
42 Pages Posted: 24 Dec 2011 Last revised: 28 Oct 2014
Date Written: April 14, 2014
Patent-assertion entities, sometimes known as `patent trolls,' do not manufacture goods themselves but profit from licensing agreements that they often enforce via the threat of litigation. This paper explores empirically how litigation by a patent troll affected the sales of medical imaging technology. It finds evidence that relative to similar products, made by the same firm, but not covered by the patent, imaging software sales declined by one-third. This was not due to a suppression in underlying demand by hospitals but instead is linked to a lack of incremental product innovation during the period of litigation.
Keywords: Patents, Litigation, Patent Assertion Entities, Trolls, Healthcare IT, Technology, Hospital IT, Economics of Intellectual Property
JEL Classification: K0, O3
Suggested Citation: Suggested Citation