Effects of Patent Rights on Acquisitions and R&D

50 Pages Posted: 23 Apr 2014 Last revised: 6 Aug 2019

See all articles by Tolga Caskurlu

Tolga Caskurlu

University of Amsterdam Business School

Date Written: August 5, 2019

Abstract

I investigate how patent rights affect small firm R&D incentives through the acquisition channel. For this purpose, I hand-collect detailed data on patent lawsuits filed in the Court of Appeals for the Federal Circuit (CAFC). Using historical decisions of randomly assigned judges as an instrument for lawsuit outcomes and a Supreme Court decision as an exogenous variation for the strength of patent rights, I find that infringers increase acquisitions to obtain substitute patents in a strong patent rights regime. The increase in acquisition market liquidity leads to more innovation, venture capital (VC) financing, and successful outcomes for small firms.

Keywords: Patents, Mergers and Acquisitions (M&A), Innovation, Research and Development (R&D), Patent Law

JEL Classification: G34, O32, K10

Suggested Citation

Caskurlu, Tolga, Effects of Patent Rights on Acquisitions and R&D (August 5, 2019). Available at SSRN: https://ssrn.com/abstract=2427191 or http://dx.doi.org/10.2139/ssrn.2427191

Tolga Caskurlu (Contact Author)

University of Amsterdam Business School ( email )

Roetersstraat 18
Amsterdam, 1018WB
Netherlands

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