Questionable Science Will Misguide Patent Policy -- The $83 Billion per Year Fallacy
9 Pages Posted: 30 Sep 2014 Last revised: 27 Jan 2017
Date Written: November 25, 2015
This paper reveals fundamental flaws in the event studies method used by Bessen et al. in their empirical assessment of patent litigation costs. It is shown that these authors ignored major confounders and have omitted relevant data from all lawsuit dispositions. Examples of litigation involving Non Practicing Entities are presented to show that by only accounting for stock price declines upon announcement of the commencement of litigation, and ignoring any stock price corrections upon resolution and disposition of litigation, the authors produce implausibly high estimates for patent litigation cost to shareholders.
Keywords: Patent litigation, event studies, Non Practicing Entities
Suggested Citation: Suggested Citation