Investing in Legal Advice: Competition at the Courthouse?
28 Pages Posted: 28 Jul 2015 Last revised: 17 Jan 2016
Date Written: December 2, 2015
I study the resource spending decision of plaintiffs in patent lawsuits. I use a unique sample of US patent litigation cases and focus on an important decision of the plaintiffs; their decision to hire external counsels.
I show that plaintiffs hire significantly more counsels the closer they compete with the defendants on the product market. Hence, the competitive situation on the product market is reflected in the plaintiff's enforcement strategy. Furthermore, the litigant's size is positively correlated with the number of counsels hired by the plaintiff; a result that identifies a channel for the observations that patents owned by large firms are less likely to be litigated.
Keywords: litigation, patents, strategic value, competition, litigant status
JEL Classification: K00, K41, O34
Suggested Citation: Suggested Citation