Crafting Intellectual Property Rights: Implications for Patent Assertion Entities, Litigation, and Innovation

Feng, Josh, and Xavier Jaravel. 2020. "Crafting Intellectual Property Rights: Implications for Patent Assertion Entities, Litigation, and Innovation." American Economic Journal: Applied Economics, 12 (1): 140-81.

79 Pages Posted: 13 Sep 2016 Last revised: 20 Mar 2020

See all articles by Josh Feng

Josh Feng

University of Utah - David Eccles School of Business; National Bureau of Economic Research

Xavier Jaravel

London School of Economics & Political Science (LSE) - Department of Economics

Date Written: December 11, 2018

Abstract

We show that examiner-driven variation in patent rights leads to quantitatively large impacts on several patent outcomes, including patent value, citations, and litigation. Notably, Patent Assertion Entities (PAEs) overwhelmingly purchase patents granted by "lenient" examiners. These examiners issue patents that are more likely to be litigated by both PAEs and conventional companies, and that also have higher invalidity rates. PAEs leverage a specific friction in the patent system, which stems from lenient examiners and affects litigation more broadly. These patterns indicate that there is much at stake during patent examination, contradicting the influential "rational ignorance" view of the patent office.

Keywords: Innovation, Litigation, Examiners

JEL Classification: O30, O31, O34, O38, K41

Suggested Citation

Feng, Josh and Jaravel, Xavier, Crafting Intellectual Property Rights: Implications for Patent Assertion Entities, Litigation, and Innovation (December 11, 2018). Feng, Josh, and Xavier Jaravel. 2020. "Crafting Intellectual Property Rights: Implications for Patent Assertion Entities, Litigation, and Innovation." American Economic Journal: Applied Economics, 12 (1): 140-81., Available at SSRN: https://ssrn.com/abstract=2838017 or http://dx.doi.org/10.2139/ssrn.2838017

Josh Feng

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
2016977982 (Phone)

Xavier Jaravel (Contact Author)

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom
7456842728 (Phone)
NW12AR (Fax)

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