Are Litigated Patents More Valuable? The Case of Light Emitting Diodes

24 Pages Posted: 28 Nov 2016

See all articles by Cédric Gossart

Cédric Gossart

Université Paris-Saclay, Univ Evry, IMT-BS, LITEM, 91025, Evry-Courcouronnes, France

Altay Ozaygen

Institut Mines-Télécom Télécom Ecole de Management

Muge Ozman

Institut TELECOM, Telecom & Management SudParis, CEMANTIC

Date Written: November 25, 2016

Abstract

Recently the LED sector has been growing very rapidly, with an expanding knowledge base and an increasing array of markets in which LEDs are used. Consequently, the number of LED-related patents has increased exponentially, as well as the amount of patent litigations. One of the factors that can hamper innovation in such high growth fields is when incumbent firms use their patent pools to deter innovation by competitors, especially by smaller firms. If so, patents would undermine innovation instead of supporting it, and thus undermining the LEDs huge potential of energy savings. To shed light on the extent to which LED patents might be used to deter innovation in the sector, we examine the nature of litigated patents, compared with non-litigated patents, and explore the main drivers of patent lawsuits. The results indicate that litigated LED patents are significantly higher quality scientifically than non-litigated ones. This has two implications. First, LED incumbent firms do not seem to be using strategic maneuvering, and that patent litigations in the LED sector are the result of innovation-related factors, rather than being guided by mere profiteering. Second, this conclusion does not imply that patent protection fosters innovation in the LED sector, because a concentration of patents in the hands of incumbent firms reduces technological variety, which mainly comes from small and innovative firms.

Keywords: patents, litigations, LED, lighting, eco-innovation, barriers

JEL Classification: O31, O34, P14, D23

Suggested Citation

Gossart, Cédric and Ozaygen, Altay and Ozman, Muge, Are Litigated Patents More Valuable? The Case of Light Emitting Diodes (November 25, 2016). Available at SSRN: https://ssrn.com/abstract=2875824 or http://dx.doi.org/10.2139/ssrn.2875824

Cédric Gossart

Université Paris-Saclay, Univ Evry, IMT-BS, LITEM, 91025, Evry-Courcouronnes, France ( email )

9, rue Charles Fourier
Évry-Courcouronnes, Ile de France 91011
France

Altay Ozaygen (Contact Author)

Institut Mines-Télécom Télécom Ecole de Management ( email )

9, rue Charles Fourier
Évry, Ile de France 91011
France

Muge Ozman

Institut TELECOM, Telecom & Management SudParis, CEMANTIC ( email )

9 rue Charles Fourier
Evry, 91011
France

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