Design Patent Protection, Imitation Behaviors, and Market Value: Evidence from Egyptian Goddess v. Swisa

49 Pages Posted: 5 May 2020 Last revised: 24 Dec 2020

See all articles by Tian Heong Chan

Tian Heong Chan

Emory University - Goizueta Business School

Po-Hsuan Hsu

National Tsing Hua University - Department of Quantitative Finance

Kevin Tseng

National Taiwan University - Department of Finance; National Taiwan University - Center for Research in Econometric Theory and Applications

Date Written: August 28, 2020

Abstract

We examine how an unexpected regulation change strengthened legal protection of design patents, thereby preventing mimicking behaviors and enhancing their economic value. Using an unexpected decision of the Federal Circuit Court of Appeals, we show that more intricate designs (which were more likely to be mimicked before) suffer less imitation afterwards. Stock market reactions to grants of intricate design patents also increase more than reactions to grants of simple design patents after this decision. The market values of firms with more intricate design patents also increase significantly after the decision. Moreover, such positive reactions are more pronounced among firms facing fiercer product market competition and among firms previously involved in design patent litigation.

Keywords: design innovation, patent system, market performance, firm strategy, organization and behavior

JEL Classification: G18, K11, L51, O34

Suggested Citation

Chan, Tian Heong and Hsu, Po-Hsuan and Tseng, Kevin, Design Patent Protection, Imitation Behaviors, and Market Value: Evidence from Egyptian Goddess v. Swisa (August 28, 2020). Available at SSRN: https://ssrn.com/abstract=3574702 or http://dx.doi.org/10.2139/ssrn.3574702

Tian Heong Chan

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

Po-Hsuan Hsu

National Tsing Hua University - Department of Quantitative Finance ( email )

101, Section 2, Kuang-Fu Road
Hsinchu, Taiwan 300
China

Kevin Tseng (Contact Author)

National Taiwan University - Department of Finance ( email )

1, Sec. 4, Roosevelt Road
Taipei, 106
Taiwan

National Taiwan University - Center for Research in Econometric Theory and Applications ( email )

1 Sec. 4, Roosevelt Road
Taipei 106, 106
Taiwan

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