The Effect of Patent Litigation Insurance: Theory and Evidence from NPEs

60 Pages Posted: 16 Sep 2020

See all articles by Bernhard Ganglmair

Bernhard Ganglmair

ZEW – Leibniz Centre for European Economic Research - Junior Research Group Competition and Innovation; University of Mannheim - Department of Economics; Mannheim Centre for Competition and Innovation (MaCCI)

Christian Helmers

Santa Clara University - Leavey School of Business; Universidad Carlos III de Madrid

Brian J. Love

Santa Clara University School of Law

Multiple version iconThere are 2 versions of this paper

Date Written: 2020

Abstract

We analyze the extent to which private defensive litigation insurance deters patent assertion by non-practicing entities (NPEs). We study the effect that a patent-specific defensive insurance product,offered by a leading litigation insurer, had on the litigation behavior of insured patents' owners, all of which are NPEs. We first model the impact of defensive litigation insurance on the behavior of patent enforcers and accused infringers. We show that the availability of defensive litigation insurance can have an effect on how often patent enforcers will assert their patents. We cconfirm this result empirically showing that the insurance policy had a large, negative effect on the likelihood that a patent included in the policy was subsequently asserted relative to other patents held by the same NPEs and relative to patents held by other NPEs with portfolios that were entirely excluded from the insurance product. Our findings suggest that market-based mechanisms can deter so-called "patent trolling."

Keywords: NPEs, patents, insurance, litigation

JEL Classification: G22, K41, O34

Suggested Citation

Ganglmair, Bernhard and Helmers, Christian and Love, Brian J., The Effect of Patent Litigation Insurance: Theory and Evidence from NPEs (2020). ZEW - Centre for European Economic Research Discussion Paper No. 20-037, Available at SSRN: https://ssrn.com/abstract=3693666 or http://dx.doi.org/10.2139/ssrn.3693666

Bernhard Ganglmair (Contact Author)

ZEW – Leibniz Centre for European Economic Research - Junior Research Group Competition and Innovation ( email )

L7,1
Mannheim, 68161
Germany

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany

Mannheim Centre for Competition and Innovation (MaCCI) ( email )

L 7, 1
Mannheim, 68131
Germany

Christian Helmers

Santa Clara University - Leavey School of Business ( email )

500 El Camino Real
Santa Clara, CA California 95053
United States

Universidad Carlos III de Madrid ( email )

CL. de Madrid 126
Madrid, Madrid 28903
Spain

Brian J. Love

Santa Clara University School of Law ( email )

500 El Camino Real
Santa Clara, CA 95053
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
12
Abstract Views
116
PlumX Metrics