Fight or Surrender to Counterfeiters: Litigation as a Response to Trademark Infringement

51 Pages Posted: 6 Apr 2021

See all articles by Shreekanth Mahendiran

Shreekanth Mahendiran

University of Lausanne

Chirantan Chatterjee

SPRU-Sussex, U-Sussex Business School; Hoover Institution, Stanford University; Indian Institute of Management, Ahmedabad

Anthony J. Dukes

University of Southern California - Marshall School of Business

D. Daniel Sokol

USC Gould School of Law; USC Marshall School of Business

Date Written: April 2, 2021

Abstract

This research explores the role of trademark litigation as a deterrent strategy against counterfeiters in markets where government trademark enforcement is weak. Litigation can convey to potential counterfeiters that a trademark-holding firm would sue upon entry. We explore this idea empirically in the context of pharmaceutical trademarks in India using the framework of a stylized theoretical model. We construct a database of trademarks and examine litigation activity by certain trademark-holders. Our findings indicate that litigation reduces subsequent counterfeiting. Because litigation can be extremely costly for a trademark-holding firm, it is worthwhile only when it has legal advantages in pursuing cases. Not all trademark-holding firms have such legal advantages and are, therefore, better off surrendering to infringers and incurring a cycle of settlements with future counterfeiters.

Keywords: Trademark infringement, trademark protection, reputation, litigation, intellectual property rights

JEL Classification: O34, L140, K42

Suggested Citation

Mahendiran, Shreekanth and Chatterjee, Chirantan and Dukes, Anthony J. and Sokol, D. Daniel, Fight or Surrender to Counterfeiters: Litigation as a Response to Trademark Infringement (April 2, 2021). USC Marshall School of Business Research Paper Sponsored by iORB, No. Forthcoming, Available at SSRN: https://ssrn.com/abstract=3817945 or http://dx.doi.org/10.2139/ssrn.3817945

Shreekanth Mahendiran

University of Lausanne ( email )

Lausanne, 1015
Switzerland

Chirantan Chatterjee

SPRU-Sussex, U-Sussex Business School ( email )

Brighton, BN1 9SL
United Kingdom

HOME PAGE: http://https://profiles.sussex.ac.uk/p535606-chirantan-chatterjee

Hoover Institution, Stanford University ( email )

Stanford, CA 94305
United States

HOME PAGE: http://https://www.hoover.org/profiles/chirantan-chatterjee

Indian Institute of Management, Ahmedabad ( email )

Vastrapur
Ahmedabad, Gujarat 380 015
India

HOME PAGE: http://https://www.iima.ac.in/web/faculty/faculty-profiles/chirantan-chatterjee

Anthony J. Dukes (Contact Author)

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA California 90089
United States
213-740-3846 (Phone)

HOME PAGE: http://sites.usc.edu/anthonydukes/

D. Daniel Sokol

USC Gould School of Law ( email )

699 Exposition Boulevard
Los Angeles, CA 90089
United States

USC Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA California 90089
United States

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