Defensive Patenting and Portfolio Synergies: The Impact of Patent Invalidation on the Renewal of Citing Patents

Abstract

This paper investigates how court invalidations affect the decision to renew citing patents.  A patent invalidation creates a shock for its holder but also its competitors who cite this patent: invalidation wipes out portfolio synergies and the necessity to hold defensive patents.  This paper finds that when the Federal Circuit invalidated a patent, the invalidation affected the renewal likelihood of citing patents.  On the one hand, invalidations negatively affected the renewal decision of patents held in different portfolio that cited the invalidated patent.  This observation supports that some patents are only renewed for defensive purposes.  On the other hand, the portfolio size also affects the renewal decision.  This observation supports the existence of portfolio synergies.  But these two effects depend on the renewal anniversary.

Keywords: patent, defensive patenting, portfolio synergies, patent renewal, patent invalidation