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The cost of engaging in litigation over intellectual property assets diminishes their value as an incentive to invest in research. The frequency of court cases reflects firms' strategies for appropriating innovation rents. We examine the characteristics of litigrated patents and their owners by combining, for the first time, information about patent case filings from the U.S. district courts with detailed data from the U.S. Patent and Trademark Office. By comparing filed cases to a control group, we show that there is substantial variation across patents in their exposure to litigation risk. We use this empirical evidence to examine hypotheses about the determinants to patent suits.
The purpose of the RAND Journal of Economics, formerly the Bell Journal of Economics, is to support and encourage research in the behavior of regulated industries, the economic analysis of organizations, and more generally, applied microeconomics. Both theoretical and empirical manuscripts in economics and law are encouraged. Website: www.rje.org
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