Innovation in the Shadow of Patent Litigation

Yann Ménière (1, 2) , Sarah Parlane (3)

1 CERNA i3 - Centre d'économie industrielle i3
2 CORE - Center of Operation Research and Econometrics [Louvain]
3 UCD School of Economics

We analyze non-cooperative R&D investment by two firms that already hold patents that they can assert against each other with probabilistic success. The market structure results from stochastic innovation and patent litigation. Depending on the level of infringement fees, we highlight positive and negative effects of litigation threats on innovation. We define an appropriate regulatory structure of infringement fees that will implement socially efficient R&D investments in the case of symmetric and asymmetric patent portfolios.

Mots clés: Innovation; Brevet; Contrefaçon; Litige; Investissement efficace

Domaines: Economies et finances

Yann Ménière, Sarah Parlane. Innovation in the Shadow of Patent Litigation. Review of Industrial Organization, 2008, 32 (2), pp.95-111. ⟨10.1007/s11151-008-9167-y⟩. ⟨hal-00397130⟩