Patent , patent litigation , credit rating , firm value
Abstract:
I analyse how patent litigation outcome in Germany affects the performance of
the disputing firms by interpreting changes in a firm's credit rating as a proxy
for changes in firm performance. The results match theoretical considerations on
the functioning of the bifurcated German patent litigation system: The separation
of litigation and invalidity decisions, resulting in invalidity decisions taking much
longer than decisions on infringement, provides patent holders with a window of
opportunity to enforce patents that may later be invalidated. This shifts a major
share of the immediate risk to the defendant and allocates bargaining power to
the plaintiff. The estimation results provide support for this incongruity. Plaintiffs
on average profit from litigation while defendants agreeing upon a settlement deal
lose as much as defendants losing in trial. I further show that small, inexperienced
defendant firms are at a disadvantage when dealing with litigation.
Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.
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