How Patent Strategy Affects the Timing and Method of Patent Litigation Resolution

Abstract

The goal of this paper is to explain how generic patent strategies that firms use to support their competitive advantage in the product-market influence non-market outcomes related to the timing of patent litigation resolution. In contrast with prior research that has studied settlement in patent litigation essentially as a one-shot bargaining game, this paper seeks to explain litigation resolution as an outcome of the competing mechanisms of settlement and adjudication that operate continually during litigation. Using a large sample of patent litigations in research medicines and computers, I model the timing of patent litigation resolution in a proportional hazards framework, wherein settlement and adjudication are competing risks. The evidence found is consistent with the proposition that the speed with which patent litigation is resolved by either settlement or adjudication reflects the use of proprietary, defensive, and leveraging patent strategies by firms. These findings also help to explain unexpected and anomalous findings regarding the settlement of patent litigation reported in prior research.

Citation

Somaya, D. (2016), "How Patent Strategy Affects the Timing and Method of Patent Litigation Resolution", Strategy Beyond Markets (Advances in Strategic Management, Vol. 34), Emerald Group Publishing Limited, pp. 471-504. https://doi.org/10.1108/S0742-332220160000034014

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