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.
This research would not have been possible without David Mowery and Bronwyn Hall, who provided valuable early advice and access to data. Martin Dresner, Phil Evers, Brent Goldfarb, Curt Grimm, Josh Newberg, James Prieger, David Teece, Robert Windle, Rosemarie Ziedonis, and participants at the Academy of Management Conference provided valuable feedback on earlier drafts. Detailed comments and suggestions from Editor Rick Vanden Bergh and two anonymous referees for this volume are gratefully acknowledged.
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/S0742-332220160000034014Download as .RIS
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