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Recent US federal court rulings have provided new guidance on the use of economic models of bargaining in estimating reasonable royalty damages in patent cases. After reviewing relevant case law and providing an overview of the bargaining range approach, we describe one analytic method (the Rubinstein Bargaining Model) for developing a quantitative starting point with which to divide a bargaining range and explain how it can be tied, at least in part, to the facts and circumstances of the parties around the time of the Hypothetical Negotiation. We also describe how this approach can be used in conjunction with an analysis of other quantitative and qualitative factors related to the bargaining power of the parties, to help estimate reasonable royalty damages.

This issue of Research in Law and Economics covers several areas of important research by a variety of international scholars. It contains technical papers on the appropriate way to estimate damages in patent disputes, as well as methods for evaluating relevant markets and vertically integrated firms when determining the competitive effects of mergers and other actions. There are also papers on the implication of different legal processes, regulations, and liability rules on consumer welfare, which range from the impact of delays in legal decisions in labor cases in France to issues of criminal liability related to the use of artificial intelligence.

This paper proposes that patents are real options that allow holders of patents the right but not the obligation to sue others. We suggest that the likelihood of a patent being litigated is positively associated with value of the patent and the extent of disclosure (prior art cited) in the patent. However, under conditions of greater value, increases in disclosure reduce the likelihood of litigation of the focal patent. Similarly, under conditions of greater disclosure, increases in value reduce the likelihood of litigation of the focal patent. Rare events logit analyses of business method patents that were litigated, compared to patents that were not litigated, offer empirical evidence supporting the hypotheses.

A brief critique of the so‐called yardstick approach to assessing damages resulting from patent infringement which not only informs product managers whose responsibilities may include assisting legal counsel in preparing infringement suits or defenses, but also touches on the shortcomings of analog sales forecasting techniques.

This chapter discusses current issues raised by the use of patents in university-industry technology commercialization. After introducing how patent laws operate in the global marketplace, this chapter provides an overview of the U.S. patent system, describing aspects of the process by which patents are obtained and enforced. The focus of the chapter then turns to some of the benefits and costs to academia of the impact of the Bayh-Dole Act, which allows universities to capture returns from federally funded research. The chapter identifies some of the challenges created by the expanding scope of subject matter eligible for patent protection and concludes with a discussion of some of the issues and opportunities associated with the strategic licensing and enforcement of patents that may impact invention and innovation in the academy and beyond.

Under the patent system created by Congress a patent enjoys only a rebuttable presumption of validity. The resulting probability of invalidity has an economic value. The incentive for a challenger to capture that value creates consumer benefit. In contrast, a payment by the patent holder to the challenger to recognize validity changes the congressionally mandated rebuttable presumption into a conclusive presumption. When a patent holder enlarges the reward granted to him by Congress, by paying a potential rival to confess validity, he reduces efficiency and consumer welfare and, therefore, commits a per se violation of the antitrust laws.

Firms may suffer differently from the patent thickets in a particular technology field. This paper explores how patent thickets affect the financial performance of firms with different patent propensities and technological leadership.

From the perspective of patent strategy, the authors study how patent propensity, the possibility that a firm applies for patents, affects the patent thickets and financial performance. Additionally, this paper uses patent stock to measure technological leadership, the degree to which a firm can develop, maintain and enhance technology and product innovation, to study the impact of patent propensity on firms. A three-way interaction model is used to explore the relationship among patent thickets, patent propensity, technological leadership and financial performance based on an unbalanced panel of 69 Chinese telecommunication equipment firms from 2008 to 2019.

The authors find that patent propensity positively moderates patent thickets and financial performance. Notably, technological leadership negatively moderates the moderating effect of patent propensity.

This paper enriches the heterogeneous literature of patent thickets and financial performance. It sheds light on the fact that firms with different technological leadership may use different patent strategies to cut through patent thickets.

The Supreme Court’s decision in Federal Trade Commission v. Actavis, Inc. is a challenge to conventional antitrust analysis. Conventional civil antitrust cases are decided by a preponderance of the evidence. This means that conduct challenged under the rule of reason is only condemned if the conduct resulted in more competitive harm in the actual world than a world without the alleged violation. Under conventional analysis, the intent of the parties also plays only a supporting role in determining whether the conduct was anticompetitive. A holder of a valid patent has a right to exclude others practicing the patented technology. And, the patent holder is not assumed to have market power because it expended resources in maintaining exclusionary rights. Actavis creates doubts about these propositions in circumstances beyond the “reverse” payment settlement of a patent suit that may have delayed an alleged infringer market entry. This chapter explores whether applying Actavis logic to antitrust litigation can result in condemnation of practices where there is little chance of an anticompetitive effect, where the patent holder likely has a valid and infringed patent, where there is little reason to believe that the patent holder has market power, and where only one party, or no parties, to an agreement have an anticompetitive intent. This chapter also investigates whether Actavis creates new problems with standing analysis, damages calculations, and the balancing of efficiencies against anticompetitive effects. Nevertheless, the lower courts have begun to extend the logic of Actavis. This is apparent in the condemnation of no-Authorized-generic settlements.

Since 2015, China has made efforts to reform its intellectual property rights (IPR) system to better protect and stimulate innovation. These reforms are a result of the demand for more stringent intellectual property (IP) protection from China’s domestic, innovative industries and a measure to ease the pressure exerted by its foreign trading partners, particularly against the background of the US-China trade dispute that started at the beginning of 2018. This paper summarizes these reforms and their implications.

This paper combines a variety of sources, including academic articles, government websites, news reports, industry surveys and expert opinions, to offer insights in China’s IPR system and its recent reforms.

This paper summarizes and discusses (1) the state’s law amendments, including the 2015 amendment of the “Law on Promoting the Transformation of Scientific and Technological Achievements”, the second amendment of the “Anti-Unfair Competition Law” with regard to trade secret protection, the fourth amendment of the “Patent Law”, and the legislations and regulations addressing the criticisms of the US administration over China’s so-called “forced” technology transfer policies; (2) the establishment of the specialized IP courts and tribunals since 2014; (3) the restructuring of the State IP Office; and (4) the issuing of an “Outline for Building an IPR Powerhouse (2021–2035)”.

This paper highlights China’s efforts to make its IPR system stronger and more just. It also discusses international observers’ reactions and pinpoints specific areas for further improvement.

This chapter provides an overview of five modes of intellectual property (IP) protection – patents, designs, copyrights, trademarks, and trade secrets – available in the United States, the European Union, and Japan. After describing the purposes of and principal differences among the five types of IP protection and outlining the advantages of each form, the chapter provides country- and region-specific information. The authors highlight the aspects of IP law in which international harmonization has, or has not yet, occurred, and offer insights into the relative advantages of various national and regional IP protection systems.