Patent privateering, litigation, and R&amp;D incentives

Lemus, J; Temnyalov, E

Patent privateering, litigation, and R&D incentives

Lemus, J

Temnyalov, E

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Publication Type:: Journal Article
Citation:: RAND Journal of Economics, 2017, 48 (4), pp. 1004 - 1026
Issue Date:: 2017-12-01

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Field	Value	Language
dc.contributor.author	Lemus, J https://orcid.org/0000-0002-7691-9182	en_US
dc.contributor.author	Temnyalov, E https://orcid.org/0000-0002-1077-8196	en_US
dc.date.available	2020-05-25T19:13:44Z
dc.date.issued	2017-12-01	en_US
dc.identifier.citation	RAND Journal of Economics, 2017, 48 (4), pp. 1004 - 1026	en_US
dc.identifier.issn	0741-6261	en_US
dc.identifier.uri	http://hdl.handle.net/10453/124350
dc.description.abstract	© 2017, The RAND Corporation. We model “patent privateering”—whereby producing firms sell patents to Patent Assertion Entities (PAEs), which then license them under the threat of litigation—in a bargaining game. PAEs can negotiate higher licensing fees than producing firms because they cannot be countersued for infringement. Privateering produces two countervailing effects: it increases the offensive value of patents, whereas it decreases their defensive value and lowers the aggregate surplus of producing firms. Embedding the bargaining game into a Research and Development (R&D) contest for multiple complementary technologies, we find that privateering may increase R&D investments, even as it induces more litigation threats and reduces industry profits.	en_US
dc.relation.ispartof	RAND Journal of Economics	en_US
dc.relation.isbasedon	10.1111/1756-2171.12211	en_US
dc.subject.classification	Economics	en_US
dc.title	Patent privateering, litigation, and R&D incentives	en_US
dc.type	Journal Article
utslib.citation.volume	4	en_US
utslib.citation.volume	48	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	14 Economics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
utslib.copyright.status	open_access
pubs.issue	4	en_US
pubs.publication-status	Published	en_US
pubs.volume	48	en_US

Abstract:

© 2017, The RAND Corporation. We model “patent privateering”—whereby producing firms sell patents to Patent Assertion Entities (PAEs), which then license them under the threat of litigation—in a bargaining game. PAEs can negotiate higher licensing fees than producing firms because they cannot be countersued for infringement. Privateering produces two countervailing effects: it increases the offensive value of patents, whereas it decreases their defensive value and lowers the aggregate surplus of producing firms. Embedding the bargaining game into a Research and Development (R&D) contest for multiple complementary technologies, we find that privateering may increase R&D investments, even as it induces more litigation threats and reduces industry profits.

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http://hdl.handle.net/10453/124350

Patent privateering, litigation, and R&amp;D incentives

Patent privateering, litigation, and R&D incentives