Crafting Intellectual Property Rights: Implications for Patent Assertion Entities, Litigation and Innovation

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We show that much of the heterogeneity in patent outcomes, such as patent value, citations and litigation, is caused by the way patent rights are crafted, rather than by heterogeneity in idea quality. We obtain variation in patent rights from the quasi-random allocation of patents to examiners: a one standard deviation change in examiner effects leads stock market capitalization to increase by 3 million dollars, citations by 24%, and litigation by 64%. Patent Assertion Entities, which are very active in litigation and licensing, overwhelmingly purchase and assert patents granted by “lenient” examiners, who craft patents with higher litigation and invalidity risks.



Last updated on 12/06/2017