on sharks trolls and their patent prey unrealistic damage awards and firms strategies of being infringed abstract patent trolls or sharks are patent holding individuals or often small firms who trap r d intensive manufacturers in patent infringement situations in order to receive damage awards for the illegitimate use of their technology while of great concern to management their existence and impact for both corporate decision makers and policy makers remains to be fully analyzed from an academic standpoint in this paper we show why patent sharks can operate profitably why they are of growing concern how manufacturers can forearm themselves against them and which issues policy makers need to address to do so we map international indemnification rules with strategic rationales of small patent holding firms and large manufacturers within a theoretical model our central finding is that the courts unrealistic consideration of the trade offs faced by inadvertent infringers is a central condition for sharks to operate profitably

pre empted patents infringed patents and firms participation in markets for technology abstract in recent years firms have increasingly contributed to and been confronted with a patent landscape characterized by numerous but marginal inventions overlapping claims and patent fences as a result firms risk their patent applications to be pre empted or to be infringed upon by rivals while both aspects constitute major challenges for the appropriation of returns to inventive activity extant literature suggests that participation in the market for technology might actually resolve or at least alleviate these problems in this paper we investigate the effect of pre empted and infringed patents on firms engagement in in and cross licensing based on a sample of more than 1100 german manufacturing firms our results show that firms engage in in licensing as a reaction to pre empted patents and in cross licensing if their protected ip was infringed upon however these effects vary depending on the fragmentation of technology fields and whether the firm operates in a discrete or complex product industry

litigation and settlement in patent infringement cases a patent grants its owner the right to sue intruders that have been identified the patentholder must then supervise the market and react in case of infringement his reaction may be to go to court to settle or to accept entry we investigate how intensive the monitoring effort should be and how it will influence the entry decision in a simultaneous game even if the penalty paid by the infringer in case of a finding of liability is high the patentholder may prefer a settlement to a trial the likelihood of entry may increase with the penalty in sequential games regardless who plays first entry occurs comparatively less often than in the simultaneous game

intellectual property litigation activity in the usa abstract brand names or trademarks carry incredible economic power and prestige there is increasing recognition by world bodies that intellectual property ip whether manifested in patents trademarks copyrights or trade secrets is highly valuable and must be protected through robust ip enforcement the usa is an interesting natural laboratory as patent trademark and copyright litigation battles have been raging domestically for some time the paper discusses the four main forms of ip assets the legal remedies that are available to enforce the property rights inherent in each type of ip asset the basic damages theory relating to each form of ip and how damages may be calculated when each type of asset is presumed to be infringed the increased recognition of the value of ip has led to stronger enforcement of ip protection an increase in ip litigation and growing policy actions that are focused on how that protection should be manifested an empirical analysis of how the ip litigation activity in the usa has changed over time is also presented

patenting in the shadow of competitors this article empirically examines the patenting behavior of new biotechnology firms that have different litigation costs i show that firms with high litigation costs are less likely to patent in subclasses with many other awards particularly those of firms with low litigation costs this pattern is consistent with the literature on costly litigation which suggests that firms that have high litigation costs will take greater precautions to avoid litigation these results are robust to a variety of control variables and modifications that seek to test alternative explanations

patent damages and spatial competition this paper analyzes price competition between a spatially difierentiated product patentee and an imitator anticipating the possibility of future patent damages we compare the performance of three damage regimes the reasonable royalty regime the only one that yields symmetric equilibrium pricing maximizes static welfare and yields the highest incentives to innovate when patent enforcement is nearly certain the lost proflts regime the only one that may deter infringement yields the highest incentives to innovate when patent enforcement is less than certain and product value is su ciently high the unjust enrichment regime is weakest our results ofier an e ciency argument for abandoning it we also describe new insights into the hypothetical negotiation that the courts use to construct

the role of patent rights in mergers consolidation in plant biotechnology few micro level empirical papers have addressed the impact of the patent system on industry structure using firm level patent data for public and private firms in plant biotechnology we develop a measure of patent enforceability duration models show that patent statistics are a useful predictor of the timing of merger activity we find that patent enforceability is an important factor influencing the likelihood of mergers mergers in plant biotechnology may be partially motivated by the enforcement of patent rights when firms have overlapping technologies some of the merger activity may be explained by attempts to avoid mutually blocking technology as exemplified in the case of roundup ready corn

patent policy imitation incentives and the rate of cumulative innovation abstract we study an infinite horizon cumulative innovation model in which patents are characterized by their length and the likelihood of being ruled valid in a patent infringement litigation strengthening patent protection via a greater validity or length has two opposing effects on innovation 1 a negative litigation effect due to increasing the litigation threat for future innovators and 2 a positive competition effect due to reducing profit eroding imitation by competitive firms without innovation capacity the optimal innovation maximizing patent policy balances these two opposing effects for moderate patent validity longer remaining lifetime increases innovation due to the competition effect the opposite is true for higher validity for which the litigation effect dominates moderate validity and infinite patent length maximizes innovation when future profits are subject to greater discounting and r d costs are low while strong validity and finite length stimulates more innovation under lower discounting and higher r d costs

tilting the table the use of preliminary injunctions abstract this paper examines the economic role of preliminary injunctions in legal disputes we present a model in which differences in financing costs drive the use of preliminary injunction and explore the implications of this legal remedy for ex post efficiency and ex ante incentives controlling for the nature of the dispute we examine the relationships between the financial status of litigating parties and whether a preliminary injunction is requested the empirical analysis uses detailed data compiled for a sample of 252 patent suits and reveals patterns generally consistent with those suggested by the model

transport costs and urban property values in the 1970s in this paper we use data on property values published annually for the 56 local government areas in the melbourne metropolitan area to investigate the response of the property market to the oil price rises of the seventies we show that property values appeared to have responded rapidly to the australian petrol price increase of 1978 more accessible properties gaining in value relative to less accessible the 1973 increase was not passed on to australian consumers but the depression in manufacturing industry which started after it also had an impact on the property market as values in areas where manufacturing workers lived fell in value relative to others

contributory infringement rule and patents abstract the contributory infringement rule assesses liability to a third party that contributes to the infringement of a patent not only are firms that directly infringe liable but those that indirectly contribute are also liable we investigate how this rule affects the creation of a network of members e g an e commerce network we find that the enforcement of indirect liability does not induce more trials in equilibrium firms settle out of court but because of the threat of trial the network size decreases and the social welfare is reduced surprisingly we find that if the compensation paid by the indirect infringers is high the rule does not benefit the patentholder and may not even give enough r d incentives ex ante it is possible to find a direct compensation for the patentholder that is socially preferable

taking a financial position in your opponent in litigation before filing suit a plaintiff can take a financial position in a defendant firm a short position benefits the plaintiff by transforming a negative expected value claim into a positive expected value one and by enhancing the claim s settlement value if the capital market is less than strong form efficient the plaintiff also benefits directly from the decline in the defendant s stock price when the defendant is privately informed about the case s merits bargaining failures can arise while aggressive short selling benefits the plaintiff at the expense of the defendant moderate levels of short selling can benefit the defendant and raise the settlement rate

firm reputation and incentives to milk pending patents abstract in this paper we develop a theory of patenting in which a firm preserves its reputation by only applying for a patent whenever a truly patentable idea has been generated firms have a short run incentive to deviate and receive additional rents from unworthy pending patents as well as potential rents from pto mistakes in granting patents we provide conditions for reputation to be preserved in equilibrium and analyze which market environments are favorable for such an equilibrium to exist in particular we analyze the merits of different patent systems

protecting intellectual property rights are small firms handicapped this paper studies the determinants of patent suits and settlements during 1978 99 by linking information from the u s patent office the federal courts and industry sources we find that litigation risk is much higher for patents that are owned by individuals and firms with small patent portfolios patentees with a large portfolio of patents to trade or other characteristics that facilitate cooperative resolution of disputes are much less likely to prosecute infringement suits however postsuit outcomes do not depend on these characteristics these findings show that small patentees are at a significant disadvantage in protecting their patent rights because their greater litigation risk is not offset by more rapid resolution of their suits our empirical estimates of the heterogeneity in litigation risk can help in developing private patent litigation insurance to mitigate the adverse affects of high enforcement costs

empirical evidence on recycling and trade of paper and lead in developed and developing countries empirical evidence on recycling at a global scale is scant often data on recycling are provided on national levels only the few obtainable cross country studies on recycling are mostly focussed on one particular material or region therefore it is difficult to draw general conclusions on recycling in developed and developing countries an aggregated overview of trade and recycling in both regions was presented in chapter 1 it was recognised that trade in secondary materials from developed to developing countries has increased significantly in the last three decades this typical trade pattern is a strong indication for specialisation in the recycling sector of both regions

exhaustible resources and secondary materials a macroeconomic analysis abstract in this paper we have developed an endogenous growth model to deal with exhaustible resources and secondary materials together under the assumptions that these two inputs are or are not technologically perfect substitutes of each other in order to compare the results obtained under both hypotheses we highlight the implication of these two assumptions on the rate of growth of total output and upon the flow of exhaustible resources extracted there are also some other interesting findings related to the spill over on welfare of the waste recycling process and the dynamics of shadow prices of both inputs considered finally some implications on hotelling s rule also emerge in our analytical framework

the effect of environmental regulation on optimal plant size and factor shares the method for measuring the effects of environmental regulation on the size distribution of industrial plants and the distribution of factor shares described in this paper focuses on the 20 industries with highest per unit pollution abatement costs and the 20 with the lowest costs the study finds that compliance with environmental laws has not only reduced the number of plants in the affected industries but has placed a greater burden on small rather than on large plants besides redistributing within industry market shares environmental regulation has increased the use of capital relative to labor although the disproportionate burden placed on small plants in the high abatement cost industries may have been unintended it is likely that large firms will be less vocal opponents of environmental regulation than are small firms 22 references 12 tables

patent office in innovation policy nobody s perfect abstract the number of patent applications and bad patents issued has been rising rapidly in recent years based on this trend we study the overload problem within the patent office and its consequences on the firms r d incentives we assume that the examination process of patent applications is imperfect and that its quality is poorer under congestion depending on policy instruments such as submission fees and the toughness of the non obviousness requirement the system may result in a high r d equilibrium in which firms self select in their patent applications or in an equilibrium with low r d opportunistic patent applications and the issuance of bad patents multiple equilibria often co exist which deeply undermines the effectiveness of policy instruments we investigate the robustness of our conclusions as to how the value of patent protection is formalized taking into consideration the introduction of a penalty system for rejected patent applications as well as the role of commitment to a given patent protection policy

litigation and settlement an empirical approach litigants in civil lawsuits involving monetary damages often find an out of court settlement preferable to a trial most theoretical models of settlement choice employ an expected utility maximizing framework that emphasizes the importance of risk preferences litigation costs and the distribution of trial awards an empirical model of settlement choice is used to examine whether the variables prominent in the theoretical literature are statistically useful in explaining the occurrence and monetary value of settlements estimates from a sample of civil filings provide new empirical evidence of how the legal system affects the behavior of litigants during the settlement process copyright 1989 by mit press

the settlement of patent litigation in this article i develop a model to analyze patent licensing that is induced as part of a settlement agreement to avoid litigation of the issue of patent validity the patentee possesses private information about patent validity and makes a take it or leave it settlement offer to a single potential rival an essentially unique sequential equilibrium exists if out of equilibrium beliefs are restricted appropriately the model analyzes the effect of the probability of settlement and litigation

characteristics of patent litigation a window on competition we examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to r d yet the propensity of semiconductor firms to patent has risen dramatically since the mid 1980s we explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 u s semiconductor firms during 1979 1995 the results suggest that the 1980s strengthening of u s patent rights spawned patent portfolio races among capital intensive firms but it also facilitated entry by specialized design firms copyright 2001 by the rand corporation

the costs of inefficient bargaining and financial distress abstract this study provides the first large sample analysis of the stock market reactions to interfirm litigation when a suit is filed the common stock of the typical defendant declines by about 1 while the plaintiff experiences no significant gains for the average pair of firms the combined drop in value upon filing is 21 million much of the loss is regained if the suit is settled the findings suggest that bargaining among firm claimants sometimes leads to very inefficient outcomes part of the leakage is explained by the costs of increased financial distress imposed on the defendant

what makes companies pursue an open science strategy whereas recent scholarly research has provided many insights about universities engaging in commercial activities there is still little empirical evidence regarding the opposite phenomenon of companies disseminating scientific knowledge our paper aims to fill this gap and explores the motivations of firms that disclose research outcomes in a scientific format besides considering a dimension internal to the firm we focus particularly on knowledge sourcing from academic institutions and the appropriability regime we conduct an econometric analysis with firm level data from the fourth edition of the french innovation survey cis and matched scientific publications for a sample of 2512 rd performing firms from all manufacturing sectors this analysis provides evidence that firms are more likely to adopt academic principles if they need to access scientific knowledge that is considered important for their innovation development whereas the mere existence of collaborative links with academic institutions is not a strong determinant furthermore the results suggest that the inclination of firms to publish is sensitive to the level of knowledge spillovers in a sector and the effectiveness of legal appropriation instruments c 2013 elsevier b v all rights reserved

the response of mining investment to a decline in economic growth the case of copper in the 1970s abstract this paper analyses how an industry like mining where investments take long to complete adjusts to a permanent decline in demand growth optimal control theory is the method used it is shown that an extended period of excess capacity and low prices will follow after a slowdown in growth this is because profit maximizing firms will continue to complete projects to which large investment funds have already been committed even when they anticipate the price fall numerical solutions of the control problem obtained by using parameters relevant to the copper industry are compared with actual performance of this industry in the late 1970s

patents and cumulative innovation causal evidence from the courts cumulative innovation is central to economic growth do patent rights facilitate or impede such follow on innovation this paper studies the effect of removing patent protection through court invalidation on the subsequent research related to the focal patent as measured by later citations we exploit random allocation of judges at the u s court of appeal for the federal circuit to control for the endogeneity of patent invalidation we find that patent invalidation leads to a 50 percent increase in subsequent citations to the focal patent on average but the impact is highly heterogeneous patent rights appear to block follow on innovation only in the technology fields of computers electronics and medical instruments moreover the effect is entirely driven by invalidation of patents owned by large patentees that triggers entry of small innovators suggesting that patents may impede the democratization of innovation

licensing weak patents in this paper we revisit the issue of licensing weak patents under the shadow of litigation departing from the seminal paper by farrell and shapiro 2008 we consider innovations of any size and not only small innovations and we allow the number of licensees to be less than the number of firms in the downstream industry it is shown that the optimal two part tariff license from the patent holder s perspective may either deter or trigger litigation and conditions under which each case arises are provided we also reexamine the claim that the licensing revenues from weak patents overcompensate the patent holder relative to what a natural benchmark would command finally we suggest two policy levers that may alleviate the harm raised by the licensing of weak patents

patent pools and cross licensing in the shadow of patent litigation this paper develops a framework to analyze the incentives to form a patent pool or engage in cross licensing arrangements in the presence of uncertainty about the validity and coverage of patents that makes disputes inevitable it analyzes the private incentives to litigate and compares them with the social incentives it shows that pooling arrangements can have the effect of sheltering invalid patents from challenges this result has an antitrust implication that patent pools should not be permitted until after patentees have challenged the validity of each other s patents if litigation costs are not too large

regulation and firm size fda impacts on innovation this article estimates the highly differential impacts of fda regulations on pharmaceutical firms of various sizes where size is measured as scale of r d expenditures estimation is performed using the method of maximum quasi likelihoods using productivity trends of the united kingdom as a control to isolate fda regulatory effects in the united states it is shown that smaller u s pharmaceutical firms suffered devastating reductions in research productivity because of fda regulations in contrast the largest u s pharmaceutical firms apparently benefited from regulation as sales gains due to reduced competition more than offset their quite moderate declines in research productivity

litigation liability and incentives for care abstract in this paper potential injurers are subject to a negligence standard and differ in cost of taking care in the event of accident the injurer s degree of care is private information in litigation that follows award of damages for pain and suffering will lead to a general increase in care and hence reduce the likehood of accident a tighter negligence standard will lead some potential injurers to take more care and others to take less adoption of a rule under which the loser at trial must pay the litigation costs of the winner will reduce the pressure for punitive damages

what is behind the recent surge in patenting abstract we investigate the cause of an unprecedented surge of us patenting over the past decade conventional wisdom points to the establishment of the court of appeals of the federal circuit by congress in 1982 we examine whether this institutional change which has benefited patent holders explains the burst in us patenting using both international and domestic data on patent applications and awards we conclude that the evidence is not favorable to the conventional view instead it appears that the jump in patenting reflects an increase in us innovation spurred by changes in the management of research

the demand for scrap and primary metal ores after a decline in secular growth old scrap and primary metal ores are substitute raw materials in metal production the paper explores the changing composition in their use following a permanent deceleration in economic growth the cases of copper and iron steel are employed to track the usage of scrap after a secular slow down in the rate of growth of finished metal demand such as occurred in the mid 1970s the conclusions suggest that the expanding role of scrap will result in stagnant demand for primary metal ores in the 1980s and 1990s la demande deferraille et de minerai de metaux primnaires apres une chute dans la croissance economique seculaire la ferraille et le minerai de m6taux primaires sont des matieres premieres qui sont des substituts dans la production du m6tal ce m6moire examine le changement dans la composition de l usage de l un et de l autre apres une decel6ration permanente dans la croissance 6conomique on examine en d6tail les cas du cuivre et du fer acier pour calibrer l usage de la ferraille apres la sorte de d6clin dans la croissance de la demande de m6tal fini qu on a v6cu dans le milieu des annees 1970 l auteur conclut que le role plus grand de la ferraille va vouloir dire une stagnation de la demande de minerais de metaux primaires dans les annees 1980 et 1990 carl van duyne 1946 1983 my professional colleague and personal friend carl van duyne died at the end of february 1983 as work on the present paper was drawing to a close though physically he is not longer with us his spiritual presence will remain through his valuable contributions in various fields to the academic work of the institute

unintentional unavoidable and beneficial knowledge leakage from the multinational enterprise knowledge leakage as an undesirable outcome for mnes is an accepted view in ib literature we challenge this view and argue that knowledge leakage is often unintentional unavoidable and beneficial for the mne in a highly networked and information rich society knowledge leakage from mnes 1 happens naturally due to interfirm relationships interactions and socialization 2 is unavoidable due to employee mobility and 3 facilitates knowledge inflows due to the reciprocity nature of knowledge exchange and hence is beneficial for mnes in addition the costs of protecting knowledge incurred by an mne will often outweigh the benefits

how strong are weak patents economists usually conceive of patents as property rights that prevent others from practicing the patenting technology unless they first obtain a license from the patent holder even for ironclad patents i e for patents that are certain to be valid the existing literature has shown that the analysis of equilibrium licensing contracts is surprising subtle and complex 1 for example the analysis is quite different depending upon whether one firm s licensing contract is observable to the other firms likewise equilibrium outcomes are quite different if royalties must be linear than in the case where two part tariffs and other non linear royalties are permitted in that literature a downstream firm that refuses to sign a contract with the upstream supplier either exits the industry in the case that the upstream supplier controls an essential input or must rely on more costly inputs in the case of a non essential input in other words the downstream firm s threat point is to use some backstop technology in practice however patents are issued after a brief examination by the patent office to see if they meet the statutory requirements for novelty and non obviousness mounting evidence indicates that many weak patents i e patents unlikely to be found valid if challenged in court are issued by the u s patent and trademark office uspto 2 some observers view this with great alarm arguing that uspto is handing out undeserved monopolies others by contrast have suggested that these weak patents are of little concern because they will have little commercial impact because they will be licensed at commensurately low royalty rates or not enforced at all we study the commercial impact of weak patents more precisely we define a patent s strength as the probability that it will be found valid if challenged in court and we examine the relationship between a patent s strength and the royalties that it can command the distinctive

the patent paradox revisited an empirical study of patenting in the u s semiconductor industry 1979 1995 we examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to r d yet the propensity of semiconductor firms to patent has risen dramatically since the mid1980s we explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 u s semiconductor firms during 1979 1995 the results suggest that the 1980s strengthening of u s patent rights spawned patent portfolio races among capital intensive firms but it also facilitated entry by specialized design firms

patent litigation with endogenous disputes the recent explosion of patenting and patent disputes has sparked a growing literature on the economics of patent litigation generally models in this literature take the existence of a dispute as given this assumption is troubling because it hampers the interpretation of empirical studies of patent litigation and the assessment of many patent policy reforms disputes would not arise if all technology adopters obtained ex ante licenses from patent owners this suggests that two stories could explain the origin of patent disputes in one the technology adopter observes a patented technology but chooses to imitate inventing around and or hiding the infringement in the other the adopter develops his own technology and is unaware of another firm s putative patent rights this kind of innocent infringement occurs because patent rights often have uncertain boundaries or questionable validity in addition the sheer number of patents facing a typical innovator makes careful assessment quite burdensome furthermore patent claims are often hidden sometimes strategically until after firms have made technology investments these two accounts suggest that a model of disputes should consider the decisions of patent owners to invent to patent and to monitor use of the patented technology by others and the decisions of potential infringers to monitor extant patents and develop and adopt new technology claude crampes and corinne langinier 2002 endogenize disputes by focusing on a patent owner s monitoring activity and imitative behavior by potential infringers our model includes this behavior but it also includes defendants who invent around a patent and defendants who are unaware of the patented technology we find that this richer model generates testable implications that better match empirical evidence on patent litigation

the economics of product patents this paper develops a model of product patents in which the patent changes the nature of market entry behavior rather than preventing entry entirely the model incorporates three levels of action namely the innovator s patenting decision the potential entrant s location decision and possible court action the analysis demonstrates how the characteristics of the patents system and the enforcement framework can influence rivals variety choices and thus the market equilibrium it also considers how the system can in principle be adjusted to improve social welfare copyright 1990 by american economic association

the administrative costs of corporate bankruptcy a note in this paper we present evidence on the direct administrative costs of corporate bankruptcy the investigation is directed toward providing evidence that may be helpful in answering questions about the role of bankruptcy costs as a determinant of corporate capital structures the importance of bankruptcy costs as a determinant of corporate financing policy has been extensively debated in the finance literature the origins of the debate can be traced to modigliani and miller 8 and robichek and myers 9 under the assumption that debt is default free and interest payments are taxdeductible modigliani and miller demonstrated that firms will maximize their market values by maximizing their use of debt financing robichek and myers demonstrated that this conclusion also holds when debt is not default free but bankruptcy is costless to explain observed corporate debt to total value ratios which typically fall in the range of 20 percent to 30 percent robichek and myers 9 and baxter 1 appealed to the existence of bankruptcy costs as a possible counterweight to the tax deductibility of interest payments subsequently kraus and litzenberger 5 scott 10 lee and barker 6 kim 4 and turnbull 13 developed formal models in which firms maximize value by increasing their use of debt financing to the point where the marginal present value of future tax shields equals the marginal present value of future bankruptcy costs the bankruptcy cost literature has identified three types of costs as potentially relevant to the determination of a firm s optimal mix of debt and equity financing 1 the direct administrative expenses paid to various third parties involved in the bankruptcy proceedings 2 the shortfall in realized value when assets are sold in liquidation or the indirect costs of reorganization and 3 the loss of tax credits which the firm would have received had it not gone bankrupt contrarily haugen and senbet 3 and to a lesser extent miller 7 and warner 14 have argued that the only bankruptcy costs relevant to the determination of a firm s optimal capital structure are the direct administrative costs of bankruptcy the crux of their argument is that the shortfall costs of liquidation the indirect costs of reorganization and the loss of tax credits which occurs upon dissolution of the firm are in fact relevant to the liquidation investment decisions of the firm these costs would be borne by the security holders of a failing firm

patent enforcement a review of the literature without the confidence that patent rights can be enforced quickly and efficiently when needed the patent system will not stimulate innovation for this reason governments academics international institutions and the private sector have poured significant resources into gathering and analysing statistics on patent enforcement over the last two decades this paper reviews these studies and finds that while infringement is relatively common much enforcement occurs informally and less than 1 2 of patents incur litigation new strategic uses of the enforcement system especially by nonpracticing entities are the major emerging enforcement issue especially in the united states while the old problem of litigation costs attracts the lion s share of empirical attention it has produced remarkably few solutions to date

the effect of patents on trade abstract in contrast with quotas and tariffs it is theoretically ambiguous whether fewer or weaker rules over intellectual property rights will increase or decrease trade in patentable goods the prevailing view is that anticipation of imitation reduces exporters incentive to export goods to jurisdictions with weak patent regimes this empirical paper uses new measures of how the destination country patent system can affect trade in contrast with existing studies which assume would be exporters can always get a patent in the target foreign market we construct measures of the bias against foreign patent applicants and patents which may block imported goods we find evidence that the presence of destination country blocking patents has the larger negative impact on international trade being refused a patent also has a negative impact on trade but the magnitude is smaller

reason and rationality during energy crises this paper develops a technique for extracting the expectations embedded in the current prices of energy using durable goods and applies it to used car markets during the two energy crises of the 1970s the resulting estimates indicate that consumers took the energy crises seriously and formed expectations about future gasoline prices that appear rational when compared with the historical gasoline price series with the forecasts of specialists and experts or with the actual postsample behavior of gasoline prices the evidence therefore supports the view that consumers are able to make rather complex choices with a great deal of rationality and casts doubt on the wisdom of policies based on assumptions to the contrary

product liability research and development and innovation product liability ideally should promote efficient levels of product safety but misdirected liability efforts may depress beneficial innovations this paper examines these competing effects of liability costs on product r d intensity and new product introductions by manufacturing firms at low to moderate levels of expected liability costs there is a positive effect of liability costs on product innovation at very high levels of liability costs the effect is negative at the sample mean liability costs increase r d intensity by 15 percent the greater linkage of these effects to product r d rather than process r d is consistent with the increased prominence of the design defect doctrine

pre grant patent publication and cumulative innovation abstract we examine the implications of pre grant publication pp of patent applications in the context of a cumulative innovation model we show that pp leads to fewer applications and fewer inventions but it may raise the probability that new technologies will reach the product market and thereby enhances consumer surplus and possibly total welfare as well

credible pretrial negotiation pretrial negotiation is a structured environment in which to study bargaining with incomplete information when a plaintiff believes that a defendant owes him damages he may first attempt to reach a private settlement before resorting to a costly court imposed judgment a central issue in their negotiations is whether the plaintiff s threat to litigate is credible it is possible for the plaintiff to undermine the credibility of his litigation threat by making a settlement demand that is insufficient as a result the plaintiff must raise his settlement demand to limit the amount of bad news he can learn if his offer is rejected when this credibility constraint is binding traditional comparative static results are reversed in addition even though the defendant is being sued he wants the plaintiff s threat to be credible

tax incentives and r d activity firm level evidence from taiwan this paper investigates the effect of tax incentives on r d activities in taiwanese manufacturing firms specifically we assess the potential r d enhancing effect on recipients of r d tax credits compared with their non recipient counterparts moreover the potential difference in the r d enhancing effect between high tech and non high tech firms is also examined utilizing a firm level panel dataset during 2001 and 2005 empirical results obtained by propensity score matching show that recipients of r d tax credits appear on average to have 93 53 higher r d expenditures and a 14 47 higher growth rate for r d expenditures than non recipients with similar characteristics the r d enhancing effect of r d tax credits is not found to be particularly relevant to high tech or non high tech firms we further employ a generalized method of moment gmm of the panel fixed model to control for the endogeneity of r d tax credits and firm heterogeneity in determining r d expenditure various estimates based on the entire sample and high tech firms are quite similar and there is a significantly r d enhancing effect of r d tax credits this result suggests that the r d preferential policy has induced more r d expenditure by firms in taiwan while the existence of the r d enhancing effect brought on by tax incentives is intuitive the estimates can provide insightful implications for the r d tax policy

antitrust settlements and trial outcomes risk aversion plays an important role in explaining why antitrust cases settle instead of going to trial using a jointly estimated model of settlement and trial outcome the authors find that a one percent increase in the probability that the plaintiff wins at trial raises the probability of a settlement by 0 13 percent they also find that reputation effects are not a significant factor for defendants so the risk aversion of the defendants does not play a dominant role in determining whether the parties settle plaintiffs are more likely to win in certain jurisdictions which encourages venue shopping by plaintiffs copyright 1996 by mit press

patent thickets courts and the market for innovation we study how fragmentation of patent rights and the formation of the court of appeals for the federal circuit cafc affected the duration of patent disputes and thus the speed of technology diffusion through licensing we develop a model of patent litigation which predicts faster settlement when patent rights are fragmented and when there is less uncertainty about court outcomes as was associated with the pro patent shift of the cafc we confirm these predictions empirically using a data set that covers patent suits in u s district courts during the period 1975 2000 finally we analyze how fragmentation affects total settlement delay considering both the reduction in dispute duration and the increase in the number of patent negotiations