The effect of patent litigation and patent assertion entities on entrepreneurial activity
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Tucker_The effect.pdf
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Author(s)
Kiebzak, Stephen
Rafert, Greg
Tucker, Catherine Elizabeth
Date Issued
October 2015
Journal
Research Policy
Publisher
Elsevier BV
Citation
Kiebzak, Stephen et al. “The Effect of Patent Litigation and Patent Assertion Entities on Entrepreneurial Activity.” Research Policy 45, 1 (February 2016): 218–231 © 2015 Elsevier B.V.
Version
Original manuscript
Abstract
This paper empirically investigates the statistical relationship between levels of patent litigation and venture capital investment in the U.S. We find that VC investment, a major funding source for entrepreneurial activity, initially increases with the number of litigated patents. However, there is a “tipping point” where further increases in the number of patents litigated are associated with decreased VC investment, which suggests an inverted U-shaped relation between patent litigation and VC investment. This appears strongest for technology patents, and negligible for products such as pharmaceuticals. Strikingly, we find evidence that litigation by frequent patent litigators, a proxy for litigation by patent assertion entities, is directly associated with decreased VC investment, with no positive effects initially.
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-NonCommercial-NoDerivs License
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DOI of Published Version
https://doi.org/10.1016/J.RESPOL.2015.07.002
