Characteristics of patent litigation: A window on competition

The cost of engaging in litigation over intellectual property assets diminishes their value as an incentive to invest in research. The frequency of court cases reflects firms' strategies for appropriating innovation rents. We examine the characteristics of litigated patents and their owners by combining, for the first time, information about patent case filings from the U.S. district courts with detailed data from the U.S. Patent and Trademark Office. By comparing filed cases to a control group, we show that there is substantial variation across patents in their exposure to litigation risk. We use this empirical evidence to examine hypotheses about the determinants of patent suits.