TY - JOUR

T1 - Effects of patent privateering on settlements and R&D under sequential market entry

AU - Klapper, Felix B.

AU - Siemering, Christian

N1 - Funding Information: This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

PY - 2024/3

Y1 - 2024/3

N2 - We investigate patent litigation, settlements and R&D incentives on a market where two firms develop technologies in order to obtain patents and produce goods. Firms may sell IP rights to a Patent Assertion Entity (PAE) that acts as intermediary for patent monetization. We find that compared to simultaneous market entry, the effect of this so-called patent privateering is mitigated if firms enter sequentially. Furthermore, we show that privateering may decrease industry profits by distortion of R&D incentives even when there is no rent extraction by the PAE.

AB - We investigate patent litigation, settlements and R&D incentives on a market where two firms develop technologies in order to obtain patents and produce goods. Firms may sell IP rights to a Patent Assertion Entity (PAE) that acts as intermediary for patent monetization. We find that compared to simultaneous market entry, the effect of this so-called patent privateering is mitigated if firms enter sequentially. Furthermore, we show that privateering may decrease industry profits by distortion of R&D incentives even when there is no rent extraction by the PAE.

KW - Innovation

KW - Intellectual property rights

KW - Patent assertion entities

KW - Patent licensing

KW - R&D

KW - Sequential entry

UR - http://www.scopus.com/inward/record.url?scp=85183640737&partnerID=8YFLogxK

U2 - 10.1016/j.infoecopol.2024.101080

DO - 10.1016/j.infoecopol.2024.101080

M3 - Article

AN - SCOPUS:85183640737

VL - 66

JO - Information economics and policy

JF - Information economics and policy

SN - 0167-6245

M1 - 101080

ER -