The Patent Litigation Explosion

This paper provides the first look at patent litigation hazards for public firms during the 80s and 90s. Consistent with our model, litigation is more likely when prospective defendants spend more on R&D, when prospective plaintiffs acquire more patents and when firms are larger and technologically close. Public firms face dramatically increased hazards of litigation as plaintiffs and even more rapidly increasing hazards as defendants, especially for small public firms. The increase cannot be explained by patenting rates, R&D, firm value or industry composition. Legal changes are the most likely explanation. *Research on Innovation and Boston University School of Law, and Boston University School of Law, respectively. Thanks to Iain Cockburn, Bronwyn Hall, Jay Kesan, Zorina Khan, Jenny Lanjouw, Josh Lerner, Glynn Lunney Jr., Mark Schankerman, John Turner and participants in seminars at the ALEA, BU, the IIOC, NBER and Napa for helpful comments. Thanks to Annette Fratantaro, Bob Hunt, Megan MacGarvie and Rosemarie Ziedonis for sharing data. Thanks to Debbie Koker for research assistance. Contact: jbessen@bu.edu 1 – Patent Litigation Explosion Bessen & Meurer – 8/05