disadvantage in protecting their patent rights since their greater litigation risk is not
offset by more rapid resolution of their suit.
== Objectives of the paper==
# Identify the main empirical factors that determine which patents are litigated.
# To understand whether small firms with a small patent portfolio are handicapped in the process of protecting their intellectual property rights.
==Data==
===Small vs. large firm===
Listed firms are classified under:
* Large firms: employment above the median of 5,425.
* Small firms: employment below the median.
===Litigated patents===
Identified from the LitAlert database produced by Derwent(private vendor).
* 13,625 patent cases filed during 1978-99, each identifying the the main patent in dispute
* 9,345 are involved in the sample of suites
* Derwent data matched to all U.S. patent related cases, code 830. (Federal Judicial Center, Federal Court Cases: Integrated Data Base, 1970-89 (1999))
===Control group and control variables===
*Matched set of patents as control group:
**For each litigated patent, another was chosen at random from the set of all patents with the same application year and primary three-digit USPC assignment(thus controlling for technology and cohort effect).
* For each litigated and matched patent the following characteristics
# Nationality of the patent owner
# Technology field: the first assigned USPC class
# Number of claims: higher claim number associated with greater patent value and thus more disputes.
# Citations
# Ownership: Individual, listed/unlisted company.
# Patent portfolio size: grouped into 1-100, 100-900, >900
# Relative size of potential disputants: measure of the asymmetry in portfolio size between a patentee and a representative disputant he can expect to face on each patent.Let <math>Z_{cf}</math> be the portfolio size for firm $f$ in technology class $c$, and let $Z_c = \sum_f Z_{cf}$ denote all patents in the class. $Z_f = \sum_c Z_{cf}$ is the portfolio size for firm $f$ $Z_c^* Z_c / n_c$ is the average portfolio size of the $n_c$ firms with patents in class $c$.The relative portfolio size of firm $f$ for patent $ i$ is given by:$R_{if} = Z_f /\sum_c w_{ci} Z_c^*$, where $w_ci = F_{ci}/F_i$ is the fraction of forward citations to patent $i$ that falls into technology class $c$.
# Technology concentration
==Model==
* Litigation process is analyzed in four steps:
# The probability that a suit is filed
# Probability of a post-suit settlement, Pr(settlement| suit is filed)
# Timing of any post suit settlement
# Plaintiff (assumed to be the patentee) win rate, Pr(plaintiff wins| adjudication)
* Legal costs are closely related to the stages that a case reaches rather than the actual length.
* Two main models:
# Divergent expectation(DE)
#* each party estimates the quality of her case with error
#* case goes to trial when one party is sufficiently optimistic about her case
# Asymmetric information(AI)
#* Probablity of the plaintiff win is private information
#* An uninformed party makes an offer
#* Trials arise in separating equilibria, thus a win rate for the informed party should tend to 100 percent.
* They show that data strongly favors DE.
* Probability of patent suit (Probit)
** Holders of large portfolios are less likely to file suits involving any given patent in their portfolio.
* Postsuit outcomes
** Not controlled for selection
** Given any selection that occurs, is there any remaining association between patent and patentee characteristics and the outcomes? No.
[[Category: Internal]]
[[Internal Classification: Academic Paper| ]]