Stylised fact of patent litigation: value, scope and ownership

This paper investigates the characteristics of litigated patents by combining for the first time information about patent case filings from the U.S. district courts and detailed data from the U.S. Patent and Trademark Office. We construct a series of indicators for the factors which the theoretical literature suggests contribute to litigation: frequency of disputes, the size and asymmetry of stakes, the structure of information, and costs. Compared to a random sample of U.S. patents from the same cohorts and technology areas, we find that more valuable patents and those with domestic owners are considerably more likely to be involved in litigation. Patents owned by individuals are at least as likely to be the subject of a case as corporate patents and litigation is particularly frequent in new technology areas. We interpret the results with reference to theoretical models of litigation and settlement and discuss what they suggest about the effect of patent litigation on the incentives to invest in R&D