| This dissertation consists of five chapters. Chapter One introduces a broad integrative framework for patent strategy, and translates the implications of that framework for the domain of patent litigation.; In Chapter Two, settlement outcomes in patent litigation are modeled as resulting from two main patent strategies---the use of patents as "isolating mechanisms" to protect valuable non-contractible firm rents, and their "defensive" role in obtaining access to external intellectual property through mutual hold-up. Parameter estimates from a sample selection Probit model provides support for the former, while the evidence for mutual hold-up is inconclusive. The use of a sample of suits from two industries---computers and research medicines---helps inform inter-industry differences in patent strategy, and highlights the role of defensive patent strategies in systems industries like computers.; Chapter Three studies the timing of patent suit resolution, and provides further insight into the patent strategies being pursued by firms through litigation. Suit duration is modeled in a proportional hazards competing risks framework, which provides a powerful corroborative test for the use of patents as isolating mechanisms. The results also robustly support the defensive use of computer patents, but suggest a more nuanced interpretation---the cost of mutual hold-up encourages quicker resolution of suits, but this happens through both quicker settlement as well as quicker adjudication. Evidence is also found for predatory litigation by larger firms, and spillovers from the suit for the royalty harvesting strategies of firms.; Chapter three examines broad patterns in patent litigation in the United States over the years 1970--2000. The number of patent suits filed has risen sharply since the mid-1980s, and it appears that even the propensity to litigate patents has increased. Increases in patent litigation have been most dramatic in medical and electronics technologies, and in Western states, the latter reflecting both overall innovation growth and the increasing concentration of electronics technologies there. However, increasing patent litigation has also been accompanied by remarkable reductions in the duration of patent suits and by a proclivity toward early settlement.; Chapter Five concludes the dissertation with a discussion of its contributions, and directions for future research. |
