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Journal Article

Conflict resolution, public goods and patent thickets

Management Science 62 (3): 704–721
An abridged version of this article was previously published in the AOM Best Paper Proceedings
2015 Darmstadt Innovation Research Best Paper Award
Dietmar Harhoff, Georg von Graevenitz, Stefan Wagner (2016)
Microeconomic behavior, industrial organization, firm objectives, organization and behavior, market structure, firm strategy, market performance, patent system, patent litigation
JEL Code(s)
K11, K41, O34
Postgrant validity challenges at patent offices rely on the private initiative of third parties to correct mistakes made by patent offices. We hypothesize that incentives to bring postgrant validity challenges are reduced when many firms benefit from revocation of a patent and when firms are caught up in patent thickets. Using data on opposition to patents at the European Patent Office we show that opposition decreases in fields in which many others profit from patent revocations. Moreover, in fields with a large number of mutually blocking patents, the incidence of opposition is sharply reduced, particularly among large firms and firms that are caught up directly in patent thickets. These findings indicate that postgrant patent review may not constitute an effective correction device for erroneous patent grants in technologies affected by either patent thickets or highly dispersed patent ownership.
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