Determinants of Patent Litigation in Germany

This paper presents an empirical analysis of the determinants of patent litigation in Germany, based on information from suits filed during the period from 1993 to 1995 at two of the three most important district courts. A control group was formed by selecting a random sample from the population data taken at this period of time. The results of a probit analysis show that relatively valuable patents are more likely to be involved in litigation cases than the average patent. Patents which have survived opposition are more likely to encounter subsequent litigation actions after the granting procedure than patents which have not been opposed. Patent owner?s ability to trade patents with potential infringers and to interact with them repeatedly appears to promote pretrial settlement and to prevent patentees from filing suits. In contrast to results for the U.S., individual patent owners in Germany were found to be no more likely to face litigation than companies. --Patent,Infringement,Litigation,Innovation

Determinants of Patent Litigation in Germany

This paper presents an empirical analysis of the determinants of patent litigation in Germany, based on information from suits filed during the period from 1993 to 1995 at two of the three most important district courts. A control group was formed by selecting a random sample from the population data taken at this period of time. The results of a probit analysis show that relatively valuable patents are more likely to be involved in litigation cases than the average patent. Patents which have survived opposition are more likely to encounter subsequent litigation actions after the granting procedure than patents which have not been opposed. Patent owner's ability to trade patents with potential infringers and to interact with them repeatedly appears to promote pretrial settlement and to prevent patentees from filing suits. In contrast to results for the U.S., individual patent owners in Germany were found to be no more likely to face litigation than companies

The Influence of Strategic Patenting on Companies' Patent Portfolios

This paper analyses whether strategic motives for patenting influence the characteristics of companies' patent portfolios. We use the number of citations and oppositions to represent these characteristics. The investigation is based on survey and patent data from German companies. We find clear evidence that the companies' patenting strategies explain the characteristics of their patent portfolios. First, companies using patents to protect their technological knowledge base receive a higher number of citations for their patents. Second, the motive of offensive – but not of defensive – blocking is related to a higher incidence of oppositions, whereas companies using patents as bartering chips in collaborations receive fewer oppositions to their patents. --strategic patenting,patent portfolio characteristics

The influence of strategic patenting on companies' patent portfolios

This paper analyses whether strategic motives for patenting influence the characteristics of companies' patent portfolios. We use the number of citations and oppositions to represent these characteristics. The investigation is based on survey and patent data from German companies. We find clear evidence that the companies' patenting strategies explain the characteristics of their patent portfolios. First, companies using patents to protect their technological knowledge base receive a higher number of citations for their patents. Second, the motive of offensive - but not of defensive - blocking is related to a higher incidence of oppositions, whereas companies using patents as bartering chips in collaborations receive fewer oppositions to their patents. --strategic patenting,patent portfolio characteristics

Patent litigation settlement in Germany - why parties settle during trial

This paper looks at the decision to settle patent litigation in Germany from a new angle by focusing on detailed data on within-trial actions and motivations by plain- tiff, defendant and the courts. Using a new dataset covering about 80% of all patent litigation cases in Germany between 2000 and 2008 we estimate the likelihood of within-trial settlement. We find that the within-trial settlement decision is to some degree driven by the proceedings that change the pre-trial setting of the negotia-This paper looks at the decision to settle patent litigation in Germany from a new angle by focusing on detailed data on within-trial actions and motivations by plain- tiff, defendant and the courts. Using a new dataset covering about 80% of all patent litigation cases in Germany between 2000 and 2008 we estimate the likelihood of within-trial settlement. We find that the within-trial settlement decision is to some degree driven by the proceedings that change the pre-trial setting of the negotia- tions in terms of information and stakes and make previously refused settlement a new option. Additionally, firm-specific stakes as measured by the relation of the involved parties to the disputed patent as well as firm-specific strategies are found to affect the general willingness to settle after the filing of a court case. The results suggest that pre-trial failure of settlement negotiations can to some extent be offset by within-trial settlement through efforts made by court and involved parties, but that the disposition to settle is to a larger degree determined by firm-specific stakes and strategies in the case

Incidence, settlement and resolution of patent litigation suits in Germany

Patents are government grants of an entitlement to enforce a legal right. This means that, although the safeguarding and enforcement of property rights are essential for investment, trade and eventually for economic growth, patents are far from ironclad property rights. Their limits of validity have to be enforced when facing potential infringing actions. Within the European Union there is a vital discussion going on about the design of the European Patent System and consequently about the enforcement system. There are detailed planes about creating a European Community patent. The establishment of a unique enforcement system in the sense of one central patent court in Europe creates a number of technical and jurisdictional problems which seems hardly to be solved. The experiences of the various European enforcement systems should be evaluated and taken into account when shaping a European Patent system. This thesis offers a unique empirical investigation of the enforcement of German patent rights. It contains three essays on various aspects of patent litigation in Germany and adds empirical evidence to the existing literature, most of which is built on large data sets for the United States. To date, however, relatively little research has focused on Germany. The investigation of patent litigation in the German patent system is interesting owing to certain important features which distinguish it from the U.S. system. First, for Germany there is an estimated litigation rate of about 1 percent of all patents in force at any given time. Lanjouw and Schankerman estimate a probability of a patent suit being filed of about 2.1 per cent for the United States. Twice as many patent lawsuits per patent are therefore pursued in the US than in Germany. Second, in contrast to the patents analyzed for the U.S., the type of German patents analyzed in this thesis is subject to the European and German system of applying for and granting patents. Third, the enforcement of patents is strictly separated into infringement disputes where the validity of the patent is not questioned and invalidity suits which are filed at a different court. As legal enforcement of patent rights depends crucially on the judicial system I introduce the German patent system and its enforcement mechanism in Chapter 2. As already noted, German patents, when they are applied for at the European Patent Office (EPO), are subject to the European patent system. Opposition procedures are regarded as the first legal test of patent validity and can be filed by any third party. All three essays consider the impact on the enforcement system of this distinctive feature of the German patent system. All essays draw on the same unique data set which was collected by the author using information retrieved from written court files as part of an ongoing procedure. The data set contains all patent litigation suits filed from 1993 to 1995 at two of the three main District Courts in Germany which have jurisdictional responsibility for disputes relating to intellectual property rights. 715 litigation cases involving more than 900 patents were identified for this time period. Detailed information about the course of the case as well as patent characteristics from various different data bases have been merged to the patentee data. Chapter 3 includes a detailed description of the database. In Chapter 4, I estimate the determinants of patent litigation at the two District Courts in Mannheim and Düsseldorf. I analyze the probability of litigation as a function of a set of exogenous variables which reflect characteristics of the patent, market conditions, and characteristics of the patent owner. As one of the main results, I find a significant higher probability of litigation for patents which are more valuable than the average. Small firms are more often involved in patent litigation suits than larger ones which points to the high relative value the litigated patent has for small companies compared to larger ones. Contrary to results for the U.S., I did not find that individual patentees are more likely to be involved in patent suits. These results have direct implications for the calculation of risk based litigation insurance fees, of the type planned in the EU. In addition, Chapter 4 contributes to the existing literature by providing evidence of a positive relationship between the incidence of opposition procedures and the probability of litigation. This result contributes to the discussion in the U.S. about whether installing an opposition system there would lead to qualitatively more valuable patents and, hence, to a lower probability of involvement in litigation and challenge suits. Chapter 5 extends the analysis of Chapter 4 to consider the reasons why trials, which are themselves generally the outcome of a failure to reach settlement during pre-trial negotiations, nonetheless often result in settlements. I look at the settlement decision at various stages of the trial: before the hearing, after the hearing, at first appeal (after court decision at the District Court). The results suggest that, at the time of litigation, almost all available information is used to decide whether to file a suit or not. Additional information evolving in the course of time, for example because of annulment suits, influence the pattern of settlement at later stages of the trial. The results suggest that the legal environment exerts a powerful influence on the settlement decision at each stage of the trial. The general settlement rate not only differs considerably between the District Courts, but also at each stage of the trial. The overall conclusion of the analysis in this Chapter is that, at each stage, the decision to settle is made independently of the preceding decision. The results from Chapter 5 lead directly to the key issue dealt with in Chapter 6. This Chapter sheds light on how the duration of trials is determined: the speciality of the infringing action may result in efforts being made to terminate the suit, or its duration may be affected by the general characteristics of the patent or of the patentee. In particular, I tackle the question of whether the outcome of a patent litigation suit is influenced directly by the efforts the litigant undertake in order to terminate a legal patent dispute. This analysis goes one important step further than the existing literature by using detailed information about the course of the case. I particularly take the means of defense into consideration: filing an annulment suit, the procedural details of a hearing and requests of suspension. The results of this Chapter reveal that annulment suits as a means of defense of the potential infringer delays court adjudication but not settlement in German patent litigation suits. Only if suspension is requested is the hazard of termination of both types of patent suit termination decreased. The results suggest that courts are experienced in handling complex litigation claims and expert reports

Invalid but infringed? An analysis of the bifurcated patent litigation system

In bifurcated patent litigation systems, claims of infringement and validity of a patent are decided independently of each other in separate court proceedings at different courts. In non-bifurcated systems, infringement and validity are decided jointly in the same proceedings at a single court. We build a model that shows the key trade-off between bifurcated and non-bifurcated systems and how it affects the incentives of plaintiffs and defendants in patent infringement cases. Using detailed data on patent litigation cases in Germany (bifurcated) and the U.K. (non-bifurcated), we show that bifurcation creates situations in which a patent is held infringed that is subsequently invalidated. We also show that having to challenge a patent’s validity in separate court proceedings under bifurcation implies that alleged infringers are less likely to do so. We find this to apply in particular to more resource-constrained alleged infringers. Finally, we find parties to be more likely to settle in a bifurcated system

Invalid but infringed? : an analysis of Germanys bifurcated patent litigation system

We analyze the impact of the probabilistic nature of patents on the functioning of Germany’s bifurcated patent litigation system where infringement and validity of a patent are decided independently by different courts. We show that bifurcation creates situations in which a patent is held infringed that is subsequently invalidated. Our conservative estimates indicate that 12% of infringement cases in which the patent’s validity is challenged produce such ‘invalid but infringed’ decisions. We also show that having to challenge a patent’s validity in separate court proceedings means that more resource-constrained alleged infringers are less likely to do so. We find evidence that ‘invalid but infringed’ decisions create uncertainty which firms that were found to infringe an invalid patent attempt to reduce by filing more oppositions against newly granted patents immediately afterwards

Patent litigation in Europe

We compare patent litigation cases across four European jurisdictions – Germany, France, the Netherlands, and the UK – covering cases filed during the period 2000-2008. For our analysis, we assemble a new dataset that contains detailed information at the case, litigant, and patent level for patent cases filed at the major courts in the four jurisdictions. We find substantial differences across jurisdictions in terms of case loads. Courts in Germany hear by far the largest number of cases in absolute terms, but also when taking country size into account. We also find important between-country differences in terms of outcomes, the share of cases that is appealed, as well as the characteristics of litigants and litigated patents. A considerable number of patents are litigated in multiple jurisdictions, but the majority of patents are subject to litigation only in one of the four jurisdictions

Das deutsche Forschungs- und Innovationssystem: Ein internationaler Sytemvergleich zur Rolle von Wissenschaft, Interaktionen und Governance für die technologische Leistungsfähigkeit

Der vorliegende Bericht zum Projekt "Das deutsche Forschungs- und Innovationssystem - ein internationaler Systemvergleich zur Rolle von Wissenschaft, Interaktionen und Governance für die technologische Leistungsfähigkeit" fasst die erarbeiteten Befunde des Projektes zusammen und präsentiert Schlussfolgerungen und Empfehlungen, die wir aus diesen Befunden für die deutsche Forschungs- und Technologiepolitik ableiten. Er gliedert sich in Kapitel, die - das deutsche Wissenschaftssystem in seinen Grundstrukturen beschreiben, mit einem Schwergewicht auf die außeruniversitäre Forschung (AUF), deren Leistungsfähigkeit und Stellenwert für das deutsche Wissenschaftssystem, - die verschiedenen Kanäle des Wissenschafts- und Technologietransfers (WTT) zwischen Wissenschaft und Wirtschaft darstellen und hinsichtlich ihrer Leistungsfähigkeit bewerten - die Governance im System der deutschen Forschungs- und Technologiepolitik bzw. -förderung analysieren, - den Strukturwandel und die wissenschaftliche und technologische Spezialisierung im internationalen Vergleich einschätzt und diskutiert. Daran schließt sich eine Bewertung dieser Befunde mit dem Herausarbeiten von Handlungsnotwendigkeiten sowie Empfehlungen für die deutsche Forschungs- und Innovationspolitik an. Grundlage für diese Befunde waren zum einen quantitative sekundärstatistische und ökonometrische Analysen, umfassende Dokumentenanalyse sowie qualitative Interviews mit den Akteuren des deutschen Innovationssystems, zum anderen aber auch eine sehr umfassende primärstatistische Erhebung unter den Einrichtungen der deutschen außeruniversitären Forschungslandschaft