Patent Litigation in Europe

We compare patent litigation cases across four European jurisdictions—Germany, the UK (England and Wales), France, The Netherlands—using case-level data gathered from cases filed in the four jurisdictions during the period 2000–2008. Overall, we find substantial differences across jurisdictions in terms of caseloads—notably, courts in Germany hear by far the largest number of cases, not only in absolute terms, but also when taking macro-economic indicators into account—and we further find important cross-country variances in terms of case outcomes. Moreover, we show empirically that a considerable number of patents are litigated across multiple European jurisdictions; and further, that in the majority of these cases divergent case outcomes are reached across the different jurisdictions, suggesting that the long-suspected problem of inconsistency of decision-making in European patent litigation is in fact real. Finally, we note that the coming into force of the Unified Patent Court in Europe may, in the long term, help to alleviate this inconsistency problem

Activity Overinvestment: The Case of R&D

The literature on corporate diversification has often argued for and established the case that companies often overdiversify in a product market sense – i.e. enter into unrelated product markets where they may not fully cover their cost of capital. Yet, even without engaging in unrelated diversification, managers need to make resource allocation decisions to a variety of activities that a company conducts to consummate its business. In this article we focus on Research and Development (R&D) activity and we discuss the effects that the uncertainty, boundary ambiguity, feedback latency, R&D lumpiness and legitimacy that characterize technological contexts can have in making overinvestment in R&D likely. Specifically, in this article we a) draw attention to the construct of activity overinvestment, and specifically R&D overinvestment, b) use the received literature to argue that there exists a prima facie case for examining this construct and its antecedents in order to evaluate the extent and implications of R&D overinvestment, and c) make the more general case that the resource allocation literature needs to study the issue of activity overinvestment systematically

Spillback Effects of Expansion When Product-Types and Firm-Types Differ

Contrary to perspectives that credit firms with only limited abilities to undertake significant change successfully, recent research has demonstrated that firms often improve their performance after undertaking major expansion to their operations. In this paper, we build on a study by Mitchell and Singh (1993) to test for differences in expansion effects, depending on whether the new goods substitute for old products and whether the firm is a generalist or specialist participant in the industry. The analysis helps us understand when a business can undertake major change successfully. The results have implications for ecological and other definitions of the core of a business and highlight the necessity for firms to undertake changes even at considerable risk to their existing operations.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/68398/2/10.1177_014920639502100105.pd

Income tax buyouts and income tax evasion

A tax buyout is a contract between tax authorities and a tax payer which reduces the marginal income tax rate in exchange for a lump-sum payment. While previous contributions have focussed on labour supply, we consider the interaction with tax evasion and show that a buyout can increase expected tax revenues. This will be the case if (1) the audit probability is constant and the penalty for evasion is a function of undeclared income or (2) the penalty depends on the amount of taxes evaded, and authorities use information about income generated by the decision about a tax buyout offer when setting audit probabilities. Since individuals will only utilise a tax buyout if they are better off, higher tax revenues imply that such contracts can be Pareto-improving

Prospect theory and tax evasion: a reconsideration of the Yitzhaki puzzle

The standard expected utility (EUT) model of tax evasion predicts that evasion is decreasing in the marginal tax rate (the Yitzhaki puzzle). Recent literature shows cases in which incorporating prospect theory (PT) does and does not overturn the Puzzle. In a general environment that nests both PT and EUT preferences, we provide a detailed study of how the elements of PT affect the Puzzle. PT does not always reverse the Puzzle, hence we give and interpret conditions for when it does and does not. When allowing for stigma and/or variable audit probability, PT reverses the Puzzle in the same way and with the same limitations as does EUT, if equally augmented

Empirical Analysis of the Assessment of Innovation Effects in U.S. Merger Cases

In this empirical study all mergers that have been challenged by the U.S. antitrust agencies FTC and DOJ between 1995 and 2008 were analyzed in regard to the question to what extent and how the agencies assessed the innovation effects of mergers. Theoretical background is the still open question how negative effects of mergers on innovation should be taken into account in merger policy. Although we can show in our study that in one third of all challenged mergers also innovation concerns were raised, the results also point to a still existing large degree of uneasiness and inconsistencies of the agencies in regard to the assessment of innovation effects. A particularly interesting result is that - despite the wide-spread rejection of the "innovation market approach" in the antitrust debate - the agencies used more an innovationspecific assessment approach that includes also innovation in the market definition than the pure traditional product market concept. Additionally, we also found significant differences between the assessment approaches of the FTC and the DOJ

The Imd Pathway Is Involved in Antiviral Immune Responses in Drosophila

Cricket Paralysis virus (CrPV) is a member of the Dicistroviridae family of RNA viruses, which infect a broad range of insect hosts, including the fruit fly Drosophila melanogaster. Drosophila has emerged as an effective system for studying innate immunity because of its powerful genetic techniques and the high degree of gene and pathway conservation. Intra-abdominal injection of CrPV into adult flies causes a lethal infection that provides a robust assay for the identification of mutants with altered sensitivity to viral infection. To gain insight into the interactions between viruses and the innate immune system, we injected wild type flies with CrPV and observed that antimicrobial peptides (AMPs) were not induced and hemocytes were depleted in the course of infection. To investigate the contribution of conserved immune signaling pathways to antiviral innate immune responses, CrPV was injected into isogenic mutants of the Immune Deficiency (Imd) pathway, which resembles the mammalian Tumor Necrosis Factor Receptor (TNFR) pathway. Loss-of-function mutations in several Imd pathway genes displayed increased sensitivity to CrPV infection and higher CrPV loads. Our data show that antiviral innate immune responses in flies infected with CrPV depend upon hemocytes and signaling through the Imd pathway

Competition, R&D and Innovation: Testing the Inverted-U in a Simultaneous System

To address the relationship between innovation and competition we jointly estimate the opportunity, production, and impact functions of innovation in a simultaneous system. Based on Swiss micro-data, we apply a 3-SLS system estimation. The findings confirm a robust inverted-U relationship, in which a rise in the number of competitors at low levels of initial competition increases the firm's research effort, but at a diminishing rate, and the research effort ultimately decreases at high levels of competition. When we split the sample by firm types, the inverted-U shape is steeper for creative firms than for adaptive ones. The numerical solution indicates three particular configurations of interest: 1. an uncontested monopoly with low innovation, 2. low competition with high innovation, and 3. a "no innovation trap" at very high levels of competition. The distinction between solution 1. and 2. corresponds to Arrow's positive effect of competition on innovation, whereas the difference between outcomes 2. and 3. captures Schumpeter's positive effect of market power on innovation. Simulating changes of the exogenous variables, technology potential, demand growth, firm size and exports have a positive impact on innovation, while foreign ownership has a negative effect, and higher appropriability has a positive impact on the number of competitors