To Sue or not to Sue: Co-opetition in the Patent Market

Yu Chao Cheng*, Yuhong Lan, Wenting Liu, Shang-Jyh Liu

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

1 Scopus citations

Abstract

The emergence of Non-Practicing Entities (NPEs) has drawn mixed responses from the Practicing Entities (PEs), suggesting sophisticated interactions between the two. The extant literature, however, focuses largely on the legal aggressiveness of NPEs, and the competition between NPEs and NPEs. Therefore, the aim of this study is to offer a more comprehensive view of the NPE-PE interactions, using "Game Theory". It is revealed in this study that, when encountering NPEs, PEs' decision is critical, and might often determine the outcome of the game. And the PEs' decision is predominantly influenced by the interplay of factors, such as "the requested royalties", the "cost of negotiation/litigation" and the "expectation of litigation outcome". Depending on the player's decision, the "NPE - PE Game" could develop into either competition (to sue) or cooperation (not to sue). In particular, NPEs with R&D capabilities are in a strong position to engage in technology transfer, and therefore can assume diverse roles, i.e. as both competitor and complementor, in the patent market. In conclusion, "NPE-PE game" could take many forms, such as licensing partnership, litigation counterparts, or a mixture of technology and patent transactions, and consequently drive the patent market dynamics in various ways.

Original languageEnglish
Title of host publication2012 Proceedings of Portland International Center for Management of Engineering and Technology
Subtitle of host publicationTechnology Management for Emerging Technologies, PICMET'12
Pages1025-1033
Number of pages9
StatePublished - 1 Nov 2012
Event2012 Portland International Conference on Management of Engineering and Technology - Technology Management for Emerging Technologies, PICMET'12 - Vancouver, BC, Canada
Duration: 29 Jul 20122 Aug 2012

Publication series

Name2012 Proceedings of Portland International Center for Management of Engineering and Technology: Technology Management for Emerging Technologies, PICMET'12

Conference

Conference2012 Portland International Conference on Management of Engineering and Technology - Technology Management for Emerging Technologies, PICMET'12
CountryCanada
CityVancouver, BC
Period29/07/122/08/12

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