?url_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Adc&rft.relation=http%3A%2F%2Feprints.imtlucca.it%2F95%2F&rft.title=A+Simple+Theory+of+Defensive+Patenting&rft.creator=Chiou%2C+Jing-Yuan&rft.subject=HB+Economic+Theory&rft.subject=K+Law+(General)&rft.subject=T201+Patents.+Trademarks&rft.description=This+paper+examines+innovating+firms%E2%80%99+incentives+to+engage+in+defensive+patenting.%0D%0AIt+first+establishes+a+%E2%80%9Ctruce+equilibrium%E2%80%9D+in+patent+enforcement%3A+when+litigation+is%0D%0Acostly%2C+the+equal+strength+of+two+symmetric+parties%E2%80%99+patent+portfolios+deters+any+patent%0D%0Adisputes+along+the+equilibrium+path.+This+equilibrium+behavior+generates+two+benefits%0D%0Aof+defensive+patenting%2C+namely%2C+to+prevent+licensing+outlays+and+to+protect+downstream%0D%0Ainvestments.+In+addition%2C+firms+can+use+patents+to+coordinate+non-contractible%0D%0Ainvestment+decisions.+Depending+on+the+joint+interests%2C+they+can+either+reach+a+license%0D%0Ain+order+to+guarantee+high+investment+incentives%2C+or+agree+not+to+grant+a+license+so%0D%0Athat+investments+are+deterred+by+the+litigation+threat.+On+the+other+hand%2C+the+strategic%0D%0Apatenting+concern+may+generate+a+bandwagon+of+patent+accumulation%2C+where+firms%0D%0Arush+to+the+patent+office+to+get+a+patent%2C+but+the+subsequent+investment+performance%0D%0Ais+the+same+as+when+there+is+no+patent+at+all.%0D%0AThe+paper+also+argues+that+defensive+patenting+may+weaken+the+effectiveness+of%0D%0Apatents+as+an+appropriation+scheme.+This+offers+an+explanation+that+the+%E2%80%9Cpro-patent%E2%80%9D+policy+shift+in+the+United+States+since+the+1980s+may+actually+have+undermined+the%0D%0Aincentive+power+of+the+patent+system.%0D%0A&rft.date=2006-09&rft.type=Working+Paper&rft.type=NonPeerReviewed&rft.format=application%2Fpdf&rft.language=en&rft.identifier=http%3A%2F%2Feprints.imtlucca.it%2F95%2F1%2FChiou_2006a.pdf&rft.identifier=++Chiou%2C+Jing-Yuan++A+Simple+Theory+of+Defensive+Patenting.++Working+Paper+++++++(Unpublished)+++