(2014). Invalid But Infringed? An Analysis of Germany's Bifurcated Patent Litigation SystemMax Planck Institute for Innovation & Competition Research Paper No. 14-14.
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.
Also published in Journal of Economic Behavior & Organization Volume 131, Part A, 2016, 218 - 242
Also published as ZEW - Centre for European Economic Research Discussion Paper No. 14-072
