[go: up one dir, main page]

IDEAS home Printed from https://ideas.repec.org/p/ebg/heccah/1448.html
   My bibliography  Save this paper

Sharpen your Sword for Litigation: Incumbent Strategic Reaction to the Threat of Entry

Author

Listed:
  • Conti, Annamaria

    (Fundación Instituto de Empresa, S.L. - IE Business School)

  • Ortega, Leonardo

    (Georgia Institute of Technology - Scheller College of Business)

  • Sung, Elie

    (HEC Paris)

Abstract
While patents have been shown to play a role as barriers to entry, they also reveal information about incumbent strategies and risk being invalidated. We examine the tradeoff incumbents face between using their patents ex-ante as entry deterrents or ex-post once competitors have revealed their moves. Leveraging the unique characteristics of the pharmaceutical sector, where it is possible to observe exactly when a competitor entry threat materializes, and exploiting exogenous variation in that timing, we show that incumbents intentionally fragment and delay the full disclosure of their intellectual property rights through continuation patents. They disproportionately reveal continuation patents after a competitor entry threat becomes concrete, tailoring their response to the threat they have received and successfully delaying competitor entry through litigation. The detected incumbents’ reaction is stronger when their attacked drugs are valuable and when the patents listed at the FDA approval of a drug are relatively narrow in scope.

Suggested Citation

  • Conti, Annamaria & Ortega, Leonardo & Sung, Elie, 2021. "Sharpen your Sword for Litigation: Incumbent Strategic Reaction to the Threat of Entry," HEC Research Papers Series 1448, HEC Paris.
  • Handle: RePEc:ebg:heccah:1448
    DOI: 10.2139/ssrn.3949676
    as

    Download full text from publisher

    File URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3949676
    File Function: Full text
    Download Restriction: no

    File URL: https://libkey.io/10.2139/ssrn.3949676?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Strategic Reactions; Innovation; Second Mover Advantage; Information Asymmetries; Continuation patents;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebg:heccah:1448. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Antoine Haldemann (email available below). General contact details of provider: https://edirc.repec.org/data/hecpafr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.