Strategic determinants of decisions not to settle patent litigation

Research output: Contribution to journalArticlepeer-review


Settlement outcomes in patent litigation are modeled as resulting from strategies pursued by firms with their patented technologies. Hypotheses are derived for two types of influences: the use of patents as isolating mechanisms to protect valuable strategic stakes, and their 'defensive' role in obtaining access to external technologies through mutual hold-up. Parameter estimates from a sample selection probit model provide support for the strategic stakes hypotheses, while the evidence for mutual hold-up is inconclusive. Interindustry comparisons show that nonsettlement of patent suits in both research medicines and computers is increased by strategic stakes and, in addition, mutual hold-up appears to play an important role in computer patent suits.

Original languageEnglish (US)
Pages (from-to)17-38
Number of pages22
JournalStrategic Management Journal
Issue number1
StatePublished - Jan 2003
Externally publishedYes


  • Firm strategy
  • Intellectual property
  • Litigation
  • Patents

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management


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