George Mason University School of Law
This paper estimates the total cost of patent litigation to alleged infringers. We use a large sample of stock market event studies around the date of lawsuit filings for US public firms from 1984-99. We find that the total costs of litigation are much greater than legal fees and costs are large even for lawsuits that settle. Lawsuits cost alleged infringers about $28.7 million ($92) in the mean and $2.9 million in the median. Moreover, infringement risk rose sharply during the late 1990s to over 14% of R&D spending. Small firms have lower risk relative to R&D.
James Bessen & Michael J. Meurer,
The Private Costs of Patent Litigation
Journal of Law, Economics & Policy
Available at: https://scholarship.law.bu.edu/faculty_scholarship/1392
Draft available on SSRN