Document Type
Working Paper
Publication Date
9-2026
Language
en-US
Abstract
This paper presents a model of the activity of patent intermediaries and potential infringers in a system of costly patent litigation. Because the intermediary, in comparison to the inventor, has a more credible threat to sue, both the revenue from infringement litigation and the intrinsic value of the patent are greater in the intermediary’s hands. The central finding is that intermediaries license patents to potential infringers when infringement litigation is inefficient. Intermediaries tend to acquire high-quality patents from inventors and assign low-quality patents to potential infringers. Another issue this model addresses is the differential between the private and the social value of patents. Infringement reduces the private value of a patent but can increase the social value. This distinction implies that private and social incentives to license or to litigate patents may diverge. Intermediaries benefit society by licensing socially inefficient patents.
Recommended Citation
Keith N. Hylton,
Patents and Incentives to Assign, License, or Litigate
(2026).
Available at:
https://scholarship.law.bu.edu/faculty_scholarship/4311
