Innovation, Unemployment and Policy in the Theories of Growth and Distribution
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Innovation, Unemployment and Policy in the Theories of Growth and Distribution

Edited by Neri Salvadori and Renato Balducci

Innovation, Unemployment and Policy in the Theories of Growth and Distribution increases our understanding about the more relevant economic determinants and policy aspects of the interdependence between economic growth and income distribution.
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Chapter 5: Partial imitation, inequality and growth: the role of the courts' interpretation of patent law

Carmelo Pierpaolo Parello and Luca Spinesi

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5. Partial imitation, inequality and growth: the role of the courts’ interpretation of patent law* Carmelo Pierpaolo Parello and Luca Spinesi 5.1. INTRODUCTION According to Lanjouw and Schankerman (2001), patent litigation has grown dramatically during the period 1978–99. Combining data from the LitAlert database with other information collected by the U.S. Patent and Trademark Office, they report that the number of patents rose by almost tenfold, with much of this increase concentrated during the 1990s. Lerner (1995) and Lanjouw and Lerner (2002) provide empirical evidence that even if parties can settle their patent disputes without resorting to suits, the effective threat of litigation influences the incentive to undertake R&D by preventing small firms entering those R&D areas where the threat of litigation from larger firms is high. Lanjouw and Schankerman (2001) find that the mean filing rates vary substantially across technology fields and that the plaintiff’s probability of winning the patent suit does not depend on the characteristics of patents and their owners among patent disputes.1 On such concerns, they state that: From a policy perspective, this is good news because it means that enforcement of patent rights relies on the effective threat of court actions (suits) more than on extensive post-suit, legal proceedings that consume court resources (Lanjouw and Schankerman, 2001, p. 26) In this chapter we study the implication for R&D of the determinants of patent infringement and declaratory judgement suits. In particular, can court decisions represent the guidelines for interpreting and applying the...

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