The impacts of patent litigation with NPEs on firms' patent strategy.

There has been an explosion of patent litigation by non-practicing entities (NPEs) and the NPEs' lawsuits differ in important ways from other patent lawsuits. This study attempts to analyze the effect of patent disputes with NPEs on the subsequent patenting activities of the firms that are sued. By considering patent disputes with NPEs as facilitators of change in existing patent strategies, this study further reveals the impact of patent disputes on innovation activities at the firm level. After experiencing litigation with NPEs as defendants, we focus on the types of patents the affected firms file, where they are applied, and how they are obtained. According to the results of the study, firms who are experiencing NPEs litigation are more likely to own high-quality patents, broaden their search scope and apply for patents in a wider range of areas, which is achieved through co-patenting and acquisitions from the technology market. [ABSTRACT FROM AUTHOR]