Information- and rivalry-based perspectives on reactive patent litigation strategy

Abstract

Patent litigation is a common form of legal, economic and strategic behaviors that arise in a variety of business domains. Using information-based and rivalry-based theories, this study explores how asymmetric information, competitive rivalry in a strategic group and market positions influence companies' reactions to patent litigation. By applying an experimental design method to develop scenarios for top executives of small and medium-sized enterprises, the results show that a theoretical framework of asymmetric information, competitive rivalry in a strategic group and market positions affect a firm's reactive patent litigation strategy. These findings not only broaden information- and rivalry-based theories' explanations of reactive patent litigation decisions, but also enable us to formulate the codes of conduct for the managerial capability in regard to legal astuteness in patent litigation.