Learning to Litigate: the Relationship Between Past Litigation Experience and Litigation Outcomes in the Chinese Intellectual Property System

Beverly B. Tyler,Kristina Vaarst Andersen,Karin Beukel

doi:10.1007/s41471-021-00118-4

Beverly B. Tyler, Kristina Vaarst Andersen

Open Access

https://doi.org/10.1007/s41471-021-00118-4

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Abstract

Intellectual property (IP) and the protection of IP is of increasing importance to firms’ competitiveness, and firms must be able to defend their IP when it is infringed upon. In most markets, IP and the defense of IP is a stringent legal process, but in developing markets and markets undergoing changes, this is not necessarily so. The Chinese IP system and protection is comparatively new, and the system is still under development. In this study, we analyze the relationship between firms’ previous litigation experience and litigation outcomes using a sample of 10,211 court cases tried in China between 2001 and 2009. We find that despite litigation being a rare event for most firms, plaintiffs’ prior litigation experience and especially prior successful litigation experience or experience with specific case types is related to their likelihood of a positive outcome. However, plaintiffs’ successful application of prior litigation experience is contingent on the type of litigation case.

Highlights

Intellectual property (IP) is a tool to appropriate value from innovation and protect the firm’s innovation investments (Rivette and Kline 2000; Somaya 2012; Teece 1986)
We find that despite litigation being a rare event for most firms, plaintiffs’ prior litigation experience and especially prior successful litigation experience or experience with specific case types is related to their likelihood of a positive outcome
This paper analyzed how litigation experience and the share of previous positive litigation experience are related to the likelihood of receiving a positive outcome in a focal litigation case

Summary

Introduction

Intellectual property (IP) is a tool to appropriate value from innovation and protect the firm’s innovation investments (Rivette and Kline 2000; Somaya 2012; Teece 1986). Litigation research in law and economics is the prime contributor to our current understanding of the reasons why firms take other firms to court for using their IP without permission, and of the factors that affect the plaintiff’s likelihood of winning. Key factors found to affect the likelihood of plaintiff success are type of technology (Lanjouw and Lerner 1998), corporate status and income (Janicke and Ren 2006), and a domestic plaintiff’s advantage over a foreign defendant (Janicke and Ren 2006; Moore 2003). Litigation research provides a cursory understanding of firms’ motivations to litigate IP and the factors that influence their success, it does not offer insights into the relationship between firms’ experience with previous litigation and their likelihood of a positive litigation outcome

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