Abstract
The paper analyzes the effects of ex post declarations of patent validity, a component of patent quality, on follow-on patenting decisions by both assignees and rivals to a given patent. Using a DiD-matching estimator, this chapter estimates the effects of validation, or an increase in the probability of validity through ex parte reexamination on follow-on patenting. I find that validation increases for overall and external follow-on patenting but the results are mixed for internal follow-on patenting. The increase in follow-on patenting by rivals can be attributed to an increase in defensive patenting based on the positioning of follow-on patents in technology space after validation. The positioning of external follow-on patenting is unaffected by validation. Finally, I find that the validation effect is more prominent in complex relative to discrete technologies.
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