The aff further complicates business ability to check for accidental infringements which leads to more litigation cases, clogging courts
Benassi & Martin-Sanchez 22; Mario Benassi [Department of Economics, Management and Quantitative Methods, University of Milan, Milan, Italy], Miryam Martin-Sanchez [Department of Economics, Management and Quantitative Methods, University of Milan, Milan, Italy and Department of Business Management, Comillas Pontifical University-ICADE, Madrid, Spain]; November 1st 2022; “Patent Intermediaries and Litigation”; Palgrave Macmillan; https://link.springer.com/chapter/10.1007/978-3-031-10310-0_7 // LFS CHef
The surge in patent applications and in patents granted did not occur without a cost. It is often impossible for companies willing to innovate on the previous knowledge stock protected by patents to obtain the ex-ante licensing agreements needed for their innovations. This impossibility is especially likely when rights are dispersed among several holders. Significant coordination costs may arise, and problems in aligning different interests can make innovation difficult or even impossible. Moreover, any company willing to introduce significant changes in products and processes faces the risk of “unconscious ignorance” due to increasingly compelling IP blindness. For Benassi and Di Minin (2009), as technologies evolve at a faster pace and become more likely to converge, companies pursuing innovative strategies may violate other companies’ rights. Violation occurs because time to innovation and time to market are much shorter than the time required to complete the process of fling a patent application and being granted the patent. Companies may thus unintentionally violate existing patents, no matter how many resources they commit to IP management to monitor all possible innovators. Not surprisingly, the surge in patent applications parallels a signifcant increase in patent litigation. Bessen and Meurer (2012) found that the total cost of lawsuits was large compared to estimated legal fees, estimates of patent value, and R&D spending. Although faith-based IP tends to justify IP as a moral end in itself (Lemley, 2015), evidence from ongoing research suggests the importance of careful consideration not only of the pros and the cons of the patent system but also of the economic, institutional, and legal effects resulting from the spread of patents. The market for patents and its challenges form one of the most significant issues in this regard.