pp电子

Patent litigation has increasingly become a powerful strategic and legal weapon for firms to defend their business territories and to deter other firms’competitive actions. In this study, we examine how a plaintiff firm’s and a defendant firm’s relative status in terms of firm size and innovation reputation may affect stock market reactions to these firms upon a patent litigation announcement. Focusing on patent litigation announcements in the Wall Street Journal in 2005-2010, we find that stock market on average reacted positively to the plaintiffs but negatively to the defendants. Moreover, we find that when a plaintiff had lower status than the corresponding defendant, the plaintiff gained greater positive abnormal return and the defendant had smaller negative abnormal return. Our findings contribute to a better understanding of stock market’s reactions to patent litigations and suggest that low-status firms may benefit from“negativeassociations”(e.g., through initiating a patent litigation) with high-status firms.