Patent opposition, IP firm capabilities, and technology entry: empirical evidence from European patent data

Abstract This paper examines the extent to which patent litigiousness relates to entry into a new technological domain (TD). Unless firms have sufficient intellectual property (IP) capabilities, patent litigiousness in the form of opposition may raise barriers to entry. We test this hypothesis using a large-scale dataset of patents applied for at the European Patent Office (EPO) between 2000 and 2015. We introduce a new measure of TD patent litigiousness based on the frequency of oppositions at the EPO. Patent litigiousness is negatively associated with technological entry for small firms, especially in high-tech and complex TDs. Unlike small firms, large firms benefit from previous experience with opposition, which favors the development of IP capabilities and reduces the uncertainty of entering highly litigious TDs.