Patent Litigation and Innovation Strategy: A Cognitive Perspective on the Biopharmaceutical Industry

Although previous research has investigated effects of patent litigations on the innovation performance of defendant firms, the effects of litigations on the innovation processes of plaintiff firms have not been fully examined. Building on the attention-based view of the firm, we propose that a firm’s greater litigiousness regarding patent infringements negatively affects exploration orientation in its attention, as well as the novelty of its new research and development (R&D) projects. By analyzing the data of 41 global biopharmaceutical firms between 2001 and 2019, we generally find supportive evidence for our suggestions. Our study contributes to the literature on corporate litigation and innovation by introducing a cognitive perspective on their mutual relationships.