In many industries broad cross-license agreements are considered a useful method to obtain freedom to operate and to avoid patent litigation. In this paper I study the previously neglected dynamic trade-off between litigating and cross-licensing that firms face to protect their intellectual...

We study how fragmentation of patent rights (‘patent thickets’) and the formation of the Court of Appeal for the Federal Circuit (CAFC) affected the duration of patent disputes, and thus the speed of technology diffusion through licensing. We develop a model of patent litigation which...