Work detail

The Impact of Judicial Verdicts Regarding Patent Litigation on Stock Prices

Author: Bc. Kateřina Vlčková
Year: 2015 - summer
Leaders: Jiří Novák M.Sc., Ph.D., Deloitte Corporate Chair
Work type: Bachelors
Language: English
Pages: 56
Awards and prizes:
Abstract: This thesis examines the impact of judicial verdicts on patent holders’ stock
prices. Our dataset contains 40 companies which were involved in a legal dispute
concerning patent infringement or patent invalidity and which were judged
by the England and Wales High Court (patent court). This work states three main
hypotheses which are examined within the empirical part. To understand the impact
of a judgement on the stock price of the patent holder we used an event study
which measures the impact of economic events on stock prices. We divided the main
hypothesis into two parts. The first part examines whether the stock price increases
in case of a trial victory and the second part tests whether the stock price decreases
in case of a trial defeat. Our empirical analysis refused an alternative hypothesis
and so the first part was confirmed. Nevertheless our results did not confirm
the second part of the first hypothesis and the stock price shows the positive abnormal
return even in case of a trial defeat. On the basic of these results we conclude
that judgements influence the stock price in some specific cases but they are not
a dominant factor. However we confirm the next hypothesis that the stock price reacts
more sensitively to the judgement’s announcement in a trial concerning patent invalidity
than in a trial concerning patent infringement. This paper contributes to present
literature about patent litigation, etc. as well as to the studies focus on factors affecting
the stock price. The main goal of this work was to fill up a gap in the literature
focus on this issue.




Patria Finance
Česká Spořitelna