Essays in Law and Economics

Abstract

This collection of essays applies empirical techniques from economics to questions in law, with a focus on innovation and litigation. A common theme among these articles is that empirical analysis can be used to measure and predict how legal actors respond to economic incentives.

Chapter 1 explores an understudied question in patents: what is the relative importance of patent term (i.e., duration of patent protection) across different industries? This article (co-authored with fellow Princeton Ph.D. candidate, Judd Cramer) measures term sensitivity through patent applicants’ response to the passage of the TRIPS agreement, which changed how term was calculated. We find significant differences in term sensitivity across industries, some of which follows conventional wisdom (patent term is important in pharmaceuticals) and some of which does not (it also matters for software). Our measure is highly correlated with patent renewal rates across industries. This corroborates an intuitive prediction that we formalize in a model: industries that place a greater value on patent term tend to have higher expected profits toward the end of term.

Chapter 2 applies these empirical results in a policy context. This law review piece explains how the U.S. Patent and Trademark Office could increase its revenues and promote innovation by charging different patent “prices” for inventions in different industries. Such pricing could also be used to tailor effective patent term across industries, an emergent goal for many legal scholars.

Chapter 3 turns to diversity jurisdiction cases, a prominent form of federal litigation. I develop a general model of forum shopping and empirically corroborate one of its testable predictions: parties (particularly corporations) who litigate outside of their home state settle cases more often than parties who litigate at home. My results are robust under a variety of specifications, including ones with fixed effects for plaintiff home state, years of suit filing and termination, forum, and case type.