An Invalidity Strategy against Patent Barriers: Evidence from Chinese Enterprises

Abstract In the global trade market, patents evolve into strategic barriers to block overseas competitors. Patent invalidity proceeding, the acknowledged countermeasure, is nevertheless a double-edge sword. Drawing on a conjunction of resource-based view theory and synergy theory, an invalidity strategy for the foreign enterprises against the barriers is provided, i.e., challenging the infringed patent cooperatively. A mediated moderating model together with samples consisting of Inter Partes Review proceedings pertaining to Chinese enterprises spanning a time period from 2012 to 2020 are introduced to empirically examine the cooperative invalidity strategy. We show that the strategy is indeed effective. Further analyses demonstrate that a foreign enterprise would receive some higher odds of the patent being invalided when cooperating with an NPE/NPEs compared to a PE/PEs. Additionally, dynamic capability mediates the relationship between the strategy and the outcome of an invalidity proceeding while patent quality plays a moderating role. JEL Classification: O31; O34; K41