Preliminary Injunctive Relief: Theory and Evidence from Patent Litigation

This paper examines the suggestion that established plaintiffs request preliminary injunctions to engage in predation against less financially healthy firms. We first present a model in which differences in litigation costs drive the use of preliminary injunctions in civil litigation. The hypothesis is tested using a sample of 252 patent suits, which allows us to characterize the litigating parties while controlling for the nature of the dispute. The evidence is consistent with the predation hypothesis. We then explore various implications of the model and the impact of policy reforms.