Companies use patents more as a 'don't mess with me' signal than as actual weapons to sue people.
March 19, 2026
Original Paper
The Problem of Rulemaking in Uncertain Patent Markets - A Sociological Analysis of Patenting Strategies as a Device to Signal and Coordinate on the Rules of the Game
SSRN · 6301960
The Takeaway
While we usually think of patents as tools to sue competitors and exclude others, this study found that firms primarily use them to signal the 'rules of the game' and coordinate a truce. The presence of patents often results in an equilibrium where firms agree—without ever speaking—not to sue or harm one another.
From the abstract
This paper discusses the sociological implications of irreducible ex-ante uncertainty in patent markets. One can break down the firms' management of uncertainty in two sequential steps and characterize the first step as a sociological process where firms must define the rules of the game within which in the second stage economically efficient exchange can take place. Firms cannot explicitly coordinate/collude but can use patenting strategies (patent rights assets) as a device to signal and coord