On the Legal Protection and Value of Novel Designs : Evidence from Egyptian Goddess v. Swisa

We examine how the strengthened legal protection of novel designs prevents mimicking behaviors and thus enhances the economic value of novel designs and their assignees. Using an unexpected decision of the Federal Circuit Court of Appeals, we show that more intricate designs (which were more likely to be mimicked before) suffers less imitation afterwards. Stock market reactions to grants of intricate design patents also increases more than reactions to grants of simple design patents after this decision. Moreover, such positive reactions are more pronounced among firms facing fiercer product market competition and among firms previously involved in design patent litigation