The Exposure of Emerging Market MNCs to Patent Litigation Abroad

Threats from patent litigations are a major roadblock for the internationalization strategies of MNCs from emerging markets (EMNCs). While extant theory focuses on weak patent systems in emerging economies as an obstacle for multinational corporations from developed economies, we conceptualize them as experiential learning contexts, shaping patent enforcement routines of local firms. We reason that superstitious learning from patent enforcement experiences as defendants in weak, domestic patent systems are counterproductive for EMNCs. Overconfidence in underdeveloped patent enforcement competences expose them to costly patent litigation abroad. We find empirical support analyzing 2273 Indian firms between 2007 and 2017. Vicarious learning from operating in many countries with strong patent systems and experience with patent filings abroad create boundary conditions.