Multimarket Contact and Patent Litigation in the Global Smartphone Industry

Multimarket contact, which can both heighten interfirm competition and facilitate mutual forbearance, has been an important concept in the competitive dynamics literature. This paper disentangles the two mechanisms by examining the link between multimarket contact and occurrence of patent litigations at the dyad level in the context of the global smartphone market. We decompose the construct of multimarket contact into a geographical dimension (when smartphone vendors meet in multiple countries) and an product-level dimension (when smartphone vendors meet in multiple product lines categorized by different operation systems). We find that the geographical dimension of multimarket contact increases the occurrence of patent litigations between smartphone vendors in a dyad, but the product-level dimension of multimarket contact decreases them. The two constructs’ impacts on patent litigation are different because the mechanism driving geographical dimension’s impact is competition for market share in the glob...