Tilting the Table? The Use of Preliminary Injunctions

Abstract

This paper examines the economic role of preliminary injunctions in legal disputes. We present a model in which differences in financing costs drive the use of preliminary injunction and explore the implications of this legal remedy for ex post efficiency and ex ante incentives. Controlling for the nature of the dispute, we examine the relationships between the financial status of litigating parties and whether a preliminary injunction is requested. The empirical analysis uses detailed data compiled for a sample of 252 patent suits and reveals patterns generally consistent with those suggested by the model.