From Trade War to Patent Litigations: Are Chinese Firms Becoming Legal Targets in the U.S.?

This study examines how the U.S.-China trade war affected patent litigation risk for 503 U.S.-listed Chinese firms from 2010 to 2022. Using Difference-in-Differences (DID) and event study designs, we find that firms in industries subject to Section 301 tariffs experienced a significant post-2018 surge in defendant patent litigation. While institutional factors, such as foreign director ratios and Hong Kong cross-listings, failed to mitigate this risk, competitive capabilities proved effective as deterrents. Specifically, high market concentration (HHI) and R&D intensity significantly attenuated the increase in litigation, indicating that mutual forbearance and the credible threat of technological retaliation deter opportunistic lawsuits. With no significant effects observed in plaintiff-side litigation, these findings suggest that substantive economic and technological deterrence is more critical than symbolic legitimacy in defending against geopolitical legal vulnerabilities.