Patents are increasingly being used as strategic instruments in competitive markets. The signalling character of patents as indicator of indicating high innovation dynamics has increased over the past ten years, as has the significance of patents in company evaluation. In spite of these changes in the function of patents, their proliferation still remains a precondition to their effectiveness. The strategic behaviour of patent holders and potential infringers is the projects main object of study.The ZEW has compiled a data set which pertains to patent litigation suits filed between 1993 and 1995. On a descriptive level it becomes evident that the number of legal disputes at the two district courts under observation has more than doubled to 715 cases. It is mostly German incorporated companies that are involved as parties. Nearly half of the contested patents are related to mechanical engineering. This may be attributable to the high number of patent submissions in this field per se or reflect the fact that here infringement may easily be traced. Only about 14 percent of the (utility) patents under dispute are from the chemical or pharmaceutical industries.At first, it was analysed whether certain characteristics of the patents disputed over in infringement trials differ from those which remain uncontested. Thereto, the patents under legal revision were matched by a control group of uncontested patents according to technological classification and year of application. It was shown that highly valuable patents have a greater probability of dispute in infringement trials than patents of average value do. Value was here assessed in terms of value correlates, which as a whole allow for the weighting of the value of the patented innovations relative to other patents. The value correlates include the number of citations in subsequent patent applications (forward citations), the number of citations contained in the respective patent (backward citation), the number of claims and the size of the patent family. Has a patent already been appealed to in the past, the probability of an infringement trial is, all else equal, greater than without prior appeal. The characteristics of the patent owners play an equally significant role in the probability of a trial. Firms with a larger portfolio of patents, so has been shown, file for infringement rather less often than patent owners with a smaller portfolio. This may be associated to greater experience in negotiating licence agreements or to the higher negotiation potential in general.The probability of agreement among the parties does not depend on the characteristics of the patent anymore once the litigation trial is under way. All pertinent information has already been taken into account before the trials onset. As regards settlement of the trial, the proportions in size come into play. The parties once again strategically engage their relative negotiation power in order to arrive at an agreement. As viewed from a game theoretical perspective, additional information or aspects may surface which delay legal or out-of-court settlement. It was shown that an annulment claim by the defendant leads to greater likelihood of agreement. Furthermore, it was shown that the parties behaviour significantly differs among the district courts under investigation. At the district court in Mannheim preceding disputes over the patent, i.e. appeals to the issue of a patent, negatively influence the probability of agreement before court.