To leverage patents for innovation protection, firms increasingly build patent fences to block competitors, yet identifying which inventions warrant such fences is essential for realizing their strategic value. The inherent uncertainties in technology and markets make it difficult to pinpoint commercially promising inventions and complete the fencing process. This study posits that patent invalidation serves as an information cue, guiding firms toward key areas requiring protection by highlighting promising domains. Empirical analysis of 899 Chinese firms experiencing patent invalidation events reveals that such challenges drive intensified patenting in the contested domains, with stronger effects observed in domains perceived as strategically important. Furthermore, firms tend to reinforce relatively weaker areas within these prioritized domains.
