Abstract: After more than four decades of rapid development, Chinese firms have reached the threshold of transformation from imitation to innovation, from technological follower to parallel walker and leader. However, this transformation requires plenty of conditions especially the support of high standards and high-strength intellectual property protection. The higher the intensity of intellectual property protection, the more distinct the property rights boundary of firms' innovation achievements, and the more inclined firms are to win market competition through innovation. Among varieties of ways of intellectual property protection, judicial protection plays a leading role and determines the intensity of intellectual property protection to a large extent. As an important way of intellectual property judicial protection, whether patent litigation can promote Chinese firms’ indigenous innovation is directly related to the transformation of firms’ innovation strategy. Based on the 2017 patent survey data of Chinese firms, this paper examines the impact of patent litigation on firms' indigenous innovation strategies. We find that the experience in patent litigation can effectively stimulate indigenous innovation for the firms involved. This finding is robust in adopting propensity score matching method and coarsened exact matching method, as well as using instrumental variable method and conditional mixed process method. This indicates that judicial protection of intellectual property rights is conducive to promoting firms’ indigenous innovation. The heterogeneity analysis shows that the promoting effect of judicial protection of intellectual property rights on firm’s innovation is more significant for small and micro firms and firms in patent-dependent industries as well as domestic firms. This paper contributes to the literature from the two perspectives. Firstly, different from the existing research focusing on the impact of patent litigation on the R&D investment, patent application and management of the firms involved, this study explores the effect of patent litigation on firms' indigenous innovation strategies, which enriches the literature on the innovation effect of patent litigation. Secondly, compared with existing literature examining the influence of firms' own characteristics and market environment on firms' indigenous innovation，this paper focuses on the role of judicial protection of intellectual property rights, extending the research on the influencing factors of indigenous innovation. This paper has the following implications for intellectual property policy in China. Firstly, we need to improve the judicial protection system of intellectual property rights to stimulate firms' indigenous innovation. Specifically, to carry out the judicial adjudication mode of "integration of three trials", speed up the development of intellectual property judge team and ensure the fairness and efficiency of patent judicial adjudication. Secondly, the patent judicial protection system needs to pay appropriate attention to special firm groups. Since small and micro firms are weak in litigation ability, it is suggested to improve the convenience and friendliness of the judicial system for these firms. Firms in patent-dependent industries are prone to get caught in the "patent thicket" and patent disputes. Therefore, it is proposed to improve the professional level of judges and increase the efficiency of trials, especially in "patent thicket" related trials. Considering the disadvantages of domestic firms in litigation resources, we suggest that the judicial system help them reduce litigation costs effectively.