Damages and Injunctions in Protecting Proprietary Research Tools

Mark Schankerman and Suzanne Scotchmer ()
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Mark Schankerman: London School of Economics

Law and Economics from EconWPA

Abstract: We investigate how liability rules and property rules affect the incentives to invest in research tools. We argue that it is hard to deter infringement under any of the enforcement regimes available. However, counter-intuitively, a credible threat of infringement can actually be beneficial to the patent holder. We compare the two doctrines of damages under the liability rule, namely, lost profit (lost royalty) and unjust enrichment, and argue that unjust enrichment protects the patent holder better than lost royalty. Both can be superior to a property rule (the right to enjoin infringement), depending on how much delay is permitted before infringement is enjoined. We also show that, for patents on end-user products, the ranking of liability doctrines is reversed: unjust enrichment is inferior to lost profits.

JEL-codes: K0 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law
Date: 2001-01-05
Note: 36 pages, Acrobat .pdf
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http://129.3.20.41/eps/le/papers/0012/0012002.pdf (application/pdf)

Related works:
Working Paper: Damages and Injunctions in Protecting Proprietary Research Tools (2000)
Working Paper: Damages and Injunctions in Protecting Proprietary Research Tools (2000)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwple:0012002

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