 Trademark infringement and optimal monitoring policyYosef Mealem, Yacov Yacobi and Gideon Yaniv Journal of Economics and Business, 2010, vol. 62, issue 2, 116-128 Abstract: The paper addresses a trademark infringer who seeks to capitalize on the reputation of a trademark owner, sells an identical product under a trademark which is confusingly similar to that of the owner, charges the same price and competes with him in the same market. We show that the welfare-maximizing monitoring intensity is zero, hence the government is not likely to engage in monitoring infringement. Recognizing this, the trademark owner may consider monitoring the market himself, discovering, however, that this is worth his while only if the penalty for infringement, which he fully collects, is sufficiently high. Given the entry condition, an increase in the penalty may either raise or lower the optimal monitoring intensity. In the former case it will counter-intuitively increase the infringer's expected profit, apparently because a higher penalty will also lead to a raise in price. While monitoring enables the trademark owner to maintain a positive profit level, it reduces social welfare. The government may intervene to eliminate the private incentive for monitoring through taxing the collected penalty. Keywords: Trademark; owner; Trademark; infringement; Perfect; counterfeiting; Optimal; monitoring; Social; welfare (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:62:y::i:2:p:116-128 Access Statistics for this article Journal of Economics and Business is currently edited by Emanuele Bajo and Moritz Ritter More articles in Journal of Economics and Business from Elsevier |
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