The RAND Journal of Economics · 2001 · 133 citations · 8 references
LawIntellectual Property LawProperty LawIntellectual PropertyPatent LawUnjust EnrichmentInjunctions In Patent CasesIntellectual Property EnforcementIntellectual Property ProtectionIntellectual Property RightsPatent DamagesPatent InfringementDamages For InfringementDamages In Patent LitigationInfringing Technology LiabilityIntellectual Property DamagesIntellectual Property InjunctionsPatent Infringement RemediesProperty RuleUnjust Enrichment Remedy
Infringement may not be deterred under any enforcement regime available. The study investigates how liability and property rules protect intellectual property and compares damages doctrines, arguing that unjust enrichment better protects patent holders for proprietary research tools. The authors compare lost profit (lost royalty) and unjust enrichment damages doctrines to evaluate protection for proprietary research tools. A credible threat of infringement can benefit patent holders, and depending on delay before injunction, damages can be superior to property rules, though for end‑user products or cost‑reducing innovations the conclusions may reverse.
We investigate how liability rules and property rules protect intellectual property. Infringement might not be deterred under any of the enforcement regimes available. However, counterintuitively, a credible threat of infringement can actually benefit the patentholder. We compare the two doctrines of damages, lost profit (lost royalty) and unjust enrichment, and argue that unjust enrichment protects the patentholder better than lost royalty in the case of proprietary research tools. Both can be superior to a property rule, depending on how much delay is permitted before infringement is enjoined. For other proprietary products (end-user products, cost-reducing innovations), these conclusions can be reversed.
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Property Rules versus Liability Rules: An Economic Analysis
Louis Kaplow, Steven Shavell · Harvard Law Review · 1996 · 328 citations · Full text