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Damages and injunctions in protecting proprietary research tools

Schankerman, Mark and Scotchmer, Suzanne (2000) Damages and injunctions in protecting proprietary research tools. E00-288. Berkeley Electronic Press, California, USA.

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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, counterintuitively, a credible threat of infringement can actually be beneficial to the patentholder. 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 patentholder 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.

Item Type: Monograph (Working Paper)
Official URL:
Additional Information: Copyright © 2000 Mark Schankerman & Suzanne Scotchmer.
Library of Congress subject classification: H Social Sciences > HB Economic Theory
K Law > K Law (General)
Journal of Economic Literature Classification System: K - Law and Economics > K0 - General
Sets: Collections > Economists Online
Departments > Economics
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Identification Number: E00-288
Date Deposited: 06 Jul 2006

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