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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. 2554. Centre for Economic Policy Research, London, UK.

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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, 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 (Discussion Paper)
Official URL: http://www.cepr.org
Additional Information: © 2000 Mark Schankerman and Suzanne Scotchmer
Library of Congress subject classification: K Law > K Law (General)
Journal of Economic Literature Classification System: K - Law and Economics > K0 - General > K00 - General
Sets: Collections > Economists Online
Departments > Economics
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 2554
Date Deposited: 27 May 2008 13:33
URL: http://eprints.lse.ac.uk/5084/

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