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Damages and injunctions in the protection of proprietary research tools

Schankerman, Mark and Scotchmer, Suzanne (1999) Damages and injunctions in the protection of proprietary research tools. . National Bureau of Economic Research, Cambridge, MA., USA.

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Profit on proprietary research tools is determined partly by the remedies for infringement, such as damages and injunctions. We investigate how damages under a liability rule and the opportunity for injunctions under a property rule can affect the incentives to develop research tools. We show that the prevailing legal doctrine of damages under liability rule, called lost profit or reasonable royalty, suffers from a logical circularity which leads to an indeterminacy in permissible damages. This can create insufficient incentives to develop research tools. Incentives can be improved either by a property rule with injunctions or by a liability rule under the doctrine of unjust enrichment.

Item Type: Monograph (Working Paper)
Official URL:
Additional Information: © 1999 Mark Schankerman and Suzanne Scotchmer
Divisions: Economics
Subjects: K Law > K Law (General)
JEL classification: 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)
Date Deposited: 28 May 2008 08:25
Last Modified: 05 Jan 2021 00:51

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