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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. 7086. National Bureau of Economic Research, Cambridge, MA., USA.

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Identification Number: 7086

Abstract

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: http://www.nber.org
Additional Information: © 1999 Mark Schankerman and Suzanne Scotchmer
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: 01 Oct 2010 08:54
URI: http://eprints.lse.ac.uk/id/eprint/5098

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