Abstract

http://ssrn.com/abstract=1002976
 
 

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Patent Damages and Spatial Competition


Matthew Henry


Cleveland State University

John L. Turner


University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics

July 2007


Abstract:     
This paper examines the impact of three patent damage regimes on licensing and competition between a patentee and imitator. We focus on product patents in a differentiated, duopoly setting. Neither per-unit royalties nor fixed fees under efficient licensing are unique in equilibrium. As a result, the "reasonable royalty" damage regime's application of a hypothetical negotiation gives the court significant discretion in assigning damages. The lost profits regime, the only one that may deter infringement, typically yields the highest incentives to innovate for highly valuable products. The unjust enrichment regime is weakest. Our results offer an efficiency argument for abandoning it.

Number of Pages in PDF File: 38

Keywords: Patent, litigation, damages, spatial, differentiated

JEL Classification: K2, O3

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Date posted: July 26, 2007  

Suggested Citation

Henry, Matthew and Turner, John L., Patent Damages and Spatial Competition (July 2007). Available at SSRN: http://ssrn.com/abstract=1002976 or http://dx.doi.org/10.2139/ssrn.1002976

Contact Information

Matthew Henry
Cleveland State University ( email )
Cleveland, OH
United States
216-687-4532 (Phone)
HOME PAGE: http://www.csuohio.edu/class/economics/people/henry.html
John L. Turner (Contact Author)
University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics ( email )
Athens, GA 30602-6254
United States
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References:  26
Citations:  3

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