Damages and Injunctions in Protecting Intellectual Property
Mark A. Schankerman
London School of Economics and Political Science; Centre for Economic Policy Research (CEPR)
University of California - Department of Economics ; School of Law, University of California, Berkeley; National Bureau of Economic Research (NBER)
RAND Journal of Economics, Vol. 32, No. 1, 2000
We investigate how liability rules and property rules protect intellectual property. Infringement might not be deterred under any of the enforcement regimes available. However, counterintuitively, a credible threat of infringement can actually benefit the patentholder. We compare the two doctrines of damages, lost profit (lost royalty) and unjust enrichment, and argue that unjust enrichment protects the patentholder better than lost royalty in the case of proprietary research tools. Both can be superior to a property rule, depending on how much delay is permitted before infringement is enjoined. For other proprietary products (end-user products, cost-reducing innovations), these conclusions can be reversed.
Accepted Paper Series
Date posted: December 24, 2000
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