A Transaction Cost Theory of Patent Law
Paul J. Heald
University of Illinois College of Law; Bournemouth University - Centre for Intellectual Property Policy & Management (CIPPM)
October 17, 2005
Ohio State Law Journal, Vol. 66, p. 473, 2005
Patent law is under-theorized in the sense that the predominating incentive-based justifications cannot by themselves adequately explain empirical evidence on patenting gathered by research economists. This article provides an alternative justification for patent law based on private transaction costs savings offered by patent law in comparison to alternative options available to those who wish to exploit information assets. In particular, it identifies striking parallels to corporate law as described in recent scholarship and shows how patents act as affirmative asset partitions, ameliorate significant team production problems, and encourage technology transfer. Even if the patent system provides no significant incentives to invent, it can be explained and justified in terms of transaction costs savings alone.
Number of Pages in PDF File: 40
Keywords: patents, transaction costs, new institutional economics, team production, asset partition, technology transfer, incentives
JEL Classification: O3, H42, K00, L1Accepted Paper Series
Date posted: April 28, 2003
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo5 in 0.422 seconds