The Independent-Invention Defense in Intellectual Property

John M. Olin Law and Economics Working Paper No. 98-11

Posted: 26 Feb 1999

See all articles by Stephen M. Maurer

Stephen M. Maurer

University of California, Berkeley

Suzanne Scotchmer

University of California - Department of Economics (Deceased); University of California, Berkeley - School of Law; National Bureau of Economic Research (NBER)

Date Written: October 1998

Abstract

Patents differ from other forms of intellectual property in that independent invention is not a defense to infringement. We argue that the patent rule is inferior. First, the threat of entry by independent invention would induce patentholders to license the technology, lowering the market price. Provided independent invention is as costly as the original cost of R&D, the market price will still be high enough to cover the patentholder's costs. Second, a defense of independent invention would reduce the wasteful duplication of R&D effort that occurs in patent races. In either case, the threat of independent invention creates a mechanism that limits patentholders' profits to levels commensurate with their costs of R&D.

JEL Classification: O31

Suggested Citation

Maurer, Stephen M. and Scotchmer, Suzanne, The Independent-Invention Defense in Intellectual Property (October 1998). John M. Olin Law and Economics Working Paper No. 98-11. Available at SSRN: https://ssrn.com/abstract=145140

Stephen M. Maurer

University of California, Berkeley ( email )

Berkeley, CA 94720
United States

Suzanne Scotchmer (Contact Author)

University of California - Department of Economics (Deceased)

Berkeley, CA 94720-3880
United States

University of California, Berkeley - School of Law

215 Boalt Hall
Berkeley, CA 94720-7200
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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