Purging Patent Law of ‘Private Law’ Remedies
55 Pages Posted: 24 Sep 2011 Last revised: 11 Feb 2014
Date Written: September 23, 2011
This paper rejects the fundamental "private law" premise of patent law remedies that courts should always attempt to restore the status quo ante by making the patentee "whole" in the event of infringement. Instead, the patent system and its associated remedies should be viewed as part of a "public law" regulatory regime designed to further the societal goal of optimizing innovation incentives. Such an approach mandates significant changes in the structure of patent remedies. For example, when the patent-in-suit covers a minor component of a complex product, I argue that injunctions and make-whole damages should not just be denied to non-practicing entities (NPEs) -- as prior scholars have argued -- but to practicing entities as well. In contrast, courts should generally award more than make-whole damages in cases involving difficult-to-detect infringement. More fundamentally, the damages and injunction provisions of the Patent Act -- which derive from a private law foundation -- should be jettisoned in favor of remedies that directly promote optimal innovation incentives.
Keywords: patents, damages, remedies, injunctions, royalties, licensing, eBay, NPE
JEL Classification: K2, O3, O34
Suggested Citation: Suggested Citation