Patents, Prizes, and Property

20 Pages Posted: 10 Mar 2017 Last revised: 13 Apr 2017

See all articles by Ted M. Sichelman

Ted M. Sichelman

University of San Diego School of Law

Date Written: February 8, 2017

Abstract

The traditional view is that patents and prizes stand in stark contrast to one another as means for promoting innovation. On this view, patents are government grants of private property rights that result in market-based, ex post rewards for innovative activity in the form of supracompetitive pricing. Prizes are awards determined ex ante by public regulators in exchange for placing the innovation into the public domain. Recently, several commentators have questioned this dichotomy, noting that patents and prizes can function economically in quite similar ways. Although there is much value in this insight, the property-based remedies that often flow from patent infringement can result in important distinctions between patents and prizes. These differences in turn may have substantial effects on the innovative process. Nonetheless, patents should still generally be classified as regulatory tools used by governments to achieve the social end of innovation. To be certain, legal exclusivity — like other regulatory tools — may be effected via private property rights to economize on information and administrative costs. Yet, the theoretical justifications for patents, which primarily sound in promoting social aims, should not be confused with the aims of traditional areas of private law — such as real property, contract, and tort — which, to a much more notable degree, protect individual interests.

Keywords: patents; property; prizes; grants; research & development; regulation; invention; innovation; transaction costs; public domain

JEL Classification: K11, K2, O34

Suggested Citation

Sichelman, Ted M., Patents, Prizes, and Property (February 8, 2017). Harvard Journal of Law and Technology, Vol. 30, pp. 279-297, 2017; San Diego Legal Studies Paper No. 17-273. Available at SSRN: https://ssrn.com/abstract=2930140

Ted M. Sichelman (Contact Author)

University of San Diego School of Law ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States
(619) 260-7512 (Phone)
(619) 260-2748 (Fax)

HOME PAGE: http://https://www.sandiego.edu/law/faculty/profiles/bio.php?ID=795

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