Transaction Costs and Patent Reform

17 Pages Posted: 5 Apr 2007

See all articles by Paul J. Heald

Paul J. Heald

University of Illinois College of Law

Abstract

This article considers current proposals for patent law reform in light of a simple theory about intellectual property law: In a world without transaction costs, the assignment of property rights is not necessary to stimulate the optimal production of creative goods. Because potential users of inventions could contract for their creation, a compelling justification for granting property rights in these intangibles is the reduction of real-world transaction and information costs that hinder, or make impossible, contract formation between users and creators. Proposals for patent law reform, therefore, should be evaluated by whether a change in legal rights, or in the regulatory process increases or lowers these costs.

Keywords: patents, inventions, coase, transaction costs, ebay, reform

JEL Classification: I01, K12, K19

Suggested Citation

Heald, Paul J., Transaction Costs and Patent Reform. Santa Clara Computer & High Technology Law Journal, Vol. 23, 2007, UGA Legal Studies Research Paper No. 07-009, Available at SSRN: https://ssrn.com/abstract=978194

Paul J. Heald (Contact Author)

University of Illinois College of Law ( email )

504 E. Pennsylvania Avenue
Champaign, IL 61820
United States
706-372-2567 (Phone)

HOME PAGE: http://www.law.illinois.edu/faculty/profile/PaulHeald

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