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Transaction Costs and Patent Reform

17 Pages Posted: 5 Apr 2007  

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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