nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2016‒09‒04
two papers chosen by
Giovanni Ramello
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. An Optimal Rule for Patent Damages Under Sequential Innovation By Chen, Yongmin; Sappington, david
  2. The laws of action and reaction: on determinants of patent disputes in European chemical and drug industries By Rahul RK Kapoor; Nicolas van Zeebroeck

  1. By: Chen, Yongmin; Sappington, david
    Abstract: We analyze the optimal design of damages for patent infringement in settings where the patent of an initial innovator may be infringed by a follow-on innovator. We consider damage rules that are linear combinations of the popular "lost profit" (LP) and "unjust enrichment" (UE) rules, coupled with a lump-sum transfer between the innovators. We identify conditions under which a linear rule can induce the socially optimal levels of sequential innovation and the optimal allocation of industry output. We also show that, despite its simplicity, the optimal linear rule achieves the highest welfare among all rules that ensure a balanced budget for the industry, and often secures substantially more welfare than either the LP rule or the UE rule.
    Keywords: Patents, sequential innovation, infringement damages, linear rules for patent damages.
    JEL: D4 K2 O3
    Date: 2016–08–30
  2. By: Rahul RK Kapoor; Nicolas van Zeebroeck
    Keywords: Patent Litigation; Opposition; Patent System; Patent Value; Patent Strategy; European Patent Office
    Date: 2016–08–24

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