Citation

Discussion Paper Details

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Title: Damages and Injunctions in Protecting Proprietary Research Tools

Author(s): Mark Schankerman and Suzanne Scotchmer

Publication Date: September 2000

Keyword(s): Damages, Injunctions, Intellectual Property and Research Tools

Programme Area(s): Industrial Organization

Abstract: We investigate how liability rules and property rules affect the incentives to invest in research tools. We argue that it is hard to deter infringement under any of the enforcement regimes available. However, counterintuitively, a credible threat of infringement can actually be beneficial to the patentholder. We compare the two doctrines of damages under the liability rule, namely, lost profit (lost royalty) and unjust enrichment, and argue that unjust enrichment protects the patentholder better than lost royalty. Both can be superior to a property rule (the right to enjoin infringement), depending on how much delay is permitted before infringement is enjoined. We also show that, for patents on end-user products, the ranking of liability doctrines is reversed: unjust enrichment is inferior to lost profits.

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Bibliographic Reference

Schankerman, M and Scotchmer, S. 2000. 'Damages and Injunctions in Protecting Proprietary Research Tools'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2554