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Abstract:
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Abstract:
This paper contributes to the fundamental discussion of setting optimal
liabilities in restitution law by analyzing the effects that the existing
multitude of indemnification rules for patent infringements have on
innovative and imitative activity. From a theoretical legal standpoint, the
choice of patent law is particularly enlightening due to its hybrid public and
private nature. From an economic perspective its relevance lies in regulating
the driving forces of welfare in highly industrialized societies. Our analysis
of regulations from six different jurisdictions (US, JP, DE, UK, FR, NL)
reveals that from a scholarly standpoint none of the regulations sets optimal
liabilities in general. Our major finding is that an expectation damage rule
based on a renegotiation outcome from an ex-ante perspective (falling in
between the generic legal notions of ‘lost profits’ and ‘infringer’s profits’)
between licensor and licensee appears optimal in patent infringement cases
to avoid dynamic inefficiencies. The result is intuitive, however, was not
predicted by the existing literature on indemnification law.
Keywords: Patents, litigation, damage awards, innovation,
infringement
JEL-Classifications: K41,L00, L20 |
This work is licensed under a Creative Commons License.
