Vargas Barrenechea, Martin (2009): Licensing probabilistic Patents and Liability Rules: The Duopoly case.
Download (243kB) | Preview
In this paper a game is used to compare the licensing of a cost reduction innovations under lost profits (LP) and unjust enrichment (UE), both damage rules that are used by courts in the calculation of damages when a patent has been infringed. The market is composed by two homogeneous firms that compete in quantities (Cournot), both firmas produces a homogeneous good. One of the firms (patent holder) develops a cost reduction innovation (drastic or non-drastic) and got a patent for this innovation. Under the shadow of probabilistic property rights, It is founded that licensing by using royalty rate is preferred compared with fixed fees, also it is observable little licensing (just big innovations). By comparing LP against UE, it is concluded that for drastic innovation the patentee and licensee are better off under LP. However social welfare is greater under UE. In the case of a non drastic innovation the results do not show a rule better than the other one.
|Item Type:||MPRA Paper|
|Original Title:||Licensing probabilistic Patents and Liability Rules: The Duopoly case|
|Keywords:||innovation, law, damage rules, patent, licensing games|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior ; Transaction Costs ; Property Rights
O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O34 - Intellectual Property and Intellectual Capital
P - Economic Systems > P4 - Other Economic Systems > P48 - Political Economy ; Legal Institutions ; Property Rights ; Natural Resources ; Energy ; Environment ; Regional Studies
K - Law and Economics > K1 - Basic Areas of Law > K11 - Property Law
|Depositing User:||Martin Barrenechea|
|Date Deposited:||20. Aug 2009 11:23|
|Last Modified:||20. Feb 2013 01:54|
J.J. Anton and D.A. Yao. Finding” Lost” Profits: An Equilibrium Analysis of Patent Infringement Damages. Journal of Law, Economics, and Organization, 23(1):186, 2007.
K.J. Arrow. Economic Welfare and the Allocation of Resources for Invention, 1962.
J.P. Choi. Alternative damage rules and probabilistic intellectual property rights: Unjust enrichment, lost profits, and reasonable royalty remedies. Information Economics and Policy, 21(2):145–157, 2009.
M.I. Kamien and Y. Tauman. Patent Licensing: The Inside Story. The Manchester School, 70(1):7–15, 2002.
J.O. Lanjouw and M. Schankerman. Protecting Intellectual Property Rights: Are Small Firms Handicapped?*. The Journal of Law and Economics, 47 (1):45–74, 2004.
M.A. Lemley and C. Shapiro. Probabilistic Patents. Journal of Economic Perspectives, 19:75, 2005.
European Patent Office. Annual report. 2004.
European Patent Office. Annual report. 2008.
M. Schankerman and S. Scotchmer. Damages and Injunctions in Protecting Intellectual Property. The RAND Journal of Economics, 32(1):199–220, 2001.
D. Sen and Y. Tauman. General licensing schemes for a cost-reducing innovation. Games and Economic Behavior, 59(1):163–186, 2007.
X.H. Wang. Fee versus royalty licensing in a Cournot duopoly model. Economics Letters, 60(1):55–62, 1998.
Available Versions of this Item
- Licensing probabilistic Patents and Liability Rules: The Duopoly case. (deposited 20. Aug 2009 11:23) [Currently Displayed]