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Patent Infringement: Lessons from Industrial Economics

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  • Bryan R. Krouse
  • Clement G. Krouse

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    Abstract

    Once a patent is found to have been infringed the law generally entitles the patentholder to monetary losses suffered as the result of the illegal conduct. It is shown here that there are important differences between the losses awarded under U.S. case law and those that economic models of competition indicate would allow patentholders to just capture the social value of their innovations and, with that, provide private incentives for efficient levels of innovation. The prevailing case law generally overestimates the harm, providing an incentive for the patentholder to opportunistically claim infringement. In the end this increases the reward to innovation and encourages overinvestment. The record of the widely read State Industries vs. Mor-Flo Manufacturing Co. (883 F.2d 1573, Fed. Cir. 1989, cert. denied, 493 U.S. 1022, 1990) provides a case study.

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    Bibliographic Info

    Article provided by Springer in its journal Journal of Industry, Competition and Trade.

    Volume (Year): 4 (2004)
    Issue (Month): 3 (09)
    Pages: 191-206

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    Handle: RePEc:kap:jincot:v:4:y:2004:i:3:p:191-206

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    Web page: http://springerlink.metapress.com/link.asp?id=105724

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    Cited by:
    1. Ottoz Elisabetta & Cugno Franco, 2012. "Does Banning Side Payments in Patent Settlements Suffice to Fully Protect Consumers?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201201, University of Turin.

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