IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v70y2009i1-2p296-310.html
   My bibliography  Save this article

Contributory infringement rule and patents

Author

Listed:
  • Langinier, Corinne
  • Marcoul, Philippe

Abstract

The contributory infringement rule assesses liability to a third party that contributes to the infringement of a patent. Not only are firms that directly infringe liable, but those that indirectly contribute are also liable. We investigate how this rule affects the creation of a network of members (e.g., an e-commerce network). We find that the enforcement of indirect liability does not induce more trials in equilibrium. Firms settle out-of-court, but because of the threat of trial, the network size decreases and the social welfare is reduced. Surprisingly, we find that if the compensation paid by the indirect infringers is high, the rule does not benefit the patentholder and may not even give enough R&D incentives ex ante. It is possible to find a direct compensation for the patentholder that is socially preferable.

Suggested Citation

  • Langinier, Corinne & Marcoul, Philippe, 2009. "Contributory infringement rule and patents," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 296-310, May.
  • Handle: RePEc:eee:jeborg:v:70:y:2009:i:1-2:p:296-310
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167-2681(08)00211-4
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. James Bessen & Robert M. Hunt, 2007. "An Empirical Look at Software Patents," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(1), pages 157-189, March.
    2. Schankerman, Mark & Scotchmer, Suzanne, 2001. "Damages and Injunctions in Protecting Intellectual Property," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 199-220, Spring.
    3. Cremer, Jacques & Rey, Patrick & Tirole, Jean, 2000. "Connectivity in the Commercial Internet," Journal of Industrial Economics, Wiley Blackwell, vol. 48(4), pages 433-472, December.
    4. Jeffrey K. MacKie-Mason & Hal Varian, 1994. "Economic FAQs About the Internet," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 75-96, Summer.
    5. Carl Shapiro, 2001. "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting," NBER Chapters,in: Innovation Policy and the Economy, Volume 1, pages 119-150 National Bureau of Economic Research, Inc.
    6. Shapiro, Carl, 2003. " Antitrust Limits to Patent Settlements," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 391-411, Summer.
    7. Kaplow, Louis & Shavell, Steven, 1996. "Accuracy in the Assessment of Damages," Journal of Law and Economics, University of Chicago Press, vol. 39(1), pages 191-210, April.
    8. William Landes & Douglas Lichtman, 2003. "Indirect Liability for Copyright Infringement: Napster and Beyond," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 113-124, Spring.
    9. Cremer, Jacques, 2000. "Network externalities and universal service obligation in the internet," European Economic Review, Elsevier, vol. 44(4-6), pages 1021-1031, May.
    10. James Boyd & Daniel E. Ingberman, 2003. "Fly by Night or Face the Music? Premature Dissolution and the Desirability of Extended Liability," American Law and Economics Review, Oxford University Press, vol. 5(1), pages 189-232.
    11. James Bessen & Eric Maskin, 2009. "Sequential innovation, patents, and imitation," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 611-635.
    12. Bruce Hay & Kathryn E. Spier, 2005. "Manufacturer Liability for Harms Caused by Consumers to Others," American Economic Review, American Economic Association, vol. 95(5), pages 1700-1711, December.
    13. Claude Crampes & Corinne Langinier, 2002. "Litigation and Settlement in Patent Infringement Cases," RAND Journal of Economics, The RAND Corporation, vol. 33(2), pages 258-274, Summer.
    14. Cremer, Jacques & Hariton, Cyril, 1999. "The Pricing of Critical Applications in the Internet," Journal of the Japanese and International Economies, Elsevier, vol. 13(4), pages 281-310, December.
    15. Aoki, Reiko & Hu, Jin, 1999. "A Cooperative Game Approach to Patent Litigation, Settlement, and Allocation of Legal Costs," Working Papers 216, Department of Economics, The University of Auckland.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Gupeng & Lv, Xiaofeng & Zhou, Jianghua, 2014. "Private value of patent right and patent infringement: An empirical study based on patent renewal data of China," China Economic Review, Elsevier, vol. 28(C), pages 37-54.

    More about this item

    Keywords

    Patents Network Infringement;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:70:y:2009:i:1-2:p:296-310. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/jebo .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.