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Optimal Remedies For Patent Infringement, Keith N. Hylton, Mengxi Zhang
Optimal Remedies For Patent Infringement, Keith N. Hylton, Mengxi Zhang
Faculty Scholarship
This paper derives optimal remedies for patent infringement, examining damages awards and injunctions. The fundamental optimality condition that applies to both awards and injunctions equates the marginal static cost of intellectual property protection with the marginal “dynamic” benefit from the innovation thereby induced. When the social value of the patent is sufficiently high, the optimal award induces socially efficient investment by giving the innovator the entire social value of her investment.