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Deterrence And Damages: The Multiplier Principle And Its Alternatives, Richard Craswell
Deterrence And Damages: The Multiplier Principle And Its Alternatives, Richard Craswell
Michigan Law Review
One purpose of fines and damage awards is to deter harmful behavior. When enforcement is imperfect, however, so the probability that any given violation will be punished is less than 100%, the law's deterrent effect is usually thought to be reduced. Thus, it is often said that the ideal penalty (insofar as deterrence is concerned) equals the harm caused by the violation multiplied by one over the probability of punishment. For example, if a violation faces only a 25% (or one-in-four) chance of being punished, on this view the optimal penalty would be four times the harm caused by the …
Limiting Patentees' Market Power Without Reducing Innovation Incentives: The Perverse Benefits Of Uncertainty And Non-Injunctive Remedies, Ian Ayres, Paul Klemperer
Limiting Patentees' Market Power Without Reducing Innovation Incentives: The Perverse Benefits Of Uncertainty And Non-Injunctive Remedies, Ian Ayres, Paul Klemperer
Michigan Law Review
Uncertainty and delay in patent litigation may have unforeseen virtues. The combination of these oft-criticized characteristics might induce a limited amount of infringement that enhances social welfare without reducing (or without substantially reducing) the profitability of the patentee. Patent infringement is generally viewed as socially inefficient because infringement reduces the patentee's ex ante incentive to innovate. Limited amounts of infringement combined with increased patent duration, however, can substantially reduce the distortionary ex post effects of supracompetitive pricing without reducing the patentee's ex ante incentives to innovate. Indeed, this Article derives a legal regime that preserves the incentive to innovate by …