Probabilistic Patents

Bibliographic Data

ID4029945
AuthorsMark A Lemley (0000-0002-2944-0582, William H. Neukom Professor of Law, Stanford Law School, Stanford, California, and of counsel, Keker & Van Nest LLP, San Francisco, California.), Carl Shapiro (0000-0003-4430-3655, University of California, Berkeley)
Year2005
Volume19
Issue2
Pages75-98
Publication date2005-04-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Journal of Economic Perspectives (JOURNAL)
Journal identifiersISSN: 0895-3309 • E-ISSN: 1944-7965
PublisherAmerican Economic Association (PUBLISHER • US)
DOI10.1257/0895330054048650
OpenAlexW4233445588
LanguageEN
Citations received32
References cited22

Economists often assume that a patent gives its owner a well-defined legal right to exclude others from practicing the invention described in the patent. In practice, however, the rights afforded to patent holders are highly uncertain. Under patent law, a patent is no guarantee of exclusion but more precisely a legal right to try to exclude. Since only 0.1% of all patents are litigated to trial, and since nearly half of fully litigated patents are declared invalid, this distinction is critical to understanding the economic impact of patents. The growing recognition among economists and legal scholars that patents are probabilistic property rights has significant implications for our understanding of patents in four important areas: (1) reform of the system by which patents are granted; (2) the legal treatment of patents in litigation; (3) the incentives of patent holders and alleged infringers to settle their disputes through licensing or cross-licensing agreements rather than litigate them to completion; and (4) the antitrust limits on agreements between rivals that settle actual or threatened patent litigation

Probabilistic logic · Computer Science · Innovation Policy and RD · Intellectual Property and Patents · Pharmaceutical Economics and Policy · Artificial Intelligence

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