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Open Access Publications from the University of California

Still Looking for Lost Profits: The Case of Horizontal Competition

  • Author(s): Schankerman, Mark
  • Scotchmer, Suzanne
  • et al.
Abstract

JEL Classifications: L41, K21

Abstract: When infringement of a patent dissipates profit relative to the licensing agreement that would otherwise occur, damages under the lost-profit rule deter infringement, and otherwise not. We develop this point in a general model and give two examples. However, joint profit might not be dissipated by infringement. An important example is where there are restrictions on licensing that arise from competition policy.

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