Results of a new study by researchers from UCI and the University of Kansas suggest that, contrary to popular belief, greater amounts of innovation, productivity and social wealth may occur when people are required to pay damages for illegally using an invention rather than prohibited from using it at all.
The study reinforces earlier findings by the researchers - UCI associate professor of informatics Bill Tomlinson and professor Andrew Torrance of the University of Kansas School of Law - offering experimental evidence that the most innovation may result when inventors receive no protection from the legal system.
Using the "Patent Game," an interactive computer-based model that attempts to simulate patent systems, Tomlinson and Torrance conducted controlled experiments to evaluate the merits of property rules (which expressly prohibit people from utilizing a patent owner's invention) and liability rules (which require infringers to pay damages but do not bar them from using an invention).
"Conventional wisdom says people will invent less if property rights are not strongly enforced," Torrance said. "However, we found that the threat of prohibition actually dampened innovation."
The pair's latest study appears in the spring issue of the Yale Journal of Law & Technology.
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