EX-POST LIABILITY RULES IN MODERN PATENT LAW. Ex-post aansprakelijkheidsregels in een modern octrooirecht
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1 EX-POST LIABILITY RULES IN MODERN PATENT LAW Ex-post aansprakelijkheidsregels in een modern octrooirecht Proefschrift ter verkrijging van de graad van doctor aan de Erasmus Universiteit Rotterdam op gezag van de rector magnificus Prof.dr. H.G. SCHMIDT en volgens besluit van het College voor Promoties. De openbare verdediging zal plaatsvinden op 17 September 2010 om uur door Rosa Julieta Fiorella Maria Castro BERNIERI geboren te Londen, Verenigd Koninkrijk ERASMUS UNIVERSITEIT ROTTEKDAM
2 CONTENTS Acknowledgments List of Abbreviations v xi Introduction 1 Chapter I. Property and Liability Rules: Implications for Patent Rights Introduction Economics of patent protection The economic rationale of patents The economics of patent enforcement The interface between substantive and enforcement patent law Property rules and liability rules Property rules and liability rules in IP Descriptive studies Critics against IP liability rules Privately organized liability rules Property and liability rules in patent law The case against liability rules for patent rights The case for patent liability rules: Transaction costs Strategic behavior and patent hold-ups Patent hold-ups The modern patent landscape Multi-parties negotiation: The anti-commons Network externalities Uncertainty over rights Patent quality problems Conclusions 63 Chapter II. Ex-Post Liability Rules: A Historical View Introduction Compulsory licensing in international history 66 vii
3 Ex-Post Liability Rules in Modern Patent Law 2.1. Early patent times The first compulsory licensing provisions Origins of the principal national patent systems U.K U.S France Germany Ex post liability rules in the TRIPS Agreement Article 31 of the TRIPS Agreement Article 44 of the TRIPS Agreement A post-trips landscape Remedies for patent infringement Common law countries Civil law countries Creation of rights and choice of remedies The inibitoria in the industrial property context The European landscape with respect to IP remedies Ill 6. Conclusions 116 Chapter III. Ex-Post Liability Rules: A Comparative Legal View Introduction Ex-post liability rules U.S. ex-post liability rules The ebay case Post ebay interpretation of the four-factor test Irreparable harm Inadequate remedies Balance of hardships Public interest The post ebay decision landscape Willful v. inadvertent infringement Preliminary Injunctions Other liability rules in the U.S U.K Injunctions as an equitable remedy Discretion to award damages in lieu of injunctions The rationale of ex-post liability rules in the U.K Other ex-post liability rules: Compulsory licenses Italy Property rules: Final injunctions 156 VHl
4 Contents 5.2. Judicial discretion: How much space? Preliminary injunctions Willful and Inadvertent infringement Other ex-post liability rules: Compulsory licenses Conclusions 169 Chapter IV. Ex-Post Liability Rules: When Should They Be Used? Introduction Patent hold-ups: Economic theory Economics of patent hold-ups: The Lemley and Shapiro model Refinements and critics Assumptions of the models From patent hold-ups to patent strategic behavior Strategic behavior and ex-post liability rules Problems put forward by ebay v. MercExchange Strategic behavior Multi component patents Dubious quality patents The landscape of strategic behavior in Europe Incidence and effects of strategic behavior A case study: the European pharmaceutical sector Patent strategies in the European pharmaceutical sector Policy suggestions of the Final Report Beyond the European pharmaceutical sector Patent strategic behavior: Towards a broader framework Actors: Non-manufacturing entities, trolls, ambushes and others Definition and business models Evolution of patent strategic behavior The conduct: Trolling behavior Conclusions 231 Chapter V. Ex-Post Liability Rules: Towards an Efficient Design Introduction The Efficient implementation of ex-post liability rules How could courts efficiently apply ex-post liability rules? 234 The balancing test in post-ebay cases A monetary substitute for a property rule TRIPS: Adequate compensation and adequate remuneration Determining the level of compensation: An impossible task? 241 ix
5 Ex-Post Liability Rules in Modern Patent Law 3.3. Remuneration for compulsory licenses after the TRIPS Agreement Patent infringement: The goals of damages substituting injunctions Post-eBay application Law and economics of damage remedies Other costs of patent liability rules Interference with bargaining outcomes Ex-post liability rules and legal uncertainty Cost-benefit analysis of the rules A comparative overview of costs and benefits of rules Conclusions 258 Chapter VI. Conclusions The research question Findings of the research Chapter Chapter II Chapter III Chapter IV Chapter V Impact and applications of this research Lessons from the entitlements literature to the patent field Patent policy. Efficiency and other goals of public interest Intellectual property as property Rules of interpretation: The role of courts and agencies The design of patent liability rules Future research Other IP rights: Copyright, trademarks and unfair competition law Public choice applications Antitrust and IP interface Further national, international and European harmonization 286 List of References 289 Appendix 309
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