Document Type
Working Paper
Publication Date
2-8-2023
Publisher
Boston University School of Law
Language
en-US
Abstract
This paper examines a simple and old question: should innovators receive a patent or a prize? The answer I provide is equally simple: they should receive both. The literature on patents versus prizes has proceeded mostly under the assumption that there should be a choice between a regime of patents and a regime of prizes in which patents fall into the public domain upon award of the prize. There are significant “public choice costs” under the prize plans. By this I mean there are risks of inappropriate transfers to patentees – that is, looting – and of confiscation of patentees, through the conduct of or through the omissions of government agents. The innovation regime I propose is a patent-plus-prize scheme. The patentee would receive the patent and a prize that approximates consumer surplus. Public choice costs are considerably lower than under prize schemes: there would be no looting and no risk of confiscation under patent-plus-prize. In addition, private and social incentives to innovate are aligned.
Recommended Citation
Keith N. Hylton,
A Patent and a Prize
(2023).
Available at:
https://scholarship.law.bu.edu/faculty_scholarship/3421
