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19 J. Int'l Bus. & L. 50 (2019-2020)
Nash Bargaining Solution and Its Generalizations in Intellectual Property Litigation: VirnetX and an Analysis of the Court's Decision

handle is hein.journals/jibla19 and id is 58 raw text is: NASH BARGAINING SOLUTION AND ITS GENERALIZATIONS IN INTELLECTUAL PROPERTY LITIGATION: VIRNETX AND AN ANALYSIS OF THE COURT'S DECISION Professor Rajeev R. Bhattacharya, Ph.D. Washington Finance and Economics at Johns Hopkins University* RRB@Washington-Finance.com I. ABSTRACT The purpose of this article is to explain the Nash Bargaining Solution and its generalizations, especially in the presence of asymmetric bargaining power. The article discusses the pros and cons in the context of intellectual property litigation. Furthermore, it provides a description and detailed analysis of the Court's decision in VirnetX from this perspective. KEYWORDS: Nash Bargaining Solution - Generalizations - Asymmetric Bargaining Power - Intellectual Property - Litigation - VirnetX II. INTRODUCTION This paper discusses the Nash Bargaining Solution, as initially posited by the legendary Nobel Laureate John Nash,', arguably the father of modem economics, and generalized by John Harsanyi,2 Reinhard Selten,3 Lloyd Shapley,4 Ehud Kalai and Meir * Mailing address: Mailing address: Professor Rajeev Bhattacharya, Johns Hopkins University, 1717 Massachusetts Avenue, Washington, DC 20036., U.S.A. I acknowledge, with gratitude, the very helpful comments from John Greenberg; the usual caveats apply. I have not received any substantial funding for this research and have no conflicts of interest. John Nash, The Bargaining Problem, 18 ECONOMETRICA 155, (1950); John Nash, Two Person Cooperative Games, 21 ECONOMETRICA 128, (1953); Press Release, NOBELPRIZE.ORG (Oct. 11, 1994) bttp://www.nobelprize.org/nobel prizes/economic-sciences/laureates/1994/press.html (Professor Nash was awarded the Nobel Prize in Economics in 1994). 2 See John C. Harsanyi, A Bargaining Model for the Cooperative n-Person Game, 4 INT'L ECON. R. 194 (1959). See generally John Harsanyi, Biographical, NOBELPRIZE.ORG https://www.nobelprize.org/prizes/economic-sciences/1994/harsanyilfacts/ (last visited Feb. 28, 2020) (Professor Harsanyi was awarded the Nobel Prize in economics in 1994). See Reinhard Selten, Valuation of n-Person Games, 52 ANNALS OF MATHEMATIC STuD. 577 (1964); See generally Reinhard Selten, Facts, NOBELPRIZE.ORG https://www.nobelprize.org/prizes/economic- sciences/1994/selten/facts/ (last visited Feb. 28, 2020)( Professor Selten was awarded the Nobel Prize in economics in 1994). 50

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