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14 Yale J.L. & Tech. 138 (2011-2012)
Property Rules, Liability Rules, and Patents: One Experimental View of the Cathedral

handle is hein.journals/yjolt14 and id is 138 raw text is: PROPERTY RULES, LIABILITY RULES, AND PATENTS: ONE EXPERIMENTAL VIEW OF THE CATHEDRAL Andrew W. Torrance* Bill Tomlinson** 14 YALE J.L. & TECH. 138 (2011) ABSTRACT In their seminal 1972 article, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, Guido Calabresi and A. Douglas Melamed proposed an analytic framework for comparing entitlements protected by property rules and liability rules. Their article has become one of the cornerstones of modern legal scholarship, and the influence of the theory of legal rules they established has extended far beyond tort and property into almost every area of the law, including intellectual property. Despite the prodigious influence this theory of legal rules has had, its implications have never been explored experimentally. To remedy this knowledge gap, we conducted a series of controlled experiments on liability and property rules, using the patent system as an experimental model. Expressed in the nomenclature of Calabresi and Melamed, the United States'patent law has recently witnessed a shift away from property rules and towards liability rules. This Article presents an experimental study that attempts to test the hypothesis that amounts of innovation, productivity, and social utility vary across patent systems that tend to emphasize either property rules or liability rules. The results of our experiments suggest that the choice between property and liability rules does, indeed, matter, but in a surprising way. Despite the common assumption that property rules tend to outperform liability rules, we found the opposite. in a computational model of the patent system, liability rules outperformed property rules in generating innovation, productivity, and social utility. * Professor of Law, University of Kansas School of Law; B.Sc., Queen's University; A.M., Ph.D., J.D., Harvard University. I thank Professor Fred S. McChesney, Class of 1967 James B. Haddad Professor of Law, Northwestern University School of Law, for his suggestion to consider using our model of patent systems to attempt to test hypotheses regarding liability rules, property rules, and innovation. ** Associate Professor, Informatics Department, Donald Bren School of Information and Computer Sciences, University of California, Irvine; A.B., Harvard University; M.F.A., California Institute of the Arts; S.M., Ph.D., MIT. Both authors thank Nitin Shantharam and Bryant Jones for their assistance implementing the system.

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