Compulsory Liability Rule and Liability Rule by Default Regimes

Abstract

In Chap. 2 it was shown that there is a degree of inefficient overuse of property rules in the current German law system and that the same would apply to the future system under the regulation on the European Patent with Unitary Effect. Considerations regarding constraints such as distributional preferences and higher-ranking law have shown that such inefficient use is also not necessary. The analysis in Chap. 3 suggests that current private liability rules result in a reduction of the overuse of property rules. Although a more intensive use of private liability rules seems possible and should be encouraged, this is not a solution to all the problems raised above because patentees will switch to a liability rule if they profit from it and will not take into account what would be better for society. Therefore, in some cases, compulsory liability rules and liability rules by default, which need to be implemented by the legislature, may be necessary to come closer to striking an optimal balance between exclusivity and non-exclusivity with regard to economic efficiency. As already mentioned, the current compulsory liability rule mechanisms in the German patent law system, including those derived from antitrust law, are almost never used and so far have not led in a single case to the replacement of a property rule by a liability rule; liability rule by default mechanisms essentially do not exist. The questions that can be raised are, therefore, whether courts should make more intensive use of existing legal provisions—meaning especially whether a different interpretation of the existing statutes would be possible—or if the statutes should be amended.