Patent Accidents: Questioning Strict Liability in Patent Law

Abstract

Accidental infringement of patent rights is a pervasive and growing problem in the Information Age. As IP rights proliferate and expand in scope, it is becoming increasingly easy for companies and individuals to inadvertently infringe patents. When such accidental infringement occurs, patent law holds the infringer strictly liable. This contrasts with many areas of tort law where defendants are only liable if they act negligently. This Article questions the normative desirability of strict liability in patent infringement cases. Assuming the primary value of patent law is utilitarian, the Article poses the research question: What liability rule will maximize social welfare? The Article answers the question theoretically by applying economic models of accidents developed in tort law literature. The research finds that a negligence rule is preferable. Unlike strict liability, negligence liability will encourage both patentees and technology users to take reasonable measures to prevent accidental infringement, and thus minimize the social cost of patent accidents. Therefore, the Article recommends reforms to the liability rule in direct patent infringement cases. Defendants should be liable for accidental patent infringement only when they fail to adopt reasonable care to avoid the infringement.