As patent law begins to transform in the 21st century we see
more and more discussions about appropriate patent policy. While there are many
discussions about the merits of patent awards themselves, there is also a
debate about appropriate relief for patent infringement.
One discussion centers on injunctive relief for patent
infringement. A popular theory, the Lemley-Shapiro theoretical model of “patent
holdup,” argues that the threat of a potential injunction often inflates
royalty payments above and beyond an appropriate market rate. The theory also
promotes the removal of injunctive relief as a presumption for patent
infringement. On an elementary level, the Lemley-Shapiro model promotes a
reduced role for injunctive relief while promoting monetary damages.
Gregory Sidak takes a different view, arguing that the
problem is not potential injunctive relief, but the failure to create an appropriate
marketplace to determine proper royalty rates in cases where infringement
exists. Sidak sees a continued feature role for injunctive relief, but suggests
that minor revisions will better serve rights holders and potential infringers.
Bottom Line: While
this is the most elementary summary of the arguments, this current debate is a
barometer of the ongoing discussions about patent rights in the new information
economy. We can expect to continue to see academics, policy groups and industry
passionately argue their beliefs and interests in a watershed time for
decisions about the future of patents and other intellectual property rights.