Author(s)

Liang Dong, Rong Zhang, Yan Yu

Corresponding Author

Yan Yu

ABSTRACT

“Questionable patent” is one of the most serious problems facing the patent system. This paper suggests that the existing patent system can’t build relationship well between patent right and patent value, and causes the imbalance of patent holder’s rights and obligations, and then result in “questionable patent”. This paper has come up with the idea of contract of patent insurance on the premise that patent’s validity is uncertain, analyzed the strategic choice of all the participants through a sequential game model, and designed the optimal patent insurance contract on this basis. The results show that if the patent insurance premium and patent infringement compensation can be reasonably designed and the patent authorization behavior of innovative manufacturer can be properly intervened, the regulator could regulate the whole market through innovative manufacturer, and then achieve objectives such as compensating R&D cost of innovative manufacturer, minimizing the monopoly manufacturers’ profit and maximizing social welfare.

KEYWORDS

Questionable patent, Patent system, Contract of patent insurance, Sequential game