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Property Rights and Patent Litigation in Early Nineteenth-Century America

Published online by Cambridge University Press:  03 March 2009

B. Zorina Khan
Affiliation:
Visiting Assistant Professor of Economics, University of California, Los Angeles, CA 90024.

Abstract

Economic development depends on the establishment of appropriate institutions, such as a patent system that defends property rights in inventions. Skeptics argue that patents in early America were unenforceable because judges arbitrarily ruled against patentees. I examine 795 patent cases to assess the role of the courts and find that judges protected patent rights because they believed that inventors were motivated by expected returns. Although changes occurred in the 1850s, the courts consistently upheld the view that the patent system fostered economic growth. If inventive activity indeed responded to material incentives, this finding implies that the legal system stimulated technical change by reinforcing the effectiveness of the patent system.

The laws of the United States are extremely favorable to the division of property.

—Alexis de Tocqueville, Democracy in America

Type
Articles
Copyright
Copyright © The Economic History Association 1995

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