Error Costs & IP Law

A court in doubt about an IP statute’s scope can err in two ways. It can wrongly narrow the IP right’s reach, or wrongly broaden it. The latter error, however, is worse: A wrongly broadened IP statute effectively creates new property and thereby diminishes the public domain and others’ freedom of action. To correct erroneous broadening, unlike erroneous narrowing, the legislature must thus eliminate a now-established property right. And that is very hard to do. Courts cannot, of course, avoid making at least some mistakes. Courts can, however, prefer the mistakes that are easier, not harder, for the legislature to correct. This Essay explores this error-cost-based approach to IP statutes. The time is ripe for more effective interbranch dialogue on IP law, for the America Invents Act of 2011—comprising some of the most significant changes to patent law since the 1952 Patent Act—came fully into force in March 2013.

The full text of this Article is available to download as a PDF.