An Economic Analysis of Intellectual Property Damages

Knowledge management can not be separated from intellectual property protection, and intellectual property damages play a crucial role in intellectual property protection. Based on the use of economic analysis, this paper comprehensively analyzes the characteristic, compensation principle and compensation amount of intellectual property infringement, and makes an empirical analysis by using the practical data. Furthermore, a new system of intellectual property damages is constructed, which has three main points. Firstly, the infringer has more chance of escaping liability in intellectual property infringement. Secondly, it should be determined by the chance of escaping liability whether compensatory damages principle is applied or punitive damages principle. Finally, punitive damages of intellectual property are directly proportional to the actual harm and inversely proportional to the product of the probability of detecting infringement and the probability of bearing liability if detecting infringement.