This article considers current proposals for patent law reform in light of a simple theory about intellectual property law: In a world without transaction costs, the assignment of property rights is not necessary to stimulate the optimal production of creative goods. Because potential users of...

Patent law is under-theorized in the sense that the predominating incentive-based justifications cannot by themselves adequately explain empirical evidence on patenting gathered by research economists. This article provides an alternative justification for patent law based on private transaction...