Law and Economics of Reverse Engineering, The

Intellectual Property and Copyright and Trademark

Article Snapshot


Pamela Samuelson and Suzanne Scotchmer


Yale Law Journal, Vol. 111, pp. 1575-1663, 2002


This looks at law relating to studying man-made objects to figure out how they work, “reverse engineering.”

Policy Relevance

Reverse engineering can often benefit consumers and competition, but some narrow restrictions make sense.

Main Points

  • In many areas of manufacturing, using reverse engineering to figure out a firm’s trade secrets is allowed. Laws restricting reverse engineering are more common in information-related areas like software, computer chips, and entertainment media.    

  • Legal restrictions usually make sense when a reverse engineer can easily capture almost all of the knowledge and value of a product just by studying it; this is common with information goods, and often harder with manufactured goods.

  • Legal restrictions should balance harm to competition from stopping reverse engineering against harm to innovators from letting copycats cut into their profits.

  • Legally, computer chip makers may study competitors’ chips to learn how they work and use the information in a new chip, but the second maker must contribute engineering of his own, raising his costs. This makes sense and helped the chip industry grow.

  • Software copyright cases make sense in allowing reverse engineering so a firm can make its software work with that of a competitor.
    • Incentives to develop new platforms such as an operating system are lower if reverse engineering is allowed. But competitors can use reverse engineering to stop a platform from “tipping” and controlling the market.
    • It might harm competition for courts to enforce contracts that stop reverse engineering of software.

  • With music and movies, the law limiting reverse engineering of technology used to prevent copying goes too far. More reverse engineering should be allowed.

  • Limits on reverse engineering need not require banning it completely.

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