Abstract: Through a trilateral game model, this paper studies protective effect of the lost-royalty doctrine and the unjust-enrichment doctrine to the cumulative innovation of basic research respectively under the condition of product differentiation, and then analyses the optimal compensation mechanism of patent infringement on this basis. The results show that the lost-royalty doctrine could effectively maintain the benefit of patent holders compare with the unjust-enrichment doctrine. Only by mixed using the two compensation mechanism to build an ex-ante mechanism, the court could maximize the social welfare by guiding firms’ behavior indirectly. The court is not only a “arbiter” but also a “guide”, and plays a more proactive role in patent system.

Key words: basic innovation, patent infringement, lost-royalty doctrine, unjust-enrichment doctrine