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Innovation on trial: punitive damages versus new products
Abstract:
Innovation, scientific discovery transformed into valuable products, is a powerful asset for the United States in today's global economy, but it is being put on trial by the U.S. product liability system. Strict liability and huge jury awards, bloated by the uncontrolled imposition of punitive damages, have led to a proliferation of lawsuits, which in turn has created immense legal uncertainty for innovators who want to create new products. Because a high level of legal uncertainty and scientific innovation cannot coexist, new, safe products may be kept off the market and the scope of research and development restricted. Punitive damages constitute the driving force behind this problem, and both judges and legislators should aim at bringing them under control with legal reforms.
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Punishment
Punishment can be positive or negative. Positive punishment involves adding an undesirable stimulus, such as scolding, to decrease a behavior. Negative punishment involves removing a desirable stimulus, such as taking away a favorite toy, to decrease behavior.

