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Full-Text Articles in Law
Competition And Innovation: The Breakup Of Ig Farben, Felix Poege
Competition And Innovation: The Breakup Of Ig Farben, Felix Poege
Faculty Scholarship
The relationship between competition and innovation is difficult to disentangle, as exogenous variation in market structure is rare. The 1952 breakup of Germany’s leading chemical company, IG Farben, represents such a disruption. After the Second World War, the Allies occupying Germany imposed the breakup because of IG Farben’s importance for the German war economy instead of standard antitrust concerns. In technology areas where the breakup reduced concentration, patenting increased strongly, driven by domestic firms unrelated to IG Farben. An analysis of patent texts shows that an increased propensity to patent does not drive the effect. Descriptively, IG Farben’s successors increased …
All Your Works Are Belong To Us: New Frontiers For The Derivative Work Right In Video Games, J. Remy Green
All Your Works Are Belong To Us: New Frontiers For The Derivative Work Right In Video Games, J. Remy Green
Faculty Scholarship
In copyright law, the author of an original work has the exclusive right to prepare further works derivative of that original. Video game developers’ works are protected by the Copyright Act. As video games take advantage of more advanced technology, however, players are doing more creative, interesting, and original things when they play games. Certain things players do create independent economic value and are the kinds of acts of original authorship our copyright system is designed to encourage. However, since the author of the video game is entitled to the full panoply of rights under the laws of the American …
From Knowledge To Ideas: The Two Faces Of Innovation, James Bessen
From Knowledge To Ideas: The Two Faces Of Innovation, James Bessen
Faculty Scholarship
Innovative ideas have unique properties arising from low communication costs. But ideas come from knowledge that is costly to communicate. “Formalizing” knowledge — codifying, developing standards, etc. — reduces these costs. In a simple model, formalization is associated with changes in the nature of competition between two equilibrium regimes. In one, knowledge is formalized, new technology replaces old and patents increase innovation incentives. In the other, knowledge is not formalized, old technology coexists with new, patents decrease innovation incentives and firms sometimes freely exchange knowledge. The equilibrium changes as technology improves over a life-cycle, affecting firm strategy, innovation policy, geographic …
The Rhetoric Of Intellectual Property: Copyright Law And The Regulation Of Digital Culture, By Jessica Reyman (Book Review), Jessica Silbey
The Rhetoric Of Intellectual Property: Copyright Law And The Regulation Of Digital Culture, By Jessica Reyman (Book Review), Jessica Silbey
Faculty Scholarship
A short book review of Jessica Reyman’s, The Rhetoric of Intellectual Property: Copyright Law and the Regulation of Digital Culture.
Sequential Innovation, Patents, And Imitation, James Bessen, Eric Maskin
Sequential Innovation, Patents, And Imitation, James Bessen, Eric Maskin
Faculty Scholarship
How could such industries as software, semiconductors, and computers have been so innovative despite historically weak patent protection? We argue that if innovation is both sequential and complementary--as it certainly has been in those industries--competition can increase firms' future profits thus offsetting short-term dissipation of rents. A simple model also shows that in such a dynamic industry, patent protection may reduce overall innovation and social welfare. The natural experiment that occurred when patent protection was extended to software in the 1980?s provides a test of this model. Standard arguments would predict that R&D intensity and productivity should have increased among …
What's Wrong With The Patent System? Fuzzy Boundaries And The Patent Tax, James Bessen, Michael J. Meurer
What's Wrong With The Patent System? Fuzzy Boundaries And The Patent Tax, James Bessen, Michael J. Meurer
Faculty Scholarship
The annual number of patent lawsuits filed in the U.S. has roughly tripled from 1970 to 2004. The number of suits was more or less steady in the 1970s, climbed slowly in the 1980s, and exploded in the 1990s. Why? The usual answers point to (1) the growth of the “new economy” and the concomitant explosion of patenting, (2) the failure of the Patent Office to reject patents on old or obvious inventions, or (3) the rise of the patent troll. There is an element of truth in all these answers, but even collectively they do a poor job explaining …
The Value Of U.S. Patents By Owner And Patent Characteristics, James Bessen
The Value Of U.S. Patents By Owner And Patent Characteristics, James Bessen
Faculty Scholarship
This paper uses renewal data to estimate the value of U.S. patents, controlling for patent and owner characteristics. Estimates of U.S. patent value are substantially larger than estimates for European patents, however, the ratio of U.S. patent value to R&D for firms is only about 3%. Patents issued to small patentees are much less valuable than those issued to large corporations, perhaps reflecting imperfect markets for technology. Litigated patents are more valuable, as are highly cited patents. However, patent citations explain little variance in value, suggesting limits to their use as a measure of patent quality.
Estimates Of Patent Rents From Firm Market Value, James Bessen
Estimates Of Patent Rents From Firm Market Value, James Bessen
Faculty Scholarship
The value of patent rents is an important quantity for policy analysis. However, estimates in the literature based on patent renewals might be understated. Market value regressions could provide validation, but they have not had clear theoretical foundations for estimating patent rents. I develop a simple model to make upper bound estimates of patent rents using regressions on Tobin's Q. I test this on a sample of US firms and find it robust to a variety of considerations. My estimates correspond well with estimates based on patentee behavior outside the pharmaceutical industry, but renewal estimates might be understated for pharmaceuticals.
What The Future Holds: Policy Choices In A Global Marketplace, Maureen A. O'Rourke
What The Future Holds: Policy Choices In A Global Marketplace, Maureen A. O'Rourke
Faculty Scholarship
This essay's title is a misnomer. No one knows "What the Future Holds" in the global marketplace. We can, however, make some educated guesses about the issues that will assume particular importance in the next year or so. Thus, the essay might be more accurately titled, "What May or May Not Be the Important Issues in Internet Commerce in the Next Year or So'"-less catchy, admittedly, but closer to the truth.
Fair Use As Market Failure: A Structural And Economic Analysis Of The Betamax Case And Its Predecessors, Wendy J. Gordon
Fair Use As Market Failure: A Structural And Economic Analysis Of The Betamax Case And Its Predecessors, Wendy J. Gordon
Faculty Scholarship
In the recent and much publicized Universal City Studios, Inc. v. Sony Corp. of America (Betamax) case, the Court of Appeals for the Ninth Circuit held that persons who make videotapes of copyrighted television programs in the privacy of their homes should be considered to be copyright infringers. Basic to the court's reasoning was a misunderstanding of the "fair use" doctrine. Called "the most troublesome [doctrine] in the whole law of copyright," "fair use" renders noninfringing certain uses of copyrighted material that might technically violate the statute, but which do not violate the statute's basic purposes.