Law Commons^™

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 …

Games Without Frontiers: The Increasing Importance Of Intellectual Property Rights In The People’S Republic Of China, James M. Cooper

Faculty Scholarship

Intellectual property (“IP”) protection in the People's Republic of China has been murky and amorphous. The country is currently enjoying a historic era with significant infrastructure and investment projects occurring as the Chinese consumer society substantially expands. These simultaneous trends require that China commit to the securitization and protection of IP rights to sustain its rapid economic growth.

Authors And Machines, Jane C. Ginsburg, Luke Ali Budiardjo

Faculty Scholarship

Machines, by providing the means of mass production of works of authorship, engendered copyright law. Throughout history, the emergence of new technologies tested the concept of authorship, and courts in response endeavored to clarify copyright’s foundational principles. Today, developments in computer science have created a new form of machine, the “artificially intelligent” (AI) system apparently endowed with “computational creativity.” AI systems introduce challenging variations on the perennial question of what makes one an “author” in copyright law: Is the creator of a generative program automatically the author of the works her process begets, even if she cannot anticipate the contents …

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 …

Copyright's Technological Interdependencies, Clark D. Asay

Faculty Scholarship

Copyright was initially conceptualized as a means to free creative parties from dependency on public and private patrons such as monarchs, churches, and well-to-do private citizens. By achieving independence for creative parties, the theory ran, copyright led to greater production of a more diverse set of creative works.

But this lingering conception of copyright is both inaccurate and harmful. It is inaccurate because, in today’s world, creative parties are increasingly dependent upon “Technological Patronage” from the likes of Google, Amazon, Apple, and others. Thus, rather than being alternatives or adversaries, copyright and Technological Patronage are increasingly interdependent in facilitating both …

Improving (Software) Patent Quality Through The Administrative Process, Arti K. Rai

Faculty Scholarship

The available evidence indicates that patent quality, particularly in the area of software, needs improvement. This Article argues that even an agency as institutionally constrained as the U.S. Patent and Trademark Office (“PTO”) could implement a portfolio of pragmatic, cost-effective quality improvement strategies. The argument in favor of these strategies draws upon not only legal theory and doctrine but also new data from a PTO software examination unit with relatively strict practices. Strategies that resolve around Section 112 of the patent statute could usefully be deployed at the initial examination stage. Other strategies could be deployed within the new post-issuance …

Searching Secrets, Nita A. Farahany

Faculty Scholarship

A Fourth Amendment violation has traditionally involved a physical intrusion such as the search of a house or the seizure of a person or her papers. Today, investigators rarely need to break down doors, rummage through drawers, or invade one’s peace and repose to obtain incriminating evidence in an investigation. Instead, the government may unobtrusively intercept information from electronic files, GPS transmissions, and intangible communications. In the near future, it may even be possible to intercept information directly from suspects’ brains. Courts and scholars have analogized modern searches for information to searches of tangible property like containers and have treated …

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

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

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 …

Strangers In A Strange Land: Specialized Courts Resolving Patent Disputes, Lawrence M. Sung

Faculty Scholarship

As the number of cases and disputes involving proprietary technology subject to intellectual property rights has increased in recent years, a decades-old view that such matters should be adjudicated exclusively by specialized courts and judges has experienced a renaissance. This call for specialized, or problem-solving, courts at both the federal and state levels is not unique to the intellectual property field, however. Indeed, there has been a significant movement over the past several years to establish specialized drug courts, community courts, mental health courts, and domestic violence courts. One common element among these efforts is the idea that specialized courts …

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

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

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.

Inducers And Authorisers: A Comparison Of The Us Supreme Court's Grokster Decision And The Australian Federal Court's Kazaa Ruling, Jane C. Ginsburg, Sam Ricketson

Faculty Scholarship

On June 27, 2005, the US Supreme Court announced its much-awaited decision in MGM Studios, Inc. v. Grokster Ltd. A few months after this, the Federal Court of Australia handed down its decision at first instance in relation to parallel litigation in that country concerning the KaZaa file sharing system. Both decisions repay careful consideration of the way in which the respective courts have addressed the relationship between the protection of authors' rights and the advent of new technologies, particularly in relation to peer-to-peer networks.

In the Grokster case, songwriters, record producers and motion picture producers alleged that two popular …

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.

Collegiality And Collaboration In The Age Of Exclusivity, Lawrence M. Sung

Faculty Scholarship

No abstract provided.

Foucault In Cyberspace: Surveillance, Sovereignty, And Hardwired Censors, James Boyle

Faculty Scholarship

This is an essay about law in cyberspace. I focus on three interdependent phenomena: a set of political and legal assumptions that I call the jurisprudence of digital libertarianism, a separate but related set of beliefs about the state's supposed inability to regulate the Internet, and a preference for technological solutions to hard legal issues on-line. I make the familiar criticism that digital libertarianism is inadequate because of its blindness towards the effects of private power, and the less familiar claim that digital libertarianism is also surprisingly blind to the state's own power in cyberspace. In fact, I argue that …

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.