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Hold-Up And Patent Licensing Of Cumulative Innovations With Private Information, James Bessen
Hold-Up And Patent Licensing Of Cumulative Innovations With Private Information, James Bessen
Faculty Scholarship
When innovation is cumulative, early patentees hold claims against later innovators. Then potential hold-up may cause prospective second stage innovators to forego investing in R&D. It is sometimes argued that ex ante licensing (before R&D) avoids hold-up. This paper explores ex ante licensing when information about development cost is private. In this case, contracts may not be written ex ante. Moreover, the socially optimal division of profit occurs with weak patents and ex post licensing. Empirical evidence on licensing conforms to a model with private information. In some innovative industries, little ex ante licensing occurs, suggesting hold-up remains a problem.
Specialized Trial Courts: Concentrating Expertise On Fact, Arti K. Rai
Specialized Trial Courts: Concentrating Expertise On Fact, Arti K. Rai
Faculty Scholarship
In the absence of a specialized patent trial court with expertise in fact-finding, the Court of Appeals for the Federal Circuit often reviews de novo the many factual questions that pervade patent law. De novo review of fact by an appellate court is problematic. In the area of patent law, as in other areas of law, there are sound institutional justifications for the conventional division of labor that gives trial courts primary responsibility for questions of law. This Article identifies the problems created by de novo appellate review of fact and argues for the creation of a specialized trial court …
Inventions, Industry Standards, And Intellectual Property, Mark R. Patterson
Inventions, Industry Standards, And Intellectual Property, Mark R. Patterson
Faculty Scholarship
When an industry standard incorporates a patented invention, the demand for products that comply with the standard has two components. Some of the demand may be for the inherent technical advantages of the invention; the patentee is generally entitled to revenues attributable to this demand. But some of the demand is for the benefits of standardization, such as interoperability, and the patentee is not entitled to revenues attributable to this demand. From this point, the article draws two conclusions. First, the amounts to which a patentee is entitled, either in litigation or in licensing negotiations, should be calculated by determining …
Antitrust And The Costs Of Standard-Setting: A Commentary On Teece & (And) Sherry Symposium: The Interface Between Intellectual Property Law And Antitrust Law: Commentary, Mark R. Patterson
Antitrust And The Costs Of Standard-Setting: A Commentary On Teece & (And) Sherry Symposium: The Interface Between Intellectual Property Law And Antitrust Law: Commentary, Mark R. Patterson
Faculty Scholarship
The creation of an industry standard is a process that has much in common with the creation of a patented invention. Indeed, if standards are not patentable, it is only because of certain doctrinal peculiarities of patent law. It is therefore important to preserve the incentives for organizations to incur the costs of standard-setting activity, so that society may gain the benefits of the resulting standards. The law can preserve those incentives by treating the contributions of industry standards as distinct from those of inventions that are incorporated in them. More specifically, antitrust law should ensure that the patentees of …