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Full-Text Articles in Law

The Debilitating Effect Of Exclusive Rights: Patents And Productive Inefficiency, William Hubbard Sep 2014

The Debilitating Effect Of Exclusive Rights: Patents And Productive Inefficiency, William Hubbard

All Faculty Scholarship

Are we underestimating the costs of patent protection? Scholars have long recognized that patent law is a double-edged sword. While patents promote innovation, they also limit the number of people who can benefit from new inventions. In the past, policy makers striving to balance the costs and benefits of patents have analyzed patent law through the lens of traditional, neoclassical economics. This Article argues that this approach is fundamentally flawed because traditional economics rely on an inaccurate oversimplification: that individuals and firms always maximize profits. In actuality, so-called "productive inefficiencies" often prevent profit maximization. For example, cognitive biases, bounded rationality ...


Consumer Welfare In Competition And Intellectual Property Law, Herbert J. Hovenkamp Jan 2014

Consumer Welfare In Competition And Intellectual Property Law, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

Whether antitrust policy should pursue a goal of "general welfare" or "consumer welfare" has been debated for decades. The academic debate is much more varied than the case law, however, which has consistently adopted consumer welfare as a goal, almost never condemning a practice found to produce an actual output reduction or price increase simply because productive efficiency gains accruing to producers exceeded consumer losses.

While some practices such as mergers might produce greater gains in productive efficiency than losses in consumer welfare, identifying such situations would be extraordinarily difficult. First, these efficiencies would have to be "transaction specific," meaning ...


Actavis, The Reverse Payment Fallacy, And The Continuing Need For Regulatory Solutions, Daniel A. Crane Jan 2014

Actavis, The Reverse Payment Fallacy, And The Continuing Need For Regulatory Solutions, Daniel A. Crane

Articles

The Actavis decision punted more than it decided. Although narrowing the range of possible outcomes by rejecting the legal rules at the extremes and opting for a rule of reason middle ground, the opinion failed to grapple with the most challenging issues of regulatory policy raised by pharmaceutical patent settlements. In particular, it failed to clearly delineate the social costs of permitting and disallowing patent settlements, avoided grappling with the crucial issues of patent validity and infringement, and erroneously focused on “reverse payments” as a distinctive antitrust problem when equally or more anticompetitive settlements can be crafted without reverse payments ...


Still Aiming At The Wrong Target: A Case For Business Method And Software Patents From A Business Perspective, Kristen Jakobsen Osenga Jan 2014

Still Aiming At The Wrong Target: A Case For Business Method And Software Patents From A Business Perspective, Kristen Jakobsen Osenga

Law Faculty Publications

In Part I, I briefly discuss the rise and recent fall of business method patents. Part II covers the scholarly literature discussing business method and software patents. In Part III, I explain the proxy argument that I have made elsewhere and show how it plays in the recent decisions surrounding the patent eligibility of business method and software inventions. I then explain why the analysis of business method and software patents in the literature uses the same proxy-type arguments to avoid more difficult questions of patentability and policy. Finally, I conclude by explaining how business method and software patents, if ...


Intellectual Property Experimentalism By Way Of Competition Law, Tim Wu Jan 2014

Intellectual Property Experimentalism By Way Of Competition Law, Tim Wu

Faculty Scholarship

Competition law and Intellectual Property have divergent intellectual cultures – the former more pragmatic and experimentalist; the latter influenced by natural law and vested rights. The US Supreme Court decision in Federal Trade Commission v. Actavis is an intellectual victory for the former approach, one that suggests that antitrust law can and should be used to introduce greater scrutiny of the specific consequences of intellectual property grants.