Intellectual Property Law Commons^™

The Creativity Effect, Christopher Buccafusco, Christopher Jon Sprigman

Faculty Scholarship

This Article reports the first experiment to demonstrate the existence of a valua­tion anomaly associated with the creation of new works. To date, a wealth of social science research has shown that the least amount of money that owners of goods are willing to accept to part with their possessions is often far greater than the amount that purchasers would be willing to pay to obtain them. This phenomenon, known as the endowment effect, may create substantial inefficiencies in many markets. Our experi­ment demonstrates the existence of a related "creativity effect." We show that creators of works value their creations …

Korea's Patent Policy And Its Impact On Economic Development: A Model For Emerging Countries?, Jay A. Erstling, Ryan E. Strom

San Diego International Law Journal

The purpose of this paper will be to examine Korean patent policy as exemplified by its patent legislation and the activities of KIPO. Part II will take a brief look at the rationale underpinning Korea’s confidence in the power of the patent system to stimulate economic growth. Part III of the paper will look at the Korean Patent Act as an example of strong, comprehensive patent legislation that fully complies with international standards and responds well to the perceived needs of patent applicants. Part III will examine one of the highlights of Korean patent legislation, the Korean Invention Promotion Act, …

Sequential Musical Creation And Sample Licensing, Peter Dicola

Faculty Working Papers

All musical creation builds on previous works. But using fragments of existing musical works in a new work can often constitute copyright infringement. Copyright law, in cases like Bridgeport Music v. Dimension Films (6th Cir. 2005), has recently increased its restrictions on musicians who wish to engage in sampling, defined as the practice of using other creators' sound recordings to create new music. The paper describes a model of copyright holders' and samplers' incentives to create in light of the need to negotiate licenses for sample-based works to avoid violating copyright law. Even in the absence of traditional transaction costs …

The 8% Solution - Or How Good Are The Calculation Economics By The Federal Circuit In Lucent V. Microsoft?, 9 J. Marshall Rev. Intell. Prop. L. 797 (2010), W. Lesser

UIC Review of Intellectual Property Law

Lucent v. Microsoft brought to the fore again the complexity of infringement damage estimates. Differences in approaches were laid open in this case with the trial court jury settling $358 million in damages against Microsoft and the appeals court striking down the value as lacking substantial evidence. Damages were established on the “reasonable royalty” basis for a product which was neither licensed nor sold. This article contends that the appeals court took too narrow a view of economics in its analysis of the software sector. Specifically, the court seems to have applied a “perfect competition” model to a sector which …

Complex Economics And Patent Remedies, John M. Golden

IP Theory

No abstract provided.

Misplaced Fears In The Legislative Battle Over Affordable Biotech Drugs, David E. Adelman, Christopher M. Holman

Faculty Works

Much like tort reform, the debate over recently enacted legislation on biotech drugs — and particularly regulatory supplements to patent protection — has taken on a significance that dwarfs its impact on prescription drug expenditures. Under the Health Care Reform legislation, Congress enacted two major reforms: First, creation of an abbreviated Food and Drug Administration (FDA) approval process for follow-on biologics (FOBs), which are the analogues of generics for biotech drugs. Second, establishment of a twelve-year “data exclusivity” period in which clinical testing data collected by brand-name innovators cannot be used by producers of FOBs to satisfy FDA testing requirements. …

Valuing Intellectual Property: An Experiment, Christopher Buccafusco, Christopher Sprigman

Faculty Scholarship

In this article we report on the results of an experiment we performed to determine whether transactions in intellectual property (IP) are subject to the valuation anomalies commonly referred to as “endowment effects”. Traditional conceptions of the value of IP rely on assumptions about human rationality derived from classical economics. The law assumes that when people make decisions about buying, selling, and licensing IP they do so with fixed, context-independent preferences. Over the past several decades, this rational actor model of classical economics has come under attack by behavioral data showing that people do not always make strictly rational decisions. …

Economies Of Desire: Fair Use And Marketplace Assumptions, Rebecca Tushnet

Georgetown Law Faculty Publications and Other Works

At the moment that “incentives” for creation meet “preferences” for the same, the economic account of copyright loses its explanatory power. This piece explores the ways in which the desire to create can be excessive, beyond rationality, and free from the need for economic incentive. Psychological and sociological concepts can do more to explain creative impulses than classical economics. As a result, a copyright law that treats creative activity as a product of economic incentives can miss the mark and harm what it aims to promote. The idea of abundance—even overabundance—in creativity can help define the proper scope of copyright …

One Size Does Not Fit All: A Framework For Tailoring Intellectual Property Rights, Michael W. Carroll

Scholarly Articles in Law Reviews & Journals

The United States and its trading partners have adopted cultural and innovation policies under which the government grants one-size-fits-all patents and copyrights to inventors and authors. On a global basis, the reasons for doing so vary, but in the United States granting intellectual property rights has been justified as the principal means of promoting innovation and cultural progress. Until recently, however, few have questioned the wisdom of using such blunt policy instruments to promote progress in a wide range of industries in which the economics of innovation varies considerably.

Provisionally accepting the assumptions of the traditional economic case for intellectual …

Subsidizing Creativity Through Network Design: Zero Pricing And Net Neutrality, Robin S. Lee, Tim Wu

Faculty Scholarship

Today, through historical practice, there exists a de facto ban on termination fees – also referred to as a “zero-price” rule (Hemphill, 2008) – which forbids an Internet service provider from charging an additional fee to a content provider who wishes to reach that ISP’s customers. The question is whether this zero-pricing structure should be preserved, or whether carriers should be allowed to charge termination fees and engage in other practices that have the effect of requiring payment to reach users. This paper begins with a defense of the de facto zero-price rule currently in existence. We point out that …

The Law, Culture, And Economics Of Fashion, C. Scott Hemphill, Jeannie Suk

Center for Contract and Economic Organization

Fashion is one of the world’s most important creative industries. It is the major output of a global business with annual U.S. sales of more than $200 billion — larger than those of books, movies, and music combined. Everyone wears clothing and inevitably participates in fashion to some degree. Fashion is also a subject of periodically rediscovered fascination in virtually all the social sciences and the humanities. It has provided economic thought with a canonical example in theorizing about consumption and conformity. Social thinkers have long treated fashion as a window upon social class and social change. Cultural theorists have …

Intellectual Liability, Daniel A. Crane

Articles

Intellectual property is increasingly a misnomer since the right to exclude is the defining characteristic of property and incentives to engage in inventive and creative activity are increasingly being granted in the form of liability rights (which allow the holder of the right to collect a royalty from users) rather than property rights (which allow the holder of the right to exclude others from using the invention or creation). Much of this recent reorientation in the direction of liability rules arises from a concern over holdout or monopoly power in intellectual property. The debate over whether liability rules or property …

The Death Of Copyright Protection In Individual Price Valuations, A Flawed Merger Doctrine, And Financial Market Manipulation: New York Mercantile Exchange V. Intercontinentalexchange, Jeremy V. Murray

Buffalo Law Review

No abstract provided.

An Economic Justification For Open Access To Essential Medicine Patents In Developing Countries, Sean Flynn, Aidan Hollis, Mike Palmedo

Scholarly Articles in Law Reviews & Journals

This paper offers an economic rationale for compulsory licensing of needed medicines in developing countries. The patent system is based on a trade-off between the “deadweight losses” caused by market power and the incentive to innovate created by increased profits from monopoly pricing during the period of the patent. However, markets for essential medicines under patent in developing countries with high income inequality are characterized by highly convex demand curves, producing large deadweight losses relative to potential profits when monopoly firms exercise profit-maximizing pricing strategies. As a result, these markets are systematically ill-suited to exclusive marketing rights, a problem which …

Self-Realizing Inventions And The Utilitarian Foundation Of Patent Law, Alan J. Devlin, Neel U. Sukhatme

Georgetown Law Faculty Publications and Other Works

Unlike other forms of intellectual property, patents are universally justified on utilitarian grounds alone. Valuable inventions and discoveries, bearing the characteristics of public goods, are easily appropriated by third parties. Because much technological innovation occurs pursuant to significant expenditures—both in terms of upfront research and subsequent commercialization costs—inventors must be permitted to extract at least part of the social gain associated with their technological contributions. Absent some form of proprietary control or alternative reward system, economics predicts that suboptimal capital will be devoted to the innovative process.

This widely accepted principle comes with an important corollary: namely, that canons of …

On The Continuing Misuse Of Event Studies: The Example Of Bessen And Meurer, Glynn S. Lunney Jr

Faculty Scholarship

In their book, Patent Failure: How Judges, Bureaucrats, and Lauyers Put Innovators at Risk, James Bessen and Michael Meurer present an empirical assessment of the costs and benefits of patent protection. Their conclusion is startling. For most industries, the availability of patents discourages innovation.

According to Bessen and Meurer, patents benefit innovators by providing exclusivity and thereby enabling an innovator to capture more rents or profits from their innovation than they could with lead-time or other market mechanisms alone. While innovators can obtain rents from their own Patents, they also face the threat of infringement litigation from Patents held by …

Turned On Its Head?: Norms, Freedom, And Acceptable Terms In Internet Contracting, Richard Warner

All Faculty Scholarship

Is the Internet turning contract law on its head? Many commentators contend it is. Precisely this issue arises in current controversies over end user license agreements (EULAs) and Terms of Use agreements (TOUs, the agreements governing our use of web sites). Commentators complain that, in both cases, the formation process unduly restricts buyers’ freedom; and, that sellers and web site owners exploit the process to impose terms that deprive consumers of important intellectual property and privacy rights. The courts ignore the criticisms and routinely enforce EULAs and TOUs. There is truth on both sides of this court/commentator divide. EULAs and …

Beyond Microsoft: Intellectual Property, Peer Production And The Law's Concern With Market Dominance, 18 Fordham Intell. Prop. Media & Ent. L.J. 291 (2008), Daryl Lim

UIC Law Open Access Faculty Scholarship

No abstract provided.

Is Fame All There Is? - Beating Global Monopolists At Their Own Marketing Game, 40 Geo. Wash. Int'l L. Rev. 123 (2008), Doris E. Long

UIC Law Open Access Faculty Scholarship

In the global economy of the twenty-first century, "coca-colanization" has become a painful economic reality for developing nations. With new branding strategies and a legal protection regime that favors the famous marks of global monopolists, local businesses are not only losing market share, they are also losing their ability to compete in a new environment where leveraged marks often have little relevance to the actual value of the products or services for local consumers. To counter these trends, and add rationality to the global trademark regime, developing countries must develop new strategies and a conscious policy that not only values …

The Making Of The Post-War Paradigm In American Intellectual Property Law, Steven Wilf

Faculty Articles and Papers

During the New Deal period, intellectual property underwent a transformation. Copyright was recast from literary property to industrial property; trademark shifted from a common law tort of palming off to a regulatory regime for a mass consumer economy, and patent law was rethought to accommodate corporate invention. This essay begins by examining the advantages of looking at intellectual property as deeply situated in New Deal debates over political economy, and calls for a new history of intellectual property very different from conventional narratives moored in the introduction of new technologies. More broadly, it suggests that examining foundational past policy debates, …

Do Patents Perform Like Property?, Michael J. Meurer, James Bessen

Faculty Scholarship

Do patents provide critical incentives to encourage investment in innovation? Or, instead, do patents impose legal risks and burdens on innovators that discourage innovation, as some critics now claim? This paper reviews empirical economic evidence on how well patents perform as a property system.

Trolling For Trolls: The Pitfalls Of The Emerging Market Competition Requirement For Permanent Injunctions In Patent Cases Post-Ebay, Benjamin H. Diessel

Michigan Law Review

In eBay v. MercExchange, a unanimous Supreme Court announced that a new four-factor test should be employed by district courts in determining whether to award an injunction or damages to an aggrieved party whose intellectual property has been infringed. In the context of permanent injunctions in patent cases, district courts have distorted the four-factor test resulting in a "market competition requirement." Under the new market competition requirement, success at obtaining an injunction is contingent upon a party demonstrating that it is a market competitor After consistent application in the first twenty-five district court cases post-eBay, the market competition requirement …

Should Patent Infringement Require Proof Of Copying?, Mark A. Lemley

Michigan Law Review

Patent infringement is a strict liability offense. Patent law gives patent owners not just the right to prevent others from copying their ideas, but the power to control the use of their idea--even by those who independently develop a technology with no knowledge of the patent or the patentee. This is a power that exists nowhere else in intellectual property (IP) or real property law, but it is a one that patentees have had, with rare exceptions, since the inception of the Republic. In an important paper in the Michigan Law Review, Samson Vermont seeks to change this, arguing …

When Second Comes First: Correcting Patent’S Poor Secondary Incentives Through An Optional Patent Purchase System, Jordan Barry

ExpressO

As research has advanced, technologies have become more closely knit, and the relationships between them—both complementary and competitive—have become increasingly important. Unfortunately, the patent system’s use of monopoly power to reward innovators creates inefficient results by overly encouraging the development of substitute technologies and discouraging the development of complementary technologies. This paper explains how an optional patent purchase system could help ameliorate such problems and discusses the implications of such a system.

Chain Reaction: How Property Begets Property, Sabrina Safrin

Rutgers Law School (Newark) Faculty Papers

Classic theories for the evolution of property rights consider the emergence of private property to be a progressive development reflecting a society’s movement to a more efficient property regime. This article argues that instead of this progressive dynamic, a more subtle and damaging chain reaction dynamic can come into play that traditional theories for intellectual and other property rights neither anticipate nor explain. The article suggests that the expansion of intellectual and other property rights have an internally generative dynamic. Drawing upon contemporary case studies, the article argues that property rights evolve in reaction to each other. The creation of …

Copyright In An Era Of Information Overload: Toward The Privileging Of Categorizers, Frank Pasquale

Faculty Scholarship

Environmental laws are designed to reduce negative externalities (such as pollution) that harm the natural environment. Copyright law should adjust the rights of content creators in order to compensate for the ways they reduce the usefulness of the information environment as a whole. Every new work created contributes to the store of expression, but also makes it more difficult to find whatever work one wants. Such search costs have been well-documented in information economics. Copyright law should take information overload externalities like search costs into account in its treatment of alleged copyright infringers whose work merely attempts to index, organize, …

Richard Lillich Memorial Lecture: Nurturing A Transnational System Of Innovation, Jerome H. Reichman

Florida State University Journal of Transnational Law & Policy

No abstract provided.

Knowledge, Competition And The Innovation: Is Stronger Ipr Protection Really Needed For More And Better Innovations, Giovanni Dosi, Luigi Marengo, Corrado Pasquali

Michigan Telecommunications & Technology Law Review

The main questions addressed in this Article are thus: given that growth is a highly desirable phenomenon and that it is primarily spurred by technological innovation, how should society solve the problem of favoring a sufficient level of investments in R&D? In particular, is it necessarily true and always desirable that, independent of any other consideration, society should protect innovators from competition and shelter them in a legally protected and enforced monopoly? Is it true that the real source of economic value of new recipes is only found in the blueprints of ideas that those recipes implement? Is it necessarily …

Messages From The Front: Hard Earned Lessons On Information Security From The Ip Wars, 16 Mich. St. J. Int'l L. 71 (2007), Doris E. Long

UIC Law Open Access Faculty Scholarship

Cyberspace is often a battlefield with a wide array of armies posed to challenge one another across the increasing array of rhetoric and technology that has made it such a potent arena for global digital commerce. Perry Barlow's infamous demand that cyberspace be left to its own devices because of its unique unregulated nature may have been answered by Larry Lessig's reply that code may in fact be used to regulate cyberspace, but the reality is that social norming demands, the evanescence of technological controls, and the perceived utility of illicit conduct utilizing the internet make any regulation problematic at …

Copyright Under Siege: An Economic Analysis Of The Essential Facilities Doctrine And The Compulsory Licensing Of Copyrighted Works, 17 Alb. L.J. Sci. & Tech. 481 (2007), Daryl Lim

UIC Law Open Access Faculty Scholarship

No abstract provided.