SSRN Papers Dealing with IP, Development and Innovation

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The Patent Lottery: Exploiting Behavioral Economics for the Common Good by Dennis Crouch

Lotteries are immensely pop­u­lar. Players are will­ing to give the orga­nizer a large mon­e­tary cut of every ticket pur­chase in return for a chance at a jack­pot. In some ways, our cur­rent patent sys­tem oper­ates as a lot­tery as well. Most patents are rel­a­tively worth­less, while a few are highly valu­able. Reaching the major pay­out of a highly valu­able patent takes per­se­ver­ance in the face of tremen­dous uncer­tainty. Like lot­tery play­ers, small entre­pre­neur­ial com­pa­nies and indi­vid­u­als have shows signs of bounded ratio­nal­ity. In par­tic­u­lar, what I call the patent lot­tery effect is asso­ci­ated with the phe­nom­ena of poten­tial inno­va­tors over­weight­ing the size of a poten­tial pay­out on inno­va­tion while neglect­ing to fully con­sider the actual prob­a­bil­ity of obtain­ing that pay­out. The poten­tial bounded ratio­nal­ity of actors in the patent sys­tem chal­lenges our tra­di­tional notions of the patent incentive.

In many set­tings, bounded ratio­nal­ity prob­lems are patched-​​up with edu­ca­tion and pater­nal­ism such as in the form of con­sumer pro­tec­tion. In this arti­cle, I take a dif­fer­ent approach and instead explore ways that the over­con­fi­dence of inno­va­tors may alter our choice of inno­va­tion pol­icy levers in ways that increase inno­va­tion but decrease the monop­oly cost of patents.

Do Patents Perform Like Property? by Michael Muerer and James Bessen

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.

The Property Rights Movement’s Embrace of Intellectual Property: True Love or Doomed Relationship? by Peter Menell

The recent Supreme Court bat­tle over the legal stan­dard for per­ma­nent injunc­tions in patents cases (eBay v. MercExchange) marked an impor­tant new front in the Property Rights Movement’s cam­paign to estab­lish a strict and broad inter­pre­ta­tion of prop­erty rights and their enforce­ment. This essay explores whether Professor Richard Epstein’s embrace of intel­lec­tual prop­erty rights is likely to pro­duce a durable mar­riage of tra­di­tional prop­erty rights the­ory and intel­lec­tual prop­erty pro­tec­tion or merely rep­re­sents a fling that will not with­stand divi­sive rela­tional pres­sures. It shows that philo­soph­i­cal, func­tional, intel­lec­tual, and polit­i­cal ten­sions stand in the way of a sta­ble or endur­ing rela­tion­ship between advo­cates of strong and unyield­ing prop­erty rights and intel­lec­tual prop­erty own­ers. The need for dynamism and adapt­abil­ity within the intel­lec­tual prop­erty rights field may well weaken the sup­port for abso­lutism in prop­erty jurispru­dence and pol­icy, rein­forc­ing the shift away from the Blackstonian con­cep­tion of property.

A New Balance between IP and Antitrust by Mark Lemley

In this arti­cle, I intro­duce the inter­ac­tion between intel­lec­tual prop­erty (IP) and antitrust law. I describe the ways in which these two impor­tant areas of gov­ern­ment reg­u­la­tion are and are not in ten­sion, and dis­cuss the his­tory of the rela­tion­ship between these laws. I argue that IP and antitrust have cycled between over– and under-​​protection, and that we are cur­rently (and mis­tak­enly) con­di­tioned to think of pri­vate prop­erty and pri­vate order­ing as effi­cient in and of them­selves, rather than as effi­cient only in the con­text of robust mar­ket com­pe­ti­tion. Further, I argue that antitrust can serve the goals of inno­va­tion and dynamic effi­ciency directly in cir­cum­stances in which com­pe­ti­tion, not monop­oly, serves as a spur to inno­va­tion. The goal of the IP and antitrust laws should be to seek a robust bal­ance between com­pe­ti­tion and monop­oly in the ser­vice of dynamic effi­ciency. When IP laws are strong, antitrust laws should also be strong, and vice versa.