An anticommons is a fragmented allocation of property rights in which resources are prone to underuse because it is costly to assemble necessary permissions to put resources to use. The more rights holders and the more varied their entitlements, the more challenging it is to avoid waste through bargaining. The patent system continuously creates new rights for new claimants, with limited opportunity to establish consensus valuations as technology changes. Patent aggregation might seem like an effective market solution to the problem of fragmented ownership, yet the rise of patent aggregators seems to have done more to reduce costs of assertion by patent owners than to reduce costs of clearing rights by technology users. The result may be a greater risk of underuse as subsequent innovators need to evaluate and clear more rights that they might otherwise have ignored with little risk of assertion in the absence of aggregation
Copyright provides monopoly grants for creators, and these rights have traditionally been protected by a combination of law and technology. Recent technological changes associated with digitization have undermined effective copyright protection by facilitating piracy. At the same time, other aspects of digitization have reduced the cost of bringing new products to market. Despite collapsing revenue to some industries, such as recorded music, the number of new creative products – in music, movies, television, and books - has risen sharply. By many measures, the value of the new products to consumers is also high. Despite the understandable concerns of many in these industries, we are currently experiencing a golden age for new
Sean A. Pager
Does copyright foster the development of creative industries in developing countries? To answer, this chapter explores case studies from Nigeria, India, and China. It argues that copyright’s decentralized, market-driven incentives and allocative efficiencies offer distinct advantages over alternative models such as state patronage and commons-based development. The chapter emphasizes that copyright need not be embraced as an all-or-nothing proposition. Copyright norms can govern some aspects of creative industry operations, while remaining absent in other domains. Thus, high levels of piracy in developing countries are not necessarily incompatible with copyright. As industries develop, however, copyright’s benefits become more salient, and the logic of formalization exerts a gravitational pull. The chapter also examines the interplay between copyright and cultural diversity. It argues that the causal relationships here are complex and ambiguous. It is far from clear, however, that copyright markets are intrinsically hostile to diversity, and copyright’s absence poses its own set of concerns.
David L. Schwartz and Ted Sichelman
This chapter provides a roadmap of the principal data sources for the various forms of intellectual property protection. We first explain what data is available about patents, copyrights, trademarks, and other types of intellectual property, and where to find it. Then we identify and analyze data sources specifically relating to intellectual property licensing and litigation—growing areas of research by scholars and lawyers.
Peter S. Menell
Notice of intellectual property content, ownership, boundaries, scope of rights (and limitations), enforcement institutions, and remedial consequences plays a central role in resource planning and other economic and social functions. This chapter examines the function, design, and economic effects of intellectual property notice and disclosure rules and institutions. Based on this analysis, the chapter offers a comprehensive set of policy, institutional, and litigation reforms.
Peter S. Menell
The information revolution has brought demand-side effects to the fore of economic activity, business strategy, and intellectual property jurisprudence and policy. Intellectual property doctrines play a central role in harnessing network effects, promoting innovation to overcome excess inertia, and balancing consumer welfare, competition, and innovation. This chapter surveys and integrates the economic, business strategy, and legal literatures relating to network effects and intellectual property. Section I introduces the topic of network effects and provides an overview of this chapter. Section II describes the functioning of network markets. Section III examines the interplay of business strategy, contract, standard setting organizations, intellectual property, and competition policy. Section IV presents three principles for tailoring intellectual property regimes and competition policy for network technologies. Section V traces the evolution of intellectual property protection for network features of systems and platforms. Section VI discusses the interplay of intellectual property protection and competition policy. Section VII assesses the extent to which intellectual property protection and competition policy align with the normative design principles. Section VIII identifies promising areas for future research.
Keith E. Maskus
This chapter reviews evidence regarding several of the most important relationships between intellectual property rights (IPRs) and economic development. Theoretical analysis generally yields ambiguous predictions, while empirical analysis suffers from the lack of data on key questions. Nonetheless, several interesting findings are discussed. First recent research suggests that patent reforms can expand innovation in emerging countries with sound facilitating conditions. Second, patent reforms in emerging countries have attracted significantly higher inward flows of technology and encouraged the development of export sectors. However, such processes are absent in the poorest countries. Third, simulation models suggest that new patent regimes could raise pharmaceutical prices in developing countries. Recent empirical evidence, however, suggests that this effect may be offset by other factors. Moreover, stronger patent protection induces faster product launches in reforming countries. Thus, the impact of patents on access to medicines in developing economies may not be as negative as often feared.
Peter S. Menell and Suzanne Scotchmer
This chapter examines economic models of innovation and the ramifications for intellectual property policy. It begins with stand-alone innovation and then introduces cumulative innovation. The analysis explores eligibility requirements, duration and breadth of protection, rights and defenses, remedies, and channeling doctrines. The chapter emphasizes the role of licensing and cumulative innovation.
This chapter begins by defining collective management (of copyright and related rights) and collective management organizations (CMOs). After briefly reviewing possible definitional characteristics, the first part of the chapter uses a functional approach to define CMOs and then explains their economic and noneconomic functions. The next part discusses key aspects of the economic analysis of collective management, namely the justification for collective management, and the valuation of licensed repertoires (or copyright works or objects of neighboring rights) and individual works within such repertoires. This includes a survey of major economic models used in this field. The second part ends with a discussion of efficiency issues related to collective management. The third and last part considers the specific aspects that arise in collective management when it is applied to online uses of copyright material
Paul J. Heald
Empirical research suggests strongly that copyright law—or at least excessive term length—has a negative effect on the public availability of works. Books, for example, become more available when they fall into the public domain. Also, follow-on works, such as audiobooks, are created at a higher rate after the underlying work falls into the public domain. In addition, for the most popular works, copyright is associated with significantly higher prices, which affects accessibility. Empirical evidence of other copyright-related market constraints is presented.