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.
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 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.
J. Jonas Anderson and Peter S. Menell
Patent claims define the scope of the patent right and hence are central to the operation of the patent system. Following the Supreme Court’s decision in Markman v. Westview Instruments (517 U.S. 370 (1996)), holding that “the construction of a patent, including terms of art within its claim, is exclusively within the province of the court,” district judges began the practice of construing patent claims in advance of trial following so-called “Markman” hearings. These constructions became subject to appellate review after the trial or summary judgment ruling. This chapter surveys empirical studies examining: (1) reversal rates; (2) the sources and methodologies that judges employ in construing patent claims; and (3) appellate behavior generally. It examines the hypotheses underlying these studies, the data used, the empirical methods deployed, and the principal results. It also suggests directions for further research.