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JustinColannino-FirstPaper 18 - 13 Jan 2012 - Main.IanSullivan
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Forced pooling as a solution to the tragedy of the anticommmons in patent law | | | Our concept of forced pooling is simple: when an anticommons in a particular resource or group of resources is found to be deterring innovation the government can step in and seize the right to exclude from the patent holders, and place these patents into a patent pool. This effectively overcomes the three problems of transaction costs, conflicting goals and overvaluing of patents: the actors have no right as to how their property is used in the pool. Note that we do not discuss here who decides what 'deterring innovation' means - it is an important question beyond the scope of this paper. | |
<
< | The question then becomes what constitutes 'fair compensation'. We propose a mandatory licensing scheme to reward the patent holder. When an entity wishes to use the pool they must devote some capped percentage of the gross income to the members of the pool whose patents were used. This scheme is detailed in figure 1. Thus, we retain some semblance of market in that the 'better' patents get used more and thus produce more income, ensuring that the patent holders will receive some form of fair compensation based on the worth of the use of their research. | >
> | The question then becomes what constitutes 'fair compensation'. We propose a mandatory licensing scheme to reward the patent holder. When an entity wishes to use the pool they must devote some capped percentage of the gross income to the members of the pool whose patents were used. This scheme is detailed in figure 1. Thus, we retain some semblance of market in that the 'better' patents get used more and thus produce more income, ensuring that the patent holders will receive some form of fair compensation based on the worth of the use of their research. | | | Benefits of the forced pooling scheme
The forced pooling scheme is not very different from the liability scheme proposed by Bar-Gill and Parchomovsky [1]. In both schemes the right to exclude is taken and replaced with some monetary compensation. The major differences, and benefits of our forced pooling scheme, are the lower transaction costs, greater predictability of damages and the greater incentive for the industry to consolidate their rights independent of government interference. |
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JustinColannino-FirstPaper 16 - 25 Mar 2008 - Main.JustinColannino
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Forced pooling as a solution to the tragedy of the anticommmons in patent law
The anticommons and its tragedy | |
<
< | An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michael Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed its occurrence in post soviet regimes [4] and in biomedical research with Rebecca S. Eisenberg [5]. In the particular case of patents the under-utilization is the suppression of innovation due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need.
- What's the point of footnotes in a wiki? Just use links.
| >
> | An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michael Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed its occurrence in post soviet regimes [4] and in biomedical research with Rebecca S. Eisenberg [5]. In the particular case of patents the under-utilization is the suppression of innovation due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need. | | | Heller and Eisenberg establish three main hurdles that must be overcome to prevent tragedy in the Biomedical anticommons, which can be extended to patents in general. These are the high transaction costs of bundling rights, conflicting goals of rights holders and rights holders overvaluing of their piece of the resource. | |
<
< | While some view this situation as one with a free market solution [6], others think that this is a pitfall in the current system and thus an area ripe for government intervention [7]. Proposed solutions range from supplanting the right to exclude with liability rules [1] to giving free compulsory licenses for experimental use [8]. | >
> | While some view this situation as one with a free market solution [6], others think that this is a pitfall in the current system and thus an area ripe for government intervention [7]. Proposed solutions range from supplanting the right to exclude with liability rules [1] to giving free compulsory licenses for experimental use [8]. | | | Government seizure as a solution to the tragedy | |
<
< | Government seizure is not a new idea. Seizure has been a useful way for government to overcome high transactions costs, hold-outs or parties unwilling to release their rights at any cost in the building of roads and other public works for centuries. The use of seizure is specifically allowed for the public good with fair compensation in the fifth amendment of the US constitution, and a recent supreme court case has held that seized property can go into private hands as long as its use is for the public good [9]. | >
> | Government seizure is not a new idea. Seizure has been a useful way for government to overcome high transactions costs, hold-outs or parties unwilling to release their rights at any cost in the building of roads and other public works for centuries. The use of seizure is specifically allowed for the public good with fair compensation in the fifth amendment of the US constitution, and a recent supreme court case has held that seized property can go into private hands as long as its use is for the public good [9]. | | | The standard argument for granting patent holders the right to exclude is that it is an incentive to innovate. Thus, the argument goes, removing that right will chill innovation as patents will become less valuable because of the taking of rights. Our solution tries to walk the line between ensuring incentives for innovation and decreasing the hurdles and tolls that an innovator needs to take advantage of the protected ideas in downstream research.
Seizure through a forced pooling scheme | |
<
< | Patent pools have been a used to stop under-utilization if patents in the past. Upon entering World War I the US government brokered the creation of a patent pool to encourage aviation, which was stagnating due to disagreements between the Wright company and their competitors [2]. In the realm of copyright, collectives for authors and musicians exist to lessen the transaction costs of licensing [3]. | >
> | Patent pools have been a used to stop under-utilization if patents in the past. Upon entering World War I the US government brokered the creation of a patent pool to encourage aviation, which was stagnating due to disagreements between the Wright company and their competitors [2]. In the realm of copyright, collectives for authors and musicians exist to lessen the transaction costs of licensing [3]. | | | Our concept of forced pooling is simple: when an anticommons in a particular resource or group of resources is found to be deterring innovation the government can step in and seize the right to exclude from the patent holders, and place these patents into a patent pool. This effectively overcomes the three problems of transaction costs, conflicting goals and overvaluing of patents: the actors have no right as to how their property is used in the pool. Note that we do not discuss here who decides what 'deterring innovation' means - it is an important question beyond the scope of this paper.
The question then becomes what constitutes 'fair compensation'. We propose a mandatory licensing scheme to reward the patent holder. When an entity wishes to use the pool they must devote some capped percentage of the gross income to the members of the pool whose patents were used. This scheme is detailed in figure 1. Thus, we retain some semblance of market in that the 'better' patents get used more and thus produce more income, ensuring that the patent holders will receive some form of fair compensation based on the worth of the use of their research.
Benefits of the forced pooling scheme | |
<
< | The forced pooling scheme is not very different from the liability scheme proposed by Bar-Gill and Parchomovsky [1]. In both schemes the right to exclude is taken and replaced with some monetary compensation. The major differences, and benefits of our forced pooling scheme, are the lower transaction costs, greater predictability of damages and the greater incentive for the industry to consolidate their rights independent of government interference. | >
> | The forced pooling scheme is not very different from the liability scheme proposed by Bar-Gill and Parchomovsky [1]. In both schemes the right to exclude is taken and replaced with some monetary compensation. The major differences, and benefits of our forced pooling scheme, are the lower transaction costs, greater predictability of damages and the greater incentive for the industry to consolidate their rights independent of government interference. | | | Lower transaction costs and greater predictability
The liability scheme relies on courts to set the price of the patent to the infringer ex post. Presumably, the threat of lawsuit would then lead to negotiations about how valuable the patent was to the new invention. However, this could open the infringer to crippling litigation. Imagine a the manufacturer of a dvd player, which uses thousands of patents. Under the liability scheme, the manufacturer would need to anticipate hundreds of negotiations and lawsuits to bring their product to market, an unpredictable task and a deterrent to innovation. | | | References | |
<
< | [1] A Marketplace for Ideas?, | >
> | [1] A Marketplace for Ideas?, | | | Oren Bar-Gill and Gideon Parchomovsky,
84 Texas Law Review 395, 2005. | |
<
< | [2] Property Rights, Progress, and the Aircraft Patent Agreement
George Bittlingmayer | >
> | [2] Property Rights, Progress, and the Aircraft Patent Agreement,
George Bittlingmayer | | | Journal of Law and Economics, 31; 227-248, 1988. | |
<
< | [3] An Economic Analysis of Copyright Collectives, | >
> | [3] An Economic Analysis of Copyright Collectives, | | | S. Besen, S. Kirkby and S. Salop,
Virginia Law Review, 78; 383-441, 1992. | |
<
< | [4] The Tragedy of the Anticommons: Property in the Transiton from Marx to Markets, | >
> | [4] The Tragedy of the Anticommons: Property in the Transiton from Marx to Markets, | | | Michael A. Heller,
111 Harv. L. Rev. 621, 1998. | |
<
< | [5] Can Patents Deter Innovation? The Anticommons in Biomedical Research, | >
> | [5] Can Patents Deter Innovation? The Anticommons in Biomedical Research, | | | Michael A. Heller and Rebecca S. Eisenberg,
Science 1 May 1998: Vol. 280. no. 5364, pp. 698 - 701. | |
<
< | [6] Engineering a Deal: Toward a Private Ordering Solution to the Anticommons Problem, | >
> | [6] Engineering a Deal: Toward a Private Ordering Solution to the Anticommons Problem, | | | F. Scott Kieff and Troy A. Paredes,
Stanford Law and Economics Olin Working Paper No. 330 (November 2006).
Available at SSRN: http://ssrn.com/abstract=948468 . | |
<
< | [7] Standing on the Shoulders of Giants: Cumulative Research and the Patent Law, | >
> | [7] Standing on the Shoulders of Giants: Cumulative Research and the Patent Law, | | | Suzanne Scotchmer,
The Journal of Economic Perspectives, Vol. 5, No. 1. (Winter, 1991), pp. 29-41. | |
<
< | [8] What Does the Public Get? Experimental Use and the Patent Bargain, | >
> | [8] What Does the Public Get? Experimental Use and the Patent Bargain, | | | Katherine J. Strandburg,
Wisconsin Law Review 2004: 81. | |
<
< | [9] Kelo v. City of New London, 545 U.S. 469 (2005). | >
> | [9] Kelo v. City of New London, 545 U.S. 469 (2005). | | |
- March-in rights already exist. They are unused for the same reason that a right to create compulsory pools would be unused: there is no uncaptured regulator with an incentive to employ the available instruments. You might as well begin facing the problem as it will face you for the rest of your lifetime: the patent system has ceased to produce positive outcomes and is now a source of serious potential evils. Its abolition is not only desirable but necessary. Discussion of the kind you offer here is too radical to be adopted and to impotent to do any good. Existing scholarship is full of shit, and venality is widespread, because doctors are not the only professionals easily corrupted by an extremely wealthy industry that has no respect whatever for the rule of law. You can decide to be on the side of the pharmaceutical manufacturers, with their plan to create lifetime-long monopolies in custom molecules that sustain individual existence (thus making one person's life the permanent legal property of someone else), or you can be in favor of abolition. All intermediate positions are actually just support for the bad guys. Which side are you on?
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JustinColannino-FirstPaper 15 - 24 Mar 2008 - Main.EbenMoglen
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Forced pooling as a solution to the tragedy of the anticommmons in patent law | | | The anticommons and its tragedy
An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michael Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed its occurrence in post soviet regimes [4] and in biomedical research with Rebecca S. Eisenberg [5]. In the particular case of patents the under-utilization is the suppression of innovation due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need. | |
>
> |
- What's the point of footnotes in a wiki? Just use links.
| | | Heller and Eisenberg establish three main hurdles that must be overcome to prevent tragedy in the Biomedical anticommons, which can be extended to patents in general. These are the high transaction costs of bundling rights, conflicting goals of rights holders and rights holders overvaluing of their piece of the resource.
While some view this situation as one with a free market solution [6], others think that this is a pitfall in the current system and thus an area ripe for government intervention [7]. Proposed solutions range from supplanting the right to exclude with liability rules [1] to giving free compulsory licenses for experimental use [8]. | | | [9] Kelo v. City of New London, 545 U.S. 469 (2005). | |
>
> |
- March-in rights already exist. They are unused for the same reason that a right to create compulsory pools would be unused: there is no uncaptured regulator with an incentive to employ the available instruments. You might as well begin facing the problem as it will face you for the rest of your lifetime: the patent system has ceased to produce positive outcomes and is now a source of serious potential evils. Its abolition is not only desirable but necessary. Discussion of the kind you offer here is too radical to be adopted and to impotent to do any good. Existing scholarship is full of shit, and venality is widespread, because doctors are not the only professionals easily corrupted by an extremely wealthy industry that has no respect whatever for the rule of law. You can decide to be on the side of the pharmaceutical manufacturers, with their plan to create lifetime-long monopolies in custom molecules that sustain individual existence (thus making one person's life the permanent legal property of someone else), or you can be in favor of abolition. All intermediate positions are actually just support for the bad guys. Which side are you on?
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JustinColannino-FirstPaper 14 - 18 Mar 2008 - Main.IanSullivan
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Forced pooling as a solution to the tragedy of the anticommmons in patent law | | | [9] Kelo v. City of New London, 545 U.S. 469 (2005). | |
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< | | | |
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JustinColannino-FirstPaper 13 - 05 Mar 2008 - Main.IanSullivan
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Forced pooling as a solution to the tragedy of the anticommmons in patent law | | | [9] Kelo v. City of New London, 545 U.S. 469 (2005). | |
>
> | | | |
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JustinColannino-FirstPaper 12 - 14 Feb 2008 - Main.JustinColannino
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Forced pooling as a solution to the tragedy of the anticommmons in patent law
The anticommons and its tragedy | |
<
< | An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michael Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed this occurrence in post soviet regimes [4] and in biomedical research with Rebecca S. Eisenberg [5]. In the particular case of patents the under-utilization is the suppression of innovation due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need. | >
> | An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michael Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed its occurrence in post soviet regimes [4] and in biomedical research with Rebecca S. Eisenberg [5]. In the particular case of patents the under-utilization is the suppression of innovation due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need. | | | Heller and Eisenberg establish three main hurdles that must be overcome to prevent tragedy in the Biomedical anticommons, which can be extended to patents in general. These are the high transaction costs of bundling rights, conflicting goals of rights holders and rights holders overvaluing of their piece of the resource. |
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JustinColannino-FirstPaper 11 - 14 Feb 2008 - Main.JustinColannino
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Forced pooling as a solution to the tragedy of the anticommmons in patent law | | | Heller and Eisenberg establish three main hurdles that must be overcome to prevent tragedy in the Biomedical anticommons, which can be extended to patents in general. These are the high transaction costs of bundling rights, conflicting goals of rights holders and rights holders overvaluing of their piece of the resource. | |
<
< | While some view this situation as one with a free market solution [6], others think that this is a pitfall in the current system and thus an area ripe for government intervention [7]. Proposed solutions range from surplanting the right to exclude with liability rules [1] to giving free compulsory licenses for experimental use [8]. | >
> | While some view this situation as one with a free market solution [6], others think that this is a pitfall in the current system and thus an area ripe for government intervention [7]. Proposed solutions range from supplanting the right to exclude with liability rules [1] to giving free compulsory licenses for experimental use [8]. | | | Government seizure as a solution to the tragedy | |
<
< | Government seizure is not a new idea. Seizure has been a useful way for government to overcome high transactions costs, hold-outs or parties unwilling to release their rights at any cost in the building of roads and other public works for centuries. The use of seizure is specifically allowed for the public good with fair compensation in the fifth amendment of the US constitution, and a recent supreme court case has held that siezed property can go into private hands as long as its use is for the public good [9]. | >
> | Government seizure is not a new idea. Seizure has been a useful way for government to overcome high transactions costs, hold-outs or parties unwilling to release their rights at any cost in the building of roads and other public works for centuries. The use of seizure is specifically allowed for the public good with fair compensation in the fifth amendment of the US constitution, and a recent supreme court case has held that seized property can go into private hands as long as its use is for the public good [9]. | | | The standard argument for granting patent holders the right to exclude is that it is an incentive to innovate. Thus, the argument goes, removing that right will chill innovation as patents will become less valuable because of the taking of rights. Our solution tries to walk the line between ensuring incentives for innovation and decreasing the hurdles and tolls that an innovator needs to take advantage of the protected ideas in downstream research. |
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JustinColannino-FirstPaper 10 - 14 Feb 2008 - Main.JustinColannino
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<
< | Seizure as a solution to the tragedy of the anticommmons in patent law | >
> | Forced pooling as a solution to the tragedy of the anticommmons in patent law | | | The anticommons and its tragedy
An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michael Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed this occurrence in post soviet regimes [4] and in biomedical research with Rebecca S. Eisenberg [5]. In the particular case of patents the under-utilization is the suppression of innovation due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need. | | | The standard argument for granting patent holders the right to exclude is that it is an incentive to innovate. Thus, the argument goes, removing that right will chill innovation as patents will become less valuable because of the taking of rights. Our solution tries to walk the line between ensuring incentives for innovation and decreasing the hurdles and tolls that an innovator needs to take advantage of the protected ideas in downstream research.
Seizure through a forced pooling scheme | |
<
< | A patent pool has been a solution to encourage innovation in the past. Upon entering World War I the US government brokered the creation of a patent pool to encourage aviation, which was stagnating due to disagreements between the Wright company and their competitors [2]. In the realm of copyright, collectives for authors and musicians exist to lessen the transaction costs of licensing [3]. | >
> | Patent pools have been a used to stop under-utilization if patents in the past. Upon entering World War I the US government brokered the creation of a patent pool to encourage aviation, which was stagnating due to disagreements between the Wright company and their competitors [2]. In the realm of copyright, collectives for authors and musicians exist to lessen the transaction costs of licensing [3]. | | | Our concept of forced pooling is simple: when an anticommons in a particular resource or group of resources is found to be deterring innovation the government can step in and seize the right to exclude from the patent holders, and place these patents into a patent pool. This effectively overcomes the three problems of transaction costs, conflicting goals and overvaluing of patents: the actors have no right as to how their property is used in the pool. Note that we do not discuss here who decides what 'deterring innovation' means - it is an important question beyond the scope of this paper. | |
<
< | The question then becomes what constitutes 'fair compensation'. We propose a mandatory licensing scheme to reward the patent holder. When an entity wishes to use the pool they must detail what patents they wish to use and devote some capped percentage of the gross income to the members of the pool whose patents were used. This scheme is detailed in figure 1. Thus, we retain some semblance of market in that the 'better' patents get used more and thus produce more income, ensuring that the patent holders will receive some form of fair compensation based on the worth of the use of their research. | >
> | The question then becomes what constitutes 'fair compensation'. We propose a mandatory licensing scheme to reward the patent holder. When an entity wishes to use the pool they must devote some capped percentage of the gross income to the members of the pool whose patents were used. This scheme is detailed in figure 1. Thus, we retain some semblance of market in that the 'better' patents get used more and thus produce more income, ensuring that the patent holders will receive some form of fair compensation based on the worth of the use of their research. | | | Benefits of the forced pooling scheme
The forced pooling scheme is not very different from the liability scheme proposed by Bar-Gill and Parchomovsky [1]. In both schemes the right to exclude is taken and replaced with some monetary compensation. The major differences, and benefits of our forced pooling scheme, are the lower transaction costs, greater predictability of damages and the greater incentive for the industry to consolidate their rights independent of government interference.
Lower transaction costs and greater predictability | |
<
< | The liability scheme relies on courts to set the price of the patent to the infringer ex post. Presumably, the threat of lawsuit would then lead to negotiations about how valuable the patent was to the new invention. However, this could open the infringer to crippling litigation. Imagine a the manufacturer of a dvd player, which uses thousands of patents. Under the liability scheme, the manufacturer will need to anticipate hundreds of negotiations and lawsuits to bring their product to market, an unpredictable task and a deterrent to innovation. | >
> | The liability scheme relies on courts to set the price of the patent to the infringer ex post. Presumably, the threat of lawsuit would then lead to negotiations about how valuable the patent was to the new invention. However, this could open the infringer to crippling litigation. Imagine a the manufacturer of a dvd player, which uses thousands of patents. Under the liability scheme, the manufacturer would need to anticipate hundreds of negotiations and lawsuits to bring their product to market, an unpredictable task and a deterrent to innovation. | | | The forced pooling scheme, on the other hand, has a known capped percentage of gross income to go back to the pool, so the liability is predictable, and there is no need to go to the courts or bargain with different rights holders. |
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JustinColannino-FirstPaper 9 - 14 Feb 2008 - Main.JustinColannino
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| META TOPICPARENT | name="FirstPaper%25" |
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Seizure as a solution to the tragedy of the anticommmons in patent law
The anticommons and its tragedy | |
<
< | An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michel Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed this occurrence in post soviet regimes [4] and in biomedical research with Rebecca S. Eisenberg [5]. In the particular case of patents the under-utilization is the suppression of innovation due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need. | >
> | An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michael Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed this occurrence in post soviet regimes [4] and in biomedical research with Rebecca S. Eisenberg [5]. In the particular case of patents the under-utilization is the suppression of innovation due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need. | | | | |
<
< | Heller and Eisenberg establish three main hurdles that must be overcome to prevent tragedy in the Biomedical anticommons, which can be extended to patents in general. These are the high transaction costs of bundling rights, conflicting goals of rights holders and a rights holder overvaluing of their particular piece of the resource. | >
> | Heller and Eisenberg establish three main hurdles that must be overcome to prevent tragedy in the Biomedical anticommons, which can be extended to patents in general. These are the high transaction costs of bundling rights, conflicting goals of rights holders and rights holders overvaluing of their piece of the resource. | | | | |
<
< | While some view this situation as one with a free market solution [6], others think that this could be a pitfall in the current system and thus an area ripe for government intervention [7]. Proposed governmental solutions range from surplanting the right to exclude with liability rules [1] to giving free compulsory licenses for experimental use [8]. | >
> | While some view this situation as one with a free market solution [6], others think that this is a pitfall in the current system and thus an area ripe for government intervention [7]. Proposed solutions range from surplanting the right to exclude with liability rules [1] to giving free compulsory licenses for experimental use [8]. | | | Government seizure as a solution to the tragedy
Government seizure is not a new idea. Seizure has been a useful way for government to overcome high transactions costs, hold-outs or parties unwilling to release their rights at any cost in the building of roads and other public works for centuries. The use of seizure is specifically allowed for the public good with fair compensation in the fifth amendment of the US constitution, and a recent supreme court case has held that siezed property can go into private hands as long as its use is for the public good [9]. | |
<
< | The standard argument for granting patent holders the right to exclude is that it will give a financial incentive to innovate. Thus, the argument goes, removing that right will chill innovation as patents will become less valuable because of the taking of rights. Our solution tries to walk the line between ensuring compensation for innovation and decreasing the hurdles and tolls that an innovator needs to take advantage of the protected ideas in downstream research. | >
> | The standard argument for granting patent holders the right to exclude is that it is an incentive to innovate. Thus, the argument goes, removing that right will chill innovation as patents will become less valuable because of the taking of rights. Our solution tries to walk the line between ensuring incentives for innovation and decreasing the hurdles and tolls that an innovator needs to take advantage of the protected ideas in downstream research. | | | Seizure through a forced pooling scheme
A patent pool has been a solution to encourage innovation in the past. Upon entering World War I the US government brokered the creation of a patent pool to encourage aviation, which was stagnating due to disagreements between the Wright company and their competitors [2]. In the realm of copyright, collectives for authors and musicians exist to lessen the transaction costs of licensing [3]. |
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JustinColannino-FirstPaper 8 - 14 Feb 2008 - Main.JustinColannino
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<
< | Seizure as a solution to the tragedy of the anticommmons in intellectual property | >
> | Seizure as a solution to the tragedy of the anticommmons in patent law | | | The anticommons and its tragedy | |
<
< | An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michel Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed this occurrence in post soviet regimes [2] and in biomedical research with Rebecca S. Eisenberg [3]. In the particular case of intellectual property the under-utilization is the suppression of innovation based on patented resources due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need. | >
> | An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michel Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed this occurrence in post soviet regimes [4] and in biomedical research with Rebecca S. Eisenberg [5]. In the particular case of patents the under-utilization is the suppression of innovation due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need. | | | | |
<
< | Heller and Eisenberg establish three main hurdles that must be overcome to prevent tragedy in the Biomedical anticommons, which can be extended to intellectual property in general. These are the high transaction costs of bundling rights, conflicting goals of rights holders and a rights holder overvaluing of their particular piece of the resource. | >
> | Heller and Eisenberg establish three main hurdles that must be overcome to prevent tragedy in the Biomedical anticommons, which can be extended to patents in general. These are the high transaction costs of bundling rights, conflicting goals of rights holders and a rights holder overvaluing of their particular piece of the resource. | | | | |
<
< | While some view this situation as one with a free market solution [4], others think that this could be a pitfall in the current system and thus an area ripe for government intervention [5]. Proposed governmental solutions range from surplanting intellectual property with liability rules [1] to giving free compulsory licenses for experimental use [6]. | >
> | While some view this situation as one with a free market solution [6], others think that this could be a pitfall in the current system and thus an area ripe for government intervention [7]. Proposed governmental solutions range from surplanting the right to exclude with liability rules [1] to giving free compulsory licenses for experimental use [8]. | | | Government seizure as a solution to the tragedy | |
<
< | The basis for seizure
Here we present the idea of government seizure as a solution to the tragedy of the anticommons in intellectual property law. This is not a new idea. Government seizure has been a useful way for the government to overcome high transactions costs, hold outs or parties unwilling to release their rights at any cost in the building of roads and other public works for centuries. The use of seizure is specifically allowed for the public good with fair compensation in the fifth amendment of the US constitution, and a recent supreme court case has held that the property can go into private hands as long as its use is for the public good. Kelo v. City of New London, 545 U.S. 469 (2005). | >
> | Government seizure is not a new idea. Seizure has been a useful way for government to overcome high transactions costs, hold-outs or parties unwilling to release their rights at any cost in the building of roads and other public works for centuries. The use of seizure is specifically allowed for the public good with fair compensation in the fifth amendment of the US constitution, and a recent supreme court case has held that siezed property can go into private hands as long as its use is for the public good [9]. | | | | |
<
< | The standard argument for the right to exclude in intellectual property is that it will encourage innovation. Thus, the argument goes, removing that right will chill innovation as patents will become less valuable because of the taking of rights. Thus, our solution tries to walk the line between compensation for innovation and decreasing the hurdles and tolls that an innovator needs to take advantage of the protected ideas in downstream research. | >
> | The standard argument for granting patent holders the right to exclude is that it will give a financial incentive to innovate. Thus, the argument goes, removing that right will chill innovation as patents will become less valuable because of the taking of rights. Our solution tries to walk the line between ensuring compensation for innovation and decreasing the hurdles and tolls that an innovator needs to take advantage of the protected ideas in downstream research. | | | Seizure through a forced pooling scheme | |
<
< | The concept of seizure is simple: when an anticommons in a particular resource or group of resources is found to be deterring innovation the government can step in and seize the right to exclude from the patent holders, and place these patents into a patent pool. This effectively overcomes the three problems of transaction costs, conflicting goals and overvaluing of patents: the actors have no right as to how their property is used in the pool. Note that we do not discuss here who decides what 'deterring innovation' means - it is an important quesiton beyond the scope of this paper. | >
> | A patent pool has been a solution to encourage innovation in the past. Upon entering World War I the US government brokered the creation of a patent pool to encourage aviation, which was stagnating due to disagreements between the Wright company and their competitors [2]. In the realm of copyright, collectives for authors and musicians exist to lessen the transaction costs of licensing [3]. | | | | |
<
< | The question then becomes what constitutes 'fair compensation'. We propose a mandatory licensing scheme to reward the patent holder. When an entity wishes to use the pool they must detail what patents they wish to use and devote some capped percentage of the gross income to the members of the pool with a bonus to those whose patents were used. This scheme is detailed in figure 1. Thus, we retain some semblance of market in that the 'better' patents get used more and thus produce more income, ensuring that the patent holders will receive some form of fair compensation based on the worth of the use of their research. | >
> | Our concept of forced pooling is simple: when an anticommons in a particular resource or group of resources is found to be deterring innovation the government can step in and seize the right to exclude from the patent holders, and place these patents into a patent pool. This effectively overcomes the three problems of transaction costs, conflicting goals and overvaluing of patents: the actors have no right as to how their property is used in the pool. Note that we do not discuss here who decides what 'deterring innovation' means - it is an important question beyond the scope of this paper.
The question then becomes what constitutes 'fair compensation'. We propose a mandatory licensing scheme to reward the patent holder. When an entity wishes to use the pool they must detail what patents they wish to use and devote some capped percentage of the gross income to the members of the pool whose patents were used. This scheme is detailed in figure 1. Thus, we retain some semblance of market in that the 'better' patents get used more and thus produce more income, ensuring that the patent holders will receive some form of fair compensation based on the worth of the use of their research. | | | Benefits of the forced pooling scheme
The forced pooling scheme is not very different from the liability scheme proposed by Bar-Gill and Parchomovsky [1]. In both schemes the right to exclude is taken and replaced with some monetary compensation. The major differences, and benefits of our forced pooling scheme, are the lower transaction costs, greater predictability of damages and the greater incentive for the industry to consolidate their rights independent of government interference.
Lower transaction costs and greater predictability | |
<
< | The liability scheme relies on courts to set the price of the patent to the infringer ex post. Presumably, the threat of lawsuit would then lead to negotiations about how valuable the patent was to the new invention. However, this could open the infringer to crippling litigation. Imagine a the manufacturer of a dvd player, which uses thousands of patents. Under the liability scheme, the manufacturer will need to plan on thousands of negotiations and lawsuits to bring their product to market, an unpredictable task and a deterrent to innovation. | >
> | The liability scheme relies on courts to set the price of the patent to the infringer ex post. Presumably, the threat of lawsuit would then lead to negotiations about how valuable the patent was to the new invention. However, this could open the infringer to crippling litigation. Imagine a the manufacturer of a dvd player, which uses thousands of patents. Under the liability scheme, the manufacturer will need to anticipate hundreds of negotiations and lawsuits to bring their product to market, an unpredictable task and a deterrent to innovation. | | | The forced pooling scheme, on the other hand, has a known capped percentage of gross income to go back to the pool, so the liability is predictable, and there is no need to go to the courts or bargain with different rights holders.
Incentive for rights consolidation independent of government interference | |
<
< | The liability scheme offers no incentive for the rights holders to break their anticommons. If bargaining breaks down, they may simply subject the infringer to a law suit. This tips the scales towards the rights holder, giving them no reason to consolidate their rights into a system favorable to innovation. | >
> | The liability scheme offers no incentive for the rights holders to break the anticommons. If bargaining breaks down, they may simply sue - there is no reason to consolidate their rights into a system favorable to innovation. | | | | |
<
< | The threat of the forced pooling scheme may encourage private bargain making to break anticommons. Forced with a choice to be unable to exclude anyone from use of their patents may force actors to the bargaining table, to overcome their conflicting goals and be realistic about the relative value of their contribution. Thus, a benefit of the proposed system may be the incentives it creates, not the benefits of its utilization. | >
> | The threat of the forced pooling scheme may encourage private bargaining to break the anticommons. Faced will a loss of rights, the actors may turn to the bargaining table. Thus, a benefit of the proposed system may be the incentives it creates, not the benefits of its utilization. | | | References | | | Oren Bar-Gill and Gideon Parchomovsky,
84 Texas Law Review 395, 2005. | |
<
< | [2] The Tragedy of the Anticommons: Property in the Transiton from Marx to Markets, | >
> | [2] Property Rights, Progress, and the Aircraft Patent Agreement
George Bittlingmayer
Journal of Law and Economics, 31; 227-248, 1988.
[3] An Economic Analysis of Copyright Collectives,
S. Besen, S. Kirkby and S. Salop,
Virginia Law Review, 78; 383-441, 1992.
[4] The Tragedy of the Anticommons: Property in the Transiton from Marx to Markets, | | | Michael A. Heller,
111 Harv. L. Rev. 621, 1998. | |
<
< | [3] Can Patents Deter Innovation? The Anticommons in Biomedical Research, | >
> | [5] Can Patents Deter Innovation? The Anticommons in Biomedical Research, | | | Michael A. Heller and Rebecca S. Eisenberg,
Science 1 May 1998: Vol. 280. no. 5364, pp. 698 - 701. | |
<
< | [4] Engineering a Deal: Toward a Private Ordering Solution to the Anticommons Problem, | >
> | [6] Engineering a Deal: Toward a Private Ordering Solution to the Anticommons Problem, | | | F. Scott Kieff and Troy A. Paredes,
Stanford Law and Economics Olin Working Paper No. 330 (November 2006).
Available at SSRN: http://ssrn.com/abstract=948468 . | |
<
< | [5] Standing on the Shoulders of Giants: Cumulative Research and the Patent Law, | >
> | [7] Standing on the Shoulders of Giants: Cumulative Research and the Patent Law, | | | Suzanne Scotchmer,
The Journal of Economic Perspectives, Vol. 5, No. 1. (Winter, 1991), pp. 29-41. | |
<
< | [6] What Does the Public Get? Experimental Use and the Patent Bargain, | >
> | [8] What Does the Public Get? Experimental Use and the Patent Bargain, | | | Katherine J. Strandburg,
Wisconsin Law Review 2004: 81. | |
<
< | [7] Kelo v. City of New London, 545 U.S. 469 (2005) | >
> | [9] Kelo v. City of New London, 545 U.S. 469 (2005).
| META FILEATTACHMENT | attachment="Figure_1.jpeg" attr="" comment="Figure 1" date="1202956574" name="Figure_1.jpeg" path="Figure 1.jpeg" size="17873" stream="Figure 1.jpeg" user="Main.JustinColannino" version="1" |
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JustinColannino-FirstPaper 7 - 12 Feb 2008 - Main.JustinColannino
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| META TOPICPARENT | name="FirstPaper%25" |
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Seizure as a solution to the tragedy of the anticommmons in intellectual property
The anticommons and its tragedy | |
<
< | An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michel Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed this occurrence in post soviet regimes (CITE) and in biomedical research with Rebecca S. Eisenberg (CITE). In the particular case of intellectual property the under-utilization is the suppression of innovation based on patented resources due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need. | >
> | An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michel Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed this occurrence in post soviet regimes [2] and in biomedical research with Rebecca S. Eisenberg [3]. In the particular case of intellectual property the under-utilization is the suppression of innovation based on patented resources due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need. | | | Heller and Eisenberg establish three main hurdles that must be overcome to prevent tragedy in the Biomedical anticommons, which can be extended to intellectual property in general. These are the high transaction costs of bundling rights, conflicting goals of rights holders and a rights holder overvaluing of their particular piece of the resource. | |
<
< | While some view this situation as one with a free market solution (CITE), others think that this could be a pitfall in the current system and thus an area ripe for government intervention (CITE). Proposed governmental solutions range from surplanting intellectual property with liability rules (CITE) to giving free compulsory licenses for experimental use (CITE). | >
> | While some view this situation as one with a free market solution [4], others think that this could be a pitfall in the current system and thus an area ripe for government intervention [5]. Proposed governmental solutions range from surplanting intellectual property with liability rules [1] to giving free compulsory licenses for experimental use [6]. | | | Government seizure as a solution to the tragedy
The basis for seizure | |
<
< | Here we present the idea of government seizure as a solution to the tragedy of the anticommons in intellectual property law. This is not a new idea. Government seizure has been a useful way for the government to overcome high transactions costs, hold outs or parties unwilling to release their rights at any cost in the building of roads and other public works for centuries. The use of seizure is specifically allowed for the public good with fair compensation in the fifth amendment of the US constitution (CITE), and a recent supreme court case has held that the property can go into private hands as long as its use is for the public good (CITE). | >
> | Here we present the idea of government seizure as a solution to the tragedy of the anticommons in intellectual property law. This is not a new idea. Government seizure has been a useful way for the government to overcome high transactions costs, hold outs or parties unwilling to release their rights at any cost in the building of roads and other public works for centuries. The use of seizure is specifically allowed for the public good with fair compensation in the fifth amendment of the US constitution, and a recent supreme court case has held that the property can go into private hands as long as its use is for the public good. Kelo v. City of New London, 545 U.S. 469 (2005). | | | The standard argument for the right to exclude in intellectual property is that it will encourage innovation. Thus, the argument goes, removing that right will chill innovation as patents will become less valuable because of the taking of rights. Thus, our solution tries to walk the line between compensation for innovation and decreasing the hurdles and tolls that an innovator needs to take advantage of the protected ideas in downstream research.
Seizure through a forced pooling scheme | |
<
< | When an anticommons in a particular resource or group of resources is found to be deterring innovation the government can step in and seize the right to exclude from the patent holders, and place these patents into a patent pool. This effectively overcomes the three problems of transaction costs, conflicting goals and overvaluing of patents: the actors have no right as to how their property is used in the pool. | >
> | The concept of seizure is simple: when an anticommons in a particular resource or group of resources is found to be deterring innovation the government can step in and seize the right to exclude from the patent holders, and place these patents into a patent pool. This effectively overcomes the three problems of transaction costs, conflicting goals and overvaluing of patents: the actors have no right as to how their property is used in the pool. Note that we do not discuss here who decides what 'deterring innovation' means - it is an important quesiton beyond the scope of this paper. | | | | |
<
< | The question then becomes what constitutes 'fair compensation'. We propose a mandatory licensing scheme to reward the patent holder. When an entity wishes to use the pool they must detail what patents they wish to use and devote some capped percentage of the gross income to the members of the pool with a bonus to those whose patents were used. This scheme is detailed in figure 1. Thus, we retain some semblance of market in that the 'better' patents get used more and thus produce more income, ensuring that the innovators will receive some form of fair compensation from the marketplace for the use of their research. | >
> | The question then becomes what constitutes 'fair compensation'. We propose a mandatory licensing scheme to reward the patent holder. When an entity wishes to use the pool they must detail what patents they wish to use and devote some capped percentage of the gross income to the members of the pool with a bonus to those whose patents were used. This scheme is detailed in figure 1. Thus, we retain some semblance of market in that the 'better' patents get used more and thus produce more income, ensuring that the patent holders will receive some form of fair compensation based on the worth of the use of their research. | | | Benefits of the forced pooling scheme | |
<
< | The forced pooling scheme is not very different from the liability scheme proposed by Bar-Gill and Parchomovsky (CITE). In both schemes the right to exclude is taken and replaced with some monetary compensation. The major differences, and benefits of our forced pooling scheme, are the lower transaction costs, greater predictability of damages and the greater incentive for the industry to consolidate their rights independent of government interference. | >
> | The forced pooling scheme is not very different from the liability scheme proposed by Bar-Gill and Parchomovsky [1]. In both schemes the right to exclude is taken and replaced with some monetary compensation. The major differences, and benefits of our forced pooling scheme, are the lower transaction costs, greater predictability of damages and the greater incentive for the industry to consolidate their rights independent of government interference. | | | Lower transaction costs and greater predictability
The liability scheme relies on courts to set the price of the patent to the infringer ex post. Presumably, the threat of lawsuit would then lead to negotiations about how valuable the patent was to the new invention. However, this could open the infringer to crippling litigation. Imagine a the manufacturer of a dvd player, which uses thousands of patents. Under the liability scheme, the manufacturer will need to plan on thousands of negotiations and lawsuits to bring their product to market, an unpredictable task and a deterrent to innovation. | |
<
< | The forced pooling scheme, on the other hand, has a capped percentage of gross income to go back to the pool, so the liability is predictable, and there is no need to go to the courts or deal with many different actors. | >
> | The forced pooling scheme, on the other hand, has a known capped percentage of gross income to go back to the pool, so the liability is predictable, and there is no need to go to the courts or bargain with different rights holders. | | | Incentive for rights consolidation independent of government interference
The liability scheme offers no incentive for the rights holders to break their anticommons. If bargaining breaks down, they may simply subject the infringer to a law suit. This tips the scales towards the rights holder, giving them no reason to consolidate their rights into a system favorable to innovation. | |
<
< | The threat of the forced pooling scheme may encourage private bargain making to break anticommons. Forced with a choice to be unable to exclude anyone from use of their patents may force actors to the bargaining table, to overcome their conflicting goals and be realistic about the relative value of their contribution. Thus, a benefit of such a system may be its threat more than its actual use. | >
> | The threat of the forced pooling scheme may encourage private bargain making to break anticommons. Forced with a choice to be unable to exclude anyone from use of their patents may force actors to the bargaining table, to overcome their conflicting goals and be realistic about the relative value of their contribution. Thus, a benefit of the proposed system may be the incentives it creates, not the benefits of its utilization. | | | References | |
<
< | A Marketplace for Ideas?, | >
> | [1] A Marketplace for Ideas?, | | | Oren Bar-Gill and Gideon Parchomovsky,
84 Texas Law Review 395, 2005. | |
<
< | The Tragedy of the Anticommons: Property in the Transiton from Marx to Markets, | >
> | [2] The Tragedy of the Anticommons: Property in the Transiton from Marx to Markets, | | | Michael A. Heller,
111 Harv. L. Rev. 621, 1998. | |
<
< | Can Patents Deter Innovation? The Anticommons in Biomedical Research, | >
> | [3] Can Patents Deter Innovation? The Anticommons in Biomedical Research, | | | Michael A. Heller and Rebecca S. Eisenberg,
Science 1 May 1998: Vol. 280. no. 5364, pp. 698 - 701. | |
<
< | Engineering a Deal: Toward a Private Ordering Solution to the Anticommons Problem, | >
> | [4] Engineering a Deal: Toward a Private Ordering Solution to the Anticommons Problem, | | | F. Scott Kieff and Troy A. Paredes,
Stanford Law and Economics Olin Working Paper No. 330 (November 2006).
Available at SSRN: http://ssrn.com/abstract=948468 . | |
<
< | Standing on the Shoulders of Giants: Cumulative Research and the Patent Law, | >
> | [5] Standing on the Shoulders of Giants: Cumulative Research and the Patent Law, | | | Suzanne Scotchmer,
The Journal of Economic Perspectives, Vol. 5, No. 1. (Winter, 1991), pp. 29-41. | |
<
< | What Does the Public Get? Experimental Use and the Patent Bargain, | >
> | [6] What Does the Public Get? Experimental Use and the Patent Bargain, | | | Katherine J. Strandburg,
Wisconsin Law Review 2004: 81. | |
>
> | [7] Kelo v. City of New London, 545 U.S. 469 (2005) |
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JustinColannino-FirstPaper 6 - 12 Feb 2008 - Main.JustinColannino
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| META TOPICPARENT | name="FirstPaper%25" |
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Seizure as a solution to the tragedy of the anticommmons in intellectual property | | | Benefits of the forced pooling scheme
The forced pooling scheme is not very different from the liability scheme proposed by Bar-Gill and Parchomovsky (CITE). In both schemes the right to exclude is taken and replaced with some monetary compensation. The major differences, and benefits of our forced pooling scheme, are the lower transaction costs, greater predictability of damages and the greater incentive for the industry to consolidate their rights independent of government interference. | |
<
< | Lower transaction costs and predictability | >
> | Lower transaction costs and greater predictability
The liability scheme relies on courts to set the price of the patent to the infringer ex post. Presumably, the threat of lawsuit would then lead to negotiations about how valuable the patent was to the new invention. However, this could open the infringer to crippling litigation. Imagine a the manufacturer of a dvd player, which uses thousands of patents. Under the liability scheme, the manufacturer will need to plan on thousands of negotiations and lawsuits to bring their product to market, an unpredictable task and a deterrent to innovation.
The forced pooling scheme, on the other hand, has a capped percentage of gross income to go back to the pool, so the liability is predictable, and there is no need to go to the courts or deal with many different actors. | | | Incentive for rights consolidation independent of government interference | |
>
> | The liability scheme offers no incentive for the rights holders to break their anticommons. If bargaining breaks down, they may simply subject the infringer to a law suit. This tips the scales towards the rights holder, giving them no reason to consolidate their rights into a system favorable to innovation.
The threat of the forced pooling scheme may encourage private bargain making to break anticommons. Forced with a choice to be unable to exclude anyone from use of their patents may force actors to the bargaining table, to overcome their conflicting goals and be realistic about the relative value of their contribution. Thus, a benefit of such a system may be its threat more than its actual use. | | | References |
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JustinColannino-FirstPaper 5 - 11 Feb 2008 - Main.JustinColannino
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| META TOPICPARENT | name="FirstPaper%25" |
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Seizure as a solution to the tragedy of the anticommmons in intellectual property | | | While some view this situation as one with a free market solution (CITE), others think that this could be a pitfall in the current system and thus an area ripe for government intervention (CITE). Proposed governmental solutions range from surplanting intellectual property with liability rules (CITE) to giving free compulsory licenses for experimental use (CITE). | |
<
< | Government siezure as a solution to the tragedy
Here we present the idea of government seizure as a solution to the tragedy of the anticommons in intellectual property law. This is not a new idea. _Government seizure has been a useful way for the government to overcome high transactions costs, hold outs or parties unwilling to release their rights at any cost in the building of roads and other public works for centuries. The use of seizure is specifically allowed for the public good with fair compensation in the fifth amendment of the US constitution (CITE), and a recent supreme court case has held that the property can go into private hands as long as its use is for the public good (CITE). | >
> | Government seizure as a solution to the tragedy
The basis for seizure
Here we present the idea of government seizure as a solution to the tragedy of the anticommons in intellectual property law. This is not a new idea. Government seizure has been a useful way for the government to overcome high transactions costs, hold outs or parties unwilling to release their rights at any cost in the building of roads and other public works for centuries. The use of seizure is specifically allowed for the public good with fair compensation in the fifth amendment of the US constitution (CITE), and a recent supreme court case has held that the property can go into private hands as long as its use is for the public good (CITE). | | | The standard argument for the right to exclude in intellectual property is that it will encourage innovation. Thus, the argument goes, removing that right will chill innovation as patents will become less valuable because of the taking of rights. Thus, our solution tries to walk the line between compensation for innovation and decreasing the hurdles and tolls that an innovator needs to take advantage of the protected ideas in downstream research. | |
>
> | Seizure through a forced pooling scheme
When an anticommons in a particular resource or group of resources is found to be deterring innovation the government can step in and seize the right to exclude from the patent holders, and place these patents into a patent pool. This effectively overcomes the three problems of transaction costs, conflicting goals and overvaluing of patents: the actors have no right as to how their property is used in the pool.
The question then becomes what constitutes 'fair compensation'. We propose a mandatory licensing scheme to reward the patent holder. When an entity wishes to use the pool they must detail what patents they wish to use and devote some capped percentage of the gross income to the members of the pool with a bonus to those whose patents were used. This scheme is detailed in figure 1. Thus, we retain some semblance of market in that the 'better' patents get used more and thus produce more income, ensuring that the innovators will receive some form of fair compensation from the marketplace for the use of their research.
Benefits of the forced pooling scheme
The forced pooling scheme is not very different from the liability scheme proposed by Bar-Gill and Parchomovsky (CITE). In both schemes the right to exclude is taken and replaced with some monetary compensation. The major differences, and benefits of our forced pooling scheme, are the lower transaction costs, greater predictability of damages and the greater incentive for the industry to consolidate their rights independent of government interference.
Lower transaction costs and predictability
Incentive for rights consolidation independent of government interference | | | References
A Marketplace for Ideas?, |
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JustinColannino-FirstPaper 4 - 10 Feb 2008 - Main.JustinColannino
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| META TOPICPARENT | name="FirstPaper%25" |
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Seizure as a solution to the tragedy of the anticommmons in intellectual property
The anticommons and its tragedy | |
<
< | An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michel Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed this occurrence in post soviet regimes (cite harvard) and in biomedical research (cite science) with Rebecca S. Eisenberg. In the particular case of intellectual property the under-utilization is the suppression of innovation based on patented resources due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need. | >
> | An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michel Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed this occurrence in post soviet regimes (CITE) and in biomedical research with Rebecca S. Eisenberg (CITE). In the particular case of intellectual property the under-utilization is the suppression of innovation based on patented resources due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need. | | | Heller and Eisenberg establish three main hurdles that must be overcome to prevent tragedy in the Biomedical anticommons, which can be extended to intellectual property in general. These are the high transaction costs of bundling rights, conflicting goals of rights holders and a rights holder overvaluing of their particular piece of the resource. | |
<
< | While some view this situation as one with a free market solution http://papers.ssrn.com/sol3/papers.cfm?abstract_id=948468, others think that this could be a pitfall in the current system and thus an area ripe for government intervention, (ON THE SHOULDERS OF GIANTS). | >
> | While some view this situation as one with a free market solution (CITE), others think that this could be a pitfall in the current system and thus an area ripe for government intervention (CITE). Proposed governmental solutions range from surplanting intellectual property with liability rules (CITE) to giving free compulsory licenses for experimental use (CITE). | | | Government siezure as a solution to the tragedy | |
>
> | Here we present the idea of government seizure as a solution to the tragedy of the anticommons in intellectual property law. This is not a new idea. _Government seizure has been a useful way for the government to overcome high transactions costs, hold outs or parties unwilling to release their rights at any cost in the building of roads and other public works for centuries. The use of seizure is specifically allowed for the public good with fair compensation in the fifth amendment of the US constitution (CITE), and a recent supreme court case has held that the property can go into private hands as long as its use is for the public good (CITE).
The standard argument for the right to exclude in intellectual property is that it will encourage innovation. Thus, the argument goes, removing that right will chill innovation as patents will become less valuable because of the taking of rights. Thus, our solution tries to walk the line between compensation for innovation and decreasing the hurdles and tolls that an innovator needs to take advantage of the protected ideas in downstream research. | | | References
\ No newline at end of file | |
>
> | A Marketplace for Ideas?,
Oren Bar-Gill and Gideon Parchomovsky,
84 Texas Law Review 395, 2005.
The Tragedy of the Anticommons: Property in the Transiton from Marx to Markets,
Michael A. Heller,
111 Harv. L. Rev. 621, 1998.
Can Patents Deter Innovation? The Anticommons in Biomedical Research,
Michael A. Heller and Rebecca S. Eisenberg,
Science 1 May 1998: Vol. 280. no. 5364, pp. 698 - 701.
Engineering a Deal: Toward a Private Ordering Solution to the Anticommons Problem,
F. Scott Kieff and Troy A. Paredes,
Stanford Law and Economics Olin Working Paper No. 330 (November 2006).
Available at SSRN: http://ssrn.com/abstract=948468 .
Standing on the Shoulders of Giants: Cumulative Research and the Patent Law,
Suzanne Scotchmer,
The Journal of Economic Perspectives, Vol. 5, No. 1. (Winter, 1991), pp. 29-41.
What Does the Public Get? Experimental Use and the Patent Bargain,
Katherine J. Strandburg,
Wisconsin Law Review 2004: 81. |
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> | Seizure as a solution to the tragedy of the anticommmons in intellectual property | | | The anticommons and its tragedy
An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michel Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed this occurrence in post soviet regimes (cite harvard) and in biomedical research (cite science) with Rebecca S. Eisenberg. In the particular case of intellectual property the under-utilization is the suppression of innovation based on patented resources due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need. |
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Seizure as a solution to the tragedy of the anticommmons in intelectual property
The anticommons and its tragedy | |
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> | An anticommons occurs when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. The “tragedy of the anticommons”, coined by Michel Heller, is when the right to exclude is exercised by some of the right holders, with the result that the resource becomes under-utilized. Heller has discussed this occurrence in post soviet regimes (cite harvard) and in biomedical research (cite science) with Rebecca S. Eisenberg. In the particular case of intellectual property the under-utilization is the suppression of innovation based on patented resources due to the cost of using upstream resources. This problem becomes magnified because the rights holders have monopolies on the resource - the innovator cannot find an alternate supply of the resources they need.
Heller and Eisenberg establish three main hurdles that must be overcome to prevent tragedy in the Biomedical anticommons, which can be extended to intellectual property in general. These are the high transaction costs of bundling rights, conflicting goals of rights holders and a rights holder overvaluing of their particular piece of the resource.
While some view this situation as one with a free market solution http://papers.ssrn.com/sol3/papers.cfm?abstract_id=948468, others think that this could be a pitfall in the current system and thus an area ripe for government intervention, (ON THE SHOULDERS OF GIANTS). | | | Government siezure as a solution to the tragedy | |
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