Law in Contemporary Society

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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

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 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.
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<		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.
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>		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.

Revision 18r18 - 13 Jan 2012 - 23:14:18 - IanSullivan
Revision 17r17 - 12 Jan 2009 - 22:59:35 - IanSullivan
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