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.

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).

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

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.