Cover

PERSPECTIVES ON COMMERCIALIZING INNOVATION

Title

Copyright

Contents

Contributors

Dedication

Acknowledgments

Introduction

PART I: Perspectives on Theories of Intellectual Property

1 Intellectual Property and the Theory of the Firm

I. INTRODUCTION

II. OVERVIEW OF THE THEORY OF THE FIRM

A. Separation and The Theory of the Firm

B. Communication and Information Processing

C. Search and Matching

D. Bargaining

E. Moral Hazard

F. Adverse Selection

G. Contracting

H. Free Riding

III. IP AND THE THEORY OF THE FIRM

A. IP and the Intermediation Hypothesis

B. Patents, Transaction Costs, and the Firm

B. Trademarks, Transaction Costs, and the Firm

C. Copyrights, Transaction Costs, and the Firm

IV. IP, INNOVATION, AND ENTREPRENEURSHIP

V. IP, THE EXTENT OF THE MARKET, AND THE QUALITY OF INNOVATION

VI. CONCLUSION

2 A Transactional View of Property Rights

I. INTRODUCTION

A. Brief Review of the Relevant Legal and Economics Literature

B. Exploring the Property-Contract Interface by Studying Patent Licensing Cases

C. Propertys Transactional Role

II. PROPERTY RIGHTS AND PRECONTRACTUAL LIABILITY

A. The Limitations of Contractual Safeguards against Opportunism

B. The Role of Property Rights in Precontractual Disclosures

1. The Precontractual “Field Effect” of Property Rights

2. What Disclosures Do Property Rights Encourage? Evidence from the Case Law

3. Patents as Precontractual Protection

III. PROPERTY RIGHTS AND ENFORCEMENT FLEXIBILITY

A. Breach versus Infringement Suits: Strategic and Practical Advantages of Increased Flexibility

1. Infringement over Breach of Contract: Strategy and Sample Cases

2. Breach of Contract over Infringement: Strategy and Sample Cases

B. Summary: Enforcement Flexibility is in the Details

IV. WHY SHOULD WE CARE ABOUT ALL THIS? THE TRANSACTION-INTENSIVE LANDSCAPE OF THE NEW ECONOMY

V. CONCLUSION

3 The Modularity of Patent Law

I. MODULARITY AND THE PROBLEM OF RIGHTS IN INFORMATION

A. Modularity in Property

B. Intellectual Property

II. INFORMATION COSTS IN PATENT AND COPYRIGHT LAW

A. Patent versus Copyright Law

1. Definition of Rights

2. Independent Invention or Creation

3. Compulsory Licenses

4. Further Exceptions

B. Rewards and Prospects

C. Intellectual Property and the Mix of Exclusion and Governance

III. DYNAMIC IMPLICATIONS

IV. CONCLUSION

4 Forging a New Environmental and Resource Economics Paradigm: The Contractual Bases for Exchange Paradigm

I. THE OLD RESOURCE ECONOMICS

II. WAS COASE A NATURAL RESOURCE ECONOMIST?

III. ECONOMIC ANALYSIS OF THE EVOLUTION OF PROPERTY RIGHTS

IV. PROPERTY RIGHTS, TRANSACTION COSTS, AND NEGOTIATED SOLUTIONS TO ENVIRONMENTAL/RESOURCE PROBLEMS

V. TOWARD A NEW PARADIGM: THE ENVIRONMENT THROUGH COASE-COLORED GLASSES

A. Water

B. Effluent Disposal

C. Wildlife

D. Timber

E. Fisheries

VI. FORGING A NEW ENVIRONMENTAL ECONOMICS PARADIGM

5 Privatizing the Public Domain

I. POTENTIAL APPLICATIONS

A. Patent: Privatizing to Encourage Development

1. Further Scientific Assessment

2. Unpatentable Improvements

3. Uncertainty of Commercial Success

4. Advertising and Marketing

B. Patent: Privatizing to Reduce Overuse

1. Excessive Improvements of Inventions

2. Negative Externalities

C. Copyright

1. Marketing and Advertising

2. Congestion Externalities

3. Uncopyrightable Compilations

D. Trademarks

II. PROBLEMS

A. Problems Associated with Private Ownership

1. Deadweight Loss

2. Transactions Costs

3. Duplication from Inventing Around

4. Motivation to Exploit

B. Problems of Transferring to Private Ownership

1. Rent-Seeking Behavior

2. Investment Predictability

3. Identification of the Optimal Right Holder

4. Identification of the Optimal Term and Optimal Scope

5. Constitutionality

III. STRATEGIES FOR SELECTIVELY PRIVATIZING THE PUBLIC DOMAIN

A. Auctions

B. Information Markets

IV. CONCLUSION

PART II: Perspectives on the Problems of Anticommons and Patent Thickets

6 Engineering a Deal: Toward a Private Ordering Solution to the Anticommons Problem

I. SKETCHING THE BASIC STRUCTURE AND BASIC HURDLES

A. Basic Structure

B. Basic Hurdles: Unpacking the Structure

1. Hurdle One: Limited Liability and Financial Payoffs

2. Hurdle Two: Behavioralism and Peer and Social Pressure

3. Hurdle Three: Antitrust and Collective Action Benefits

4. Hurdle Four: Deal Acceptance

II. ADDITIONAL OBSTACLES AND LIMITATIONS

A. The Injunction Risk

B. The Hostage Risk

C. IP Owner Heterogeneity

D. Legal and Regulatory Risk

III.ON THE RISKS OF LEGAL REFORM

IV. SOME IMPLICATIONS FOR IP THEORY

V. CONCLUSION

7 Understanding the RAND Commitment

I. INTRODUCTION

II. WHY RAND

III. INTERPRETING RAND

A. The Economic Perspective

B. The Patent Law Perspective

1. The General Case for Exaggeration

2. How Patent Law Exaggerates

3. Exaggeration and RAND

C. The Antitrust Perspective

IV. OTHER VIEWS

V. CONCLUSION

8 Embryonic Inventions and Embryonic Patents: Prospects, Prophesies, and Pedis Possessio

I. THE TIMING OF PATENTING

A. Enthusiasm for Early Patents

B. Curbing the Enthusiasm (Modestly)

II. THE LAW FOR OBTAINING EMBRYONIC PATENTS

A. The Utility Requirement: Research Use ≠ Use

B. More Flexible Requirements

1. Prophetic Utilities

2. Prophetic Enablement

3. Prophetic Nonobviousness

4. The Written Description Doctrine

III. EMBRYONIC PATENTS AS RIGHTS OF PEDIS POSSESSIO

A. Repropertization: Purging Failed Prospect Rights

1. Abandoned-Experiment Doctrine

2. Improvement Patents, Commercial Nonobviousness, and Commercial Novelty

B. Notice Problems: Preventing Free Riding Off of Subsequent Developers

1. Publication and Caveats

2. Requiring Proof at the PTO

3. Limiting Prophetic Patents to Accommodate the Efforts of Others

IV. CONCLUSION: EMBRYONIC PATENTS FOR EMBRYONIC INVENTIONS

9 Innovation and Its Discontents

I. THEY FIXED IT, AND NOW IT’S BROKE

II. GOALS AND OBJECTIVES

A. Improve Patent Quality

B. Reduce Uncertainty

C. Keep Costs under Control

III. SOME SIMPLE TRUTHS

A. Mistakes Will Always Be with Us

B. Much More Chaff than Wheat

C. Rational Ignorance

D. Inventors Respond to How the Patent Office Behaves

E. Potential Litigants Respond to How the Courts Behave

F. Get Information to Flow into the PTO

IV. BUILDING BLOCKS OF REFORM

V. THE QUEST FOR QUALITY AT THE PTO

A. Pre-Grant Opposition

B. Postgrant Reexamination

C. Devilish Details

VI. LEVELING THE JUDICIAL PLAYING FIELD

A. The Presumption of Validity

B. Trial by Jury

VII. SOFTWARE, GENES, AND OTHER ALLEGED PATENT NIGHTMARES

A. Funny Business over Business Methods

B. Software: An Open and Shut Case for “Open Source”?

C. Should Mere Mortals Control the Human Genome?

D. Does One Patent “Size” Really Fit All?

VIII. A LESS KIND, LESS GENTLE PATENT SYSTEM

REFERENCE

PART III: Perspectives on Finance and Commercialization

10 Patents as Options

I. INTRODUCTION

II. PATENT VALUATION

A. DCF Valuation Models

B. Option Valuation Models

C. Some Policy Implications

III. PATENTS AS LITIGATION OPTIONS

A. Patent Variability Based on Components of Option Value

B. The Litigation Component of Patent Value

C. Normative Implications

IV. CONCLUSION

11 Access to Finance and the Technological Innovation: A Historical Experiment

I. BANKS, FINANCIAL MARKETS, AND TEXTILE FINANCE

A. Mexico

B. Brazil

II. FINANCE AND THE STRUCTURE AND GROWTH OF THE TEXTILE INDUSTRY

III. PRODUCTIVITY GROWTH

IV. CONCLUSIONS

12 The Decline of the Independent Inventor: A Schumpeterian Story?

I. THE PATENT SYSTEM AND THE RISE OF INSTITUTIONS SUPPORTING A MARKET FOR TECHNOLOGY

II. INDEPENDENT INVENTORS AS ENTREPRENEURS

III. DIFFICULTIES FACING INDEPENDENT INVENTORS

IV. WAS SCHUMPETER RIGHT?

PART IV: Perspectives on the University Innovation

13 University Software Ownership and Litigation: A First Examination

I. SOFTWARE PATENTING: HISTORY AND METHODS OF IDENTIFICATION

A. The History of Software Patents

B. Identifying University Software Patents

II. UNIVERSITY SOFTWARE PATENTING: TRENDS,DETERMINANTS, AND DEPARTMENTAL ORIGIN

A. Trends

B. Patent Production Functions

C. Departmental Origin

III. UNIVERSITY OWNERSHIP POLICIES

IV. UNIVERSITY SOFTWARE OWNERSHIP: A POLICY ANALYSIS

A. General Considerations

B. The Problem of Holdup Litigation

V. THE WAY FORWARD

A. The Impact of eBay v. MercExchange and In re Bilski

B. Revenue Generation without Holdup

C. Evolving Policies at “Pro-Patent” Institutions?

D. The Role of Open Source

VI. CONCLUSION

APPENDIX

A. Questions for Technology Transfer Officers

B. Questions for Academics or Graduate Students

14 The Impact of the Bayh-Dole Act on Genetic Research and Development: Evaluating the Arguments and Empirical Evidence to Date

I. THEORETICAL UNDERPINNINGS OF THE BAYH-DOLE ACT AND ITS ROLE IN STIMULATING UNIVERSITY PATENTING AND LICENSING

A. Theoretical Underpinnings of the Bayh-Dole Act

B. The Role of the Bayh-Dole Act in Stimulating Patenting and Licensing

II. THE IMPACT OF THE BAYH-DOLE ACT ON THE RESEARCH MISSION OF U.S. UNIVERSITIES

A. The Impact of the Bayh-Dole Act on Dissemination of Academic Research

B. Diversion of Research, Research Misconduct and Mismanagement, and Conflicts of Interest

III. THE IMPACT OF UPSTREAM UNIVERSITY PATENTING ON DOWNSTREAM INNOVATION AND THE PUBLIC DOMAIN

A. The Empirical Evidence to Date

B. A Theoretical Critique of Blocking Patents and an Emerging Anticommons in Biotechnology Research

IV. CONCLUSION

15 Patents, Material Transfers, and Access to Research Inputs in Biomedical Research

I. INTRODUCTION

II. DATA

III. COMMERCIAL ACTIVITY OF ACADEMIC SECTOR

IV. PATENTS AND ACCESS TO KNOWLEDGE IN UPSTREAM BIOMEDICAL RESEARCH

A. Patents and Project Choice and Abandonment

B. Patents and Knowledge Flows

V. SHARING RESEARCH MATERIALS

A. Requests for Research Inputs and Responses

B. Does Sharing of Research Inputs Vary by Technology Requested?

C. The Effect of Not Receiving Requested Research Inputs

D. The Process of Acquiring Research Inputs: MTAs, Terms, and Negotiations

E. Patents and Other Limits to Making In-House Research Inputs

F. Why Are Materials Not Being Shared?

VI. PATENTING AND THREE SIGNALING PROTEINS

VII. INDUSTRY SCIENTISTS’ EXPERIENCES WITH MATERIAL TRANSFERS AND PATENTS

VIII. CONCLUSIONS

REFERENCE

16 Are Universities Patent Trolls?

I. COMPLAINTS ABOUT UNIVERSITY PATENTS

A. The Rise of Patent Holdup

B. The Rise of University Patenting

C. Are Universities Engaged in Holdup?

II. DO WE NEED UNIVERSITY PATENTS?

III. LESSONS FROM THE UNIVERSITY PATENT EXPERIENCE

A. Toward an Enlightened University Patent Policy

B. Legal Constraints on Unenlightened Universities

C. Broader Lessons: Who Is a Patent Troll?

PART V: Perspectives on International Considerations

17 Successful Factors for Commercializing the Results of Research and Development in Emerging Economies – A Preliminary Study of ITRI in Taiwan

I. INTRODUCTION

II. RELEVANT FACTORS REGARDING INTELLECTUAL PROPERTY COMMERCIALIZATION

A. Technology Transfer Legislation

B. Intellectual Property Management

C. Professional Training

D. Market Information Exchange Platform

E. An Integral System

III. A CASE STUDY OF ITRI

A. Background

B. ITRIs Efforts in Intellectual Property Management

1. The Period prior to 1995

2. The Warm-Up Period from 1995 to 1999

3. The Period from 2000 to the Present

C. Recent Developments

D. Intellectual Property Management Structure

1. The Establishment of a Technology Licensing Office

2. Information Network for Intellectual Property Commercialization

E. Professional Development

F. Summary

IV. CONCLUSION: THE IMPLICATION OF ITRI’S SUCCESSFUL EXPERIENCES

REFERENCE

18 Commercializing University Research: Beyond Economic Incentives

I. ECONOMICS AND CULTURE

II. CULTURE AND LEGAL SYSTEMS

A. Bankruptcy

B. Intellectual Property

III. CULTURE OF ENTREPRENEURSHIP

IV. CONCLUSION

Index