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XV. Intellectual Property
(See also Section II on Property)

Foundational Materials

William M. Landes and Richard A. Posner, The Economic Structure of Intellectual Property Law (2003).  A recent book by two of the leading scholars on how IP law does and should work according to an economic analysis lens.

Peter A. Alces & Harold F. See, The Commercial Law of Intellectual Property (1994). An extensive treatise that describes the "confluence of commercial law and intellectual property." The authors devote considerable space to sales and leases of intellectual property.

The Nature of Intellectual Property

Frank Easterbrook, Intellectual Property is Still Property, 13 Harv. J. L. and Pub. Pol'y 108 (1990). A concise argument that physical and intellectual property should be treated identically under the law.

F. Scott Kieff, Property Rights and Property Rules for Commercializing Inventions, 85 Minn. L. Rev. 697 (2000). This paper explores the theoretical basis for the present system of enforcing patents with a strong property rule -- as distinct from a liability rule -- and shows why at least the option of a property right that would allow its owner to exclude use may actually avoid a socially suboptimal level of use and is therefore preferable to only government grants, tax credits, or other regulatory approaches to innovation.

Henry Smith, Intellectual Property as Property: Delineating Entitlements in Information, 116 Yale L. J. 1742 (2007). An argument that intellectual property's close relationship to property stems from the role that information costs play in the delineation and enforcement of exclusion rights.

Adam Mossoff, Is Copyright Property? 42 San Diego L. Rev. 29 (2005). A historical treatment of the question posed in the title, laying out the differences between the utilitarian and natural rights justifications for copyright as property, and the arguments of the camp that views it as a regulatory entitlement, in the context of the contemporary internet revolution.

Sabrina Safrin, Chain Reaction: How Property Begets Property, 82 Notre Dame L. Rev. 1917 (2007).  An argument that the recognition of property rights does not necessarily mean a more efficient regime, as unproductive new property rights can follow from pre-existing property rights in a chain reaction.  Prof. Safrin explores three reasons for the chain reaction phenomenon using - group behavior theory, a breach of cooperation norm, and the right of exclusion - and concludes with a cautionary tale against blindly accepting new property rights without regard for their utility.

The Economics of IP Law

Harold Demsetz, Information and Efficiency: Another Viewpoint, 12 J. L. & Econ. 1, 14 (1969). In the context of a larger debate relating to intangible assets between proponents of property rights and proponents of regulation, this paper reminds those who would use law and economics tools to only point out problems with property rights regimes that they run the risk of engaging in a "nirvana" approach rather than the preferred comparative institutional approach.

Edmund W. Kitch, Patents: Monopolies or Property Rights?, 8 Res. L. & Econ. 31 (1986). This paper explores in some depth the many competitive forces a patentee may face including those from prior technologies, alternative non-infringing substitute technologies, and potential and actual future technologies, and the combined impact of these pressures in mitigating a monopoly power of a patentee.

Edmund W. Kitch, Elementary and Persistent Errors in the Economic Analysis of Intellectual Property, 53 Vand. L. Rev. 1727 (2000). This paper explores a number of errors in the literature relating to the economics of intellectual property including the view that intellectual property rights are monopolies, the view that such rights should be analyzed individually rather than as a system, the failure to consider the downstream contracting over such rights, and the failure to consider other possibilities.

Harvey S. Perlman, Taking the Protection-Access Tradeoff Seriously, 53 Vand. L. Rev. 1831 (2000). This paper provides a review of the literature that argues an intellectual property right to exclude use may lead to a socially suboptimal level of use.

Clarisa Long, Information Costs in Patent and Copyright, 90 Va. L. Rev. 465 (2004).  An examination of the relationship between protected intellectual goods and differences between patent and copyright law in which Prof. Long argues that the differences reflect substantive differences and cautions against the importation of traits found in patent law into copyright law, and vice versa.

Stan J. Liebowitz, Economists' Topsy Turvey View of Piracy, 2 Review of Economic Research on Copyright Issues 5 (2005).  A critique of the popular economic position that copying leads to gains for the copyright owner, showing how such gains are grossly exaggerated, emphasizing the often overlooked role of institutional and behavioral details of individual markets.

F. Scott Kieff & Troy A Paredes, The Basics Matter: At the Periphery of Intellectual Property, 73 Geo. Wash. L. Rev. 174 (2004). This article explores the law and economics of the interface IP law shares with other areas of law such as contracts and antitrust and shows how a more simple decisional framework can be used to decide what otherwise seem to be tough cases and the importance of such a framework for providing appropriate ex ante incentives.

Issues in Patent Law

Donald S. Chisum, Craig Allen Nard, Herbert F. Schwartz, Pauline Newman, & F. Scott Kieff, Principles of Patent Law (3d ed. 2004).  A patent textbook by several of the leading authors on the subject.

Edmund W. Kitch, The Nature and Function of the Patent System, 20 J.L. & Econ. 265 (1977). A landmark analysis of patents and patent law. Professor Kitch argues that the presence of law increases "the output from resources used for technological innovation."

Kenneth W. Dam, The Economic Underpinnings of Patent Law, 23 J.L. Stud. 247 (1994). This article provides an overview of the economic underpinnings of patent law in general and in particular is often cited for pointing out the important distinction between what may be covered by a given patent and what may be properly characterized as a distinct "market," thereby reminding that patents are often not monopolies.

F. Scott Kieff, The Case for Registering Patents and the Law and Economics of Present Patent-Obtaining Rules, 45 B.C. L. Rev. 55 (2003). This article explores the law and economics of the positive law rules for obtaining patents and points out new insights on the putative clash between flexibility and certainty regarding claim scope and the doctrine of equivalents and on the role of fee-shifting provisions as dealt with in cases such as Knorr-Bremse.

John R. Allison, Mark A. Lemley, Kimberly A. Moore, and R. Derek Trunkey, Valuable Patents, 92 Geo. L. J. 435 (2004).  This paper argues for a new patent structure based on an understanding of how patents work in practice.  The authors argue that valuable patents are those that are litigated and that the reason that 99% of patents are never enforced is that the patents themselves are not valuable and that patent law should take into account these factors in achieving the ultimate goal of encouraging innovation.

Issues in Copyright Law

Richard A. Epstein, Liberty versus Property? Cracks in the Foundations of Copyright Law, 42 San Diego L. Rev. 1 (2005).  An examination of the philosophical underpinnings of copyright law in which Prof. Epstein argues that there exists an irresolvable tension in copyright law between liberty and property, both of which have costs and involve significant trade-offs, but that once the costs are recognized, copyright does a fairly good job of navigating the trade-offs.

William M. Landes and Richard A. Posner, Indefinitely Renewable Copyright, 70 U. Chi. L. Rev. 471 (2003).  An article that attacks the assumption that economic efficiency requires limited durations of copyright protection through empirical evidence, which demonstrates that indefinitely renewable copyrights would not starve innovation in the public domain. See also William M. Landes & Richard A. Posner, An Economic Analysis of Copyright Law, 18 J. Legal Stud. 325 (1989).

Issues in Trademark Law

William M. Landes and Richard A. Posner, The Economics of Trademark Law, 78 Trademark Rep. 267, 304 (1987). This paper explores the economics of trademark law and shows why if appropriation is forbidden by a property rule, the benefits of a trademark's popularization will be internalized to mark owners and the amount of investing in potentially famous marks will rise.

William M. Landes & Richard A. Posner, Trademark Law: An Economic Perspective, 30 J. L. & Econ. 265 (1987). In this work, the authors assert that current trademark law "can best be explained on the hypothesis that the law is trying to promote economic efficiency."

IP and the Common Law

Edmund W. Kitch, Intellectual Property and the Common Law, 78 Va. L. Rev. 293 (1992). Included in a symposium on The Law and Economics of Intellectual Property, this selection discusses the possibility of a common law system of intellectual and industrial property, but recognizes that "the contours of such a common law system are unknowable because the judges have used the limits of the statutory systems to define the limits of the common law system."

Richard Epstein, International News Service v. Associated Press: Custom and Law as Sources of Property Rights in News, 78 Va. L. Rev. 85 (1992). Analyzes this key 1918 Supreme Court case in terms of first principles of property rights, concluding that the case is "justly celebrated" and "will remain one of the enduring monuments of the common law." Part of a symposium on the law and economics of intellectual property.

The Role of Norms in an IP Regime

Jennifer E. Rothman, The Questionable Use of Custom in Intellectual Property, 93 Va. L. Rev. 1899 (2007).  An analysis of IP-related norms and the impact that custom has on IP rights that sharply critiques the incorporation of customs into IP law as flowing from early court decisions, rather than from a bottom-up systemic ordering that would produce beneficial and efficient rules. For a response to Professor Rothman see Richard Epstein, Some Reflections on Custom in the IP Universe, 93 Va. L. Rev. In Brief 223 (2008).

Mark F. Schultz, Copynorms: Copyright Law and Social Norms in Intellectual Property and Information Wealth (Peter Yu, ed., 2007). A case for the importance of norms in the copyright context, applying social norms literature to copyright.

F. Scott Kieff, Facilitating Scientific Research: Intellectual Property Rights and the Norms of Science - A Response to Rai & Eisenberg, 95 Nw. U. L. Rev. 691, 705 (2001). This paper engages in a comparative institutional analysis in the field of basic biological research between a world with the market for academic kudos and the world with the market for academic kudos plus cash and shows why despite the problems identified by patent opponents the option of strong property rights is still the preferred approach in this area.

Richard A. Posner, The Little Book of Plagiarism (2007).  This short, easy-to-read book makes the case that plagiarism is an "embarrassingly second-rate" offense, which is better punished through social admonition than by legal remedies. 

Licensing versus Private Ordering

There have been numerous calls to collectively administer rights via forms of compulsory licenses to overcome alleged "anti-commons" problems and other problems caused by transaction costs.  Some scholars have proposed general blanket licenses of content via rights to fileshare compensated through a revenue pool derived from taxes.  Many have proposed some sort of legislative action to solve the transaction cost problem that Google Books sought to address, and has now attempted to address via a class action settlement. For an argument that, in the digital realm, the influence costs associated with compulsory licensing schemes make them  a more expansive mechanism for setting prices than are private negotiations see Robert Merges, Compulsory Licensing vs. the Three ‘Golden Oldies': Property Rights, Contracts, and Markets, 508 Cato Policy Review 1 (Jan. 2004).

For an analysis of the Google books settlement and the four ways in which it differed from the predicted "fair use" outcome, see Matthew Sag, The Google Book Settlement and the Fair Use Counterfactual 55 N.Y.L.S. L. Rev. __(2010).

F. Scott Kieff & Troy A Paredes, Engineering a Deal: Toward a Private Ordering Solution to the Anticommons Problem, 47 B.C. L. Rev. 111 (2007). This paper offers a solution to the anticommons problem that businesses face when multiple IP rights cover a single good or service, and prevent or retard the provision of that good or service. Through the use of a concrete example (DNA-on-a chip technology) Profs. Kieff and Paredes argue for a private ordering solution that combines the use of a limited liability entity and certain constraints on IP owners, in order to provide IP owners with a financial stake in the company while discouraging IP owners from holding out opportunistically.

Last updated December 2010

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