Chapter 12: On the Comparative Institutional Economics of Intellectual Property in Biotechnology
F. Scott Kieff 1 INTRODUCTION Despite numerous reforms over the past century,2 important problems continue to plague the IP systems of today, generating numerous proposals for further reform tomorrow. For example, recent high profile cases like the patent litigation threatening to shut down the BlackBerry® service3 have drawn sharp criticism in the business community4 as being prime examples of the pernicious impact of protecting intellectual property (IP) rights with strong property rules, backed up by injunctions, rather than weaker liability rules, which would give rise only to a right to payment.5 Controversial examples more closely linked to biotechnology include the litigation over a potential experimental use exemption for infringement.6 Various forms of liability treatment have been offered. For example, Ayres and Klemperer advocate a patent litigation system characterized by uncertainty and delay, which they show could serve as a form of compulsory license, or liability rule.7 Others simply advocate various exemptions to infringement, such as for what they call fair use.8 Some suggest that the open-source model be applied more generally, including in all bioscience.9 Underlying these critiques of IP is a view that property rights either restrict access or cause anticompetitive effects. The arguments raised today are quite similar to those raised throughout most of the past century; and, as usual, the reform efforts target all three branches of the federal government – legislature, executive agencies, and courts.10 This chapter endeavors to show how addressing these concerns with conventional approaches11 is likely to exacerbate the problems of access and...
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