November 9, 2006
New Papers from The Berkeley Electronic Press
From the email announcement:
Announcing the Law and Technology Scholarship (Selected by the Berkeley Center for Law & Technology), part of the bepress Legal Repository found at http://law.bepress.com/repository.
PUBLISHER: The Berkeley Electronic Press
Peter S. Menell - Professor of Law, UC Berkeley Boalt Hall School of Law and Director, BCLT
Robert P. Merges - Wilson Sonsini Professor of Law, UC Berkeley Boalt Hall School of Law and Director, BCLT
Pamela Samuelson - Professor of Information Management & Law, UC Berkeley SIMS & Boalt Hall School of Law and Director, BCLT
Howard A. Shelanski - Professor of Law, UC Berkeley Boalt Hall School of Law and Director, BCLT
This email contains a table of contents, followed by abstracts and some general information.
TABLE OF CONTENTS:
Pam Samuelson "Questioning Copyright in Standards".
Pam Samuelson "Enriching Discourse on Public Domains".
Andrew A. Toole and Dirk Czarnitzki "Patent Protection, Market Uncertainty, and R&D Investment".
James Gibson "Risk Aversion and Rights Accretion in IP Law".
Mark Schultz "Copynorms: Copyright and Social Norms".
Peter S. Menell and David Nimmer "Unwinding Sony".
Pam Samuelson, "Questioning Copyright in Standards" (June 22, 2006). Berkeley Center for Law and Technology. Law and Technology Scholarship (Selected by the Berkeley Center for Law & Technology). Working Paper 22.
The rise of the information economy has caused copyright law to become a new actor in the intellectual property rights and standards debate because standard-setting organizations (SSOs) increasingly claim copyrights in standards and charge substantial fees for access to and rights to use standards such as International Organization for Standardization (ISO) country, currency, and language codes and standard medical and dental procedure codes promulgated by the American Medical Association (AMA) and the American Dental Association (ADA).
This article will consider whether standards such as these, especially those whose use is mandated by government rules, should be eligible for copyright protection as a matter of U.S. copyright law. Part I reviews several lawsuits that have challenged copyrights in numbering systems devised to enable efficient communication and will argue that the decisions upholding copyrights in the AMA and ADA codes were incorrectly decided in light of past and subsequent caselaw, the statutory exclusion of systems from copyright, and various policy considerations. Part II considers copyright caselaw and policies that have persuaded courts to exclude standards from the scope of copyright protection under the scenes a faire and merger of idea and expression doctrines. It also considers whether government mandates to use certain standards should affect the ability to claim copyright in those standards. Part III assesses whether SSOs need copyright incentives to develop and maintain industry standards they promulgate and whether arguments based on incentives should prevail over other considerations. It will also identify some competition and other public policy concerns about allowing private entities to own standards, particularly those whose use is required by law.
Pam Samuelson, "Enriching Discourse on Public Domains" (July 7, 2006). Berkeley Center for Law and Technology. Law and Technology Scholarship (Selected by the Berkeley Center for Law & Technology). Working Paper 23.
Is there one public domain, or are there many public domains? The scholarly literature predominantly assumes there is only one, for references abound to "the public domain" in the singular. Yet, even a cursory review of this literature reveals that scholars sometimes define this term differently. So if there is only one public domain, but many definitions, perhaps one objective of scholarly discourse about the public domain should be to seek consensus on the one "true" definition.
Professor James Boyle has provocatively suggested that there are many public domains, and has urged scholars to develop a rich vocabulary for distinguishing among them. He points out that the word "property" has multiple meanings, and discourse about property proceeds without confusion because legal professionals have learned to discern which meaning is intended from the textual context. Boyle urges intellectual property scholars to develop a similarly nuanced public domain vocabulary so that it will be possible to distinguish among its several meanings as well.
This essay considers the potential benefits of accepting the existence of multiple public domains and ways in which discourse about public domains might be enriched thereby. Part II provides a synopsis of thirteen conceptions of the public domain found in the law review literature, explaining each, generally by reviewing the explication of it offered by its principal proponent or discoverer. Part III organizes the definitions by recognizing that they cluster around three main foci: 1) the legal status of information resources, 2) freedoms to use information resources, even if protected by IP rights, and 3) accessibility of information resources. Although it is common to think of information resources as either IP-protected or public domain, and as either publicly accessible or not, Part III shows that the public domain literature views these concepts not as binary opposites, but rather as points along a continuum. Part IV discusses the advantages and disadvantages of recognizing multiple public domains and recommends the use of adjectives to clarify discourse about the many public domains. The constitutional public domain, for instance, is distinct from the privatizable (although not yet, privatized) public domain. This Part differentiates among conceptions of public domains that should be accepted and those that perhaps should not. The principal advantage of recognizing multiple public domains is that it illuminates a range of important social values served by these domains and a plethora of strategies for preserving them and the values they serve.
Andrew A. Toole and Dirk Czarnitzki, "Patent Protection, Market Uncertainty, and R&D Investment" (September 13, 2006). Berkeley Center for Law and Technology. Law and Technology Scholarship (Selected by the Berkeley Center for Law & Technology). Working Paper 24.
The main reason governments grant patent protection is to spur innovation. Patents give inventors temporary monopoly rights that allow them to appropriate a greater share of the returns from their innovations and this augments private incentives to undertake research and development (R&D) investment. Consequently, patent protection should stimulate private R&D investment. However, the size of this stimulus is far from clear since it depends on how effective patents are as a mechanism for appropriating returns.
Drawing on real options investment theory, this paper highlights one mechanism through which patents may improve appropriability and stimulate R&D investment - by reducing the effect of market uncertainty on the firm's investment decision. Real options investment theory predicts that greater uncertainty about market revenues reduces current R&D investment by increasing the value of waiting. A patent may protect the firm from market uncertainties including, among other things, imitation by rivals. This protection reduces the patenting firm's sensitivity to market uncertainty, decreases the value of waiting, and leads to greater current R&D investment. For firms exploiting this "real options mechanism" of patent protection, R&D investment will be less sensitive to market uncertainties, such as revenue volatility.
Our regression analysis tests this hypothesis. Using a sample of 692 West German manufacturing firms, we find that revenue volatility significantly reduces R&D investment by non-patenting firms whereas firms with patent protection have no significant response. This suggests that patent protection, acting through the real options mechanism, diminishes the patenting firm's sensitivity to market uncertainties and stimulates R&D investment.
But how important is this mechanism? Schankerman (1998) suggests calculating the "equivalent subsidy rate" (ESR) to measure the importance of patent protection for capturing private returns. We calculate ESR as the incremental increase in R&D investment from adopting patent protection for an average, previously non-patenting, firm. We find that patent protection induces a 20% increase in R&D investment and this is a measure of the private return to patent protection for our sample. To our knowledge, this "real options mechanism" has not been examined in the patent literature but it may prove to be a fruitful approach to understanding the impact of the patent system on investment and innovation.
James Gibson, "Risk Aversion and Rights Accretion in IP Law" (October 17, 2006). Berkeley Center for Law and Technology. Law and Technology Scholarship (Selected by the Berkeley Center for Law & Technology). Working Paper 25.
Intellectual property's road to hell is paved with good intentions. Because liability is difficult to predict, intellectual property users often seek licenses even when proceeding without one might be permissible. Yet because the existence (vel non) of licensing markets plays a key role in determining the breadth of rights, these seemingly sensible licensing decisions eventually feed back into doctrine; the licensing itself becomes proof that the entitlement covers the use. Over time, then, public privilege recedes and rights expand, moving intellectual property's ubiquitous gray areas into what used to be virgin territory--where risk aversion again creates licensing markets, which cause further accretion of entitlements, which in turn push the gray areas even farther afield, and so on. This "doctrinal feedback" is not a result of changes in the positive law (the scholarship's usual focus), but is instead rooted in longstanding, widely accepted doctrine and prudent behavior on the part of everyone involved. Moreover, because feedback is so ingrained in established law and practice, its various cures tend to create more problems than they solve. There exists, however, one promising solution--subtle changes in doctrine's use of licensing information--that can keep intellectual property market-referential without making it market-reverential.
Mark Schultz, "Copynorms: Copyright and Social Norms" (October 17, 2006). Berkeley Center for Law and Technology. Law and Technology Scholarship (Selected by the Berkeley Center for Law & Technology). Working Paper 26.
Social norms regarding the copying, distribution, and use of expressive works (copynorms) are essential to understanding how copyright law affects society. By mitigating how stringently copyright owners and users actually enforce and observe copyright law, copynorms - whether those of librarians or file sharers - moderate, extend, and undermine the effect of copyright law. Yet, scholarship and public policy debates all too often overlook this phenomenon. This paper addresses this gap in the literature.
After reviewing the legal scholarship and social science literature on how social norms interact with law, the paper examines several examples of copynorms that significantly alter the effect of copyright law. First, the norms of some communities consciously seek to mitigate or combat the effects of copyright law: the norm entrepreneurship of Creative Commons; writer's norms in favor of limited quotation with attribution; the norms of the open source and free software community; the norms of librarians; the norms of hackers; and the norms of warez traders. Next, there are copynorms that arise from collective behavior more than conscious design: the acceptance of search engine indexing and archiving; e-mail replying and forwarding norms; blogger norms; and consumer home recording. Last, the paper examines the role of social norms in the greatest of copyright's current social dilemmas - file sharing - and concludes that copynorms are essential to understanding and resolving this challenge.
Based on analysis of research regarding the relative effectiveness of normative strategies and deterrent strategies for securing compliance with law, the paper concludes with suggestions for how copynorms might be influenced to foster greater support for copyright law. For example, the entertainment industry needs to support highly visible, legal alternatives to file sharing, while aggressively portraying compliance as the norm rather than the exception. Allowing people to believe that file sharing is the norm is disastrous to efforts to foster pro-compliance norms. Consumers' perceptions of fairness of business practices are also important, because norms are influenced by reciprocity. Finally, copyright owners may need to rely increasingly on core communities of avid fans, encouraging them to assist with the distribution and marketing of their work, enforcement of rights, and promotion of pro-compliance norms.
Peter S. Menell and David Nimmer, "Unwinding Sony" (October 23, 2006). Berkeley Center for Law and Technology. Law and Technology Scholarship (Selected by the Berkeley Center for Law & Technology). Working Paper 27.
The dawning of the digital age has brought the Supreme Court's Sony "staple article of commerce" doctrine to center stage in legal and policy discussions about the proper role and scope of copyright protection. To technology companies, it represents a vital safe harbor for product design; to the content industries, this doctrine remains an Achilles heel. The origins of this doctrine have always been somewhat obscure. With nary a peak at the text or the legislative history of the then-recently enacted overhaul of the copyright system, the Supreme Court adverted to patent law to determine the scope of indirect liability - a fundamental issue that would loom large in the shift from the analog to the digital distribution platform for content. A slim majority of the Supreme Court justified this interpretation of the Copyright Act of 1976 on the basis of a vague assertion of "historic kinship" between patent and copyright.
This article scrutinizes this critical logical premise. Part I exhaustively reviews the litigation and correspondence of the justices to understand why the Court paid so little attention to the legislative materials and so much to the patent law. It finds that gaps in the information provided to the Court, in conjunction with the justices' lack of familiarity with copyright law generally and the Copyright Act of 1976 in particular, led the Court astray. Part II tests the "historic kinship" premise, finding that it cannot withstand scrutiny. Had the Court traced the origins of copyright and patent back to their source, it would have seen that they both derive from a common wellspring: tort principles. Concerns about patent misuse and improper leveraging of monopoly power led the courts, and later Congress, to carve out an express safe harbor in patent law for those selling "staple articles of commerce" - products suitable for substantial non-infringing uses. Part III demonstrates that the 1976 Copyright Act envisioned that courts would continue to use the traditional tort wellspring, informed by the distinctive challenges of copyright enforcement. This would have brought the reasonable alternative design framework of products liability law into play. The article shows that this approach would almost certainly have resulted in the same outcome that the Sony Court reached, but of critical importance, it would have provided a more sound and dynamic jurisprudential framework for calibrating liability as new technologies develop. Part IV examines Sony's legacy, showing that subsequent legislative activity, court decisions, and the marketplace reflect a practical reality that lies closer to the reasonable alternative design standard than a broad "staple article of commerce" safe harbor. In reality, Sony's "staple article of commerce" doctrine has proven largely symbolic and unworkable, as Congress, the courts, and businesses in the marketplace have sought to promote product innovation without unduly jeopardizing copyright protection. The failure to recognize that reality, however, breeds doctrinal confusion, distorts case law evolution, and stultifies the larger policy debate over copyright protection in the digital age.
November 9, 2006 | Permalink
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