Blockchain Papers

Jonathan Putnam

No abstract is available for this record.

Ronald Zhao

No abstract is available for this record.

Harvey S. Perlman

Law and economics scholarship has contributed much to our understanding of both the nature of intellectual property rights generally and the features of individual intellectual property regimes. Indeed it is hard to imagine a field other than antitrust law that is so explicitly governed by economic thinking. In authorizing the copyright and patent systems, Article I, Section 8 of the United States Constitution expressly incorporates a social welfare imperative as the basis for its grant of power.1 Certainly economists and economically oriented legal academics have given the field the attention it is due. I am far from being a sophisticated economic thinker, although I admire those who are and the insights they have brought to my understanding of what is at stake in intellectual property. My comments are more practical in nature. They involve the tension that arises throughout the law of intellectual property and unfair competition between protection of intellectual achievement and public access to intellectual products. This tension is reflected in the central questions: When are intellectual property rights appropriate and what is their proper scope? Economics seems to provide an apt description but an inadequate basis for answering these questions. And there lies, in my view, one of the reasons for the trend throughout intellectual property to enlarge property rights at the expense of access. For those of us who deem this trend problematic, economic analysis seems increasingly unhelpful in formulating a response protective of the public domain. The tension between protection and access pervades intellectual property and unfair competition law. The casebook Ed Kitch and I coauthored uses it as one of the themes that tie the disparate chapters of the book together.2 Protection or access is at issue whether the case involves a local barber who wants an exclusive property interest in the barbering business of Howard Lake, Minnesota,3 or the promisee of a contract who claims to have a property interest in the future performance of the promissor,4 or the firm that claims a property interest in the firm's investment in the human capital of its workers,5 or the trademark owner who asserts a property right over portions of the English language,6 or the celebrity who seeks to capture gains from his or her celebrity status,7 or the more traditional cases involving constitutionally recognized authors and inventors. There should be little doubt that the trend throughout intellectual property and unfair competition is toward greater protection and diminished access.8 The Digital Millennium Copyright Act9 is a notorious example of a protectionist advance, as is the apparent willingness of the Patent and Trademark Office and the Federal Circuit to expand the realm of patent protection.10 But the trend is noticeable elsewhere as well. The adoption of the trademark dilution cause of action11 and the expanding protection against cybersquatters12 have refocused trademark law away from its traditional function of prevention of consumer confusion toward one that confers substantial property rights on trademark owners. 13 The protection of trade dress without proof of secondary meaning also favors property rights over rights of access.14 A similar rule applied to product designs and configurations would have created an even more damaging effect on competition, but the Supreme Court happily required proof of actual distinctiveness. 15 The classic misappropriation doctrine announced in International News Service v. Associated Press represents the power of the protectionist rhetoric over substance.16 The Restatement (Third) of Unfair Competition recognizes that the case offers little in terms of a coherent principle and has been of only marginal significance.17 Proponents of access may take heart from the doctrine's limited application, and yet it is currently asserted as an appropriate model in defense of data base protection18 and it continues to attract judicial adherents. …

Wallace E. Huffman, Richard E. Just, Huffman, Wallace E., Just, Richard E.

This paper reviews agricultural research structural and organizational changes in western developed countries, examines new financing prospects for agricultural research, and provides some tentative conclusions about which organizations are best positioned to provide services for the twenty-first century. Given that these countries face many similar economic, political, scientific, and agroclimatic factors and fiscal issues, we can expect a set of similar new developments that have potentially important and widespread long-run implications. After three common developments are outlined, principles of impure public good financing are applied leading to the following agricultural science policy recommendations: (i) new political jurisdictions should be formed to finance research, e.g. new alliances across countries and subregions within large countries; (ii) intellectual property rights should be strengthened to increase the total amount and share of total (public and private) agricultural research that is privately financed and conducted, i.e. the private sector should find it profitable to undertake a large share of applied research but not be expected to finance public-sector agricultural research; and (iii) the public sector should redirect its research efforts increasingly to areas that are socially worthwhile, but not privately undertaken, e.g. in the basic and pretechnology areas, on environmental, resources, food safety and human nutrition, and policy. Finally, large countries that have developed a system of shared public and private financing and performance and decentralized public support of agricultural research seem best positioned for meeting the needs of the twenty-first century.© 1999 Elsevier Science B.V. All rights reserved.

Richard Graham Halliday, A.L. Drasdo, Cynthia E. Lumley, Stuart Walker

A survey of 45 leading pharmaceutical companies has been used to investigate aspects of their Research and Development (R&D) strategies, the allocation of resources including the financing and staffing of R&D functions, and the numbers of New Chemical Entities (NCEs) in the development process. The companies included the top ten by R&D expenditure in 1992 (top 10 companies). The study identified characteristics of leading companies and provided comparative data. The principal findings are that: top ten companies had the highest R&D to sales ratios, progressed more NCEs after the drug candidate selection stage in 1992 and had achieved a greater geographical decentralization of staff than any other company. Japanese companies differed in some respects from western companies, even those of a similar size. They operated with smaller clinical and regulatory affairs functions and made detailed plans for R&D expenditure further ahead than western companies, on average, more than 5 years compared with 3 years. an increase in aggregated R&D staffing had occurred between 1990 and 1992 in 33 companies for which data for both years were available and staff numbers had decreased in only five of those companies. top ten companies differed from others in their apparent productivity measured in terms of staff or R&D expenditure per NCE after the drug candidate selection stage, utilizing more staff and having greater R&D expenditure per NCE. The results also appear to indicate early signs of a change in the structure of the industry according to R&D expenditure, which has since become more apparent. There was a distinct polarization by R&D budget size among the respondent companies: five companies were spending $900m or more on R&D in 1992 while the majority of the rest were spending less than a third of that amount.

Chien‐Fu Chou, Oz Shy

Economists and policy makers have always argued that the patent system is necessary for a growing economy despite the fact that temporary monopoly rights to innovators imply a distortion of the price system. However, economists have not yet come up with a unified theory to determine the optimal duration of patents. In this paper, we develop a simple dynamic model which identifies two important welfare effects of the patent system, the effect on the incentive to innovate and that of the price distortion caused by the monopoly rights of patent holders. Using this framework, we analyze the factors which determine the optimal duration of patents awarded to new product developers. We argue that the possibility of a finite optimal patent life does not arise in the literature on product development since it considers only a constant returns to scale technology for developing new products. We first confirm the optimality of an infinite patent life for this technology and then show that if the cost of developing new products is increasing with the rate of instantaneous product development then the optimal patent life for economies with a population growth rate less than the interest rate is finite. In addition, we show that for economies with population growth rate exceeding the interest rate, the optimal patent life may also be finite provided that the degree of product substitution is sufficiently high. The patent system can be viewed as a method of assigning property rights to innovators in order to encourage research and development. Theoretically, the optimal R&D level can be tackled using a standard public goods analysis (such as the problem of financing a new bridge) yielding a result that optimal allocations can be achieved at the cost of a significant amount of government intervention. Perhaps for this reason most decentralized societies have chosen a different way to motivate people to engage in R&D, and this is done by assigning temporary monopoly rights to innovators.

Brian D. Wright

Though public intervention in the market for research is virtually universal, economists have paid surprisingly little attention to the choice of the form of research incentive in a given market structure. Many studies concentrate on patents, but any assumption of their superiority over other incentives has been founded on intuition rather than on formal analysis. In this paper I analyze the choice between three of the most alternative means of public intervention in the research market, namely, patents, prizes, and direct contracting for research services. I show why, and under what conditions, any one of the three may be preferred by a social welfare-maximizing administrator in a competitive economy, using a model that, for the first time, pays explicit attention to differences in the informational roles of each of these alternatives. In the extensive literature on the economics of patents (see Arnold Plant, 1934; Fritz Machlup, 1958; Charles Taylor and Z. A. Silberston, 1973; Morton Kamien and Nancy Schwartz, 1975; and F. M. Scherer, 1977, for valuable surveys), formal analysis weighs the benefits of patents as a solution to the market failure associated with the inappropriability of knowledge against the welfare cost due to the restriction on the use of the knowledge generated, and this tradeoff is optimized by patent life adjustment in William Nordhaus (1969). Scant analytical attention is paid to alternative incentive mechanisms. (An exception is Ben Yu, 1981, who considers the role of prior contracting for inventions.) But as many writers (for example, Dan Usher, 1964; Yoram Barzel, 1968; Joseph Stiglitz, 1969; Carole Kitti, 1973; Glenn Loury, 1979; Partha Dasgupta and Stiglitz, 1980a) have pointed out in various contexts, the incentive offered by an unlimited patent to competitive researchers may be excessive, due to the common pool problem discussed further in Section I below. If the patent administrator and researchers share the same information, as implicitly assumed in previous models, then the patent life limitation can be adjusted to provide the optimal patent incentive, given the pool problem. But in all such models, patents would not be chosen in a fully optimized fiscal system. Researchers and the administrator are assumed to have identical information about the shadow price of potential inventions; a patent is just a means of turning this shadow price into a monetary reward. But monetary compensation can instead be offered directly to researchers by the state. Assuming that patent revenues incur a higher deadweight loss than an equivalent amount of public funds financed by less distortionary means (for example, a minimally efficient tax system), appropriate prizes or government contracts are socially preferable to patents with optimal lives. If the patent is ever to be the optimal incentive mechanism for research, it must possess advantages not captured in existing models. Informal discussions of patents emphasize their informational role. To include the latter as a justification for decentralized invention incentives, I incorporate an ex ante imbalance of information about costs and benefits of research in the model presented in Section II. But this alone is not quite enough. It is further necessary to specify that the terms of the award must be fixed before *Department of Economics, Economic Growth Center, Box 1987 Yale Station, Yale University, New Haven, CT 06520. I thank, with the usual caveat, Marguerite Alejandro-Wright, Cindy Arfken, Martin Baily, Nuong Brennan, Steven Englander, Robert Evenson, Richard Levin, Richard Nelson, Susan Rose-Ackerman, Denis Wright, and two referees for assistance of various kinds.