process and effects of digitization are studied primarily where unfettered
enterprise prevails, where markets are open, and especially on the Internet
where activity can be readily observed and measured. In short, where the light is. At the edge, things are less clear. Amplified and modulated by increasingly
diverse business practices, the powerful effects of digitization ultimately
face the inertia of deeply embedded institutions. How do firms, policymakers, and the public
make practical sense of the interaction?
outlining the dimensions of digital transformation, I compare how four
different intellectual property regimes have been affected by digitization. I
then focus on patents as the most institutionally embedded and complex rights
regime. Here the impact of digitization began long ago, but the systemic
effects have emerged only over time. The
expansion of patent markets against growing asymmetries of information has led
to the first Presidential initiative on patents in half a century, resurgent
debate in Congress over patent reform, and, more remarkably, strategic use of
patents by nations as well as firms.
patent system now bears comparison to the financial sector in terms of its mix
of private interests, markets, and public agencies. While there are no momentous events analogous
to the Lehman collapse, there are familiar signs of dysfunction such as
positive feedback loops, moral hazard, information failure, and principal-agent
conflict. While the absence of data on
patent practice is a limitation, I will draw on available resources to
formulate a few conclusions, recommendations, and a set of paradoxes that
suggest an agenda for future research.
work in progress grows out of my long engagement with digitization and the
Internet dating to the Information Infrastructure Project at the Kennedy School
(1989-1997), my equally long involvement with patent policy in the U.S. and
Europe (from different perspectives in academia, industry, and government), and
recent work with the OECD project on New
Sources of Growth: Knowledge-Based Capital.