Policy Implications of Weak Patent Rights

James J. Anton; Hillary  Greene; Dennis  Yao

Article | Innovation Policy and the Economy

Policy Implications of Weak Patent Rights

by James J. Anton, Hillary Greene and Dennis Yao

Abstract

Patents vary substantially in the degree of protection provided against unauthorized imitation. In this chapter we explore a range of work addressing the economic and policy implications of "weak" patents—patents that have a significant probability of being overturned or being circumvented relatively easily—on innovation and disclosure incentives, antitrust policy, and organizational incentives and entrepreneurial activity. Weak patents cause firms to rely more heavily on secrecy. Thus, the competitive environment is characterized by private information about the extent of the innovator's know-how. In such an environment weak patents increase the likelihood of imitation and infringement, reduce the amount of knowledge publicly disclosed, and potentially reduce the incentives to innovate. The discussion also highlights some implications of weak patents for antitrust policy. Weak patent rights increase the likelihood of patent litigation over commercially valuable patents and raise the specter of anticompetitive settlements. Encouraging the antitrust agencies to refer some patents for re-examination by the patent office would facilitate investigation of potentially anticompetitive IP settlements. Finally, we note some implications for weak property rights in settings involving employee-inventors and employee misuse of confidential information. In the former case an increase in the strength of legal property rights such as patents reduces the employer's ability to prevent employees departing with valuable know-how, in part because a stronger property right increases the value of the employee's start-up option. In the latter case, an increase in legal penalties for breach of confidentiality has the expected effect of decreasing such occurrences.

Keywords: Patents; Motivation and Incentives; Entrepreneurship; Competition; Policy; Innovation and Invention; Rights; Monopoly; Business Startups;

Format: Print

26 pages

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Citation:

Anton, James J., Hillary Greene, and Dennis Yao. "Policy Implications of Weak Patent Rights." Innovation Policy and the Economy 6 (2006): 1–26. (Harvard users click here for full text.)

In this paper we exploit a natural experiment resulting from self-regulation adopted in the ready-to-eat (RTE) breakfast cereal industry. This event induced product repositioning which compressed the relevant product space and increased competition. Through this lens, we assess specific performance impacts associated with the regulation and develop links between product positioning and product brand equity resources. The latter results provide dynamic connections between positioning choices and the value of resources as determined by consumer demand and market competition. As a group, products constrained by regulation perform relatively poorer than unconstrained products, though unconstrained products are also negatively affected by the increased competition caused by the regulation-induced compression. Among other results, we also find that higher brand equity is not always relatively more valuable than lower brand equity when products are forced to reposition.

Article | William & Mary Law Review | March 2019

Antitrust as Speech Control

Hillary Greene and Dennis Yao

Antitrust law, at times, dictates who, when, and about what people can and cannot speak. It would seem then that the First Amendment might have something to say about those constraints. And it does, though perhaps less directly and to a lesser degree than one might expect. This article examines the interface between those regimes recasting antitrust thinking in terms of speech control. Our review of the antitrust-First Amendment legal landscape focuses on the role of speech control. It reveals that while First Amendment issues are explicitly addressed relatively infrequently within antitrust decisions, certain speech (for example, speech that promotes economic efficiency) receives indirect protection as a byproduct of antitrust law. The potential challenges associated with indirect, rather than direct, protection of such speech are then explored. Significantly, such de facto protection does not, however, extend to speech furthering noneconomic values. We then consider some of the pros and cons associated with extending protection to nonefficiency speech values. Central to society’s improved treatment of such speech within antitrust settings is a willingness to recognize the pitfalls of the status quo, to undertake incremental change and to consciously cultivate learning. Perhaps the reality that such interface issues are only likely to worsen given the ever-growing and evolving information economy will get society talking.

Keywords: antitrust law; first amendment; Spoken Communication; Laws and Statutes;

Citation:

Greene, Hillary, and Dennis Yao. "Antitrust as Speech Control." William & Mary Law Review 60, no. 4 (March 2019): 1215–1267. View Details

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