Seeking the AntiCommons

Interesting historical look at patent-pools and ‘transaction entrepreneurs’ by USC law professor Jonathan Barnet leads him to the conclusion that the “anti-commons” concerns in the patent context don’t hold weight in practice.

IP scholars and policymakers often maintain that [anti-commons] effects are endemic in IP-governed markets and therefore tend to endorse the view that IP rights should be reduced to mitigate those effects. The descriptive component of that proposition cannot be reconciled with the clear weight of contemporary and historical evidence—covering more than a century’s worth of experience—that AC effects are repeatedly mitigated through independent market action by affected constituencies or transactional entrepreneurs. This is true both in concentrated markets, in which repeat-players have incentives and capacities to converge on a knowledge-sharing arrangement, and dispersed markets, in which intermediaries commonly enter to supply transactional solutions that ameliorate AC frictions. Remarkably, recent historical research shows that this proposition holds true even in “easy” cases that have long been assumed to provide clear illustrations of AC effects. Recognizing the shortcomings of the AC thesis as a descriptive proposition rebuts normative intuitions that intensive levels of IP acquisition and enforcement trap markets in a transaction-cost web that depresses innovation. This sophisticated view of AC effects as a potential but rarely realized outcome provides the basis for a more nuanced appreciation of the role of IP rights in creative and technology markets.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2633695

 

 

15 thoughts on “Seeking the AntiCommons

  1. 7

    I can guarantee that there will be no substantive posts by the typical anti-software and anti-business method patent view holders on the subject of this thread.

    And yes, by substantive, I do mean an inte11ectually honest post that objectively recognizes and integrates all of the points of discussion long on the tables of dialogue of this here “America’s leading patent law source.”

    Oh, I do so hope to be proven wrong in this instance.

    I do I do I do.

  2. 6

    Justifying non-erosion of IP or any other rights by arguing they do not threaten the commons, an economy, a public, or any system or government is a fundamental moral, ethical, and political inversion.

    It is like trying to justify protection of the rights to life, liberty, and the pursuit of happiness, because they do not harm a government or a system, or a politician’s pet project to build a public park… as though governments and systems and works whose sole purpose is to serve individual people have rights to exist independently or over and above the rights of individual people.

    It is not the case that a government or a system is to be served by these rights, nor does anyone need to plea and argue that they are so served nor apologize for any appearance that they are not so served, for it is the very opposite that is true, the government and the system are set up solely in service of those rights, and they are absolute guiding principles of freedom.

    Far from needing to plead IP rights aren’t that bad because they do not harm some mystical commons upon which the existence of some imaginary collective public depends, one needs to recognize that rights and freedom are what makes life and happiness to every individual of that public possible.

    1. 6.1

      Rights and freedom are not distinct things. One cannot have freedom without rights. One cannot have rights without law. One cannot have law without government.

      The idea of the commons is like an idea of some natural wilderness were all the resources are owned by all. In such an environment there are no rights, and experience shows that might makes right.

      Only when people have rights to a particular piece of property does one invest. Take a look at Haiti as an example of what happens when nobody owns the land.

  3. 5

    Speaking about separation of powers – and other constraints that the Royal Nine face:

    In other words, it is high time to take a critical look at the Court’s own scrivining and subjective conjectural basis of “may” cause some future harm to innovation and realize that the Court too is not allowed to provide such advisory opinions in its Wax Nose re-writing of statutory law.

    Maybe Judge O’Malley can publish a follow-on piece….

    1. 5.1

      Absolute and Total B$ Ned.

      Your worship of the Royal Nine is a severe weakness. For example, you want separation of powers – but only when it aligns with your agenda. You post a link to O’Malley who explicitly warns against currying the law inappropriately through judicial activism and then disappear (as usual) when I point that out and ask you about it – politely even, so please spare your latest round of B$ on that topic.

      Your oath as an attorney – I invite you once again to read it – does NOT place the Court above the constitution. You seem unable or unwilling to understand what that means.

      You sir, are a hypocrite beyond compare. And a coward and inte11ectually dishonest to boot.

      Ford, Cruz, Palin – none of whom mirror my views are nothing more than you muckraking again. Douglas as a Justice? one of the all time worsts – regardless of what Ford tried to do.

  4. 4

    SMARTFLASH LLC v. APPLE INC.
    link to cafc.uscourts.gov

    More than a year into litigation and only three months prior to trial, Apple filed a series of CBM petitions on 101 grounds against a number of SmartFlash patents. While these petitions were pending, the district court litigation went to trial resulting in a jury verdict in favor of SmartFlash including on 101. After trial was complete, the PTAB authorized trial on virtually all SmartFlash patents. Apple moved to stay further litigation. The district court denied Apple’s motion. On appeal, the Federal Circuit (O’Malley for court, Linn) affirmed. Newman dissented – because the Federal Circuit reversed a similar stay in Samsung because the Samsung case had not yet gone to trial and Newman believed that Apple and Samsung should be treated similarly.

    Part of the reason for the holding of the court was that the purpose for CBM’s was to provide an alternative to litigation. Apple had argued that for a bright line rule that whenever a CBM was authorized that there be an automatic stay. This notion was rejected by the court.

    Congress enacted the AIA, in part, to address concerns
    about business method patents. With this Court’s
    decision in State Street Bank & Trust Co. v. Signature
    Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), the
    test for patent eligibility greatly expanded until the
    Supreme Court’s decision in Bilski v. Kappos, 561 U.S.
    593 (2010), which significantly curtailed the patentability
    of business methods. As a result of “[t]his judicial expansion
    and subsequent judicial retraction of U.S. patentability
    standards . . . a large number of business-method
    patents” issued that may not be valid. 157 Cong. Rec.
    S1379 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl).
    Through the enactment of Section 18 of the AIA, Congress
    sought to clarify this confusion by providing “a relatively
    inexpensive administrative alternative to litigation for
    addressing disputes concerning the validity of [CBM]
    patents.” 157 Cong. Rec. S1379 (daily ed. Mar. 8, 2011)
    (statement of Sen. Kyl); see also 157 Cong. Rec. S1364
    (daily ed. Mar. 8, 2011) (statement of Sen. Schumer)
    (noting that the fundamental purpose of the CBM review
    process is “to provide a cost-efficient alternative to litigation”).

    But in order to realize Congress’s intent to establish
    an alternative to district court litigation for CBM issues,
    parties must file CBM petitions in a manner that facilitates
    this goal. We recognize that there is no statutory
    deadline to file a CBM petition, unlike other post-grant
    proceedings, but we nevertheless conclude the timing of
    the petitions in this case created a tactical advantage for
    Apple. … By waiting to submit its petitions until
    almost the eve of trial and well after it filed its motion for
    summary judgment on the § 101 issue, Apple was able to
    first pursue its § 101 defense at the district court and
    then at the PTAB. As the district court correctly found,
    this strategy thus afforded Apple multiple opportunities
    to pursue a single defense—a clear tactical advantage.

    Newman’s dissent recognized that the uncertainty in the state of the law regarding the relationship of the executive to the courts that should be a factor on the side of staying the Apple litigation. Her remarks specifically referred to the constitutional relationship between the executive and courts.

    Section 324(a) provides: “The determination by the
    Director whether to institute a post-grant review under
    this section shall be final and nonappealable.” On the
    “broadest reasonable” claim construction, and in view of
    the “more likely than not” determinations and the unreviewability
    at the threshold2 of the decision to institute
    post-grant review, the SmartFlash claims at this stage
    are not cloaked in optimism.

    The PTO has stated that a district court’s determination
    does not provide collateral estoppel and is not res
    judicata against PTAB determinations. See, e.g., Interthinx,
    Inc. v. Corelogic Sols., LLC, No. CBM2012-00007
    (P.T.A.B. Jan. 30, 2014) (“[W]e conclude that res judicata
    and collateral estoppel do not limit the Board’s ability to
    decide the challenges at issue . . . .”). Much remains to be
    resolved; the present state of uncertainty of law and
    procedure, and the ongoing search for the optimum mechanism
    for determining patent validity, weigh heavily on
    the side of staying the Apple proceedings, rather than
    continuing to finality in the district court.

    The issue is not simply that of deference between tribunals
    of different assignments, nor of constitutional
    dimension as to the relationship between the judiciary
    and an executive agency. Included must be the overarching
    concern for serving the national interest in technological
    advance, and how best to achieve it. Until these
    issues are resolved, prudent adjustment is appropriate.

    2. Although this court held in Versata Development
    Group, Inc. v. SAP America, Inc., No. 2014–1194, 2015
    WL 4113722 (Fed. Cir. July 9, 2015), that any issues
    relevant to the decision to “institute” are subject to review
    on appeal of final judgment, the court sustained the
    restriction on interlocutory appeal of the threshold determination
    of whether to institute post-grant review.

    1. 4.1

      This judge continues to evidence a shameful ignorance of Article III and the rules governing separation of powers. The quoted statement below is particularly egregious — I hope that the academics are taking note; this is the shakiest of foundations upon which the PTAB was built.

      “The issue is not simply that of . . . constitutional
      dimension as to the relationship between the judiciary
      and an executive agency. Included must be the overarching
      concern for serving the national interest in technological
      advance, and how best to achieve it.”

      1. 4.1.1

        Ned too lacks a consistent view of the separation of powers.

        More of that “if-it-aligns-with-Ned-it-must-be-a-genius” malady.

        Just look at his “pals” here: Malcolm, 6, and Random.

        How much real legal knowledge do you think is in that group?

  5. 3

    So Professor Eisenberg was wrong about the impact of the so-called “anti-commons”? Why am I not surprised.

  6. 2

    What about anti-Commune effects endemic in all markets caused by the existence of individual property rights? Shouldn’t the scholars and policy makers endorse that individual property rights in general be reduced to mitigate those anti-Commune effects?

      1. 2.1.1

        Common now… what was “true” “for” Adam Smith “then” is not necessarily “true” for “us” “now”.

        Modern “Progress” marches on, there is no “I” in “Commune”,… resistance is futile.

  7. 1

    In other words, it is high time to take a critical look at the Court’s own scrivining and subjective conjectural basis of “may” cause some future harm to innovation and realize that the Court too is not allowed to provide such advisory opinions in its Wax Nose re-writing of statutory law.

    Maybe Judge O’Malley can publish a follow-on piece….

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