Workshop-Style Conference on the Law, Economics, Business, and Policy Implications for Innovation and Competition of Diverse Business Models for Using Patents
Friday, June 25, 2010 at the Hoover Institution at Stanford University
Cosponsored by the
Hoover Project on Commercializing Innovation
Tilburg Law and Economics Center at Tilburg University
The interactions among patents, innovation, and competition are complex and dynamic. Significant debates exist about whether and how patents may operate to facilitate or frustrate innovation and competition, as well as overall economic growth. At the same time, the legal systems that implement patents are endogenous institutions in that they involve human-made laws, rules, and norms promulgated and enforced through a political system influenced by market and government actors with varying interests and abilities to shape them.
This conference will explore the diverse business models that have evolved for using patents, with a focus on understanding why particular market actors find them useful or problematic. Business models that have recently attracted attention in debates include so-called nonpracticing entities, trolls, and brokers. At the same time, more traditional topics of industrial organization continue to be in play, including “make or buy,” vertical integration, modularity, M&A, spin-outs, and so on. For example, does it make sense as a matter of business or policy to have on the one hand a design shop or a fab-lesschip-maker, while on the other hand a foundry? What are the costs and benefits of specialization as compared with vertical integration?
By bringing together a cross section of leaders from the practice, policy, and academic communities of business, finance, economics, and law, this one-day event will operate in a collegial, workshop style to address these challenges in an open and dispassionate manner, fostering a much-needed dialogue among key actors in the increasingly complex, but also increasingly rich, ecosystem of innovation. Operating under Chatham House Rules, participants will be free to use information gained at the workshop, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed. All papers and slides posted on this web page are being made available only for the limited purpose of helping participants best engage in discussion at the conference itself. They are discussion drafts and may not be circulated or cited without author permission.
To maintain a collegial ambiance, this event will be held in a small venue with limited capacity, which requires that only invited guests will be able to join us. A few seats have been reserved for members of the general academic, practitioner, government, and other interested communities.
(affiliations listed for identification purposes only – all views are solely those of the individuals)
8:00 a.m. – 8:30 a.m. Breakfast
8:30 a.m. – 9:00 a.m. Keynote Address: Harold Demsetz
9:00 a.m. – 10:30 a.m. Panel 1: General Thoughts on Boundaries of the Firm
Presentation by Scott Masten (University of Michigan, business), comments by Anne Layne-Farrar (LECG), moderator Scott Hemphill (Columbia University, law)
Implications of transaction cost economics and boundaries of the firm for the use of specialization/componentization in industry, with a focus on high-tech firms. Specialization and componentization are well scrutinized when focusing on physical assets, but does the analysis change when non-physical assets are involved or dominate? (focus on more general, non-IP, issues) [Download Slides – Scott Masten] [Download Slides – Anne Layne-Farrar] [Download Comments – Anne Layne-Farrar]
10:30 a.m. – 10:50 a.m. Coffee break
10:50 a.m. – 12:20 p.m. Panel 2: Patents and the Theory of the Firm
Presentation by Dan Spulber (Northwestern University, business), comments by Josh Wright (George Mason University, law), moderator Stuart Graham (Chief Economist, United States Patent and Trademark Office)
The role of IP in the theory of the firm is examined. The implications for the establishment of firms, the creation of markets and organizations, and entrepreneurship will be discussed. The specific implications of IP are highlighted with a focus on invention and innovation. The discussion highlights the importance of property rights. [Download Paper] [Download Slides]
12:20 p.m. – 1:00 p.m. Lunch
1:00 p.m. – 2:30 p.m. Panel 3: Concerns Raised by Changes in Patent Law
Presentation by Scott Kieff (George Washington University, law), comments by Rebecca Eisenberg (University of Michigan, law), moderator Rod Cooper (Protecting Assets of the Mind)
How has the legal framework of patents interacted with the range of contemporary controversial business models? How did that legal framework contribute to their development, and how does it now help or hurt their use? Consider how the strengthening of patents in the 1980s and ’90s encouraged licensing and so on, as well as the current backlash against patents. [Download Paper]
2:30 p.m. – 2:45 p.m. Coffee break
2:45 p.m. – 4:15 p.m. Panel 4: Concerns Raised by New Business Models
Presentation by Rob Merges (University of California at Berkeley, law), comments by Damien Geradin (Tilburg University, law), moderator John Mulgrew (Microsoft)
Can some of the contemporary controversial business models business models be a threat to innovation – from licensing firms to patent trolls? What is the nature and extent of the problem? What countermeasures have been and can be deployed? In what ways are antitrust concerns raised by the problems and the solutions? [Download Slides] [Download Related Paper]
4:15 p.m. – 4:30 p.m. Coffee break
4:30 p.m. – 6:00 p.m. Panel 5: Patent Valuation and Transactions
Presentation by Leonard Jacoby (Cleary Gottlieb) and Jim Malackowski (Ocean Tomo)
What is the role of patents in mergers, acquisitions, and other related transactions? How are patents valued? Do patent portfolio valuation difficulties create obstacles to deals? What are the deal structures parties use to help mitigate valuation problems and what are the costs of those structures? [Download Slides – Leonard Jacoby] [Download Slides – Jim Malackowski]
6:00 p.m. – 6:45 p.m. Reception
6:45 p.m. – 8:15 p.m. Dinner