Coordination, Property & Intellectual Property: An Unconventional Approach to Anticompetitive Effects & Downstream Access
Professor F. Scott Kieff, Associate Professor of Law at Washington University in St. Louis and Research Fellow at the Hoover Institution at Stanford University, December 2005
Despite numerous reforms over the past century, many of the same problems continue to plague the intellectual property ("IP") systems of today, generating further proposals for reform tomorrow. Two of the most infamous and persistent problems are anticompetitive effect and downstream access. Conventional approaches to these problems focus on a variety of issues other than coordination, and endeavored to shift IP to make it less like property. This paper shows how focusing on coordination when shaping IP regimes can better facilitate both competition and downstream access; and how treating IP more like property can better facilitate coordination.
The paper follows the general approach of the field called New Institutional Economics ("NIE"), which has taught numerous lessons about the different problems that are triggered by different institutions of laws and norms, including, more generally, that because no institution is perfect, our choices among institutions must be informed by our views of the solutions we most want and the problems we can best mitigate or bear. Using the lessons of NIE, the paper explores a theory of the institution of property rights as playing a particular role in facilitating coordinating among many diverse complementary users of an asset. Under this view, coordination is offered as an alternative to other goals that have been suggested including internalizing externalities, mitigating rent dissipation, or providing direct incentives, and property is offered as an alternative to other institutions or organizations that also can facilitate this coordination goal, including, fame, families, firms, and government. A focus on property and coordination make sense for IP because facilitating coordination can be effective in easing the problems of anticompetitive effect and reduced downstream access that have longed plagued the system, because property can be effective in achieving the goal of coordination, and because the otherwise concomitant problems of property can be mitigated by a well designed system of property rights in IP. As a result, a shift in focus towards property and coordination should improve the framework for analyzing debates over IP in general.
The shift in focus towards property and coordination has several practical effects. First, it explains why many of reform proposals of yesterday and today that do not use the coordination approach should be expected to only exacerbate the two key persistent problems of anticompetitive effect and reduced downstream access. Second, it explains why certain aspects of the IP regimes of patent, trademark, and copyright may be working well and why others may be candidates for change or outright elimination. Third, it introduces a case against any IP regime that frustrates coordination because such a regime likely will exacerbate the two key persistent problems of anticompetitive effect and reduced downstream access. By way of example, the paper sketches the beginnings of a case against the present copyright regime.