Innovation for the 21st century : harnessing the power of intellectual property and antitrust law

421 Pages·2010·1.41 MB·English

by  Michael A. Carrier

innovation for the 21st century
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innovation for the 21st century
harnessing the power of
intellectual property and
antitrust law
michael a. carrier
oxford university press
1
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Library of Congress Cataloging-in-Publication Data
Carrier, Michael A.
Innovation for the 21st century: harnessing the power of intellectual property and antitrust law/
Michael A. Carrier.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-19-534258-1 (hardback : alk. paper) 1. Intellectual property--United States. 2. Antitrust
law--United States. I. Title.
KF3116.C37 2009
346.7304’8--dc22
2008042087
_____________________________________________
First printing in paperback, 2010
ISBN 9780199794287 (paperback : alk. paper)
1 2 3 4 5 6 7 8 9
Printed in the United States of America on acid-free paper
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contents
Acknowledgments vii
Introduction 1
i. primer
Chapter 1. Innovation 19
Chapter 2. Intellectual Property 35
Chapter 3. Antitrust 55
Chapter 4. Antitrust and IP: 20th Century 71
Chapter 5. Antitrust and IP: 21st Century 87
ii. copyright
Chapter 6. Pioneering Peer-to-Peer and Other Disruptive
Dual-Use Technologies 105
Chapter 7. Damaging Copyright Damages 147
Chapter 8. The Digital Millennium Copyright Act: From
Pirates to User Innovators 163
iii. patent
Chapter 9. Better Patents: A Post-Grant Opposition Procedure 205
Chapter 10. Less Dangerous Patents: A Framework for Relief 231
Chapter 11. Biotechnology Dilemma 1: Patented Research
Tools and Experimental Use 253
Chapter 12. Biotechnology Dilemma 2: Material Transfer Agreements 279
iv. antitrust
Chapter 13. Innovation Markets: Saving Lives and Money in the
Pharmaceutical Industry 295
Chapter 14. Supporting Standard-Setting Organizations 323
Chapter 15. Unsettling Drug Patent Settlements: A Framework
for Presumptive Illegality 345
Conclusion 383
Index 385
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acknowledgments
No book of this scope can be accomplished single-handedly. I received helpful
comments from Chris Anderson, Jon Baker, Jonathan Band, Mike Carroll, Perry
Dane, Don Dodge, Harry First, Bert Foer, Shubha Ghosh, Rich Gilbert, Scott
Hemphill, Renata Hesse, Gwen Hinze, Stephen Horowitz, Herb Hovenkamp,
Mark Janis, Greg Lastowka, Anne Layne-Farrar, Mark Lemley, Christopher
Leslie, Gail Levine, Jason Mendelson, Michael Meurer, Joe Miller, Joe Milowic,
Brian Nester, Sean O’Connor, Mark Popofsky, Tony Reese, Bill Rosenblatt,
Pamela Samuelson, Josh Sarnoff, F.M. Scherer, Dave Schwartz, Ephraim
Schwartz, Greg Sidak, Katherine Strandburg, Jay Thomas, Eric von Hippel, Dave
Weisberg, Phil Weiser, Kevin Werbach, and Christopher Yoo. In addition,
s tudents in seminars I taught at Rutgers Law School in the 2007–2008 year
offered useful feedback on my proposals.
I have also benefi ted from the excellent work of many research assistants.
Assisting in the early stages of research were Alex Gonzalez, Philip Jon, Mike
Koptiw, Jon Marshfi eld, Ryan Murphy, Jon Pentzien, and Dave Tseng. Giving up
even more of their time to add impressive contributions in later stages were
Lionel Cassin, Katie Coyne, Llewy Davis, Erin Fitzgerald, Brian Fitzsimons, Sean
Neafsey, and Ryan Strauss.
A scholar can ask for no better law school dean than Ray Solomon, who has
consistently and enthusiastically supported my work in so many indispensable
ways. Jay Feinman and Dennis Patterson have been generous mentors through-
out this project as well as my academic career. Lori Rowland cheerfully kept on
top of my personal library of interlibrary loans. Fran Brigandi reliably kept on
top of everything else, providing sterling administrative support and never letting
any of my thousands of sources slip through the cracks.
Going back further in time, I would like to thank my parents, Judy Carrier
and Peter Carrier, who taught me so much about the importance of passion and
perseverance, as well as effective writing.
Fast–forwarding to the present, I am thankful for the support I have received
from my two daughters, Jordan and Brooke Carrier. Throughout the duration of
this project, fi ve-year-old Jordan has written numerous “books.” I will always
remember the untold hours of her sitting by my side studiously doing her
“work.” And I fear I may also bear some responsibility for three-year-old Brooke’s
infatuation with colored tape fl ags, whose many purposes I never fathomed.
My highest gratitude is reserved for my wife, Sharri Horowitz. Sharri has
shown more patience and understanding than anyone could reasonably (or unrea-
sonably) ask. I could never have written a book of this scope in 12 months without
her unfl agging support and tolerance of nights and weekends at the keyboard. In
allowing me to pursue my dream, I am eternally grateful to Sharri.
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introduction
Innovation 2
Innovation’s Laws 3
Innovation’s Confl ict 4
Innovation’s Urgency 5
Innovation’s Solution: Primer 5
Innovation’s Solution: Copyrights 6
Innovation’s Solution: Patents 7
Innovation’s Solution: Antitrust 9
Innovation’s Solution: Innovation 10
Global Application 11
The Road Map 12
Innovation is crucial to us. It is our iPods. Our YouTubes. Our prescription
drugs. Our LPs becoming CDs becoming MP3 fi les. We may not always focus on
innovation’s importance. But we cannot imagine life without it. Nor is it just us,
consumers in American society. Economists, who do not often see eye to eye,
have consistently emphasized the signifi cant role that innovation plays in
economic growth.
Innovation, however, has been threatened in recent years. Part of the blame,
surprisingly enough, lies with the U.S. legal system. The antitrust laws have not
suffi ciently appreciated innovation. Nor have the intellectual property (IP)
regimes—in particular, patent and copyright law. In certain cases, the laws have
even stifl ed innovation.
This book aims to reverse this trend. It offers ten ambitious proposals to
foster innovation. The proposals address generic drugs, BlackBerry devices, valid
patents, peer-to-peer (P2P) software, and countless other cutting-edge challenges.
They promise to improve our patent system. They show how copyright law can
promote innovation and not quash fl edgling technologies. And they illustrate
how antitrust can incorporate innovation, particularly in the pharmaceutical
industry.
Of the patent, copyright, and antitrust regimes, the patent system’s effects on
innovation have received the most attention. Countless books and editorials as
well as congressional legislation have sought to remedy the adverse effects of
patents. As I show in my proposals, there is still room for better patents, less
dangerous patents, and recommendations for the biotechnology industry.
The effects of copyright law, in contrast, have been neglected. Courts have
crafted elaborate tests to distinguish benefi cial from infringing uses of technolo-
gies like P2P software. But such tests have created litigation land mines. I address
these and other copyright hurdles to innovation.