The University of Chicago Law School Faculty Blog

IP: Social and Cultural Theory (Rob Merges)

I want to respond to some of Madhavi's points about culture. Then, even though it is a topic that is not well suited to the blog format, I want to say a few quick things about utilitarian vs. rights-based views of IP.

Madhavi is right that my thoughts on culture include a greater concern for high quality content, produced by what I call "professional creatives."  She seems to imply, though, that I understand these high-quality products to be coextensive with "culture". She says I view culture as "emerging from a professional class that has refined taste (and presumably talent)," while Madhavi herself "offer[s] a more democratic view of culture." This is not quite accurate.

Student Blogger - The Optimal Use of Discretionary Review versus Direct Appeal

Federal courts in the United States hear over 50,000 appeals a year and state courts hear approximately 300,000. Over 250,000 of these appeals are duds. Certainly a great amount of resources are wasted in these losing appeals, many of which likely had little chance of success.

Professor Steven Shavell suggests that appellants should be provided with an additional method of appeal, as a way of alleviating these wasted costs in his paper “On the Design of the Appeals Process: The Optimal Use of Discretionary Review versus Direct Appeal”. Instead of being required to spend a large sum of money to prepare a full appeal, appellants should have the option to seek a less expensive form of discretionary review.

Most appeals systems require direct appeal while some supreme courts use discretionary review, like the Supreme Court’s petition for certiorari. It is hard to fundamentally reform these appellate systems in most countries because there are constitutional rights to appeal. Instead of changing the appeals system, Shavell proposes that appellants be given a choice: Pursue a costly full appeal, or get a cheaper, quick look at the case via discretionary review.

IP: Social and Cultural Theory (Rochelle Dreyfuss)

I am very much looking forward to Professor Sunder's book.  I agree that it's high time to think more systematically about crafting intellectual property law in a manner that takes account of other values.  That is true not only for domestic law, but also at the international level.  The TRIPS Agreement, as part of a trade pact, treats knowledge "products" as commodities.  That makes them easy to trade, but as Graeme Dinwoode and I have suggested in a series of articles (and will treat at greater length in our forthcoming book, Achieving Balance in International Intellectual Property, to be published by Oxford University Press), the trade perspective tends to lose sight of such matters as cultural development, changes in the creative environment, and human rights, including the right to health.  As Madhavi suggests, current law also fails to deal effectively with collaborative production and open innovation.  Indeed, I've written a couple of articles on the collaboration issue in science.

However, like other bloggers, I am somewhat puzzled by the dichotomies that are drawn here.  Perhaps it's a matter of degree, or perhaps there are a few scholars who think about IP as uni-dimensionally as Madhavi suggests.  But it's hard to imagine there are very many.  IP hardliners (protectionists) in both patent and copyright law regularly confront non-economic incentives.  On the science side, it's impossible to miss the impact of university research on technological development.  Yet, in that milieu, the norms at play are ones that Madhavi would likely not classify as economic.  More generally, it is so difficult to fully appropriate economic benefits in basic science that--as Scott Stern puts it--scientists pay to be scientists.  Paradoxically, some of the copyright high protectionists focus even more heavily on non-economic interests.  They tend to favor moral rights--rights that inhibit economic exploitation because they protect other values, such as the author's personality and the integrity of her contribution to the culture.

IP: Cultural Theory and Economics Analysis (Omri Ben-Shahar)

I was not officially invited to join the discussion, but I wanted to sneak in a thought or two in reaction to some of the themes already raised.

First, it may well be that the incentive perspective has been the dominant approach in American IP law, but it would be incorrect to characterize it as the prescription of economic analysis. To restate what is probably obvious to all, a utilitarian (or “economic”) social welfare function, as applied to IP, measures only one dimension: the total net value from creation, use of, and access to the information goods. Incentives-to-create matter only indirectly, as a feasibility constraint, to guarantee that information goods that are costly to produce and to distribute will be supplied.  But what the social welfare function is set to maximize— the ultimate goal under the utilitarian framework—is not to promote more inventions but rather to promote more value from use.

Second, it may well be that the tools of economic analysis do not currently have the necessary resolution to prescribe the precise limits of IP rights, such limits that would strike the perfect balance between incentives and access, and would lead to maximization of social welfare. But the fact that the principle identified by economic theory—the tradeoff between access and incentives—is difficult to implement with precision does not mean that other principles for limiting IP rights should trump it. Choosing not to look at incentives, or to “override” the incentive/feasibility calculus, would not make it go away. Ironically, the conclusion I draw from the complaint that economic analysis is too crude is that we need to focus on it more, to further refine it, rather than to look elsewhere.

IP: Social and Cultural Theory - Does Economics Describe or Perform IP? (Mario Biagioli)

Madhavi Sunder's framing questions are pitching this discussion quite high -- appropriately so, given what's at stake.  As my grasp of the debate is not, unfortunately, as "panoptical" as hers or Prof Merges', I can only try to contribute by bringing in a more limited, different perspective.

Coming to IP not through a formal training in law but rather through debates over scientific authorship and the history of patenting by scientists, I am not directly invested in either supporting or critiquing economic conceptualizations of IP.  From my disciplinary point of view, that so much discourse about IP is framed by the logic and assumption of neoclassical economics does not look like a "natural" fact, but rather the result of some kind of history. Still, that does not imply that economics would necessarily provide bad or unacceptably narrow conceptualizations of IP.  While I find no reason to attribute them the status of a "master narrative," different economic perspectives on IP can function as tools that, depending on who uses them and how, can produce results ranging from illuminating, sharp, and thought-provoking to flat and predictable as only ideological scholarship can be.  

I'd say that the way one views the relationship between economics and IP depends on how "scientific" one takes economics to be.  For instance, in my neck of the disciplinary woods, scholars like MacKenzie, Callon, Latour, and Lepinay have argued, in different ways, that economics does not simply describe the dynamics of the economy (the way a science would describe its object).  It rather develops models that, once adopted by powerful actors like the finance industry, start functioning more like prescriptions than descriptions of the markets' behavior. "Economics perform the economy," says MacKenzie.  While these perspectives acknowledge the powerful effects of economics (as they argue that economics is part of the construction of the economy), they also take away from it its status of 'science' and replace it with that of "builder" or "performer".  

I wonder whether we could apply some of these perspectives to the relationship between economics and IP.  One could argue, for instance, that while the discourse of economics has indeed shaped much of the doctrinal and policy directions in which IP has been articulated, it has not done so because it was able to model and describe the motivations and behavior of authors and inventors in a "scientific" manner, but rather because that kind of modeling has been used and turned into practice by powerful political and corporate IP stakeholders (and also, perhaps, by individual authors who, with so much economic imagery swirling around in media and public discourse, have come to conceive of their own creative work as a process of "maximization of intellectual property"). MacKenzie has shown that the Black-Scholes-Merton formula for pricing options ended up structuring (rather than just describing) the behavior of securities markets.  Maybe the economics talk about IP has performed the same kind of "self fulfilling prophecy".  That does not men that that kind of talk is either right or wrong.  It is simply constitutive.  Which also means that it could be constituted differently -- even very differently.

IP: Social and Cultural Theory (Madhavi Sunder)

I first want to thank Rob Merges for his deeply thoughtful engagement with my post. His incisive introductory remarks evince an openness to considering alternative points of view, regardless of his priors and where the future is unknown.

I want to make three points on this second day of our debate.

First, Rob’s post suggests that there is far more agreement today than I believe there was even just three years ago on the broadest claim I am making here: that the narrow economic approach to IP proves insufficient as a comprehensive approach to this law. Professor Merges suggests that he seeks to find answers to intellectual property’s troubles not only in more economic studies but in the writings of the well-known law firm of “Locke, Kant, & Co.” Today even economically oriented theorists of this law recognize the limits of the narrow “intellectual property-as-incentives” story. In his post Professor Merges tellingly reveals that he has “come to see that the optimal number of IP rights is not something that economic analysis is really equipped to determine, at least not with the current set of tools we have available.” I want to reiterate Rob’s statement about the limits: “economic analysis is inadequate to the very difficult task of determining exactly ‘how much’ IP is enough, and in some cases exactly how IP rights ought to be crafted and limited.” Economics is relegated, in Professor Merges’s account, to lower level administrative duties, not “foundational” questions: after we decide whom to reward, “economics can be "very helpful … in figuring out how to spend as little as possible administering the rights, collecting the money, and distributing payment.” The fact that today IP scholars of all persuasions can increasingly agree on the need to broaden our ambit is significant and should not be understated. The time is ripe for reform, not only of law but also of theory.

IP: Social and Cultural Theory (Rob Merges)

Madhavi Sunder’s initial essay travels a wide landscape. The nature of the blog medium, of course, means she has time enough only for a few stops on the journey, but they are suggestive of the richness and intricacy of the overall landscape – the contemporary terrain of intellectual property (IP) law and policy. I am going to shadow Madhavi for a few of these stops, reviewing some of her suggestive ideas. But more importantly, I want also to give another view – my personal view – of the landscape she describes. My goal here is not to redraw the map Madhavi is making, but to give the reader a different orientation within it. What I want to provide is not counterarguments so much as an alternate key or legend; not a different frame, but a reorganization drawn from a few points on my personal compass. (A fuller version of these comments -- my own map, so to speak -- will have to await the publication of my own book, "Justifying  Intellectual Property," from Harvard University Press next year.)

Professor Sunder’s main point is that economic analysis of IP is too narrow; it fails to capture some important things about what is happening in the IP landscape, and why it matters. And what is happening, she says, is that the conditions under which culture is created are changing – and changing fast.

She is right that economic analysis is inadequate to the very difficult task of determining exactly “how much” IP is enough, and in some cases exactly how IP rights ought to be crafted and limited. I have come to see that the optimal number of IP rights is not something that economic analysis is really equipped to determine, at least not with the current set of tools we have available. (That's why I have been delving into Locke, Kant, and Co. in researching my own forthcoming book.)

But to say that we need to expand the standard tools we use to think and talk about the foundations of IP policy is not the same at all as saying what shape that policy ought to take. It is not even necessarily the same as saying that we ought to reduce or diminish the role of economic analysis. Economic tools, in my view, are terrific at carrying out policy directives. They are just often indeterminate at the operational level when it comes to answering foundational questions. When we ask too much of them, they will of course fail. So we as a society may decide that rewarding writers, filmmakers, and the like, is a good thing to do. At this point economics can be very helpful, not only in helping assess the direct costs of these rewards on others, but also in figuring out how to spend as little as possible administering the rights, collecting the money, and distributing payment.

Beyond Economic Analysis of Intellectual Property: The Need For Social and Cultural Theory (Madhavi Sunder)

Over the course of the last century intellectual property has grown exponentially, but its march into all corners of our lives and to the most destitute corners of the world has paradoxically exposed the fragility of its economic foundations while amplifying its social and cultural effects. Today intellectual property laws bear considerably upon central features of human flourishing, from the developing world’s access to food, textbooks, and essential medicines, to the ability of citizens everywhere to democratically participate in political and cultural discourse.

Despite these real world changes, intellectual property scholars insist on explaining this field through the narrow lens of a particular economic vision.Intellectual property is understood solely as a tool to solve an economic "public goods" problem: nonrivalrous and nonexcludable goods such as music and scientific knowledge will be too easy to copy and share—thus wiping out any incentive to create them in the first place—without a monopoly right in the creations for a limited period of time.

In a forthcoming book, iP: YouTube, MySpace, Our Culture, under contract with Yale University Press, I argue that an intellectual property law befitting our new participatory century must lift its gaze beyond the narrow goal of incentivizing the creation of more intellectual products to facilitating critical and autonomous participation in the cultural sphere. Modernity is not simply technology. A modern intellectual property law must promote our capacity to author our own lives. These are not too lofty concerns for intellectual property law. Recall that the first copyright statute in England, the Statute of Anne, subtitled "An Act for the Encouragement of Learning," had as its aim nothing less than the promotion of Enlightenment itself. Today, august bodies from the European Patent Office (EPO) to the World Intellectual Property Organization (WIPO) urge the need for a broader understanding of intellectual property law.

Sudan: Does International Criminal Law Help or Hurt?

Last week the International Criminal Court (ICC) issued an arrest warrant for Sudanese President Omar Al-Bashir, confirming charges of war crimes and crimes against humanity but rejecting the prosecutor’s charge of genocide.  The immediate response has been for Al-Bashir to dig in, expelling 13 international aid groups as “spies” and severely worsening the humanitarian situation. This raises the issue of whether or not international criminal law deters or exacerbates human rights violations.  Professors Ku and Nzelibe argued for the latter in an article a couple years ago; the vast majority of international criminal law scholars seem to believe the former.

What is clear is that this is a make-or-break decision for the ICC, as I explore recently in an article our Chicago Journal of International Law. Some optimists believe that Al-Bashir will be turned over by his own countrymen.  But the more likely outcome, given the negative reaction to the indictment by the African Union, China and much of the Arab World, is that Al-Bashir will continue to be able to defy the Court. With a Chinese veto, the Security Council is unlikely to approve new sanctions or to take collective steps for Al-Bashir’s arrest.  This puts the West in the position of ratcheting up costly sanctions on the Sudan (unlikely to be effective without Security Council support) or else appearing impotent in the face of a severely deteriorating humanitarian situation.  In the short run, then, I am afraid Ku and Nzelibe seem to have the better argument.

Beyond Economic Analysis of Intellectual Property: The Need For Social and Cultural Theory?

Next week the Faculty Blog will hold another discussion along the lines of our Future of the WTO mobblog last week. Visiting Professor of Law Madhavi Sunder will initiate the conversation, and she will be joined by Professors Funmi Arewa of Northwestern law, Mario Biagioli of Harvard's Department of the History of Science, Graeme Dinwoodie of Chicago-Kent law, Rochelle Dreyfuss of NYU law, and Rob Merges of the University of California, Berkeley, law school. Feel free to join in the discussion!