Shubha Ghosh

Creativity, Law and Entrepreneurship

Creativity, Law and Entrepreneurship explores the idea of creativity, its relationship to entrepreneurship, and the law’s role in inhibiting and promoting it. The inquiry into law and creativity reduces to an inquiry about what people do, what activities and actions they engage in. What unites law and creativity, work and play, is their shared origins in human activity, however motivated, to whatever purpose directed. In this work contributors from the US and Europe explore the ways in which law incentivizes particular types of activity as they develop themes related to emergent theories of entrepreneurship (public, private, and social); lawyering and the creative process; creativity in a business and social context; and creativity and the construction of legal rights.

Takings, the Exit Option, and Just Compensation

There are several distinct interpretations of the Fifth Amendment of the Constitution mandate of the payment of just compensation for the taking of private property for a public use. The traditional economic position, put forward by Blume, Rubinfeld and Shapiro, is that just compensation requirements in the absence of imperfect markets will lead to overcapitalization. Richard Epstein calls for a broad interpretation of the Takings Clause to protect private property from redistributionist policies. Frank Michaelman interprets the Takings Clause as a means to insure efficient government regulation when demoralization costs are considered in the cost-benefit calculus. This paper starts with a discussion of the omission of demoralization costs in traditional economic models of takings. By addressing this omission, this paper contributes to the growing literature on the political economy of takings (see Been, Fischel, and Sterk) by exploring the effect of the exit option on optimal takings and compensation rules. While previous economic models have considered the takings game in the context of a single jurisdiction, this paper models the takings problem in a multi-jurisdictional context. The model is used to analyze whether states should take, purchase, or tax to finance a public project when citizens have the exit option. The model developed in this paper provides the necessary first step to develop a richer, more complete model of takings, taxation, state competition, and exit.

When Property is Something Else: Understanding Intellectual Property through the Lens of Regulatory Justice

While everyone agrees that the subject of intellectual property is copyrights, patents, trade marks and related legal concepts, such as trade secrets, there is increasing doubt that this subject can or should be described as property (Carrier, 2004; Lemley, 2005).Blackstone’s Commentaries discusses patents and copyright as a species of monopoly (1979b, pp. 407, 159). Contemporary economic theorists, uninfluenced by the legal theorist William Blackstone, analyse intellectual property as a species of the monopoly problem (Levine and Boldrin, 2002). Even the concession that intellectual property is a set of property rights does not resolve the issue, for the rights created by copyright, patents, trade marks and related concepts are decidedly different from the rights granted to land or other tangible assets (Heald, 2005). Even intangibility cannot serve as a marker for differentiation since what is labelled intellectual property is different from intangible assets such as securities and other financial instruments. Scholarly pages are expended debating what intellectual property is not. In this chapter, I explore what intellectual property is. My concern is less with the name, and even though the term ‘intellectual property’ is unfortunate, it is acceptable if properly understood for the concept being referenced.

Decoding and Recoding Natural Monopoly, Deregulation, and Intellectual Property

The paper examines a parallel between arguments in the deregulation movement to limit the scope of natural monopolies and arguments for limiting the scope of exclusivity for intellectual property. The first part of the paper examines natural monopoly regulation as a metaphor for understanding intellectual property drawing on arguments based on declining average costs of production and negligible marginal costs of distribution. The author concludes that while the cost arguments often surface as a justification for intellectual property, cost-based justifications do not offer a satisfactory basis for determining the scope of intellectual property rights. The second part of the paper turns to critiques of natural monopoly regulation and develops arguments from these critiques for limiting intellectual property rights. The paper concludes with three principles to guide intellectual property reform: (1) recognizing the role of the user in properly determining the value of intellectual property; (2) identifying the role of potential competition in determining the scope of intellectual property rights; and (3) recognizing the role of political economy in shaping the regulatory role of intellectual property.

Open Borders, the US Economic Espionage Act of 1996, and the Global Movement of Knowledge and People

The United States made trade secret misappropriation a federal crime in 1996 through enactment of the Economic Espionage Act. This paper explores the principal provisions of that Act, the seminal case law, and the implications for labor mobility between firms and across countries.

Patent Law and the Assurance Game: Refitting Intellectual Property in the Box of Regulation

Patent law is often understood through the fiction of social contract. The author argues that this fiction does not offer an adequate economic or political theory of patent law, that is, one that will explain the unique relationship between government and property that patents entail. As an alternative to social contract theory, a regulatory theory of patent law is developed based on the assurance game taken from game theory. The assurance game is used to show how patent law serves to regulate the invention process and the market for innovative products.

FRAND in India

This paper examines FRAND issues in India. From an institutional perspective, Indias FRAND cases do not effectively establish the appropriate role for antitrust in FRAND. On the one hand, there is the potential for hold-up and anti-competitive conduct in the FRAND setting. Such situations would be very fact specific but the CCI orders to date use sweeping language and analysis based on per se like rules of illegality. On the other hand, the creation of per se like rules of illegality create the possibility that CCI will act as a price regulator rather than antitrust enforcer. Over time and with greater use of economic analysis (and greater reliance on the economic staff at CCI), CCI may improve its institutional capabilities. However, the role of jurisdiction as between CCI and the judiciary remains unclear. How best to treat FRAND disputes will take time but the hope is that through greater experience and learning by doing, the Indian competition system will set out a set of economically informed principles for sound FRAND enforcement.On the issue of institutional design and deference, one question that has not yet been reached (and may not for some time) is how the courts should handle deference when CCI has developed the necessary economic skills to undertake complex cases of antitrust and technology. Should the judiciary defer to agency as expert once expertise developed? This is potentially a chicken and egg problem on developing expertise and rules of deference in need of further study. Complicating matters further is that the economics on competition and patents is complex. Creating an administrable economic model that is coherent remains a work in progress.Overall the Indian FRAND cases suggest that the current mix of Indian institutions may not yet be well suited to address complex issues of antitrust enforcement. Consequently, such cases should be approached cautiously with a mind on how to think through the economics of innovation, and the implications of enforcement on technology, IP and competition to yield optimal results and the right institutional structure for improved enforcement.

Incentives, contracts, and intellectual property exhaustion

This chapter examines the claim that the exhaustion doctrine reduces incentives for the creation of new works and inventions. In order to make the strongest argument in favor of intellectual property exhaustion, I will be working solely within the incentivesbased justification for intellectual property. Since the claims for evisceration of incentives are most often made for copyright and patent, I will focus on copyright and patent exhaustion in the last section of this chapter. The positive conclusion is that intellectual property exhaustion is consistent with incentivesbased justifications for intellectual property rights. For the purposes of this chapter, I define incentivesbased rationale for intellectual property rights1 as the view that rights of exclusivity are needed in order to promote creativity and invention and their dissemination. This exclusivity allows the creator to sell rights of access or use to the work. With this ability to commercialize rights in a creative work, the creator can develop a market, and possibly an industry, within which the works can propagate under the control and management of the rights holder. Through these mechanisms, exclusivity creates incentives for the creative person (who harnesses the legally provided exclusivity to exploit the work) and the public (who can benefit from the work through market exchange). However, the incentives theory can become groundless and unprincipled if taken too far. Lawmakers, whether in the legislature or the courts, might fall victim to the claim that if some exclusivity is needed for creativity, then more exclusivity can produce more creative and innovative works. Since exclusive rights are relatively costless to provide and the potential upside for consumers and culture is great, the temptation readily arises for establishing expansive rights. Although it is easy to challenge the incentives argument from outside its terms, what is most compelling is that the terms of the incentives

Patent Exhaustion on Trial in the United States

This chapter examines intellectual property exhaustion policy and doctrine with a focus on the parallels between copyright and patent law.

Nature, nurture and DNA sequences.

*University of Wisconsin Law School, Madison, WI 53706, USA E-mail: ghosh7@wisc.edu On 13 June 2013, the US Supreme Court addressed the question of the patentability of DNA sequences. The Court’s answer seems straightforward. Isolating a naturally occurring DNA sequence does not give rise to patentability whereas creating a synthetic DNA sequence may be patentable. While this response seems clear cut on the surface, the answer raised even more questions. This article is one entry into the cottage industry of patent law ana lysis that is generated by the Court’s unanimous decision in Association for American Pathologists v. Myriad Genetics [1]. In this article, the decision is analyzed and put in the context of both the present, and the near future. Although some find the decision devastating for the pharmaceutical and biotechnological industries, the ruling is not as fatal as some claim, and sets the right course for the future of synthetic genetics.