Articles
Karen A. Campbell, IP Protection Games: Does Technology Type Matter For Entrepreneurial Behavior? (2011), available athttp://ssrn.com/abstract=1784863.
Abstract: T his paper builds on an analytical tool for studying entrepreneurship in a new classical general equilibrium framework. The entrepreneurial economy model takes the consumer-producer economy model and makes explicit the role of the entrepreneur. This paper uses it to study entrepreneurial behavior when assumptions regarding contract enforcement and intellectual property rights can be violated. An extended form game involving an entrepreneur and a trading partner is presented.
Results show that different subgame perfect equilibria arise depending on whether the venture idea (innovation) is production specific or a general purpose technology. Furthermore, depending on the type of technology, different mechanisms for intellectual property (IP) protection are desirable, in terms of total social utility. This has implications for the way IP laws are crafted and why (one-size-fits-all) patent laws have come under fire. The results give some foundation for the intuition on both sides of the patent law debates. It makes precise when stronger IP protections may be needed to help entrepreneurs and trading partners out of a prisoner’s type dilemma versus when these laws may not be necessary.
Colleen Chien, Startups and Patent Trolls, 17 Stan. Tech. L. Rev. 461 (2014).
Abstract (adapted from author): The impact of Patent Assertion Entities (PAEs) on startups is crucial, because startups contribute to job creation and innovation, making them potential targets of patent demands. To assess the impact of trolls on startups, the author analyzed a comprehensive database of patent litigations from 2006 to the present, conducted a non-random survey of 223 tech company startups, 79 of which had received a demand, and interviewed nearly 20 entities with relevant knowledge of startup patent issues. The author finds that although large companies tend to dominate patent headlines, most unique defendants to troll suits are small.
What can be done to decrease the harms of patent assertion and increase the benefits of a robust patent market to small companies and startups? Focusing on this question, the article presents new data suggesting that a number of the reforms put in place over the last year, including by the America Invents Act, are having a positive impact.
Increasing the cost of software patents would limit the number of patents but would also disadvantage startups that patent, relative to large companies and PAEs with large budgets. The distributional impacts of reforms need to be kept in mind, and this article suggests some alternative reforms for the consideration of the courts, Congress, and the market.
Saul Estrin, Julia A. Korosteleva & Tomasz Marek Mickiewicz, Which Institutions Encourage Entrepreneurs to Create Larger Firms? (IZA Discussion Paper No. 5481, 2011), available at http://ssrn.com/abstract=1765646.
Abstract: We develop entrepreneurship and institutional theory to explain variation in different types of entrepreneurship across individuals and institutional contexts. Our framework generates hypotheses about the negative impact of higher levels of corruption, weaker property rights and especially intellectual property rights, and a larger state on entrepreneurs who plan to grow faster. We test these hypotheses using the Global Entrepreneurship Monitor surveys in 55 countries for 2001-2006, applying a multilevel estimation framework. We confirm our main hypotheses but we find no significant impact from intellectual property rights.
Charles Tait Graves & James A. Diboise, Do Strict Trade Secret and Non-competition Laws Obstruct Innovation? 1 Entrepreneurial Bus. L.J. 323 (2007).
Abstract (from introduction): This Article examines whether non-competition covenants and overbroad trade secret laws operate to restrict innovation and impede the growth of small, creative businesses - especially those founded by former employees of larger, established companies. We summarize the nascent scholarship around these issues, and pose several questions for future research by legal scholars and economists. We then critically analyze aspects of non-competition, fiduciary duty, and trade secret law - bodies of law which we refer to as “the law of employee mobility.” We conclude that reform in these areas would likely promote innovation, and we invite further discussion around these important but neglected areas of law.
Lars Persson & Joshua S. Gans, Entrepreneurial Commercialization Choices and the Interaction Between IPR and Competition Policy (IFN Working Paper No. 895, 2012), available at http://ssrn.com/abstract=2048235.
Abstract (from authors): This paper examines the interaction between intellectual property protection and competition policy on the choice of entrepreneurs with respect to commercialization as well as the rate of innovation. The authors find that stronger intellectual property protection makes it more likely that entrepreneurs will commercialize by cooperating with incumbents rather than competing with them. Consequently, they demonstrate that competition policy has a clearer role in promoting a higher rate of innovation in that event. Hence, the authors identify one reason why the strength of the two policies may be complements from the perspective of increasing the rate of entrepreneurial innovation.
Timothy S. Simcoe, Stuart J. Graham & Maryann Feldman, Competing on Standards? Entrepreneurship, Intellectual Property, and Platform Technologies, 18(3) J. Econ. & Mgm’t Strategy 775 (2009).
Abstract (from authors): Entrepreneurs often rely on intellectual property (IP) to earn a return on their innovations, and also compatibility standards, which allow them to supply specialized components for a shared technology platform. This paper compares the IP strategies of small entrepreneurs and large incumbents that disclose patents at 13 voluntary standard setting organizations (SSOs). These patents have a relatively high litigation rate. For small private firms, the probability of filing a lawsuit increases after disclosure to the SSO. For large public firms, the filing rate is unchanged. Although forward citations increase after disclosure for all firms, the size of this effect is the same for entrepreneurs and incumbents. These results suggest that standards increase the difference between large and small firms’ incentives to litigate, rather than the relative value of their patents. We conclude that because specialized technology providers cannot seek rents in complementary markets, they defend IP more aggressively once it has been incorporated into an open platform.
Kyle Tondo-Kramer, Increasing Access to Startup Financing through Intellectual Property Securitization, 27 J. Marshall J. Computer & Info. L. 613 (2010).
Abstract: This paper discusses how a private company running a single, nationwide database of encumbered intellectual property and intangible assets can ease the burden on creditors and pave the way for more creditors to enter this market. Part two offers a brief overview of how intellectual property securitization works and some of the impediments to using this type of securitization. Part three proposes a possible solution to the problem creditors face regarding the filing of a financing statement when attempting to securitize intellectual property, and provides an in depth analysis as to why the suggestion that a private company runs a single, nationwide database is appropriate. Finally, part four will conclude by arguing that, if implemented properly, the single, nationwide database managed by a private company is the first step towards bringing more creditors into the market and providing startups with the necessary cash to survive.