{"title":"A Search-Costs Theory of Limiting Doctrines in Trademark Law","authors":"Stacey L. Dogan, Mark A. Lemley","doi":"10.4337/9781848441316.00008","DOIUrl":"https://doi.org/10.4337/9781848441316.00008","url":null,"abstract":"Trademarks have value because they reduce consumer search costs and thus promote overall efficiency in the economy. While the search costs theory provides a compelling argument for trademark rights, it also compels an equally important - but often overlooked - set of principles for defining and limiting those rights. Certainly, trademark laws can make it easier and cheaper for consumers to locate products with desired qualities, thus making markets more competitive. Yet if carried too far, trademark law can do the opposite: it can entrench market dominance by leading firms and make it harder for competitors to crack new markets. The evolution of trademark law reflects a continual balancing act that seeks to maximize the informational value of marks while avoiding their use to suppress competitive information. Most of the literature on the search costs theory of trademark law has focused on the theory as a rationale for trademark protection. In this article, we examine its role in supporting trademark defenses. We find that some trademark defenses unambiguously lower consumer search costs and thus promote the goals of trademark law. Another group of defenses, however, involves behavior that increases consumer search costs for some individuals even as it improves economic conditions for others. We believe that these latter defenses - genericness, functionality, and abandonment - may sometimes go too far in accepting increased consumer search costs as the cost of achieving competition. Rather than the all-or-nothing approach suggested by these doctrines, we suggest that consumers would benefit from a more nuanced approach in these doctrines.","PeriodicalId":281709,"journal":{"name":"Intellectual Property Law eJournal","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-03-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127535453","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Cumulative Innovation, Sampling and the Hold-Up Problem","authors":"R. Pollock","doi":"10.2139/ssrn.961351","DOIUrl":"https://doi.org/10.2139/ssrn.961351","url":null,"abstract":"With cumulative innovation and imperfect information about the value of innovations, intellectual property rights can result in hold-up and therefore it may be better not to have them. Extending the basic cumulative innovation model to include `sampling' by second-stage firms, we find that the lower the cost of sampling, or the larger the differential between high and low value second-stage innovations, the more likely it is that a regime without intellectual property rights will be preferable. Thus, technological change which reduces the cost of encountering and trialling new `ideas' implies a reduction in the socially optimal level of rights such as patent and copyright.","PeriodicalId":281709,"journal":{"name":"Intellectual Property Law eJournal","volume":"308 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-03-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114414775","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Intellectual Property Rights, Parallel Imports and Strategic Behavior","authors":"Mattias Ganslandt, K. Maskus","doi":"10.2139/ssrn.982241","DOIUrl":"https://doi.org/10.2139/ssrn.982241","url":null,"abstract":"The existence of parallel imports (PI) raises a number of interesting policy and strategic questions, which are the subject of this survey article. For example, parallel trade is essentially arbitrage within policy-integrated markets of IPR-protected goods, which may have different prices across countries. Thus, we analyze fully two types of price differences that give rise to such arbitrage. First is simple retail-level trade in horizontal markets because consumer prices may differ. Second is the deeper, and more strategic, issue of vertical pricing within the common distribution organization of an original manufacturer selling its goods through wholesale distributors in different markets. This vertical price control problem presents the IPR-holding firm a menu of strategic choices regarding how to compete with PI. Another strategic question is how the existence of PI might affect incentives of IPR holders to invest in research and development (R&D). The global research-based pharmaceutical firms, for example, strongly oppose any relaxation of restrictions against PI of drugs into the United States, arguing that the potential reduction in profits would diminish their ability to innovate. There is a close linkage here with price controls for medicines, which are a key component of national health policies but can give rise to arbitrage through PI. We also discuss the complex economic relationships between PI and other forms of competition policy, or attempts to limit the abuse of market power offered by patents and copyrights. Finally, we review the emerging literature on how policies governing PI may affect international trade agreements.","PeriodicalId":281709,"journal":{"name":"Intellectual Property Law eJournal","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-03-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132831537","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Secret Life of Legal Doctrine: The Divergent Evolution of Secondary Liability in Trademark and Copyright Law","authors":"M. Bartholomew, John Tehranian","doi":"10.15779/Z38R708","DOIUrl":"https://doi.org/10.15779/Z38R708","url":null,"abstract":"The recent explosion in intellectual property litigation has witnessed increasing recourse to secondary liability theories. The courts have responded favorably to plaintiffs by enunciating substantial reinterpretations of extant principles, thereby precipitating a veritable secondary liability revolution. Numerous commentators have bemoaned this trend, contending that judicial recasting of liability rules expands intellectual property rights beyond their intended scope, thereby resulting in an overprotective regime that stifles innovation. Yet one of the most striking aspects of the secondary liability revolution has been all but ignored in the literature: While the courts have broadened the scope of secondary liability principles with respect to copyright, no such move has occurred in the trademark arena. This divergence is unusual for several reasons. Secondary theories of liability in both trademark and copyright law share the same origins - the common law of tort and agency - and, in the past, were applied identically regardless of whether a trademark or a copyright was at issue. The case law offers no explanation for why this schism between secondary copyright and trademark has developed. Additionally, modern innovations cannot explain the divide: by facilitating the reproduction of marks and the global distribution of products, digital technology poses just as much of a threat to trademark holders as it does to copyright interests. This Article takes a critical first step in clearing the murky waters of secondary infringement by setting forth and analyzing the divergence between the secondary trademark and copyright liability regimes. We first disaggregate the various theories of secondary liability by analyzing the current law of contributory and vicarious trademark and copyright infringement. As we argue, despite common origins, trademark and copyright law have taken divergent paths over the years. Although many courts have recognized this divergence, they have not carefully parsed out the differences and have blindly accepted the differences without serious scrutiny or rationalization. We then attempt to explain the reasons behind the differences we identify in the two secondary liability doctrines. Specifically, we ask why the courts have created a two-tier system of secondary liability. In so doing, we examine what the divergent path of secondary trademark and copyright liability principles says about the law-making process, the evolution of legal doctrine, and the choices being made between two complementary systems of intellectual property protection. As our analysis reveals, it does not appear that fundamental differences in the nature or origin of trademark and copyright, rational balancing of economic risk-bearing considerations, or notions of romantic authorship can explain this bifurcation. Rather, a panic over copyright infringement in the digital age has beset the courts, causing the injudicious and often uncritical expansion ","PeriodicalId":281709,"journal":{"name":"Intellectual Property Law eJournal","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-03-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122806072","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Thomas R. Lee, Glenn L. Christensen, Eric D. DeRosia
{"title":"Trademarks, Consumer Psychology, and the Sophisticated Consumer","authors":"Thomas R. Lee, Glenn L. Christensen, Eric D. DeRosia","doi":"10.2139/ssrn.967742","DOIUrl":"https://doi.org/10.2139/ssrn.967742","url":null,"abstract":"The degree of consumer \"sophistication\" is an important factor in the judicial evaluation of the legal standard of trademark infringement: the likelihood of consumer confusion. Yet although the law in this field is premised on assumptions about consumer psychology, the case law has developed in ignorance of an important body of scholarship devoted to that very subject. This article seeks to remedy this disconnect by drawing on scholarship in the field of consumer psychology to develop a model of consumer cognition. The consumer psychology literature suggests a much richer conception of sophistication than is currently acknowledged by the courts. The case law is dominated by an ad hoc treatment of sophistication that has generated numerous conflicts and inconsistencies in the judicial evaluation of trademark infringement. Our model provides a comprehensive framework for understanding the proper role of consumer sophistication in trademark infringement litigation and for resolving many of the conflicts in the case law.","PeriodicalId":281709,"journal":{"name":"Intellectual Property Law eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-03-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130682248","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Patent Litigation Insurance and R&D Incentives","authors":"Luigi Buzzacchi, Giuseppe Scellato","doi":"10.2139/ssrn.988406","DOIUrl":"https://doi.org/10.2139/ssrn.988406","url":null,"abstract":"A major policy concern regarding patenting activity is related to the actual enforceability of the patents granted by Patent Offices. The risk of facing elevated legal costs to defend patent rights can affect ex-ante incentives to invest in RD (ii) coverage is voluntary and the insurer cannot discriminate between patents, and (iii) coverage is compulsory. The model highlights a set of peculiar strategic characteristics of insurance for legal expenditures which contribute to singling out the reasons underlying the underdevelopment of this market. We suggest that the crucial reason for such a failure is not adverse selection; consequently, we challenge the benefits of making coverage compulsory.","PeriodicalId":281709,"journal":{"name":"Intellectual Property Law eJournal","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127254648","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Disputed Quality of Software Patents","authors":"J. Allison, Ronald J. Mann","doi":"10.2139/ssrn.970083","DOIUrl":"https://doi.org/10.2139/ssrn.970083","url":null,"abstract":"We analyze the characteristics of the patents held by firms in the software industry. Unlike prior researchers, we rely on examination of the individual patents to determine which patents involve software inventions. This method of identifying the relevant patents is more laborious than the methods that previous scholars have used, but it produces a dataset from which we can learn more about the role of patents in the software industry. In general, we find that the patents computer technology firms obtain on software inventions have more prior art references, claims, and forward citations than the patents the same firms obtain on non-software inventions. We also find that the patents that software firms obtain on software inventions also have more prior art references, claims, and forward citations than the software patents obtained by the firms that derive revenues from other product lines. Finally, we conclude that the patents of the largest firms are no better (or worse) than the patents of the smallest firms, belying the idea that large firms are plagued by challenges based on the worthless patents of their smaller competitors. The paper closes with a brief discussion of the implications of our empirical analysis. The findings undermine the strongest criticisms about the low quality of software patents. It is simply not accurate to say that software patents as a class have remarkably low numbers of prior art references and forward citations. Thus, they cut against technology-based patent reforms designed to make it more difficult to obtain software patents. On the other hand, the evidence that small firms are no less capable than large firms at producing quality patents vitiates concerns that higher hurdles at the early stage of the patenting process would disadvantage smaller inventors in particular.","PeriodicalId":281709,"journal":{"name":"Intellectual Property Law eJournal","volume":"16 6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128532282","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Free Market Economics Provides the 'Obvious' Solution","authors":"J. Pohl","doi":"10.2139/ssrn.962556","DOIUrl":"https://doi.org/10.2139/ssrn.962556","url":null,"abstract":"Perhaps the most fundamental question in patent law is whether or not a given invention is patentable. Nonetheless, despite a half century of experience with the modern patent statute, this question still cannot be answered reliably. Courts use one of two conflicting approaches. The subjective approach better empowers courts to revoke \"junk patents.\" The objective approach provides a more predictable decision-making procedure. Given the negligible economic detriment caused by \"junk patents,\" the subjective approach appears to undermine judicial predictability needlessly.","PeriodicalId":281709,"journal":{"name":"Intellectual Property Law eJournal","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-02-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127285735","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Next Ten Years in Copyright Law: An Asian Perspective","authors":"Mary W. S. Wong","doi":"10.2139/SSRN.1017144","DOIUrl":"https://doi.org/10.2139/SSRN.1017144","url":null,"abstract":"This paper was prepared for the Queen Mary (UK) - Fordham Law School (US) - IP Academy (Singapore) London Trilogue in February 2007. It aims to briefly predict some of the copyright issues that are likely to present significant legal and policy challenges over the next ten years. The discussion is based on certain recent trends and developments, such as a proliferation of bilateral free trade agreements, the rise of user-generated content, and the growth of the free software/open source and access to knowledge movements.","PeriodicalId":281709,"journal":{"name":"Intellectual Property Law eJournal","volume":"75 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114209444","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Intellectual Property as a Carrot for Innovators: Using Game Theory to Show the Limits of the Argument","authors":"C. Engel","doi":"10.2139/ssrn.968941","DOIUrl":"https://doi.org/10.2139/ssrn.968941","url":null,"abstract":"Policymakers all over the world claim: no innovation without protection. For more than a century, critics have objected that the case for intellectual property is far from clear. This paper uses a game theoretic model to organise the debate. It is possible to model innovation as a prisoner's dilemma between potential innovators, and to interpret intellectual property as a tool for making cooperation the equilibrium. However, this model rests on assumptions about cost and benefit that are unlikely to hold, or have even been shown to be wrong, in many empirically relevant situations. Moreover, even if the problem is indeed a prisoner's dilemma, in many situations intellectual property is an inappropriate cure. It sets incentives to race to be the first, or the last, to innovate, as the case may be. In equilibrium, the firms would have to randomise between investment and non-investment, which is unlikely to work out in practice. Frequently, firms would have to invent cooperatively, which proves difficult in larger industries.","PeriodicalId":281709,"journal":{"name":"Intellectual Property Law eJournal","volume":"1804 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129666525","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}