Abstract

http://ssrn.com/abstract=1441987
 


 



Costly Intellectual Property


Jonathan S. Masur


University of Chicago - Law School

David Fagundes


Southwestern Law School

April 1, 2012

Vanderbilt Law Review, vol. 64
University of Chicago Institute for Law & Economics Olin Research Paper No. 596
U of Chicago, Public Law Working Paper No. 383

Abstract:     
Though they derive from the same constitutional source of law, patents and copyrights vest very differently. Patents arise only after an applicant successfully navigates a cumbersome and expensive examination, while copyrights arise costlessly upon mere fixation of a work in a tangible medium of expression. Each of these vesting systems has drawn much criticism. Some scholars argue that the patent examination system imposes heavy costs while failing to eliminate invalid patents. Each of these claims, though, fails to take into account the social benefits (or costs) associated with the screening mechanism (or lack thereof) required for owners to perfect their rights. The social-welfare implications of process costs have been studied in other settings, but largely ignored in the intellectual property (IP) literature. In this Article, we leverage the insights of this literature to craft a novel theory showing why the much-maligned patent and copyright vesting systems are actually socially beneficial. Our analysis rests on a descriptive account of how patents and copyrights create differential social and private values, and shows that costly screens select differently across the classes of value in each of these cases, so that process costs are warranted in the patent setting but undesirable for copyright. Finally, we abstract the insights of this paper to generate two more general insights about law. First, we illustrate how this analysis of costly screens generates a broader account of how law does and should govern processes for vesting IP rights. In so doing, we offer a novel and unified theory of IP process. Second, we explore how our discussion of process costs in the IP setting illuminates the underappreciated benefits and costs of screens in other areas of law.

Number of Pages in PDF File: 68

Keywords: intellectual property, patent, copyright

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Date posted: August 2, 2009 ; Last revised: September 19, 2012

Suggested Citation

Masur, Jonathan S. and Fagundes, David, Costly Intellectual Property (April 1, 2012). Vanderbilt Law Review, vol. 64; University of Chicago Institute for Law & Economics Olin Research Paper No. 596; U of Chicago, Public Law Working Paper No. 383. Available at SSRN: http://ssrn.com/abstract=1441987 or http://dx.doi.org/10.2139/ssrn.1441987

Contact Information

Jonathan S. Masur
University of Chicago - Law School ( email )
1111 E. 60th St.
Chicago, IL 60637
United States
773.702.5188 (Phone)
HOME PAGE: http://www.law.uchicago.edu/faculty/masur/
David Fagundes (Contact Author)
Southwestern Law School ( email )
3050 Wilshire Blvd.
Los Angeles, CA 90010
United States
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