Comparing Alternative Institutional Paths to Patent Reform

Abstract:     
[enter Abstract Body]In light of the significant cost of legal change in an economic climate that can little afford wasted expense it has become imperative to re-examine costs associated with alternative avenues for achieving legal reform. This is particularly true in areas such as patent law which involve complex and interrelated bodies of statutory law, common law and agency regulation that are closely intertwined with private market practices - leaving open multiple options for change through processes with divergent characteristics and costs. Change in the law does not happen instantaneously or in a vacuum, yet the cost and consequences of transition are frequently neglected in considerations of legal change. Despite vigorous and prolonged debate over the content of patent reform, for example, Congress and commentators alike have failed to address the transition costs associated with legislating change and to explore institutional choice for changing the law as a way of managing these costs. Bridging a gap in the literature on legal change and, more specifically, patent law change, I propose an approach in which alternative mechanisms for patent law change are characterized and compared solely in terms of selected characteristics likely to influence transition cost. The variables selected are variance, specificity, speed and participation - dimensions of legal process that are both likely to differ across alternative institutional processes and to have a significant impact on transition costs. This approach provides a systematic way of examining the cost consequences of institutional choice in enacting law change. Examples are drawn from the current patent reform bill to illustrate how careful institutional choice might result in lower transition costs and to suggest when judicial decision making or private market norms and standards might become more attractive mechanisms than legislation for bringing about patent law change. I also suggest, however, that the current political climate, characterized by high expectations of strong leadership and broad economic change, may alter and even reduce some of the comparative costs of legislating change. If Congress is serious about reforming patent law in order to reap economic gain, it should not ignore its own opportunities for cost savings through careful process design.

Number of Pages in PDF File: 74

Keywords: cost of change, patent reform

Accepted Paper Series