Table of Contents

Firm Size and the Impact of Securities Regulation

Douglas J. Cumming, York University - Schulich School of Business
April M. Knill, Florida State University
Nela Thomas Richardson, Commodity Futures Trading Commission (CFTC)

Joint Copyrights Management by Collecting Societies and Online Platforms: An Economic Analysis

Christian Handke, Erasmus University Rotterdam (EUR) - Faculty of History and Arts

Hollywood Creative Accounting: The Success Rate of Major Motion Pictures

Sergio Sparviero, University of Salzburg

Secrecy and Patents: Evidence from the Uniform Trade Secrets Act

Ivan P. L. Png, National University of Singapore

U.S. Court Upholds Antitrust Action Against Patent Troll

Michael A. Carrier, Rutgers University School of Law - Camden

Ongoing Royalties in Patent Cases After eBay: An Empirical Assessment and Proposed Framework

Christopher B. Seaman, Washington and Lee University School of Law

A Unitary Patent for a (Dis)United Europe: The Long Shadow of History

Aurora Plomer, University of Sheffield - School of Law

Editorial Notes

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Sponsored by the Kauffman Foundation

"Firm Size and the Impact of Securities Regulation" Free Download
Journal of Comparative Economics, Forthcoming

DOUGLAS J. CUMMING, York University - Schulich School of Business
APRIL M. KNILL, Florida State University
NELA THOMAS RICHARDSON, Commodity Futures Trading Commission (CFTC)

Using a newly-assembled dataset of 45,220 firms across 46 countries spanning the years 1996-2007, we find incongruent effects of regulation across firm size. We find that public enforcement facilitates small firm security issuance, while private enforcement benefits large firms more than small firms. However, once small firms access equity markets, private enforcement enhances the amount of equity capital raised in domestic markets. Stronger public enforcement gives rise to larger firms raising capital internationally. Comprehensively, results suggest that public (private) enforcement is more (less) consequential to firm-level access to capital than previously believed.

"Joint Copyrights Management by Collecting Societies and Online Platforms: An Economic Analysis" Free Download

CHRISTIAN HANDKE, Erasmus University Rotterdam (EUR) - Faculty of History and Arts

This paper discusses the effects of technological change on joint (copy)rights management (JRM). The economic literature discusses JRM as a response to relatively high transaction costs in complex markets for copyright works. Based on a formal analysis, we show that JRM reduces the average transaction costs per transaction and the total number of transactions under a broad range of conditions. Throughout the 20th Century, JRM was mostly conducted by copyrights holder collectives. Recently, private for-profit online platforms are taking on core functions of JRM. Our formal analysis yields two essential results: (1) the efficient scale and scope of JRM will increase as copyright works are increasingly traded via digital ICT networks; (2) a change from collective JRM on behalf of rights holders to commercial intermediation weakens the position of rights holders, and will aggravate problems with the private provision of copyright works with public good attributes.

"Hollywood Creative Accounting: The Success Rate of Major Motion Pictures" Free Download
Media Industries Journal 2.1, ISSN: 2373-9037

SERGIO SPARVIERO, University of Salzburg

Academic, trade, and popular publications commonly assert that 80 percent of motion pictures fail to make a net profit, suggesting also that the main players of the motion picture industry operate in highly volatile market conditions. More importantly, major film companies use this argument to negotiate for better terms with their production and distribution partners, to lobby for stricter copyright protections, and to argue in favor of media conglomeration as a hedge against adverse market conditions. This article disputes these assertions by calculating the full range of income that major motion pictures derive from their primary and secondary markets. It demonstrates that a large share of studio films are ultimately profitable, therefore challenging the arguments that conglomerates make with industry partners and government policy makers.

"Secrecy and Patents: Evidence from the Uniform Trade Secrets Act" Free Download

IVAN P. L. PNG, National University of Singapore

Stronger trade secrets law affects patenting in conflicting ways. By strengthening appropriability and protecting work in progress, stronger trade secrets law raises the return to commercialization and increases patenting. However, stronger trade secrets law possibly induces businesses to substitute secrecy for patents.

Here, I exploit differences in the timing of the Uniform Trade Secrets Act (UTSA) in U.S. states to study the effect of stronger legal protection of trade secrets on patenting. The UTSA was associated with about 7 percent more patents in discrete technology industries but no significant change in complex technology industries. The effects are concentrated among larger and older businesses, technology leaders, and those subject to more intense competition.

These findings are consistent with stronger legal protection of trade secrets leading businesses to exploit more inventions and to substitute secrecy for patenting, to degrees varying by business and industry circumstances.

"U.S. Court Upholds Antitrust Action Against Patent Troll" Free Download
e-Competitions Bulletin, No. 73428, May 2015

MICHAEL A. CARRIER, Rutgers University School of Law - Camden

On March 2, 2015, Judge Paul W. Grimm of the U.S. District Court for the District of Maryland offered a wide-ranging analysis of antitrust claims against the conduct of famous “patent troll� Intellectual Ventures (IV). IV sued Capital One for patent infringement, Capital One sought to amend its Answer and Counterclaims to add antitrust counterclaims, and, in this opinion, Judge Grimm allowed this amendment. The opinion in Intellectual Ventures v. Capital One is important for three primary reasons.

The first involves market definition. The court defined the relevant market narrowly to cover only IV’s patent portfolio. In moving “upstream� to patents, such a maneuver is not constrained by the limits of customer demand and whether products can be substituted in a “downstream� product market.

The second development centers on predatory monopolization conduct. The court plowed new ground in finding monopolization based on the acquisition of a patent portfolio. It distinguished between a “bona fide� patent acquisition and IV’s process of working backwards from product to patent, locating companies with sunk product investments and then suing them for patent infringement.

Third, the court resuscitated the oft-criticized Brown Shoe case and its incipiency standard. The court offered just such a framework in asserting that “it may be that Plaintiffs’ first 10, or 100, or 1,000 patent acquisitions did not violate § 7,� but that “at some point, the acquisitions...created a monopoly and crossed the line to actionable under § 7.�

In short, the decision in Intellectual Ventures v. Capital One offers an aggressive roadmap for the antitrust analysis of patent trolls. This court can provide more guidance as the case goes forward, as the framework promises to have a significant effect on patent trolls, particularly in their acquisition and use of patent portfolios.

"Ongoing Royalties in Patent Cases After eBay: An Empirical Assessment and Proposed Framework" Free Download
23 Texas Intellectual Property Law Journal 203 (2015)

CHRISTOPHER B. SEAMAN, Washington and Lee University School of Law

The Supreme Court’s landmark decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 288 (2006), significantly changed the remedial landscape for patent owners, holding that a permanent injunction would not automatically follow a finding that an asserted patent was infringed and not invalid. As a result, a substantial number of prevailing patentees have been denied the ability to exclude future acts of infringement. eBay’s impact is perhaps most acute for patent assertion entities (“PAEs�) — firms that own, license, and assert patents in litigation, but do not themselves directly practice the patented technology — who rarely can satisfy eBay’s four-factor test.

In eBay’s wake, the Federal Circuit has approved an alternative prospective remedy called an ongoing royalty. But despite lower courts’ increasing use of this remedy, numerous questions about the structure and methodology for determining an ongoing royalty remain unresolved. This Article addresses the issue of ongoing royalty awards from both an empirical and doctrinal perspective. First, it reports the results of an original empirical study regarding ongoing royalty awards by district courts since eBay. Second, it proposes a new framework for computing an ongoing royalty that requires consideration of actual or anticipated changes to the relevant product market, as well as potential future alternatives to the patented technology, in determining the amount of an ongoing royalty award.

"A Unitary Patent for a (Dis)United Europe: The Long Shadow of History" Free Download
International Review of Intellectual Property and Competition Law, August 2015

AURORA PLOMER, University of Sheffield - School of Law

The international patent system is undergoing a profound transformation towards ever greater global integration of institutions and harmonization of standards. The movement for unification of the European patent system is part of this wider global trend, but the unification goal has proved difficult to realize in Europe notwithstanding persistent efforts dating back to the end of WWII. This paper draws on confidential archived documents to retrace the early origins and evolution of the European unification movement to examine what can be learnt from history. In line with recent historiographies of the synergies and rivalries between international organizations and the European community, the paper reveals three phases in the evolution of norms and institutions in the unification movement in Europe. In the first phase, the European unification project is driven by the Council of Europe as part of an abstract ideal of European integration and is characterized by a ‘co-existence’ model based on common denominators in national laws. In the second phase, the harmonization agenda is taken over by the European Community and its rationale morphed into the community’s goal of (dis)integration of national patent laws and their replacement by a uniform and autonomous patent community system as a strategic tool for the realization of the common market. But the EC’s initiative is frustrated and results instead in partial harmonization with the adoption of the European Patent Convention in 1973 and the creation of the European Patent Organization. This opens a third phase and problematic for the European community which is having to integrate a pivotal external institution into a unified legal architecture to serve the community’s goals. The last part of the paper illustrates with a case study how the shadow of the past has left its imprint in the disjointed and overly complex legal architecture of the latest patent unification initiative in the form of the EU ‘patent package’ which was given the green light by the Grand Chamber of the Court of Justice of the European Union on 5th May 2015 and whose effect, it is argued, is to enlarge the role of the EPO whilst leaving the EPO outside the legal reach of the European Union.


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