Critical Analysis: Property Rules, Liability Rules, and Molecular Futures - Bargaining in the Shadow of the Cathedral

GENE PATENTS AND CLEARING MODELS: FROM CONCEPTS TO CASES, Geertrui Van Overwalle, ed., Cambridge University Press, 2009

UC Irvine School of Law Research Paper No. 2009-12

14 Pages Posted: 14 Mar 2009 Last revised: 5 Oct 2015

Dan L. Burk

University of California, Irvine School of Law

Date Written: 2009

Abstract

This chapter from the forthcoming Cambridge University Press volume Gene Patents and Clearing Models: From Concepts to Cases comments on the international FAO treaty for sharing genetic resources and on proposals by Rai et al. to create a shared testing system for small molecule pharmaceutical development. Both of these intellectual property distribution models incorporate liability rule regimes that include aspects of options markets. In this chapter, I attempt to situate the FAO treaty and the Rai et al proposal within both the landscape of property theory and the existing literature on real options. To do so I draw upon recent literature analyzing property and liability rules from the standpoint of options and information theory. Although the literature on intellectual property and real options is currently sparse, I suggest that this approach has much to tell us about the development of systems for intellectual property liability regimes, particularly the incentive choices that might guide us to choose them or to reject them. I conclude with some observations regarding the allocative choices that we might make in a proposal like that of Rai et al, including some possibilities not considered in their paper.

Keywords: intellectual property, seeds, small molecules, pharmaceuticals, real options, patents, property rules, liability rules, trade secrets, FAO treaty

JEL Classification: O31, O32, O33, O34, O38, L65, Q13, Q16, Q17, D82, H41

Suggested Citation

Burk, Dan L., Critical Analysis: Property Rules, Liability Rules, and Molecular Futures - Bargaining in the Shadow of the Cathedral (2009). GENE PATENTS AND CLEARING MODELS: FROM CONCEPTS TO CASES, Geertrui Van Overwalle, ed., Cambridge University Press, 2009; UC Irvine School of Law Research Paper No. 2009-12. Available at SSRN: https://ssrn.com/abstract=1359216

Dan L. Burk (Contact Author)

University of California, Irvine School of Law ( email )

4500 Berkeley Place
Irvine, CA 92697-1000
United States
949-824-9325 (Phone)

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