Proxy Signals: Capturing Private Information for Public Benefit

Washington U. Law Review, Vol. 90, No. 1, 2012

Temple University Legal Studies Research Paper No. 2012-15

62 Pages Posted: 29 Mar 2012 Last revised: 17 Jun 2016

Gregory N. Mandel

Temple University - James E. Beasley School of Law

Date Written: March 28, 2012

Abstract

This Article presents an original empirical methodology to identify which patent laws will best promote optimal incentives to innovate for society. Vociferous debates over patent reform pit the United States’ largest innovation industries against each other in a dispute concerning whether stronger or weaker patent rights are necessary to promote innovation. Past efforts to answer this question have been thwarted by an inability to parse the impossibly complex social and legal relationship between innovation and patent law. Rather than considering such problems directly, the proxy technique introduced here offers a new framework to leverage indirect signals that capture better information than previously available concerning how best to promote incentives to innovate. In certain contexts, it is possible to use empirical information about the trade-off between the incentives and exclusivity costs of patent law to identify particular private industries that (1) face trade-offs equivalent to those that society faces, and (2) possess far superior information concerning how best to balance such trade-offs. Where industries satisfy both criteria, their private preferences will happen to align with social innovation objectives and can be mined for previously untapped, socially beneficial information. The proxy signal approach provides a new public choice methodology, designed to leverage the strength of collective private industry and market knowledge, in a manner that can be applied to other legal domains beyond patent law.

Keywords: intellectual property, patent, innovation, law and economics

JEL Classification: K10, K20, K30, O30, O31, O32, O33, O34

Suggested Citation

Mandel, Gregory N., Proxy Signals: Capturing Private Information for Public Benefit (March 28, 2012). Washington U. Law Review, Vol. 90, No. 1, 2012; Temple University Legal Studies Research Paper No. 2012-15. Available at SSRN: https://ssrn.com/abstract=2030414

Gregory Mandel (Contact Author)

Temple University - James E. Beasley School of Law ( email )

1719 N. Broad Street
Philadelphia, PA 19122
United States
(215) 204-2381 (Phone)

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