The Nature of Sequential Innovation

80 Pages Posted: 24 Jan 2017 Last revised: 5 Aug 2018

See all articles by Christopher Buccafusco

Christopher Buccafusco

Benjamin N. Cardozo School of Law

Stefan Bechtold

ETH Zurich

Christopher Jon Sprigman

New York University School of Law

Date Written: January 20, 2017

Abstract

When creators and innovators take up a new task, they face a world of existing creative works, inventions, and ideas, some of which are governed by intellectual property (IP) rights. This presents a choice: Should the creator pay to license those rights? Or, alternatively, should the creator undertake to innovate around them? Our Article formulates this “build on/build around decision” as the fundamental feature of sequential creativity, and it maps a number of factors—some legal, some contextual—that affect how creators are likely to decide between building on existing IP or building around it. Importantly, creators are influenced by more than just formal IP rights. We identify three other sets of factors—(1) Technological and Artistic, (2) Market, and (3) Creator—that can also affect the path of sequential innovation by encouraging either building on or building around. Our focus on creators’ build on/build around decisions offers a richer, but more complex, account of the nature of sequential innovation and, in so doing, yields insights into its efficient legal regulation.

Keywords: patent, copyright, growth, theory of the firm, make or buy, bargaining, licensing, value, markets, consumer, tastes, creativity, Taylor Swift

Suggested Citation

Buccafusco, Christopher J. and Bechtold, Stefan and Sprigman, Christopher Jon, The Nature of Sequential Innovation (January 20, 2017). William & Mary Law Review, Vol. 59, 2017; Cardozo Legal Studies Research Paper No. 510. Available at SSRN: https://ssrn.com/abstract=2902937 or http://dx.doi.org/10.2139/ssrn.2902937

Christopher J. Buccafusco (Contact Author)

Benjamin N. Cardozo School of Law ( email )

55 Fifth Ave.
New York, NY 10003
United States

Stefan Bechtold

ETH Zurich ( email )

IFW E 47.2
Zurich, 8092
Switzerland
+41-44-632-2670 (Phone)

HOME PAGE: http://www.ip.ethz.ch/people/bechtold

Christopher Jon Sprigman

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

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