Alternatives to IPRsLect 4 BW

Alternatives to IPRsLect 4 BW - EEP 143 Lecture 4 Outline...

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EEP143Lecture4Wright07 EEP 143 Lecture 4 Outline • Briefly: More on public goods, monopoly and price discrimination Ex ante versus ex post views of incentives and intellectual property rights (“IPRs”) • Alternatives to IP protection
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EEP143Lecture4Wright07 News (from Kevin Perkins) House Expected to Vote on Contentious Patent Reform Bill Friday WASHINGTON (AP) -- The House this week is planning to take up a contentious patent reform bill that seeks to curtail infringement lawsuits that have resulted in large damage awards against companies such as Microsoft Corp. The House bill, sponsored by Reps. Howard Berman, D-Calif., and Lamar Smith, R-Texas, would increase the information available to patent examiners and set up a process to re-evaluate patents after they are granted. Supporters argue such post-grant reviews would help weed out patents for minor innovations and overly broad patents by allowing companies to challenge them without having to go through litigation. The House Judiciary Committee unanimously approved the legislation in July, and the Senate Judiciary Committee has approved a similar bill.
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EEP143Lecture4Wright07 - p Clocks Demand curve Marginal cost Private Goods: The competitive market is efficient price = marginal cost: Why is that efficient? What if a template must be developed?
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EEP143Lecture4Wright07 From last class: Price Discrimination • What is price discrimination? • Who gains from perfect price discrimination? • Who gains from imperfect price discrimination? Is imperfect price discrimination always bad? Example? • We’ll revisit these important questions later in the course
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EEP143Lecture4Wright07 knowledge that “DNA is a double helix” software digital music What do these have in common?
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EEP143Lecture4Wright07 • High cost to create • Zero (or low) cost to distribute to users • High cost to control access and use • Are these advantages or disadvantages?
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EEP143Lecture4Wright07 • So far, discussion has considered efficiency of use of an existing innovation, an “ex post” perspective: – Assumes the invention has been made
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EEP143Lecture4Wright07 Ex ante vs. ex post incentives • In general, opponents of IP emphasize the cost of limiting access to existing inventions. (examples?) • In general, American and British economists stress the inventive effects of IP for future inventions
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EEP143Lecture4Wright07 Ex ante vs. ex post incentives • There is also a European tradition: inventor has a moral right to her invention • Many lawyers view the patent grant as an exchange of monopoly right for disclosure of the innovation and how to make it
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EEP143Lecture4Wright07 Ex ante vs. ex post incentives • Ex ante, IP decentralizes innovation incentives – No negotiation before inventing – No grant application – “users” rather than taxpayers pay • (cf. Dutch art market support)
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EEP143Lecture4Wright07 Many lawyers, some economists assume IPRs are the correct means of rewarding invention Here, 1. Start by modeling the problem 2. See if IPRs are the solution
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This note was uploaded on 08/01/2008 for the course ECON 143 taught by Professor Wright during the Fall '07 term at University of California, Berkeley.

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Alternatives to IPRsLect 4 BW - EEP 143 Lecture 4 Outline...

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