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Summary

The regulation of innovation and the optimal design of legal institutions in an environment of uncertainty are two of the most important policy challenges of the twenty-first century. Innovation is critical to economic growth. Regulatory design decisions, and, in particular, competition policy and intellectual property regimes, can have profound consequences for economic growth. However, remarkably little is known about the relationship between innovation, competition, and regulatory policy.

Any legal regime must attempt to assess the tradeoffs associated with rules that will affect incentives to innovate, allocative efficiency, competition, and freedom of economic actors to commercialize the fruits of their innovative labors. The essays in this book approach this critical set of problems from an economic perspective, relying on the tools of microeconomics, quantitative analysis, and comparative institutional analysis to explore and begin to provide answers to the myriad challenges facing policymakers.

Available from Cambridge University Press

On November 9, the en banc US Court of Appeals for the Federal Circuit heard oral arguments in an extremely important patent infringement case (mp3 of oral argument here). Hanging in the balance are the very incentives for technological innovation and the seeds of economic progress. The arguments made in the case by the infringer, EchoStar, would have the effect of reducing the certainty and thus the efficacy of patent rights by weakening the ability of the courts to define and enforce patents clearly, quickly and efficiently. While for some commentators this is probably a feature, and not a bug, of EchoStar’s position, I find its stance and its claims to be extremely troublesome.

Read the full piece here. 

Summary

“Michael Carrier has written a timely and interesting book. There is much to like about the book, in particular its accessible format and content. I do fear that it is a bit overly ambitious, however, hoping both to educate the completely uninitiated as well as to develop a more advanced agenda, and at times it reads like two separate books. I suppose related to this criticism are my more detailed comments, which perhaps distill down to this: The book repeatedly and appropriately canvasses both sides of some pretty heated debates, nicely presenting the most basic arguments, and suggesting if not saying that these are matters about which we are profoundly uncertain. Nevertheless, with what seems to me to be little support (and with only essentially anecdotal empirical support), Carrier then chooses sides.

For example, the concept of the innovation market is contentious and unsettled. Carrier presents truncated versions of both sides of this debate and then summarily votes in favor of innovation markets, slyly offering to confine the analysis to pharmaceutical industry mergers, but nevertheless offering a “framework for innovation-market analysis.” Frankly, the framework strikes me as little more than a stylized merger analysis under the Guidelines, with a “Schumpeterian Defense” thrown in for good measure (but extremely limited, and essentially the same as the traditional failing firm defense). I see little here to suggest that the innovation market analysis, even as styled by Carrier, will do much effectively to incorporate dynamic efficiency concerns into antitrust. And there are other examples. I would have preferred to see a book that went into far greater depth in defending these sorts of choices among uncertain alternatives.”