ICLE Academic Affiliate Adam Mossoff was a guest on National Public Radio’s Planet Money podcast to discuss the purpose and value of patents in the economy.  The full episode is embedded below.

MALONE: Adam Mossoff – law professor at George Mason University, patent expert, and knows a lot about how patents get turned into actual, you know, money.

MOSSOFF: You know, patents are property rights, and they, like all property rights, might lead to great success or may not.

MALONE: Property rights. And Adam gave us this comparison that I find really useful. He said, you know, a patent is just an idea sketched out and then legally tied to the inventor. And that really is kind of like somebody who say, you know, just owns a piece of vacant land.

BERAS: Yeah. Adam says vacant land isn’t inherently a business. Its owner would have to figure out what to do with it.

MOSSOFF: They can sit and wait for the land to grow in value. They can lease it out and become a landlord. They can build a factory on it. They can build an office building on it. They can build a home. And then, they can sell that home.

Abstract

Universities are encouraged to undertake research through grants from government agencies, foundations, and other organizations. The Bayh-Dole Act reinforces this incentive structure by allowing universities to take ownership of the resultant patents. Included in these rights is the ability to generate income by licensing patents and bringing patent infringement lawsuits. Undoubtedly, exercising these rights to financially benefit the university is economically rational. But might such actions also impose a cost on the public despite the fact that these very patents arose from public research subsidies?

This study examines the relationship between a university’s research expenditures and its likelihood to litigate patent infringement claims. It finds that research expenditures increase litigation frequency, suggesting that universities may use funds earmarked for research and innovation on patent litigation. We argue that patent rights provided by the Bayh-Dole Act may motivate this phenomenon—which encourages universities to seek rents, rather than pursue innovation. Our study adds to the extant literature about firm behavior, describing universities as vertical integrators as well as horizontal coordinators. It further suggests that these coordinations inure to a university’s private benefit—but not necessarily the benefit of the public, for which universities are ostensibly organized.

In the world of video games, the process by which players train themselves or their characters in order to overcome a difficult “boss battle” is called “leveling up.” I find that the phrase also serves as a useful metaphor in the context of corporate mergers. Here, “leveling up” can be thought of as acquiring another firm in order to enter or reinforce one’s presence in an adjacent market where a larger and more successful incumbent is already active.

Read the full piece here.

Abstract

The battle over rules governing 5.9 GHz airwaves offers important lessons in both the creation of property rights and applied public choice. Set aside in 1999, the 75 MHz “Car Band” band was designated by the U.S. Federal Communications Commission (FCC) to support emerging vehicle telematics and computerized driving. Transportation regulators and automakers, including General Motors, Ford, and BMW, claimed this would efficiently promote road safety, fuel savings, and collision avoidance, as dedicated bandwidth would operate under a “spectrum commons” regime designed to favor such applications. While anticipated services gradually developed, the 5.9 GHz band did not. Spectrum inputs outside the “Car Band” accommodated driving applications, while the general development of wireless networks shifted social priorities. Eventually, Internet services companies such as Comcast, Google and Microsoft claimed the 75 MHz allocation was wastefully large and that switching access rules to favor WiFi would generate net benefits. Suggested for possible reallocation by the U.S. Department of Commerce since 2012, the FCC issued an order in 2020 to split the baby: 45 MHz of the band would be shifted to Wi-Fi, with 30 MHz remaining dedicated for Intelligent Transportation Systems. The FCC’s 2020 “Cost Benefit Analysis” purports to quantify the trade-offs involved, but upon scrutiny fails to plausibly value Wi-Fi services or to even consider the relevant opportunity costs. The costly, delay-intensive and ad hoc policy process (whose costs are additionally ignored by the FCC) begs for further development of auction mechanisms to rationalize alternative rights assignments.

Not only have digital-image generators like Stable Diffusion, DALL-E, and Midjourney—which make use of deep-learning models and other artificial-intelligence (AI) systems—created some incredible (and sometimes creepy – see above) visual art, but they’ve engendered a good deal of controversy, as well. Human artists have banded together as part of a fledgling anti-AI campaign; lawsuits have been filed; and policy experts have been trying to think through how these machine-learning systems interact with various facets of the law.

Read the full piece here.

In our previous post on Gonzalez v. Google LLC, which will come before the U.S. Supreme Court for oral arguments Feb. 21, Kristian Stout and I argued that, while the U.S. Justice Department (DOJ) got the general analysis right (looking to Roommates.com as the framework for exceptions to the general protections of Section 230), they got the application wrong (saying that algorithmic recommendations should be excepted from immunity).

Read the full piece here.

At the Jan. 26 Policy in Transition forum—the Mercatus Center at George Mason University’s second annual antitrust forum—various former and current antitrust practitioners, scholars, judges, and agency officials held forth on the near-term prospects for the neo-Brandeisian experiment undertaken in recent years by both the Federal Trade Commission (FTC) and the U.S. Justice Department (DOJ). In conjunction with the forum, Mercatus also released a policy brief on 2022’s significant antitrust developments.

Read the full piece here.

Abstract

In bpost and Nordzucker the Grand Chamber of the European Court of Justice has finally arrived at a unified test for ne bis in idem, applicable to all areas of EU law. It rejected the antitrust-specific threefold condition of idem (same offender, same facts, and same protected legal interest) developed in Aalborg Portland and Toshiba, and focused solely on material acts, in line with Van Esbroek and Menci. The judgements are extremely timely given the increasing risks of overlapping decisions as a result of recent legislative initiatives undertaken at EU and national level targeting large online platforms. The paper maintains that, although bpost and Nordzucker are welcomed, some relevant issues remain unaddressed and may undermine the sound implementation of the ne bis in idem principle in the digital economy.

ICLE Chief Economist Brian Albrecht was a guest on the Federal Drive with Tom Temin podcast to discuss new rules proposed by the Federal Trade Commission (FTC) to ban workplace noncompete agreements. The full episode is embedded below.