Governing the Digital Commons

" Governing the Digital Commons ," 59 Proc. Haw. Int’l Conf. Sys. Sci. 4369 (2026) (with Madelyn Rose Sanfilippo, Brett M. Frischmann and Michael J. Madison)

"Governing the Digital Commons," 59 *Proc. Haw. Int’l Conf. Sys. Sci.* 4369 (2026) (with Madelyn Rose Sanfilippo, Brett M. Frischmann and Michael J. Madison)

Madelyn Rose Sanfilippo et al., Governing the Digital Commons, 59 Proc. Haw. Int'l Conf. Sys. Sci. 4369 (2026)

Madelyn Rose Sanfilippo
Brett M. Frischmann
Michael J. Madison
Katherine J. Strandburg

In modern sociotechnical systems, digital commons, as the co-production of data or knowledge and community via networked systems (e.g., de Rosenay, 2020;Morell, 2014), are increasingly prevalent and visible. Along with the people and digital resources produced, governance regarding participation, access, and use of data and knowledge is necessary to foster engagement (Madison et al., 2009). Such commons governance is polycentric, with many centers of decisionmaking, addressing both dilemmas associated with underlying knowledge resources and dilemmas associated with shared communication and coordination strategies needed to produce effective governance itself (Sanfilippo & Strandburg, 2021). From platforms dedicated to crowd-sourcing and online creation communities-including MTurk, Upwork, Wikipedia, and FoldIt-to emergent subcommunities dedicated to everything from social movements to niche hobbies, via Facebook Groups or specific Toks, modern networked interactions produce significant information resources as digital commons (Fuchs, 2020;Kwet, 2020). This mini-track explores community governance of innovation and creativity, immaterial resources long associated with intellectual property from an interdisciplinary perspective via the lens of the Governing Knowledge Commons (GKC) framework. The GKC framework (Frischmann et al., 2014) structures institutional analysis of a variety of knowledge commons, including digital commons, in order to identify strategies, norms, and rules that structure participation in and knowledge resources throughout their lifecycle. The framework, rooted in the Institutional Analysis and Development (IAD) framework, specifically applies to data, information, and knowledge resources and processes and interactions that govern and shape them (Sanfilippo et al., 2021). Through this approach, it is possible to analyze that which makes governance of intangible information and data resources unique, as well as analyze and compare the processes by which strategies, norms, and rules regarding things like online privacy and security, trust and safety, and data quality develop and change over time and across contexts. Considering the interplay between these factors in complex realities, this mini-track presents three case studies that illustrate the pervasive nature of digital commons challenges in current events. In "Privacy Fragility in Direct-to-Consumer Genetic Testing: Lessons from the 23andMe Journey," Koltan, Magoon, and Yates conceptualize privacy fragility as heavily dependent on data governance over time, rather than simply on the static conditions under which data is collected, stored and used. The paper uses the case of the consumer genetic testing company, 23andMe, and its recent bankruptcy to explore governance failures in the digital commons constructed via interplay between consumers, genetic data, and commercial genomic data processors and aggregators. In "Governing Manipulative and Synthetic Content on Social Media Platforms," Kaushik and Sanfilippo explore the challenges with digital commons around sociotechnical content production and its impact on vulnerable community members, including teens and young adults. Through a case study of GenAI governance on social media platforms and third parties that produce advertisements for social media, analysis highlights the governance failure and loopholes that allow scams and deepfakes to manipulate and deceive users. These case studies highlight how social, cultural, political, and technical and economic elements and contexts are shape the characteristics of digital knowledge commons and associated governance, dilemmas, and shared resource management. The also suggest wider implications regarding, collective action problems in the modern digital economy which place stakeholders in tension with one another; this particularly clear around decision-makers with commercial interests in contrast with impacted users and data subjects who may be harmed by poor or insufficient governance. At a time when deepfakes, misinformation, and online manipulation, as well as data breaches, degradation of digital infrastructure, and pervasive ownership and intellectual property challenges around AI training data and generated materials pose such significant challenges across online communities and digitally mediated interactions, deeper understanding of effective governance is more important than ever. By identifying sources of governance conflict and failure, the mini-track aims to build conversation among interdisciplinary scholars to develop best practices and design principles that sustainably support crowd sourcing, data governance and protection, collaboration, peer production, and various other sociotechnical processes in healthy online and digitally mediated communities.


" Guest Column: Tarantino vs. Miramax — Behind the NFT ‘Pulp Fiction’ Case, and Who Holds the Advantage ," Hollywood Reporter , Nov. 2021 (with Kal Raustiala)

"Guest Column: Tarantino vs. Miramax — Behind the NFT ‘Pulp Fiction’ Case, and Who Holds the Advantage," *Hollywood Reporter*, Nov. 2021 (with Kal Raustiala)

Kal Raustiala & Christopher Jon Sprigman, Guest Column: Tarantino vs. Miramax — Behind the NFT ‘Pulp Fiction’ Case, and Who Holds the Advantage, Hollywood Reporter (Nov. 2021), https://www.hollywoodreporter.com/business/digital/tarantino-miramax-pulp-fiction-nft-1235052378/

Earlier this month Quentin Tarantino announced a planned sale of NFT’s, or “non-fungible tokens,” based off of his original hand-written script of Pulp Fiction. Within days Miramax, the studio that produced the iconic 1994 film, filed suit. The NFT goldrush, which started in obscure corners of the Internet and then moved to sports and art, has now reached Hollywood with full force. Tarantino’s attempt to recruit NFTs to give Pulp Fiction a second life has, unsurprisingly, already commanded a lot of attention. Who can “mint” NFTs related to an existing film or TV series — and what aspects can be minted — is a frontier rights question for the entertainment industry. Miramax’s lawsuit is the first big-name dust-up over it, but unlikely to be the last. Few if any existing contracts expressly discuss NFTs. Already murky ownership and intellectual property questions threaten to capsize some attempted NFT launches, perhaps including Tarantino’s. For these reasons, the Pulp Fiction suit offers a window on legal disputes to come. The details of exactly what Tarantino is proposing to sell are murky, but Miramax’s complaint and the website Tarantino has stood up to hawk the NFTs both offer clues. Tarantino’s website explains that the NFTs are linked to scanned images of handwritten early drafts of the Pulp Fiction script, replete with misspellings and cross-outs: Each NFT consists of a single iconic scene, including personalized audio commentary from Quentin Tarantino. The collector who will purchase one of these few and rare NFTs will get a hold of secrets from the screenplay and a glimpse into the mind and the creative process of Quentin Tarantino. The owner will enjoy the freedom of choosing between: 1. Keeping the secrets to himself for all eternity 2. Sharing the secrets with a few trusted loved ones 3. Sharing the secrets publicly with the world Tarantino’s claim that the NFTs “consist” of the images and audio commentary is misleading. NFTs don’t actually incorporate images or sound. They are simply small bits of code, recorded in blockchain. NFTs often contain a “hash” of some image—that is, a short cryptographic code—and some contain a link to an internet address that displays a copy of the image. The hash is not the image (or the sound file) and cannot be used to reproduce or display it. As we explain below, this is important from an intellectual property perspective. An NFT may also contain the seller’s cryptocurrency wallet address, and sometimes an address for a smart contract that governs future transactions in the NFT. In short, an NFT isn’t an image, or a sound file, and doesn’t contain either. So why is Tarantino selling NFTs along with the screenplay images and his audio musings? Doubtless in part to capitalize on all the hype NFTs have generated, and in part to ride the rush to all things ‘90s. But there is a deeper reason. NFTs are touted as a 21st century, blockchain-based version of the age-old paper certificate of authenticity. Still, as we’ve previously pointed out, if the point of NFTs is to identify a particular copy of some work of art as “authentic,” they are about as good — or as bad — as the paper certificates that we’ve been relying on forever. Yet perhaps because of their loose connection to booming cryptocurrencies, NFTs, as digital attestations of ownership, can command enormous valuations in the market. Indeed, the third-highest selling artwork in history by a living artist was attached to an NFT by the little-known artist Beeple, sold last spring by Christie’s for $69 million. The underlying art, of course, is readily available online — for free. Whatever the source of the magic of NFTs, Miramax would prefer that it, and not Tarantino, collect the potentially huge windfall at stake. And in an attempt to seize back the opportunity, Miramax accuses Tarantino of breach of contract and copyright and trademark infringement. Are those claims likely to succeed? The outcome of litigation is notoriously difficult to predict. But at this early stage, and barring new developments, we give a slight nod to Tarantino. Miramax’s breach of contract claim argues that their original 1993 contract with Tarantino gives them the right to mint NFTs related to Pulp Fiction. That claim faces a couple of hurdles. The first is that the contract doesn’t mention NFTs — not surprising as almost no one outside a small group of techno-savvy blockchain enthusiasts were even aware of the concept before this year. The second is that in the contract Tarantino explicitly reserves certain rights. Specifically, Tarantino retains the right to: print publication (including without limitation screenplay publication, “making of” books, comic books and novelization, in audio and electronic formats as well, as applicable). Whether Tarantino’s reserved right to screenplay publication covers the planned NFT sale is the core question in this dispute. Miramax says no, not because the contract prevents Tarantino from widely disseminating the screenplay, but for the exact opposite reason — Miramax claims that Tarantino doesn’t have the right to a restricted sale. Miramax argues that “the proposed sale of a few original script pages” is a “one time transaction” which isn’t “screenplay publication.” This argument is weak. Miramax is relying on the fact that under U.S. copyright law, distribution of only a small number of copies to a small number of recipients isn’t usually considered publication — unless no limitations are imposed on further distribution. And here, Tarantino is promising to give his buyers carte blanche to “shar[e] the secrets publicly with the world” — that is, if the buyer wishes, to email copies of the screenplay image to everyone he or she knows or even post it to the internet for all to see. Ironically, by promising to convey more rights to the buyer, Tarantino is better able to circumvent Miramax’s objections. As a result, it looks to us like Tarantino is acting within his reserved rights to publish the screenplay (or portions of it), including in audio and electronic formats. If Tarantino has the contractual right to sell images of portions of the script, there’s no breach of contract. And there’s no copyright infringement either — Tarantino can’t be deemed an infringer of materials the contract gives him the right to copy and distribute to the public. Miramax also challenged Tarantino’s unauthorized use of imagery on his NFT auction website—specifically, cartoon illustrations of the characters played by John Travolta and Samuel L. Jackson. Characters are copyrightable, so these illustrations are indeed potentially infringing. Miramax is on much stronger ground here, and perhaps in acknowledgement, Tarantino has already replaced the cartoon drawings of the beloved Pulp Fiction hitmen with a headless figure wearing a suit that simply looks similar to the suits those characters wore in the film. It’s imaginable that the court might find that Tarantino’s initial use of the characters was infringing, but that already-rectified misstep is unlikely to generate substantial damages or result in an injunction halting the sale of the Pulp Fiction NFTs. Last are Miramax’s trademark claims. To show trademark infringement, Miramax will have to show that consumers are likely to be confused about the source of Tarantino’s NFTs — that is, that a substantial number of consumers are likely to mistakenly believe that Tarantino’s Pulp Fiction NFTs actually originate with Miramax. That is going to be a difficult argument to make. First, although Miramax has trademark registrations for Pulp Fiction relating to a number of categories of merchandise like action figures, costumes, posters, tote bags, and mugs, none of these registrations mentions NFTs. That isn’t surprising, and doesn’t alone doom Miramax’s trademark claims. But it does make them chancier. Second, Miramax cannot allege infringement based on consumer confusion about the source of the images and other “secrets” that Tarantino is hawking along with the NFTs. The Supreme Court has held that trademark claims cannot be based on confusion about the source of “communicative products” like an image. Moreover, whether trademark law even applies to digital files at all is an open question: UCLA trademark guru Mark McKenna has mounted a strong argument that they do not, and to date few courts have opined on the matter. Yet even if trademark law is theoretically relevant, it’s difficult to see how consumers are likely to be confused here. The Pulp Fiction NFTs are literally branded as the “Tarantino NFTs,” and the public likely associates Pulp Fiction far more strongly with Tarantino, who wrote, directed, and acts in the film, than with Miramax, which ponied up the money to make it. Any residual possibility of consumer confusion could likely be addressed by a statement on Tarantino’s NFT website disclaiming association with Miramax. In short, the trademark claims, if properly handled, shouldn’t derail the NFT auction. In the end, the Miramax/Tarantino Pulp Fiction dispute is both less and more than meets the eye. Less, because in reality this is largely a grubby contract dispute, in which the NFTs in question are mostly a MacGuffin. More, because the dispute demonstrates that big-name players are likely to come to blows over NFTs sooner rather than later, and often there will be no clear contractual language to determine rights. And when that happens, the copyright implications are likely to be harder to sort out. Consider, for example, what happens if someone mints an NFT connected to the work of another filmmaker or musician without their consent. Perhaps surprisingly, there may be no copyright implications because no copies are actually being made or distributed. The NFT may point to a link for a webpage that displays an image belonging to someone else. But that, in and of itself, is not clearly illegal. Indeed, this basic sequence has already happened. After the Pulp Fiction NFT dispute blew up online last week, intellectual property expert Brian Frye created and quickly sold his own Pulp Fiction NFT. Along the way, Frye poked a bit of fun at Tarantino, Miramax, and the entire notion that something as quicksilver as “secret thoughts” can be owned: Ownership of this NFT constitutes ownership of certain secret and confidential thoughts I created about the movie Pulp Fiction (1994), which was directed by Quentin Tarantino. The owner of the NFT will have exclusive access to those thoughts, which they may use in any way they like. We don’t expect that either Miramax or Quentin Tarantino will sue Frye. And yet, if it turns out that NFTs aren’t just a manifestation of late-pandemic boredom, we expect that more than a few Hollywood lawyers will be re-reading old contracts and attempting to divine who has the rights to mint them. Kal Raustiala is a professor at the UCLA School of Law. Chris Sprigman is a professor at the New York University School of Law and co-founder of Lex Lumina, PLLC, a law firm focused on intellectual property.


" Harmonization Without Consensus: Critical Reflections on Drafting a Substantive Patent Law Treaty ," 57 Duke L.J. 85 (2007) (with Jerome H. Reichman) Abstract In this Article, we contend that the World Intellectual Property Organization's proposed Substantive Patent Law Treaty (SPLT) is premature. Developing countries are struggling to adjust to the heightened standards of intellectual property protection required by the TRIPS Agreement of 1994. With TRIPS, at least, these countries obtained side payments (in the form of trade concessions) to offset the rising costs of knowledge products. A free-standing instrument, such as the SPLT, would shrink the remaining flexibilities in the TRIPS Agreement with no side payments and no concessions to the catch-up strategies of developing countries at different stages of technological advancement.

"Harmonization Without Consensus: Critical Reflections on Drafting a Substantive Patent Law Treaty," 57 *Duke L.J.* 85 (2007) (with Jerome H. Reichman)

									Abstract

In this Article, we contend that the World Intellectual Property Organization's proposed Substantive Patent Law Treaty (SPLT) is premature. Developing countries are struggling to adjust to the heightened standards of intellectual property protection required by the TRIPS Agreement of 1994. With TRIPS, at least, these countries obtained side payments (in the form of trade concessions) to offset the rising costs of knowledge products. A free-standing instrument, such as the SPLT, would shrink the remaining flexibilities in the TRIPS Agreement with no side payments and no concessions to the catch-up strategies of developing countries at different stages of technological advancement.

Jerome H. Reichman & Rochelle C. Dreyfuss, Harmonization Without Consensus: Critical Reflections on Drafting a Substantive Patent Law Treaty, 57 Duke L.J. 85 (2007)

Proposals to further harmonize domestic patent laws at the international level 1 have understandably attracted considerable attention. 2 As intellectual property continues to grow as a component of global trade, the costs of worldwide protection and enforcement have soared. 3 Patent holders accordingly seek ways to acquire and maintain their exclusive rights more efficiently in an integrated world marketplace. 4 They are also increasingly frustrated by the need to pursue multiple actions for infringement in cross-border disputes. 5 Under the bedrock principle of territoriality, successive litigations can trigger different applications of domestic and international patent norms to the same set of facts and can lead to conflicting judgments and arguably irreconcilable outcomes. 6 [Vol. 57:85 Governments have responded to the upswing in patent applications by searching for techniques that would allow them to share examination responsibilities and costs. 7 The Patent Cooperation Treaty 8 and various regional agreements, such as the Convention on the Grant of European Patents, embody many important procedural advances. 9 These instruments, however, are seldom the product of true harmonization exercises, in part because the outcome of examinations conducted within these frameworks is typically a set of individual national patents that remain separately enforceable under local laws. 10 In 1994, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement or TRIPS), 11 which incorporated the 1967 text of the Paris Convention for the Protection of Industrial Property, 12 took a major step toward substantive patent law harmonization. It established a set of minimum international standards of protection for some 150 participating countries. 13 Yet the Agreement, which did not attempt to create a uniform or deeply harmonized global patent regime, left ample room for national variations and approaches, which are often collectively deemed "the TRIPS flexibilities." 14 The effort by the World Intellectual Property Organization (WIPO) to organize a thorough exploration of the possibilities for further harmonization is therefore a welcome development to much of the patent community. 15 Under the aegis of WIPO's Standing Committee on the Law of Patents (SCP), the Draft Substantive Property Organization, supra note 9, however, does grant a regional patent. A draft European Patent Litigation Agreement is also under consideration. Draft Agreement on the Establishment of a European Patent Litigation System, Feb. 16, 2004 15. See, e.g., Daeshik Jeh, Director, Patent Examination Policy Team, Korean Intellectual Property Office, Presentation Before the WIPO, Open Forum on the Draft Substantive Patent Law Treaty (SPLT): International Patent Law Harmonization and Development: The Experience of the Republic of Korea (Mar. 1, 2006), available at http://www.wipo.int/ meetings/en/2006/scp_of_ge_06/scp_of_ge_06_inf1.html (discussing the benefits and desirability of harmonization); Kenji Kamata, Japan Intellectual Property Association, Presentation Before the WIPO, Open Forum on the Draft Substantive Patent Law Treaty (SPLT): The Rationale and Benefits of Patent Law Harmonization (Mar. 1, 2006), available at http://www.wipo.int/ meetings/en/2006/scp_of_ge_06/scp_of_ge_06_inf1.html (same). Patent Law Treaty (SPLT) 16 represents an attempt "to pursue a 'deep harmonization' of both the law and practice" concerning not just the drafting, filing, and examination of patent applications, but also the cornerstone requirements of patentability. 17 Ideally, member states would agree to adopt identical rules concerning what constitutes a novel and useful invention, when a technical advance meets the requirement for an "inventive step" (nonobviousness), and how much information must be revealed by the patent disclosure. "Deep harmonization" would also entail agreement on priority of inventorship (whether a patent is awarded to the first to invent or the first to file) and whether inventors will be accorded a grace period permitting publication for some period prior to filing. 18 Notably, through the efforts of the so-called Group of Friends of Development, 19 this initiative is being tested against the drive for a more development-friendly agenda at WIPO, with a view to ensuring 18. Id. ("This approach was adopted in an attempt to avoid the controversial hurdles to agreement that were found in the past."); see also Philippe Baechtold, The Future Role of WIPO in the Area of Industrial Property, in THE FUTURE OF INTELLECTUAL PROPERTY IN THE GLOBAL MARKET OF THE INFORMATION SOCIETY, supra note 17, at 139, 143 ("[T]here are other issues that require further reflection . . . [including] the question of patentable subject matter, . . . the requirement of technical character of the invention, the exceptions from patentability, the introduction of some form of grace period and the issue of equivalents."). 19. In the Fall of 2004, the General Assembly of the World Intellectual Property Organization invited comment on a proposal presented by the Group of Friends of Development (led by Argentina and Brazil) for the establishment of a Development Agenda for WIPO. WIPO, Gen. Assembly, Proposal by Argentina and Brazil for the Establishment of a Development Agenda for WIPO, WO/GA/31/11 (Aug. 27, 2004), available at http://www.wipo. int/documents/en/document/govbody/wo_gb_ga/pdf/wo_ga_31_11.pdf. Since then, many other proposals have been presented and discussed. E.g., WIPO, Provisional Comm. on Proposals Related to a WIPO Development Agenda, Report of the Third Session, at 1, PCDA/3/3 (June 11, 2007), available at http://www.wipo.int/edocs/mdocs/mdocs/en/pcda_3/pcda_3_3.pdf; WIPO, Provisional Comm. on Proposals Related to a WIPO Development Agenda, Proposal for a Decision of the PCDA on the Establishment of a WIPO Development Agenda, PCDA/2/2 (June 23, 2006), available at http://www.wipo.int/edocs/mdocs/mdocs/en/pcda_2/pcda_2_2.pdf; see also James Boyle, A Manifesto on WIPO and the Future of Intellectual Property, 2004 DUKE L. & TECH. REV. 9, at 3-4 (2004), available at http://www.law.duke.edu/journals/dltr/articles/pdf/ 2004DLTR0009.pdf (criticizing the "one size fits all" approach of WIPO and the TRIPS agreement). consideration of the needs of all nations, whatever their technological capacities may be. 20 Despite the promise such an effort holds, we believe that it is unwise to move to deep substantive harmonization so quickly after the TRIPS Agreement elevated patent standards universally. 21 These standards challenged the technological catch-up strategies of all the developing countries and saddled them with social costs they are struggling to absorb. 22 As the endless controversies surrounding pharmaceutical patents demonstrate, 23 higher standards of global protection-whatever their incentive effects 24 -also generate severe and unintended distributional consequences for the developing 441, 444 (2000). Developing countries, however, that did not previously allow product patents on pharmaceutical and agricultural chemical products were given another five years to cover them, subject to a "mail-box" provision for patents arising in the meantime. TRIPS Agreement, supra note 11, arts 65.4, 70.8-70.9 (mailbox and minimum exclusive marketing rights). 22. 25 A further round of harmonization will likely aggravate these and other unresolved problems without producing any offsetting user rights or concessions for these countries. On the contrary, the dynamics of TRIPS and the post-TRIPS trade agreements teach that even a development-sensitive negotiation process is likely to produce an instrument that furthers the interests of developed countries at the expense of poorer, less powerful participants. 26 More controversially, we contend that higher levels of harmonization will harm even the developed countries, including those that are most aggressively pressing for yet another round of multilateral intellectual property negotiations. The domestic patent laws as currently practiced were largely formulated for the inventions of the Industrial Revolution, 27 and these laws still reflect the technological premises and concepts of the creative sectors as they were then structured. Yet in this postindustrial information age, with knowledge-intensive inventions emerging from new kinds of research institutions, creative entities are organized nonhierarchically and along continuously changing lines. 28 New players, such as universities and scientific research organizations, routinely patent their output, and whole new sectors, including biotechnology and information technology, have emerged. 29 Until the operations of these and other new technical communities are better understood, there is a greater need for legal experimentation at the substantive level than for harmonization. In the absence of any international governance infrastructure capable of interpreting and amending the law (rather than freezing it prematurely), a compelling case can be made for delaying deep harmonization until other methods for improving the efficiency of a global patent system have been fully explored. 30 Part I of this Article surveys the implications of deep harmonization for developing countries, and Part II does likewise for developed countries. Part III suggests that the appropriate goal for the progressive development of world intellectual property law after TRIPS is to nurture an "incipient transnational system of innovation," 31 which can, in turn, provide the appropriate template for validating global patent norms over time. Before moving to the more controversial claim that harmonization could boomerang against its developed-country advocates, we stress that even a cursory look at the results of the TRIPS Agreement reveals the problems harmonization of the type envisioned by the SPLT pose for the developing world. Although TRIPS specifically leaves room for nations to tailor their laws to their internal needs and pace of intellectual advancement, 32 experience shows that emerging economies are, in fact, greatly challenged by the costs and hardship associated with adjusting their development strategies to new legal realities and that successive rounds of negotiations tend to reduce the flexibilities available for nations to tailor intellectual property law to their own needs. In principle, higher standards of patent protection under the TRIPS Agreement will provide needed incentives to invest in the innovative sectors of some developing economies, 34 to make hightechnology products available to local industries, and to promote new licensing agreements and direct foreign investments. 35 In practice, however, their different national and regional capabilities, institutions, and endowments limit the developing countries' absorptive capacities and reduce the potential benefits of open markets for knowledge goods. This "technology divide" is further widened by the high rents exacted by technology exporters. 36 Whether they fall into the high-, medium-, or low-income brackets, all the developing countries-except for a small group of Least Developed Countries (LDCs)-that seek to become suppliers of knowledge goods must compete on roughly the same normative terms and conditions that govern advanced industrialized countries. Although some developing countries have demonstrated considerable capacity in certain technological sectors, 38 all are struggling to cope with the limits TRIPS places on their ability to reverse engineer upto-date foreign technologies that were previously unpatented in their territories. For example (and especially problematical), the ability to produce generic drugs without regard to pharmaceutical patents was completely eliminated in 2005. 39 For an economy like that of India, where the generic drug industry is a significant source of income and a key locus of technological development, "fair following" by honest means of reverse engineering had been an important strategic option. 40 Whether they engage in the production of knowledge goods for local consumption or for export purposes, developing countries must internalize the TRIPS-mandated intellectual property standards in ways that stimulate potentially innovative industrial sectors without legally discriminating against foreign competitors. 41 They must also avoid undermining those less-advanced sectors of their own economies that meet local needs for knowledge goods at affordable prices. India's new patent law, for example, reflects the tensions between efforts to stimulate the nation's research-based meet specified eligibility criteria); id. arts. 65 At the same time, the foreign technology suppliers' demands for increased rent extraction-combined with refusals to work, refusals to deal, and various forms of unchecked anticompetitive conducthamper the efforts of developing-country entrepreneurs to acquire high-technology goods on open markets at prices that preserve their own comparative advantages. 43 These practices also frustrate their governments' ability to attract foreign direct investment and to build the infrastructure needed to move to a more competitive position on the technological frontier. 44 Although the full extent of these barriers has been insufficiently studied, it seems that high-tech manufacturers in developed countries prefer selling to wholly owned foreign subsidiaries rather than to potential competitors in developing countries. When sales are made to third parties, the net welfare gains from technology installation may be offset by the costs of increased rent extraction. 45 Moreover, all the developing countries, even those not engaged in the production of knowledge goods, must maintain patent offices and create mechanisms that enable foreign patent owners to enforce their rights-a costly and burdensome operation. How they accomplish this task will seriously affect their internal development strategies along with their ability to supply such essential public goods as education, public health, environmental safety, scientific advancement, and a soundly competitive marketplace for goods and services. These tensions are linked with, but not necessarily determined by, problems of wealth distribution. For example, the TRIPS Agreement made assumptions about technological self-sufficiency that proved inaccurate and contributed directly to a health crisis over much of the globe. 48 Although the subsequent Doha Round remedied the problem by permitting countries to issue compulsory licenses to meet the health needs of nations unable to produce locally needed medicines, the Doha Agreement took several years to negotiate and its efficacy is yet to be demonstrated. 49 Admittedly, TRIPS gives its Members some leeway to tailor their laws to local needs. For example, states can presumably supply their own definitions of "inventive step" and determine for themselves the technological scope of patent protection. 50 They can refuse to patent diagnostic, surgical, and therapeutic methods; 51 they can exclude from 47. Maskus & Reichman, supra note 30, at 33-35; cf. Chon, supra note 25, at 28-49 (describing the nation-state as the "best guardian of the domestic welfare bargain" upon which the international trading system should not unduly intrude); Peter K. Yu patentability inventions required to protect ordre public, morality, and human health; 52 and they can grant limited exceptions to the exclusive rights conferred. 53 They also have increasing power to order compulsory licenses. 54 These flexibilities allow developing countries considerable policy space in which to maximize the benefits and minimize the social costs of adopting the international minimum standards. But addressing these flexibilities is expensive and requires a sophisticated legal infrastructure. Taken together with the costs of complying with the obligations TRIPS mandates, the burden on developing countries is formidable. 55 To make matters worse, these same countries must increasingly also deal with pressures to provide the higher, TRIPS-plus levels of intellectual property protection embodied in bilateral or regional trade agreements. Against this background, any form of deep harmonization through the SPLT that is likely to win the support of the developed countries seems certain to erode whatever flexibilities the developing countries still retain under the TRIPS Agreement and under subsequently negotiated TRIPS-plus Free Trade Agreements (including their Most Favored Nation implications 57 ). Consider, for example, the eligibility requirement of an inventive step (nonobviousness). 58 The standard of inventiveness is intimately tied to a nation's economic goals, and especially to its citizens' technological 58. Id. art. 27.1 (requiring patents to be made available for inventions that are "new, involve an inventive step and are capable of industrial application"). Footnote 5 equates the terms "inventive step" and "capable of industrial application" with "nonobvious" and "useful." Id. n.5. potential and to the types of creativity it can hope to foster. 59 Even within one nation, determining the right standard can be difficult. In the United States, for example, the threshold of nonobviousness has varied widely at different periods, 60 and it remains a contentious issue. 61 Perhaps for these reasons, TRIPS leaves the height of the inventive step to national law. Presumably, deep harmonization requires convergence on a single standard. Yet finding one that would suit countries at different levels of technological sophistication and for all kinds of intellectual advances could easily prove impossible. 62 Whatever standard is chosen will, at best, represent a mediate position-one that will differ from the optimum for many developing countries. More generally, there is a risk that virtually every procompetitive option still left open to developing countries under their domestic patent laws-from exceptions to patentability to limitations on exclusive rights and the possibility of imposing compulsory licenses 63 -would shrink or disappear in the SPLT. After all, if experience is any guide, on virtually all of these issues, the advanced industrialized countries will tend to demand higher protectionist standards than those favored by policymakers in developing countries. The United States, for example, has shown little willingness to limit the scope of patentable subject matter by adopting the "technical effect" requirement found in other countries' patent statutes. 64 2004). Indeed, despite more than two-hundred years of experience with a patent system, the standard of nonobviousness was just the subject of another Supreme Court case, KSR International Co. v. Teleflex, Inc., 127 S. Ct. 1727 (2007). KSR's effect on patent issuances remains to be seen, but it appears to have once again raised the standard of nonobviousness. 62. For example, although the standard in the United States is currently low, see, e.g., JAFFE & LERNER, supra note 60, at 34-35, the standard in India is high, see Mueller, supra note 38, at 86-89. 63. See UNCTAD-ICTSD, RESOURCE BOOK, supra note 14, at 351-57. 64. Compare Convention on the Grant of European Patents, supra note 9, arts. 52-53, 57 (requiring patents to be capable of having an "industrial application," defined by the EPO as requiring the ability to be used in any kind of industry), and European Patent Office, generally-has resisted the inclusion of exceptions to patentability for health, the environment, or the protection of genetic resources and traditional knowledge. 65 In fact, the United States appears to be taking the position that any agreement reached must reflect the standards of protection found in U.S. law. 66 Such intransigence does not bode well for the kind of compromising required to produce an instrument that truly accommodates diverse needs. Of course, the TRIPS Agreement adopted some relatively high standards, and various bilateral and regional free trade agreements impose even higher ones. 67 But in those negotiations, there is, at least theoretically, the prospect that advanced industrialized countries will exchange higher intellectual property standards for trade concessions in other areas which fosters some degree of equity. The rents to be extracted from a highly protectionist intellectual property regime would thus be offset (to some extent) by new market access opportunities. In the context of a free-standing patent agreement, such as the SPLT, no such compensation is possible. There is little in the way of offsetting doctrinal concessions that private stakeholders would permit developed-country negotiators to offer developing countries in return for adopting a patent regime that the latter regard as suboptimal. The counterargument is that the benefits of a smoothly working worldwide patent system will ultimately trickle down to developing countries and help them climb the technological innovation ladder. 69 Such a system would, in theory, lower transaction costs, produce greater legal certainty, and permit emerging economies to invest in building the technological skills of their population, secure in the knowledge that technology transfer and foreign direct investment will follow. 70 However, the counterargument has many defects. One is that no one knows the exact contours of a system that would produce these results, and a good case can be made for quite divergent approaches. For example, one of us has taken the Indian example to heart and argued that developing countries would benefit from a patent system that makes it easy to acquire protection. 71 The theory is that such a regime would encourage innovation at the level at which it can be realistically elicited, and that the resulting patents would produce "buy in" in the form of an appreciation for the wealth that intellectual property protection creates. 72 Conversely, the other author has suggested exactly the opposite: that the need to build competitive markets mandates that the acquisition of full patent rights should be 68. 73 On this view, governments should rely on second-tier regimes-such as utility model laws or "compensatory liability regimes" (liability rules)-to stimulate investment in locally attainable adaptations or improvements of foreign technology, and in "cumulative and sequential innovation" generally. 74 In the absence of empirical evidence either way, experimentation makes more sense than freezing the law prematurely. Trumping all of these substantive and strategic considerations, moreover, is the fact that what developing countries most need is a period of calm and stability in which to devise intellectual property strategies consistent with both the TRIPS Agreement and the needs of their own emerging national and regional systems of innovation. This is a lengthy and arduous task in its own right. It is difficult for governments and civil society to interact in devising innovation policies that will maximize the use of local assets, minimize the social costs of high international minimum standards of intellectual property protection, and preserve an optimal supply of public goods that are as essential to long-term development prospects as legal incentives to innovate. Developing countries cannot succeed if, at the international level, a new round of multilateral intellectual property negotiations threatens to raise the technological ladder once again, before these countries even get a solid foothold on it. 76 However cogent the concerns of developing countries might be, one must nonetheless weigh them against the supposed benefits of deep harmonization. 77 envision a compromise scheme that achieves these ends on behalf of developed economies, but permits developing countries to reject such changes if, on balance, they are not as helpful to them as pursuing a slower track. Developing countries could be further placated with selected concessions 78 and compensatory side payments. 79 The sad truth, however, is that no one has managed to put forward a vision of a properly functioning patent system for the developed world that commands even the appearance of a consensus. There are as many different proposals on the table as there are thinkers and investigators. With its relatively experienced patent office, excellent trial courts, specialized appellate court, and a Supreme Court poised to add a generalist perspective, the United States uniquely possesses the kind of institutional infrastructure needed to build and maintain a strong patent law system. 80 Even so, all that the proponents for change in that country can agree on is that the patent law badly needs reform. The risk and cost of litigation is rising rapidly, which creates a drag on innovation and imposes disincentives to invest in creative production. 81 Two studies by the National Academies 82 and another by the Federal Trade 78. Concessions might include greater harmonization of international patent law with the Convention on Biological Diversity, with imposition of certificates of origin and prior consent for inventions making use of developing country resources and with some recognition of traditional knowledge in international intellectual property law. 83 and criticism from numerous legal and economics scholars 84 and a variety of judges 85 have offered various diagnoses of the problems and assorted, often contradictory, prescriptions for change. Indeed, even the goals of the patent system are the subject of debate: although patents may still protect inventors from free riders, scholars have suggested that in many new industries, patents serve signaling, financing, and allocating functions, 86 which arguably could be performed in ways that have fewer adverse effects on the public interest. 87 protemics and steps that the NIH can take to promote productivity and innovation); NAT'L RESEARCH COUNCIL, A PATENT SYSTEM FOR THE 21ST CENTURY (2004) (offering seven criteria for evaluating the present patent system and seven recommendations for designing a more effective patent system). 83 87. For example, Dirk Czarnitzki and his coauthors demonstrate a positive correlation between patenting rate and publication rate, which suggests that publications could serve as In Europe, similar uncertainty exists. In a publication entitled Scenarios for the Future, 88 the European Patent Office (EPO) 89 has frankly recognized the uncertain future of the worldwide patent system. It has outlined four different scenarios that could emerge in response to different interest groups seeking to influence domestic and international policymaking forums. The first scenario envisions the tightening of worldwide patent standards under an international treaty, such as the SPLT, a position championed by many multinational corporations. 90 A second scenario envisions the evolution of a variegated system in which developing countries-especially emerging economies-gradually reshape the existing patent system to suit their own comparative advantages. 91 A third scenario envisions a shift toward second-tier regimes, possibly sounding in liability rules rather than exclusive rights, which would specifically address the problems posed by cumulative and sequential innovation. 92 The fourth scenario envisions a re-elaboration of the 89. The EPO is not an organ of the European Communities. Rather, it was established by the Convention on the Grant of European Patents (EPC). Id. at inside cover. The EPO, which acts as a regional patent office for the member states, is the executive body of the treaty members. There is also an administrative council, which operates as a de facto legislative body. Revisions of the EPC are undertaken by an intergovernmental diplomatic conference for the contracting states. Id. 90. See id. at 30-47. With "[b]usiness as the dominant driver," this scenario tells "[t]he story of consolidation in the face of a system that has been so successful that it is collapsing under its own weight; Power and Global Jungle are the major driving forces." Id. at 29. 91. See id. at 48-65. With "[g]eopolitics as dominant driver," this scenario tells "the story of conflict in the face of changing geopolitical balances and competing ambitions, where Power and Global Jungle are the major driving forces, but in contrast to the business-led scenario, the states are the key players." Id. at 29. 92. See id. at 95-96. With "[t]echnology as dominant driver," this scenario tells "[t]he story of differentiation in the face of global systemic crises, where Pace of Change, Systemic Risks and Knowledge Paradox (as the nature of knowledge changes) are the major driving forces." Id. at 29; see also J.H. Reichman, Of Green Tulips and Legal Kudzu: Repackaging Rights in [Vol. 57:85 basic patent paradigm that would give much greater weight to the provision of public goods and "access to knowledge" in general, at the expense of private incentives to innovate. 93 Although the EPO takes no position on which of these scenarios it favors, its publication demonstrates that policymakers responsible for the future evolution of the patent system will be constrained to take account of the divergent interests underlying each of these remarkably prescient scenarios. It should, indeed, surprise no one that routine tinkering with a patent paradigm launched in Venice in the fifteenth century and refined by the United Kingdom in the seventeenth century cannot answer the hard questions raised by new technologies and the new modes of producing them. 94 There are major challenges for which past experiences give only untested and untrustworthy hypotheses, with no convincing empirical studies on the horizon to resolve the doubts. These problems affect all aspects of patent protection. Not only are there discordant views on how high the inventive step should be, there are also disagreements on virtually every substantive topic under discussion in connection with the SPLT: novelty and utility standards, the research exemption, compulsory licenses-along with standards for analyzing infringement and awarding relief. 95 Furthermore, there are a multitude of open procedural questions-including questions about the level of scrutiny that patent offices give to applications, 96 the standards for reexamining issued patents, as well as the availability of avenues to challenge patents administratively (through opposition procedures) 97 and judicially (through, for instance, declaratory judgment actions). 98 The National Academies' Report criticized the reluctance of the Court of Appeals for the Federal Circuit to defer to the examination guidelines that the U.S. Patent Office applies to new technologies, while applying unrealistic standards of its own that ignore what those skilled in the art actually know. 99 Others have questioned vesting powers over patent law in a single specialized court, pointing to the Federal Circuit's penchant for de novo review, 100 its apparent lack of interest in economics or patent policy, 101 and its insulation from criticism. 102 This Article cannot explore all of the problems with which the system is grappling. Our purpose is to demonstrate how promulgating substantive law in the absence of either a normative consensus or an authority competent (in both the cognitive and juridic sense) to administer and revise it will interfere with the emergence of new industries, with scientific advancement, and with the development of new approaches to encouraging and supporting innovation. Although there is broad dissatisfaction with domestic patent systems, many of the complaints-at least in the United States-are based on law developed for emerging sectors, principally information technology and biotechnology. 103 These issues merit a deeper look. With regard to the IT sector, there is considerable debate about the need for exclusive rights to promote development of software and business methods and whether patent protection is the appropriate regime to use. Unlike copyrights and contractual rights, patents create claims that are good even against independent inventors. For cumulative technologies or in instances where interoperability is an important goal, the need to sift through prior patents and negotiate rights arguably creates a high tax on innovation and a drag on development. 104 Other untoward consequences may flow from the decision to permit patenting in this area. For example, the risk of debilitating suits motivates participants to acquire multiple patents, hoping that with enough potential counterclaims, they can fend off or negotiate their way out of difficulty. The result is a vicious cycle: thickets of rights that are expensive (or nearly impossible) to clear, requiring an ever-larger arsenal of defensive protection. 105 Furthermore, many IT products involve multiple inventions and, accordingly, multiple licenses. 106 In that environment, holdout possibilities are numerous and, as the Blackberry case 107 nearly demonstrated, can potentially undermine the investments of producers, other patentees, and the public. 108 All of this patenting activity fosters so many potential lawsuits that, as economists James Bessen and Michael Meurer have concluded, the cost of litigation has begun to exceed the profits from patents by all measures in this sector. In addition, some IT products are characterized by strong network effects and standard setting, which may make switching costs high and lock consumers into inferior products. 110 Those holding patent rights in products toward which a market has tipped receive awards out of proportion to the technical contributions of the inventors. When these patents also dominate their fields, they allow right holders to prevent entry by competitors. 111 Commentators further criticize the way the law has been administered. To some, the European approach, which looks for a technical effect, is superior because it greatly limits the kinds of information technology that can be protected. 112 Others note that, because courts assume the level of skill in the art to be high, they relieve patentees of the obligation to disclose the underlying code. These patents can be very broad and, because they fail to enable, they deprive the public of disclosure, which is one of the significant benefits of the patent system. 113 Moreover, because monetary damages are calculated based on the value of the product and not of the patent that has been infringed, this sector attracts "trolls," who are in the business of making money though litigation rather than through product development. 2. Biotechnology. The burgeoning field of biotechnology is experiencing a different set of problems. Here, courts and the PTO consider the level of skill quite low, 115 which leads to narrow patents and the danger of an "anticommons effect." 116 When that occurs, property rights cannot be aggregated efficiently to create, for example, effective methods for assembling and screening new molecules or to realize the ambitions of personalized medicine, which would require whole-genome sequencing. Because U.S. courts tend to conceptualize DNA as molecules rather than information products, 117 manufacturers and researchers can easily evade patent rights in some cases by-essentiallyparaphrasing the information covered by the patent. 118 As a result, the patent may yield insufficient incentives to support research in a given area. 119 Paradoxically, there is also a growing number of patents in this field-particularly patents on genes and certain proteins that are, at least for research purposes, so broad 120 that it is unlikely a patent holder could efficiently exploit the entire breadth of the claims. Meanwhile, the potential blocking effects appear increasingly serious. Reconciling the Needs of Different Sectors. It is not clear that these problems will be easy to resolve. First, these quick sketches of two emerging sectors demonstrate that there is disagreement concerning the existence, scope, and nature of the problem. For example, despite the strong and persistent complaints about patents in the software industry, there is some empirical evidence that the patent system is not hurting-and may be helping-the development of this sector. 121 Patent reform is thus stalling at least in part because domestic stakeholders cannot even agree that reform will be worth the dislocations it will entail. Second, there are disputes about how to handle the problems. For example, some economists claim that reengineering the law is not necessary. They argue that the system could be restored to order by simply improving the quality of the patents that issue (that is, by creating a mechanism for ensuring that patents issue only for inventions that are truly nonobvious). 122 Third, it is proving so difficult to find common ground among the various patent industries that some have suggested sector-specific legislation. 123 If heeded, this approach could take patent law down untested pathways culminating in a set of clumsy, sui generis regimes. 124 Moreover, even if such an approach proved politically feasible in a domestic setting, it could elicit objections sounding in the TRIPS Agreement, which requires that "patents . . . be available and patent rights enjoyable without discrimination as to . . . the field of technology." 125 But TRIPS is only a minimum standard regime. Were the United States bound by an instrument that required complete substantive harmonization, resolving the issues that exist within emerging industries would not be feasible without endless rounds of entangling negotiations-and, if the system includes enforceable obligations, unsettling appeals. 126 Moreover, the technology sectors are hardly the end of the line: science is sure to generate new and equally daunting innovation opportunities in the future. Synthetic biology represents one such development. 127 Because it utilizes both software and biotechnological advances, this field potentially suffers from the combined impact of growing incoherence and a cause of the incipient breakdown that is weakening the international intellectual property system from within"). 125. TRIPS Agreement, supra note 11, art. 27 (1); see also Panel Report, Canada-Patent Protection of Pharmaceutical Products, WT/DS114/R (Mar. 17, 2000) (distinguishing between permissible reconcilable "differentiation" attributable to needs of different product sectors and impermissible "discrimination"). PATENT LAW HARMONIZATION 113 patenting problems in both sectors. Were the SPLT to be implemented, its adherents would have diminished capacity to adapt the legal order so that such new opportunities could flourish. The prospects for the future could become even more troubling. As patenting moves upstream to cover fundamental advances, existing dysfunctionalities within the system could impede scientific progress and reduce the chances of generating future opportunities for innovation. Drawing once again on the situation in the United States as an example, a reorganization underway within the scientific community has begun to pose hard and unresolved problems for patent law. A major development was, undoubtedly, the wholesale entry of universities into the patent system. Since the passage of the Bayh-Dole Act in 1980, 129 which permits universities to patent the fruits of federally funded research, filings by the university sector have significantly increased. 130 Although the statute aimed mainly to encourage technology transfer, universities increasingly understand it as a funding mechanism, with many untoward consequences for science and education. Most obviously, work that once would have gone into the public domain for general and free use becomes privatized. 131 128. See 130. The issue of cause and effect is itself a subject of dispute. Some claim that the Bayh-Dole Act created the university patenting phenomenon, whereas others contend that universities' desire to patent gave rise to the Act. Although there is some empirical evidence indicating that universities have begun to patent more selectively and license these opportunities more wisely, 133 horror stories abound in which universities reportedly signed over rights without any guarantee that their licensees would bring products to market. Indeed, sometimes universities appear to have licensed rights to institutions that had private reasons to stifle research and access. 134 Perhaps to counter this problem, the courts have begun to deploy various patent law theories to narrow the ambit of broad claims. 135 But overly narrow rights in "slivers of innovation" create problems of their own. 136 Even if the universities' behavior were to improve, problems with their patenting practices could persist. Courts have decided that because universities are behaving as commercial actors, patent law should treat them as such. Accordingly, courts do not afford academic researchers special privileges to delay work on patentable subject matter, even when the delay arises from attempts to preserve pedagogic opportunities for students. 137 This creates one of a series of new conflicts between a university's educational mission and its commercial goals; between a faculty member's research and teaching commitments; and between the academy's duties as honest brokers in science policy debates and its proprietary self-interest. Far more worrisome is the judicial trend to deny academics engaged in scholarly inquiry any further research exemptions from infringement liability. 138 Fortunately, few infringement suits have been filed against universities to date, but if such cases were to proliferate unchecked, the cost of basic science would soar. Even in the absence of suits against scientists, an empirical study has uncovered evidence that university research is beginning to suffer from an anticommons effect. 139 Although some studies also claim that patents have little direct impact on university work, scholarship has documented the erosion of the Mertonian norms, with increased secrecy and a growing reluctance to share research materials. 140 Furthermore, patenting could easily come to affect scholarly agendas, shifting attention from the basic work that opens whole new fields of knowledge to applied research aimed narrowly at exploiting particular commercial markets. Again, the empirical evidence is mixed, but the effects of an increasing interest in patenting (and commerce) on the part of university faculty is alarming. 141 137. See, e.g., Griffith v. Kanamaru, 816 F.2d 624, 626 (Fed. Cir. 1987) (finding no excuse for a university professor-inventor's inactivity when he claimed that his delay was due in part to the fact that he was waiting for a particular graduate student to begin work). 138. See, e.g., Madey v. Duke Univ., 307 F.3d 1351, 1362 (Fed. Cir. 2002) ("[O]ur precedent does not immunize any conduct that is in keeping with the alleged infringer's legitimate business, regardless of commercial implications. For example, major research universities, such as Duke, often sanction and fund research projects with arguably no commercial application whatsoever. However, these projects unmistakably further the institution's legitimate business objectives, including educating and enlightening students and faculty participating in these projects. These projects also serve, for example, to increase the status of the institution and lure lucrative research grants, students and faculty."). 139 In theory, of course, legislation might remedy some of these problems. For example, Congress could enact a codified research exemption. 142 Patent applications from academics could be examined differently, and the scope of patents could be adjusted to deal with the anticommons effect. When necessary, compulsory licenses to unblock dependent patents and enable improvers to reach the market could also be enacted, a solution that remains fully consistent with the TRIPS Agreement. 143 Yet, as Section A showed, there is substantial disagreement concerning the very existence of the problems and the wisdom of proposed legislative solutions. 144 Were the laws in question subject to substantive international obligations, it would compound these problems. Some economies may rely on the spillover benefits of basic research; others may see commercializing university work as an important source of funding. Another complicating factor is that universities do not participate equally in all commercial sectors. Consequently, arguments about technological neutrality would arise in any attempt to alter the patent system to protect core scientific progress. When faced with the problems of new technologies and new players, countries have adopted very different strategies. In particular, the U.S. approach differs significantly from developments in Europe. With regard to patents in biotechnology, for example, the EPO, following the European Directive on Biotechnology, 145 seems to be breaking away from the "chemical compound" analogy that typifies U.S. law. Instead, it has begun to treat DNA patents as information products, whose eligibility tests should turn on the quality and industrial applicability of the information revealed. 146 The EC Biotechnology Directive also added a new compulsory license to facilitate interaction between infringing plant breeders and biotech patents. 147 When implementing the Biotechnology Directive, moreover, a number of European governments have embarked on new directions of their own at the expense of a uniform law. Although some nations were initially unwilling to fully implement the Biotechnology Directive, 148 others, such as Germany, have attempted to limit gene patents to the use or purpose recited in the application. 149 The EPO also seems to have handled the information technology sector more cautiously than the United States by insisting on a demonstrable "technical contribution" palpably beyond the state of the art. 150 How the EPO proceeds in this area following the European Parliament's rejection of a proposed Community Directive on the Patenting of Software deserves careful scrutiny. 151 Furthermore, even if patents on software were eventually to produce the kind of blocking effects experienced in the United States, many European countries formally recognize the possibility of compulsory licenses for dependent patents on improvements. 152 Although these provisions are seldom invoked, they likely exert in terrorem effects that stimulate efficient licensing practices, and they provide patent authorities with a codified antiblocking measure when needed. Moreover, the patent system is not the only mechanism for encouraging technological progress. A strong argument can be made for supplementing patents with new kinds of intermediate or secondtier protection systems that are more attuned to present-day technological realities. Although robust property-like regimes, such as patent law, presuppose clear boundaries between different rights holders, the actual boundaries between products of the new technologies are often ill-defined. The problem of cumulative innovation is thus aggravated by the ways in which new contributions are dependent on, and intermingled with, earlier innovations. Patents increasingly breed high litigation and transaction costs because they artificially divide that which is inherently indivisible, a practice that needlessly slows the rate of innovation by chilling the ability of second comers to build on earlier contributions for both scientific and commercial purposes. In sectors where these conditions prevail, a different kind of regime may be superior. To give one example, compensatory liability regimes-liability rules-may be a good solution for cumulative technologies. They would protect first comers against wholesale duplication while enabling improvers to build on their work, subject to an obligation to return a healthy share of the potential gains to the earlier innovator. 154 These entitlements could be voluntarily adopted by industrial sectors or mandated by law or regulation to resolve blocking effects. 155 Other ideas-open source models, collaborative modes of production, clearinghouse models-have also attracted growing attention, 156 although their dependence on exclusive property rights is often overlooked. 157 Of course, not all the advocates of deep harmonization claim to know all the answers; rather, some suggest codifying basic aspects of domestic patent law-so-called "best practices"-that would provide a solid foundation for transnational harmonization. 158 But this approach is premised on several fallacies. First, even for countries at similar levels of technological sophistication, "best practices" are not likely to be the same. Moreover, what any given country views as "best practices" in patent law may reflect other practices in other laws-including copyright, trade secret, utility model laws, and, above all, competition laws-that may vary widely from one country to another. 159 The advocates of a "best practices" approach to [Vol. 57:85 harmonization do not explain how to identify which practices are genuinely the best, or explain how international lawmakers will keep the practices they choose responsive to changing needs. Another more subtle effect of premature legal harmonization is that it could unhelpfully homogenize creative development. The diverging approaches observed in national innovation laws may not solely depend on differing perceptions of how to cure the same set of problems. Some of these differences may emerge from differing problems, differences that arise because each society values its own specific kinds of creativity and prioritizes its technological requirements in its own way. The TRIPS Agreement still leaves countries some room to exclude developments from patentability on grounds such as public policy and lack of inventiveness, or because the work is not considered within a field of "technology" and therefore not within the subject matter of patent law. 160 As a result, a country that excels in certain kinds of work has some flexibility to put the tools for accomplishing that work into the public domain; other countries skilled in producing the tools may prefer to make them patentable. 161 technology sector). The debate outlined in the text accompanying this footnote suggests that, at a minimum, the level of intellectual property protection in any given country may depend on whether that country has enacted and implemented antitrust law to deal with competitive excesses. Yet, the SPLT (like TRIPS) does not mandate protection outside the intellectual property field, and antitrust law is only one of the many related issues that might influence the appropriate level of protection. Because the information necessary to match particular approaches to specific types of innovation opportunities is lacking, allowing nations to experiment would be highly beneficial. Some will use legislative solutions; the Supreme Court's foray into patent law suggests that the U.S. approach may be judicially based; 162 and in some places, voluntary schemes will emerge. Over time, experts can compare and evaluate these experiments, and when one or another solution appears to yield positive results, nations can emulate that approach. Harmonization would, in that event, be achieved voluntarily and on the basis of actual empirical data and experience, not simply backroom wrangling and special-interest lobbying. 163 Allowing nations to shape their laws also gives rise to comparative advantages by enabling each nation to foster what its technological community does best. So long as trade remains relatively free, the flexibility to experiment enhances social welfare worldwide. Accommodations between national and regional systems of innovation can then evolve over time on the basis of bottom-up preferences. Without an agreed-upon legitimate governance process (through administrative agencies, courts, and legislatures), it is difficult to see how these kinds of continual accommodations can occur. A politically skewed re-regulation of the world market, 163. To be sure, special-interest politics will play out in domestic arenas as well. But in the international context, the problems are particularly severe: well-heeled groups may be better at attracting international attention, and differences in the ways in which international and domestic instruments are reviewed tend to systematically unravel carefully negotiated deals in a direction that favors right holders. To put this another way, patent law's raison d'être is to encourage the production of novelty and inventiveness. Its success means that there will always be new problems to solve. It makes little sense to preclude the U.S. Supreme Court, the European Court of Justice, and their equivalents elsewhere, along with national agencies and legislatures-all of which have shown themselves capable of creating law responsive to new circumstances-from offering their contributions to the evolution of the future patent system. Of course, if trade is relatively free and creativity flourishes, some international coordination of the patent system becomes a necessity. But instead of premature substantive harmonization, what an integrated world economy needs is a method for lowering the costs that discrepancies in national laws impose on international actors and a system that will gradually enable innovators in all countries to reach the world market by means that are geared to their different national and regional capabilities and endowments. 165 The trick, then, is to decide which laws actually need some modest degree of harmonization and to find a mechanism for revising the law as new coordination problems crop up. New measures are urgently needed at the prosecution stage. system in a direction that makes serial applications easier to accomplish. Nonetheless, modest harmonization of the standards of patentability could dramatically lower private costs and make work sharing among national patent offices feasible. 167 It is not, however, necessary to rely on top-down negotiation at WIPO; beneficial moves toward a more unified approach could be made even in the face of a moratorium on new international lawmaking. 168 After all, when the advantages of a particular rule become evident, nations often tend to voluntarily conform their law to that rule. For example, with the exception of the United States, every country has acquiesced in awarding priority on a first-to-file basis; 169 the United States is considering the absolute novelty standard in use elsewhere; 170 and there is discussion (and some action) outside the United States to introduce a grace period similar to that found in American law. 171 Cooperation at the level of government agencies and courts can achieve significant moves toward coordination. 172 These mechanisms are well known in international law generally and are taking hold in transnational patent law as well. For example, the European, Japanese, and U.S. patent offices regularly hold trilateral meetings to discuss sets of representative cases and to identify differences in examination practice. When law permits, the offices iron out their differences, so that they can examine applications using the same [Vol. 57:85 standards. 173 Further coordination is achieved through examiner exchange programs 174 and regular judicial forums at which patent-law judges can discuss common challenges that arise in their respective national jurisdictions. 175 Many post-grant issues could benefit from comprehensive international attention. For example, because patentees operate on a global scale, costly infringement suits on parallel patents have become common. 176 Although different results remain technically possible (in that national patents are independent of one another 177 ), inconsistent outcomes (in that different parties win in different locations) can complicate global marketing efforts. Some of these transnational cases have tempted courts to give extraterritorial effect to their own laws, a practice that can lead to multiple liabilities for the same harm and damage claims for acts that were legal in the territory where they were performed. 178 Globalization has also created new opportunities for sharp practices. Examples include harassment of lawful users with successive suits 179 and so-called "torpedo actions" that prevent the patentee from obtaining timely relief. 180 In addition, because patents are territorial, infringers can spread their activities across several states and leave the patent holder with no single place where a court can find the patent to have been infringed. 181 Once again, top-down solutions are not necessarily the right approach. Another less radical response would permit parties in transnational cases to consolidate all their claims before a single tribunal or to coordinate multiple lawsuits through cooperation among the courts in which actions are pending. This would reduce costs, conserve court resources, reduce opportunities for harassment, and hopefully mitigate the extraterritorial impulse. Furthermore, as Professor Graeme Dinwoodie has suggested, courts hearing multijurisdictional cases may be positioned to find middle ground among disparate rules-that is, to further harmonization efforts through common-law adjudication. 182 Although adjudicators have proved reluctant to forge new procedural approaches on their own, 183 several organizations are in the process of proposing guidelines and procedures that courts (or national governments) could adopt. Some apply to transnational litigation generally; 184 others to intellectual [Vol. 57:85 property cases specifically. 185 If one of these projects were to succeed, the experience generated would provide future advocates of harmonized patent law with data of extraordinary value. Even when a more centralized approach becomes propitious, questions will remain about the level at which harmonization should take place. Thus, the European Community has long been debating the merits of instituting a Community Patent and other regions are considering similar projects. 186 The United States, Europe, Japan, and other industrialized countries have discussed the possibility of creating a "limited package" instrument. 187 These initiatives differ from the SPLT negotiations in a significant way. Because they involve nations that are similar economically and technologically, there is no need to compromise on rules that are, in fact, optimum for no one. If such arrangements were to move forward, broader harmonization might eventually trickle down, as nations reaching the technological frontier decided to voluntarily join an existing regime. Finally, there are advantages to giving the system established under the TRIPS Agreement more time to evolve. [AIPPI], supra note 5, at 827 (resolving that "courts of a given country should be allowed to make a ruling over infringing acts regarding certain intellectual property rights, which have taken place in any other country"); Yoav Oestreicher, Recognition and Enforcement of Foreign Intellectual Property Judgments: Analysis and Guidelines for a New International Convention 10 (2004) (unpublished S.J.D. dissertation, Duke University School of Law), available at http://ssrn.com/ abstract=939093 (proposing a minimalist international intellectual property convention to solve the world community's continuing inability to regulate the field). The European Union has also had a European Patent Litigation Agreement under consideration. Draft Agreement on the Establishment of a European Patent Litigation System, supra note 10. 186. See supra note 9. 188. The Council for TRIPS bears responsibility for monitoring TRIPS implementation issues. See TRIPS Agreement, supra note 11, art. 68. There are also nongovernmental international intellectual property community would learn a great deal from examining how well emerging economies adapt to the minimum standards TRIPS sets out, from scrutinizing the decisions of the WTO's dispute-settlement apparatus, 189 and from observing how WTO Members cope with TRIPS mistakes, such as the one solved in the Doha round. 190 As drafted, TRIPS has some of the features that a responsive harmonized law needs. It has a dispute resolution system that could be used to keep the law current and, as the Doha Ministerial Declaration on TRIPS and Public Health demonstrated, a quasilegislative body able to make larger corrections. 191 It is worth waiting to see how well these existing mechanisms deal with the problems challenging the international patent community. As it stands, however, the TRIPS Agreement is not a final answer to the problem of harmonizing global patent law. The regime lacks a solid legislative basis for adjusting intellectual property law to changing needs. Despite precatory statements about the need for balance, 192 the Agreement focuses solely on the producer end of the equation and does not establish user rights. Thus, it includes no way for the parties to strike, at the international level, the balance between proprietary and access interests that good patent law [Vol. 57:85 requires. 193 Although dispute resolution panels have hinted that their charge includes making normative assessments of the legitimate expectations of patentees-a procedure that could, in theory, develop a series of user rights-these panels have looked no further than a narrow reading of existing rules protecting user interests. 194 They articulate nothing like the normative vision required of a dynamic system, capable of responding to new situations. Arguably, a properly functioning patent law also requires competition law safeguards. The TRIPS Agreement permits Members to control anticompetitive abuse, but it does not mandate such control. 195 If WIPO intends to proceed with the SPLT, it would do well to consider what sorts of user safeguards are needed, to determine whether it is viable to separate the regime that creates exclusive rights from the regime that controls monopolies, and to develop experience and consensus regarding the delicate intersection PATENT LAW HARMONIZATION 129 between these two bodies of law, 196 with due regard to the needs of countries at different levels of development. 197 This Article demonstrates that any efforts to achieve deep harmonization of world patent law at the present time, such as those contemplated by the SPLT, are both premature and counterproductive. The evidence shows, instead, that the worldwide intellectual property system has entered a brave new scientific epoch, in which experts have only tentative, divergent ideas about how best to treat a daunting array of emerging new technologies. The existing system has become increasingly dysfunctional because it operates with a set of rudimentary working hypotheses that have not kept pace with technical change. As different countries put these hypotheses to the test, the focus of international lawmakers-whether at WIPO, the WTO, or in a trilateral coalition-should be on gaining experience and data from living within the parameters set out by the TRIPS Agreement during a prolonged period of open-minded experimentation. If international policymakers rise above sectarian interests and power politics to concentrate on nurturing the incipient transnational system of innovation that the TRIPS Agreement brought into being, they can stimulate research and innovation on a grander scale than ever before. But they must take the time and invest the effort to get it right. Locking in the fleeting, competitive advantages of one group of stakeholders or another at the expense of real innovators and dynamic entrepreneurs everywhere is a bad strategy that will compromise the world's aggregate innovative capacity in the long run. Instead of moving forward with harmonization for its own sake, the 197. See Drexl, supra note 159, at 709, 720 ("[R]elevant product markets usually have a limited geographical scope. Whereas intangible goods protected by IPRs may be exploited worldwide, the geographical market for products based on such IPRs is not necessarily a global one. . . . For instance, in poorer countries that are net importers of agricultural goods, small farmers will not compete with farmers on foreign markets."); Ullrich, supra note 159, at 40 ("Community and national protection must be seen as complimentary parts of an overall system of protection, where unification and harmonization allow to balance uniformity with specificity and stability with flexibility of protection."). [Vol. 57:85 international intellectual property community must first identify and test trustworthy, empirically supportable solutions likely to benefit humanity at large. 23. See, e.g., Janice M. Mueller, Taking TRIPS to India-Novartis, Patent Law, and Access to Medicines, 356 NEW ENG. J. MED. 541, 541 (2007) (discussing Novartis's effort to patent Gleevec); Robert Steinbrook, 34. See Straus, supra note 33, at 4. 35. See, e.g., KEITH E. MASKUS, INTELLECTUAL PROPERTY RIGHTS IN THE GLOBAL ECONOMY 109-42 (2000); Keith E. Maskus, Kamal Saggi & Thitima Puttitanun, art. 28. 51. Id. art. 27(3)(a). 60. See ADAM B. JAFFE & JOSH LERNER, INNOVATION AND ITS DISCONTENTS 35 (2004). 61. See id.; John H. Barton, Non-Obviousness, 43 IDEA 475, 508 (2003); Rebecca S. Eisenberg, 66. See generally Hauda, supra note 17. 67. See, e.g., Australia-United States Free Trade Agreement, U.S.-Austl., art. 17.4.7(e)(i), 71. Dreyfuss & Lowenfeld, supra note 59, at 300. 72. Id. [Vol. 57:85 made relatively difficult. 77. See Baechtold, supra note 18, at 142-43. See generally Hauda, supra note 17; Jeh, supra note 15.

I. THE LIKELY ADVERSE IMPACT ON DEVELOPING COUNTRIES

A. The Social Costs of the TRIPS Patent Standards

II. THE LIKELY ADVERSE IMPACT ON DEVELOPED COUNTRIES

III. NURTURING AN INCIPIENT TRANSNATIONAL SYSTEM OF INNOVATION

art. 28. 51. Id. art. 27(3)(a).


Hillary for President

" Hillary for President ," Chicago Tribune , Aug. 15, 2011

"Hillary for President," *Chicago Tribune*, Aug. 15, 2011

Christopher Jon Sprigman, Hillary for President, Chicago Tribune (Aug. 15, 2011), https://www.chicagotribune.com/2011/08/05/hillary-for-president/

During the 2008 presidential primaries, Hillary Clinton ran an ad called “3 a.m. phone call.” The ad juxtaposed pictures of sleeping children with the insistent ring of a telephone. A grave voice asked us to consider who we would want in the White House when the phone rang at 3 a.m. with news of trouble. The message was clear: Barack Obama lacked the strength to be president. I remember how angry that ad made me. I was newly hired as a junior professor, working hard to get tenure. My nonworking hours were, however, devoted almost entirely to getting Obama elected. I didn’t have a high-profile role in the campaign; I worked behind the scenes drafting policy documents. But I traveled to Denver to speak at a policy debate held during the Democratic National Convention, and spoke at a Richmond, Va., campaign event alongside Google CEO Eric Schmidt. The Obama campaign ran on the hard work of many thousands of people like me. But President Obama won’t be able to depend on the same kind of help in 2012. Because, it turns out, Hillary Clinton was right. Like most Americans, I’ve spent the last several weeks watching in disbelief as Washington edged closer to defaulting on the nation’s debt. And now that the crisis is over, I’m even angrier. Obama has handed the GOP a victory that is disproportionate to either their real leverage (the GOP controls only one house of Congress) or the appeal of their ideas (Americans favor deficit reduction plans that include both spending cuts and tax increases over the GOP’s single-minded focus on cuts). The only thing the Republicans really had going for them was their determination to debauch the creditworthiness of the United States if they didn’t get their way. But against a weak president, that was enough. First President Obama said he wanted a “clean deal,” one raising the debt limit without condition. The GOP said no. Then Obama demanded that any deal include both cuts and revenue increases. To soften GOP opposition, he offered $4 in cuts for every dollar in new revenues, but everyone could see he was negotiating with himself, and the GOP responded by rejecting any new revenues. Next was a proposal of all spending cuts, no tax increases, in return for the GOP’s agreement to grant enough borrowing authority to last through the 2012 election. Again, the GOP refused. Every time the GOP dug in, the president retreated. And he never explained to the American people in plain language the reason for Republicans’ intransigence — that they would rather the United States default on its debt than oblige the wealthiest Americans to pay their fair share of the tax burden. Which brings us to the final deal — about $2.5 trillion in cuts, no new revenues and the certainty of another debt battle before the 2012 election. The GOP has prevailed on all fronts. But the real problem is deeper. From Franklin D. Roosevelt to Bill Clinton, Democrats created and vigilantly protected a system that provided decent retirement and medical benefits for the elderly, and basic medical care, food and income assistance for the poor. Even George W. Bush, no one’s idea of a liberal, never really challenged what Democrats created. In fact, Bush added a new drug benefit to Medicare. That’s why it’s shocking that a Democrat, Barack Obama, has acquiesced in a process that will eviscerate the New Deal. Obama agreed to major cuts to entitlement programs. In return, Republicans gave nothing. And it won’t be the last time. The GOP has discovered a new playbook, one to which they’ll return as soon as the ink is dry. Next will be further Medicare cuts, and a hike in the Medicare eligibility age. Social Security recipients must also brace themselves for large benefit cuts. This will be done on the sly by limiting cost-of-living adjustments. And the retirement age will almost certainly be raised. It’s already 67 for those born after 1960, so you best plan to stay fit until at least 70. I’m not a political expert, so I don’t know if Obama can be re-elected. I only know he shouldn’t be. He has broken with the faith that has sustained Democrats since the 1930s — faith in the power of government to soften inequality, and to provide some measure of security for the old, the poor and the sick. Hillary, I’m sorry for not listening to you back in 2008. But perhaps you’ll give me another chance. Resign as secretary of state, and run against Obama in 2012. I will work my heart out for you. And I bet that millions of other angry Democrats will be with me. Christopher Sprigman is a professor at the University of Virginia School of Law.