PATENTLY UNCERTAIN

Innovation is an inherently uncertain process. Success is typically coupled with risk and we can only hope that those with great ideas will persevere. To encourage innovation, society reduces some of the innovation risk through structures like funding systems, regulation, and of course intellectual property rights. But what happens when uncertainty strikes the legal protection devices themselves? Faced with unclear rules and increasingly speculative rewards, some innovators may simply stop playing the game. Such uncertainty has recently been a topic of great concern in the U.S. patent system. Some believe that the suddenly unknowable nature of fundamental questions like what is patentable has had the effect of dramatically undermining legal incentives. Others question whether a crisis really exists. They point out that uncertainty can have positive effects, and even, be a source of strategic advantage. How can we tell good uncertainty from bad? This article provides a novel framework for evaluating patent uncertainty that explains how complaints and complacency can exist contemporaneously. It draws on the behavioral economics literature to provide a deeper understanding of how innovators react to unknown legal environments. Based on this analysis, the article identifies three different types of legal uncertainty: (1) investment-killing; (2) if-then; and (3) remedial uncertainly. It asserts that only the first creates a problem that must be addressed by legal reform, while the others are actually essential to a healthy innovation system. The article concludes with specific prescriptions for addressing negative uncertainty that depend on both firm and policymaker action

Medical Product Information Incentives and the Transparency Paradox

Recent allegations that essential safety and efficacy information is often suppressed by medical product manufacturers or poorly evaluated by regulators have led to calls for greater information transparency. The public is justifiably concerned that its ability to conduct an informed risk-benefit assessment of drugs and medical devices is compromised. Several changes have already been made to federal regulatory law and medical research policy to mandate greater disclosure and more changes are being considered. However, it is possible that these measures may backfire by enhancing significant tort-based economic disincentives for generating new information.I n other words, greater disclosure requirements could, paradoxically, lead to less information production. The resulting shortfall could be extremely dangerous and have a detrimental effect on health care for years to come. This Article addresses the crisis on the horizon and proposes a unique solution that connects tort law disincentives to information production incentives. It explains why an economically rational company would be expected to respond to transparency with less information and proposes a tort liability limitation as a solution that will encourage a cost-internalizing company to increase information production. This Article also considers the impact of the FDA\u27s recent position on preemption along with other regulatory enhancements and concludes that these are effective, but second-best solutions

Medical Product Information Incentives and the Transparency Paradox

Recent allegations that essential safety and efficacy information is often suppressed by medical product manufacturers or poorly evaluated by regulators have led to calls for greater information transparency. The public is justifiably concerned that its ability to conduct an informed risk-benefit assessment of drugs and medical devices is compromised. Several changes have already been made to federal regulatory law and medical research policy to mandate greater disclosure and more changes are being considered. However, it is possible that these measures may backfire by enhancing significant tort-based economic disincentives for generating new information.I n other words, greater disclosure requirements could, paradoxically, lead to less information production. The resulting shortfall could be extremely dangerous and have a detrimental effect on health care for years to come. This Article addresses the crisis on the horizon and proposes a unique solution that connects tort law disincentives to information production incentives. It explains why an economically rational company would be expected to respond to transparency with less information and proposes a tort liability limitation as a solution that will encourage a cost-internalizing company to increase information production. This Article also considers the impact of the FDA\u27s recent position on preemption along with other regulatory enhancements and concludes that these are effective, but second-best solutions