An Economic Theory of Infrastructure and Commons Management

In this article, Professor Frischmann combines a number of current debates across many disciplinary lines, all of which examine from different perspectives whether certain resources should be managed through a regime of private property or through a regime of open access. Frischmann develops and applies a theory that demonstrates there are strong economic arguments for managing and sustaining openly accessible infrastructure. The approach he takes differs from conventional analyses in that he focuses extensively on demand-side considerations and fully explores how infrastructure resources generate value for consumers and society. As a result, the theory brings into focus the social value of common infrastructure, and strongly suggests that the benefits of open access (costs of restricted access) are significantly greater than reflected in current debates. Frischmann\u27s infrastructure theory ultimately ties together different strands of legal and economic thought pertaining to natural resources such as lakes, traditional infrastructure such as road systems, what antitrust theorists describe as essential facilities, basic scientific research, and the Internet. His theory has significant potential to reframe a number of important debates within intellectual property, cyberlaw, telecommunications, and many other areas. Note: Professor Lawrence Lessig will publish a Reply titled Re-Marking the Progress in Frischmann in the same edition of the Minnesota Law Review

The Pull of Patents

The conventional view of the role of patents in the university research context (and more generally) is that patent-enabled exclusivity improves the supply-side functioning of markets for university research results (and inventions more generally) as well as those markets further downstream for derivative commercial end-products. The reward, prospect, and commercialization theories of patent law take patent-enabled exclusivity as the relevant means for fixing a supply-side problem—the undersupply of private investment in the production of patentable subject matter or in the development and commercialization of patentable subject matter that would occur in the absence of patent-enabled exclusivity. Put another way, patents attract private investment to productive activities that might otherwise be less attractive investments. The reason why is rather straightforward and well-understood. Without patents, the fruits of the investments, intellectual fruit, would be too easily accessed and used by others without compensation to the original investor, thus undermining the incentive to invest in the first place. This is the standard public goods story that serves as the textbook explanation for why we have a patent system. While the supply-side view of the role of patents is important, a view from the demand-side is needed to fully appreciate the role of patents in the university research context (and more generally) and to fully inform university decisions about the extent to and manner in which they participate in patenting and commercializing research. Introducing patents into the university research system, along with a host of other initiatives aimed at tightening the relationship between universities and industry, is (primarily) aimed at increasing connectivity between university science and technology research systems and the demands of industry for both university research outputs (including research results and human capital) and upstream infrastructural capital necessary to produce such outputs. In this essay, I explore how university science and technology research systems perform economically as infrastructural capital and explain how these systems generate social value. I explain the dual role of patents in the university research context. On the supply side, patents facilitate the transfer (or “push”) of university research to industry. On the demand side, patents attract (or “pull”) university resources to meet industry demands. I focus on the demand side dynamic and explain how “patent pull” in the university research context may lead to a slow and subtle shift in the allocation of critical infrastructure resources within universities. I explore what this means for both universities and society, and conclude with some observations about how universities might approach these issues strategically. Approaching the role of patents from the demand side is an entirely new enterprise, and it is critical to understanding the role of patents in the university context and more generally. Thus, in conclusion, I also make a few suggestions about future avenues of research in this area

Response: Systems of Human and Intellectual Capital

This essay reviews Orly Lobel\u27s article The New Cognitive Property: Human Capital Law and the Reach of Intellectual Property. It commends Professor Lobel for outlining the contours of the “new” field of human capital law, and for emphasizing the potential consequences of the growing enclosure of cognitive capacities in contemporary markets. From this starting point the essay makes two modest suggestions for researchers. First, it suggests that those building on Lobel’s work consider more contextual description and evaluation of human and intellectual capital production systems. Doing so would avoid overly abstract, macro-level analysis that is often divorced from reality and from the critical nuances that shape actors’ individual and collective motivations and behavior. It would also avoid excessive reliance on overly specific, micro-level analysis, which can be anecdotal. Second, the essay emphasizes the importance of establishing normative baselines prior to evaluating or prescribing reform

Response: Systems of Human and Intellectual Capital

This essay reviews Orly Lobel\u27s article The New Cognitive Property: Human Capital Law and the Reach of Intellectual Property. It commends Professor Lobel for outlining the contours of the “new” field of human capital law, and for emphasizing the potential consequences of the growing enclosure of cognitive capacities in contemporary markets. From this starting point the essay makes two modest suggestions for researchers. First, it suggests that those building on Lobel’s work consider more contextual description and evaluation of human and intellectual capital production systems. Doing so would avoid overly abstract, macro-level analysis that is often divorced from reality and from the critical nuances that shape actors’ individual and collective motivations and behavior. It would also avoid excessive reliance on overly specific, micro-level analysis, which can be anecdotal. Second, the essay emphasizes the importance of establishing normative baselines prior to evaluating or prescribing reform

Intergenerational Progress

This Essay prepared for the Wisconsin Law Review’s symposium on Intergenerational Equity lays the groundwork for a broader understanding of the goals of IP law in the United States by arguing that there is room for a normative commitment to intergenerational justice. First, we argue that the normative basis for IP laws need not be utilitarianism. The Constitution does not require that we conceive of IP in utilitarian terms or that we aim only to promote efficiency or maximize value. To the contrary, the IP Clause leaves open a number of ways to conceive of Progress; courts’ and scholars’ overwhelming acceptance of the utilitarian approach reflects nothing more than a modern policy choice. Second, we argue that acceptance of the utilitarian frame has led too easily to reliance on markets as the exclusive mechanism for achieving Progress, which has had a dramatic impact on the path of IP law and discourse. Specifically, we argue that, because it relies so heavily on the market, and because the market is inherently short-sighted, IP is less future regarding than it could be. This is disappointing because the subject matter of IP makes it particularly susceptible to the promotion of intergenerational progress. In the end, we conclude that a commitment to intergenerational justice is both compatible with Progress and normatively attractive. intellectual property, intergenerational equity, utilitarian, shortsighte

Retrospectives: Tragedy of the Commons After 50 Years

International audienceGarrett Hardin's "The Tragedy of the Commons" (1968) has been incredibly influential generally and within economics, and it remains important despite some historical and conceptual flaws. Hardin focused on the stress population growth inevitably placed on environmental resources. Unconstrained consumption of a shared resource-a pasture, a highway, a server-by individuals acting in rational pursuit of their self-interest can lead to congestion and worse, rapid depreciation, depletion, and even destruction of the resources. Our societies face similar problems, not only with respect to environmental resources but also with infrastructures, knowledge, and many other shared resources. In this Retrospective, we examine how the tragedy of the commons has fared within the economics literature and its relevance for economic and public policies today. We revisit the original piece to explain Hardin's purpose and conceptual approach. We expose two conceptual mistakes he made, that of conflating resource with governance and conflating open access with commons. This critical discussion leads us to the work of Elinor Ostrom, the recent Nobel Prize in Economics Laureate, who spent her life working on commons. Finally, we discuss a few modern examples of commons governance of shared resources

An Economic Theory of Infrastructure and Commons Management

In this article, Professor Frischmann combines a number of current debates across many disciplinary lines, all of which examine from different perspectives whether certain resources should be managed through a regime of private property or through a regime of open access. Frischmann develops and applies a theory that demonstrates there are strong economic arguments for managing and sustaining openly accessible infrastructure. The approach he takes differs from conventional analyses in that he focuses extensively on demand-side considerations and fully explores how infrastructure resources generate value for consumers and society. As a result, the theory brings into focus the social value of common infrastructure, and strongly suggests that the benefits of open access (costs of restricted access) are significantly greater than reflected in current debates. Frischmann\u27s infrastructure theory ultimately ties together different strands of legal and economic thought pertaining to natural resources such as lakes, traditional infrastructure such as road systems, what antitrust theorists describe as essential facilities, basic scientific research, and the Internet. His theory has significant potential to reframe a number of important debates within intellectual property, cyberlaw, telecommunications, and many other areas. Note: Professor Lawrence Lessig will publish a Reply titled Re-Marking the Progress in Frischmann in the same edition of the Minnesota Law Review