Valuing Intellectual Property: An Experiment

In this article we report on the results of an experiment we performed to determine whether transactions in intellectual property (IP) are subject to the valuation anomalies commonly referred to as “endowment effects”. Traditional conceptions of the value of IP rely on assumptions about human rationality derived from classical economics. The law assumes that when people make decisions about buying, selling, and licensing IP they do so with fixed, context-independent preferences. Over the past several decades, this rational actor model of classical economics has come under attack by behavioral data showing that people do not always make strictly rational decisions. Perhaps the most important research in this field is that related to the “endowment effect” – the discovery that, contrary to economic predictions, people value the same object more when they own it than when they do not. To date, the endowment effect has been observed for a variety of goods including mugs, lottery tickets, and hunting permits. Our experiment establishes a substantial valuation asymmetry between authors of poems and potential purchasers of them. As we explain in detail in the article, we constructed a market for the poems that was modeled on a market for licensing IP. The observed differences in valuation indicate that IP licensing markets may be substantially less efficient that previously believed. Our results suggest that (1) the preferences of IP creators, owners, and purchasers are unstable and dependent on the initial distribution of property rights in creative works, and (2) large gaps arise between purchasers’ willingness to pay and sellers’ willingness to accept even though the poems are non-rival property and the contemplated alienation of the property is therefore only partial. Our findings suggest that private transactions in creative goods may face significant transaction costs arising from cognitive biases that drive the price that creators and owners of IP are likely to demand for transfers considerably higher than what buyers will, on average, be willing to pay. This does not mean, of course, that transactions in IP will not take place – we see such transactions happening out in the world every day. Our research suggests, however, that IP transactions may occur at a level that is significantly suboptimal, and that the baleful effect of cognitive and affective biases is likely to be more serious for transactions in works of relatively low commercial value, or for which no well-established custom or pattern helps to inform valuation. These results have considerable implications for the structuring of IP rights, IP formalities, IP licensing, and fair use

Fashion\u27s Function in Intellectual Property Law

Clothing designs can be beautiful. But they are also functional. Fashion’s dual nature sits uneasily in intellectual property law, and its treatment by copyright, trademark, and design patent laws has often been perplexing. Much of this difficulty arises from an unclear understanding of the nature of functionality in fashion design. This Article proposes a robust account of fashion’s function. It argues that aspects of garment designs are functional not only when they affect the physical or technological performance of a garment but also when they affect the perception of the wearer’s body. Generally, clothes are not designed or chosen simply to look good. They are also characteristically designed or chosen to look good on. This approach clarifies the appropriate treatment of fashion design in intellectual property, and it exposes the conceptual limitations of the Supreme Court’s recent copyright decision in Star Athletica, L.L.C. v. Varsity Brands, Inc

Fashion\u27s Function in Intellectual Property Law

Clothing designs can be beautiful. But they are also functional. Fashion’s dual nature sits uneasily in intellectual property law, and its treatment by copyright, trademark, and design patent laws has often been perplexing. Much of this difficulty arises from an unclear understanding of the nature of functionality in fashion design. This Article proposes a robust account of fashion’s function. It argues that aspects of garment designs are functional not only when they affect the physical or technological performance of a garment but also when they affect the perception of the wearer’s body. Generally, clothes are not designed or chosen simply to look good. They are also characteristically designed or chosen to look good on. This approach clarifies the appropriate treatment of fashion design in intellectual property, and it exposes the conceptual limitations of the Supreme Court’s recent copyright decision in Star Athletica, L.L.C. v. Varsity Brands, Inc

What\u27s a Name Worth?: Experimental Tests of the Value of Attribution in Intellectual Property

Despite considerable research suggesting that creators value attribution – i.e., being named as the creator of a work – U.S. intellectual property (IP) law does not provide a right to attribution to the vast majority of creators. On the other side of the Atlantic, however, many European countries give creators, at least in their copyright laws, much stronger rights to attribution. At first blush it may seem that the U.S. has gotten it wrong, and the Europeans have made a better policy choice in providing to creators a right that they value. But for reasons we will explain in this Article, matters are a lot more complicated than that. This Article reports a series of experiments that are the first to attempt to quantitatively measure the value of attribution to creators. In previous research, we have shown that creators of IP are subject to a “creativity effect” that results in them assigning substantially higher value to their works than neoclassical economic theory predicts. The first two experiments reported in this Article suggest a way that the creativity effect may be reduced – creators are willing to sacrifice significant economic payments in favor of receiving attribution for their work. The value to creators of attribution raises the question whether U.S. IP law should be re-structured to provide attribution as a creator’s default right. The third and most important experiment reported here casts doubt on the value of giving creators such a default right, because creators value attribution differently depending on whether the legal rule gives it to them as an initial entitlement or not. When creators are given a right to attribution as a default they value credit four times higher than when attribution is not the default option. Our findings make clear that creators value attribution, and that the prospect of obtaining it can lead to a more efficient level of transacting. At the same time, and paradoxically, our findings also suggest that before we restructure American law, which provides no right to attribution for the vast majority of creators, we need to take care, because it is possible, under conditions that we will describe, that providing creators with a default right to attribution will result in less efficient transacting. Finally, our findings have important implications for property theory which are broader than IP law or attribution rights. Our third experiment suggests that a party who enjoys a default legal right as part of her initial complement of rights will tend to treat that legal right in a fashion similar to any other form of initial entitlement, and overvalue it relative to what neoclassical theory would predict. This suggests a principle regarding how to efficiently structure default rules in any setting. All other factors being equal, an efficiently-structured default rule will locate the initial legal entitlement in the party who is either less likely to overvalue the entitlement, or, if overvaluation seems inevitable regardless of where the initial entitlement is placed, is likely to overvalue it less

Forgetting Functionality

In Star Athletica, LLC v. Varsity Brands, Inc., the U.S. Supreme Court had an opportunity to clarify copyright law’s treatment of product designs that incorporate functionality. Its opinion failed to do so in a host of different ways. In this comment (as part of the symposium From Shovels to Jerseys: A Guide to Apply Star Athletica v. Varsity Brands), we address just one of the opinion’s shortcomings: its failure to adequately define and distinguish between a design’s functional and expressive features. Not only does the Court’s neglect produce uncertainty for creators, litigants, and judges, the opinion makes it substantially easier for copyright claimants to obtain protection for utilitarian aspects of designs, contrary to copyright statute and policy

The antisaccade task as an index of sustained goal activation in working memory: modulation by nicotine

The antisaccade task provides a laboratory analogue of situations in which execution of the correct behavioural response requires the suppression of a more prepotent or habitual response. Errors (failures to inhibit a reflexive prosaccade towards a sudden onset target) are significantly increased in patients with damage to the dorsolateral prefrontal cortex and patients with schizophrenia. Recent models of antisaccade performance suggest that errors are more likely to occur when the intention to initiate an antisaccade is insufficiently activated within working memory. Nicotine has been shown to enhance specific working memory processes in healthy adults. MATERIALS AND METHODS: We explored the effect of nicotine on antisaccade performance in a large sample (N = 44) of young adult smokers. Minimally abstinent participants attended two test sessions and were asked to smoke one of their own cigarettes between baseline and retest during one session only. RESULTS AND CONCLUSION: Nicotine reduced antisaccade errors and correct antisaccade latencies if delivered before optimum performance levels are achieved, suggesting that nicotine supports the activation of intentions in working memory during task performance. The implications of this research for current theoretical accounts of antisaccade performance, and for interpreting the increased rate of antisaccade errors found in some psychiatric patient groups are discussed

Cue-Elicited Craving in Heroin Addicts at Different Abstinent Time: An fMRI Pilot Study

Objective: We evaluated the effect of short-term and long-term heroin abstinence on brain responses to heroin-related cues using functional magnetic resonance imaging (fMRI). Methods: Eighteen male heroin addicts following short-term abstinence and 19 male heroin addicts following long-term abstinence underwent fMRI scanning while viewing heroin-related and neutral images. Cue-elicited craving and withdrawal symptoms in the subjects were measured. Results: Following short-term abstinence, greater activation was found in response to heroin cues compared to neutral cues in bilateral temporal, occipital, posterior cingulate, anterior cingulate, thalamus, cerebellum, and left hippocampus. In contrast, activations in bilateral temporal and occipital and deactivations in bilateral frontal, bilateral parietal, left posterior cingulate, insula, thalamus, dorsal striatum, and bilateral cerebellum were observed following long-term abstinence. Direct comparisons between conditions showed greater brain reactivity in response to smoking cues following short-term abstinence. In addition, short-term abstinence had more serious withdrawal symptoms than the long-term. Conclusion: The present findings indicate that compared to short-term, long-term abstinence manifests less serious withdrawal symptoms and significantly decreases neural responses to heroin-related cues in brain regions subserving visual sensory processing, attention, memory, and action planning. These findings suggest that long-term abstinence can decrease the salience of conditioned cues, thereby reducing the risk of relapses. The study's limitations are noted

Nicotinic acetylcholine receptor subunit variants are associated with blood pressure; findings in the Old Order Amish and replication in the Framingham Heart Study

<p>Abstract</p> <p>Background</p> <p>Systemic blood pressure, influenced by both genetic and environmental factors, is regulated via sympathetic nerve activity. We assessed the role of genetic variation in three subunits of the neuromuscular nicotinic acetylcholine receptor positioned on chromosome 2q, a region showing replicated evidence of linkage to blood pressure.</p> <p>Methods</p> <p>We sequenced <it>CHRNA1</it>, <it>CHRND </it>and <it>CHRNG </it>in 24 Amish subjects from the Amish Family Diabetes Study (AFDS) and identified 20 variants. We then performed association analysis of non-redundant variants (n = 12) in the complete AFDS cohort of 1,189 individuals, and followed by genotyping blood pressure-associated variants (n = 5) in a replication sample of 1,759 individuals from the Framingham Heart Study (FHS).</p> <p>Results</p> <p>The minor allele of a synonymous coding SNP, rs2099489 in <it>CHRNG</it>, was associated with higher systolic blood pressure in both the Amish (p = 0.0009) and FHS populations (p = 0.009) (minor allele frequency = 0.20 in both populations).</p> <p>Conclusion</p> <p><it>CHRNG </it>is currently thought to be expressed only during fetal development. These findings support the Barker hypothesis, that fetal genotype and intra-uterine environment influence susceptibility to chronic diseases later in life. Additional studies of this variant in other populations, as well as the effect of this variant on acetylcholine receptor expression and function, are needed to further elucidate its potential role in the regulation of blood pressure. This study suggests for the first time in humans, a possible role for genetic variation in the neuromuscular nicotinic acetylcholine receptor, particularly the gamma subunit, in systolic blood pressure regulation.</p

Scopolamine Administration Modulates Muscarinic, Nicotinic and NMDA Receptor Systems

Studies on the effect of scopolamine on memory are abundant but so far only regulation of the muscarinic receptor (M1) has been reported. We hypothesized that levels of other cholinergic brain receptors as the nicotinic receptors and the N-methyl-D-aspartate (NMDA) receptor, known to be involved in memory formation, would be modified by scopolamine administration