Of Green Tulips and Legal Kudzu: Repacking Rights in Subpatentable Innovation

How to enable entrepreneurs to appropriate the fruits of their investments in cumulative and sequential innovation\u27 without impeding follow-on innovation and without creating barriers to en- try has become one of the great unsolved puzzles that the law and economics of intellectual property rights needs to address as the new millennium gets underway. This Article draws briefly from my earlier works to identify some of the key historical difficulties en- countered in protecting small grain-sized innovations that do not rise to the level of novel and nonobvious inventions or original and creative works of authorship. It then re-examines these difficulties through the lens of a hypothetical green tulip problem, which encapsulates certain recurring investment dilemmas that afflict entrepreneurs operating under the hybrid intellectual property regimes available from both the domestic and international intellectual property systems. Without focusing on the technical operations of any of these hybrid regimes in detail, the green tulip exercises set out below will demonstrate why, from a structural perspective, they tend systematically to thwart the most socially desirable outcomes, especially with regard to follow-on innovations. The Article goes on to show how innovators and second comers working on common technical trajectories could better resolve these same problems by a more rational allocation of their collective costs of research and development ( R&D )

NCEAS: Promoting Creative Collaborations

NCEAS -- an ecological synthesis center -- is changing the way ecological research is conducted by fostering new forms of collaboration and interdisciplinary researc

Of Green Tulips and Legal Kudzu: Repacking Rights in Subpatentable Innovation

How to enable entrepreneurs to appropriate the fruits of their investments in cumulative and sequential innovation\u27 without impeding follow-on innovation and without creating barriers to en- try has become one of the great unsolved puzzles that the law and economics of intellectual property rights needs to address as the new millennium gets underway. This Article draws briefly from my earlier works to identify some of the key historical difficulties en- countered in protecting small grain-sized innovations that do not rise to the level of novel and nonobvious inventions or original and creative works of authorship. It then re-examines these difficulties through the lens of a hypothetical green tulip problem, which encapsulates certain recurring investment dilemmas that afflict entrepreneurs operating under the hybrid intellectual property regimes available from both the domestic and international intellectual property systems. Without focusing on the technical operations of any of these hybrid regimes in detail, the green tulip exercises set out below will demonstrate why, from a structural perspective, they tend systematically to thwart the most socially desirable outcomes, especially with regard to follow-on innovations. The Article goes on to show how innovators and second comers working on common technical trajectories could better resolve these same problems by a more rational allocation of their collective costs of research and development ( R&D )