Blinded by the Light: Information Overload and Its Consequences for Securities Regulation

The tone of this Article and its policy suggestions are necessarily tentative. The concerns about information overload expressed here are part of a larger trend considering how our growing understanding of investor psychology and behavioral finance might impact securities regulation. Before arguing for major regulatory reform, there is still much to be learned about information overload and about investor psychology and behavioral finance generally. Indeed, I ultimately call for more empirical research to better understand how investors process information and make investment decisions. My goal here is to highlight that information overload is a real concern that should not be ignored

Engineering a Deal: Toward a Private Ordering Solution to the Anticommons Problem

The problems of the intellectual property ( IP ) anticommons are infamous. Many people fear that the potential for vast numbers of IP rights to cover a single good or service will prevent an enterprise from even attempting to launch a business Ivor fear of being unduly taxed or retarded or simply held up. This Article offers a solution based on private ordering within the context of existing laws. This approach uses a limited liability entity structured so that IP owners are given an actual stake in the operating business and thus an incentive to participate in the enterprise; and yet at the same time, the IP owners face a number of constraints that mitigate their interest in acting opportunistically by holding out. Through carelitl attention to IP owner payoffs and self-restraint, the proposed structure is designed to coordinate behavior among relevant II\u27 owners, thus overcoming the anticommons problem. This approach is designed to help lawyers serve their role as transaction cost engineers who can structure relationships in ways that get deals done

An Approach to Intellectual Property, Bankruptcy, and Corporate Control

Corporate control is the central concern of corporate law, and, in addition to priority, has become a core concern of bankruptcy. The question of corporate control in bankruptcy is especially important for intellectual property ( IP ) rights. Bankruptcy proceedings do not compromise fundamentally the value of most tangible assets. Tangible assets generally retain their value both during and after bankruptcy proceedings, although there is always the risk that the business will be run poorly. IP is different. IP rights are typically most valuable when they carry a credible threat of injunction. As a result, to the extent the delay and coordination problems of bankruptcy lead to the under-enforcement of a debtor\u27s IP rights - or simply to the impression of under-enforcement - bankruptcy can frustrate the important coordination benefits IP rights otherwise serve. The bankruptcy process itself potentially can erode the private value of IP to a firm and all of its constituencies, as well as the public value of IP in facilitating downstream commercialization of the subject matter IP otherwise protects. To ensure that a debtor\u27s IP rights are enforced vigorously in bankruptcy, a party with the right incentives, information, and resources, as well as with standing to sue, must have control over IP assets in bankruptcy. A prepackaged bankruptcy or an assignment of a debtor\u27s IP assets for the benefit of its creditors might mitigate the delay and coordination problems of bankruptcy. Borrowing from structured finance, we explore a different option: the creation of a bankruptcy-remote special purpose entity ( SPE ) to which a company transfers all or part of its IP assets to ensure that the assets do not become part of the company\u27s bankruptcy estate when and if the company is ever in bankruptcy. A properly structured IP SPE would have the critical attribute that a holder of IP must have to ensure the value of the IP: the credible perception by all market players that the SPE can enjoin infringers of, as well as transact over, the IP. The sort of IP securitization that we outline is very similar in structure to a traditional asset securitization. One of the principal normative criticisms of the IP securitization structure, as we propose it, is that the structure might accelerate what some might see as the death of legal liability by removing assets from the reach of a debtor\u27s creditors in bankruptcy. Accordingly, in addition to outlining the IP securitization structure, this Essay briefly explores how the death of legal liability may be exaggerated and how concerns over the death of legal liability may be overstated. More to the point, in some instances, IP securitization may best ensure the value of IP assets to the benefit of a debtor\u27s creditors and other constituencies

An Approach to Intellectual Property, Bankruptcy, and Corporate Control

Corporate control is the central concern of corporate law, and, in addition to priority, has become a core concern of bankruptcy. The question of corporate control in bankruptcy is especially important for intellectual property (“IP”) rights. Bankruptcy proceedings do not compromise fundamentally the value of most tangible assets. Tangible assets generally retain their value both during and after bankruptcy proceedings, although there is always, the risk that the business will be run poorly. IP is different. IP rights are typically most valuable when they carry a credible threat of injunction. As a result, to the extent the delay and coordination problems of bankruptcy lead to the under-enforcement of a debtor\u27s IP rights-or simply to the impression of under-enforcement-bankruptcy can frustrate the important coordination benefits IP rights otherwise serve. The bankruptcy process itself potentially can erode the private value of IP to a firm and all of its constituencies, as well as the public value of IP in facilitating downstream commercialization of the subject matter IP otherwise protects. To ensure that a debtor\u27s IP rights are enforced vigorously in bankruptcy, a party with the right incentives, information, and resources, as well as with standing to sue, must have control over IP assets in bankruptcy. A prepackaged bankruptcy or an assignment of a debtor\u27s IP assets for the benefit of its creditors might mitigate the delay and coordination problems of bankruptcy. Borrowing from structured finance, we explore a different option: the creation of a bankruptcy-remote special purpose entity (“SPE”) to which a company transfers all or part of its IP assets to ensure that the assets do not become part of the company\u27s bankruptcy estate when and if the company is ever in bankruptcy. A properly structured “IP SPE” would have the critical attribute that a holder of IP must have to ensure the value of the IP: the credible perception by all market players that the SPE can enjoin infringers of as well as transact over, the IP. The sort of “IP securitization “that we outline is very similar in structure to a traditional asset securitization. One of the principal normative criticisms of the IP securitization structure, as we propose it, is that the structure might accelerate what some might see as the death of legal liability by removing assets from the reach of a debtor\u27s creditors in bankruptcy. Accordingly, in addition to outlining the IP securitization structure, this Article briefly explores how the death of legal liability may be exaggerated and how concerns over the death of legal liability may be overstated. More to the point, in some instances, IP securitization may best ensure the value of IP assets to the benefit of a debtor\u27s creditors and other constituencies

The Basics Matter: At the Periphery of Intellectual Property

Controversies often arise at the interfaces where intellectual property ( IP ) law meets other topics in law and economics, such as property law, contract law, and antitrust law. Participants in the debates over how to mediate these interfaces often view each interface as a special case deserving unique treatment under the law. The doctrines of copyright and patent misuse are cases in point: they graft select antitrust principles onto copyright or patent law, even though there is an entirely distinct body of law - antitrust law - designed to deal with the putative concerns about competition that allegedly give rise to misuse. In this essay, we argue that a better approach for mediating disputes at the periphery of IP law focuses on what we term the basics - or core principles and features - of each area of law, and rarely requires specialized frameworks. For example, according to our basics matter approach, there is no need to create special doctrines or approaches to address issues relating to matters such as price discrimination or restrictive licensing arrangements involving IP. Rather, analyzing the legality of such arrangements simply requires one to look to the basics of substantive IP law, antitrust law, and what some people call the general law - property law, contract law, and the like. Applying the basics of each area of the law gives us a workable - and more predictable - framework of analysis than creating one - with more specialized approaches, such as the doctrines of copyright or patent misuse, using the basics results in easier to apply rules for resolving disputes that transacting parties can better understand and rely on in advance. By reducing legal uncertainty, the basics matter approach facilitates the ex ante coordination necessary to promote innovation through the commercialization of the inventions, symbols, and creative works that are protected by patents, copyrights, and trademarks - the entire goal of IP law and an important goal of antitrust law

An Approach to Intellectual Property, Bankruptcy, and Corporate Control

Corporate control is the central concern of corporate law, and, in addition to priority, has become a core concern of bankruptcy. The question of corporate control in bankruptcy is especially important for intellectual property (“IP”) rights. Bankruptcy proceedings do not compromise fundamentally the value of most tangible assets. Tangible assets generally retain their value both during and after bankruptcy proceedings, although there is always, the risk that the business will be run poorly. IP is different. IP rights are typically most valuable when they carry a credible threat of injunction. As a result, to the extent the delay and coordination problems of bankruptcy lead to the under-enforcement of a debtor\u27s IP rights-or simply to the impression of under-enforcement-bankruptcy can frustrate the important coordination benefits IP rights otherwise serve. The bankruptcy process itself potentially can erode the private value of IP to a firm and all of its constituencies, as well as the public value of IP in facilitating downstream commercialization of the subject matter IP otherwise protects. To ensure that a debtor\u27s IP rights are enforced vigorously in bankruptcy, a party with the right incentives, information, and resources, as well as with standing to sue, must have control over IP assets in bankruptcy. A prepackaged bankruptcy or an assignment of a debtor\u27s IP assets for the benefit of its creditors might mitigate the delay and coordination problems of bankruptcy. Borrowing from structured finance, we explore a different option: the creation of a bankruptcy-remote special purpose entity (“SPE”) to which a company transfers all or part of its IP assets to ensure that the assets do not become part of the company\u27s bankruptcy estate when and if the company is ever in bankruptcy. A properly structured “IP SPE” would have the critical attribute that a holder of IP must have to ensure the value of the IP: the credible perception by all market players that the SPE can enjoin infringers of as well as transact over, the IP. The sort of “IP securitization “that we outline is very similar in structure to a traditional asset securitization. One of the principal normative criticisms of the IP securitization structure, as we propose it, is that the structure might accelerate what some might see as the death of legal liability by removing assets from the reach of a debtor\u27s creditors in bankruptcy. Accordingly, in addition to outlining the IP securitization structure, this Article briefly explores how the death of legal liability may be exaggerated and how concerns over the death of legal liability may be overstated. More to the point, in some instances, IP securitization may best ensure the value of IP assets to the benefit of a debtor\u27s creditors and other constituencies