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

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

Inverse Compton Emission from Galactic Supernova Remnants: Effect of the Interstellar Radiation Field

The evidence for particle acceleration in supernova shells comes from electrons whose synchrotron emission is observed in radio and X-rays. Recent observations by the HESS instrument reveal that supernova remnants also emit TeV gamma-rays; long awaited experimental evidence that supernova remnants can accelerate cosmic rays up to the ``knee'' energies. Still, uncertainty exists whether these gamma-rays are produced by electrons via inverse Compton scattering or by protons via neutral pion decay. The multi-wavelength spectra of supernova remnants can be fitted with both mechanisms, although a preference is often given to neutral pion decay due to the spectral shape at very high energies. A recent study of the interstellar radiation field indicates that its energy density, especially in the inner Galaxy, is higher than previously thought. In this paper we evaluate the effect of the interstellar radiation field on the inverse Compton emission of electrons accelerated in a supernova remnant located at different distances from the Galactic Centre. We show that contribution of optical and infra-red photons to the inverse Compton emission may exceed the contribution of cosmic microwave background and in some cases broaden the resulted gamma-ray spectrum. Additionally, we show that if a supernova remnant is located close to the Galactic Centre its gamma-ray spectrum will exhibit a ``universal'' cutoff at very high energies due to the Klein-Nishina effect and not due to the cut-off of the electron spectrum. As an example, we apply our calculations to the supernova remnants RX J1713.7-3946 and G0.9+0.1 recently observed by HESS.Comment: 4 pages, 4 figures. Uses emulateapj.cls. Accepted by ApJ

Comparison of measurements of the outer scale of turbulence by three different techniques

We have made simultaneous and nearly simultaneous measurements of L0, the outer scale of turbulence, at the Palomar Observatory by using three techniques: angle-of-arrival covariance measurements with the Generalized Seeing Monitor (GSM), differential-image-motion measurements with the adaptive-optics system on the Hale 5-m telescope, and fringe speed measurements with the Palomar Testbed Interferometer (PTI). The three techniques give consistent results, an outer scale of approximately 10-20 m, despite the fact that the spatial scales of the three instruments vary from 1 m for the GSM to 100 m for the PTI

Reynolds-Averaged Turbulence Model Assessment for a Highly Back-Pressured Isolator Flowfield

The use of computational fluid dynamics in scramjet engine component development is widespread in the existing literature. Unfortunately, the quantification of model-form uncertainties is rarely addressed with anything other than sensitivity studies, requiring that the computational results be intimately tied to and calibrated against existing test data. This practice must be replaced with a formal uncertainty quantification process for computational fluid dynamics to play an expanded role in the system design, development, and flight certification process. Due to ground test facility limitations, this expanded role is believed to be a requirement by some in the test and evaluation community if scramjet engines are to be given serious consideration as a viable propulsion device. An effort has been initiated at the NASA Langley Research Center to validate several turbulence closure models used for Reynolds-averaged simulations of scramjet isolator flows. The turbulence models considered were the Menter BSL, Menter SST, Wilcox 1998, Wilcox 2006, and the Gatski-Speziale explicit algebraic Reynolds stress models. The simulations were carried out using the VULCAN computational fluid dynamics package developed at the NASA Langley Research Center. A procedure to quantify the numerical errors was developed to account for discretization errors in the validation process. This procedure utilized the grid convergence index defined by Roache as a bounding estimate for the numerical error. The validation data was collected from a mechanically back-pressured constant area (1 2 inch) isolator model with an isolator entrance Mach number of 2.5. As expected, the model-form uncertainty was substantial for the shock-dominated, massively separated flowfield within the isolator as evidenced by a 6 duct height variation in shock train length depending on the turbulence model employed. Generally speaking, the turbulence models that did not include an explicit stress limiter more closely matched the measured surface pressures. This observation is somewhat surprising, given that stress-limiting models have generally been developed to better predict shock-separated flows. All of the models considered also failed to properly predict the shape and extent of the separated flow region caused by the shock boundary layer interactions. However, the best performing models were able to predict the isolator shock train length (an important metric for isolator operability margin) to within 1 isolator duct height

Stick-Fixed Maneuver Points in Roll, Pitch, and Yaw and Associated Handling Qualities

The stick-fixed pitch maneuver point is an important measure of aircraft longitudinal dynamic response and handling quality characteristics, and includes effects of both aerodynamic and inertia properties of the aircraft about the pitch axis. In the present work, the existence of stick-fixed roll and yaw maneuver points is demonstrated, which are determined from the lateral forces, moments, and inertial properties of the aircraft. These stick-fixed roll and yaw maneuver points are directly related to the predicted lateral handling qualities. Example results are included for several aircraft that demonstrate the importance of this parameter when predicting the dynamic response of the aircraft. A better understanding of stick-fixed roll, pitch, and yaw maneuver points can inform aircraft design during early stages to ensure adequate handling qualities for both longitudinal and lateral modes

On the Importance to Economic Success of Property Rights in Finance and Innovation

This Essay surveys recent developments across the fields of finance and innovation to highlight some common themes concerning the importance of property rights to economic success. Society regularly makes choices when shaping the precise contours of the legal institutions that govern the behavior of market actors, often in response to high profile issues like the collapse of Enron and the patenting of life-saving AIDS drugs. Recognizing that no set of legal institutions or related enforcement mechanisms will be perfect, this Essay explores some particularly helpful institutional features based on property rights that too often are overlooked by policy makers and commentators, even though these property-based institutional features have long been associated with economic success in a number of diverse settings