An Organizational Approach to the Design of Patent Law

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2012] AN ORGANIZATIONAL APPROACH 243
Incorporating the cognitive level into the institutional environment
provides an opportunity to explore both the importance
of mental models in constraining behavior relevant to
innovation, such as risk taking, and potential avenues for responding
to these limitations through, for example, patent law
change. 142 Experimental economics, behavioral economics, and
experimental psychology may provide underutilized avenues
for exploring these aspects of human learning and decision
making and their implications for the design of patent laws. 143
2. Embedded Institutions (Informal Rules)
Informal rules include the norms, values, customs, and
conventions that shape behavior relevant to systems of innovation.
144 For example, they include both informal rules that influence
how science and technology are “produced” and resulting
innovations developed and deployed, 145 and informal rules
that influence the evolution of patent laws and their effectiveness.
Policy analysis under the organizational approach requires
the study of the different aspects of the embeddedness of
innovation—whether cultural, structural, or political—and the
implications that the embeddedness has for patent policy. 146 Informal
rules depend on existing political, social, and cognitive
NORTH, INSTITUTIONS, INSTITUTIONAL CHANGE AND ECONOMIC PERFORMANCE
85–86 (1990).
142. See Williamson, supra note 75, at 600.
143. Experimental psychology and behavioral economics may provide insights
into how individuals respond to different risk-reward systems as well as
on transformational aspects of creating ownership over intangibles. E.g., Andrew
W. Torrance & Bill Tomlinson, Patents and the Regress of Useful Arts, 10
COLUM. SCI. & TECH. L. REV. 130, 140–42 (2009) (discussing the use of games
and simulations to investigate how actors respond to various patent situations).
144. See Williamson, Transaction Cost Economics: How it Works; Where it
is Headed, 146 DE ECONOMIST 23, 26–29 (1998).
145. See, e.g., BRUNO LATOUR, SCIENCE IN ACTION: HOW TO FOLLOW
SCIENTISTS AND ENGINEERS THROUGH SOCIETY 15–17 (1987) (offering a contested
approach to the empirical study of science and technology which emphasizes
that science and technology must be studied “in the making,” and
looking at the social construction of science through the study of laboratory
processes and systems). While many may disagree with Latour’s view of the
social construction of science, he offers a useful perspective on the different
types of formal and informal rules that together channel economic activity.
146. Williamson, supra note 75, at 597. See e.g. Rochelle Cooper Dreyfuss,
Does IP Need IP? Accommodating Intellectual Production Outside the Intellectual
Property Paradigm, 31 CARDOZO L. REV. 1437, 1443–47 (2010) (offering
an example of the importance of embedded analysis in the context of evaluating
open systems of innovation).