An Organizational Approach to the Design of Patent Law

6 VERTINSKY FINAL_JAD (DO NOT DELETE) 2/27/2012 2:20 PM
2012] AN ORGANIZATIONAL APPROACH 263
dustry-specific and technology-specific studies and models to
inform proposals for a more tailored approach to patent policy.
224 The effectiveness of patents in furthering desirable forms
of economic behavior depends on a variety of factors. Examples
offered by the existing patent literature, particularly NIEbased
work, include differences in the levels of investment
needed to develop technologies and the risks of appropriation,
differences in licensing costs in different markets, 225 relative
costs of increased incentives to pioneer inventors versus the
costs of impeding incremental improvers, 226 and industryspecific
factors that allow for patents to perform better or worse
as property rights. 227 Norms can also play a role in influencing
what types of collaborative practices are considered. 228
The organizational approach offers a way of incorporating
these different factors into patent policy design because it looks
at the organization of innovation with the recognition that efficient
organizational form will be context dependent. In moving
away from a uniform patent law, however, we need to consider
whether selection between paths of innovation is an appropriate
domain for patent lawmakers. As North reminds us, institutions
are inherently imperfect. They are subject to the ideas,
ideologies, and interests of those who govern. How much government
intervention do we want in selecting for or against alternative
forms of innovation? Decisions about the nature of
the tailoring must also be made in light of the costs of administering
such detailed rules and the limitations of both decisionmakers
and implementers of the rules. A slightly different but
equally important policy implication is that the government is,
whether directly or indirectly, selecting for or against certain
kinds of innovation through patent policy. 229 In certain coun-
224. See, e.g., Hall & Ziedonis, supra note 222, at 101; Peter Lee, Towards
a Distributive Commons in Patent Law, 2009 WIS. L. REV. 917, 924–25; Fiona
Murray, The Stem Cell Market: Patents and the Pursuit of Scientific Progress,
356 NEW ENG. J. MED. 2341, 2343 (2007).
225. See, e.g., Gallini & Scotchmer, supra note 120, at 62–65 (arguing that
the ideal design of an intellectual property system depends on the ease with
which rights holders can enter into licensing and other contractual arrangements
involving these rights).
226. See id. at 68.
227. See BESSEN & MEURER, supra note 22, at 91–94.
228. See, e.g., Jay P. Kesan, Transferring Innovation, 77 FORDHAM L. REV.
2169, 2169 (2009) (discussing the focus of universities on narrow licensing
practices and the need to explore broader forms of collaboration in their technology
transfer practices).
229. See, e.g., Bessen, supra note 221, at 26–32. See also Rebecca S. Eisen-