An Organizational Approach to the Design of Patent Law

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2012] AN ORGANIZATIONAL APPROACH 217
havior in a way that can inform effective rule design. 17
Adopting this way of thinking about patent law can improve
policy decisions in significant ways. First, if patent policy
is specifically designed to respond to flaws in human decision
making, such as limited information and opportunism, it will
be more robust in addressing these flaws. By placing decisionmakers
at the center of the analysis and recognizing the different
mechanisms through which rules both influence and are influenced
by human behavior, this approach can identify and
encompass a broader range of functions for patents, including
those often overlooked or ignored. 18
Second, the organizational approach focuses specifically on
how to align patent policy more closely with broader innovation
goals. 19 By providing a commonality of purpose, that of using
economic organization to increase innovation, this approach
provides a way of mapping patent policy more readily into the
areas of concern in national innovation policy. 20 For example,
patent laws can be evaluated to determine whether they facilitate
or hinder clustering, public-private partnerships, and other
types of arrangements that are the focus of current national
innovation strategies. Moreover, once the value of patents to
national innovation objectives can be demonstrated, political
17. The dangers of including too much, as opposed to too little, context in
the analysis of legal rules is clear. See Eric A. Posner, Economic Analysis of
Contract Law After Three Decades: Success or Failure?, 112 YALE L.J. 829,
838–39 (2003) (arguing that the economic analysis of contract law fails because
of its indeterminacy). New Institutional Economics has been relatively
successful in the development of analytical tools that capture and examine
empirical regularities, moving between observation and abstraction.
18. Examples include transformative effects on potential entrepreneurs
and expressive functions that reflect and encourage norms of information
sharing or retention. Timothy R. Holbrook, The Expressive Impact of Patents,
84 WASH. U. L. Rev. 573, 575–76 (2006).
19. Ted Sichelman makes the interesting point that the current system of
private law damages for patent infringement is inconsistent with a public law
goal of using patents to increase innovation. He argues that patent law remedies
should be designed to promote the types of levels of innovation that are
most beneficial to society instead of being used to compensate for private
wrongs inflicted on private parties. Ted Sichelman, Purging Patent Law of
Private Law Remedies, 4–5 (2011) (unpublished working paper), available at
http://www.law.stanford.edu/display/images/dynamic/events_media/Ted%20Si
cheman%20%20Purging%20Patent%20Law%20of%20Private%20Law%20Rem
edies.pdf. I also argue that patent law should be designed in light of innovation
outcomes, and suggest that one way to do this is to make the organization
of innovation the central focus of patent policy.
20. See Barnett, supra note 9; see also Robert P. Merges, supra note 15, at
1516.