Balkinization  

Monday, March 30, 2015

Incentives and Competition in Innovation Markets: A Study of the FAA UAS Test Sites Competition

Guest Blogger

Robert Heverly

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

The (commercial) drones are coming. Amazon wants to deliver packages with them, as does Google, and utilities want to monitor their infrastructure with them. Known more properly as Unmanned Aircraft Systems (UAS), the Federal Aviation Administration has proposed new rules to regulate commercial drone use, and states have passed laws in an attempt to protect privacy and prevent alleged misuse of the drones (for example, preventing hunting by UAS).

In 2012, Congress passed the Federal Aviation Administration Modernization and Reform Act (FMRA), in which it directed the Federal Aviation Administration (FAA) to begin integrating Unmanned Aircraft Systems (UAS, or drones) into the national airspace. Section 332(c) required the FAA to designate six UAS national test ranges to allow testing to begin at those sites (without this authority, UAS cannot be used for commercial purposes without specific FAA authority). No funding was included in the test range designation; instead, UAS could fly at the ranges pursuant to a local, streamlined approval process, avoiding the otherwise relatively lengthy existing FAA procedure). Fifty applicants initially sought FAA authority to open test ranges, a number the FAA first reduced to 24 and finally to the six awardees (the FAA has since issued proposed rules for more general commercial UAS use, and even more recently approved use of certain UAS below 200 feet without significant restrictions).

The UAS industry is an innovative industry. We can contrast UAS with industries, such as manufacturing or even gambling facilities, that states may seek to entice to locate within their borders for purposes of encouraging economic development. Silicon Valley was not built by luring employers into the region. It was built – and succeeds – because of the benefits that innovation bring to the region (and it is so successful that there are now various “Silicon” and “Valley” themed regions throughout the world as others attempt to recreate Silicon Valley’s success).


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Sunday, March 29, 2015

The Path of Robotics Law

JB

I have posted a draft of my latest essay, The Path of Robotics Law, on SSRN. Here is the abstract:

This essay, written as a response to Ryan Calo's valuable discussion in "Robotics and the Lessons of Cyberlaw," describes key problems that robotics and artificial intelligence (AI) agents present for law.

The first problem is how to distribute rights and responsibilities among human beings when non-human agents create benefits like artistic works or cause harms like physical injuries. The difficulty is caused by the fact that the behavior of robotic and AI systems is "emergent;" their actions may not be predictable in advance or constrained by human expectations about proper behavior. Moreover,the programming and algorithms used by robots and AI entities may be the work of many hands, and may employ generative technologies that allow innovation at multiple layers. These features of robotics and AI enhance unpredictability and diffusion of causal responsibility for what robots and AI agents do.

Lawrence Lessig’s famous dictum that “Code is Law” argued that combinations of computer hardware and software, like other modalities of regulation, could constrain and direct human behavior. Robotics and AI present the converse problem. Instead of code as a law that regulates humans, robotics and AI feature emergent behavior that escapes human planning and expectations. Code is lawless.

The second problem raised by robotics and AI is the "substitution effect." People will substitute robots and AI agents for living things—and especially for humans. But they will do so only in certain ways and only for certain purposes. In other words, people tend to treat robots and AI agents as special-purpose animals or special-purpose human beings. This substitution is likely to be incomplete, contextual, unstable, and often opportunistic. People may treat the robot as a person (or animal) for some purposes and as an object for others. The problem of substitution touches many different areas of law, and it promises to confound us for a very long time.

Finally, the essay responds to Calo's argument about the lessons of cyberlaw for robotics. Calo argues that lawyers should identify the “essential characteristics” of robotics and then ask how the law should respond to the problems posed by those essential characteristics. I see the lessons of cyberlaw quite differently. We should not think of essential characteristics of technology independent of how people use technology in their lives and in their social relations with others. Because the use of technology in social life evolves, and because people continually find new ways to employ technology for good or for ill, it may be unhelpful to freeze certain features of use at a particular moment and label them “essential characteristics.” Innovation in technology is not just innovation of tools and techniques; it may also involve innovation of economic, social and legal relations. As we innovate socially and economically, what appears most salient and important about our technologies may also change.

Saturday, March 28, 2015

Commemorating the Joint Committee on Reconstruction

Gerard N. Magliocca

This is a year filled with sesquicentennial anniversaries of the Civil War.  Lee's surrender to Grant, Lincoln's assassination, and the ratification of the Thirteenth Amendment all occurred in 1865.

But another transformative event of 1865 may not be celebrated at all.  In December 1865, Congress created the Joint Committee on Reconstruction, which gave us the Fourteenth Amendment.  As far as I know, this conclave, which amounted to a Second Constitutional Convention, has never received any official recognition.  Given that Reconstruction was condemned as a disaster until the 1960s, this lack of respect is unsurprising.  We are well past that point now, though, and thus I hope that many elected officials, law schools, and bar associations will work to rectify that wrong.

Friday, March 27, 2015

IP and Other Regulations

Guest Blogger

Mark A. Lemley [1]

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School


Intellectual property (IP) is a form of regulation. As I have argued elsewhere, [3] IP laws are deliberate government interventions in the market to try to shape how people participate in that market, encouraging new creation by rewarding it with above-market returns and discouraging imitation by imposing damages or even barring it altogether.

Once we understand IP laws as government social policies that seek to alter market outcomes, we can start to think of those laws as part of a broader tapestry of government rules that affect innovation in a complex variety of ways. Daniel Hemel and Lisa Ouellette have already situated IP regimes among a variety of other government policy levers designed to affirmatively encourage innovation and market entry, including prizes, grants, and tax incentives. [4]
 
But the potential role of regulation in encouraging market entry is not limited to offering various forms of government-sponsored largess to innovators. More traditional forms of regulation restrict market entry. Doing so offers supracompetitive returns to market incumbents who benefit from the entry barriers regulations impose. Taxi drivers benefit – or did until quite recently – from the absence of a truly competitive market, propped up by government limits on market entry. So too do the learned professions, which limit entry into their fields, sometimes in quite blatantly anticompetitive ways. [5] Pharmaceutical companies benefit from the limits the FDA puts on generic entry, over and above – and sometimes regardless of – the existence of patents. [6]

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Innovation Law Beyond IP 2: Bringing the State Back In

Guest Blogger

Amy Kapczynski

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

I’m looking forward to welcoming a superb group here to Yale this weekend for our second annual “Innovation Law Beyond IP” conference. I’m particularly excited about the main theme of our gathering this year: bringing the state back in.

I’ve puzzled for many years about the reflexive pessimism about the state that prevails in the field of IP.  The dominant justification for IP law, in fact, relies at its core on a particular view of the state.  As Kenneth Arrow noted long ago, IP rights create necessary inefficiencies, and these make the state a plausible competitor to the market on efficiency grounds.  Why, then, should we use IP rather than the state?  Because, as one of the leading IP law casebooks tells us:
Intellectual property rights have the advantage of limiting the government’s role in allocating resources to a finite set of decentralized decisions: whether particular inventions are worthy of a fixed period of protection. The market then serves as the principal engine of progress. Decentralized consumers generate demand for products and competing decentralized sellers produce them. By contrast, most other incentive systems, especially large-scale research funding, require central planning on a mass scale. (Merges, Menell & Lemley, 18)
This image of the state casts a long shadow in the field.  So long, in fact, that it reaches deep into the “beyond IP” literature.  Larry Lessig, for example, argues that “[I]f the twentieth century taught us one lesson, it is the dominance of private over state ordering.” (Future of Ideas, 12).  We should rebel against IP law in part, Lessig says, because we should “limit the government’s role in choosing the future of creativity.” (Id. at xvi).


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The Innovation State: "No Country" for Old Rules, only Experimental Ones?

Guest Blogger

Sofia Ranchordás

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

We love the word innovation. We pronounce it endlessly and, very often, meaninglessly. It seems like everything can be qualified as an innovation these days, and hence escape the legal control and the heavy hand of the state. Law and innovation are often presented in the popular media---and a portion of the literature---as two realities that shouldn’t mix. While innovation is an intangible, evolving, and trial-and-error process, law is made of stable and predictable rules.

Regulators seem to aim at a form of legal certainty which is not compatible with the inherent uncertainty that characterizes innovation. Therefore, whenever law tries to regulate innovative products and services, it often ends up stifling innovation by applying rigid and obsolete rules that constrain the freedom of innovators. As I have explained in my previous work on sharing economy, we have witnessed this problem with the prohibition of Uber in Europe, where the ‘old rules’ designed for taxi regulation have been used to prohibit this innovative form of peer-to-peer economy.

However, is this tension between law and innovation truly due to the inherent uncertainty of innovation, or to the normative uncertainty that confronts regulators? In other words, in many cases, clinical trials and ex ante evaluations may already provide regulators with sufficient information as to the potential risks and benefits of an innovation, but this may still not say much about the rules to be enacted in a concrete case, or the timing of such rules.


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Thursday, March 26, 2015

Property Rules and Liability Rules for Genetic Data

Guest Blogger

Jorge L. Contreras

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

In 2009, the Texas Department of Health agreed to destroy a research biobank containing approximately 5.3 million infant blood samples. The samples, stored on index cards as dried blood spots, were collected over an eight-year period as part of a state program to screen newborns for genetic disorders and birth defects.  The parents of each infant consented to the blood draw and the testing.  Nevertheless, when four Texas parents discovered that the state retained the infant blood spots for future research, they sued (Beleno v. Lakey (W.D. Tex. 2009)).  Andrea Beleno and the other parents alleged that the state’s use of infant blood spots for research purposes without their express consent violated their right to privacy under the Fourteenth Amendment, among other things. To settle the litigation, the state agreed to destroy its entire repository of more than five million infant blood spots, an invaluable and irreplaceable resource for biomedical research. 

The result in Beleno is not unique.  Individuals have been asserting the right to control the use of biological samples and data with increasing frequency. In a highly-publicized case involving the Havasupai tribe, Arizona State University agreed to return DNA samples and discontinue several lines of research following objections from tribe members (Havasupai Tribe v. Ariz. Bd. of Regents, 220 Ariz. 214, 217 (2008)). They argued that, although they may have consented to the use of their DNA for diabetes research, they did not consent to other uses, including research on schizophrenia and ancient human migration.  After the tribe brought suit seeking $50 million in damages, the university settled, notwithstanding the fact that tribe members signed broad consent forms potentially authorizing the research.

It is axiomatic under U.S. law that there is no property interest in mere facts. Nevertheless, as these cases show, with respect to human genetic data, a de facto property regime has emerged in all but name. This regime has enabled individuals to exert strong proprietary rights over the use of data obtained from them, leading to instances in which research has been hindered or stopped, and in which valuable resources have been destroyed.  The mechanism by which individuals have been able to assert control over “their” data is informed consent.

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Creative Production Without Intellectual Property

Guest Blogger

Kate Klonick

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

The problem of the commons has existed as long as humans have formed communities: how do you protect against overfishing in an ocean no one owns, but everyone uses? How do you prevent pollution in a sky that belongs to no one, but everyone breathes?

In talking about more traditional natural resource-based commons problems, economists and lawyers have largely debated the relative merits of two approaches to solving the commons problem:
  1. letting the state resolve the problem (through laws); or
  2. letting the market resolve the problem (through privatization).
An alternative approach, developed by Elinor Ostrom — and which won her a Nobel Prize in Economics in 2009 — escapes this binary, and suggests that a voluntary self-governing citizenry will create its own institutions and solutions to commons problems. Ostrom created a framework for analyzing and studying these institutions, as a means of creating societal preconditions to support their development.

But protecting and allocating natural resources like fish or air or land is slightly different than allocating culture and knowledge.  “Knowledge commons” — as Brett Frischmann, Michael Madison, and Katherine Strandburg explain in Governing Knowledge Commons — are created by humans and are both intellectual and cultural. In natural resources, the problem of the commons stems from the self-interest individuals have in depleting a common resource; but in intellectual and cultural resources, the problem of the commons stems from the challenge of incentivizing the ongoing creation of these resources, while also recognizing that such contributions are public goods.

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Understanding Value in a Black Box Society

Frank Pasquale

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

A “big data revolution” is afoot in the social sciences. The increasing volume, variety, and velocity of data are irresistible raw material for inquiry. For its most optimistic exponents, the “datistic turn” renews social science by focusing inquiry on objective, verifiable, and measurable facts.* Explicit models of behavior premised on (quasi-)experimental evidence may render once-soft fields as hard as biology, chemistry, or physics. On this account, experimental or quantitative social science has led the way, and other fields must conform their methods accordingly, or risk marginalization or extinction.

The datistic turn should revive interest in a neglected meta-field: the philosophy of social science. Lively debates raged in mid-20th century between some forerunners of today’s big data devotees (behaviorists), and interpretive social scientists committed to more narrative, normative, and holistic inquiry. The behaviorists’ tendency to treat mental processes as a “black box” is uncannily echoed in many current researchers’ uncritical acceptance of extant corporate data sets (and limits imposed on their use) as objective records.

Given firms’ triple layers of real and legal secrecy, and obfuscation, journals should be wary of such research until it is truly reproducible. Moreover, given the importance of key firms themselves to understanding our society, their internal decisionmaking should be archived for eventual release (even if it is decades in the future).  Social scientists might consider going beyond analysis of extant data, and joining coalitions of activists, to assure a more expansive, comprehensible, and balanced set of “raw materials” for analysis, synthesis, and critique. In short, rather than solely watching society, social science must now commit to assuring the representativeness and relevance of what is watched. The only alternative to “future-forming” research is to let the most powerful pull the strings in comfortable obscurity, while scholars’ agendas are dictated by the information that, by happenstance or design, is readily available.
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Wednesday, March 25, 2015

Centralization, Fragmentation, and Replication in the Genomic Data Commons

Guest Blogger

Peter Lee

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

Genomics—the study of organisms’ entire genomes—holds great promise to advance biological knowledge and facilitate the development of new diagnostics and therapeutics. Genomics research has benefited greatly from various policies requiring the rapid disclosure of nucleotide sequence data in public databases. The result is a genomic data commons, a widely-accessible repository of information from which all members of the scientific community can draw. Notably, this intensely productive space operates almost completely outside of formal intellectual property law through a combination of public funding, agency policy, and communal norms.

The genomic data commons has attracted significant scholarly interest both because of its great potential to advance biomedical research as well as its broader lessons about the nature of commons-based productivity. For instance, Jorge Contreras has charted the evolution of the genomic data commons from a system that essentially disseminates information into the public domain into a more complex, “polycentric” governance institution for managing knowledge resources. This paper, which grows out of Brett Frischmann, Michael Madison, and Kathy Strandburg’s project to study commons governance, explores less appreciated but highly significant complexities of managing genomic information. In so doing, it seeks to shed greater light on the nature of commons in general.

In particular, this paper focuses on the governance challenges of correcting, updating, and annotating vast amounts of sequence data in the commons. Most legal accounts of the genomic data commons focus on researchers’ initial provisioning of data and access to such data by other scientists. Delving into the science of genome sequencing, assembly, and annotation, however, this paper highlights the indeterminate nature of sequence data and related information. Quite simply, the genomic data commons is full of errors and incompleteness. Accordingly, this paper examines four approaches for correcting, completing, and updating existing data: contributor-centric data management, third-party biocuration, community-based wikification, and specialized databases and genome browsers. It argues that these approaches reveal deep tensions between centralization and fragmentation of control within the genomic data commons, a tension that can be mitigated through a strategy of replication.

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The Hidden Wisdom of Architectural Copyright Before the AWCPA

Guest Blogger

Kevin Emerson Collins

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

My project follows through on an intuition about the value of architectural copyright that dates from my days as an architect before I went to law school. When I was an architect, I believed that copyright would be valuable to me not because it prevented other architects from borrowing from my designs but rather because it gave me more bargaining power in relation to the building owners who were my clients. More specifically, my current project identifies the hidden wisdom of architectural copyright before the adoption of the Architectural Works Copyright Protection Act (AWCPA) of 1990—an odd copyright regime that, to date, no one has sought to justify. Formalizing my old intuition, I argue that the primary benefit of pre-AWCPA copyright was not an augmented incentive to create but rather the resolution of a variant of Arrow’s information paradox. That is, pre-AWCPA architectural copyright was a well-engineered copyright regime because it allowed strangers to free ride on design information while it prevented building owners who were contractually related to architects from opportunistically appropriating disclosed information without full payment.

Before the AWCPA, copying original expression from an architectural drawing amounted to infringement, but copying the exact same original expression from a constructed building did not. Economically speaking, pre-AWCPA architectural copyright was therefore a defeasible right because it lost much of its economic value upon the construction of a building. Pre-AWCPA copyright was a facially odd copyright without an analog in any other copyrightable subject matter. Imagine protecting the drawings used to design useful articles, but not the conceptually separable aspects of the useful articles themselves. Alternatively, imagine protecting the sketches made in preparation for large-scale murals or mosaics, but not the completed murals or mosaics.

Pre-AWCPA copyright has been widely criticized by critics who evaluate it under the incentives-access tradeoff that underpins conventional economic justifications of copyright. Aspiring to a maximalist regime, some copyright scholars criticize pre-AWCPA copyright directly, arguing that its defeasible rights are too paltry. Because free riding on constructed buildings is permitted, they posit that it does not generate meaningful incentives to invest in creative architectural design. Others, aspiring to a minimalist regime, argue in favor of thin—or perhaps even non-existent—copyright protection for architecture. However, they do not defend the defeasible nature of pre-AWCPA rights as a good way to limit an architect’s copyright rather than, say, a strictly administered substantial similarity test. In sum, pre-AWCPA architectural copyright was not only weak, but runtish as well. If the point of copyright is to generate incentives for creativity and tamping down on the most egregious free riding is the most palatable way of having copyright augment the incentive to create, pre-AWCPA copyright simply misses the mark.

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Tuesday, March 24, 2015

We Don’t Need No State! Wait. The State Funds That? Never Mind.

Guest Blogger

Deven Desai

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

The sub-theme for Innovation Law Beyond IP 2 is “Bringing the State Back In.” That theme prompted me to submit a proposal in part because I am not sure the state ever left. The assumption of bringing the state back in seems to be that it has been pushed out or ignored. Marianna Mazzacuto’s white paper on the state and innovation and her follow-up book, The Entrepreneurial State, on the topic offer another perspective: that society has under-valued the state’s role in innovation.

As I kicked around the conference theme, I thought about the number of times I had said the term. "Innovation" has been gutted of meaning. When I worked it Silicon Valley, I was constantly hearing that everything and everyone was "innovative." What do you want to be? Innovative. Why should we fund you? We are innovative. Why shouldn’t we tax you? We will stop innovating. It reached a point that I’d not be surprised if someone claimed to be innovative in the way they crossed a street. The ever-present invocation of innovation made me think: what exactly do we mean by innovation? And are some innovations more important than others? Furthermore, from where do innovations come?

Part of the problem is that the focus on innovation in general misses that any given innovation is part of a system, and it is the system that matters. If we think about systems that support innovation, it appears that there are three parts to such a system:
  1. discovery
  2. invention
  3. innovation.
The state plays a role for each part. The problem today seems to be that as soon as one talks of the state being involved in anything, what Fred Block has called “market fundamentalism” rises to challenge and deny that the state has any role to play. In addition, the Schumpeterian idea of gales of creative destruction has been claimed by many sides of the innovation policy debate and confuses the debate further. As I read Schumpeter, I found that he recognized the differences between invention and innovation. He also recognized that not all innovations are equal.

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Ceci N’est Pas Un Taxi: Definitional Defiance as Innovation in the Platform Economy

Guest Blogger

Orly Lobel

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

Over 10,000 new platform companies have sprouted and mushroomed in less than a decade and they continue to pop up daily. The platform economy, while not easy to define or quantify, was valued in 2013 at $26 billion with predictions of an exponential growth to $110 billion in the next few years. A recent Price Waterhouse report predicts that globally, revenues from the platform sectors could hit $335 billion by 2025.

So what’s your business? You don’t need to open a restaurant to host cooking events; you don’t need to become a taxi driver to offer paid rides; you don’t need to open a hotel to be a lodging host; you don’t need to start a moving company to get paid for helping someone relocate. Platform businesses are challenging conventional industries in every realm, including hotels (Airbnb, Couchsurfing, Homeaway, VRBO), office space (Liquid Space, ShareDesk), parking spaces (ParkingPanda, Park Circa), transportation (Lyft, Sidecar, Uber), restaurants (Eatwith, Feastly, Blue Apron, Munchery), used clothing (ThredUp), household tools (Open Shed), outdoor gear (Gearcommons), capital (Zopa; Prosper, Kickstarter, Bitcoin), broadcasting (Aereo, FilmOn.com), co-developing (Quirkly, Etsy), legal services (Upcounsel), medical services (Healthtap), academic tutoring (Uguru), everyday errands such as grocery shopping and laundry (TaskRabbit, Instacart, Airtasker, Washio), and specialized errands, such as  flower delivery (BloomThat), dog-walking (DogVacay) and package delivery (Shyp).

New digital technologies are turning everything into an available resource: services, products, spaces, connections, and knowledge, all of which would otherwise be collecting dust. It’s been called the sharing economy, the disaggregated economy, the peer-to-peer economy (P2P), human-to-human (H2H), the community marketplace, the on-demand economy, the app economy, mesh economy, gig economy, and the "Uberization of everything."

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Monday, March 23, 2015

Publishing without Property

Guest Blogger

Lea Shaver

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

In "Copyright and Inequality," I explored the ways in which copyright protection often – perhaps inevitably – fails to incentivize books for certain audiences, because they are too poor, speak the “wrong” languages, or require niche content or formats. The project I will present at the Beyond IP 2 conference examines a possible solution to copyright’s inequality problem, one which holds the potential to finally bring books to billions of readers long neglected by the mainstream publishing industry.

In India, Pratham Books pursues the mission of “A book in every child’s hand,” producing more than 1000 titles in over 15 languages, and reaching 52 million children. The African Storybook Project distributes openly licensed stories on a digital platform that facilitates translation to help young children develop a love of reading. First Book provides low-cost new books to over 160,000 schools and community programs, and leverages its buying power to demand more diverse books.

Social publishers are defined by the centrality of a social mission rather than the pursuit of profit. For this reason, they often rely heavily on social subsidies and treat their product as a social good to be distributed free or at cost. Often, but not always, social publishers also engage in social production. These alternative content-production models leverage intrinsic motivations, social networks, and peer production enabled by digital platforms.

My project analyzes this emerging phenomenon to understand how law and policy can help social publishers reach their fullest potential, and to derive broader lessons from this example of intellectual production without IP.

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Governing Knowledge Commons

Guest Blogger

Michael Madison

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

Empirical investigation into different modalities of knowledge production, distribution, access, and preservation has accelerated in recent years.  Much of the energy behind that effort emerges from the intuition that formal intellectual property law frameworks are inadequate and/or incomplete to describe what one observes in the world when examining the governance of innovation.  “Peer production” frameworks, and frameworks simply “beyond intellectual property,” are likewise inadequate and/or incomplete; broad, simple labels cannot themselves correct for the errors and omissions of IP as such and cannot capture the significance of diverse ground-level details.

Yet policymaking cannot proceed effectively if it tries to align law with micro-level experience, or if researchers advance policy arguments based on isolated case studies of innovation “beyond intellectual property.”  What is needed is an empirical strategy for investigating the mechanics of innovation systems that encourages both micro-level and system-level inquiry and invites comparing and eventually synthesizing lessons across diverse innovation domains, accepting linkages among commons-based production, user-innovation, IP-based production, and state-sponsored production.  Commons-based production, sometimes in part referred to as “peer production,” is widespread and heavily theorized, yet commons governance is under-researched.  One-off studies and anecdotes have been collected without a strategy for using that data to build a larger model of knowledge and innovation governance.

My colleagues Brett Frischmann, Kathy Strandburg and I proposed the first part of such a strategy in our 2010 paper, Constructing Commons in the Cultural Environment, and we refine that strategy and demonstrate its potential in Governing Knowledge Commons, the edited collection that is the subject of my presentation at the Innovation Law Beyond IP 2 conference.

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Sunday, March 22, 2015

Trademark Innovation to Support Open Collaboration

Guest Blogger

Stephen LaPorte and Yana Welinder

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

Next week, scholars from around the world will gather at Yale Law School to discuss different institutions that impact knowledge production at the Innovation Law Beyond IP 2 conference. One of the topics will be how legal rules and infrastructure can sustain or undermine commons-based peer-production. Trademark law is one such legal regime that is rarely discussed in this context. Unlike copyright law’s Creative Commons and open source licenses, trademark law has not generated new inventions to support collaborative production on the internet. Trademark law provides some support for collaborative projects like Wikipedia and Linux by protecting their brands from imposters and making the brands distinguishable so that the projects can use them to recruit new contributors. But brand protection can also impose restrictions that go against communities’ values and slow down their work. Over the past decade, communities and their lawyers have found different strategies to reconcile their novel forms of knowledge production with the stringent requirements of trademark law.

The core tension between collaboration and trademark law is the requirement of quality control. The quality control requirement is based on the theory that a trademark should be a reliable indicator of a good’s origin. When trademark holders provide permission for someone to use their mark, they usually retain the right to inspect the quality of the goods that carry the mark and impose restrictions on how the mark may be used. Open source and free culture communities, on the other hand, thrive on openness and decentralization. These communities rely on technical tools and social norms to maintain the quality of their project.

In 2010, collaborative communities got a wake-up call with a Ninth Circuit ruling that the Freecycle Network had lost the legal rights in its logo due to non-traditional brand management. Freecycle had failed to enter into proper quality control provisions with affiliate organizations when they gave the organizations general permission to use the Freecycle logo without specific restrictions. The Court found this to be naked licensing, a form of trademark abandonment, that limited the Freecycle Network’s ability to enforce their trademark. This case served as a warning of the risk of naked licensing to collaborative communities that were too open. Since then, collaborative communities have been grappling with how to protect their marks in a manner that fits open source and free culture values.

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Saturday, March 21, 2015

The Cost of Free and Paradoxes of Informational Capitalism

Guest Blogger

Guy Pessach

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

Among other aspects and dimensions, the frame “Beyond IP” summarizes two key complementary insights in contemporary politics of intellectual property. The first insight touches upon the limits, shortcomings and social costs that are associated with legal ordering of cultural/information production through intellectual property regimes. The second insight lists alternative structures, institutions and regulatory options for the promotion of innovation and ubiquitous cultural flourishing. Both insights reside upon concrete and persuasive arguments.

At least to some degree, the shift from an IP-centric approach to alternate methodologies that go beyond IP was stimulated by the emergence of digitization and networked communications platforms. New methods and reduced costs of producing, storing and distributing content/information provide fertile grounds and constant demonstration that there are enhanced schemes, beyond IP, for cultural and knowledge sustainability.

“Beyond IP” is not just a frame for mobilization but also a descriptive term that captures and summarizes contemporary information, creative and cultural activities, which rest upon concepts of free content, free access and openness as their building blocks.

Yet, it is at this juncture that another, less noticed, aspect of “Beyond IP” is being revealed: the political economy of certain “Beyond IP” realms, and particularly market-oriented realms, may be counterintuitive to the above-mentioned premises.

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Friday, March 20, 2015

The Political Safeguards of Horizontal Federalism (continued)

Heather K. Gerken

Yesterday I noted that Ari Holtzblatt and I have recently put forward the first account of the political safegaurds of horizontal federalism. While the literature on horizontal federalism is growing quickly, no one has proposed a safeguards account to match the account routinely lauded in the context of vertical federalism.

The reason for this striking disconnect underlines the differences between these two fields of inquiry. Conflict, after all, is a recurring feature of both vertical and horizontal federalism. What divides the two fields is how we should respond to the ineluctable fact of friction. State-federal friction has long been understood to be both a problem and a valuable part of a well-functioning democracy. Moreover, most vertical federalism scholars think that the political arena, not the judiciary, is the right forum for these fights. Political institutions, not the courts, represent the true “safeguards” of federalism.

Scholars of horizontal federalism are much less sanguine about interstate conflict – lawyers, after all, hate spillovers -- and most of them look to the judiciary to referee state-to-state conflict. Congress, administrative agencies, political parties, networked interest groups – all are thought to safeguard vertical federalism. But even though those same institutions are available to mediate conflict among the states, there is no safeguards account to be found in horizontal federalism.

 The current state of the law and literature makes clear why no one has thought to develop a safeguards account to match the one that dominates debates over vertical federalism. Why bother with the political safeguards if politics are the problem and the judiciary is the solution? Because we lack a descriptive and normative argument that interstate conflict serves productive ends, there is no reason to think that spillovers can or should be left to the free play of politics.

Our paper begins to build the descriptive and normative arguments necessary for a safeguards account. First, we debunk that me arguments routinely invoked for cabining spillovers and the interstate conflict they generate, including principles of territoriality, equality among the states, and democratic self-rule (all of which are typically grouped under the larger rubric of “sovereignty”). Second, we build the affirmative case for valuing the role that spillovers play in a well-functioning democracy, many of which have to do with the values associated with “living under someone else’s law.” Finally, we spend some time identifying the political institutions and can and do safeguard horizontal federalism.

Intellectual Property as Global Public Finance

Guest Blogger

Lisa Larrimore Ouellette

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

The conventional justification for IP is that information is a public good (i.e., it is non-rival and non-excludable), and making information excludable through IP allows it to be efficiently supplied by private markets. Both sides of this account have been questioned: not all information has the characteristics of a public good or can be made excludable through IP, and propertization is not the only way the state compensates public-goods providers. As Daniel Hemel and I analyzed in Beyond the Patents–Prizes Debate, the state also encourages information production through mechanisms such as tax incentives and direct spending. One challenge for domestic innovation policy is recognizing that, like conventional public finance mechanisms, IP facilitates a transfer from consumers to innovators, and that the off-budget nature of this IP “shadow” tax should not affect the innovation policy choice.

In our paper "Intellectual Property as Global Public Finance," Daniel and I examine information production at the global level, where conventional public finance mechanisms are lacking. Many information goods are global public (or quasi-public) goods, so under the conventional account, global coordination is needed to prevent countries from free-riding on each others' information production. Global IP treaties such as the TRIPS Agreement help solve this global coordination problem by requiring countries to contribute to the extent that they use the information produced under IP laws, with defection punished by trade sanctions. In the global context, the off-budget nature of IP laws may be an asset, as it facilitates creation of this stable Nash equilibrium in a way that maps onto very different national public finance regimes.

If this were the full story, one would expect to find little state investment in non-IP innovation mechanisms for which free-riding cannot be prevented. And yet governments at all levels do invest significant resources beyond IP in producing information goods. Daniel and I offer a number of hypotheses to explain these investments. For example, producing information goods has local production externalities, so nation-states may compete to attract innovative individuals and firms. Relatedly, rent-seeking may cause countries to use information subsidies to circumvent free-trade limits on industrial subsidies, and may cause industry interest groups to lobby for grants and tax credits to extract subsidies from the state. Non-pecuniary motivations such as altruism and the pursuit of prestige may supplement these incentives for high-profile goods.

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Thursday, March 19, 2015

The Political Safeguards of Horizontal Federalism

Heather K. Gerken

Yesterday and the day before, I blogged about the unexpected benefits associated with spillovers – when one state’s policy affects citizens in another state -- and the friction they generate. Today, I want to connect those observations to a larger set of questions about federalism. 

What’s so striking about the near-universal hostility to interstate spillovers is that it stands in stark contrast to one of vertical federalism’s central tenets. While we mourn friction between the states, friction between the states and the federal government has been a celebrated feature of American democracy for centuries. When federal policy spills over into a traditional state domain or state policy spills over into the federal realm, it causes the same kind of friction that arises from interstate spillovers. This friction has led to all sorts of problems, including inefficiency, conflict, and division. Federalism scholars don’t deny these harms. They simply insist that we also pay attention to the productive possibilities associated with state-federal friction. 

In a recent article entitled “The Political Safeguards of Horizontal Federalism,” Ari Holtzblatt and I argue that it’s time to apply this lesson to the horizontal realm. Like friction between the states and federal government, friction among the states comes with both costs and benefits, and it’s here to stay. Our goal, then, shouldn’t be to eliminate interstate friction, but to harness it—taking advantage of its many democratic benefits while avoiding its more serious costs. In the spirit of this observation, my co-author and I build a case for the political safeguards of horizontal federalism. 

For decades we’ve debated whether “political safeguards” preserve healthy relations between the states and the federal government and thus reduce or eliminate the need for judges to referee state-federal tussles. But no one has made such an argument about relations among the states, and the few scholars to have considered the question insist that such safeguards don’t exist. Our Article takes the opposite view. 

Although the literature on horizontal federalism has been burgeoning, it’s not surprising that the literature is missing an account of the political safeguards of horizontal federalism given the field’s core commitments, all of which push against a safeguards account. Developing a political safeguards account for horizontal federalism, then, involves both excavation and construction. First, we must dig into the doctrine and scholarship in order to account for the puzzling differences between the fields. Second, once we’ve examined (and debunked) the arguments that have prevented scholars from even thinking to develop a safeguards account, we must build it. I’ll talk about both projects tomorrow.

Regulating Secrecy

Guest Blogger

Nicholson Price

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

Many inventors who wish to protect their inventions from imitators are faced with a choice: do they rely on trade secrecy or patents?  The literature has explored how inventors make this choice—when they are likely to choose trade secrecy, when they should choose trade secrecy from an individual perspective, when we as a society would prefer that they choose patents (or trade secrecy)—and how to shape incentives and the rules of trade secrecy and patentability to help drive that choice in socially optimal directions.  But trade secrecy and patent law do not operate in a vacuum, and one strong interaction that has been underexplored is how these incentives are affected by regulatory oversight, and how that oversight can change the incentives to choose between the two.  In particular, I argue that way regulation strengthens trade secrecy is complex and is overlooked in current policy debates, and that regulatory regimes should act deliberately to reduce secrecy in heavily regulated industries.

When I say “regulatory oversight,” I am thinking principally about heavily regulated industries, with strict oversight and, typically, a market gatekeeper (though I think the insights may also apply in other regulated contexts).  The paradigmatic example is the Food and Drug Administration’s oversight of new drugs: the FDA determines which drugs can be examined in clinical trials and allowed onto the market.  It also regulates when and how drugs are manufactured, how drugs are marketed, when they can be removed from the market, and when and how competitors can enter the market.  Other similarly regulated regimes include pesticides, medical devices, and biologics, and to a lesser degree, aerospace, nuclear energy, and military tech/procurement.

In these contexts, IP protection often becomes more powerful by its link to the regulatory benefit under three conditions:

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Wednesday, March 18, 2015

Living Under Someone Else's Law (continued): Why Self-Rule Isn't a Democratic Trump Card

Heather K. Gerken

Yesterday I argued that the near-universal condemnation of spillovers is a bit of a mystery given their near-universal presence in our system. Spillovers are a natural consequence of integration, and the price for preventing them is too high.

In a new piece in the Democracy Journal, which builds on a piece in the Michigan Law Review, James Dawson and I argue that while spillovers undoubtedly involve real costs, they in fact generate substantial democratic benefits. To be sure, spillovers require all of us to live under someone else’s law, which violates the deep-seated democratic principle of self-rule. But democracy isn’t only about self-rule; it’s also about ruling together. Given our impulse to retreat into our all-too comfortable red or blue enclaves, it’s very useful for our worlds to collide now and then. Those collisions give us a chance to see how other people live, to live under someone else’s law, to try someone else’s policy on for size.

Indeed, as James and I explain in detail, spillovers force us to engage with our opponents and search for common ground. They tee up national debates and prevent politicians from leaving all the hard questions to the states. They help us overcome gridlock by shifting the burden of inertia and pushing both sides to engage. They prod state lawmakers to cross party lines and broker a compromise solution. Spillovers, in short, force state and federal officials to do what they are supposed to do: politic, find common ground, and negotiate a compromise that no one likes but everyone can live with.

Spillovers matter even at democracy’s most granular level: the habits of everyday citizens. Political enclaves are a too easy a solution for political elites, but they’re also too easy for the rest of us. Spillovers enlist everyday citizens in the practice of pluralism. At the very least, they prevent us from being oblivious. Indeed, spillovers ensure that those least likely to be receptive to an idea—those nestled in enclaves with the opposite policy—confront that idea directly. They help us sort out annoying differences that prompt little more than a collective shrug from genuinely deep disagreements that require our collective attention. Spillovers can thus tell us a great deal more than polling or voting about whether a modus vivendi can be had. In an era defined by polarization, in short, spillovers can help mitigate the big sort-ing of America.

 Put differently, spillovers cause political friction, and friction has its uses in a political system. The reason that the discussion has been so one-sided thus far is that the arguments against spillovers—rooted as they are in the principle of self-rule—are so intuitive. But it’s worth remembering that while our democratic commitments may begin with self-rule, they should not end with it. Democratic self-rule is often played as a trump card, but it isn’t. Every community would like to live by its own lights. Every person would like to live by his own lights. But we quickly learn that our preferences differ. Democracy requires us to do just what spillovers require us to do: Work it out. Sometimes we work it out directly. Sometimes we need a referee. Sometimes we just take our lumps and live under a policy we don’t like. And we do so for a simple reason: We’d rather live with other people than without them.

Tuesday, March 17, 2015

The Benefits of Living Under Someone Else's Law

Heather K. Gerken

James Dawson and I have just published a new piece in the Democracy Journal entitled “Living Under Someone Else’s Law,” which is an extension of some work I did with Ari Holtzblatt on “The Political Safeguards of Horizontal Federalism.”   The piece takes a counterintuitive view on spillovers, which occur when citizens in one state pass a law that affects those in another.  Spillovers are all but universally condemned inside and outside the academy. It’s not hard to see why. It is unsettling when one state’s policies stretch beyond its territories.  No one wants to live under someone else’s law, after all.  We argue, however, that it’s in fact quite useful for people to live under someone else’s law and that spillovers should be understood as part of a well-functioning democracy.


As I’ll discuss today and tomorrow, those who condemn spillovers miss two important points.  First, if you worry about spillovers, there’s a lot to worry about.  Spillovers are ubiquitous in a highly integrated, tightly networked system like ours. When California passes climate change regulation or Texas rewrites its schoolbooks to question evolution or Wisconsin refuses to do business with any company that violates federal labor law or Virginia maintains lax gun rules, the peoples of other states are affected.  Detroit automakers change their manufacturing process to avoid losing the California market, so every state suddenly finds itself living under California law.  School boards purchase textbooks that are more conservative than their population and thus find themselves living under Texas’s law.  Companies seeking to do business in Wisconsin change their practices nationwide.  Firearms flood into New York via the “Iron Pipeline” even though New York has restrictive gun regulations.  When states regulate shoulder-to-shoulder in a tight policy-making space, they inevitably jostle one another. Regulatory overlap is a stubborn fact.


We could surely try to turn back the clock and return to a simpler time. But the price of avoiding spillovers is maintaining clear jurisdictional lines and limiting policy-making domains.  That price is too steep. We’d have to give up on a nationally integrated market. We’d have to give up on a nationally integrated political system. We might even have to stop our citizens from crossing state lines. In the abstract, self-rule sounds like an unalloyed good. In practice, it isn’t. Self-rule always requires a trade-off. And when we recognize the many goods we’d have to sacrifice to attain it—the goods associated with integration—the trade-off is less appealing. 


As I’ll explain tomorrow, there are good reasons not just to tolerate spillovers, but to value them.  Living under someone else’s law may seem to violate the principle of self-rule, but it’s actually a democratic good unto itself.

Cluster Competition

Guest Blogger

Camilla Hrdy

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

Governments across the globe have increasingly made it a core feature of their economic development policies to foster the growth of “innovation clusters” in their jurisdictions: regional economies made up of innovative firms, talent, and supporting institutions, which are thought to benefit from proximity to one another. The concept is elusive, and is often accompanied with references to examples of successful clusters, ranging from biotech in Boston, to information technology in Silicon Valley, to marine technologies in eastern North Carolina.

Now the U.S. federal government is getting involved. The most prominent example of the expanded federal role in growing clusters is the regional innovation program (RIP) created in the America Competes Act (2010) in order to encourage and support the development of “regional innovation strategies.” Administered by the Economic Development Administration (EDA) in coordination with agencies like the Department of Energy (DOE), the RIP’s flagship initiative is a multi-agency grant competition through which states, regional governments, and other stakeholders compete for federal grants and matching funds to design and implement strategies for growing innovation clusters or science and research parks. The largest cluster grant to date has gone to the Greater Philadelphia area, which received over $150 million in federal and matched funds to build an Efficient Energy Buildings hub focusing on developing ways to make buildings more energy-efficient.

The U.S. government’s decision to fund a national cluster competition is curious in light of the fact that there is already an intense competition to grow innovation clusters in the United States at the regional level. For decades, states, cities, and other subdivisions of states have put significant resources into programs to build innovation clusters, from spending on infrastructure, to investments in higher education and university research, to tax breaks, subsidies, and public venture capital for firms seeking to conduct or commercialize cutting-edge research.

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IP and Constitutional Equality

Guest Blogger

Jessica Silbey

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

Intellectual property reform most often questions the most effective levers for “promoting progress” by incentivizing creativity and innovation. However, substantial ambiguity exists as to what “progress” means, particularly in some of the most notable (and critiqued) court cases interpreting intellectual property statutes (e.g., Aereo, Golan, Eldred, Bowman). What is the content of “progress” towards which IP law reaches?

I have been thinking about this question from multiple levels, beyond the drafting and legislative history of the Constitution’s clause. If we think that it matters that those engaging in creative and innovative work perceive an alignment between IP protection and “progress” in their field or culture generally, presumably we would think it important to ask those people and qualitatively measure and analyze their answers. I have done that to some extent over several years in dozens of interviews with creative and innovative professionals and their business managers or lawyers. It may perhaps be unsurprising that many people who make, distribute and commercialize creative or innovative work otherwise protected by IP do not think that IP promotes “progress” as defined by facilitating more and better work. Perhaps less surprising, however, is that “progress” to them appears to resonate less with quantity and quality of work and more with equality and distributive justice regarding their practices and experiences of working.

To be sure, mining the empirical data set for substantive and narrative themes about how IP helps or hinders “progress” of science and art reveals a diversity of “progress” values. This presents an opportunity and perhaps several puzzles. Insofar as the mandate to Congress is to “promote progress of science and useful arts” through certain exclusive rights, if the kind of progress that creative and innovators care about and toward which they strive is better known, it may be easier to tailor regulation to achieve those goals. Similarly, urging a more specific articulation of what “progress” might mean for congressional legislation aimed at it, would also be an improvement in government transparency.

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The Success of "Access to Error"

Guest Blogger

Lea Shaver

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

Michal Shur-Ofry’s article, "Access to Error," is a thoroughly enjoyable read, outstanding in both concept and execution. Hers is one of those arguments that makes you think, “How did we miss that?” And, “Now what do we do about it?"

Here’s the foundational insight, in brief: patents provide an incentive to disclose workable technologies. Failures are the blind spot of the patent incentive structure. But there is actually an enormous value in knowing what doesn’t work. As the author points out, the commercial value of knowing what doesn’t work makes this knowledge eligible for trade secret protection. But that is the opposite of incentivizing its disclosure, where it can do the most good.

In the health sector, other scholars have pointed out the problems associated with allowing companies with a financial stake in pharmaceutical research to selectively release their research results. This literature has been closely tied to the context of pharmaceutical research and assumes that the need for access to unsuccessful trial results is unique to that context.

This article takes that concern to a different level, with relevance to all areas of science and technology, business models and social innovation. IP facilitates a market for invention at the end-stage, when you have a successful technology. But the secrecy along the way is counter-productive to speeding innovation.

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Monday, March 16, 2015

Access to Error

Guest Blogger

Michal Shur-Ofry

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

What are your immediate associations to the word "innovation"? The responses I received while running this question through friends and acquaintances ranged from the general ("progress", "future", "modernization", "technology", "patents", "curiosity", "thinking outside the box", "fresh", and "intriguing") to the specific ("artificial intelligence", "spaceships", "cherry tomatoes", "Einstein", "Da Vinci" and "Apple"). No one, however, mentioned errors, failures or negative findings.

This is hardly surprising—we tend to associate innovation with success (or other positive things) and errors with defeat. But errors and innovation are actually tightly linked. My purpose in this project is to focus on errors as drivers of innovation. I argue that the current incentive structure in our innovation ecosystem, both within and beyond IP, does not provide sufficient incentives for the dissemination of errors and other negative information. I further hope to start a conversation about access-to-error as an important (and largely overlooked) goal for innovation policy.

First, what do errors have to do with innovation? To clarify, I use "errors" here in a very broad sense, that includes mistakes, failures, falsifications, blind-alleys, negative findings and additional types of negative information. The main answer is almost obvious, and was suggested by philosophers of science long ago: errors provide us with important negative knowledge, the knowledge of what doesn't work, which brings us closer to understanding what does. In the words of Karl Popper: "we learn from our mistakes."

But there is more to it: errors are especially important for triggering paradigm shifts---a particular type of innovation that opens up new fields of research and can completely change scientific domains. Thomas Kuhn in his influential work about scientific revolutions recognized that paradigm shifts are often preceded by detecting mistakes and inconsistencies under existing paradigms. Indeed, actual shifts in physics, life-sciences and even behavioral economics provide ample examples for the power of errors to push innovation beyond the state of the art. More recent research in the field of complexity highlights another angle: due to the networked and inter-dependent nature of many innovation ecosystems small errors that accumulate undetected can eventually cause large-scale catastrophes---famous failures of aircraft, buildings and nuclear plants provide powerful examples. The detection of errors in complex innovation ecosystems may therefore be especially significant. Finally, although my focus is on the scientific and technological domains, errors and mistakes are also drivers of artistic creativity.

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Perverse Innovation

Guest Blogger

Dan Burk

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

Recombinant crops are unpopular in Europe.  Known as “GMOs,” an acronym for genetically modified organisms, crops that have been altered by recombinant DNA technologies have sparked public concern over potential safety and health risks.  While there is little scientific evidence to support such concerns, the possibility of unknown risks from such plants prompts European consumers to avoid foods derived from GMO crops, and both GMO plants and products are subject to strict and costly regulatory controls.  Prominent labeling is required for GMO derived products, and regulatory oversight for GMO planting is stringent.  In the past two decades, only one European Union application for planting GMO crops has been approved.

As a consequence, seed producers have moved away from recombinant DNA technology for producing new seed varieties in Europe.  Instead, they have adopted a different approach, producing new crops with desired characteristics, such as herbicide tolerance, through chemical or radiation treatments.  Mutagenic plant varieties may be produced by exposing seeds to nuclear radiation, which causes random changes in the plant genome.   Alternatively, seeds may be exposed to mutagenic chemicals, again causing random changes in their genes, some of which may be commercially beneficial.  Mutated plants with desirable traits are then selected from the altered seeds and propagated for sale.

These mutagenic crops are subjected to essentially no regulation, and unlike recombinantly modified crops can be readily grown and distributed in the EU.  There is little question that mutagenic crops have been “genetically modified” in any common or ordinary sense of that term.   There is no indication that they are any safer or healthier than GMO crops – indeed, unlike GMO crops, some mutagenic crops have had to be withdrawn from the market because of inadvertently increased levels of naturally occurring toxins, such as cyanide.

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The Likely Mismatch Between Federal R&D Funding and Optimal Innovation

Guest Blogger

Joshua Sarnoff

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

I am attending and presenting at the Innovation Law Beyond IP 2 conference hosted by the Yale Information Society Project.  As the conference website notes, IP is only one of many legal institutions that can help promote, stifle, or govern knowledge production.  The website then lists some of the categories of measure that national (or sub-national) governments can use to promote innovation production and dissemination, in part reproducing a taxonomy of measures that I developed in a prior work.  These are:
  1. subsidies of different forms (which could include intellectual property rights as a wealth transfer in the form of a grant of property rights)
  2. procurement by the government, with various kinds of risk sharing and timing considerations
  3. direct development by government institutions
  4. creation or promotion of different forms of commons
  5. various forms of product or market regulation (in which category I place IP rights, and which affects market returns and thus private investment and innovation behaviors). 
The focus of the conference is on the role that states should play in innovation law, and how to design state institutions to meet the challenge of innovating effectively (based in part on successful past experiences with “state-led innovation”).

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The State as Pharmaceutical Entrepreneur: Moving from Laws that Stifle to Laws that Foster

Guest Blogger

Liza Vertinsky

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

The U.S. government is acting increasingly as an entrepreneurial partner with the private sector in pharmaceutical innovation. Government actors such as the NIH and the FDA are relying heavily on public-private partnerships, contractual arrangements that involve a sharing of risk, cost and control between public and private sector participants, to accelerate the pursuit of cures for complex diseases in areas where private sector efforts have proven to be inadequate. They are working with private partners in areas of drug discovery and development that were previously left primarily to the market.

Recent high profile U.S. government initiatives aimed at combating antimicrobial resistance,  supporting neuro-technological innovation, and facilitating personalized medicine approaches to disease illustrate the reliance on public-private partnership strategies to redesign the drug discovery and development process. These initiatives and many others undertaken by the government to spur biomedical innovation share in common a role for government that goes beyond funding and provision of public goods. It involves the government directly in the creation and implementation of new approaches to drug discovery and development, with the government working alongside private sector participants in cost and risk sharing arrangements at all stages of drug discovery and development.

The expanding role for public-private partnerships can be largely attributed to a combination of shrinking public and private sector R&D budgets, rising R&D costs, the complexity of those diseases that account for much of the U.S. public health burden, and a growing gap between private sector efforts and public health needs. The enormity of the task of developing drugs for some of these complex diseases requires the mobilization  and pooling of both private and public resources and expertise in new forms of collaborative production in order to lower costs and improve results. The legal framework that governs state involvement in drug discovery and development has failed to respond to this changing innovation paradigm, however.

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Innovation Law Beyond IP 2: Introducing the Blog Symposium

Guest Blogger

Gabriel J. Michael

For the Innovation Law Beyond IP 2 conference, March 28-29 at Yale Law School

On the weekend of March 28-29, the Yale Law School Information Society Project is hosting its second conference on Innovation Law Beyond IP. To expand the discussion beyond our one weekend in New Haven, panelists and commentators will be guest blogging here at Balkinization over the coming weeks with some initial thoughts on the conference papers, and more broadly on how we should define our field as scholars of innovation.

This year's conference focuses on the role of the state, and the state's relationship to innovation. While the state is of course central to intellectual property rights, it also acts to promote and hinder innovation in myriad other ways: e.g., tax incentives, grants, prizes, regulation of innovation and its sustaining institutions, education and immigration policy, tort law, and more. In our call for papers, we asked panelists to take up these issues, and we're pleased with the response we received.

Together, our participants will be discussing innovation outside the traditional framework of intellectual property. For example, Amy Kapczynski argues that open science presents a workable alternative to conventional intellectual property law in facilitating information production, and presents a case study of the flu network as an example

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Is Hobby Lobby Worse for Religious Liberty than Smith?

Andrew Koppelman

Imagine a world where religious people are a kind of aristocratic elite who are entitled to injure nonadherents with impunity – a world which would “permit every citizen to become a law unto himself.” Employment Division v. Smith held that “courting anarchy” in this manner was a conclusive reason to hold that there is no constitutional right to religious exemptions from laws of general applicability. The Hobby Lobby decision (by some of the same judges!) threatens to bring that world into being.

If government refusals to accommodate are viewed with the kind of skepticism that the Court displays in Hobby Lobby, then claims of accommodation will always be supported by some imaginable less restrictive means, even if its enactment is politically impossible. The consequence in practice will be an interpretation of religious liberty in which adherents get to harm nonadherents. Religious liberty here means the right to impose your religion on other people who don’t share your views.

One of the principal attractions of the idea of religious liberty has always been that the exercise of one person’s religion doesn’t hurt anyone else. In Thomas Jefferson’s classic formulation: “it does me no injury for my neighbour to say there are twenty gods, or no god. It neither picks my pocket nor breaks my leg.” But paying for contraceptives that should be covered by insurance is exactly like having one’s pocket picked, while involuntary pregnancy is worse than a broken leg. If this is the official meaning of religious liberty, then the broad acceptance of religious liberty will quickly fade.


Frederick Mark Gedicks and I elaborate on these claims in a new paper just posted on SSRN, here.

Sunday, March 15, 2015

The Republican Fiasco and the Obama Tragedy

Guest Blogger

Bruce Ackerman

There is a paradoxical relationship between the Netanyahu Speech, the Senate Letter, and the larger tragedy of the Obama Presidency – how a candidate pledged to repudiate Bush-era abuses will leave office confirming and extending many of the worst Bush precedents in the conduct of foreign and military affairs. I discuss these issues in a conversation with Louis Fisher and Jeff Rosen in a Constitution Center podcast: http://blog.constitutioncenter.org/2015/03/podcast-american-foreign-policy-iran-and-the-constitution/


Saturday, March 14, 2015

A cross-ideological amicus brief on sex discrimination and same-sex marriage

Andrew Koppelman

George Mason University law Professor (and Volokh Conspiracy blogger) Ilya Somin and I recently submitted an amicus brief urging the Supreme Court to invalidate laws banning same-sex marriage because the discriminate on the basis of sex. Ilya is the author of The Grasping Hand: Kelo v. City of New London and the Limits of Eminent Domain" (University of Chicago Press, forthcoming), "Democracy and Political Ignorance: Why Smaller Government is Smarter" (Stanford University Press, 2013), and coauthor of "A Conspiracy Against Obamacare: The Volokh Conspiracy and the Health Care Case" (Palgrave Macmillan, 2013).  I am very grateful for the opportunity to work with him on this. The brief is written on behalf of ourselves and four other academics: Stephen Clark (a leading expert on gay rights issues), Sanford Levinson (one of the nation’s most prominent constitutional theorists), and well-known legal scholars Irina Manta and Erin Sheley.

Here is a brief excerpt that summarizes our argument:
Each of the laws challenged in this case clearly mandates that whether one can marry any specific person depends on whether one is a man or a woman. As a recent district court decision striking down a similar Missouri law explains, “[t]he State’s ‘permission to marry’ depends on the gender of the would-be participants. The State would permit Jack and Jill to be married but not Jack and John. Why? Because in the latter example, the person Jack wishes to marry is male. The State’s permission to marry depends on the genders of the participants, so the restriction is a gender-based classification.” Lawson v. Kelly, 14–0622–CV–W–ODS, 2014 WL 5810215, at *8 (W.D. Mo. Nov. 7, 2014)….
Classifications based on sex… are subject to… intermediate level of scrutiny. “[S]tatutory classifications that distinguish between males and females” are presumptively invalid, and thus, to overcome this barrier, must be “substantially related” to the achievement of “important governmental objectives.” See Craig [v. Boren], 429 U.S. at 197.
The brief explains why laws banning same-sex marriage qualify as sex discrimination subject to heightened scrutiny under both longstanding Supreme Court precedent, and the original meaning of the Fourteenth Amendment. In addition to explicitly classifying on the basis of gender, laws banning same-sex marriage are also often, at least in part, motivated by overbroad stereotypical generalizations about the sexes and their appropriate roles in the family. Legislation based on broad gender or racial stereotyping is in and of itself constitutionally suspect. We also rebut several standard objections to the sex discrimination argument, including claims that laws banning same-sex marriage do not discriminate on the basis of gender because they impose symmetrical burdens on both men and women, or because they are not motivated by sexism.

It is perhaps worth noting that this brief brings together people on different sides of the political spectrum who rarely agree on other disputed constitutional issues. Ilya and I have a long history of disagreement on a variety of cases, most notably the Obamacare litigation, where we wrote amicus briefs, articles, and books on opposite sides of the issue. The other four scholars joining the brief are also divided between those generally associated with the political right, and those on the left.

We are grateful to Stephen Clark and others for helpful suggestions on how to improve the brief, and to Joe Lombardo and Camilla Taylor for all their good work in helping to prepare it.

Wednesday, March 11, 2015

Curt Bradley on "Civics Lecture" to Iran

Neil Siegel

Over at The Conversation, my colleague Curt Bradley offers a blunt, learned assessment of the March 9 letter that forty-seven Republican Senators signed and directed at the leaders of Iran.  The letter purports to instruct Iran's leaders on the limited legal effect of "a mere executive agreement" that they might reach with President Obama on their nuclear program.  Bradley explains why the letter betrays ignorance of the legal status of executive agreements under international law, undermines our nation's interests in having other nations comply with their legal commitments to us, and further weakens the institutional prerogatives of the Senate vis-a-vis the President.

Long live partisan politics.  Madison keeps rolling in his grave.

Tuesday, March 10, 2015

How the Decline of Trust led to Dysfunctional Government

Stephen Griffin

That is, in essence, the thesis of a new book I've written.  Intended to be short and accessible, the University Press of Kansas is publishing it this fall in a series edited by Sandy and Jeff Tulis.  I've just posted Chapter 1 of Broken Trust: Dysfunctional Government and Constitutional Reform, to SSRN.  Chapter 1 serves both as the introduction and begins the discussion by setting out my themes of the relationship of trust in government to the constitutional order, understanding dysfunctional government in terms of studying the aftermath of “policy disasters,” and whether and how we should reform the Constitution.

Chapter 1 begins by establishing a framework, inspired by the work Madison did in preparation for the Philadelphia Convention, for assessing claims that dysfunctional government justifies changing the Constitution.  It argues that although the idea that our government is dysfunctional is quite plausible, it is much harder than most assume to build a case that this dysfunction justifies fundamental constitutional reform.  Despite this, the book assumes the burden of arguing that such fundamental reform is justified.  However, I have an original take on how such an argument can be made and so I go about this task differently from most of the existing literature.  In particular, although I have no quarrel with the evidence of political polarization, at least among elites, I steer clear of arguments about dysfunction based on polarization.  I believe that the problem of trust in government is more fundamental and relevant to the challenge of justifying constitutional reform.
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Monday, March 09, 2015

"what it means to love America"

Marty Lederman

Difficult to recall a speech so powerful and inspiring in our time.  Fellow ConLaw profs, take heed: When you're putting together the required readings in your next syllabus . . .

(Video available here.)

Why Not Judicial Review: The Rule of Law or The Rule of (Politicized) Judges?

Brian Tamanaha

In "Why Judicial Review? Democratic Legitimacy," Jack eloquently advocates judicial review for fragile democracies. Let me offer a brief rejoinder. Here is his key argument:
But courts-- and especially constitutional courts-- offer something that these other institutions cannot. They can offer legitimacy based on the rule of law. What courts can do is issue opinions that say that something is legal or not legal. In so doing, they legitimate the work of the political branches. They offer legitimation when they declare laws and practices unconstitutional or illegal and, equally important, when they uphold the constitutionality and legality of certain laws and practices. The authority of the court to legitimate-- to say yes-- depends on its potential power to say no-- to withhold legitimation. Through the power to legitimate according to opinions that purport to be grounded in law and legal reasons, constitutional courts offer a form of legitimation that no other players-- whether church, army, or capital-- can offer.
This passage is jarring to read in the wake of the intense political-legal debate over King v. Burwell (framed as a statutory question), on the heels of Sebelius, Citizens United, Shelby County, and so on. Many constitutional decisions, though they "purport to be grounded in law and legal reasons," ultimately turn on political considerations like political principles, policy preferences, and anticipated consequences. This runs through constitutional theory as well: Balkin's Living Originalism and Scalia's Fainthearted Originalism diverge on many outcomes along political lines, though both are set forth in legal terms.

Legitimacy based on the rule of law does not come about simply because judges in black robes issue decisions couched in legal terminology. It requires that decisions be determined by the law and appear to be determined by the law. Issues that come before constitutional courts, however, are often the most legally open as well as politically fraught.

Jack observes, "But in the contemporary context -- of many different kinds of societies divided by religion, ethnicity, and language, and with only limited experience in maintaining free institutions -- you may not be able to get good results in fledgling democracies without constitutional courts." This is correct as far as it goes, but it prompts the crucial question: In societies with such sharp divisions (often greater than the Red-Blue divide in America) will constitutional courts issue decisions based on the law? Or will the decisions turn on political considerations and be perceived as political by citizens.

More to the point, granting judges the power to strike legislation on constitutional grounds raises the stakes for the other political branches because constitutional decisions are harder to overcome. This inevitably leads to battles to control who becomes judges (witness the politicization of judicial appointments in the US). In many societies with fragile democracies, courts are also fragile institutions. Giving courts the power of judicial review may increase efforts to undermine judicial independence, making it all the harder for the rule of law to develop.

Finally, it is unsettling to see Jack refer to Bush v. Gore positively at the close of his essay. That was not the Court's finest hour. Nor was it necessarily good for our democracy or for the country that it was so swiftly acceded to with relatively little protest. I'm not sure fragile democracies should take any lesson from the case and its aftermath.

Saturday, March 07, 2015

Why judicial review? Democratic legitimacy

JB

This Friday I attended a workshop at Yale Law School on Sam Issacharoff's forthcoming book, Fragile Democracies: Constitutional Courts in the Breach, organized by my colleague Heather Gerken, Guy Charles of Duke and Michael Kang of Emory.

Issacharoff's argument is that constitutional courts offer stability in emerging democracies--what he calls "fragile democracies."  At their best, constitutional courts can help regimes keep on track in their quest to become and remain democratic, even if the powers and influence of constitutional courts always remain limited.  Although courts cannot do everything, and are often quite vulnerable, they can help ensure political competition and the ability of successive elections to discipline politicians.

We might juxtapose Issacharoff's argument with that of critics of judicial review like Jeremy Waldron, who argue that judicial review is not necessary in well-functioning democracies. Issacharoff responds that emerging democracies are not yet well-functioning; in these situations constitutional courts can and do play an important role in shoring up democracy when it is most vulnerable.

I would add that if judicial review proves important or even necessary for fledgling democracies, it is unlikely to wither away (like the state in Marx's theory of history) once democracy becomes more established.  Instead, multiple institutions will increasingly rely on constitutional courts for multiple functions.  If you employ constitutional courts at the beginning of your democratic enterprise, you are likely to keep them.

Waldron is not insensitive to this point; rather his assumption is that well-functioning democracies can and do emerge without constitutional courts-- Great Britain and New Zealand provide examples of how this happened. But in the contemporary context -- of many different kinds of societies divided by religion, ethnicity, and language, and with only limited experience in maintaining free institutions -- you may not be able to get good results in fledgling democracies without constitutional courts. And once you have constitutional courts, they will tend to be baked into the constitutional and political structure. They will be difficult to replace because so many different actors depend on them to perform various functions within a democracy and to help keep democracy running.

Issacharoff's thesis about the role of constitutional courts in fragile democracies led to two questions, both ably presented by my colleague Dan Markovits. First, why do we care about achieving stable democracy in new regimes rather than political stability in general? Why shouldn't we settle for Singaporean-style political stability rather than putting our hopes on a distinctively democratic form of stability with genuine political competition and rotation in office? Second, why should we focus on courts as a crucial ingredient in providing democratic stability? After all, there are many different institutions that can help stabilize democracy in a country. For example, the military, capital, landowners, religious institutions, and civil society can all work to preserve political stability and support democratic government.

The answer to both questions is legitimacy.

First, at an earlier point in history, people might not have thought that achieving *democratic* legitimacy was especially important. Many people might have been content with a stable order that did not violate peoples' rights too much or too often. But by the beginning of the twenty-first century, political legitimacy is increasingly democratic legitimacy.  Even countries that are not democratic (and do not intend to be) like to pretend that they are democratic, by pointing to elections, plebiscites, or other features of popular participation to show that they are responsive to popular will.  Their hypocrisy is the compliment that vice pays to virtue.  So we rightly care about whether constitutional courts can help promote democratic legitimacy and stability, not just legitimacy and stability in general.

Second, it is true that many different institutions can help fragile democracies achieve and maintain democratic practices. But given their composition and nature, each of them can only do certain things. The military can maintain order by threatening to shoot people and otherwise use force. The church can use its moral authority and threaten excommunication or moral condemnation.  Capital (and wealth more generally) can work to preserve economic stability and avoid crises that would harm democracy (as J.P. Morgan and his colleagues did at the beginning of the 20th century to prevent a panic and a run on banks).  Civil society organizations can mobilize to show popular support for a regime.

Nor should we forget forms of influence from outside a nation's borders. International public opinion and international political and legal institutions can pressure politicians to behave; international organizations like the World Bank and the IMF can put economic pressure on politicians to maintain the rule of law and democratic practices; other countries, working either individually or collectively, can threaten sanctions or withhold benefits; or they can offer assistance in return for pro-democratic reforms, and so on.

All of these institutions can help support fledgling democracies in valuable ways.  Of course, they can also work against democracy, too. (Think of military coups as an example).

But courts-- and especially constitutional courts-- offer something that these other institutions cannot. They can offer legitimacy based on the rule of law.  What courts can do is issue opinions that say that something is legal or not legal. In so doing, they legitimate the work of the political branches. They offer legitimation when they declare laws and practices unconstitutional or illegal and, equally important, when they uphold the constitutionality and legality of certain laws and practices. The authority of the court to legitimate-- to say yes-- depends on its potential power to say no-- to withhold legitimation. Through the power to legitimate according to opinions that purport to be grounded in law and legal reasons, constitutional courts offer a form of legitimation that no other players-- whether church, army,  or capital-- can offer.

The importance of the role of courts in political legitimation emerged only gradually.  If we go back far enough in history, the blessing of the Catholic Church might have been a far greater and more desirable source of legitimation for a monarch.  Going back still further in time, military power-- for example the force of the Imperial Roman army-- might have been the best guarantee of stability in an outlying province.

But in our age, democracy based on the rule of law is the gold standard of political legitimacy.  From the perspective of that standard, the blessing of courts is particularly important.  Courts represent the rule of law, and therefore offer a special kind of stability and legitimacy that the military and the church cannot. Even popular support cannot guarantee that politicians act according to law-- indeed, mass support may tempt them to abandon legal norms.

But one should not confuse the idea that courts can bestow legitimacy and stabilize democracy with the idea that they can do so by themselves. They also need support from at least some of the other institutions and practices I have just mentioned-- the military, the church, capital, civil society, and international organizations and institutions. If courts do not have support from at least some of these institutions, they will not be able to stand up to politicians, who will roughly push aside the work of judges aside, ignore judges or replace them with judges who are far more tractable.

Institutions like the military, the church, or capital--or international influences--often prove to be necessary supports for judicial legitimation, which is not the same thing as saying that they can bestow judicial legitimation themselves. Indeed, they may need the legitimating function of courts as much as courts need their support to shore up a fledgling democracy. Owners of capital and landowners in particular have long seen courts as an important bulwark against despotism; Alexander Hamilton's famous justification of judicial review in The Federalist is an example.

This explanation shows why constitutional courts sometimes find it very difficult to preserve democracy in states that become dominated by a single party-- often the original revolutionary party that established the new regime.  In one-party states, the dominant party may have successfully co-opted all of the other institutions-- including capital, the military, and the church. If this happens, courts have nothing to fall back on.  They can try to stand up to politicians who undermine democratic institutions, but they are unlikely to get very far. Instead, they may find that they may have to let the dominant party get most of what it wants,  temporize and find ways to preserve their institutional status for a later time.

This thesis suggests that judicial review by constitutional courts can grow stronger over time if parties and institutions see courts as an effective ally when they do not control the reins of power. That is, judicial review tends to become more established and more powerful when there is genuine political competition and regular rotation in office, so that all parties have reason to treat the courts as a potential ally. In a hostile political environment, the judiciary may be an important support for an out-of-power party or faction.  Moreover, as Mark Graber and Keith Whittington have pointed out in the American context, the political branches may increasingly rely on courts to decide questions that they cannot or do not want to decide.

In a mature democracy like the United States, this cumulative process of employing and depending on courts to provide stability and legitimation has proceeded so far that the U.S. Supreme Court was actually able to resolve a disputed presidential election in 2000.  But that sort of interdependence takes a great deal of time to establish. The challenge for constitutional courts in emerging democracies is to help establish the conditions of political competition, that, in the long run, will help establish courts' own authority.





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