A recent explosion in the intellectual property (IP) literature focuses on a set of problems relating to an arrangement of property rights called an “anticommons.” The basic distinguishing feature of the IP anticommons is the existence of such a large number of IP rights covering a single good or service that the provision of that good or service is feared to be unduly taxed and retarded, if not outright prevented.

An often-discussed example of the anticommons problem is DNA-on-a-chip technology involving microarrays of thousands, or even tens of thousands, of individual pieces of DNA. Each piece of DNA may be covered by a different patent; and many of the patents may have different owners. It is feared that entering a business based on such a chip would require the business owner to identify, find, and then successfully transact with a staggering number of individual IP owners. Such transaction costs, combined with the risk that any one of the IP owners could hold out and compromise the entire operation, raise a number of problems for business and for the public at large. Because access to such a plethora of IP rights is required, those wanting to enter a line of business using DNA-on-a-chip technology fear that they cannot, and those seeking access to the products that such businesses would have produced are left wanting. The impact may be life threatening – preventing promising diagnoses and treatments targeted to patients having a number of specific genetic profiles.

Intellectual property (IP) is a vital and growing part of the global economy, accounting for about half of the gross domestic product in countries such as the United States. Innovation, competition, economic growth, and jobs, all can be helped or hurt by different approaches to IP. But as is so often the case, the devil is in the details, and seemingly slight changes in the particular rules of the game can have remarkable impact. This book brings together diverse perspectives from the fields of law, economics, business, and political science to explore the ways varying approaches to this driving element of our economy and society can positively and negatively impact life at home and abroad.

A central debate within the field of IP relates to its very purpose. Some see IP rights as tools for granting private monopolies or other privileges directly to creative or inventive individuals. Some of those focusing on such a direct link begrudge IP as a form of harmful patronage to a select few politically effective beneficiaries, while others focusing on this direct link offer IP as helpful rewards for inventive or creative efforts. Others see IP as a more indirect set of tools for getting new inventions or creations put to use, and they embrace the right to exclude as a coordination device for getting diverse business parties to strike the necessary deals with each other so as to help achieve appropriate distribution and commercialization of intellectual as-sets. All seem to agree that IP rights work best when they help increase innovation and competition while getting ideas put to use as broadly and rapidly as possible. Not all agree on what this means for how the rules of the game should be structured or whether particular forms of creative and inventive works should be protected by legal IP systems at all. This book presents several perspectives on the many economic, legal, and scientific issues surrounding the commercialization of IP, with a focus on patents.

Although a number of factors contributed to the stock market decline that started in 2000 – including the bursting of the “dot-com” bubble, a softer economy than many expected, September 11 and the ongoing terrorist threat, and the wars in Afghanistan and Iraq – one factor that weighed on stocks stands out for present purposes: corporate scandal. Beginning with Enron in the fall of 2001, a wave of corporate scandal crashed on the U.S. economy. In addition to Enron, the scandals involved companies such as WorldCom, Tyco, HealthSouth, Adelphia, and Global Crossing. They also ensnared mutual funds and leading financial institutions up and down Wall Street, along with major accounting firms, such as the collapsed Arthur Andersen. As if the bona fide scandals that made the headlines were not enough to drag the markets down, a record number of earnings restatements – increasing steadily from 116 restatements in 1997, to 158 in 1998, 234 in 1999, 258 in 2000, and 305 in 2001 when the scandals began to break – fueled doubt about companies' governance, finances, and business plans. These doubts became particularly sharp as the overall market tumbled through 2008.

Broad and deep securities markets, where ownership and control are widely separated, depend on a healthy dose of investor confidence to convince investors to hand over trillions of dollars to directors and officers over whom they exercise relatively little influence.

INTRODUCTION

In describing the “effective executive,” Peter Drucker said:

He continued:

Managing a company as CEO is about making decisions. Making decisions is not the hard part. The hard part, as Drucker suggests, is making good decisions and then implementing them successfully.

Without question, chief executives make astute, effective decisions routinely but not always. Lots of possibilities explain why bad decisions get made and why even good decisions get implemented poorly.