More Cool Lab Experiments on Creativity by Bechtold, Buccafusco & Sprigman

As Chris Sprigman explained in a 2011 Jotwell post, laboratory experiments are largely missing from the legal academy, but they shouldn't be. Experiments can be used to test theories and tease apart effects that can't be measured in the real world. They can explode old hypotheses and generate new ones. Chris Sprigman and Chris Buccafusco and various coauthors have been among those remedying the dearth of experimental work in IP law; e.g., I've previously blogged about a clever study by the Chrises of how people price creative works. (For more on the benefits and drawbacks of work like this, and citations to many other studies, see my Patent Experimentalism article starting at p. 87.)

Most recently, Chris and Chris have teamed up with Stefan Bechtold for a new project, Innovation Heuristics: Experiments on Sequential Creativity in Intellectual Property, which presents results from four new experiments on cumulative innovation/creation that "suggest that creators do not consistently behave the way that economic analysis assumes." (This should not be surprising to those following the behavioral law and economics literature. Or to anyone who lives in the real world.) I briefly summarize their results below.

Greg Mandel et al. on the Plagiarism Fallacy in IP

Greg Mandel (Temple Law) has done some interesting empirical work on public perceptions of IP. In his latest work, Intellectual Property Law's Plagiarism Fallacy, he has collaborated with two psychologists, Anne Fast and Kristina Olson (University of Washington), on three new studies. They conclude that debates over whether IP should serve incentive or natural rights objectives are "orthogonal" to the most common perception about IP, which is that its function is to prevent plagiarism. They argue that this "plagiarism fallacy . . . . helps explain pervasive illegal infringing activity on the Internet" as stemming from a failure to understand what IP is rather than indifference toward IP rights.

Cultural Cognition of Patents

I just posted a new essay, Cultural Cognition of Patents, which is forthcoming in IP Theory. Here is the abstract:

Simply making empirical progress is not always enough to influence policy, as demonstrated by the polarized public discourse over issues ranging from climate change to gun control. The current discourse over patents appears to have a similar pathology, in which cultural values—such as respect for strong property rights or concern about limiting access to knowledge—shape priors and affect the weight given to new information, such that advocates and policymakers on both sides of the patent wars often fail to acknowledge the ambiguity of existing evidence. In this Essay, I suggest that the “cultural cognition” framework might help scholars to understand this value-based division and to study ways to design and communicate patent experiments so that the resulting knowledge has the impact it should.

Fromer: Expressive Incentives in Intellectual Property

Are the current incentive structures in American patent and copyright law reaching their maximum utilitarian potential? In her recent article Expressive Incentives in Intellectual Property, 98 Virginia Law Review 1745 (2012), Professor Jeanne Fromer (New York University School of Law) suggests that traditional reliance on pecuniary interests leaves untapped potential in maximizing the effectiveness of intellectual property law in terms of spurring creativity and invention. She proposes using expressive incentives—incentives reflecting the moral-rights interests of creators—perhaps instead of traditional pecuniary incentives, to optimize intellectual property laws in a utilitarian framework.

Gregory Mandel – To Promote the Creative Process: Intellectual Property and the Psychology of Creativity

Does intellectual property law promote creativity? Professor Gregory N. Mandel (Peter J. Liacouras Professor of Law and Associate Dean for Research, Temple University—Beasley School of Law) extensively explores the psychological effects of the patent and copyright systems and their impact on innovation in his article To Promote the Creative Process: Intellectual Property Law and the Psychology of Creativity, 86 Notre Dame L. Rev. 1999 (2011). In this article, Professor Mandel examines modern psychological research of various thought processes, motivation, and collaboration in an effort to reveal how intellectual property laws may affect the process of innovation.

Buccafusco & Sprigman: Valuing IP

Are there problems with the way IP is priced? Professors Christopher Buccafusco (Chicago-Kent) and Christopher Sprigman (Virginia) provide a novel experimental insight on this question in Valuing Intellectual Property: An Experiment, which was published in the November 2010 issue of the Cornell Law Review. I have been thinking recently about the prices that are set for intellectual property because of Amy Kapczynski's project on theorizing the costs of these prices, which she presented at Yale Law School today (and which I'll blog about in more detail once a draft of her paper is posted). But while Kapczynski provides the first thorough critique of price itself (challenging the premise that IP should be priced whenever transaction costs are low), Valuing Intellectual Property contributes to the second-order critiques that emphasize the particularly high transaction costs in the IP context.

Buccafusco and Sprigman conducted a clever experiment to study how people set prices for creative works by creating a market for 10 poems in a $50 poetry contest. They found that the "authors" who wrote the poems and the "owners" who were told they owned one of the poems were only willing to sell their poem (and the corresponding chance of winning the contest) for over $20, while "bidders" would only pay around $10 to buy a poem. This effect was the same whether the participants could see all 10 poems or not. And even when the "contest" became a random lottery (so that each poem had a 1 in 10 chance of winning), authors and owners would only sell for over $15, while bidders would only pay around $5 (the actual expected value).

This experiment is the first demonstration of the endowment effect (where people value something they own more than an equivalent thing they don't) for non-rival, created goods. Even though the authors were reminded that they would get to keep their poems (which would be emailed to them), they still priced the poems' values as contest entries more highly than the bidders. The implication for IP is that the deadweight loss caused by copyrights and patents may be even larger than previously expected. Although the endowment effect is well established in behavioral law and economics, these inefficiencies are particularly troubling in IP, where the marginal cost of information is zero. Buccafusco and Sprigman argue that their results suggest market failures in licensing IP, which supports the use of liability rules over property rules and a more expansive fair use doctrine. More broadly, their results demonstrate another problem with using price as a signal of value for information goods.

Peter Lee: Patent Law and the Two Cultures

I'll start my patent scholarship blog with an article I helped edit for the Yale Law Journal this past fall: Patent Law and the Two Cultures by Professor Peter Lee (at U.C. Davis Law). The article notes that decisionmakers often rely on heuristics and deference to experts when confronted with technical complexity, which "raise[s] the provocative question of whether the 'cognitive miser' model is reflected in the patent system," where lay judges often are faced with complex patent disputes (Part II). Lee then describes the formalism of the Federal Circuit in terms of heuristics that lower information costs (Part III), and he sees the "holistic turn" of the Supreme Court as producing "'information consuming' standards [that] will increase technological engagement and attendant cognitive burdens for district judges" (Part IV). After laying out this descriptive theory, Lee offers a prescriptive suggestion: the Supreme Court should recognize the costliness of its holistic standards and should make rules that are "enabled" (borrowing a principle from patent law) such that lay district judges actually can apply them (Part V).

The descriptive insights in Patent Law and the Two Cultures are interesting and compelling. The prescriptive proposal, however, could be developed further. Lee is not the first scholar to argue that the Supreme Court should make its tests more workable, and it is not obvious what distinguishes patent law from other complex areas of adjudication. But Lee does provide examples, such as from Graham and eBay, of areas where the Court has provided somewhat more concrete guidance, and he argues that the Court should make more use of illustrative examples. He also does a nice job responding to potential counterarguments to this proposal. Although somewhat long, the piece is beautifully written and carefully footnoted; Lee is careful to acknowledge where his ideas fit into prior scholarship in the field. Even generalist readers (or lay judges) should be able to enjoy this piece.