《法学资料大全》（英文版）知识产权法和公司的界限.pdf

INTELLECTUAL PROPERTY LAW AND THE BOUNDARIES OF THE FIRM Oren Bar-Gill' and Gideon Parchomovsky C 2004 Oren Bar-Gill and Gideon Parchomovsky. All rights reserved 1. Introduction Innovation is crucial in technology intensive markets. For many firms inventions are a critical factor of production. Examples of downstream firms purchasing or licensing technology from upstream innovators are common(see, e.g., Arora et al., 2001). Indeed both Transaction Costs Economics (TCE)and the property rights Theory(prt)suggest that in many cases, efficiency requires that the inventive process-from the conception of an idea through its development and ultimate commercialization-be divided among several firms(Williamson, 1975; Aghion and Tirole, 1994; Arora et al., 2001; Arora and Merges, 2004) The question thus becomes which stages of the inventive hould be integrated in a single firm and which should be divided among different firms and traded on the market? We argue that the theoretic investigation of the optimal boundary between firm and market cannot be carried out in a legal vacuum. Ideally, only the economic considerations identified by TCE and Prt should affect the "make or buy"decision. In practice, however, law imposes an important constraint on the economic balance between firms and markets Critically, the law defines which stages of the inventive process are amenable to market trading. As Arrow (1962) recognized, information that is not afforded legal protection cannot be bought or sold on the market. Absent legal protection, the information holder is in a bind in order to sell the information she must disclose it to the potential buyer, but once she does, she has nothing left to sell. This paper emphasizes the important relationship between Arrow's paradox of disclosure and the question of the boundaries of information intensive firms. Only legally protected inventions,i.e patented inventions, may be traded; pre-patent stages of the innovation process may not Consequently, by force of law, rather than by the guidance of economic principle, pre- patent innovation must be carried out within the boundaries of a single firm Intellectual property law is therefore an important factor influencing the boundary between the firm and the market. When it is more difficult to obtain a patent more Innovative activity mus integrated within a single firm (or be forgone altogether) Harvard University, the Society of Fellows, and Harvard Law School, the John M. Olin Center for Law Economics and business University of Pennsylvania Law s This paper greatly benefited omments and criticisms by lan ayres, Lucian bebchul Ben-Shahar. Yochai Benkler. James Chaim Fershtman. Zohar Goshen. Oliver Hart. Josh L Robert Merges, Eric Posner, Ariel Mark Ramseyer, Edward Rock, Chris Sanchirico Siegelman, Omri Y adlin and seminar participants at boston university and penn we thank efrat procaccia or excellent research assistance. Finally, we thank the John M. Olin Center for Law, Economics and Business at Harvard Law School and the William F. Milton Fund of Harvard University for generous

INTELLECTUAL PROPERTY LAW AND THE BOUNDARIES OF THE FIRM Oren Bar-Gill* and Gideon Parchomovsky** © 2004 Oren Bar-Gill and Gideon Parchomovsky. All rights reserved. 1. Introduction Innovation is crucial in technology intensive markets. For many firms inventions are a critical factor of production. Examples of downstream firms purchasing or licensing technology from upstream innovators are common (see, e.g., Arora et al., 2001). Indeed, both Transaction Costs Economics (TCE) and the Property Rights Theory (PRT) suggest that in many cases, efficiency requires that the inventive process—from the conception of an idea through its development and ultimate commercialization—be divided among several firms (Williamson, 1975; Aghion and Tirole, 1994; Arora et al., 2001; Arora and Merges, 2004). The question thus becomes which stages of the inventive process should be integrated in a single firm and which should be divided among different firms and traded on the market? We argue that the theoretic investigation of the optimal boundary between firm and market cannot be carried out in a legal vacuum. Ideally, only the economic considerations identified by TCE and PRT should affect the “make or buy” decision. In practice, however, law imposes an important constraint on the economic balance between firms and markets. Critically, the law defines which stages of the inventive process are amenable to market trading. As Arrow (1962) recognized, information that is not afforded legal protection cannot be bought or sold on the market. Absent legal protection, the information holder is in a bind: in order to sell the information, she must disclose it to the potential buyer, but once she does, she has nothing left to sell. This paper emphasizes the important relationship between Arrow’s paradox of disclosure and the question of the boundaries of information intensive firms. Only legally protected inventions, i.e., patented inventions, may be traded; pre-patent stages of the innovation process may not. Consequently, by force of law, rather than by the guidance of economic principle, prepatent innovation must be carried out within the boundaries of a single firm. Intellectual property law is therefore an important factor influencing the boundary between the firm and the market. When it is more difficult to obtain a patent more innovative activity must be integrated within a single firm (or be forgone altogether). * Harvard University, the Society of Fellows, and Harvard Law School, the John M. Olin Center for Law, Economics and Business. ** University of Pennsylvania Law School. This paper greatly benefited from comments and criticisms by Ian Ayres, Lucian Bebchuk, Omri Ben-Shahar, Yochai Benkler, James Bessen, Chaim Fershtman, Zohar Goshen, Oliver Hart, Josh Lerner, Robert Merges, Eric Posner, Ariel Porat, Mark Ramseyer, Edward Rock, Chris Sanchirico, Peter Siegelman, Omri Yadlin and seminar participants at Boston University and Penn. We thank Efrat Procaccia for excellent research assistance. Finally, we thank the John M. Olin Center for Law, Economics and Business at Harvard Law School and the William F. Milton Fund of Harvard University for generous financial support. 1

Conversely, when the legal requirements of patentability are relaxed, as they have been in recent years, a shift of activity from firms to the market should be expected. Trade secret law and the legal treatment of covenants not to compete similarly affect firm boundaries by determining the allocation of entitlements between firms and employees The implications of innovation for the make-or-buy decision have been highlighted by Williamson(1975), Teece(1986, 1988), and Aghion and Tirole(1994) Previous work has also recognized the relevance of appropriability and intellectual property law to various contractual, strategic and organizational questions in technology ntensive industries. The importance of appropriability and the relationship between appropriability and intellectual property rights was first emphasized by Teece(1986) Arora et al. (2001) highlight the difficulty in contracting over tacit knowledge and know how(ch. 5), noting"the role of patents in facilitating transactions in technology. (p. 262 Gans and Stern(2003a)consider the implications of the disclosure paradox for entrepreneur's choice of a commercialization strategy, recognizing the role of intellectual property in solving the paradox. In a couple of related empirical studies, these authors show how intellectual property rights and appropriability problems affect the timing of cooperation/licensing(Gans and Stern, 2003b)as well as the choice of a start-up innovator between competition or cooperation (i.e. contracting) with more established firms(Gans et al., 2000). Another recent empirical study shows that technologies developed by firms operating in countries with weak intellectual property rights are used more internally(Zhao, 2003). Anton and Yao, in a series of papers, explore the implications of and the strategic responses to the disclosure paradox, caused by imperfect legal protection of pre-patent ideas(Anton and Yao, 1994, 2000, 2001, 2003a, 2003b, see also Bhattacharya and Guriev, 2004 Finally, Dan Burk and Ashish Arora and Robert merges, in two recent contributions, explicitly focus on the interrelations between intellectual property law and the boundaries of the firm question. Burk(2004 ) focuses on the implications of the theor of the firm for intellectual property law. While we focus on the reverse implications of intellectual property law for the theory of the firm, Burks insights are clearly important for our analysis. Arora and Merges(2004)show that stronger intellectual property rights support smaller firms that specialize in the supply of technology inputs. The analysis in Arora and Merges(2004) can be interpreted as proposing one way to minimize the costs associated with the disclosure paradox--through intellectual property rights in complementary assets(see also Merges, 2000; Arora et al., 2001). Our focus, on the other hand, is on intellectual property rights in the core informational asset. More generally, the preconditions for the creation of legally enforceable intellectual property rights. On while the literature has focused on the strength of intellectual property rights, we focus on The remainder of the paper is organized as follows. Section 2 presents a simple model, formalizing the role of intellectual property law as a constraint on the optimal level of vertical integration in technology-intensive industries. Section 3 draws the broader implications of the model for the structure and organization of technology intensive industries, discussing firm size, the role of research universities, r&d alliances and joint ventures, and R&D financing. Section 4 argues that intellectual property law affects not only the feasibility of the market option but also the feasibility of the firm option. Section 5 concludes

Conversely, when the legal requirements of patentability are relaxed, as they have been in recent years, a shift of activity from firms to the market should be expected. Trade secret law and the legal treatment of covenants not to compete similarly affect firm boundaries by determining the allocation of entitlements between firms and employees. The implications of innovation for the make-or-buy decision have been highlighted by Williamson (1975), Teece (1986, 1988), and Aghion and Tirole (1994). Previous work has also recognized the relevance of appropriability and intellectual property law to various contractual, strategic and organizational questions in technologyintensive industries. The importance of appropriability and the relationship between appropriability and intellectual property rights was first emphasized by Teece (1986). Arora et al. (2001) highlight the difficulty in contracting over tacit knowledge and knowhow (ch. 5), noting “the role of patents in facilitating transactions in technology.” (p. 262) Gans and Stern (2003a) consider the implications of the disclosure paradox for an entrepreneur’s choice of a commercialization strategy, recognizing the role of intellectual property in solving the paradox. In a couple of related empirical studies, these authors show how intellectual property rights and appropriability problems affect the timing of cooperation/licensing (Gans and Stern, 2003b) as well as the choice of a start-up innovator between competition or cooperation (i.e. contracting) with more established firms (Gans et al., 2000). Another recent empirical study shows that technologies developed by firms operating in countries with weak intellectual property rights are used more internally (Zhao, 2003). Anton and Yao, in a series of papers, explore the implications of and the strategic responses to the disclosure paradox, caused by imperfect legal protection of pre-patent ideas (Anton and Yao, 1994, 2000, 2001, 2003a, 2003b; see also Bhattacharya and Guriev, 2004). Finally, Dan Burk and Ashish Arora and Robert Merges, in two recent contributions, explicitly focus on the interrelations between intellectual property law and the boundaries of the firm question. Burk (2004) focuses on the implications of the theory of the firm for intellectual property law. While we focus on the reverse implications of intellectual property law for the theory of the firm, Burk’s insights are clearly important for our analysis. Arora and Merges (2004) show that stronger intellectual property rights support smaller firms that specialize in the supply of technology inputs. The analysis in Arora and Merges (2004) can be interpreted as proposing one way to minimize the costs associated with the disclosure paradox—through intellectual property rights in complementary assets (see also Merges, 2000; Arora et al., 2001). Our focus, on the other hand, is on intellectual property rights in the core informational asset. More generally, while the literature has focused on the strength of intellectual property rights, we focus on the preconditions for the creation of legally enforceable intellectual property rights. The remainder of the paper is organized as follows. Section 2 presents a simple model, formalizing the role of intellectual property law as a constraint on the optimal level of vertical integration in technology-intensive industries. Section 3 draws the broader implications of the model for the structure and organization of technologyintensive industries, discussing firm size, the role of research universities, R&D alliances and joint ventures, and R&D financing. Section 4 argues that intellectual property law affects not only the feasibility of the market option but also the feasibility of the firm option. Section 5 concludes. 2

2. Model We formalize the effect of intellectual property law on the boundaries of the firm question using a simple PRT model. Consider an inventor (D)and a developer(D).An innovation process combining the efforts of both I and d produces a value V(i, d ) where i denotes I's investment and d denotes D's investment. The value of Is outside option is v(O, and the value of D's outside option is v(d). Assuming V(i, d)>v(+v(d) the first-best investment levels are given by max(v(i, d)-i-dy Non-verifiability of investments implies contractual incompleteness that restricts the parties' options to a choice between integration(Int) and non-integration(NInt) Under the integration option, D owns the product of Is effort. Consequently, I does not enjoy any of the value created by her efforts, and is motivated to invest only by the soft incentives created within the integrated firm. Let i=i denote I's investment under integration.D's investment under integration is given by: d/m=argmax(v(, d)=d) Total net payoffs under integration are: n(i imn, d m)=v(i im, dm)-ilmedi The second alternative is non-integration(NInt), whereby I retains control over her invention, and can sell it to D ex post. The non-integration option, however, is not al ways available. Given the disclosure paradox, the NInt option is feasible only if the law recognizes the product of I's efforts as intellectual property, thus affording it legal protection. If such IP protection is granted, ex post the parties will negotiate a transfer of the legal rights from I to D. Assuming Nash bargaining, the ex post surplus V(i, d)-v(i-v(d) is equally divided between the parties. Hence, Is ex post payoff is (i, d)=v(+v(i, d)-v(i-v(dl, and D's ex post payoff is r (i, d)=r (d)+ V(i, d)-vG-v(d]. The investment levels are given by iMin =argmax/'(, d)-n and d n =argmax(r(, d )-d.We assume the existence of a unique equilibrium m, d m ) Total net payoffs under integration are We can state the following Proposition: When n( in, d m )>n (i n, d m), if Is invention is legally protected, ther non-integration will obtain, but if I's invention is not legally protected, integration will obtain i The PRT framework employed in this section borrows from Hart(1995)and from Aghion and Tirole (1994 ). A TCE model could readily be developed to capture the same effect. Theoretically, the reverse form of integration, where I owns the combined product of both parties'efforts is also possible. Following Aghion and Tirole(1994), we choose not to focus on this form of integration, which can be ruled out if I is cash constrained increased/decreased salary and other monetary and non-monetary benefits and costs conferred by the inventor's managers and peers. See, e.g., Williamson(1975). If the value of the final output v is verifiable, then Is employment contract in the Int case can be made contingent on V, thus improving Is incentive

2. Model We formalize the effect of intellectual property law on the boundaries of the firm question using a simple PRT model.1 Consider an inventor (I) and a developer (D). An innovation process combining the efforts of both I and D produces a value V(i,d), where i denotes I’s investment and d denotes D’s investment. The value of I’s outside option is , and the value of D’s outside option is . Assuming , the first-best investment levels are given by v (i) I v (d) D V (i,d) v (i) v (d) I D > + V i d i d i d max ( , ) − − , . Non-verifiability of investments implies contractual incompleteness that restricts the parties’ options to a choice between integration (Int) and non-integration (NInt). Under the integration option, D owns the product of I’s effort.2 Consequently, I does not enjoy any of the value created by her efforts, and is motivated to invest only by the soft incentives created within the integrated firm. 3 Let denote I’s investment under integration. D’s investment under integration is given by: i i Int = ˆ d V i d d d Int = argmax (ˆ, ) − . Total net payoffs under integration are: ( ) ( ) Int Int Int Int Int Int Π i , . d =V i ,d − i − d The second alternative is non-integration (NInt), whereby I retains control over her invention, and can sell it to D ex post. The non-integration option, however, is not always available. Given the disclosure paradox, the NInt option is feasible only if the law recognizes the product of I’s efforts as intellectual property, thus affording it legal protection. If such IP protection is granted, ex post the parties will negotiate a transfer of the legal rights from I to D. Assuming Nash bargaining, the ex post surplus V (i,d) v (i) v (d) is equally divided between the parties. Hence, I’s ex post payoff is I D − − ( , ) ( ) [ ( , ) ( ) ( )] 2 1 i d v i V i d v i v d I I I D π = + − − , and D’s ex post payoff is ( , ) ( ) [ ( , ) ( ) ( )] 2 1 i d v d V i d v i v d D D I D π = + − − . The investment levels are given by: i i d i I i NInt = argmax π ( , ) − and d i d d D d NInt = argmax π ( , ) − . We assume the existence of a unique equilibrium ( ) NInt NInt i ,d . Total net payoffs under integration are: ( ) ( ) NInt NInt NInt NInt NInt NInt Π i , . d =V i ,d − i − d We can now state the following: Proposition: When ( ) ( ) NInt NInt Int Int Π i ,d > Π i ,d , if I’s invention is legally protected, then non-integration will obtain, but if I’s invention is not legally protected, integration will obtain. 1 The PRT framework employed in this section borrows from Hart (1995) and from Aghion and Tirole (1994). A TCE model could readily be developed to capture the same effect. 2 Theoretically, the reverse form of integration, where I owns the combined product of both parties’ efforts, is also possible. Following Aghion and Tirole (1994), we choose not to focus on this form of integration, which can be ruled out if I is cash constrained. 3 These soft incentives include the possibility of promotion/demotion (or even dismissal), increased/decreased salary and other monetary and non-monetary benefits and costs conferred by the inventor’s managers and peers. See, e.g., Williamson (1975). If the value of the final output V is verifiable, then I’s employment contract in the Int case can be made contingent on V, thus improving I’s incentives. 3