Many states and localities have adopted salary history bans in recent years. The goal of these bans is to stop the use of a worker’s past salary to help formulate a starting salary for that worker at a new workplace. Advocates of the bans strive to diminish gender discrimination in the workplace and in particular to reduce the gender pay gap. The theory behind the ban is that on average women have a weaker salary history than men in part because of discrimination, and the use of salary history at a new employer perpetuates the effect of earlier discrimination. A growing body of empirical evidence supports the view that salary history bans work. Newly hired women in jurisdictions that implement a ban earn significantly more than newly hired women in other jurisdictions. Importantly, but less noticed, there is also evidence that salary history bans help to close the racial pay gap as well. We conclude with a discussion of the policy implications we draw from research on salary history bans.

Journal Article Cartel issues in plain sight Get access William E Kovacic, William E Kovacic George Washington University Law School, District of Columbia, USA Search for other works by this author on: Oxford Academic Google Scholar Robert C Marshall, Robert C Marshall Department of Economics, Penn State University, Pennsylvania, USA Corresponding author: E-mail: bob.marshall@bateswhite.com Search for other works by this author on: Oxford Academic Google Scholar Michael J Meurer Michael J Meurer School of Law, Boston University, Massachusetts, USA Search for other works by this author on: Oxford Academic Google Scholar Journal of Antitrust Enforcement, jnad019, https://doi.org/10.1093/jaenfo/jnad019 Published: 16 May 2023

Scholars and policy makers have tried for years to solve the tenacious and harmful crisis of low quality, erroneously granted patents. Far from resolving the problem, these determined efforts have resulted in hundreds of conflicting policy proposals, failed Congressional bills, and no way to evaluate the policies’ value or impact or to decide between the overwhelming multiplicity of policies.This Article provides not only new solutions, but a new approach for designing and assessing policies both in patent law and legal systems more generally. We introduce a formal economic model of the patent system that differs from existing scholarship because it permits us to (1) determine how a policy change to one part of the patent system affects the system as a whole; and (2) quantify the impact of policy changes. Existing scholarship typically analyses a policy by assessing its effect on just the targeted element of the patent system, but legal systems are complex with interrelated components and players react along multiple margins, so these analyses are incomplete and sometimes incorrect. Our approach fixes this problem, providing a comprehensive understanding of how a policy change affects the patent system from beginning-to-end. It also permits us to conduct complex analyses such as varying multiple policies at once. Further, much existing scholarship fails to quantify the magnitude of a policy’s effect, and even empirical scholarship can only measure the effect of an already-implemented policy, not predict the effect of a proposed change. Quantification is critical because policies generally have multiple effects, often in countervailing directions. Quantification—as shown using our model—permits scholars to determine the overall direction and size of a theoretically ambiguous effect. Quantification also allows us to compare the social welfare effects of different reforms so that policy-makers know where to focus their efforts. We apply our model to several of the most prominent policy debates in patent law. We conclude that certain reforms such as regulation of settlement licenses and increased examination intensity yield large gains in social welfare and should be prioritized. Other reforms that are popular with scholars, including decreasing the availability of injunctions and reducing litigation costs produce surprisingly small gains in social welfare. Often existing scholarship operates too much on intuition, which, we show, can be wrong. Our new approach to patent reform provides an approach that offers deeper understanding and a more effective evaluation framework.

In the years from State Street in 1999 to Alice in 2014, legal scholars vigorously debated whether patents should be used to incentivize the invention of business methods. That attention has waned just as economists have produced important new research on the topic, and just as artificial intelligence and cloud computing are changing the nature of business method innovation. This chapter rejoins the debate and concludes that the case for patent protection of business methods is weaker now than it was a decade ago.

Antitrust law has long been mindful of the danger that firms may misuse their patents to facilitate price fixing. Courts and commentators addressing this danger have assumed that patent-facilitated price fixing occurs in a single market. In this Article, we extend conventional analysis to address firms’ patent misuse to facilitate price fixing across multiple products lines. By doing so, we expose gaps in existing agency enforcement and scholarly proposals for reform. Important legal tests that make sense in the single market setting do not carry over to the context we call serial collusion, where certain offenders engage in repeat collusion across product lines. This Article argues that there is an urgent need to recast these tests to address serial collusion of the sort that prevails in the chemicals, auto parts and electronics industries. To support this argument, we develop empirical evidence consistent with the possibility that serial colluders in the chemical industry acquired and used patents to support their collusion, either directly to coordinate and monitor output and pricing or indirectly to deter new firm entry by erecting patent thickets as a barrier to entry. Throughout this Article, we describe the flaws of current antitrust doctrine when it comes to assessing patents and price fixing, suggest doctrinal improvements, and provide guidance to antitrust enforcers about how to better understand and combat serial collusion facilitated by patents.

This chapter reviews the law and economics literature on intellectual property law and price discrimination. We introduce legal scholars to the wide range of techniques used by intellectual property owners to practice price discrimination; in many cases the link between commercial practice and price discrimination may not be apparent to non-economists. We introduce economists to the many facets of intellectual property law that influence the profitability and practice of price discrimination. The law in this area has complex effects on customer sorting and arbitrage. Intellectual property law offers fertile ground for analysis of policies that facilitate or discourage price discrimination. We conjecture that new technologies are expanding the range of techniques used for price discrimination while inducing new wrinkles in intellectual property law regimes. We anticipate growing commentary on copyright and trademark liability of e-commerce platforms and how that connects to arbitrage and price discrimination. Further, we expect to see increasing discussion of the connection between intellectual property, privacy, and antitrust laws and the incentives to build and use databases and algorithms in support of price discrimination.

We provide empirical evidence that many multi-product firms have each participated in several cartels over the past 50 years. Standard analysis of cartel conduct, as well as enforcement policy, is rooted in the presumption that each cartel in which a given firm participates is a singular activity, independent of other cartel conduct by the firm. We argue that this analysis is substantially deficient in many aspects in the face of serial collusion by multi-product firms. We offer policy recommendations to reign in serial collusion, including a mandatory coordinated effects review for any merger involving a serial colluder, regardless of the apparent nature of the merger.

The paradigmatic defendant in a patent lawsuit is a vertically integrated manufacturer. But much economic activity is conducted collaboratively by a supply chain of vertically disintegrated firms, and sometimes multiple firms are implicated in infringing activities, by making, selling, or using patented technology, or by contributing to or inducing another firm’s infringement. Often patent owners have the option of suing some or all of the members of a supply chain who contribute to the design, creation and marketing of a new technology. Businesses increasingly contemplate the risk of patent infringement when they negotiate contractual relations to form a supply chain. Upstream and downstream firms recognize they may be jointly liable for patent infringement because of their relationship to each other and their connection to the new product. An interesting and difficult question is: how should they manage infringement risk to maximize their joint profit? Which firm should control litigation? Or should they plan for joint control? Should they share responsibility for damages and litigation expenses? If yes, what determines each party’s share. This Article provides guidance regarding the choice of efficient terms in indemnification agreements that respond to two objectives: efficient risk management and effective bargaining against a patent-plaintiff.

Patent law and policy have received a surprising amount of attention from courts and policymakers in recent years. (1) This attention is warranted because innovation policy is critical in determining the pace of innovation and the rate of economic growth. The reform proposals pending before Congress are motivated by widespread reports of abusive patent assertions and fears that patents sometimes stifle innovation. (2) I favor most of the pending reforms and worry that our patent system, on balance, discourages innovation. But I part company from most reform proponents who focus on harms caused by the frivolous patent litigation mounted by many non-practicing entities (NPEs). (3) Instead, I want to focus on deeper flaws in the U.S. patent system that existed before NPEs became very active and that continue today. In our book Patent Failure, (4) James Bessen and I empirically demonstrated that problems in our patent system predated the flood of NPE litigation that began around 2005. (5) We showed that, on average, the patent system actually taxes innovators in most industries (except, notably, in the chemical and pharmaceutical industries). (6) We attribute this innovation tax to problems of low patent (7) Though, again, these problems are largely absent in the chemical and pharmaceutical industries, as the patents there are relatively high quality. (8) There are three kinds of quality problems that reformers have identified. First, there are mistakes by patent examiners and courts. Second, the inventive step--the so-called non-obviousness requirement (9)--in our patent system is too low. This means that valid patents are granted on uninteresting and low-quality inventions. (10) Third--and this is my main concern--is that patents are not sufficiently (11) I will use the term failure to denote this kind of problem. Initially, most patent-reform activity in the past decade has focused on quality problems caused by patent examination mistakes. (12) These reforms were well intentioned but were not significant enough to have much effect on the innovation tax. More recent reforms focus on mitigating the harm caused when low-quality patents are asserted. (13) Here, there has been a bit more progress. Now, we possibly have a new wave of reform coming that will address notice failure. (14) Patent notice reform, if it comes at all, likely will come from many sources. Some of the reforms being considered in Congress will improve patent notice and make the patent system more property-like. (15) The U.S. Patent and Trademark Office is considering reforms to make patent ownership more transparent and patent scope more precise. (16) I suspect that much of the significant reform will come from the courts. I hope that scholars will influence Federal Circuit judges and clerks so that judicial lawmaking will be more sensitive to the ways in which an over-reaching patent system can impede innovation. I envision a change in thinking about patents comparable to the change in thinking about antitrust law associated with the Chicago School approach to antitrust. (17) So, what do I mean by failure? Suppose I own the parcel of land called Whiteacre and there is a neighboring parcel owned by another called Blackacre. Suppose I want to build an office tower on Whiteacre. I hire a surveyor, look at the deeds, and talk to my lawyers. Finally, I build the office tower on Whiteacre. In a property system with good notice, I will have little trouble building the tower on Whiteacre and keeping it off of Blackacre. Notice failure, however, could lead me to accidentally build part of my tower on Blackacre. Good notice allows me to avoid such an accident. If I have reason to build partly on Blackacre, I would negotiate to purchase some of Blackacre in advance. If I want to stay entirely on Whiteacre, I can rely on surveying technology and property deeds to assure that. …

Thanks everyone for getting here early in the morning. There are several people in the audience that I should thank. I want to single out Jim Bessen, Peter Menell, and T.J. Chiang. Their writing on notice and patent law has influenced much that I'm going to talk about today. I have also benefitted from the writing of Henry Smith and Clarissa Long on information costs and property rights. What I will say today is a mix of some new and also some of the old work that I've done with my co-authors.In this talk I want to do four things. First, I'm going to present a motivating example, and second I will discuss what causes IP litigation. I want to distinguish between bargaining failure and failure to bargain ex ante. This is the descriptive portion of my project, and the message is really pretty simple. In law and economics, we think a lot about why people who have a dispute, who sit cross from each other at a table, fail to do the efficient thing, which is to stay out of the courtroom and avoid incurring litigation costs.Law and economics scholars have a lot of explanations about why that kind of bargaining failure occurs, but actually quite little thought has gone into the questions of: When do these people find each other? How do they find each other? Will they get to the bargaining table? Coase, in his transaction cost paper, actually described this as "discovery cost."1 He had little to say about it in that paper, and not many scholars subsequently have picked that up. That's where I'm entering the academic literature-trying to think more about failure to bargain, especially failure to bargain early. What explains when and how people get together, at an early date, to deal with an IP dispute?Third, in a normative vein, I will talk about whether we should reform IP law to encourage early bargaining. I want to talk about the gains to ex ante bargains, and the incentives to search out partners, match with them, and then actually bargain. How can the law affect those incentives?To conclude, I will briefly describe policy levers that might be used to address failure to bargain.So let's talk about a detailed motivating example, the Betamax case.2 I picked this case because I think it presents an interesting example of successful early bargaining, and at the same time failed early bargaining. Also, I've picked this case because it is well-known to IP scholars. The dispute pitted Sony against Hollywood movie studios. The movie copyright owners objected to copies made by consumers using the Betamax video recorder. The case made significant contributions to the fair use doctrine and contributory liability in copyright law.The first thing I want you to observe that you probably don't know is that when Sony and other consumer electronics companies were designing what became the VCR, they met early and they cross-licensed their patents. They recognized that down the road there might be an IP dispute involving patents, but they bargained early and they cross-licensed all of the relevant patents that they had in their portfolios that might relate to the VCR.Development of the Betamax and the VHS occurred along with the video disc system, and after the Betamax had been designed and was offered for sale a couple of movie companies brought a lawsuit. And I wonder: Why did the parties effectively handle patent issues in advance, but fail in advance to deal with the copyright issues?There are going to be lots of answers to that question, and everyone in the audience will find their own answer to the question I just asked. But I want to trace out the answers to that question so that I can then think about policy, and how it might connect to this question of why was there a bargaining failure.So, why should Sony care whether a looming copyright dispute is resolved ex ante or ex post? That's the first question that I've got to answer, and I think that Sony had an opportunity to design a product that would avoid liability. …

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INTRODUCTION .................................................................................... 1683 I. UNPLANNED COAUTHORSHIP: THEORY AND PRACTICE ................. 1692 A. Finding Coauthorship Ex Post .............................................. 1695 B. The Mystery of Mutual Intent ................................................ 1699 C. Implications: Entitlement and Immunity ............................... 1702 II. THE COLLABORATIVE IMPULSE ..................................................... 1704 A. Collective Intentionality and Cooperation ............................ 1705 B. Commitments as Reasons for Action ..................................... 1712 C. The Collaborative Impulse .................................................... 1716 III. UNPLANNED COAUTHORSHIP THROUGH THE COLLABORATIVE IMPULSE ........................................................................................ 1724 A. Coauthorship as a Jointly Intentional Activity ...................... 1725 B. Coauthorship and Copyright’s Purposes .............................. 1729 C. Retaking Mutual Intent .......................................................... 1734 1. The Irrelevance of Objective Indicia ............................... 1734 2. Mutual Intent as the Search for a Collaborative Impulse ............................................................................ 1739 a. Intermeshing Subplans .............................................. 1742 b. Intermesh Versus Integration .................................... 1744 c. Contractualization ..................................................... 1747 D. Childress v. Taylor and the Collaborative Impulse ............... 1751 CONCLUSION ....................................................................................... 1755

The Federal Circuit’s expansion of patentable subject matter in the 1990s led to a threefold increase in software patents, many of which contain abstract ideas merely tethered to a general-purpose computer. There is little evidence, however, to suggest this expansion has produced an increase in software innovation. The software industry was highly innovative in the decade immediately prior to this expansion, when the viability of software patentability was unclear and software patents were few. When surveyed, most software developers oppose software patenting, and, in practice, software innovators tend to rely on other tools to capture market share such as first-mover advantage, trade secrecy, copyright, goodwill, and economic network effects. If anything, the increase in software patenting has led to an increase in software litigation, which in turn has encouraged firms to acquire patents for strategic purposes unrelated to innovation, serving as either defensive stockpiles to deter legal threats or offensive leverage for rent-seeking patent assertion entities (PAEs).Moreover, abstract software patents do not function well within a property rights framework because they fail to define cognizable metes and bounds and fail to provide effective notice to third parties of when a particular practice or product might infringe. Due to their abstractness, these claims can often be construed to cover any of the particularized processes that result in the same outcome, including those never envisioned by the inventor. Accordingly, these metes and bounds are not concrete enough to be useful to those who wish to tread carefully around them. The mere application of the idea using general-purpose technological components, such as a general-purpose computer, does nothing to abate this problem. Similarly, abstract patents defy the attempts of software innovators, or general counsel at technology companies, to stay on notice of what is already protected. This leaves firms vulnerable to investing in software development with little to no assurance that they will be able to avoid infringing upon an abstract patent, even if they conduct diligent searches within patent databases. Again, this will be true even if there are general-purpose technological components tethered to the claims, as those components do nothing to help distinguish one abstract claim from another. Proliferation of such patents also contributes to the problem of patent thickets.A well-defined 35 U.S.C. § 101 ensures that abstract software patent claims and their attendant notice and patent thicket problems do not undermine the patent system and stymie innovation. It serves as a decisive gatekeeper that the Patent Office and trial courts can use early in administrative proceedings and litigation. Further, it avoids many of the systemic challenges prevalent with the use of 35 U.S.C. §§ 102, 103, and 112 in such cases – the speed of software innovation, the difficulty locating software prior art, and lax, broad claiming standards. Accordingly, this Court should affirm the invalidity of the patent claims at issue here and hold that abstract ideas in the form of software are unpatentable and that mere computer implementation of those ideas does not create patentability.* This brief was prepared with the help of NYU Law clinical students Megan Briskman, Philip Cernera, Ilyssa Coghlan, Rafael Reyeni, Peter Van Valkenburgh, and Shawn Soen under the supervision of Professor Jason Schultz.

In the past, "non-practicing entities" (NPEs), popularly known as "patent trolls," have helped small inventors profit from their inventions. Is this true today or, given the unprecedented levels of NPE litigation, do NPEs reduce innovation incentives? Using a survey of defendants and a database of litigation, this paper estimates the direct costs to defendants arising from NPE patent assertions. We estimate that firms accrued $29 billion of direct costs in 2011. Although large firms accrued over half of the direct costs, most of the defendants were small or medium-sized firms. Moreover, an examination of publicly listed NPEs indicates that little of the direct costs represents a transfer to small inventors.

The emergence of intangible resources, such as intellectual property illuminates a previously unrecognized market failure: what we call a "notice externality." The incentives of those claiming intellectual property diverge from the social interest. Inventors and creators can sometimes benefit from obfuscating the scope of rights and keeping others in the dark about their intellectual property. This article explores the principal causes of notice failure in the development of intangible resources and offers a multifaceted framework for diagnosing, preventing, internalizing, and ameliorating its adverse effects.