THE VISION
Public institutions need to be the
vehicles by which leaders take
public responsibility for the public
interest. Otherwise, markets
determine the public interest, which
manifestly does not work.
THE REALITY
To the question “where do US innovations
come from?” a very large part of the answer
would include: publicly funded R&D,
government contracting to buy things from
the private sector that do not exist.
( Block, 2011,Weiss: 2008, 2009).
THE PROBLEM
We have now in place a system were the
tradition of intellectual property as a thin
layer of rights around a carefully preserved
public domain was replaced by a practice
where the public domain should be eliminated
whenever possible, and were the benefits of
technological progress are being appropriated
by a small number of individuals at the
expense of those most in need”
(J.Boyle: 2009).
THE PROBLEM ANALYTICALLY RESTATED
Regulation by private bodies and rent seeking in knowledge
Innovation(improvement)
based
Schumpeterian
CAPABILITIES:
Ability to create
resources strategically
First movers’
advantages &
Δ Productivity
KNOWLEDGECreative
destruction
COMMONS/SOFT
IP REGIMES
Knowledge
spreading
trough
innovation
diffusion
Structural
Change &
Development
Global
Knowledge
monopolies
INFORMATION
FEUDALISM
RETURNS
Ricardian
Based on
difficulty to
replicate
IP RENTISM
CAPABILITIES:
Ability to exclude
competitors via IP rules and
strategic patenting
Destructive
PATENT ALL BASED/
creation
STRONG IP REGIMES
TWO CRITICAL QUESTIONS
From a knowledge-governance perspective,
the first critical question that should be asked
here is:
When does extended protection cease to
work for generating Schumpeterian profits and
becomes a base for rent-seeking and rent
extraction?
TWO CRITICAL QUESTIONS
And the second :
If we conceive R&D as “turning money into
knowledge” and innovation as “turning
knowledge into money” …
Why should governments (i.e. public money)
heavily subsidize the former and almost
completely retreat from participating in the
latter?
Strong IPR’s- Based Inefficiencies

Legal-made exclusive monopolies for products for which
there may be no easily obtainable substitute (Plant),
●


OR: too secure monopolies and profits turning into rents
Strengthening IPRs vs. innovation’s diffusion (Merges),
Strategic patenting and unproductive entrepreneurship
(Baumol).
Strong IPR’s- Based Inefficiencies



IPRs and the “new economy”: strong IPRs + crucial
proprietary technologies = winner-takes-all-markets
(David, Carlton & Gertner, Landes & Posner),
International expansion of IPRs (TRIPs and BTAs) as a
second enclosure movement and a major source for global
monopolies (Boyle, Benkler),
Patent and Copyright offices as profit centres and venues
for hindering innovation (Jaffe & Lerner)

Overall strategy:

To identify the governing mechanisms of the new
knowledge ecology, and

To support governance arranjements for a more open,
developmental and public domain oriented system
for the production and dissemination of knowledge.

General rule: to promote the production, dissemination
and democratization of knowledge by means of market
shaping initiatives and trough creative destruction management
policies.

Scope: the whole economic system, but especially
knowledge intensive, technologically complex &
productivity enhancing activities.

Main policy concern: to mitigate structural inefficiencies
and to increase access, e.g.: the creation of a more
inclusive, democratic and development-oriented
knowledge ecology.
:
The US
Defense
Research Projects
Agency
Fact:
Forging
KG
for IPAdvanced
via market-shaping
initiatives
( DARPA)
has triggered
more than one-third
of allinnovations
developments
 A Government
golden-share
in strategic
in information
according
to Mr T.Tether,
(strategictechnology,
from the Public
Interest’s
point ofDarpa's
view), such as
director.
"In microelectronics,
I would say that 75-90 per cent
general
purpose technologies.
started at Darpa," he adds ( T. Tether: Interview with FT, October
20,2008).
The GS would enable the issuing of general public licenses
(to prevent “technological monopolies” or locking
competitors out).
Fact:
A century ago,
copyrights
lasted
for 14of
years
and could
 Regulation
of the
scope and
length
patents
and be
extended
another 14
if the copyright
holdertopetitioned
for anas R
copyright's
protection
according
criteria such
extension.
Today,
lastsales
for 95
spending
ascorporate
% of thecopyrights
companies’
oryears,
assetswhile
and ∆
individuals
retain
copyrights
forlifetime
70 years(e.g.:
afteratheir
deaths. tax
revenues
during
the IP
progressive
system for IP, avoiding one size fits all rules)*
There was nothing “scientific” to back these changes, but rather the
* Keep lobby
in mindofthatthe
patent
and copyrightindustry.
lengths are conventions, not scientific
powerful
entertainment
outcomes

Forging KG for IP via market-shaping initiatives:

A progressive tax on patents earned but not used or
licensed,
(in order to avoid unproductive entrepreneurship springing
from “strategic patenting” ),

Public incentives for standards development, cooperative
standard's setting, stimulus to (instead of restriction on)
research joint ventures and other forms of research and
licensing coordination,
(…in order to avoid winner-takes-all-markets due to the combination of
strong IPRs with network externalities, increasing returns – common
features of new economy’s sectors )

In fact, this is already in the EU Competition Commission’s
radar. Its former chief, Neelie Kroes, has recently argued in
a speech that …
“ industry standards for technology could be based on either
proprietary or non-proprietary technologies, but when a market
developed so that a proprietary technology became a de facto
standard and the owner of that technology exploited that market
power, competition authorities might have to intervene…
...one remedy would be to require to disclose of information at “fair
rates” so that other companies could design compatible products
and systems” ( FT: June, 11, 2008).

Knowledge governance initiatives and institutional design :

A Knowledge Governance Coordinating Body (KGCB) has to be
created, to work in coordination with existing regulatory and funding
agencies,

The management of intellectual property in general should be
subordinated to the KGCB , and addressed in coordination with
innovation and competition policies, as well as with public agencies
funding R&D,

The reinstatement of weberian state structures in order to regain
public management effectiveness (e.g. to put on hold new public
management oriented reforms).

The policy-institutions framework resulting from the
framework outlined above should:

Be flexible and pragmatic,

Address knowledge as a global public good,

Have the governance of knowledge shaped by the
public interest, and knowledge dissemination as
its main goal.



Be anti-unproductive entrepreneurship, not antibigness (“efficiency is the test, not size)
Be pro-efficiency but not libertarian (in the
“Chicago Scholl” sense of letting the market take
care of its own problems).
Be pro-cooperation, leaving room for business
networks to thrive but requiring government’s
guidance to supervise them.



Two approaches to policy can be devised from
the former discussion:
IP-centered: correcting market failures.
Underlying assumption: markets are efficient.
KG- centered: limiting the scope of the market.
Underlying assumption: markets are neither
efficient nor conducive to open and democratic
access in the field of knowledge.

By now , you know the approach I
would recommend, and why.
THANK YOU.
APPENDIX:
Mapping market features
 Mapping market features' tools:

concentration measures and market leaderships ,

degree of technological complexity (measured, for
instance, by the ratio of R&D to sales),

rate of innovation (measured by number of patent and
copyrights granted versus new products actually
being marketed),

patenting strategies (patents earned versus patents
actually used – or effectively licensed plus degree of
litigation involving patent claims),
 Mapping market features' tools (cont):

price behaviour (price’s movement over time.
Decreasing, increasing, stable?),

profits made by the leading firms and their evolution
(too secure monopolies ?),

regulatory apparatus embedding the market or sector
under, concern ( standards, requirements,
bureaucratic expertise…),

legal characteristics (enforcement mechanisms at
hand, type of contracts used, penalties..)