2.2 The Study of Intellectual Property
2.2.2 The Study of Intellectual Property
The field of intellectual property is a growth industry that may involve an unintended consequence of Moore’s Law in that the number of published articles in the field doubles on average every eighteen months. Most of that increased effort has been devoted to copyright and patents
Epstein (2003)
The literature on Intellectual Property spans three main areas: economics, law and management. As Epstein notes, patents are a popular research topic due to their clearly defined legal status, wealth of available information and easy to quantify nature. The literature follows Moore’s Law, which predicts that the speed of computers doubles every two years; here, the quantity of literature doubles every two years. Economics allows for an analysis of innovation and property, while law creates and examines the policy tools to implement efficient systems. Management tends to approach IP from an organizational view. From a simplified perspective, economics can be seen as the architect of Intellectual Property, designing the purpose and general structure; law as the builder, creating the infrastructure of IP; and management as the building maintenance, optimizing the use of IP.
Law
21 Posner (1983) p. 275
While the main focus of this research is the economics literature, thelaw and management literature is considerable and relevant. The three disciplines complement each other and often overlap in their functions.
Legal literature, unsurprisingly, focuses on the legal aspects of IP systems. As the tool of IP economic policy, law must account for the interests of both society and the owner of the IP. The theoretical and philosophical justifications noted earlier should be incorporated into the design and practice of law, as examined in
Hettinger (1989). Analyses of these justifications and the performance of the current system can be found in law journals such as the Buffalo Law Review, the Texas Intellectual Property Law Journal and the New York University Law Review.
The legal profession is heavily involved in patenting in both practice and
research. Legal professionals are involved in the bureaucratic patenting process from the beginning, when they perform patent searches, through to the final stages of licensing and litigation, etc. The relatively clear legal rights associated with patents make them an attractive subject for study. The focal areas of IP research overlap in law and economics, particularly with harmonization,
justification, strategy and development. The legal research addresses patent law harmonization (as in Manderieux, 2007) and the associated difficulties with international legal jurisdictions and domestic interests. Nard (2007) addresses the history and justification of patent systems by tracing the creation of IP systems since the initial Venetian patent system. Economist and lawyers have much to discuss in strategic use of litigation and dispute resolution (as in Kowalchyk, 2006) and in IP and economic development (as in Lucchi, 2005), among other themes.
From a legal perspective, trade secrets suffer from a relative lack of clarity in terms of both rights and ownership when compared to patents. In fact, the legal status of trade secrets is often only determined once a conflict arises (as noted in Anson, 2005.) In order to enforce the rights of a trade secret, the existence of the secret must be proven. This is an obvious weakness when compared with the officially granted patent, where the burden of proof does not lie with the owner
of the IP (Risch, 2007.) Trade secret disputes can arise as conflicts between employers, with their right to protect IP, and former employees, with their right to find employment elsewhere (Van Caegnegam, 2007.) The law literature probes trade secrets by examining the law, which is often case-‐based, and common structures and defences, as in Rissland and Ashley (1987), and inevitable disclosure, as in Lowry (1988).
Management
Management literature frequently overlaps with the economics literature in its analysis of the strategic use of IP (e.g. Bosworth and Rogers, 2001) and
assessment of IP systems (e.g. Kawaura, 2005; Hall et al, 2003), but tends to focus on how the internal structure of the firm works with intellectual assets (e.g. Liebeskind, 1997.)22 Patents are a relatively quantifiable measure of output (innovation) and thus make an appealing research topic and management tool.
For example, Human Resources use patents as a means of measuring employee performance, as described in Oldham and Cummings (1996). When considering trade secrets, the management literature examines how to maintain them within the firm’s internal organization, as in Rứnde (2001). Thus, the management literature addresses areas not typically covered in economics by examining the function and strategic use of intellectual property within the firm.
Economics
For a long time, the economic literature has had a distinct bias towards the examination of patents as distinct from other forms of IP (Arundel, 2001;
Epstein, 2003.) Economic research naturally gravitates towards subjects with good data sources and patents have long provided a rich source for the study of innovation, as noted in Arundel (2001) and Scotchmer (2005).23 Given the large amount of searchable, systematic patents data, the literature bias towards
patents over other forms of intellectual property is not surprising, as noted in Lerner (2006.) However, recent survey studies have indicated that patenting is
22 Note that while these examples include authors from Management and Business School, some of the papers could be considered interdisciplinary.
23 Scotchmer notes that the study of patents goes back to Jacob Schmookler in the 1950s.
considered an inferior strategy by firms when compared to trade secrets, lead time and marketing etc., as in Cohen, Nelson and Walsh (2000). This new
research has given some pause to the traditional, patent-‐focused line of research and generated interest in alternatives, such as trade secrets.
Patents and trade secrets are inextricably linked. In order to discuss the decision to use trade secrets fully, the decision to use patents must be explained, as
discussed in Friedman et al, (1991). However, the economics literature sometimes works with the presumption in one direction; i.e. that using trade secrets reflects a decision not to use patents, but using patents does not necessarily reflect a decision not to use trade secrets (e.g. Mansfield, 1986;
Arundel and Kabla, 1998; Erkal, 2005.) While the latter is perhaps implicit in the literature, discussions on trade secrets typically start with an explicit
examination of the former (e.g. Friedman et al, 1991.) Patent discussions do not necessarily include trade secrets, but discussions on trade secrets necessitate the inclusion of patents. This may be cause for economists to revisit earlier patent literature to include the possibility of trade secrets, as noted in Arundel (2001.)
Many parallels exist between patenting research and trade secret research in the evolution of this research and the methodology used. Fundamentally, both lines examine the role and protection of intellectual property, as in Friedman et al, 1991. Strategic use by firms, diffusion of knowledge, social surplus effects, along with a host of other IP related issues, can be applied to both patents and trade secrets. The development of the economics literature in patenting and trade secrets follow similar lines. These parallels will be developed further later in this discussion, but it can be said that the research in trade secrets is in its
adolescence and is following the same maturation process as patenting literature (Epstein, 2003.) This can particularly be seen in the use of litigation as a source of empirical evidence for trade secrets, which has only just been utilized, as in Lerner (2006) and Almeling et al (2009.) This literature review will take the research into patents and its associated limitations to explain the recent growth in trade secrets literature.