Subject: Re: termless copyright and patents
From: "Stephen J. Turnbull" <>
Date: Wed, 20 Sep 2006 11:11:55 +0900

>>>>> "Thomas" == Thomas Lord <> writes:

    Thomas> So, patents and copyrights extend for X and Y years
    Thomas> respectively and we can fight and fight about what the
    Thomas> right values for X and Y should be.

Alternatively, we could amend the copyright and patent statutes to
require a mandatory review of costs and benefits every five years,
including a series of public hearings, before a renewal of the
existing term limits (and perhaps changing the expiry date of existing
rights, but I think that is a bad idea---see the economists' amicus
brief in the Eldridge case).

    Thomas> Perhaps that fight can be put aside by choosing X and Y as
    Thomas> upper bounds and additionally setting a statutory upper
    Thomas> bound, based in part on past licensing revenue, on the
    Thomas> price of a compulsory pull-the-trigger license.

Compulsory anything is yuck.

    Thomas> A pull-the-trigger license gives the licensee the right to
    Thomas> grant the general public reasonably complete commercial
    Thomas> rights to a work.

As far as I can see there is very little gain from trade here.  The
licensor's interest is going to be dominated by the loss of royalties
from "premature" termination of "protection".  No single licensee's
financial interest is ever going to be anywhere near that large.  The
only kind of agent which can finance such purchases alone is going to
one with the power to tax.  (Maybe they do it indirectly by grants to,
eg, the FSF, but eventually it's going to be based on taxes.)  Yuck.

So basically what's left is that we grant you a monopoly, except that
if it's really valuable, we're going to allow your would-be
competitors to buy you out at a government-set price and put your
technology into play.  Is this going to hurt IBM, Sun, and Microsoft?
Not much; they are going to prefer to *not* exercise those rights
against each other, but instead participating in (conventional)
cross-licensing pools.  If the regulated price is increasing in the
amount of license revenue, then they can play the "repurchase
agreement" game: "I'll license your patent at what it's worth + $1
million, you license mine at what it's worth + $1 million, and Nobody
will buy a compulsory pull-the-trigger license at what it's worth +
0.5*$1 million."

So the end result is that IBM, Sun, and Microsoft get to buy up and
free small researchers' IP at a capped price if it looks like they
can't keep themselves from bidding up the monopoly value.  Next we'll
have the AAUP demanding "free agency" for university-developed

Graduate School of Systems and Information Engineering   University of Tsukuba        Tennodai 1-1-1 Tsukuba 305-8573 JAPAN
        Economics of Information Communication and Computation Systems
          Experimental Economics, Microeconomic Theory, Game Theory