Abstract
Why are inventors and businessmen not already cooperating? When it comes to ideas cooperation is tricky. There is a strong risk of others stealing your idea. You cannot just offer it openly. Once shared there is no taking it back. But without sharing the idea the partner cannot decide if they want it or how much it is worth. A paradox arises, called Arrow’s Fundamental Paradox of Information, which makes trading ideas very difficult. This is the reason a market for ideas has not yet evolved.
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Notes
- 1.
Roberts (1988, p. 36)
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- 3.
- 4.
- 5.
See Facebook Statistics at newsroom.fb.com/content/default.aspx?NewsAreaId = 22 (02.03.2013). For the valuation, see Bloomberg (bloomberg.com/news/2012-05-17/facebook-raises-16-billion-in-biggest-technology-ipo-on-record.html 02.03.2013). Form Marc Zuckerberg’s profile see http://www.forbes.com/profile/mark-zuckerberg (02.03.2013). Also see Byrne (2011).
- 6.
New York Times (2009).
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- 8.
The New Yorker (1993).
- 9.
See The New Yorker (1993). For other accounts also see Rajan and Zingales (2001), p. 806: “"Intel was founded to steal the silicon gate process from Fairchild" [Jackson (1997), pp. 26–27]. […] Many during the Industrial Revolution, including Arkwright who “invented” the water frame, appropriated rather than discovered the technological advances their names are associated with”.
- 10.
See Forbes (forbes.com/profile/james-dyson 02.03.2013)
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Desny v. Wilder, 299 P. 2d 257 – Cal: Supreme Court 1956. Also see Gunther-Wahl Productions, Inc. v. Mattel, Inc., 128 Cal. Rptr. 2d 50 – Cal: Court of Appeals, 2nd Appellate Dist., 8th Div. 2002
- 14.
Also see Hellmann and Perotti 2011, p. 1813 who argue such ideas are still “too vague to be granted patent rights.”
- 15.
USPTO (uspto.gov/patents/resources/general_info_concerning_patents.jsp#heading-4 02.03.2013). For a discussion, also see Kaplan (1958). Also see Copyright Law of the United States of America and Related Laws Contained in Title 17 of the United States Code (copyright.gov/title17/92chap1.html 02.03.2013), especially § 102 Subject matter of copyright: In general: “(b) In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.”
- 16.
See, for example, discussion in Shulman (1999), Boyle (2003, 2008), Boldrin and Levine (2008), Gallini (2002). Also see Jaffe and Lerner (2006), Scotchmer (2004), Merges (1999), Besen and Raskind (1991), Arora and Merges (2004), Merges and Reynolds (2000), Machlup and Penrose (1950).
Considering recent examples of questionable and often seemingly counterproductive patentability – for example Amazon’s ‘one-click’ purchasing, Priceline’s patent on reverse auctions, DNA sequencing, etc. – and abusive use of patent systems (e.g. portfolio wars, patent pooling, patent trolls), a thorough discussion seems called for.
- 17.
Gans and Stern (2010, p. 822/p. 831)
- 18.
The most promising discussion addressing this problem can be found in Anton and Yao (1994, 2002, 2004, 2005). The basic argument is intriguing. In the absence of enforceable intellectual property rights, there may still be a way of being rewarded for the innovation by a firm. To put it in simple terms (though it cannot do justice to the complexity of the analysis): The inventor would reveal the idea to a firm. The firm would reward the inventor because he/she could threaten to reveal it also to the competitors. This would lower the return. This is an elegant approach to a one shot game, and would at least set the framework of the bargaining situation. This is an elegant approach, but neither does it seem practical or possible to be generalized nor does it address several other factors and challenges that would still occur (e.g. relative distribution within the margin, fairness considerations, etc.). All of these approaches add considerable insights into the problem. They offer valuable contributions to a more general solution and offer complementary mechanisms to reinforce other solutions to ensure a more robust mechanism and enable a better bargaining position to allow for higher appropriability for inventors.
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Weiers, G. (2014). The Missing Link. In: Innovation Through Cooperation. Management for Professionals. Springer, Cham. https://doi.org/10.1007/978-3-319-00095-4_8
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