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Incentivizing the Ordinary User
Gaia Bernstein1
ABSTRACT
Critics of the patent system charge that the patent system fails to execute its
goal of promoting progress through the advancement of innovation and
dissemination because of expanding patent rights. This Article offers an
additional explanation to patent law’s failure to appropriately encourage
the dissemination of new technologies. It argues that patent law fails to
encourage dissemination because it uses competition as a proxy for
dissemination, focusing solely on the effects of the actions of the patentee
and his competitors on dissemination, while ignoring the crucial role of the
ordinary user.
The user in his everyday decisions of whether to adopt or not to adopt a
technology plays an important role in determining whether a new
technology will be disseminated. Yet, patent law contains a simplistic view
of the ordinary user as motivated by price alone. This Article reveals the
complexity of the ordinary user’s decisions regarding technological
adoption. It analyzes the sources of user resistance dividing them into two
broad categories: resistance due to novelty and resistance due to perceived
consequences.
Traditionally, the adoption process of new technologies is governed by the
market rule, that is, the market should decide which technology is adopted.
Yet, this Article proposes that government action gently nudging the user
could be particularly effective in accomplishing dissemination in cases of
market failures. It concludes by suggesting two instances, in which
government action is particularly warranted. First, when market failure
occurs because a technology is dependent on network effects and the
accumulation of a critical mass of users. Second, when time is of the
essence and there is a critical need to disseminate a technology quickly.
1
Professor of Law, Seton Hall University School of Law. I am very grateful for helpful
conversations and suggestions to Yochai Benkler, Rochelle Dreyfuss, Brett Frischmann,
Jeanne Fromer, Marina Lao, Erik Lillquist, Florencia Marotta Wurgler, Jordan Paradise,
Frank Pasquale, David Opderbeck, Guy Pessach, Bhaven Sampat, Joshua Sarnoff, Amit
Solomon, Katherine Strandsburg, Charles Sullivan and Jonathan Zittrain, For their research
assistance, I would like to thank Lauren Bolcar, Meredith Traina and Peter Slocum.
1
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Introduction
Critics of the patent system charge that the patent system fails to execute its
goal of promoting progress through the advancement of innovation and
dissemination because of expanding patent rights.2 While most scholarship
focused on the effects of strong patent rights on innovation,3 some scholars
underscored that strong patent rights inhibit dissemination.4 This Article
offers an additional explanation to patent law’s failure to appropriately
encourage the dissemination of new technologies. It points to the patent
system’s neglect of an important class of players who influence
technological dissemination. Specifically, the patent system focuses on the
patentee and his competitors while failing to acknowledge the significant
role of the user – even the couch potato – in his important every day
decisions to adopt or not to adopt a new technology.5
User decisions determine the fate of many technologies. For example,
electronic readers, such as the Kindle or the Nook, currently flood our
markets. Users of electronic readers can carry with them a practically
unlimited number of weightless books; can purchase books on an
immediate basis; and can read them off clear and easily readable screens.
Yet, many resist purchasing electronic readers, preferring the comfort of the
old-fashioned paper book and lamenting a world of bare library walls no
longer adorned by books.6 Similarly, handwritten health records in hospitals
and physicians’ clinics can now be replaced with electronic records that will
centralize all available records about a patient and reduce errors caused by
illegible handwriting and missing information. Yet, the systems’ users – the
2
3
4
See e.g., Ted Sichelman, Commercializing Patents, 62 STAN. L. REV. 341, 344 (2010)
stating that “… patent law is primarily designed to induce invention; any protection it
provides to commercialization is mostly and afterthought.” For the need to look beyond the
beginning of the technological process, see, Gaia Bernstein, In the Shadow of Innovation,
32 CARDOZO L. REV. 2257 (2010); Jeanne Fromer, The Layers of Obviousness in Patent
Law, 22(1) HARV. J. L. & TECH. 75 (2008) (discussing the importance of looking beyond
conception in the context of non-obviousness analysis).
5
For exceptions, which focused on the importance of the social acceptance of a technology
by the users, see generally, Gaia Bernstein, The Socio-Legal Acceptance of New
Technologies: A Close Look at Artificial Insemination, 77(4) WASH.L. REV. 1035 (2002)
(discussing the historical acceptance of process of the technology of artificial
insemination); Erik Lillquist & Sarah E. Waldeck, Government action in Emerging
Networked Technologies, 87 OR. L. REV. 581 (2008) (discussing the social acceptance
process of electronic payments).
6
2
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medical professionals – who are unused to the novel technology – resist.
They claim that entering information into the system detracts their ability to
focus on their medical duties.7 In both cases, neither patentee, competitors
nor price are responsible for the effect on the dissemination of the
technologies. Instead, regular everyday users are the ones who play a vital
role.
This Article begins by examining the patent system’s tools that are designed
to promote the dissemination of inventions once they have entered the
market. It focuses on two doctrines: compulsory licenses and patent misuse
and shows that both focus solely on the patentee and his competitors. The
misconduct of the patentee triggers both doctrines, which then look to the
patentee’s competitors to facilitate dissemination by increasing production
and reducing price. In essence, these doctrines treat competition as a proxy
for dissemination, assuming that if price is reduced innovations will attain
user adoption.
Patent law appears to focus on the patentee and his competitors because it
contains a simplistic view of the user as motivated by price alone. This
Article offers a more nuanced view of the ordinary user by providing a
taxonomy of reasons for user resistance to adopting new technologies. It
divides user resistance into two main causes: resistance to the technology’s
novelty and resistance due to the perceived consequences of adopting the
technology. Users resisting a technology due to its novelty may resist the
novelty of the hardware, as in the case of electronic readers or they may
resist its novel complexity. At the same time, users may resist a technology
because of the perceived economic consequences of the technology. These
include laborers fears of being replaced by technology; reluctance to lose
investments in previous technologies and unattractiveness of a technology
that has not yet attained a critical mass of users. Users may also fear noneconomic adverse effects such as fear of genetically modified food because
of potential effects on personal health or environmental concerns. Finally,
they may resist a technology because they view it as threatening a moral or
religious value. For example, fear of human cloning because of its effect on
the uniqueness of human identity.
While the law regulates the invention of new technologies through the
patent system, the prevailing wisdom is that the market determines which
technologies are eventually adopted. Yet, relying solely on market
7
3
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governance to control the adoption of new technologies is problematic. First
of all, reliance on market governance can carry grave costs. History is
replete with examples of important and eventually successful technologies
which adoption was resisted or delayed by decades and even centuries.
Secondly, the belief that it is the market alone that determines the fate of
new technologies is, in fact, unfounded. The government, on all levels,
regularly intervenes in many subtle and some unsubtle ways to encourage
users to adopt new technologies.
The technology regulating regime is charged with promoting progress. Yet,
patent law, which focuses on innovation and encouraging competition,
executes only part of the mission. This Article underscores the need for
systematic thinking and coordination to encourage user adoption. The goal
of the proposal is not to set a norm of government action. In fact, some
technologies are unsuccessful inventions and are legitimately resisted by
users. Yet, governmental action to promote user adoption is already taking
place on a broad scale by Congress, federal agencies and state and local
governments. Presently, these efforts are piecemeal and inconsistent.
While the focus of this Article is not institutional design, it builds on the
important work done by Benjamin Stuart and Arti Rai, which proposes an
Office of Innovation Policy,8 which will coordinate government agencies
decision-making regarding innovation. The articulation and enforcement of
guidelines to promote user adoption, through the type of agency proposed
by Benjamin & Rai could improve coherency and consistency. Such
guidelines can identify when governmental action to encourage user
adoption is particularly warranted, when it may be unnecessary and lay out
effective action modes.9
8
Stuart Minor Benjamin & Arti K. Rai, Structuring U.S. Innovation Policy: Creating a
White House Office of Innovation Policy, The Information Technology and Innovation
Foundation, June 2009.
9
This article is motivated by the belief that technological diffusion promotes progress and
human welfare. At the same time, the Article does not attempt to argue that diffusion
should be accorded the same weight as innovation in our technology regulating regime.
The assessment of the relative significance of the twin goals of the technology regulating
regime: innovation and diffusion is beyond the scope of this project. For literature
advocating the view that technological diffusion is an important means for promoting
human progress, see, THOMAS R. DEGREGORI, A THEORY OF TECHNOLOGY: CONTINUITY
AND CHANGE IN HUMAN DEVELOPMENT xi-xiii (1985); JOEL MOKYR, THE LEVER OF
RICHES: TECHNOLOGICAL CREATIVITY AND ECONOMIC PROGRESS 10-11 (1990).
4
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Opponents of governmental action to encourage user adoption point to the
difficulty of selecting winning technologies. They caution that the
government is likely to err and encourage the adoption of mediocre
technologies, perhaps even at the expense of superior ones. To address this
concern, the Article proposes that government action should be limited to
gentle nudges to encourage user adoption. It should not be coercive by
mandating the adoption of a new technology and making it the only viable
option. Furthermore, it proposes that government action should promote
only a new class of technology, which is where user resistance is most
likely to occur, and not advance one competing technology over another.
Finally, the Article argues that although the market can overcome some
instances of user resistance, government action is particularly warranted in
cases of market failure. While this inquiry is merely a first step to indicate
the way in which systematic thinking about government action to encourage
user adoption can be useful, its goal is twofold. It seeks to identify cases in
which government action is particularly warranted and through that to shed
light on where such action may not be necessary and the market may be
better suited to overcome user resistance. The Article highlights two
instances of market failure that could warrant government action. These
scenarios are not meant to be an exhaustive list. The first scenario is where
a technology is characterized by network effects and requires the attainment
of critical mass to achieve widespread adoption. The second scenario is in
cases of urgency – where time is of the essence.
This Article proceeds as follows. Part I examines post-market entry patent
law doctrines to reveal patent law’s constricted view of the players who
influence technological dissemination. Part II highlights the important role
of the user in his everyday technological adoption decisions and provides a
taxonomy of causes for user resistance. Part III describes the market
governance approach to the adoption of new technologies and the
objections to this approach. Part IV argues for the need to promulgate
principles for when governmental action is necessary to encourage user
adoption through gentle nudges and offers two instances of market failure in
which such action would be warranted.
I.
The Patent System and the Dissemination Objective
5
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Scholars, judges and litigants generally agree that patent law is charged
with promoting progress through advancing both innovation and
dissemination.10 Yet, the parties disagree as to whether the patent system is
executing its mission effectively.11 Critics of the patent system have focused
on the effect of strong patent rights on innovation, arguing that broad patent
rights impede subsequent innovation.12 Far fewer critics focused on
dissemination and those who have generally extended the innovation prism
to criticize the patent system’s effect on dissemination. Specifically, they
argued that strong patentee rights enable patentees to increase prices beyond
the envisioned patent monopoly, thereby unjustifiably restricting public
access.13 It appears that the focus on innovation may have obstructed a
careful examination of the patent system’s treatment of dissemination.
This Part presents an additional explanation to the patent system’s failure to
effectively promote dissemination. Namely, patent law cannot execute its
mission because it fails to account for all the players influencing
technological dissemination. Patent law doctrines focus on the patentee and
his competitors, while ignoring the crucial role of the ordinary user. In
essence, patent law treats competition as a proxy for dissemination,
assuming that once the price barrier will be eliminated through competition,
dissemination will be accomplished.
Many patent law doctrines are designed to achieve a balance between
incentivizing the patentee and promoting the general welfare, through
encouraging the dissemination of new technologies.14 Yet, the doctrines that
directly affect dissemination are those regulating the invention post its
market entry. This Part will examine two doctrines that apply to the
invention post its market entry: the doctrines of compulsory licensing and
patent misuse. It will show that both focus on the actions of the patentee and
his competitors aiming to increase dissemination through the reduction of
10
11
12
13
14
For example, the exclusivity period is limited to twenty years to ensure that after a
limited period for profit making, the invention can be produced by competitors and
disseminated more broadly. See 35 U.C.S.A. § 154)a)(2) (stating that the term of the patent
shall be for twenty years from application). Similarly, the disclosure requirement’s goal is
to release information about the patented invention that can be used by competitors who
will disseminate the invention once the patent expires. 35 U.C.S.A. § 112 (requiring that a
patent application will contain a written description that will enable any person skilled in
the art to make the invention).
6
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price. They treat competition as a proxy for dissemination, assuming that
once the price barrier is removed dissemination will occur.
A. Compulsory Licenses
1. Uses of Compulsory Licenses
Compulsory Licenses is a patent law doctrine, which is geared to encourage
dissemination of inventions in the marketplace. Unlike most patent law
doctrines, which focus on earlier stages of the technological process, the
Compulsory License Doctrine focuses on the dissemination stage seeking to
enhance the use of the technology. Usually the government issues a
compulsory license which permits a third party, who is not the patentee, to
make, use, or sell a patented invention without the patent owner’s consent.15
Compulsory licenses usually, although not always, involve payments of
royalties to the patentee.16
Generally there are four cases in which governments issue compulsory
licenses. These are anti-competitive behavior by the patentee, non-use of the
invention by the patentee, public interests including interests of national
defense, drugs and food; and to allow exploitation of a dependent patent.17
U.S. law does not include a general provision for compulsory licensing.18
Yet, the United States is a member of several treaties that endorse
compulsory licensing regimes. These treaties include the Paris Convention
for the Protection of Industrial Property,19 The Trade related Aspects of
15
The Study of the Committee on Patents, Trademark and Copyrights of the Committee on
the Judiciary United States Senate, 85th Congress, Second Session pursuant to S. Res, 236,
An Economic Review of the Patent System, at 13 (1958); NUNO PIRES DE CARVALHO, THE
TRIPS REGIME OF PATENT RIGHTS, 315(2nd edition); Colleen Chien, Cheap Drugs at What
price to Innovation: Does the Compulsory Licensing of Pharmaceuticals Hurt Innovation?
18 BERKELEY TECH. L.J. 853, 857-858 (2003); Gianna Julian-Arnold, International
Compulsory Licensing: The rationales and the Reality 33 IDEA 349, 349 (1993).
16
Colleen Chien, Cheap Drugs at What price to Innovation: Does the Compulsory
Licensing of Pharmaceuticals Hurt Innovation? 18 BERKELEY TECH. L.J. 853, 869 (2003)
(stating that royalty-free licenses are more rarely issued, usually in cases of misconduct).
17
See generally Gianna Julian-Arnold, International Compulsory Licensing: The
rationales and the Reality 33 IDEA 349, 349-350 (1993) (discussing the four instances in
which compulsory licenses are issued).
18
Adi Gillat, Compulsory Licensing to Regulated Licensing: Effects on the Conflict
Between Innovation and Access in the Pharmaceutical Industry, 58 FOOD DRUG L.J. 711,
712 (2003); Kurt M. Saunders, Patent Misuse and the Role of Public Interest as a
Deterrent to Technology Suppression, 15 HARV. J. L. & TECH. 389, 439 (2002).
19
Paris Convention, § 5(a) (allowing the issuance of compulsory licenses); Andrew W.
Torrance, Patents to the Rescue - Disasters and Patent Law, 10 DEPAUL J. HEALTH CARE
7
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Intellectual Property Rights (TRIPS) agreement20 and the North American
Free Trade Agreement (NAFTA).21 Thus, while, compulsory licenses are
relatively rare in the United States,22 through its treaty obligations and an
amalgamation of statutory provisions, the United States may, and at times
does, authorize some version of a compulsory license in three of the four
categories.
From the four categories, the U.S. government is most likely to issue a
compulsory license due to anti-competitive behavior by the patentee. Under
TRIPS a state may grant a compulsory license if the patentee engaged in
anti-competitive behavior.23 The U.S. government issues compulsory
licenses when intellectual property is acquired wrongfully or pooled with
competitors and only when this behavior is accompanied with other
predatory conduct. Earlier cases used compulsory licensing as a remedy for
monopolistic behavior. Currently, it is generally used in merger cases where
otherwise, the merged entity would control the larger part of the market.24
L. 309, 329-330 (2007) (describing compulsory licensing under the Paris Convention).
Kurt M. Saunders, Patent Misuse and the Role of Public Interest as a Deterrent to
Technology Suppression, 15 HARV. J. L. & TECH. 389, 437 (2002) (stating that the
United States is a signatory of the Paris Convention).
20
The Trade Related Aspects of Intellectual Property Rights Agreement, Art 31 (providing
the conditions for the issuance of compulsory licenses); Steven Anderman, The
Competition Law/IP ‘interface: an Introductory Note in THE INTERFACE BETWEEN
INTELLECTUAL PROPERTY RIGHTS AND COMPETITION POLICY 1, 15 (Steven D. Anderman,
ed. 2007). See generally Cynthia M. Ho, Patent Breaking or Balancing? Separating
Strands of Fact from Fiction Under TRIPS, 34 N.C.J. INT’L L. & COM. REG. 371 (2009)
(discussing the scope of compulsory licensing under TRIPS); Kevin Outterson, DiseaseBased Limitations on Compulsory Licenses under Articles 31 and 31 Bis, Boston
University School of Law Working Paper No. 09-26 available at www.ssrn.com
(discussing the Unite States position that compulsory licenses under TRIPS should be
limited to certain diseases)
21
The North American Free Trade Agreement, Art. 1709(10); W. Torrance, Patents to the
Rescue – Disasters and Patent Law, 10 DEPAUL J. HEALTH CARE L. 309, 329-334 (2007)
(discussing the impact of NAFTA’s compulsory licensing provisions on the United States’
patent policy options).
22
W. Torrance, Patents to the Rescue – Disasters and Patent Law, 10 DePaul J. Health
Care L. 309, 336 (2007)
23
TRIP, Art 31(k) (providing fewer conditions for the issuance of compulsory licenses
when patentee engaged in anti-competitive behavior).
24
Adi Gillat, Compulsory Licensing to Regulated Licensing: Effects on the Conflict
Between Innovation and Access in the Pharmaceutical Industry, 58 FOOD DRUG L.J. 711,
714 (2003). For an example of an early case, see, Hartford-Empire Co. et al., v. United
States, 323 U.S. 386, 417, 435 (1945) (ordering a compulsory license for a fixed royalty
where defendants engaged in monopolistic behavior). For an example of the recent trend,
see, In the Matter of Ciba-Geigy Limited, et al., 123 F.T.C. 842, 897 (1997) (requiring the
merged company to license some of its gene therapy patent rights to a competitor). See also
Jonathan Barnett, Cultivating the Genetic Commons: Imperfect Patent Protection and the
8
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The second category authorizes issuing a patent license due to non-use by
the patentee.25 In the U.S. the Patent Act grants the government march-in
rights for federally funded inventions. Basically, the agency that funded the
invention can require the patentee to issue licenses to ensure use of the
invention and if the patentee refuses to do so the agency may issue the
license itself.26
Under the third category, a state may issue a compulsory license in cases
where the technology is needed to serve the public interest. TRIPS allows a
state to issue a compulsory license when efforts to get a license from the
patentee on a reasonable commercial basis were unsuccessful.27Yet, a
member state may waive this requirement in case of a national emergency,
extreme urgency or cases of public non-commercial use.28 Recently, third
world countries attempted to use this provision to ensure affordable supply
of drugs affected U.S. drug manufacturers.29 But furthermore, several
statutory provisions allow the U.S. government to issue what are in effect
compulsory licenses in cases of public need.
First, the Federal government may use inventions without the patentees
consent for just compensation. By not allowing for injunctive relief, the
statute prevents the patentees from refusing to license.30 Although Congress
Network Model of Innovation, 37 SAN DIEGO L. REV. 987, 1044-1051 (2000) (describing
the issuance of compulsory licenses in merger cases).
25
Art. 5, Paris Convention for the Protection of Industrial Property (authorizing
compulsory licenses in cases of non-use). For discussions of issuance of compulsory
licenses and patent non-use, see generally, Kurt M Saunders, Patent Nonuse and the Role
of Public Interest as a Deterrent to Technology Suppression, 15 HARV. J.L. & TECH. 389,
434-449 (2002).
26
35 U.S.C. § 203. For a discussion of the government’s march-in rights, see generally,
John H. Raubitschek & Norman J. Latker, Reasonable Pricing – New Twist from March-In
Rights Under the Bayh-Dole Act, 22 SANTA CLARA COMPUTER & HIGH TECH. L.J. 149
(2005); Amy R. Schofield, The Demise of Bayh-Dole Protections Against the
Pharmaceutical Industry’s Abuses of Government-Funded Inventions, 32 J.L. MED. &
ETHICS 777 (2004).
27
TRIPS, Art. 31(b).
28
TRIPS, Art. 31(b).
29
See e.g., Elizabeth H. Williams, Live Stake in Drug Patent Clash, BALTIMORE SUN, June
3, 2007 (reporting on Thailand’s issuance of a compulsory license under TRIPS of an HIV
drug - Aluvia). See also Amy Kapczynski, Samantha Chaifetz, Zachary Katz & Yochai
Benkler, Addressing Global Health Inequities: An Open Licensing Approach for University
Innovations 20 BERKELEY TECH. L.J. 1031, 1061-1062 (discussing difficulties faced by
developing countries attempting to issue compulsory licenses under TRIPS).
30
28 U.S.C. §1498; Colleen Chien, Cheap Drugs at What price to Innovation: Does the
Compulsory Licensing of Pharmaceuticals Hurt Innovation? 18 BERKELEY TECH. L.J. 853,
862-63 (2003); Lionel Marks Lavenue, Patent Infringement Against the United States and
9
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crafted this exception with wartime emergency in mind, the government
utilized this option hundreds of times for different technologies.31 Similarly,
courts have also held that states have immunity from patent infringement
suits.32
Secondly, in addition to the general compulsory licensing regime, Congress
has provided for compulsory licenses to serve the public interest in two
specific instances. Under the Clean Air Act states may issue compulsory
licenses for air pollution reduction technologies if their use is necessary to
meet federal air quality standards. They need to show that the invention is
not otherwise reasonably available, that there are no reasonable alternatives
and that the invention’s unavailability may substantially decrease
competition or create a monopoly.33 Additionally, the Department of
Energy may issue itself or a third party a compulsory license for use of
nuclear energy inventions, if it is of primary importance in the production or
utilization of special nuclear material or atomic energy and in case of a third
party, it cannot otherwise obtain a patent on reasonable terms.34
Finally, under TRIPS a state may issue a compulsory license to permit the
exploitation of a patent that cannot be used without infringing another
patent. Currently, there are no specific provisions in U.S. law that
implement this option. 35
2. The Impact of Compulsory Licenses on Dissemination
The goal of the Compulsory Licenses Doctrine is to increase the availability
of an invention by forcing the patentee to license it. The licensee then
Government Contractors under 28 U.S.C. 1498 in the United States Court of Claims, 2 J.
INTELL. PROP. L. 389, 496-502 (1995).
31
In fact, the government used this statutory exception even more often than the case law
reveals because most patentees did not seek litigation to resolve their differences with the
government..Colleen Chien, Cheap Drugs at What price to Innovation: Does the
Compulsory Licensing of Pharmaceuticals Hurt Innovation? 18 BERKELEY TECH. L.J. 853,
862-63 (2003). Lionel Marks Lavenue, Patent Infringement Against the United States and
Government Contractors under 28 U.S.C. 1498 in the United States Court of Claims, 2 J.
INTELL. PROP. L. 389 (1995).
32
See e.g., Florida Prepaid Postsecondary Educ. Expense Bd. v. College Savings Bank, 527
U.S. 627, 647-648 (1999).
33
Clean Act Amendments of 1970, 42 U.S.C. 7608(1)(A)(B). See generally Kenneth J.
Nunnenkamp, Compulsory Licensing of Critical Patents Under CERCLA, 9 J. NAT.
RESOURCES & ENVTL. L. 397 (1993-1994) (describing the compulsory licensing regime
under the Clean Air Act).
34
42 U.S.C. § 2183(a)(e); W. Torrance, Patents to the Rescue – Disasters and Patent Law,
10 DePaul J. Health Care L. 309, 338-340 (2007).
35
TRIPS, Art 31(l).
10
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produces and sells the technology thereby increasing the public’s access to
the technology. Compulsory licensing focuses on the actions of the
intellectual property owner-- the patentee -- and his competitors. First, the
patentee’s actions or failure to act instigates the issuance of a compulsory
license in three of the four situations in which compulsory licenses are
issued. These are anti-competitive behavior, patent non-use, and refusal to
license to a dependent patent. As for the fourth public interest category,
while some causes such as a sudden need for a drug are not related to the
patentee’s behavior others, including refusal to increase manufacturing,
refusal to license to additional manufacturers or refusal to lower prices
despite public need do stem from the patentee’s conduct. Hence, in most
cases, compulsory licenses are issued as an antidote to a patentee’s behavior
that limits dissemination of an invention.
While the patentee’s conduct instigates the issuance of compulsory licenses,
the Doctrine of Compulsory Licenses focuses on the patentee’s competitors
in order to resolve the dissemination problem. By compelling the patentee
to license to competitors, the law seeks to accomplish increased production
of the invention, which will result in increased dissemination. While the
debate surrounding compulsory licensing mostly focused on the effect of
compulsory licenses on innovation,36 the underlying assumption is that the
issuance of compulsory licensing would improve access by reducing price.
F.M. Scherer in his monogram on compulsory licenses underscored the
potential advantage of compulsory licenses in facilitating competition
during the dissemination stage.37 Competition produces a broader
commercial utilization of the innovation. It transfers the benefits to
consumers through price reduction.38 The significance of enhancing
competition by improving access through the reduction of price has been
36
For the debate regarding the effects of compulsory licensing on innovation, see
generally, David Benoliel & Bruno Salama, Towards an Intellectual Property Bargaining
Theory: the Post-WTO Era, 32 U. PA. J. INT’L L. 265 (2010); Cynthia Ho, Unveiling
Competing Patent Perspectives, 46 HOUS. L. REV. 1047 (2009); Richard A. Epstein & F.
Scott Kieff, Questioning the Frequency and Wisdom of Compulsory Licensing for
Pharmaceutical Patents, The University of Chicago: The Law School John M. Olin Law &
Economics Research Paper Series No. 527 and New York University School of Law Law
&
Economics
Research
Paper
Series
No.
10-48
at
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1660702; David W. Opderbeck,
Patents, Essential Medicines and the Innovation Game, 58 VAND. L. REV. 501 (2005).
37
See F.M. SCHERER, THE ECONOMIC EFFECTS OF COMPULSORY PATENT LICENSING 66, 78
(1977).
38
See F.M. SCHERER, THE ECONOMIC EFFECTS OF COMPULSORY PATENT LICENSING 13-14
(1977).
11
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emphasized particularly in the context of the developing world and drug
supply. Policy makers in the developing world emphasize the need for
compulsory licenses in order to establish a network for low price suppliers.
The price of goods is considered a more significant determinant of market
demand in low income countries because consumers have fewer resources
to allocate among goods.39 Hence, the Doctrine of Compulsory Licenses
uses competition as a proxy for dissemination, focusing on eliminating the
price barrier.
B. Patent Misuse
1. The Scope of the Patent Misuse Doctrine
The Patent Misuse doctrine originally developed as a common law
equitable affirmative defense to an infringement claim similar to the
traditional Unclean Hands Doctrine in tort law. Under the Patent Misuse
Doctrine, defendants who are sued for patent infringement can claim as a
defense that the patentee has “misused” its patent grant. The party raising
the defense does not have to be the target of the misuse.40 If the defense is
successful, the patent will be in effect unenforceable. Courts will refuse to
grant the patentee an injunction or damages, until the patentee has stopped
misusing the patent and the effects of the misuse have dissipated.41
Patent misuse refers to a loose collection of activities by which the patent
owner is said to have taken an unfair advantage of her patent rights in the
market.42 Although courts and the legislature have greatly constricted the
Patent Misuse Doctrine through the years, certain actions by the patent
39
Fredrick M Abbott, Compulsory Licensing for Public Health Needs: The TRIPS Agenda
at the WTO after the DOHA Declaration on Public Health, Occasional Paper 9, Friends
World Committee for Consultation: Quaker United Nations Office – Geneva, at 4, 9, 16.
For example, Thailand issued several compulsory licenses for drugs in order to reduce
price. Ministry of Public Health and The National Health Security Office, Facts and
Evidences on the 10 Burning Issues Related to the Government Use of Patents on Three
Patented
Essential
Drugs
in
Thailand
at
5
(2007)
at
http://www.moph.go.th/hot/White%20Paper%20CL-EN.pdf.
40
Carl Moy, Moy’s Walker on Patent, §18.1 (4 th ed). See also Mark A. Lemley, The
Economic Irrationality of the Patent Misuse Doctrine, 78 CAL. L. REV. 1610, 1618-1619
(1990) (criticizing the lack of injury requirement).
41
Herbert Hovenkamp, Mark D. Janis, Mark A. Lemley & Christopher Leslie, IP and
Antitrust: An Analysis of Antitrust Principles Applied to Intellectual Property Law § 3.6 at
3-71-3-72 (2nd ed. 2010); Mark A. Lemley, The Economic Irrationality of the Patent
Misuse Doctrine, 78 CAL. L. REV. 1599, 1608 (1990.
42
Carl Moy, Moy’s Walker on Patent, §18.1 (4th ed.).
12
Draft: Please do not circulate or quote without permission from author.
owners are still considered misuse.43 Actions that are considered patent
misuse can be divided into two categories: actions that affect the
dissemination of the patented invention itself and actions that influence
dissemination of technology more broadly.
Courts have found different licensing arrangements affecting dissemination
of the patented invention to be patent misuse. Primary examples of these
arrangements are: discriminatory licensing (in which the patentee charges
some licensees more than others);44 restrictions on the licensee’s ability to
re-sell units of the patented invention;45 requirements that the licensee pay
royalties beyond the patented invention (for example, royalties based on the
licensee’s total sales or continued payment of royalties after the patent has
expired);46 and requirements that the licensee grant back to the patentee an
interest in improvements on the basic invention (for example, giving the
patentee permission to practice the improvement or requiring that the
invention be assigned to the patentee). 47
43
Many acts are no longer considered patent misuse. These acts include: Withholding the
invention from the market entirely, supplying the market but refusing to license, offering
licenses at an excessive price, restrictions as to territory and restrictions as to a commercial
or industrial field. § 271(d) of the Patent Act; Carl Moy, Moy’s Walker on Patent, §18.27,
§18-32 (4th ed.); Herbert Hovenkamp, Mark D. Janis, Mark A. Lemley & Christopher
Leslie, IP and Antitrust: An Analysis of Antitrust Principles Applied to Intellectual
Property Law § 3.2 (2nd ed. 2010) (describing the historical demise of the Patent Misuse
Doctrine); Christina Bohannan & Herbert Hovenkamp, Concerted Refusals to License
Intellectual Property Rights, Harvard Business Law Review Online , vol. 1 (2011)
(discussing a 2010 Federal Circuit decision – Princo v. Int’l Trade Comm’n – holding that
concerted refusals to license are also not considered patent misuse). See generally Marina
Lao, Unilateral Refusals to Sell or License Intellectual property and the Antitrust Duty to
Deal, 9 CORNELL J.L. & PUB. POL’Y 193 (1999) (discussing refusals to deal under
intellectual property and antitrust law.); Marshall Leaffer, Patent Misuse and Innovation,
10 J. HIGH TECH.L. 142, 150-151 (2010) (describing a drift away from the Patent Misuse
Doctrine over the last thirty years).
44
Carl Moy, Moy’s Walker on Patent, §18.31, (4 th ed.).
45
Subject to a narrow exception for units which were made by the licensee, where the
patentee is allowed to control the price in which the made units are initially sold. Donald S.
Chisum, Chisum on Patents,: A Treatise on the Law of Patentability, Validity and
Infringement, vol. 6 § 19.04 [3][h]; Carl Moy, Moy’s Walker on Patent, §18.32, §18-35
(4th ed.).
46
Carl Moy, Moy’s Walker on Patent, §18.38, §18.40 (4 th ed.). See e.g., Scheiber v. Dolby
Labs, 293 F.3d 1014, 1017 (7th Cir. 2002) (holding that requiring a licensee to pay a royalty
past the expiration of the patent constitutes patent misuse); Walter C. Brulotte v. Thys Co.,
85 S.Ct. 176, 180 (1964) (holding that requiring a licensee to pay a royalty past the
expiration of the patent constitutes patent misuse).
47
Carl Moy, Moy’s Walker on Patent, §18.39, (4 th ed.); Herbert Hovenkamp, Mark D.
Janis, Mark A. Lemley & Christopher Leslie, IP and Antitrust: An Analysis of Antitrust
Principles Applied to Intellectual Property Law § 3.3d (2 nd ed. 2010).
13
Draft: Please do not circulate or quote without permission from author.
Courts have also found a variety of licensing arrangements that influence
the dissemination of technology beyond the patented invention to be patent
misuse. These arrangements include tying provisions, which are the most
commonly sanctioned and most commonly litigated forms of misuse.48
Tying arrangements require that the licensee purchase things from the
patent owner in addition to the subject matter claimed in the patent. One
example is agreements that require the licensee to purchase unpatented
supplies.49 Another example is agreements that require the licensee to
purchase subcomponents of the patented invention that are not themselves
patented. 50 These arrangements also include tie-outs provisions, where
patentees refuse to deal with a licensee unless he refuses to deal with the
patentee’s competitors or promises not to compete with the patentee even
using unpatented technology.51
2. The Impact of the Patent Misuse Doctrine on Dissemination
Courts assessing whether a licensing arrangement qualifies as patent
misuse, subject the arrangement to either a per se rule or a rule of reason
investigation. Courts select the relevant rule according to the specific
arrangement at issue. Some arrangements that are considered particularly
onerous or particularly outside the patent rights, such as imposing
obligations to pay royalties on a patent after it has expired or restrictions on
the licensee’s ability to re-sell units, and are traditionally treated as misuse
per se.52 Other restrictions are tested under the rule of reason. 53 These
48
Herbert Hovenkamp, Mark D. Janis, Mark A. Lemley & Christopher Leslie, IP and
Antitrust: An Analysis of Antitrust Principles Applied to Intellectual Property Law § 3.3 at
3-13 (2nd ed. 2010); Christina Bohannan. IP Misuse as Foreclosure, 96 IOWA L. REV. 475,
501 (2011)
49
See Patent Act §271(d) (limiting liability for patent misuse for tying to cases where the
patentee has market monopoly). See e.g., Morton Salt v. G. S. Suppiger Co. 314 U.S. 488,
489-490 (1942) (where the patentee agreed to lease its patented machine that automatically
deposits salt tablets only if customers agreed to buy all their salt tablets from the patentee);
Cabrice Corp. of America v. American Patents, 283 U.S. 27, 30-31, 33-34 (1931) (where
the patentee tied the sale of its patented invention to the sale of unpatented carbon dioxide).
50
Carl Moy, Moy’s Walker on Patent, §18-41 (2008); Herbert Hovenkamp, Mark D. Janis,
Mark A. Lemley & Christopher Leslie, IP and Antitrust: An Analysis of Antitrust
Principles Applied to Intellectual Property Law § 3.3 (2 nd ed. 2010).
51
Herbert Hovenkamp, Mark D. Janis, Mark A. Lemley & Christopher Leslie, IP and
Antitrust: An Analysis of Antitrust Principles Applied to Intellectual Property Law § 3.3b
(2nd ed. 2010).
52
Carl Moy, Moy’s Walker on Patent, §18.1, , §18.32, §18-35, §18.40 (4th ed.). See e.g.,
Scheiber v. Dolby Labs, 293 F.3d 1014 (7th Cir. 2002) (holding that requiring a licensee to
pay a royalty past the expiration of the patent constitutes patent misuse).
53
There is disagreement as to whether tying restrictions are evaluated under the per se rule
or rule of reason. See Carl Moy, Moy’s Walker on Patent, §18.37, §18-41 (4th ed.).;
Herbert Hovenkamp, Mark D. Janis, Mark A. Lemley & Christopher Leslie, IP and
14
Draft: Please do not circulate or quote without permission from author.
restrictions include, requiring the licensee to pay royalties based on his total
sales,54 or grant back provisions on improvements.55 Under the rule of
reason a court must find that the overall effect of the license tends to
restrain competition unlawfully in the relevant market.56
Some commentators noted that since courts applying the per se rule do not
investigate whether the arrangement, in fact, affects competition, the Patent
Misuse Doctrine goes beyond the traditional competition objectives of
antitrust law.57 Yet, regardless of whether the Patent Misuse law is
completely or only partly competition focused in its application,
competition appears to be a core concern of the Doctrine. First of all, courts
from the inception of the Patent Misuse Doctrine focused on the
competitive danger of the patentee’s action.58 Furthermore, most
commentators agree that the currently operative Patent Misuse Doctrine is
Antitrust: An Analysis of Antitrust Principles Applied to Intellectual Property Law § 3.3 at
3-16 (2nd ed. 2010).
54
Moy’s Walker on Patent, §18.38 (4th ed.).
55
Carl Moy, Moy’s Walker on Patent, §18.39 (4 th ed.); Herbert Hovenkamp, Mark D.
Janis, Mark A. Lemley & Christopher Leslie, IP and Antitrust: An Analysis of Antitrust
Principles Applied to Intellectual Property Law § 3.3d at 3-34 (2nd ed. 2010). See e.g.,
Transparent-Wrap Mach. Corp. v. Stokes & Smith Co. 329 U.S. 637, 639, 648 (1947)
(where the court applied the rule of reason to determine whether a contract provision
providing that licensee needs to assign back to the patentee the rights to any patentable
improvements is patent misuse).
56
Moy’s Walker on Patent, §18.1 (2008).
57
See e.g., Robin C. Feldman, The Insufficiency of Antitrust Analysis for Patent Misuse 55
HASTINGS L.J. 399, 401, 436, 449 (2003) (arguing that goal of Patent Misuse Doctrine is
also to prevent wasteful and duplicative activities and creating disincentives to future
inventors); Marshall Leaffer, Patent Misuse and Innovation, 10 J. HIGH TECH.L. 142, 147,
155-158 (2010) (emphasizing the importance of maintaining a separate Patent Misuse
Doctrine because it promotes innovation interests); Christina Bohannan. IP Misuse as
Foreclosure, 96 IOWA L. REV. 475, 486-497 (2011) (stating that one approach to misuse
leans on antitrust principles on the theory that antitrust is concerned with anticompetitive
behavior while the other defines misuse as an attempt to gain power and advantage over
something outside the scope of the patent); Daniel J. Gifford, Antitrust’s Troubled
Relations with Intellectual Property, 87 MINN. L. REV. 1695 (2003) (discussing the Patent
Misuse Doctrine in the context of the relationship between intellectual property and
antitrust).. But see generally Thomas F. Cotter, Four Questionable Rationales for the
Patent Misuse Doctrine, University of Minneota Law School Legal Studies Research Paper
Series,
Research
Paper
No.
10-30,
available
at
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1616275 (arguing that the different
theoretical foundations of the Patent Misuse Doctrine are shaky).
58
Motion Pictures Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502, 519 (1917)
(…restriction would give the plaintiff such a potential for evil over an industry which must
be recognized as an important element in the amusement life of the nation… if sustained it
would be gravely injurious to the public interest…”); Herbert Hovenkamp, Mark D. Janis,
Mark A. Lemley & Christopher Leslie, IP and Antitrust: An Analysis of Antitrust
Principles Applied to Intellectual Property Law § 3.2 (2nd ed. 2010) (stating that the court’s
concern in Motion Pictures Patents was with the competitive danger that it felt such an
extension in the patent might pose).
15
Draft: Please do not circulate or quote without permission from author.
motivated at least partly from concerns about competition.59 Many scholars
point to the language of the Federal Circuit in Windsurfing v. IMF which
reframed the test using antitrust competition terminology stating that: “the
alleged infringer must show that the patentee has impermissibly broadened
the ‘physical or temporal scope’ of the grant with anticompetitive effect.”60
The Court explained that the key inquiry in patent misuse should “reveal
whether the overall effect of the behavior tends to restrain competition in an
appropriately defined market.”61 Judges and scholars pointing to these
statements and additional statutory changes have generally concluded that
the gap between patent law and antitrust is shrinking, as courts require more
actual proof of competition in the
patent misuse investigation.62 Finally, although courts evaluating licensing
investigations under the per se rule do not look at the effects on competition
59
See for example, Herbert Hovenkamp, Mark D. Janis, Mark A. Lemley & Christopher
Leslie, IP and Antritrust: An Analysis of Antitrust Principles Applied to Intellectual
Property Law § 3.2 at 3-9 (2nd ed. 2010) ((stating that patent misuse is based “on one
particular form of potential harm to competition: The distortion of a market caused by
expansion of a patent right beyond its legal scope.”); Marshall Leaffer, Patent Misuse and
Innovation, 10 J. HIGH TECH.L. 142, 147 (2010) (“The misuse doctrine is designed to curb
practices that generate anticompetitive effect” from the patent grant”); Robert J. Hoerner,
The Decline (And Fall) of the Patent Misuse Doctrine in the Federal Circuit, 69
ANTITRUST L.J. 669, 669 (2001) (stating that ”The Federal Circuit … has almost uniformly
required proof of an anticompetitive effect before the doctrine can be invoked”)
60
Windsurfing Int’l Inc. v. AMF, Inc, 782 F.2d 995, 1001 (Fed. Cir. 1986). See Thomas L.
Cotter, Misuse, 44 HOUS. L. REV. 901, 913 (2007) (citing Windsurfing and stating that the
“Federal Circuit itself has come to define patent misuse as ‘impermissibly broadening the
physical or temporal scope’ of the patent grant with anticompetitive effects.”); Robin C.
Feldman, The Insufficiency of Antitrust Analysis for Patent Misuse 55 HASTINGS L.J. 399,
426 (2003) (stating that “…the Windsurfing court drafted a test in which a claim of patent
misuse would be tested by an antitrust inquiry.”); Robert J. Hoerner, The Decline (And
Fall) of the Patent Misuse Doctrine in the Federal Circuit, 69 ANTITRUST L.J. 669, 680
(2001) (stating that: “…we see that the seeds sown in Windsurfing have germinated and
borne fruit, for ‘with anticompetitive effect’ is now cited as a requirement of misuse law”);
Marshall Leaffer, Patent Misuse and Innovation, 10 J. HIGH TECH. L. 142, 147 (2010)
(citing Windsurfing and stating that the Court of Appeals for the Federal Circuit limited
finding of misuse to conduct that also had anticompetitive effects); Janice M. Mueller,
Patent Misuse Through the Capture of Industry Standards, 17 BERKELEY TECH. L.J. 623,
673 (2002) (Citing Windsurfing and stating that “The key inquiry is whether, by imposing a
challenged condition … the patent owner has’ impermissibly broadened the physical and
temporal scope’ of the grant with anticompetitive effect.”).
61
Windsurfing Int’l Inc. v. AMF, Inc, 782 F.2d 995, 1001-02 (Fed. Cir. 1986).
62
See e.g., USM Corp. v. SPS Technologies, 694 F.2d 505, 511-512 (7th Cir. 1982) (Judge
Posner stating that the standards of misuse cases outside the classic misuse categories that
are subject to the per se rule are increasingly converging with the antitrust standards of
investigating actual competition); J. Dianne Brinson, Patent Misuse: Time for a Change, 16
RUTGERS COMPUTER & TECH. L. J, 357, 389 (1990) (stating that the statutory change
requiring market power for proof of tying as misuse made tying misuse law very similar to
tying antitrust law) .
16
Draft: Please do not circulate or quote without permission from author.
in the specific case, they assume that the restriction is so onerous that
competition must be affected.63
Similar to the Compulsory Licenses Doctrine, the Patent Misuse Doctrine
attempts to encourage dissemination through encouraging competition. In
all patent misuse cases, the law focuses on the acts of the patentee who has
taken an unfair advantage of the patent and solves the problem by focusing
on the competitors, absolving them from liability for patent infringement.
For example, courts holding that a tie-in constitutes patent misuse prevent
the patentee from unjustifiably inhibiting competition in technologies that
are related to the patented invention. By defining the act as patent misuse
and preventing the patentee from enforcing his patent courts strengthen the
patentee’s competitors, assuming that competition would lower prices and
enhance dissemination of these related technologies.64 Similarly, courts
holding that a patentee charging licensee royalties beyond the term of the
patent constitutes patent misuse prevent the patentee from unfairly reducing
competition in the patented invention. Once the patentee can no longer
enforce his patent, competitors’ position in the market is strengthened and
dissemination of the patented invention is enhanced.65 Hence, it appears that
the law of patent misuse like the law of compulsory licenses focuses on the
patentee and his competitors and fails to address the user of the technology.
II.
The User and the Dissemination of New Technologies
A. The Role of the User’s Adoption Decision in the Dissemination
Process
63
J. Dianne Brinson, Patent Misuse: Time for a Change, 16 RUTGERS COMP. & TECH. L. J,
357, 359, 394 (1990) (stating that under the misuse doctrine’s per se rule certain licensing
practices are, without inquiry into circumstances of use or economic consequences,
presumed to seriously threaten competition.); Michael A. Carrier, Resolving the PatentAntitrust Paradox Through Tripartite Innovation, 56 VAND. L. REV. 1047 (2003) (stating
that the per se analysis extends to activity that generally has only an anticompetitive
effect). But see, Comment: Standard Antitrust Analysis and the Doctrine of Patent Misuse:
A Unification Under the Rule of Reason, 46 U. PITT. L. REV. 209, 209-210 (1984-1985)
(criticizing courts’ assumption that patent license arrangements viewed as per se violations
have only obvious and inevitable anticompetitive effects and arguing that they may have
precompetitive effects).
64
See e.g., Carbice Corp. of America v. American Patents, 283 U.S. 27, 33-34 (1931)
(“The Dry Ice Corporation has no right to be free from competition in the sale of solid
carbon Dioxide. Control over the supply of such unpatented material is beyond the scope of
the patentee’s monopoly; … The Present attempt is analogous to the use of a patent as an
instrument for restraining commerce.”).
65
17
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Patent law doctrines focus on the actions of the patentee and his
competitors. Their goal is to ensure a low price for the technology. The
assumption underlying these laws is that technological dissemination is
dependent on the price barrier alone. The market narrative presumes that
once the price is lowered, the market will determine which technology
should be adopted and a worthy technology will be socially adopted. Yet,
the market narrative is lacking.66 Although the price of the technology is a
significant factor in determining whether and when a technology will be
adopted – it is not the only factor.67 Many additional factors influence the
user’s willingness to adopt a technology. The existence of these factors
points to the need to dethrone the myth of the free market as the sole
determinant-- through the competitive price mechanism -- of what
technologies will be adopted.68
Recently scholars started looking beyond the inventor or creator to the role
of the user in influencing technological design. These scholars emphasize
that technology is not value neutral. They promote the place of the user and
acknowledge the effect of her values and preferences on the technology she
uses. They particularly emphasize the role of the user as an innovator and
her affect on technological design.69
66
See Joel Mokyr, The Political Economy of Technological Change: Resistance and
Innovation in Economic History, in TECHNOLOGICAL REVOLUTIONS IN EUROPE 39, 39
(Maxine Bergand Kristin Bruland eds., 1998) (arguing that the market test is insufficient).
67
While an important factor for technological adoption is the technology’s perceived
relative advantage (the ratio of the expected benefits and the costs of adoption) in the eyes
of the user and price is an important component of this advantage, it is not the only factor.
Additional factors comprising the relative advantage are economic profitability, low initial
cost, a decrease in discomfort, social prestige and a saving of time and effort. EVERETT M.
ROGERS, DISSEMINATION OF INNOVATIONS 229-230, 233 (5th edition 2003).
68
See Joel Mokyr, The Political Economy of Technological Change: Resistance and
Innovation in Economic History. in TECHNOLOGICAL REVOLUTIONS IN EUROPE 39, 62-63
(Maxine Bergand Kristin Bruland eds., 1998).
69
See e.g., ERIC VON HIPPEL, DEMOCRATIZING INNOVATION, 7072 (2005); Yochai
Benkler, Coase’s Penguin, or, Linux and the Nature of the Firm, 112 YALE L.J. 369 (2002)
(describing peer production projects, where many individuals cooperate together to
produce a product); Dan Hunter & F. Gregory Lastowka, 46 WM. & MARY L. REV. 951,
954 (2004) (showing that “copyright’s former consumers are now the creators, producers
and disseminators of content.”), William W. Fisher, The Implications for Law of User
Innovation, 94 MINN. L. REV. 1417 (2010) (discussing legal conflicts between user
innovators and producers); Katherine Strandburg, Users as Innovators: Implications for
Patent Doctrine, 79 U. COLO. L. REV. 467 (2008) (distinguishes the user innovator from
the prevailing conception of the seller innovator in patent law, focusing on research tools
inventions). But see Julie Cohen, The Place of the User in Copyright Law, 74 FORDHAM L.
REV. 347 (2005) (providing a broader conception of the user she defines as “the situated
user.”)
18
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Indeed, the focus on the user as an innovator is an important step toward
illuminating the process of technological adoption. History is replete with
examples of users using technologies differently than their designers
expected them to be used. Individuals may use a technology for a different
function than envisioned by the inventor. For example, phone companies
originally promoted the telephone for use only as a business tool. It was the
users who transformed the telephone into a social tool.70 Yet, the focus on
the user as an innovator highlights only part of the crucial role of the user in
the dissemination process of new technologies. The user can play a role as
an innovator, but on a much more crucial and broader scale his role as a
consumer determines the fate of new technologies. The user in his function
as a potential consumer -- even the couch potato – regularly determines the
fate of technological artifacts.71
The user who influences the fate of a new technology in his basic decision
whether to adopt it or nor may be a consumer, an employee within an
organization, the management of an organization or a member of the public
70. See Claude Fischer, The Telephone Industry Discovers Sociability, in TECHNOLOGY
CHOICE: READINGS FROM TECHNOLOGY AND CULTURE 20, 2530 (Marcel C.
Lafollette & Jeffrey K. Stine eds., 1991); Roger Silverstone, Eric Hirsch & David Morley,
Information and Communication Technologies and the Moral Economies of the Household,
in CONSUMING TECHNOLOGIES: MEDIA INFORMATION IN DOMESTIC SPACES 14, 19, 2126
(Roger Silverstone & Eric Hirsch eds., 1994). Users’ choices can also constrict the
functions of a new technology and those functions may disappear or change altogether. See
Roger Silverstone, Eric Hirsch & David Morley, Information and Communication
Technologies and the Moral Economies of the Household, in CONSUMING
TECHNOLOGIES: MEDIA INFORMATION IN DOMESTIC SPACES 14, 19, 2126 (Roger
Silverstone & Eric Hirsch eds., 1994).
71
Consumption is important because it can also define identities and human relations. Even
in the most mundane process of integrating new technologies into the household, both
artifacts and people change and meanings are produced. The purchase of certain
technologies could be central to an individual or household’s efforts at self creation and
affect the relationship between members of the household and the outside world. For
example, teenagers use their consumption of music as a ticket to a peer group. Merete Lie
& Knut H. Sorensen, Making Technology Our Own? Domesticating Technology into
Everyday Life, in MAKING TECHNOLOGY OUR OWN? DOMESTICATING TECHNOLOGY INTO
EVERYDAY LIFE 1, 89 (Merete Lie & Knut H. Sorensen eds., 1996); Nelly Oudshoorn &
Trevor Pinch, How Users and Non-Users Matter, in HOW USERS MATTER: THE COCONSTRUCTION OF USERS AND TECHNOLOGY 1, 12, 14 (Nelly Oudshoorn & Trevor Pinch
eds., 2003); Roger Silverstone, Eric Hirsch & David Morley, Information and
Communication Technologies and the Moral Economies of the Household, in CONSUMING
TECHNOLOGIES: MEDIA INFORMATION IN DOMESTIC SPACES 14, 19, 21-26 (Roger
Silverstone & Eric Hirsch eds., 1994). For a discussion of domestication, see also, Anne
Sofie Laegran, Escape Vehicles? The Internet and the Automobile in a Local Global
Intersection, in HOW USERS MATTER: THE CO-CONSTRUCTION OF USERS AND
TECHNOLOGY 81 (Nelly Oudshoorn & Trevor Pinch eds., 2003).
AND
19
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whose actions affect the decisions of direct adopters. All these share in
common their crucial effect on the fate of a new technology. Hence, I define
user broadly as users or potential users who may choose to adopt or not to
adopt a technology.
The user plays an important role in adopting or rejecting a new technology.
Resistance to the adoption of new technologies takes many forms.
Behaviors constituting resistance to new technology include both
consciously motivated behavior and avoidance behavior. Similarly, they
include both overt opposition and passive reluctance to use a technology.72
Accordingly, not only individuals demonstrating against nuclear power are
rejecting a technology. Rejecters of a new technology include the woman
who would not buy genetically modified food in the supermarket and the
aging writer who refuses to substitute his typewriter for a computer and
word-processor. All these forms of conduct affect the fate of a new
technology.
User resistance to the adoption of new technologies may result in the
complete rejection of a new technology.73 For example, our computer
keyboard – QWERTY - is considered inferior to an alternative keyboard –
DVORAK – which was rejected by users. User resistance may also
significantly delay the adoption of a new technology. For example, artificial
insemination in humans was invented at the end of the 18th century. Yet, it
only reached mainstream adoption during the 1940s-1950s.74 Finally,
certain population groups may refuse to adopt the technology, thereby
restricting dissemination. For example, some parents reject childhood
inoculation technology when they refuse to vaccinate their children against
72
Some writers use narrower definitions of resistance. See e.g., Martin Bauer, Resistance to
New Technology and Its Effects on Nuclear Power, Information Technology and
Biotechnology, in RESISTANCE TO NEW TECHNOLOGY: NUCLEAR POWER, INFORMATION
TECHNOLOGY AND BIOTECHNOLOGY 1, 14 (Martin Bauer ed., 1995) (defining resistance to
include only behavior motivated by a purpose and not avoidance behavior); Dorothy
Nelkin, Forms of Intrusion: Comparing Resistance to Information Technology and
Biotechnology, in THE USA RESISTANCE TO NEW TECHNOLOGY: NUCLEAR POWER,
INFORMATION TECHNOLOGY AND BIOTECHNOLOGY 380, 380 (Martin Bauer ed., 1995)
(focusing on overt opposition and excluding passive reluctance).
73
While I focus here on complete rejection of specific technologies, resistance could take
subtler forms. For example, reluctance to learn about sophisticated ways in which a video
recorder can be used, while still using its basic functions or refraining from using a
technology in certain ways, such as not using personal data on a computer. See Ian Miles &
Graham Thomas, User Resistance to New Interactive Media: Participants, Processes and
Paradigms, in RESISTANCE TO NEW TECHNOLOGY: NUCLEAR POWER, INFORMATION
TECHNOLOGY AND BIOTECHNOLOGY 255, 262 (Martin Bauer ed., 1995).
74
Gaia Bernstein, The Socio-Legal Acceptance Process of New Technologies: A Close
Look at Artificial Insemination, 77 WASH LAW REV. 1035, 1048-1083 (2002).
20
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childhood diseases due to their fear that these inoculations may cause
autism.75
B. Factors Influencing the User’s Adoption Decision
Many factors play a role in the user’s adoption decision. Some factors play
a role in enhancing the attractiveness of a new technology. These include:
low price, economic profitability, decrease in discomfort, social prestige
and a saving of time and effort.76 Yet, I want to focus here on the main
reasons that lead to user resistance to the adoption of a new technology.77
The dissemination process of a new technology may be inhibited by one or
a combination of these factors. Different groups of users may resist the
same technology for a different set of reasons. These reasons can be
divided to two categories: the novel nature of the technology and the
perceived consequences.
i.
Novelty and User Resistance
Users resist technology because of its “newness.” Yet, their resistance to
“newness” is comprised of different reasons. First, some individuals may
resist the newness of the hardware or the process of the new technology.78
For example, despite the advantages of electronic readers, such as Kindles,
many resist adopting them deterred by the idea that paper books will
become obsolete.79
See Katherine Seligman, Vaccination Backlash; There’s a Small but Stubborn Faction of
Parents Who Don’t Vaccinate Their Children. Are There Risks? S.F. CHRON., May 25,
2003, at 8 (describing a growing movement of parents who refuse to vaccinate their
children); Sue Bennett, The Shot Felt Around the World: Did Immunization Trigger Your
Child’s Autism? Oct 14, 2004, http://www.autismcoach.com (A poll surveying parents’
beliefs that vaccinations caused their child’s autism.).
76
See EVERETT M. ROGERS, DISSEMINATION OF INNOVATIONS 229-230, 233 (5th edition
2003).
77
There are many factors that affect the adoption of new technologies. Additional factors
not discussed in detail are the triability of the invention (can it be tried on a limited basis?)
its observability (does one see others using it?), users socio-economic status and users
personality traits. EVERETT M. ROGERS, DISSEMINATION OF INNOVATIONS 258-259, 288290(5th edition 2003).
78
See Martin Bauer, Resistance to New Technology and Its Effects on Nuclear Power,
Information Technology and Biotechnology, in RESISTANCE TO NEW TECHNOLOGY:
NUCLEAR POWER, INFORMATION TECHNOLOGY AND BIOTECHNOLOGY 1, 19, 24 (Martin
Bauer ed., 1995).
79
As of January 2012 19% of adults in the United States own e-readers. The rate of ereaders ownership is rising steadily since April 2009 when only 2% owned it. Yet, it is still
not owned by the majority of the population (although 19% does own tablets that could be
used for reading books). Pew Internet American and Life Project, Tablet and E-book
Reader Ownership Nearly Double Over the Holiday Gift Giving Period, Jan 23, 2012, at 2
75
21
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Second, newness often entails complexity. Users may perceive a technology
as relatively difficult to use and, therefore, refrain from adopting it.80 This
particularly is the case when a technology is incompatible with a preceding
idea. Old ideas are the main tools that people use to assess new ideas and
give them meaning.81 A historical example involves the adoption process
of home computers in the 1980s. Users went through periods of frustration
regarding how to connect the computers and how to run software such as
word processing. Although, as we know personal computers eventually
became a common place artifact of the American household, their perceived
complexity was an important negative force in the rate of adoption of
personal computers in the 1980s. Eventually, as home computers became
more user friendly, their rate of adoption increased.82
A technology’s perceived complexity also inhibits adoption within
organizations. Bureaucracies operate on routine and standard operating
procedures which resist change.83 For example, hospital personnel impeded
the transformation to electronic records in hospitals. The adoption of
computerized electronic records84 carries many advantages, including
allowing authorized physicians to access relevant information about their
at
http://pewinternet.org/~/media//Files/Reports/2012/Pew_Tablets%20and%20ereaders%20double%201.23.2012.pdf. See also Brianna Hooks, eBooks Come of Age,
WASH. INFORMER, Sep 2-8. 2010 28, at 29 (discussing concerns regarding the demise of
books and libraries).
80
See generally LANGDON WINNER, AUTONOMOUS TECHNOLOGY: TECHNICS-OUT OF
CONTROL AS A THEME IN POLITICAL THOUGHT 28-29, 282-305 (1977) (8TH ed. 1992).
81
EVERETT M. ROGERS, DISSEMINATION OF INNOVATIONS 243-46 (5th edition 2003).
82
EVERETT M. ROGERS, DISSEMINATION OF INNOVATIONS 257-258 (5th edition 2003). .
83
See Joel Mokyr, Progress and Inertia in Technological Change, CAPITALISM IN
CONTEXT: ESSAYS ON ECONOMIC DEVELOPMENT AND CULTURAL CHANGE IN HONOR OF
E.M. HARTWELL 230, 236 (John A. James & Mark Thomas eds. 1994). The rate of adoption
and nature of adoption in organizations is different. See generally EVERETT M. ROGERS,
DISSEMINATION OF INNOVATIONS 221, 402-435 (5th edition 2003).
84
Electronic health records generally have the following functionalities: display health
information and data (including medical diagnoses, allergies, medication a patient is
taking); result management (including laboratory test results and other treatment results);
order entry and management (including computerized medication orders, such as
prescription orders that are not handwritten); decisions support (including computer
reminders that improve preventive care and disease management); and electronic
communication and connectivity (including integrating medical records across treatment
settings). See Sharona Hoffman & Andy Podgurski, Finding A Cure: The Case for
Regulation Oversight of Electronic Health Records Systems, 22 HARV. J. LAW & TEC. 103,
108-109 (2008).
22
Draft: Please do not circulate or quote without permission from author.
patients no matter where they were previously treated and reducing errors
caused for example by illegible handwriting on prescriptions.85
Yet, personnel’s training to adjust to these complex systems is cumbersome.
Medical providers and personnel need to adjust to entering all the data
required by the system in its preferred format and forego their own methods
of keeping charts; they need to become adept at using the systems and both
patients and providers need to accommodate to the central place that the
computer now takes during the physician-patient interaction.86
Consequently, some physicians rebelled against the newly installed systems
complaining that investing time in using the electronic systems distracts
them from their medical duties.87
ii.
Perceived Consequences and User Resistance
Users may refrain from adopting a new technology because they are
concerned that the use of a technology may adversely affect either their
every day well-being or may be incompatible with deeply held beliefs.
Resistance to the adoption of new technologies due to its perceived
consequences can be broken then into two categories. First, users may resist
technological adoption due to perceived practical consequences, which
include economic and non-economic effects. Second, users may resist
technological adoption because of perceived consequences of the impact of
the technology on moral and religious values.
85
42 U.S.C.A. § 300jj-11 (listing the goals of institute electronic health records). See
Sharona Hoffman & Andy Podgurski, Finding A Cure: The Case for Regulation Oversight
of Electronic Health Records Systems, 22 HARV. J. LAW & TEC. 103, 112-119 (2008)
(describing the benefits of electronic health record systems).
86
See Sharona Hoffman, Employing E-Health: The Impact of Electronic Health Records
on the Workplace, 19 KAN. J.L. & PUB. POL'Y 409, 427-428 (2010) (discussing employers
challenges in implementing electronic health record systems in the workplace); Richard J.
Baron & Elizabeth L. Fabens et al., Electronic Health Records: Just Around the Corner?
Or Over the Cliff? 143(3) ANNALS OF INTERNAL MED. 222 (Aug. 2, 2005) (describing one
practice’s difficulties in adjusting an electronic health records system).
87
Milt Freudenheim, Many Hospitals Resist Computerized Patient Care, N.Y, TIMES, June
7, 2008 (describing resistance among physicians to use electronic health records systems);
Ceci Connolly,Cedars-Sinai Doctors Cling to Pen and Paper, WASH POST, Mar. 21, 2005,
at A1 (describing staff rebellion in Cedars-Sinai Medical Center that forced the Center to
shelve its new electronic record system after three months of use). Resistance to the
adoption of electronic health record systems is not motivated by its complexity alone.
Users resist these systems also because of concerns for errors, the costs of purchasing and
implementing them and privacy and security concerns. See Sharona Hoffman & Andy
Podgurski, Finding A Cure: The Case for Regulation Oversight of Electronic Health
Records Systems, 22 Harv. J. Law & Tec. 103, 119-124 (2008).; David Blumenthal,
Stimulating the Adoption of Health Information Technology, 360(15) N. ENG, J. MED.
1477, 1477 (Apr. 9, 2009)
23
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a. Practical Consequences
User resistance may stem from economic reasons. A primary economic
reason for resistance to new technology is fear of loss of jobs. Workers fear
that their skills are made obsolete by the new technology.88 The classical
historical example involves the Luddites resistance to the industrial
revolution in England, which involved protests culminating in the breaking
of machines. The Luddites resistance was largely motivated by workers fear
of being displaced by machinery.89 Concerns of being replaced by
technology are not a legacy of the past. Today’s electronic technology takes
over many functions previously performed by individuals. For example,
even lawyers fear that some of their skills could be made obsolete, as new
discovery software quickly scans for the necessary information and rapidly
achieves results that were previously accomplished through thousands of
billable hours.90
Users and organizations may also hesitate adopting a new technology due to
sunk costs. Where investments and infrastructure were already made to
accommodate a previous technology or an existing way of doing things, it
may be more efficient to resist change.91 Particularly compelling was the
88
Joel Mokyr, The Political Economy of Technological Change: Resistance and Innovation
in
Economic
History,
at
29
(March,
1997)
available
at
http://www.fsalazar.bizland.com/PYMES/Berg.pdf.; Joel Mokyr, Technological Inertia in
Economic History, 52(2) J. ECON. HISTORY 325, 330 (1992) (explaining that the more
specific and valuable the skill or piece of equipment being replaced, the more incentive its
owner has to resist the technology that reduces its value). Technological change also
threatens non-pecuniary characteristics of labor, such as a changing physical work
environment, and transforming labor hierarchies. These changes are also resisted by
laborers. Joel Mokyr, Progress and Inertia in Technological Change, CAPITALISM IN
CONTEXT: ESSAYS ON ECONOMIC DEVELOPMENT AND CULTURAL CHANGE IN HONOR OF
E.M. HARTWELL 230, 236 (John A. James & Mark Thomas eds. 1994).
89
See generally BRIAN BAILEY, THE LUDDITE REBELLION (1998); Adrian Randall,
Reinterperting ‘Luddism’: Resistance to New Technology in the British Industrial
Revolution, in RESISTANCE TO NEW TECHNOLOGY: NUCLEAR POWER, INFORMATION
TECHNOLOGY AND BIOTECHNOLOGY 57 (Martin Bauer ed., 1995); Joel Mokyr,
Technological Inertia in Economic History, 52(2) J. ECON. HISTORY 325, 329 (1992). See
also ADRIAN RANDALL, BEFORE THE LUDDITES: CUSTOM, COMMUNITY AND MACHINERY IN
THE ENGLISH WOOLEN INDUSTRY, 1776-1809, 4, 41-68 (1991) (examining the pre-Luddites
period and showing that the woolen cloth industry in England between 1770s-1809 resisted
machinery when it threatened employment or relocated workers into a new factory based
system).
90
John Markoff, Armies of Expensive Lawyers, Replaced by Cheaper Software, N.Y.
TIMES Mar. 5, 2011. See also KIRKPATRICK SALE, REBELS AGAINST THE FUTURE, 223-228
(1995) (discussing post World War II concerns of labor displacements).
91. See Lucian Arye Bebchuk & Mark J. Roe, A Theory of Path Dependence in Corporate
Ownership and Governance, 52 STAN. L. REV. 127, 139 (1999).
24
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effect of sunk costs in current computer keyboard design. The computer
keyboard design used by most computer users is called QWERTY.
QWERTY is, in fact, believed by many to be a sub-optimal keyboard
design.92 Its arrangement of keys was selected to deal with an ancient
technological problem—the clashing of type bars on the typewriter—a
problem solved by the nineteenth-century. DVORAK, a keyboard design
that enables more effective typing, was invented in 1932. Yet, users
reluctant to adjust to a new typing method declined to adopt the DVORAK
keyboard. The preferences of existing users repeatedly outweighed those of
new users for whom it would have been more efficient to adopt the
DVORAK design.93
Finally, users may believe a technology confers a reduced advantage due to
its failure to attain critical mass. Interactive technologies can be prone to
market failure because they are often characterized by “network effects.”
Network effects exist in markets where the value an individual places on a
good increases as others use the good. Once a critical mass of people uses
the technology its rate of adoption accelerates. Thus, reaching critical mass
is imperative for the adoption of many interactive technologies. 94 A classic
example of a network effects technology is the Internet. The value of the
Internet is a function of the number of people who are connected to it.95
The Internet reached its critical mass point in 1990 with four million users
worldwide.96 Vendors and information providers, for instance, found the
92. For an explanation and history of the DVORAK keyboard, see The DVORAK
Keyboard, http://www.mit.edu/~jcb/Dvorak/.
93. See Paul A. David, Clio and the Economics of QWERTY, 75:2 AM. ECON. REV. 332
(1985); Clayton P. Gillette, Lock-In Effects in Law and Norms, 78 B.U. L. REV. 813, 817
(1998). But see S.J. Liebowitz & Stephen E. Margolis, The Fable of the Keys, XXXIII J.L.
& ECON. Apr. 1990, available at http://wwwpub.utdallas.edu/~liebowit/keys1.html (last
visited May 13, 2006) (arguing that use of the QWERTY keyboard is efficient and that the
Dvorak keyboard was justifiably rejected).
94
Goods that do not have network effects have demand curves that slope downwards, that
is, as price decreases more of the good is demanded. However, goods that have network
effects feature a different demand curve. The willingness of individuals to pay for the good
increases as the number of goods expected to be sold grows, therefore, price may increase
instead of decreasing. See Nicholas Economides & Charles Himmelberg, Critical Mass
and
Network
Size
with
Application
to
the
US
Fax
Market
at
www.stern.nyu.edu/networks/Economics_Economics_of_networkd.pdf. It should be noted,
however, that the presumed increasing returns might not be the only effects at work,
because other preferences may eventually also affect choices. See Mark Lemley &
William McGowan, Legal Implications of Network Economic Effects, 86 CAL. L. REV. 479,
497 (1998). See also EVERETT M. ROGERS, DISSEMINATION OF INNOVATIONS 343-45 (5th
edition 2003); M. Lynne Markus, Toward a “Critical Mass” Theory of Interactive Media,
in ORGANIZATIONS AND COMMUNICATION TECHNOLOGY 194 (Janet Fulk & Charles
Steinfield eds., 1990); Nicholas Economides, The Economics of Networks, INT’L J. OF
INDUS. ORG. 27 (Oct. 1996), available at http://www.stern.nyu.edu/networks/site.html.
95
See Mark A. Lemley, The Law and Economics of Internet Norms, 73 CHI.-KENT. L. REV.
1257, 1281 (1998).
96
See EVERETT M. ROGERS, DISSEMINATION OF INNOVATIONS 343-44, 346 (5th edition
2003).
25
Draft: Please do not circulate or quote without permission from author.
Internet more lucrative as more people were online. At a certain point most
offline businesses realized they had to offer an online service because a
large percentage of their clientele transferred their purchasing activity
online. In addition, when critical mass is reached, people are less likely to
abandon use of the technology because they become dependent on it.97 For
example, in 2012, it is more costly for an individual to stop using Facebook
unilaterally than it was for a Facebook user five years earlier.98
Individuals may resist new technologies due to other non-economic
practical consequences. Throughout history, individuals have resisted many
new technologies that they believed threatened to adversely affect
community health and common resources. Examples included protests
against nuclear power plants,, nuclear waste disposal and chemicals.99
Feared risks to personal or family health also played an important role in
persuading individuals to refuse using new technologies. For example,
consumers’ refusal to purchase genetically modified food stemmed from
both concerns of risks to personal health and harmful effects to the
environment.100 Similarly, a vocal movement of parents refused to vaccinate
97
See EVERETT M. ROGERS, DISSEMINATION OF INNOVATIONS 343-45 (5th edition 2003);
Lynne Markus, Toward a “Critical Mass” Theory of Interactive Media, in
ORGANIZATIONS AND COMMUNICATION TECHNOLOGY 194 (Janet Fulk & Charles Steinfield
eds., 1990).
98
See Randall Stross, Getting Older Without Getting Old, N.Y. TIMES, Mar. 6, 2010
(reporting that in 2010 Facebook had $400 million users compared to $50 million users in
2007.
99
See Allan Mazur, Opposition to Technological Innovation 13 MINERVA 58,60-61 (1975)
(showing that a perception of danger provoked popular opposition to both nuclear plants
and the fluoridation of water supplies); Joel Mokyr, The Political Economy of
Technological Change: Resistance and Innovation in Economic History, at 38 available at
http://www.fsalazar.bizland.com/PYMES/Berg.pdf.; Paul Slovic & James Flynn et al.,
Perceived Risk, Trust and the Politics of Nuclear Waste, in THE PERCEPTION OF RISK 275
(2001, Paul Slovic ed.) (describing public opposition to nuclear waste disposal); Nancy
Kraus & Torbjorn Malmfors et al., Intuitive Toxicology: Expert and Lay Judgments of
Chemical Risks, in THE PERCEPTION OF RISK 285 (2001, Paul Slovic ed.) (discussing and
comparing public and expert perception of risks in chemicals). On perceptions of risk in
technology, see generally, MARY DOUGLAS & AARON WILDAVSKY, RISK AND CULTURE:
AN ESSAY ON THE SELECTION OF TECHNOLOGICAL AND ENVIRONMENTAL DANGERS
(1982); Judith A. Bradbury, The Policy Implications of Differing Concepts of Risk 14(4)
SCI TECH & HUMAN VALUES 380 (1989).
100
See ALLAN MCHUGHEN, PANDORA’S PICNIC BASKET: THE POTENTIAL AND HAZARDS OF
GENETICALLY MODIFIED FOODS 104-128 (2000) (discussing and addressing Europeans’
health and environmental concerns regarding genetically modified foods); Marsha A.
Echols, Food Safety Regulation in the European Union and the United States: Different
Cultures, Different Laws, 4 COLUM. J. EUR. L. 525, 52729 (1998) (describing Europeans’
opposition to genetically modified foods); Gregory N. Mandel, the Future of Biotechnology
Litigation and Adjudication, 23 PACE ENVTL. L. REV. 83, 89-92 (2005-2006) (discussing
health and environmental concerns regarding genetically modified food).
26
Draft: Please do not circulate or quote without permission from author.
their children due to concerns that certain childhood vaccinations are linked
to autism.101
Other concerns related to neither health nor community well-being affect
users’ willingness to adopt a new technology. Fear of discrimination can
play a role in preventing the adoption of a new technology. For example,
despite the growing availability of genetic testing, studies showed that many
individuals decided not to undergo testing due to their fears of insurance
and employment discrimination.102
b. Impact on Moral and Religious Values
Individuals may reject a technology due to cultural, moral, social or
religious reasons.103 Historical and current examples are plentiful. Best
known for their religious opposition to technology are the Amish, a
Christian religious sect, which object to the use of many technologies and to
this day travel using horses and carriages and refrain from using electricity
and common household appliances.104 In addition, some religious groups
oppose use of reproductive technologies. For example, in 2008 the Vatican
101
See Steve P. Calandrillo, Vanishing Vaccinations: Why Are So Many Americans Opting
Out of Vaccinating Their Children? 37 U. MICH. J.L. REFORM 353, 388-390 (2004)
(pointing to fear of autism as one of the motivators of the anti-vaccination movement); Jane
E. Brody, Vaccines and Autism, Beyond the Fear Factors, Mar. 25, 2003, at F7 (reporting
on concerns that mercury in vaccines causes autism); Gardiner Harris, Measles Cases
Grow in Number, and Officials Blame Parents’ Fear of Autism, N.Y. TIMES, Aug. 22, 2008
at A6 (reporting on an increase in measles cases due to parents concerns of link between
measles vaccine and autism, despite evidence to the contrary).
102
Gaia Bernstein, The Paradoxes of Technological Dissemination: Genetic
Discrimination and Internet Privacy, 39 CONN. L. REV. 241, 25564 (2006).
103
See THOMAS R. DEGREGORI, A THEORY OF TECHNOLOGY: CONTINUITY AND CHANGE IN
HUMAN DEVELOPMENT 27 (1985) (explaining that some people will not use technologies
because their belief systems forbid it); DAVID ELLIOTT & RUTH ELLIOTT, THE CONTROL OF
TECHNOLOGY VII, 10 (1976) (arguing that the choice of one technology over another is
based on a society’s scheme of values and priorities, including cultural and religious
beliefs); EVERETT M. ROGERS, DISSEMINATION OF INNOVATIONS 241-242, 249 (5th edition
2003) (describing studies finding that incompatibility with values and belief is an obstacle
to technological adoption); JOEL MOKYR, THE LEVER OF RICHES: TECHNOLOGICAL
CREATIVITY AND ECONOMIC PROGRESS 173-176 (1990) (tying societies’ technological
progress to their value system); Joel Mokyr, Technological Inertia in Economic History,
52(2) J. ECON. HISTORY 325, 332 (1992) (stating that historically cultural and religious
elements may have had a big influence on technological decision-making);; But see
Jacques Ellul, The Technological Order, PHILOSOPHY AND TECHNOLOGY: READINGS IN THE
PHILOSOPHICAL PROBLEMS OF TECHNOLOGY 86 (1972)THE TECHNOLOGICAL ORDER 86
(arguing that technology is determinative and autonomous of social values.)
104
Lee J. Zook, Slow-Moving Vehicles, in THE AMISH AND THE STATE 145, 145-146
((Donald B. Kraybill, ed. 1993) (describing reasons for the Amish’s use of horses and
carriages in lieu of modern vehicles).
27
Draft: Please do not circulate or quote without permission from author.
affirmed the Catholic Church’s opposition to use of different forms of
reproductive technologies, including in vitro fertilization, based on the
belief that every human life, including that of an embryo, is scared..105
Others may resist certain technologies because they fear that they
destabilize important moral and social values. For example, the desire to
preserve the uniqueness of human identity and to preserve human dignity
motivates opposition to diverse technologies. During the 1970s and 1980s
as computers were adopted, studies showed that some individuals resisted
computers because they feared the idea of an autonomous entity that can
perform the functions of human thinking thereby downgrading man’s
previously unique significance in the order of things.106 Similar fears
inspired resistance to robots that can replace human functions. 107 More
recently, a different version of the argument was made to oppose human
cloning. Objectors to human cloning argued that the replication of humans
will undermine the uniqueness of individual identity, pose psychological
problems for the cloned individuals and generally erode human dignity.108
The desire to preserve the uniqueness of human identity is only one value
that often stands in the way of the adoption of new technologies. Another
example is the traditional social value of the family as a nuclear unit,
consisting of mother, father and child who are genetically related. The
technology of artificial insemination, which introduced the ability to
105
See Congregation for the Doctrine of the Faith, Instruction Dignitas Personae on Certain
Bioethical
Questions,
June
20,
2008,
available
at
http://www.vatican.va/roman_curia/congregations/cfaith/documents/rc_con_cfaith_doc_20
081208_dignitas-personae_en.html..
106
Robert S. Lee, Social Attitudes and the Computer Revolution, 34(1) PUB. OPINION
QUAR. 53, 53, 56-57 (1970).
107
See SHERRY TURKLE, ALONE TOGETHER: WHY WE EXPECT MORE FROM TECHNOLOGY
AND LESS FROM EACH OTHER 23-147 (2011) (underscoring concerns regarding robots
fulfilling human functions.).
108
See e.g., George J. Annas, Human Cloning: A Choice or an Echo? 23 DAYTON L. REV.
247, 256 (1998) (stating that “personal identity is at the heart of objections to human
cloning”); John A. Robertson, Liberty, Identity and Human Cloning76 TEX. L. REV. 1371,
1410 (1998) (discussing opposition to human cloning because it violates human dignity and
identity); Dan W. Brock, Cloning Human Beings: An Assessment of the Ethical Issues Pro
and Con, in CLONES AND CLONES: FACTS AND FANTASIES ABOUT HUMAN CLONING 141,
150-155 ( Martha C. Nussbaum & Cass R. Sunstein, eds. 1998) (discussing the argument
that human cloning violates the right to a unique identity); The President’s Council on
Bioethics, Human Cloning and Human Dignity: An Ethical Inquiry, at
http://bioethics.georgetown.edu/pcbe/reports/cloningreport/children.html
(discussing
problems of identity and individuality for the cloned child); Gina Kolata, Ethics Panel
Recommends a Ban on Human Cloning, N.Y. TIMES, June 8, 1997 (reporting that the
National Bioethics Advisory Commission recommended that President Clinton continue
the moratorium on use of federal funding to support human cloning) .
28
Draft: Please do not circulate or quote without permission from author.
produce a child with donor sperm was resisted for over 150 years because it
destabilized the traditional concept of the nuclear genetically related family.
Children could now be born who were not genetically related to their
fathers.109
III.
Government Regulation versus Market Governance
A. Let the Market Control
While the law regulates the invention of new technologies through the
patent system system, the prevailing wisdom is that the market should
determine which technologies are eventually adopted.110 Technological
entrepreneurs,111 economists,112 legal scholars,113 legislators114 and judges115
repeatedly declare that the market chooses and should continue selecting
which technology shall prevail. Advocates of market governance believe
that would be adopters, whether individuals or corporations, will select the
superior technology. As long as technologies are available on the free
market, the market will determine the optimal result for technological
progress. Proponents of market governance point to the hazards of
government action. Particularly, they underscore the difficulty of
distinguishing between user resistance that protects society from costly duds
and resistance that hinders progress.116 Given some time, they argue,
109
See generally Gaia Bernstein, The Socio-Legal Acceptance of New Technologies: A
Close Look at Artificial Insemination 77 WASH. L. REV. 1035 (2002)
110
Helge Godo, Technological Evolution, Innovation and Human Agency, in DIVERSITY IN
THE KNOWLEDGE ECONOMY AND SOCIETY: HETEROGENEITY, INNOVATION AND
ENTREPRENEURSHIP 18, 31-32 (Elias G. Carayannis & Aeis Kaloudis eds. 2008).
111
See e.g., Maggie Mahar, Irrational Exuberance over Electronic Health Records?,
Health Beat Blog, Dec. 17, 2008 at http://www.healthbeatblog.org/2008/12/irrationalexuberance-over-electronic-medical-records-.html (quoting Dr Rick Peters, founder and
former CEO of Oceania, one of the earliest enterprises of electronic health records, who
stated: “The organizations set up by industry and the government to mandate standards …
stifle innovation… keep health care IT completely out of step with the general computer
industry”); Tom Stricker, 54 MPG by 2025? Consumers Will Decide, National Journal
Expert Blog, Aug. 1, 2011 at http://energy.nationaljournal.com/contributors/tomstricker.php (Vice President of technical and Regulatory Affairs, Toyota Motor North
Ameriica Inc. writing: “Any company relying on favorable regulatory structure to succeed
is missing the bigger picture – namely, that long-term success will ultimately shine on
companies that meet customer demands at an affordable price.”)
112
113
114
115
116
See Joel Mokyr, Technological Inertia in Economic History, 52(2) J. ECON. HISTORY
325, 328 (1992) (stating that this problem is not easily resolved).
29
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technologies that are advantageous to the consumer are likely to flourish
and government action will be unnecessary.117
B. Objections to Sole Reliance on Market Governance
i.
The costs of delay and non-intervention
The appeal of allowing the market to determine the adoption of new
technologies lies, at least partly, in its deceptive neutrality. Market choice
appears as the natural state of events. Yet, the decision to let the market
control and to refrain from government action is by itself an active choice
and not necessarily the natural result.118 Moreover, this choice carries with
it a cost. Technologies that are superior and available for use are at times
resisted altogether or undergo lengthy social adoption processes.119 A
lengthy delay or complete rejection of an important technology undermines
the overall goal of the intellectual property system – the promotion of
progress. This is especially disconcerting because often it is the more
radical inventions that markets are particularly hostile to.120
Of course, not every rejected technology reduces human welfare and
inhibits progress. Nuclear weapons are a paramount example of a
technology many believe our world would be better off without. And, some
rejected technologies are, doubtless, unneeded innovations. Yet, examples
are still plentiful of technologies, which initially met social rejection only to
be socially endorsed, decades and even centuries later. One example
involves the lengthy delay in the adoption of the technology of artificial
insemination in humans. Although many believe that the reproductive
technology of artificial insemination in humans is a product of late
twentieth century science, evidence of its existence was first recorded as
117
Erik Lillquist & Sarah E. Waldeck, Government Action in Emerging Networked
Technologies, 87 OR. L. REV. 581, 623-635 (2008).
118
119
See generally Ted Sichelman, Commercializing Patents, 62 STAN. L. REV. 341, 362365 (2010) (arguing that at least half of patented invention in the United States are never
commercially exploited).
120
See Helge Godo, Technological Evolution, Innovation and Human Agency, in
DIVERSITY IN THE KNOWLEDGE ECONOMY AND SOCIETY: HETEROGENEITY, INNOVATION
AND ENTREPRENEURSHIP 18, 32 (Elias G. Carayannis & Aeis Kaloudis eds. 2008). (stating
that while certain technologies particularly incremental technologies may be more
effectively governed by the markets, markets are particularly hostile to radical innovations
warranting government action).
30
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early as the late Eighteenth Century.121 Artificial insemination technology
can overcome infertility by using a syringe type instrument to insert the
sperm of the husband or donor into the woman.122 Yet, despite the
technology’s simplicity and its need by many childless couples, the first
reports of significant social use emerged only from the 1930s-1940s.123 The
costs of market governance are particularly evident when a new technology
eventually becomes widespread, as was the case of artificial insemination
by the 1960s-1970s,124 but fails to benefit generations of potential users, in
that instance the many infertile individuals who remained childless.
ii.
The Illusion of Market Control
Although many believe that the current system is a system of market
control, the government, in fact, intervenes to encourage user adoption in
multiple ways, many of them subtle and go unnoticed by the casual
observer.125 A current example involves the adoption of health electronic
records by hospitals and private physician clinics. The government seeking
to encourage adoption, undertook a variety of measures to encourage the
process.126
First, the government offered financial incentives to doctors and hospitals in
extra Medicare payments for the “meaningful use” of electronic heath
record systems. The government offered the highest payments for 2011
adopters, the payments offered gradually reduced until eliminated by 2016.
The goal was to incentivize rapid adoption by offering the highest
incentives to the earliest adopters.127 Second, the government regulated a set
of penalties for physicians and hospitals not using electronic health records
systems meaningfully by 2015. Physicians will lose 1% of their Medicare
121
Gaia Bernstein, The Socio Legal Acceptance of New Technologies: A Close Look at
Artificial Insemination, 77 WASH. L. REV. 1035, 1048-1059 (2002).
122
Gaia Bernstein, The Socio Legal Acceptance of New Technologies: A Close Look at
Artificial Insemination, 77 WASH. L. REV. 1035, 1049-1050 (2002).
123
Gaia Bernstein, The Socio Legal Acceptance of New Technologies: A Close Look at
Artificial Insemination, 77 Wash. L. Rev. 1035, 1060 (2002).
124
Gaia Bernstein, The Socio Legal Acceptance of New Technologies: A Close Look at
Artificial Insemination, 77 Wash. L. Rev. 1035 [
] (2002).
125
Erik Lillquist & Sarah E. Waldeck, Government Action in Emerging Networked
Technologies, 87 OR. L. REV. 581, 582 (2008) (stating that “For our country’s entire
history, government action both direct and indirect – has affected what technologies will be
adopted.”)
126
David Blumenthal, Stimulating the Adoption of Health Information Technology, 360(15)
N. ENG. J. MED. 1477, 1478 (Apr. 9, 2009) (describing the government’s measures to
encourage adoption of electronic health records).
127
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fee in 2015 and the penalties escalate for each additional year of non-use.
Similarly, hospitals face cuts in Medicare fees for failure to adopt.128 Third,
the government instituted a support structure for technical installation of
electronic health records. The law provides funds to create a regional
technology extension centers to help providers install electronic health
record systems,129 funds to train workforce,130 support for educational
programs for training health care professionals, whether in the form of
funds, curriculum development or recruitment of students.131 Finally, the
government acted to alleviate fears regarding security and privacy. It
required health care professionals and associated parties to promptly notify
patients of a breach in the security of their electronic personal
information.132 And it extended HIPAA protections to health care providers
and associated parties dealing with electronic health records.133
Similarly, to encourage new payment systems the government has
historically and to this day engaged in a variety of methods to achieve social
adoption. Erik Lillquist and Sarah Waldeck provide a rich study of the
forms of government action used to encourage the adoption of novel
payment systems. First, the government provides the public information to
convince it to use a new payment system. For example, to make sure the
public recognizes and accepts electronic copies of checks, the government
required that electronic copies of checks bear the legend “This is a legal
copy of your check. You can use it the same way you would use a regular
check.134” Second, the government acted to address public concerns. For
instance, as the public started using credit card in the 1970s, their
introduction was accompanied with concerns about theft and unauthorized
charges. The government alleviated these fears by regulating that credit card
holders are not responsible for more than fifty dollars of fraudulent charges
and by enacting criminal penalties for fraudulent credit card use.135 Third,
the government acted through granting incentives or imposing sanctions.
For example, the Transit Authority in New York City acted to encourage
128
129
42 U.S.C.A. § 300jj-32 (c).
130
131
42 U.S.C.A. § 300jj-35-36.
42 U.C.S.A. § 17937; 42 U.S.C.A. § 17932.
133
42 U.S.C.A. § 300jj-19; 42 U.S.C.A. §17934; 42 U.S.C.A. § 17938.
134
12 U.S.C. § 5003(b)(2); Erik Lillquist & Sarah E. Waldeck, Government Action in
Emerging Networked Technologies, 87 OR. L. REV. 608 (2008)
135
15 U.S.C. §§ 1643-1644 (2008); Erik Lillquist & Sarah E. Waldeck, Government
Action in Emerging Networked Technologies, 87 OR. L. REV. 612-613 (2008).
132
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use of the Metro card by offering free bus transfers to Metro card users.136
Finally, the government acted to ensure the adoption of new payment
technologies by eliminating or severely curtailing the competition. For
example, in 1863 the United States issued national bank notes, which faced
stiff competition from state bank notes. Congress acted by placing a ten
percent tax on state banknotes, thus making them prohibitively expensive
and resulting in their elimination.137
IV.
Government Action to Encourage User Adoption
A. An Institutional Coordinator
The goal of our technology regulating regime is to promote progress.
Judges, legislatures and academics alike believe that progress incorporates
dissemination.138 User adoption is vital to achieve technological
dissemination. Yet, policy-makers have given little systematic thinking to
the issue of user adoption. While government action to encourage user
adoption occurs on a broad scale on all government levels: federal, state and
local, 139 it occurs in a piecemeal and inconsistent way.
An institutional actor charged with promulgating and implementing
guidelines to encourage user adoption could provide a systematic and
consistent way of addressing user adoption issues. The goal of developing
guidelines targeted at user adoption is not to set a norm of government
intervention. In fact, some technologies are unsuccessful and are
legitimately resisted by users.140 Instead, the objective of these guidelines
would be to identify when government action is warranted, when it is not
and what are the best ways to achieve user adoption. These principles will
improve coherency and consistency in an important area that has thus far
received little attention.
136
Erik Lillquist & Sarah E. Waldeck, Government Action in Emerging Networked
Technologies, 87 OR. L. REV. 614 (2008).
137
Erik Lillquist & Sarah E. Waldeck, Government Action in Emerging Networked
Technologies, 87 OR. L. REV. 620-621 (2008)
138
See generally Malla Pollack, What is Congress Supposed to Promote? Defining
“Progress” in Article 1, Section 8, Clause 8 of the United States Constitution, or
Introducing the progress Clause, 80 NEB. L. REV. 754 (2001). On the interpretation of the
term progress in the intellectual property clause, see generally, Dotan Oliar, Making Sense
of the Intellectual Property Clause: Promotion of Progress as a Limitation on Congress’s
Intellectual Property Power, 94 GEO. L.J. 1771 (2005-1006).
139
140
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Under the current regime government action to encourage user adoption is
highly decentralized. A shift toward more centralization requires
institutional change. Detailed institutional design is beyond the scope of this
Article, but the following will rely on the important work done by Arti Rai
and Stuart Benjamin on this topic. Rai and Benjamin make a compelling
case for an Office of Innovation Policy.141Although, they do not address the
issue of user adoption, they define innovation broadly to include
dissemination through putting the invention into productive use.142
Rai and Benjamin suggest that the creation of a new Office of Innovation
Policy (OIP) can address the problem of different governmental agencies
pursuing innovation strategies that are in tension if not even contradictory to
each other.143 They propose an executive entity that would have some
authority to push agencies in a way that will promote innovation.144 Rai and
Benjamin’s proposal strikes an important balance between centralization
and decentralization. They acknowledge that centralization allows for
141
Stuart Minor Benjamin & Arti K. Rai, Structuring U.S. Innovation Policy: Creating a
White House Office of Innovation Policy, The Information Technology and Innovation
Foundation, June 2009, at 2. Another potential candidate is the Patent Office (PTO). Yet,
the PTO, currently, lacks substantive rulemaking authority on patentability issues, such as
subject matter or non-obviousness, which it decides on a day-to-day basis. See Arti Rai,
Growing Pains in the Administrative State: the Patent Office’s Troubled Quest for
Managerial Control, 157 U. OF PENN.L.REV. 2051, 2052-2053(2009). And although recent
proposals emphasize the need to expand the PTO’s authority, it is unlikely that its authority
will be expanded beyond the grant of patents to formulate and enforce rules to regulate user
adoption. For proposals to expand the PTOs authority, see generally, Ted Sichelman,
Commercializing Patents, 62 STAN. L. REV. 341, 400-410 (2010) (proposing that the PTO
should issue a commercialization patent in exchange for a commitment to commercialize a
product not available in the market place); Michael J. Burstein, Rules for Patents, 52 WM.
& MARY L. REV. 1747 (2011) (arguing for the need to grant the PTO substantive rulemaking authority) John Golden, Patentable Subject Matter and Institutional Choice, 89
TEX.L. REV. 1041 (2011); Jonathan Masur, Regulating Patents, 2010 SUP. CT. REV.275
(2010) (arguing for the need to grant the PTO substantive rule-making authority).
142
Stuart Minor Benjamin & Arti K. Rai, Structuring U.S. Innovation Policy: Creating a
White House Office of Innovation Policy, The Information Technology and Innovation
Foundation, June 2009, at 2 (defining innovation policy as focusing on promoting “the
creation and diffusion of technology”).
143
Stuart Minor Benjamin & Arti K. Rai, Structuring U.S. Innovation Policy: Creating a
White House Office of Innovation Policy, The Information Technology and Innovation
Foundation, June 2009, at 3 (“Even when U.S. government entities like federal agencies
focus on innovation, they generally act without having much awareness of what other
institutions faced with similar problems have done – much less coordinating with those
institutions. Improving the awareness and coordination of innovation-related activities
among federal agencies and courts could be tremendously helpful.”)
144
Stuart Minor Benjamin &Arti K. Rai, 77(1) GEO. WASH. L. REV. 1, 6 (2008)
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efficiency, coordination, clarity and inter-organizational learning, but at the
possible cost of bad decision-making.145
Since government agencies, such as the Federal Drug Administration or the
Federal Communications Commission have specialized knowledge, which
is valuable for informed decision-making, Rai and Benjamin do not
advocate an OIP with blocking power.146 Instead, they suggest a “Hard
Look Review” regime under which agencies would be obliged to consider
all arguments even those that do not correspond with their position and
respond to the OIP’s policy position publicly. At the same time, the
specialized government agencies would not be obliged to implement the
OIP position.147
Although not specifically envisioned under Rai and Benjamin’s scheme, the
OIP could also promulgate user adoption guidelines and enforce them under
the mechanisms they propose. This could improve systematic thinking and
resolve coordination and inconsistencies regarding action to encourage user
adoption. Furthermore, it could also alleviate the problem of capture.
Currently, decisions regarding government action to encourage user
adoption are often made by specialized agencies and state and local
governments. As Rai and Benjamin explain, capture is more likely to occur
when an agency covers one or two industries and less likely when an
agency has a broader scope.148 Hence, overview by an OIP-type agency is
likely to reduce capture concerns.
ii.
The Moral Utility Objection
An important objection to incorporating user adoption guidelines into our
technology-regulating regime is that it contradicts the rejection of the Moral
Utility Doctrine. Patentees need to satisfy the utility requirement in order to
attain a patent – they must show that their patent is useful.149 In the past
moral utility was part of the utility decision. The law considered whether an
invention is ”frivolous or injurious to the well-being, good policy or sound
145
Stuart Minor Benjamin & Arti K. Rai, Structuring U.S. Innovation Policy: Creating a
White House Office of Innovation Policy, The Information Technology and Innovation
Foundation, June 2009, at 8.
146
Stuart Minor Benjamin &Arti K. Rai, 77(1) GEO. WASH. L. REV. 1, 58, 63 (2008).
147
Stuart Minor Benjamin & Arti K. Rai, Structuring U.S. Innovation Policy: Creating a
White House Office of Innovation Policy, The Information Technology and Innovation
Foundation, June 2009, at 11-12.
148
Stuart Minor Benjamin &Arti K. Rai, 77(1) GEO. WASH. L. REV. 1, 78 (2008)
149
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morals of society.”150 Thus, the Patent office (“PTO”) and the courts
evaluated the potential detrimental effects of an invention on society in
determining whether an invention should be patented. However, in recent
years, patent law has rejected the Doctrine of Moral Utility and refused to
consider whether an invention is immoral or illegal.151
The incorporation of principles to encourage user adoption into the
technology regulating regime will bring back the social effects question.
Government agencies will need to determine whether the social effects of
an invention require government action. It may, therefore, appear at first
blush to contradict the rejection of the Moral Utility Doctrine. However,
the differences between user adoption and moral utility decisions
underscore that charging the government with user adoption decisions is not
necessarily inconsistent with the rejection of the Moral Utility Doctrine.
First, the moral utility decision is tied to the invention stage. The Patent
Office decides whether to encourage the invention and application to
practice of a technology that may be immoral and injurious or a court may
later invalidate a patent because it should not have been granted in the first
place. Where a technology is at its invention or application to practice stage
its potential effects on society are less clear. Deciding early on that an
invention is immoral and should not receive a patent because it does not
meet the utility requirement may close unknown opportunities and other
potential uses for the technology.152 Conversely, user adoption decisions are
usually made when the patented invention is already in the market and its
potential uses are better known. Thus, the risk of an erroneous decision is
decreased.
Secondly, objectors to the Moral Utility Doctrine warned that the doctrine
would deter inventors with controversial inventions from filing patents,
which would have negative economic effects.153 This argument is irrelevant
to user adoption decisions because these decisions take place later in the
process – after the technology is invented and patented. Furthermore, while
150
Lowell v. Lewis, 15 F.Cas. 1018, 1019 (1817).
Juicy Whip v. Orange Bang, 185 F.3d 1364, 1366-1367 (1999 Fed. Cir.). But see,
Margo A. Bagley, The New Invention Creation Activity Boundary in Patent Law, 51 WM.
& MARY L. REV. 577 (2009-2010) (describing an international trend toward consideration
of morality involving invention creation activity).
152
Although a court may invalidate the patent later when more information is available –
the basis for its decision is that a patent should not have been granted in the first place.
153
Benjamin D. Enerson, Note: Protecting Society from Patently Offensive Invention: The
Risk of Reviving the Moral Utility Doctrine, 89 CORNELL L. REV. 685, 715 (2004).
151
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the Moral Utility Doctrine penalizes a technology by denying it patent
protection, user adoption encouragement singles out a technology for a
positive reward. Competitors will not be affected because government
action should apply to a category of technology not to a specific competitor.
Thus, inventors are unlikely to be deterred by government action to
encourage user adoption. The opposite, may in fact be true, they may be
induced to increase their efforts if they believe their invention is truly
revolutionary and could gain governmental support.
Finally, objectors to the Moral Utility Doctrine argued that the PTO is illequipped to make determinations regarding the social effects of diverse
technologies.154 Again, this argument does not apply to the incorporation of
user adoption principles into the law. These principles will play a role in
creating a systemized and consistent law to encourage user adoption but the
PTO will not be charged with their implementation. The implementation
will remain under the auspices of specialized agencies, Congress, and state
and local governments.
B. Gentle Nudges
Advocates of market governance argue that while the market will select
successful technologies because users will not adopt technologies that do
not offer a significant advantage, the government may force upon society
technological failures. Technological failures may be technologies that do
not offer a significant advantage or technologies that are inferior to other
technologies. To address these concerns, I propose that the government act
through gentle nudges to encourage user adoption and refrain from coercive
action that prevents society from exercising choice whether to adopt a
specific technology. 155 In addition, my proposal is limited to government
action to encourage the adoption of a new category of technology. It does
not extend to suggest that the government should intervene to encourage
one version of a technology over another.
154
Benjamin D. Enerson, Note: Protecting Society from Patently Offensive Invention: The
Risk of Reviving the Moral Utility Doctrine, 89 CORNELL L. REV. 685, 711 (2004).
155
But cf., Erik Lillquist & Sarah E. Waldeck, Government Action in Emerging Networked
Technologies, 87 OR. L. REV. 623-635 (2008) (arguing that the government action, whether
through gentle nudges or hard shoves, is generally inadvisable.)
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Law and social norms scholars distinguish between gentle nudges and harsh
shoves.156 Harsh shoves force change by eliminating or curtailing the older
technology.157 An example of a harsh shove involves the adoption of digital
television. The government mandated all full power television stations to
broadcast exclusively in digital format from June 2, 2009.158 Consequently,
the public had to either purchase a digital television set or connect their
television to an analog to digital converter. In essence, the government
promoted digital broadcasting by eliminating the option of analog
broadcasting. The public did not have the option of deciding whether they
believe digital broadcasting is, in fact, superior and worthy of adoption.
To compare, there are many forms of gentle nudges. My goal here is not to
provide a full survey of potential gentle nudges but to illustrate some main
examples. In one type of gentle nudge the government offers information
about a new technology.159 This could be done for example through
offering, facilitating or funding training, as is currently being done to
encourage the adoption of electronic health information systems.160 It could
also be achieved through an advertising campaign. In a second type of
gentle nudge, the government undertakes measures to alleviate concerns
about a particular technology.161 The government can reduce fears
surrounding the technology through legislation, as was done in the case of
the Genetic Information Non-Discrimination Act, which was enacted partly
to alleviate fears of genetic discrimination.162 The government can also ease
concerns by engaging in an advertising campaign. For example, when the
government wanted to convince the public to take the Swine flu vaccine, it
undertook a massive advertising campaign emphasizing that the vaccine
does not carry any hazardous side-effects.163 In a third type of gentle nudge
the government provides incentives to induce individuals to adopt a new
technology.164 Similarly the government can also provide sanctions for
those who refuse to adopt the technology. As illustrated previously,
156
157
See Erik Lillquist & Sarah E. Waldeck, Government Action in Emerging Networked
Technologies, 87 OR. L. REV. 608, 620-623 (2008).
158
159
See Erik Lillquist & Sarah E. Waldeck, Government Action in Emerging Networked
Technologies, 87 OR. L. REV. 608, 620-623 (2008)
160
161
162
163
164
See Erik Lillquist & Sarah E. Waldeck, Government Action in Emerging Networked
Technologies, 87 OR. L. REV. 608 (2008).
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physicians and hospitals who will timely adopt electronic health records
systems will receive incentives in the form of additional Medicare
payments, while those who resist adoption will eventually lose parts of their
Medicare compensation.165
Gentle nudges, as opposed to harsh shoves, only facilitate user adoption,
they cannot coerce social acceptance. Even a collection of gentle nudges, as
those described in the case of electronic health records, does not amount to
a harsh shove. A nudge is a nudge and not a shove as long as a user may
still choose not to adopt a technology. Consequently, intervention through
gentle nudges is less likely to enforce the adoption of a mediocre
technology. Regardless of incentives, sanctions, advertising, training,
information and reduction of concerns, the public is unlikely to adopt a
technology that does not confer a significant relative advantage. In a sense,
government action through gentle nudges to encourage user adoption is
similar to the government’s role in encouraging innovation through the
grant of patents. The hope of getting a patent encourages innovative
activity. In addition, the grant of a patent can facilitate innovation through
signaling the worth of the invention.166 Yet, the patent system does not
guarantee that a specific innovation will succeed. It merely provides a
gentle nudge.
Admittedly, although, a gentle nudge is less likely to lead to the adoption of
an inferior technology, the risk still exists. Yet, that risk is inevitable and
accompanies technological adoption processes dominated by the market as
well. For example, DVORAK, the superior keyboard was not adopted over
QWERTY because of sunk costs. Users were unwilling to invest the time an
training required in adjusting to a new typing system.167
Finally, I suggest that government action through gentle nudges should
apply only where the government seeks to encourage the adoption of a new
class of technology. An example of intervention to encourage use of a class
of technology is the government’s use of feed-in tariff subsidies to
encourage use of solar energy. Users who install solar panels connected to
the electrical grid receive subsidized payments for the electricity generated
165
166
Cite articles on the expressive function of the patent system.
167. See Paul A. David, Clio and the Economics of QWERTY, 75:2 AM. ECON. REV. 332
(1985); Clayton P. Gillette, Lock-In Effects in Law and Norms, 78 B.U. L. REV. 813, 817
(1998). But see S.J. Liebowitz & Stephen E. Margolis, The Fable of the Keys, XXXIII J.L.
& ECON. Apr. 1990, available at http://wwwpub.utdallas.edu/~liebowit/keys1.html (last
visited May 13, 2006) (arguing that use of the QWERTY keyboard is efficient and that the
Dvorak keyboard was justifiably rejected).
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by the panels.168 The government’s goal is to encourage use of solar energy
generally not the use of a specific type of solar panel. This is distinguished
from government action to encourage the adoption of one of several
competing technologies. For example, encouragement to use one drug over
another where both operate in a similar fashion and achieve a similar
result.169
I propose to limit government action to encourage a class of technology
versus promoting one competing technology over another for two reasons.
First of all, government action is justified as a means for overcoming user
resistance. User resistance, whether due to novelty of hardware or process;
novelty due to complexity; concerns about practical consequences such as
loss of jobs, sunk costs, effects on personal health and environment; and
pressures on moral and religious values, generally does not come up when
users select between competing technologies. User resistance usually occurs
when users are faced with truly transforming technologies – a new category
of technology. Conversely, when users adopt one technology they are
unlikely to resist its competitors due to fear of novelty or consequences.
Therefore, government action is particularly justified to encourage the
adoption of a new category of technology where lack of adoption is likely to
be a result of user resistance.
At the same time, user resistance does come up between competing
technologies in one instance. This is where a technology requires critical
mass. For example, Google+ is currently struggling to overcome the
difficulty of luring users from Facebook in order to create a critical mass of
users. However, government action to select between competitors remains
inappropriate in light of the general goals of the patent system. The patent
system seeks to encourage dissemination in order to promote progress.
Thus, ensuring dissemination of a new class of technology serves its overall
goal, while distinguishing between competitors offering different versions
of the same technology does not impact the progress goal.170
168
169
Admittedly, at times it may be hard to determine when does a technology constitute a
separate class and when it is merely a competitor to another technology. Yet, often the
distinction is possible and clear0cut. For example, the Internet is clearly a separate class of
technology, while Google+ and Facebook are without doubt competing social network
technologies.
170
One could argue that one version of the technology is so superior to another that its
promotion over competitors does in fact promote progress. Yet, it may be that in this case
the technologies are indeed not competing technologies, but the superior technology is in
essence a new category of technology even if it accomplishes similar functions as other
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C.
Instigators for Government Action
Government action is not the only way to overcome user resistance nor is it
always warranted. Promoters of new technologies will often act to
overcome resistance in order to be successful in the marketplace.
Particularly, they often engage in efforts to overcome resistance due to
novel complexity. Such efforts include design changes to simplify the
technology and advertising campaigns emphasizing the ease of use.171 In
other instances, society may require adjustment time and not measures
targeted at hasty adoption. This is often the case where resistance is a result
of pressures on moral or social values. And finally, some technologies may
be unsuccessful technologies, which society is better off without.
The goal of this section is to take a preliminary step to identify situations in
which government action is particularly justified. These are cases of market
failure. In these cases, neither the actions of the patentee, not the acts of
competitors are likely to overcome user resistance. This inquiry is a first
step seeking to indicate how systematic thinking about government action
to encourage user adoption can be useful. The goal of this preliminary
inquiry is twofold: to identify situations in which government action is
warranted and through this investigation to shed light on situations in which
government action may not be necessary. Without embarking on a
systematic exploration of situations which are suitable for government
action, we will be unable to identify situations in which the government
may be inappropriately acting to overcome user resistance This section
identifies two situations which can justify government action because of
market failure. The two situations underscored are not an exhaustive list.
These are cases where technologies are characterized by network effect that
requires critical mass for widespread adoption and cases in which
dissemination is urgent.
1. Network effects – Attaining Critical Mass
technologies on the market. For example, most would agree that while both the VCR and
the DVD accomplish the same function – enabling entertainment consumption at one’s
own leisure -- they are not competing technologies, but different categories of technologies.
171
For example, the Mac is known for its ease of use and this is emphasized in it
advertising. See e.g., http://www.apple.com/why-mac/ (stating: “A new PC is overloaded
with all sorts of applications. Most of which you don’t want or need. A Mac, on the other
hand, comes with great software that’s easy to learn and a pleasure to use .”)
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Governmental action is particularly important where a technology that is
characterized by network effects requires support to acquire critical mass.
Technologies characterized by network effects become desirable as more
people use them. Once a technology reaches critical mass its rate of
adoption accelerates. For example, interactive technologies are often
characterized by network effects – the more people use them the more
desirable they become. Consequently, it is often vital for interactive
technologies to attain critical mass in order to achieve widespread
dissemination172 While some technologies characterized by network effects
may be successfully adopted without government action, in other cases
government action could prevent a market failure inhibiting or significantly
delaying the adoption of an important new technology.173
The adoption of the Minitel – a videotext system – which gave the French
population many of the advantages of the Internet a decade earlier than the
rest of the world, illustrates the significance of government action to attain
critical mass and the ways in which it can be attained. While we have gladly
endorsed the convenience of online plane and train tickets purchase, grocery
shopping, abundant sources of information and opportunities for social
interaction, few realize that many of these conveniences were available to
172
See Nicholas Economides & Charles Himmelberg, Critical Mass and Network Size with
Application to the US Fax Market, Discussion Paper No. EC-95-11, Stern School of
Business, N.Y.U., http://raven.stern.nyu.edu/networks/95-11.pdf; EVERETT M. ROGERS,
DISSEMINATION OF INNOVATIONS AT 343-345 (5th edition 2003); M. Lynne Markus,
Toward a “Critical Mass” Theory of Interactive Media, in ORGANIZATIONS AND
COMMUNICATION TECHNOLOGY 194 (Janet Fulk & Charles Steinfield eds., 1990); Nicholas
Economides, The Economics of Networks, INT’L J. OF INDUS. ORG. 27 (Oct. 1996),
available at http://www.stern.nyu.edu/networks/site.html (last visited May 27, 2006).
173
Government action to create critical mass may also be warranted in some cases where
the encouragement of standard setting would promote interoperability. There are three
options for standardization: industry players can coordinate to select a single standard; the
market may ‘tip’ to favor a certain standard or the government may mandate a standard.
Mark A. Lemley, Standardizing Government Standard-Setting Policy for Electronic
Commerce, 14 BERKELEY TECH L.J. 745, 747 (1999) In certain cases, where the market or
industry players are unlikely to achieve standard setting, government action may be
warranted to prevent market failure. For discussions of government action compared to
other methods of standardization, see generally, Daniel Benoliel, Cyberspace
Technological Standardization: An Institutional Theory Retrospective, 18 BERKELEY
TECH. L.J. 1259 (2003); Joesph Farrell & Garth Solaner, Competition, Compatibility and
Standards: The Economics of Horses, Penguins and Lemmings (Univ. of California
Berkeley Dep’t of Econ. Working Paper No. 8610, 1986); Mark A. Lemley, Antitrust and
the Internet Standardization Problem, 28 CONN. L. REV. 1041 (1996); Kevin Werbach,
Higher Standards Regulation in the Network Age, 23 HARV. J. LAW & TEC. 179 (2009).
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large segments of the French population since the 1980s. Minitel, 174 the
French online system, offered French phone customers a multitude of online
services including online banking, travel and ticketing reservations,
specialized information services (finance, health, travel and touring,
entertainment) and online ordering of goods, such as grocery shopping,
messaging services (particularly successful were the anonymous sex
forums) jobs and classified ads and interactive games.175
Minitel was comprised of a small monitor and a keyboard. It used the phone
connection to transmit text to and from the user.176 Minitel reached
mainstream adoption in France by the mid-1980s, soon after it was
introduced in 1982. Many households and businesses used Minitel on an
everyday basis.177 Interestingly, similar services using the exact same
technology were launched in 1982 in many other countries, including the
United States, sixteen Western European countries and Japan. Yet, these
systems failed to achieve the widespread dissemination enjoyed by the
French Minitel. Consequently, residents of these countries waited until the
mid-1990s to benefit from the advantages of an online system – the
Internet.178
174
The system was officially known as the French national videotext system. William L.
Cats-Baril & Tawfik Jelassi, The French Videotext System Minitel: A Successful
Implementation of a National Information Technology Infrastructure, MIS QUARTERLY,
March 1994, 1, 1.
175
See Eric Brousseau, E-Commerce in France: Did Early Adoption prevent Its
Development, 19 INFORMATION SOCIETY 45, 46 (2003); William L. Cats-Baril & Tawfik
Jelassi, The French Videotext System Minitel: A Successful Implementation of a National
Information Technology Infrastructure, MIS QUARTERLY, Mar. 1994, 1, 8, 12. An email
service was added in 1991. William L. Cats-Baril & Tawfik Jelassi, The French Videotext
System Minitel: A Successful Implementation of a National Information Technology
Infrastructure, MIS QUARTERLY, March 1994, 1, 8.
176
See H.L. Moulaison, The Minitel and France’s Legacy of Democratic Information
Access, 21 GOV. INFO. Q. 99, 101 (2004).
177
In 1985, 39% of French businesses used Minitel. By 1990, 84% of French businesses
used Minitel and a third of the population had access to it, whether at home or at work.
Finally, by 1992 about half the French population had access to Minitel. Eric Brousseau, ECommerce in France: Did Early Adoption prevent Its Development, 19 INFORMATION
SOCIETY 45, 46 (2003); William L. Cats-Baril & Tawfik Jelassi, The French Videotext
System Minitel: A Successful Implementation of a National Information Technology
Infrastructure, MIS QUARTERLY, March 1994, 1, 16.
178
See William L. Cats-Baril & Tawfik Jelassi, The French Videotext System Minitel: A
Successful Implementation of a National Information Technology Infrastructure, MIS
Quarterly, March 1994, 1, 9-10; Ya-Ching Lee, Newspaper Online Service: A Successful
Business? Lessons Learned from Videotext Failure, Dept, of Telecommunications, Indiana
University (1999) (discussing the failure of newspaper videotext systems in the United
States); Ian Miles & Graham Thomas, User Resistance to New Interactive Media:
Participants, Processes and Paradigms, in RESISTANCE TO NEW TECHNOLOGY:
43
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Commentators raised different theories to explain the success of the French
Minitel in comparison to the failure of similar online services in other
countries. Particularly, they pointed to the rapid creation of a critical mass
of Minitel users. Minitel is an interactive communication system. It requires
a significant number of users to draw in service providers, who in turn bring
in additional users. Thus, analysts explained that the French government
monopoly on Minitel services and the initial free distribution of the system
to all phone consumers, rapidly brought in the necessary critical mass of
users.179 Conversely, promoters of similar systems in other countries failed
to meet the critical mass challenge.180 With the benefit of hindsight, based
on the success of the Internet and Minitel, parallel online systems had the
potential for mass adoption outside France during the early 1980s. Yet, most
of the world’s residents got to enjoy the benefits of an online system only
over a decade later, when the Internet reached popular use..181
NUCLEAR POWER, INFORMATION TECHNOLOGY AND BIOTECHNOLOGY 255 (MARTIN
BAUER. ED. 1995) (discussing the failure of the British videotext system).
179
Eric Brousseau, E-Commerce in France: Did Early Adoption prevent Its Development,
19 INFO. SOC. 45, 46 (2003). Specifically, the government initially distributed Minitel for
free as the only effective source of directory assistance. William L. Cats-Baril & Tawfik
Jelassi, The French Videotex System Minitel: A Successful Implementation of a National
Information Technology Infrastructure, MIS QUARTERLY, March 1994, 1, 4, 10, 15.; H.L.
Moulaison, The Minitel and France’s legacy of Democratic Information Access, 21 GOV.
INFO. Q. 99, 101 (2004). Commentators identified additional factors that contributed to
Minitel’s success. These factors included, first, the easy to use design. See William L. CatsBaril & Tawfik Jelassi, The French Videotext System Minitel: A Successful Implementation
of a National Information Technology Infrastructure, MIS QUARTERLY, March 1994, 1, 9.
Second, use of the French telephone system solely as a transmission gateway and not as an
information provider. William L. Cats-Baril & Tawfik Jelassi, The French Videotext
System Minitel: A Successful Implementation of a National Information Technology
Infrastructure, MIS QUARTERLY, March 1994, 1, 10. Third, the use of a billing system that
assured anonymity. William L. Cats-Baril & Tawfik Jelassi, The French Videotext System
Minitel: A Successful Implementation of a National Information Technology Infrastructure,
MIS QUARTERLY, March 1994, 1, 10-11, 15. See also, Ian Miles & Graham Thomas, User
Resistance to New Interactive Media: Participants, Processes and Paradigms, in
RESISTANCE TO NEW TECHNOLOGY: NUCLEAR POWER, INFORMATION TECHNOLOGY AND
BIOTECHNOLOGY 255, 262-266 (Martin Bauer. ed. 1995) (analyzing the reasons for the
failure of the British Prextel system and contrasting it to the French success story).
180
See e.g., Ya-Ching Lee, Newspaper Online Service: A Successful Business? Lessons
Learned from Videotext Failure, Dept, of Telecommunications, Indiana University (1999)
(discussing the failure of newspaper videotext systems in the United States); Ian Miles &
Graham Thomas, User Resistance to New Interactive Media: Participants, Processes and
Paradigms, in RESISTANCE TO NEW TECHNOLOGY: NUCLEAR POWER, INFORMATION
TECHNOLOGY AND BIOTECHNOLOGY 255 (Martin Bauer. ed. 1995) (discussing the failure of
the British videotext system).
181
Some believe that Minitel was not necessarily a success story because it delayed the
adoption of the Internet in France. See e.g., Hugh Dauncey, A Cultural Battle: French
Minitel, the Internet and the Superhighway, 3 CONVERGENCE72, 77-78 (1997) (pointing
that the French attachment to Minitel is one of the factors delaying Internet adoption);
44
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2. Urgency
Market processes take time as different groups of users with different levels
of risk aversion and technological sophistication decide whether to adopt a
new technology.182 Some technological adoption processes take a year or
less, while others may take decades or even centuries. Yet, at times of
national emergencies, particularly those involving health threats,
governments may need to intervene to expedite the market process.
Intervention in these cases is necessary because of the dire implications of a
market failure to achieve widespread dissemination of the technology in a
timely manner.183 The U.S. government’s intervention in the dissemination
of the swine flu vaccine illustrates the importance of expediting market
processes in these situations.
The swine flu epidemic broke out in the spring of 2009.184 On June 2009,
the WHO declared the Swine Flu to be the first pandemic in 42 years.185
Amy Harmon, Why the French hate the Internet L.A. TIMES, Jan. 27, 2007 at 1 (reporting
that the French devotion to Minitel is part of the reason for their antagonism to the
Internet.) And, doubtless the Minitel did play a role in delaying Internet adoption in France.
Yet, the picture is more complex. First, e-commerce fared differently than individual user
adoption. Although in 1997 only 22% of French businesses were online (compared to 58%
in the United States), business were able to take advantage of the infrastructure and
experience they gained in Minitel and they closed the gap quickly. By 2001, 80% of all
French businesses were online (compared to 88% in the United States). Eric Brousseau, ECommerce in France: Did Early Adoption Prevent the Development? 19(1) INFO. SOC. 45,
66 (2003). Secondly, adoption by individual users did lag behind. Between 1997-2007 the
French individual user adoption lagged 25% behind the United States. The gap began
shrinking only in 2007 and closed in 2010..Internet Users per 100 People, United Nations
Data
–
A
World
of
Information
at
http://data.un.org/Data.aspx?q=internet+users&d=WDI&f=Indicator_Code%3aIT.NET.US
ER.P2. Although Minitel played a role in delaying user adoption, additional factors were at
play. These were: low rate of homeownership of personal computers and an underdeveloped cable network. See generally Eric Brousseau, E-Commerce in France: Did
Early Adoption Prevent the Development? 19(1) INFO. SOC. 45 (2003) Finally,
acknowledging that Minitel did play a role in delaying individual user adoption between
1997-2007, the costs of this delay should be balanced against the fact that from 1982-1995
the French exclusively possessed many of the advantages of the Internet. Furthermore,
despite the slow rate of adoption from 1997 many French residents did enjoy both the
Internet and Minitel throughout this period.
182
Discuss different groups of adopters such as early adopters laggards.
183
Sometimes market failure occurs when the window of opportunity is broader (beyond a
few weeks or months or even a year) but time is still of the essence. For example, when the
market delays in adopting environmental technologies designed to reduce pollution. Yet,
the discussion of whether these situations should also be included within the category of
urgency is beyond the scope of this paper.
184
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Deaths from the swine flu during the spring raised fears of a massive
epidemic that will kill many once the flu season began in the fall of 2009.186
A flu vaccine was ready by the early fall of 2009.187 Yet, the government
was faced with the challenge of vaccinating the population at large,
beginning with the groups that were particularly at risk.188 Public health
experts warned that the whole or at least most of the U.S.
population should be vaccinated within a couple of weeks to prevent
massive outbreaks of the swine flu that could culminate in a large death
toll.189 Under these circumstances, the government could not wait for
market forces to take their course. The government was faced by the double
task of ensuring not only the supply of sufficient vaccines but also creating
a demand for the vaccine by the population at large.
The U.S. government acted quickly. First of all, it eliminated the price
obstacle by providing the vaccines for free.190 However, it had to do much
more to overcome resistance. The government vaccinated school children in
public schools and opened centers in many communities during the
weekends to facilitate the process of vaccination. It relied on volunteers to
staff these centers.191 In addition, the government engaged in a massive
advertising campaign. It had to advertise not only the availability of the
vaccine for free but also to overcome fears of the consequences of taking
the vaccine.192 Many individuals were afraid to take the vaccine due to
concerns about dangerous side-effects. Specifically, they feared that the
vaccine was new and different from previous flu vaccines and therefore
entailed additional risks.193
The U.S. government’s action to encourage the adoption of the swine flu
vaccine accomplished its goal.. A large percentage of the population
[number] took the vaccine and the feared swine flu epidemic did not break
out during the flu season of 2009-2010.194 Some critics argued that such
action was not needed and that the swine flu vaccine was never destined to
Niko Kyrakou, Swine Flu Didn’t Fly,
http://www.deepjournal.com/p/7/a/en/2527. html
185
186
187
188
189
190
191
192
193
194
46
DeepJournal,
Jan
27,
2010,
at
Draft: Please do not circulate or quote without permission from author.
become an epidemic. No consensus has been yet reached on this point.195
Yet, the criticism was targeted at the decision making process and
conclusions of the medical agencies (the World Health Organization
(“WHO)” and the Center for Disease Control (“CDC)) not the
government’s adoption of these conclusions and its implementation process.
196
Given the recommendations of the medical authorities at the time,
vaccination of the population was imperative.197 And, it is clear that a far
smaller segment of the U.S. population would have been vaccinated at that
time against the swine flu absent these steps.
Conclusion
While traditional critique of the patent system’s failure to encourage
dissemination focuses on the increasing strength of patent rights, this
Article showed that dissemination often fails due to patent law’s incomplete
conception of the players that influence dissemination. The Article
demonstrated that even the doctrines charged with regulating inventions
post their market entry stage focus only on the patentee and his competitors.
They use competition as a proxy for dissemination and assume that once the
price barrier is removed a technology will be successfully disseminated.
Yet, patent law ignores a critical player who influences the dissemination of
195
See e.g.Philip Vethge, katrin Elger et al.,the Great Swine Flu Boosterism of 2009, Mar.
18, 2010 http://www.sanfranciscosentinel.com/?p=65052 (quoting Wolfgang,Wodarg, a
member of the German parliament, telling the European Council in Strasbourg that
“millions of people worldwide were vaccinated for no good reason.” Donald McNeil, US
Reaction to Swine Flu: Apt and Lucky, N.Y, TIMES, Feb. 1, 2010 at 1 (Quoting leading
medical professionals praising the government’s response); Editorial, H1N1 Hindsight is a
Wonderful Thing, 28(3) NATURE BIOTECH. 182, 182 (2010) (“Although the nature of the
threat may have been overstated, the WHO, CDC and the other authorities had little
scientific evidence at the beginning of the H1N1 pandemic to discount the most dire
predictions of fatalities.”); Billions Wasted Over Swine Flu, Says Paul Flynn MP, BBC
News, June 24, 2010 at http://www.bbc.co.uk/news/10396382 (quoting differing views
regarding whether mass vaccination was a mistake).
196
Niko Kyrakou, Swine Flu Didn’t Fly, DeepJournal, Jan 27, 2010, at
http://www.deepjournal.com/p/7/a/en/2527. html (reporting on criticisms of the WHO’s
definition of pandemic and the allegations that the WHO created panic to boost vaccine
sales); Draft Report of the Review Committee on the Functioning of the International
Health Regulations (2005) and on Pandemic Influenza A (H1N1) 2009 , Mar 7, 2011 at
http://www.who.int/ihr/preview_report_review_committee_mar2011_en.pdf 14-15 (an
independent experts report criticizing the WHO’s definition of pandemic but finding no
evidence that panic was created to enrich vaccine manufacturers).
197
Editorial, H1N1 Hindsight is a Wonderful Thing, 28(3) NATURE BIOTECH. 182, 182
(2010) (“Faced with the certainty of a new influenza virus to which a large proportion of
the world’s population was immunologically naïve, and the uncertainty of the predictive
epidemiological models, governments had little political choice but to act anticipating
something close to the worst case scenario.”)
47
Draft: Please do not circulate or quote without permission from author.
new technologies. This player is the user in his mundane every day
decisions to adopt or not to adopt a new technology.
The Article explored the reasons for user resistance and showed that these
can be categorized into two main sources of resistance: resistance to the
novelty of the technology and resistance to the perceived consequences of
using the technology. It argued that government action through gentle
nudges to encourage user adoption is particularly warranted in two
instances of market failure: where a technology is characterized by network
effects and needs to acquire critical mass and where dissemination is urgent
and time is of the essence.
48