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Intellectual Property, Innovation, and Decision Architectures

This essay proposes a new way to assess the desirability of intellectual property rights. 

Traditionally, intellectual property assignment is assessed based on a incentive/monopoly pricing tradeoff. I suggest they should be further assessed by their effects on the decision architectures surrounding the property right – their effects on how firms make product innovation decisions. The reason is that different decisional structures for product development can be are fundamental to the performance of firms, industries, and even the economy as a whole. 

The organizational economics literature can help with this assessment. It makes an important and useful distinction between hierarchical (centralized) and polyarchical (decentralized) decision architectures. The key point of this paper is that government’s decisions with respect to property assignments can steer decision architectures toward a polyarchical or hierarchical architecture, respectively. 

Each may be optimal in difference scenarios. In industries where technologies are stable and where the industry is flat or in decline, avoiding mistakes is more important, and uncertainty may be more limited, meaning that a hierarchy supported by strong rights may produce a more profitable outcome. Conversely, strong IP rights may undesirable in fast growing-industries where the technologies in flux, because overly centralized decision-making may block the emergence of the most innovative ideas.

Predictive Decisionmaking

In this Article, Professor Abramowicz identifies a regulatory strategy that he calls “predictive decisionmaking” and provides a framework for assessing it. In a predictive decisionmaking regime, public or private decisionmakers make explicit predictions, often of future legal decisions, rather than engage in normative analysis. Several scholars, particularly in recent years, have offered proposals that fit within the predictive decisionmaking paradigm, but have not noted the connection among these proposals. The Article highlights four different mechanisms on which predictive decisionmaking regimes may rely, including predictive standards, accuracy incentives, partial insurance requirements, and information markets. After identifying several advantages that predictive decisionmaking strategies may have over nonpredictive alternatives, the Article identifies several potential problems with predictive decisionmaking, and develops a simple analytical framework for assessing predictive decisionmaking proposals.

Habeas Settlements

Why is it that criminal cases nearly always settle, but habeas corpus cases do not? The vast majority of criminal cases are resolved by guilty pleas, without a trial. But it is the rare habeas petition that is resolved out of court, rather than litigated to completion. This is a significant puzzle because criminal and habeas corpus cases have a lot in common. They involve the same parties and the same attorneys. They also involve similar bargains: the defendant or prisoner receives a shorter, more certain sentence and the prosecutor or government attorney avoids having to litigate a criminal or habeas case, respectively. This is an important puzzle because active settlement of habeas cases could reduce habeas caseloads by nearly one-third. Although most habeas petitions are sure-losers under current law, I estimate that at least 28 percent are sufficiently credible—or costly for the government to defend—that they warrant settlement.

I attempt to resolve this puzzle and propose a series of reforms to pave the way for more active (but safe) settlement of habeas cases. Most notably, I propose that Rule 35 of the Federal Rules of Criminal Procedure be modified to permit courts to amend sentences upon a habeas settlement, regardless of whether the modified sentence is within the sentencing guideline range for the prisoner’s offense. And, to ensure that any growth in habeas settlements is not at the expense of prisoners’ rights, I propose that courts be required to conduct Rule 11-type colloquies with prisoners before accepting habeas settlements.

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