processed/00012_W1999853213/metadata.json

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  "pages": [
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      "page_number": 1,
      "elements": [
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          "reading_order": 0,
          "text": "Journal of Economic Perspectives-Volume 5, Number 1-Winter 1991-Pages 3-27"
        },
        {
          "bbox": [
            94,
            161,
            369,
            257
          ],
          "label": "sec_0",
          "reading_order": 1,
          "text": "An Introduction to the\nLaw and Economics of\nIntellectual Property"
        },
        {
          "bbox": [
            96,
            271,
            440,
            299
          ],
          "label": "para",
          "reading_order": 2,
          "text": "Stanley M. Besen and Leo J. Raskind"
        },
        {
          "bbox": [
            95,
            383,
            549,
            678
          ],
          "label": "para",
          "reading_order": 3,
          "text": "Article I, Section 8, of the U.S. Constitution grants to the Congress the\npower: “To promote the progress of science and useful arts, by secur-\ning for limited times to authors and inventors the exclusive right to\ntheir respective writing and discoveries.” Under this general grant, the Congress\nhas enacted a number of statutes, including the Copyright Act [17 U.S.C.A. Sec.\n101–810], the Patent Act [35 U.S.C.A. Sec. 1–376], and the Semiconductor\nChip Protection Act of 1984 [17 U.S.C.A. Sec. 901–914]. In addition, the\nfederal government has enacted the Trademark Act of 1946 (“Lanham Act”) as\namended [15 U.S.C.A. Sec. 1051–1127] and there is state law regulation of\ntrade secrets and of misappropriation of other information. These six legal\nregimes constitute U.S. intellectual property law. In addition, the United States\nhas sought protection for the works of its authors and inventors in other\ncountries by joining a number of international intellectual property conven-\ntions, including the Berne Convention for the Protection of Literary and\nArtistic Works, the Universal Copyright Convention, and the Paris Convention\nfor the Protection of Industrial Property. Intellectual property issues have also\nbegun to occupy a prominent place in discussions of the General Agreement on\nTariffs and Trade."
        },
        {
          "bbox": [
            96,
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            729
          ],
          "label": "para",
          "reading_order": 4,
          "text": "For as long as laws have aimed at protecting intellectual property, disputes\nhave raged over which works to protect, for how long, and to what extent. The\nmainstream of the economics profession has generally argued that economic"
        },
        {
          "bbox": [
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          ],
          "label": "foot",
          "reading_order": 5,
          "text": "■ Stanley M. Besen is Senior Economist, The RAND Corporation, Washington, D.C.\nand Visiting Professor of Law and Economics, Georgetown University Law Center,\nWashington, D.C. Leo J. Raskind is Visiting Professor of Law, Brooklyn Law School,\nBrooklyn, New York, and Gray, Plant, Mooty, Mooty and Bennett Professor at Univer-\nsity of Minnesota Law School, Minneapolis, Minnesota."
        }
      ]
    },
    {
      "page_number": 2,
      "elements": [
        {
          "bbox": [
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          "label": "header",
          "reading_order": 0,
          "text": "4 Journal of Economic Perspectives"
        },
        {
          "bbox": [
            83,
            117,
            535,
            200
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "efficiency requires government support for innovative and creative activity\n(Arrow, 1962), but a dissenting tradition has argued that government action of\nany kind, including the awarding of copyrights and patents, is unnecessary to\nstimulate such activity (Plant, 1934a, 1934b; Breyer, 1970; Frase, 1966; Hughes,\n1988)."
        },
        {
          "bbox": [
            83,
            200,
            534,
            428
          ],
          "label": "para",
          "reading_order": 2,
          "text": "Although economists have written on topics of intellectual property for a\nlong time, the impact of economics on public policy in this area has been slight,\nespecially as compared to the influence of professional writings in areas such as\nantitrust and taxation. We believe that too few of the profession's resources\nhave been devoted to these issues and that, of those resources that have been\nemployed, too few have been devoted to empirical analyses. We hope that this\nintroductory essay and the three papers that follow will stimulate interest in this\nsubject. This introductory essay first describes some of the basic economic\ntradeoffs involved in intellectual property law, and then describes the frame-\nwork of the law in the six areas described above: patent, copyright, semiconduc-\ntor protection, trademark, trade secret, and misappropriation. It is intended\nboth to provide thumbnail descriptions of the various intellectual property\nregimes to economists working in this area and to indicate where additional\neconomic research might be useful."
        },
        {
          "bbox": [
            83,
            428,
            534,
            575
          ],
          "label": "para",
          "reading_order": 3,
          "text": "The other papers in this symposium provide important examples of ongo-\ning research on the economics of intellectual property. Suzanne Scotchmer\nanalyzes the complex effects of patent protection when innovation is cumula-\ntive. Rather than analyzing situations in which several firms vie to develop the\nsame innovation—the approach of the “patent race” literature—her analysis\nexamines circumstances in which only one firm can develop an initial innova-\ntion but others can also build upon it. She focuses on how the incentive to\ndevelop both the initial and subsequent inventions may be affected by the scope\nof patent protection."
        },
        {
          "bbox": [
            83,
            575,
            534,
            672
          ],
          "label": "para",
          "reading_order": 4,
          "text": "Janusz Ordover considers ways of adjusting the patent system that may\nhelp to both provide returns to the inventor, and encourage the diffusion of the\ninnovation in the economy. His paper is part of a line of work that explores the\nplace of the intellectual property system among the large number of institutions\nthat affect the amount and nature of research and development that takes\nplace."
        },
        {
          "bbox": [
            83,
            672,
            535,
            801
          ],
          "label": "para",
          "reading_order": 5,
          "text": "In the final paper, David Friedman, William Landes, and Richard Posner\nexamine the law of trade secrets using what might be called the “Chicago\nschool” approach to intellectual property protection. Taking the approach of\nprevious work by Landes and Posner (1987, 1989) on trademark and copyright\nlaw, they argue that the availability of trade secret protection may efficiently fill\nsome of the interstices left by the patent law and that the fact that trade secrets\nare protected against some types of discovery but not others may also be\nefficient. $^1$"
        },
        {
          "bbox": [
            83,
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            855
          ],
          "label": "fnote",
          "reading_order": 6,
          "text": "1 We should note here that, while we find many insights of the Friedman-Landes-Posner approach\nextremely useful, we are less sanguine than they about the efficiency properties of intellectual\nproperty law. Additional empirical analysis is needed to establish the validity of either view."
        }
      ]
    },
    {
      "page_number": 3,
      "elements": [
        {
          "bbox": [
            329,
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            551,
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          ],
          "label": "header",
          "reading_order": 0,
          "text": "Stanley M. Besen and Leo J. Raskind 5"
        },
        {
          "bbox": [
            100,
            115,
            423,
            136
          ],
          "label": "sec_1",
          "reading_order": 1,
          "text": "The Basic Economics of Intellectual Property"
        },
        {
          "bbox": [
            101,
            150,
            553,
            232
          ],
          "label": "para",
          "reading_order": 2,
          "text": "The objective of intellectual property protection is to create incentives that\nmaximize the difference between the value of the intellectual property that is\ncreated and used and the social cost of its creation, including the cost of\nadministering the system. Several specific issues are subsumed under this\ngeneral formulation."
        },
        {
          "bbox": [
            101,
            232,
            553,
            332
          ],
          "label": "para",
          "reading_order": 3,
          "text": "First, private producers have an incentive to invest in innovation only if\nthey receive an appropriate return. Whether producers will have the correct\nincentives depends on their ability to appropriate at least some of the value that\nusers place on those works. If potential innovators are limited in their ability to\ncapture this value, they may not have enough incentive to invest a socially\noptimal amount in innovative activity."
        },
        {
          "bbox": [
            101,
            332,
            553,
            495
          ],
          "label": "para",
          "reading_order": 4,
          "text": "For example, producers may be unable to capture a sufficient portion of\nthe value of their innovations if other producers can easily emulate or “ clone ” a\nnew product (Arrow, 1962) . Similarly, if private copying by individual users is\nwidespread, the revenues of creators of journals, computer software, and audio\nand videocassettes may be inadequate to support a socially optimal amount of\ncreative activity (Besen and Kirby, 1989a) . The legal treatment of related\ninnovations will also influence the ability of producers to capture sufficient\nrevenues to justify undertaking research and development. If the law permits\nothers easily to “ innovate around ” an innovation, or to produce complements\nto it, the incentives to create the innovation may be reduced significantly. $^2$"
        },
        {
          "bbox": [
            101,
            495,
            553,
            658
          ],
          "label": "para",
          "reading_order": 5,
          "text": "Price discrimination allows producers to appropriate a larger share of the\nsocial benefits of their innovations and, thus, may permit some innovations that\nwould otherwise not occur. Examples of discriminatory pricing include: charg-\ning different individual and library subscription rates for professional journals;\nestablishing license fees for computer software that vary with the number of\nusers; and setting prices for hardback and paperback versions of a book that do\nnot reflect differences in their cost of production. It should be noted, however,\nthat the “first sale” and “exhaustion” doctrines prevent copyright and patent\nowners from imposing resale conditions and thereby limit their ability to\npractice price discrimination."
        },
        {
          "bbox": [
            101,
            658,
            552,
            756
          ],
          "label": "para",
          "reading_order": 6,
          "text": "Second, there is the question of whether innovative activity takes place at\nminimum cost. The cost of creating new ideas will often depend on the extent\nto which innovators may borrow from, or build upon, earlier works. Copyright\nlaw, for example, limits borrowing by giving a creator the right not only to his\nor her own creation but also to “derivative works,” so that the costs to\nsubsequent innovators may be increased. In a winner-take-all system like that"
        },
        {
          "bbox": [
            101,
            769,
            552,
            847
          ],
          "label": "fnote",
          "reading_order": 7,
          "text": "2Spence (1976) and Dixit and Stiglitz (1977) pointed out the possibility that an innovation that is\nonly slightly more attractive to users may “ cannibalize ” the market for an earlier product. In such\ncases, it can be profitable for a firm to incur the costs of developing the new product and bringing it\nto market, although total industry profits decline by more than consumer welfare is increased. As a\nresult, total welfare, but not the welfare of consumers, would be increased by making it more\ndifficult to produce close substitutes for existing products."
        }
      ]
    },
    {
      "page_number": 4,
      "elements": [
        {
          "bbox": [
            78,
            56,
            284,
            74
          ],
          "label": "header",
          "reading_order": 0,
          "text": "6 Journal of Economic Perspectives"
        },
        {
          "bbox": [
            77,
            117,
            530,
            232
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "governing patents, competition to get the patent (and thus control over future\ninnovations based on that patent) may result in an excessive amount of re-\nsources being devoted to obtaining the prize. In fact, the combined expendi-\ntures of two firms seeking the same patentable invention in a patent race may\nnot only be larger than that of a single firm, but their combined expenditures\nmay be greater than is socially optimal (Loury, 1979; Dasgupta and Stiglitz,\n1980)."
        },
        {
          "bbox": [
            77,
            232,
            531,
            479
          ],
          "label": "para",
          "reading_order": 2,
          "text": "Other provisions of intellectual property law can lower the costs of subse-\nquent innovations. Copyright registration and patent issuance require authors\nand innovators to disclose the details of their innovations, which provides\ninformation that may help later authors and innovators to reduce their own\ncosts. In addition, the copyright law denies protection to “any idea, procedure,\nprocess, system, method of operation, concept, principle, or discovery” and\npatent protection cannot be obtained for “laws of nature, natural phenomena,\nand abstract ideas,” no matter how great the expense necessary to bring forth\nthese creations. If the market for licensing innovations were frictionless, there\nwould be no need to impose these restrictions since later innovators could\nefficiently obtain licenses to use the works of early ones. However, the lack of\ncomplete information on which to base these transactions and the market\npower that might accrue to early inventors may explain the restrictions that\nhave been imposed on protectible subject matter. These types of imperfections\nare addressed by Scotchmer in this symposium."
        },
        {
          "bbox": [
            77,
            479,
            529,
            706
          ],
          "label": "para",
          "reading_order": 3,
          "text": "A third issue, somewhat related to the second, is whether the intellectual\nproperty system strikes an appropriate balance between creating and dissemi-\nnating intellectual property. Providing incentives for the creation of many new\nworks may encourage resources to be devoted to innovative activity. However,\nif the new innovations are not widely used, the system may be less beneficial\nthan one with less creativity, but where the materials created are more broadly\ndisseminated. This issue focuses on the appropriate scope of protection. It\narises, for example, in determining the optimal duration of patents (Nordhaus,\n1969) and the optimal tradeoff between duration and breadth (Gilbert and\nShapiro, 1990; Klemperer, 1990) . Another critical element in deciding how to\nstrike the balance between encouraging creativity and dissemination is the\nextent to which creative activity responds to economic rewards. The less that\ninnovation depends on the resources invested and the potential economic\nrewards, the more limited is the case for granting substantial rights to creators."
        },
        {
          "bbox": [
            77,
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          ],
          "label": "sec_1",
          "reading_order": 4,
          "text": "Patents"
        },
        {
          "bbox": [
            77,
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          ],
          "label": "para",
          "reading_order": 5,
          "text": "A patent may be granted on any new and useful process, machine, manu-\nfacture, composition of matter, improvement and plant as well as to new,\noriginal and ornamental design for an article of manufacture (Chisum, 1989).\nThe patent right is the most powerful in the intellectual property system,"
        }
      ]
    },
    {
      "page_number": 5,
      "elements": [
        {
          "bbox": [
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          ],
          "label": "header",
          "reading_order": 0,
          "text": "Introduction to the Law and Economics of Intellectual Property 7"
        },
        {
          "bbox": [
            102,
            115,
            555,
            264
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "enabling the patent holder (patentee) to exclude all others from making,\nselling, or using the subject matter of a valid patent for a term of 17 years (in\nthe case of a design patent, 14 years). The 17-year term of pharmaceutical and\nmedical device patents may be extended for as long as five additional years.\nDuring the term of the patent, any use of the patented subject matter requires\npermission of the patentee, customarily in return for the payment of a royalty.\nThe patentee can even prevent an independent subsequent discoverer of the\nsame subject matter from making, using or selling it. At the end of the term of\nprotection, the subject matter enters the public domain."
        },
        {
          "bbox": [
            102,
            264,
            553,
            346
          ],
          "label": "para",
          "reading_order": 2,
          "text": "The scope of protection offered by a patent is determined by its claims,\nwhich are technical descriptions of the process, machine, method, or matter\ncontained in the original patent application. U.S. patent law follows the princi-\nple that the first to invent has prior claim to the invention. In all other\ncountries, the “first to file” rule determines the patentee."
        },
        {
          "bbox": [
            102,
            346,
            554,
            494
          ],
          "label": "para",
          "reading_order": 3,
          "text": "The patent statute requires that the claimed invention must be new, useful,\nand nonobvious to a person of ordinary skill in the art to which the invention\npertains. The practical effects of the novelty and nonobviousness requirements\nare that the inventor must convince the examiners in the Patent and Trade-\nmark Office that the claims in the application make a new contribution to\nknowledge and are more than a mere variation of something already known or\nforeseeable as an extension of existing knowledge. Examiners have the power\nto determine that a claim is too broad, and to grant a patent only on a\nnarrower claim, or to reject a claim entirely."
        },
        {
          "bbox": [
            103,
            508,
            321,
            526
          ],
          "label": "sec_1",
          "reading_order": 4,
          "text": "When Patents Are Disputed in Court"
        },
        {
          "bbox": [
            102,
            526,
            554,
            689
          ],
          "label": "para",
          "reading_order": 5,
          "text": "A patent holder who believes that a patent has been infringed may bring\nsuit against those who make, use, or sell the offending product. Courts may\neither choose to interpret the claims of the patent literally, or the “doctrine of\nequivalents” may be invoked and infringement will be found if there is a\nsubstantial, functional identity between the patent claims and the contested\nitem. In fact, there has been a debate as to whether a patent effectively covers\nmore than the literal subject matter of the claim by including the prospective\ntechnology inherent in the earlier patent. Kitch (1977) argues that the “pros-\npect” theory of patent interpretation is predominant; Beck (1983) contends\nthat the evidence does not support that conclusion."
        },
        {
          "bbox": [
            101,
            689,
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          ],
          "label": "para",
          "reading_order": 6,
          "text": "The supposed patent infringer may defend against the charge in four\nprincipal ways. First, the validity of the patent may be challenged as having\nbeen improvidently issued; that is, lacking the requisite requirements of novelty\nand nonobviousness. Second, a patent may be invalidated for fraudulent\nconduct; for example, by misrepresenting the prior art in the patent applica-\ntion. Third, the patent is invalid if the invention was patented or described in a\nprinted publication here or abroad, or was in public use or on sale in the\nUnited States more than one year prior to the date of the patent application.\nFinally, there is the defense of patent misuse, a doctrine limiting the use of the"
        }
      ]
    },
    {
      "page_number": 6,
      "elements": [
        {
          "bbox": [
            76,
            56,
            282,
            74
          ],
          "label": "header",
          "reading_order": 0,
          "text": "8 Journal of Economic Perspectives"
        },
        {
          "bbox": [
            75,
            118,
            527,
            202
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "patent beyond its statutory scope (Kaplow, 1984). An allegation of infringement\nmay be defeated under this doctrine if the license to use contains a condition\nthat the licensee must purchase another product from the patent holder, that\nis, if a tying arrangement is created. However, the doctrine cannot be invoked\nunless the patent holder has market power. $^3$"
        },
        {
          "bbox": [
            75,
            202,
            527,
            315
          ],
          "label": "para",
          "reading_order": 2,
          "text": "There are three basic remedies available to a patentee in an infringement\nsuit. First, the court may issue an injunction barring further use of the\ninfringing device, composition, method, process, or improvement. Second,\nthe court may award damages equal to a reasonable royalty or lost profits. If\nthe court deems a reasonably royalty inadequate in a particular case, it may\ntreble the proven damages. Third, the court may award costs and attorney's\nfees."
        },
        {
          "bbox": [
            75,
            315,
            527,
            480
          ],
          "label": "para",
          "reading_order": 3,
          "text": "Patent litigation is distinctive in the federal court system in that all patent\nappeals from U.S. District Courts and from the Patent and Trademark Office\nare heard only in the Court of Appeals for the Federal Circuit. The Federal\nCircuit was organized in 1982 to provide greater expertise and uniformity in\nthe interpretation of patent law and to achieve greater efficiency in case\nmanagement. An interim review of the performance of this specialized court\nnotes that the interpretation of patent law is becoming more precise and\ncoherent, patentees are successful more frequently against challenges of valid-\nity, and the expansion of injunctive relief and modified methods of damage\ncomputation have made infringement more costly (Dreyfuss, 1989) ."
        },
        {
          "bbox": [
            76,
            495,
            324,
            513
          ],
          "label": "sec_1",
          "reading_order": 4,
          "text": "Research and Policy Issues About Patents"
        },
        {
          "bbox": [
            75,
            513,
            527,
            642
          ],
          "label": "para",
          "reading_order": 5,
          "text": "The patent system was perceived by the framers of the Constitution as a\nsystem of incentives and rewards. The patent offers the incentive of the\nstatutory right to exclude as a means of inducing creative activity. The right, in\nturn, permits the holder to obtain the reward by having the legal power either\nto sell the right for the payment of a royalty or to retain the exclusive\nexploitation rights (Katz and Shapiro, 1985b). The right of the patent owner is\nconditioned on the disclosure of the subject matter to the public when the\npatent is issued."
        },
        {
          "bbox": [
            76,
            642,
            527,
            710
          ],
          "label": "para",
          "reading_order": 6,
          "text": "Although economic literature about the patent system is substantial, many\nquestions are still heavily disputed. For example, there is no consensus as to the\nimpact of patent protection on the growth of technology (Kitch, 1986); or on\nthe optimal duration of the patent right (McFetridge and Rafiquzzaman, 1986);"
        },
        {
          "bbox": [
            76,
            721,
            527,
            837
          ],
          "label": "fnote",
          "reading_order": 7,
          "text": "3 Patent and Trademark Authorization Act, approved November 19, 1988. Pending legislation, H.R.\n469, 101st Cong., 2d Sess. (1990), would restrict the doctrine of patent misuse further by\noverruling Supreme Court antitrust cases that presume market power from the existence of a\npatent or copyright. In hearings on February 8, 1990, this legislation was supported by representa-\ntives of the computer industry who stated that the presumption impeded owners of intellectual\nproperty rights from appropriating the return on their creative efforts. Opponents of the legisla-\ntion stated that the existing caselaw was needed to bar illegal tying arrangements in the computer\nand broadcasting industries. BNA, Patent, Trademark & Copyright Journal, Volume 39, No. 968,\np. 289, February 15, 1990."
        }
      ]
    },
    {
      "page_number": 7,
      "elements": [
        {
          "bbox": [
            331,
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          ],
          "label": "header",
          "reading_order": 0,
          "text": "Stanley M. Besen and Leo J. Raskind 9"
        },
        {
          "bbox": [
            102,
            116,
            554,
            150
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "and the data on whether patents have been used to facilitate cartel behavior is\ninconclusive (Hall, 1986)."
        },
        {
          "bbox": [
            103,
            150,
            554,
            298
          ],
          "label": "para",
          "reading_order": 2,
          "text": "The current controversy over of the role of patent protection in the\ncomputer software industry suggests the practical importance of patent protec-\ntion on a developing industry. Most of the early computer programs were\nmarketed without patent protection. When Visicalc was developed in 1979, the\nPatent Office, relying upon Supreme Court case law, took the position that the\nmathematical algorithms in computer programs were not protectible subject\nmatter. Subsequently, the Supreme Court in the Diehr case did find patentable\nsubject matter in a process utilizing a computer algorithm. 4 Since that case, the\nPatent Office has begun to grant patents on computer programs."
        },
        {
          "bbox": [
            103,
            298,
            555,
            592
          ],
          "label": "para",
          "reading_order": 3,
          "text": "The uncertainty as to the scope of patent protection of computer software\nmay limit the attraction of the patent regime for it. Recently, Refac Technology,\na firm producing no software, acquired a 5 percent ownership interest in many\nsoftware patents relating to spreadsheet programs in exchange for its promise\nto bring infringement actions. Refac was to receive a portion of all resulting\nroyalties. It then filed some 2000 patent infringements suits against large and\nsmall software companies for current and retroactive royalties. Recently, in the\nfirst of these suits, Refac was dismissed on the legal technicality that Refac's\nslight ownership interest in the patent was void for having been acquired solely\nfor the purpose of bringing abusive litigation. The court noted, however, that\nthe actual patent owner could bring the suit (131 Federal Rules Decisions 56,\nMay 29, 1990). This case has had the unsettling effect of causing software\nproducers to undertake costly and time-consuming patent searches before\nmarketing new products, an effort made difficult by the inadequacy of the\npresent system of software classification by the Patent and Trademark Office.\nThe suitability of patent protection of software in comparison to copyright\nprotection, remains an unsettled question (Mennell, 1989; Sumner and Lund-\nberg, 1989)."
        },
        {
          "bbox": [
            102,
            592,
            555,
            707
          ],
          "label": "para",
          "reading_order": 4,
          "text": "Since computer programs are functional statements constructed to solve\nproblems, they pose the issue of whether algorithms are patentable. Reports in\n1988 and 1989 that the Patent and Trademark Office had adopted a more\nliberal approach to software patent applications, which might result in granting\npatent protection to fundamental building blocks of research, led the Office to\npublish a statement of guidelines to clarify its position (Official Gazette, Septem-\nber 5, 1989). The statement concluded that mathematical algorithms"
        },
        {
          "bbox": [
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          ],
          "label": "fnote",
          "reading_order": 5,
          "text": "4The original line of Supreme Court precedents included Gottschalk v. Benson, 409 U.S. 63\n(1972); Parker v. Flock, 437 U.S. 584 (1978). The revised decision was Diamond v. Diehr, 450 U.S.\n175, 185-187 (1981). The Court held: \"Excluded from ... patent protection are laws of nature,\nnatural phenomena, and abstract ideas ... [A]n algorithm ... is like a law of nature, which cannot be\nthe subject of a patent ... [Here] ... patent protection ... [is sought] for a process of curing synthetic\nrubber. Their process admittedly employs a well-known mathematical equation, but they do not\nseek to preempt the use of that equation. Rather, they seek only to foreclose from others the use of\nthat equation in conjunction with all of the other steps in their claimed process.\""
        }
      ]
    },
    {
      "page_number": 8,
      "elements": [
        {
          "bbox": [
            75,
            56,
            287,
            73
          ],
          "label": "header",
          "reading_order": 0,
          "text": "10 Journal of Economic Perspectives"
        },
        {
          "bbox": [
            73,
            116,
            524,
            151
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "are, as such, unpatentable, but that applications of such algorithms may be\nprotectible as new processes."
        },
        {
          "bbox": [
            73,
            151,
            525,
            413
          ],
          "label": "para",
          "reading_order": 2,
          "text": "Two recent decisions by the Court of Appeals, Federal Circuit, have\nfurther unsettled this issue. The court recently affirmed a Patent and Trade-\nmark Office rejection of a patent application for a computer program that\ndiagnosed the condition of a patient by aggregating a plurality of clinical\nlaboratory tests ( In re Grams , 12 USPQ 2d 1824 [1989] ). However, even as the\ncourt held that the claim was no more than the application of a mathematical\nalgorithm to data, it also noted that the presence of a mathematical formula as\na step in a process involving mathematical steps could permit patent protection.\nIn a later decision, In re Iwahashi (12 USPQ 2d 1908 [1989] ), the court reversed\nthe Patent and Trademark Office for refusing to allow a patent on a program\nused to calculate the correlation of signals for recognition of voice patterns.\nWhere the Office had considered the program no more than a more efficient\nmeans of calculation of correlations and, thus, unpatentable as an algorithm,\nthe court interpreted the claim to involve the description of an apparatus in the\nform of a series of interrelated means. It held that such an apparatus may\nqualify for patent protection."
        },
        {
          "bbox": [
            73,
            413,
            525,
            608
          ],
          "label": "para",
          "reading_order": 3,
          "text": "These apparently contradictory decisions create considerable uncertainty\nand have raised fears among industry participants that overprotection of\nalgorithms may stifle innovation by raising the costs of subsequent innovation,\nan example of the issue analyzed by Scotchmer in this symposium. (See 39 Pat.\nTrademk. & Copyr. J. 369 [1990].) To the extent that patent protection is\nutilized, perhaps increased federal expenditures are needed to improve the\nclassification system and accelerate the examination process. Another alterna-\ntive is to permit a patent application to be made public after, say, one year,\neven if the patent examination process is not completed, as is done in Britain\nand some other countries. This step would at least help to avoid unintentional\ninfringements of patents that are still working their way through the examina-\ntion process, although it would not deal with the “overprotection” issue."
        },
        {
          "bbox": [
            73,
            608,
            525,
            820
          ],
          "label": "para",
          "reading_order": 4,
          "text": "Another public policy issue that invites economic analysis is the recent\nextension of the term of patent protection for pharmaceuticals. The brand-name\nproducers sought the extension because the delay in marketing patented\nproducts caused by the required review and approval of the Food and Drug\nAdministration (FDA) encroached on the effective term of patent protection,\nmaking it more difficult to recoup their R & D investment. The makers of\ngeneric drugs, on the other hand, objected to the long FDA review and\napproval period required for modifications of compounds already approved\nunder brand names, arguing that this duplicative review process inhibited their\nability to compete with brand-name drugs. Economic analysis of this industry\nwould illuminate the welfare effects of the resulting legislative compromise,\nwhich extended the duration of the patent monopoly while facilitating the\nsubsequent entry of generic drugs (Wheaton, 1986) ."
        }
      ]
    },
    {
      "page_number": 9,
      "elements": [
        {
          "bbox": [
            203,
            54,
            552,
            73
          ],
          "label": "header",
          "reading_order": 0,
          "text": "Introduction to the Law and Economics of Intellectual Property 11"
        },
        {
          "bbox": [
            102,
            116,
            555,
            219
          ],
          "label": "para",
          "reading_order": 1,
          "text": "Patent protection is also a current policy concern as an aspect of interna-\ntional trade (Mossinghoff, 1984) . The current GATT negotiating round is\nseeking agreement on patent norms and standards (Braga, 1989) . As techno-\nlogical innovation is linked to concerns about the balance of payments and\ncompetitiveness, economic analysis should be extended to the international as\nwell as the domestic aspects of patent protection."
        },
        {
          "bbox": [
            102,
            246,
            178,
            268
          ],
          "label": "sec_1",
          "reading_order": 2,
          "text": "Copyright"
        },
        {
          "bbox": [
            102,
            281,
            555,
            430
          ],
          "label": "para",
          "reading_order": 3,
          "text": "Although works can be registered and deposited at the Copyright Office,\nthe rights under the copyright statute exist independently of any such registra-\ntion, prior examination, or other formalities (Nimmer and Nimmer, 1989;\nGoldstein, 1989) . Instead, copyright protection attaches to the stated subject\nmatter when an “original work of authorship” is “fixed in any tangible medium\nof expression.” For example, protection attaches to the pages of a novel when\nthe word processor causes the word order to be printed on paper, meeting the\n“fixation” requirement. The words on the cathode ray tube are considered an\nunprotectible evanescent image."
        },
        {
          "bbox": [
            102,
            430,
            555,
            545
          ],
          "label": "para",
          "reading_order": 4,
          "text": "Copyright law gives protection in most circumstances for the life of the\ncreator plus 50 years. One exception is that a work prepared and published by\nthe U.S. government, like the annual Economic Report of the President , cannot\nreceive copyright protection. Presumably, the basis of this limitation is to\nencourage the dissemination of government materials to the electorate. Case\nlaw has extended this principle to preclude copyright in state laws, municipal\ncodes, legislative hearings, and judicial opinions."
        },
        {
          "bbox": [
            102,
            545,
            555,
            675
          ],
          "label": "para",
          "reading_order": 5,
          "text": "Because copyright law has no parallel to the patent system's process of\napplication and definition of claims, the scope of copyright protection is\nultimately defined by litigation. Litigation involving the validity of a patent\ninvolves a review of the file of prior art and competing claims prepared by the\nPatent and Trademark Office. By contrast, the Copyright Office makes no\nindependent review of the article or the circumstances of its creation, there is\nno official file, and the copyright owner must produce the evidence to support\nthe validity of the copyright."
        },
        {
          "bbox": [
            102,
            675,
            555,
            773
          ],
          "label": "para",
          "reading_order": 6,
          "text": "For copyright, it is only necessary that the work originated with the\nclaiming author; therefore, unlike patents, more than one valid copyright can\nbe held on identical works. The traditional hypothetical example is that there\ncould be multiple valid copyrights to identical versions of Keats's “Ode on a\nGrecian Urn,” as long as the each author produced the word order of each\npoem independently."
        },
        {
          "bbox": [
            102,
            773,
            555,
            807
          ],
          "label": "para",
          "reading_order": 7,
          "text": "Technically, a work is eligible for copyright protection if it is within one of\nfive statutory categories, is original in the sense that it was neither already in"
        }
      ]
    },
    {
      "page_number": 10,
      "elements": [
        {
          "bbox": [
            75,
            55,
            287,
            72
          ],
          "label": "header",
          "reading_order": 0,
          "text": "12 Journal of Economic Perspectives"
        },
        {
          "bbox": [
            74,
            115,
            526,
            183
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "the public domain nor copied from another, and represents a modicum of\nintellectual activity. As already described, patents attach to the application of an\nidea in the form of a machine, method, or matter. In contrast, copyright is said\nto attach only to the expression, as distinguished from the idea."
        },
        {
          "bbox": [
            74,
            183,
            526,
            312
          ],
          "label": "para",
          "reading_order": 2,
          "text": "The statute also requires “authorship.” Thus, if a chimpanzee were to\nmanipulate the keyboard of a personal computer with a graphics program and\nproduce an attractive design, protection would not exist because the modicum\nof intellectual activity to support copyright is deemed lacking. As Congress has\nextended the subject matter of copyright from books and maps to photographs,\nsound recordings, motion pictures, computer programs, and so on, courts have\nhad to determine the relevant “authorship” for each new subject (Raskind,\n1990)."
        },
        {
          "bbox": [
            74,
            312,
            526,
            574
          ],
          "label": "para",
          "reading_order": 3,
          "text": "Copyright law defines its subject matter more specifically than does the\npatent statute. Copyright protection is extended to literary works, musical\nworks (including accompanying words), dramatic works (including accompany-\ning music), pantomimes and choreographic works, pictorial, graphic and\nsculptural works, motion pictures and other audiovisual works, and sound\nrecordings. The rights accorded to a copyright owner are also tightly defined.\nCopyright protection grants five basic rights: 1) the right to reproduce the\nprotected work; 2) the right to prepare derivative works from the protected\nwork; 3) the right to distribute copies; 4) the right to perform literary, musical,\ndramatic, choreographic works publicly, as well as pantomimes, motion pic-\ntures, and other audiovisual works; and 5) the right publicly to display literary,\nmusical, dramatic, choreographic, pantomimes, and pictorial, graphic, and\nsculptural works, including the individual frame of a motion picture and other\naudiovisual works. Notice that sound recordings are omitted from the listed\nproperties having the performance right, although the composer and publisher\nof the recorded work do have the right."
        },
        {
          "bbox": [
            74,
            574,
            526,
            770
          ],
          "label": "para",
          "reading_order": 4,
          "text": "In 1980, Congress expressly extended copyright protection to computer\nprograms as literary works, defining a program as “a set of statements or\ninstructions used directly or indirectly in a computer in order to bring about a\ncertain result.” At the same time it provided that the owner of a copy of a\ncopyrighted computer program could lawfully make or authorize the making\nof another copy or adaptation of that program, provided that either: 1) the new\ncopy is created only as an essential step in utilization of that program; or 2) the\nnew copy is for archival purposes only. The maker of the archival copy is\nrequired to destroy it if the maker's legal right to possession of the program\nends. On any transfer or exchange of the underlying copyright program, the\narchival copy may be transferred only with the permission of the copyright\nowner of the underlying program."
        },
        {
          "bbox": [
            74,
            770,
            526,
            834
          ],
          "label": "para",
          "reading_order": 5,
          "text": "Extending protection to computer programs requires modifying the inter-\npretation of the basic copyright requirement of fixation. Accordingly, cases hold\nthat although the image generated by the program on the cathode ray screen is\nevanescent, the fixation requirement for a computer program is met when the"
        }
      ]
    },
    {
      "page_number": 11,
      "elements": [
        {
          "bbox": [
            320,
            49,
            548,
            66
          ],
          "label": "header",
          "reading_order": 0,
          "text": "Stanley M. Besen and Leo J. Raskind 13"
        },
        {
          "bbox": [
            98,
            112,
            549,
            146
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "source code is written on paper or when the object code or microcode is fixed\nin a computer chip."
        },
        {
          "bbox": [
            98,
            146,
            551,
            326
          ],
          "label": "para",
          "reading_order": 2,
          "text": "Remedies granted the copyright owner are more powerful than those\nprovided under any other regime of intellectual property protection. Injunc-\ntions are liberally granted in copyright cases. Monetary damages measured by\nlost profits or the profits of the infringer may be awarded. If willful infringe-\nment is shown, the court may award statutory damages up to $50,000. In\naddition, infringing material along with the equipment used to produce the\ninfringing copies may be impounded. As part of final judgment, a court may\norder sale or other disposition of impounded material or may order its\ndestruction. Copyright infringement also is a misdemeanor under the federal\ncriminal statute which carries a sanction of a fine of up to $10,000 or imprison-\nment for up to one year."
        },
        {
          "bbox": [
            99,
            326,
            551,
            442
          ],
          "label": "para",
          "reading_order": 3,
          "text": "Because copyright has its origins in the protection of books and other\nprinted expression, it is sometimes mistakenly assumed that patent protection\nexclusively covers industrial products, while copyright is limited to products\nwith a high content of creativity that address the intellect and the aesthetic\nsense. However, case law has extended copyright protection to a large group of\ncommonplace functional articles, from lamp bases to ash trays and can openers,\nitems that have nothing in common with the fine arts."
        },
        {
          "bbox": [
            99,
            442,
            551,
            623
          ],
          "label": "para",
          "reading_order": 4,
          "text": "For some products there is a choice between patent and copyright protec-\ntion. A computer program producer may seek either copyright or patent\nprotection at the outset. Exercising one alternative may restrict the other. If\ncopyright is selected first and the program is registered and sold in the United\nStates, access to foreign patent protection is lost and unless a U.S. patent\napplication is filed within twelve months of the initial sale, patent protection\nhere is also barred. If patent protection is chosen first, a copyright notice may\nalso be attached. Similarly, protection of some commonplace functional articles\nmay be sought either under the design patent regime or under copyright, but\nthe Copyright Office takes the position that material protected by a design\npatent is ineligible for copyright protection."
        },
        {
          "bbox": [
            100,
            636,
            309,
            654
          ],
          "label": "sec_1",
          "reading_order": 5,
          "text": "The Limits of Copyright Protection"
        },
        {
          "bbox": [
            99,
            654,
            551,
            719
          ],
          "label": "para",
          "reading_order": 6,
          "text": "Copyright also expressly qualifies and limits the granted rights in three\ngeneral ways. First, the more modest copyright threshold of “originality”\nmeans only that the work has not been copied. Thus, independent creation of\nan identical work is a defense against a claim of copyright infringement."
        },
        {
          "bbox": [
            99,
            719,
            551,
            801
          ],
          "label": "para",
          "reading_order": 7,
          "text": "Second, the scope of protection varies with the creative content of the\nmaterial. For example, copyright in a fact work (like a news story or a database)\ndoes not extend to the names, places, and events, but only to the expression in\nthe writer's interpretation. However, all of the expression in a poem or a novel\nis protected by copyright."
        },
        {
          "bbox": [
            99,
            801,
            551,
            833
          ],
          "label": "para",
          "reading_order": 8,
          "text": "Third, reproduction of a copyrighted work is not infringing if the copying\ncan be shown to be for a “fair use,” such as literary criticism, making a parody,"
        }
      ]
    },
    {
      "page_number": 12,
      "elements": [
        {
          "bbox": [
            79,
            57,
            291,
            75
          ],
          "label": "header",
          "reading_order": 0,
          "text": "14 Journal of Economic Perspectives"
        },
        {
          "bbox": [
            77,
            118,
            529,
            186
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "or classroom teaching. Moreover, the reproduction must not adversely affect\nthe present or potential economic interest of the owner of the protected work.\nAn example of a situation in which there is no adverse effect would be the\nreprinting an out-of-print work (Gordon, 1982; Raskind, 1984) ."
        },
        {
          "bbox": [
            77,
            186,
            529,
            382
          ],
          "label": "para",
          "reading_order": 2,
          "text": "In the recent revision of the Copyright Act, an impasse developed between\nthe higher education establishment and representatives of the publishers over a\nstatutory provision permitting photocopying by classroom teachers. The matter\nwas resolved by providing guidelines that undertake to define the circum-\nstances where multiple copying by classroom teachers does not constitute\ninfringement. The Guidelines were intended to describe a clearly permissible\n“safe harbor” amount of multiple copying for classroom use for which permis-\nsion is not required. They were not intended to state a maximum. For copying\nbeyond the Guidelines, courts are to decide fair use in the classroom setting on\na case by case basis. There is pending litigation involving a group of major\npublishers and a prominent commercial copying firm which may provide the\nfirst interpretation of the scope of the Guidelines."
        },
        {
          "bbox": [
            77,
            382,
            529,
            578
          ],
          "label": "para",
          "reading_order": 3,
          "text": "It is generally agreed that a scholar may make one copy of protected\nmaterial for study. Under a separate statutory provision, a library may make\nthat single copy on behalf of a patron as well as for preservation, archival, or\ninterlibrary loan purposes. This provision restricts the library to “isolated” and\n“unrelated” reproduction of the single copy. If the library persons become\n“aware or have substantial reason to believe” that they are participating in\n“concerted reproduction or distribution” of multiple copies, they become liable\nfor infringement, unless the fair use provision applies. A library is further\nrestricted from making a copy (except for archival or preservation purposes) of\na musical work, a pictorial, graphic, or sculptural work, a motion picture or\nother audiovisual work. However, a library may make a copy of an audiovisual\nwork dealing with news."
        },
        {
          "bbox": [
            78,
            593,
            216,
            610
          ],
          "label": "sec_1",
          "reading_order": 4,
          "text": "Transfer of Copyrights"
        },
        {
          "bbox": [
            77,
            610,
            529,
            740
          ],
          "label": "para",
          "reading_order": 5,
          "text": "Copyright provides a legal framework governing market relations. An\nowner of a copyright is empowered to grant a license to reproduce, distribute,\nperform, or display the copyrighted work and to obtain a royalty for granting\nthe right. In most circumstances, the outcomes are uncomplicated. A textbook\nauthor obtains the copyright in the manuscript by completing it, and the\nauthor can then transfer the copyright to the publisher in exchange for\nroyalties. In this way, the copyright statute provides the framework for private\ncontractual bargaining and transfer of economic interests."
        },
        {
          "bbox": [
            77,
            740,
            529,
            838
          ],
          "label": "para",
          "reading_order": 6,
          "text": "Although the copyright law is generally silent as to the terms on which\nprivate parties may strike bargains, there are some exceptions. For example,\nthe Copyright Act provides for compulsory licenses with statutorily determined\nlicense fees for some uses, like the retransmission of broadcast signals by cable\ntelevision systems (Besen, Manning, and Mitchell, 1978) . Moreover, a number\nof European countries have enacted compulsory licenses for off-air taping,"
        }
      ]
    },
    {
      "page_number": 13,
      "elements": [
        {
          "bbox": [
            202,
            52,
            550,
            71
          ],
          "label": "header",
          "reading_order": 0,
          "text": "Introduction to the Law and Economics of Intellectual Property 15"
        },
        {
          "bbox": [
            99,
            116,
            551,
            184
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "other forms of home recording, and photocopying, where the license fees are\ncollected through levies on blank recording machinery or media. $^5$ Copyright\nowners have unsuccessfully attempted to have similar levies imposed in the\nUnited States to compensate for losses from home taping."
        },
        {
          "bbox": [
            99,
            184,
            552,
            379
          ],
          "label": "para",
          "reading_order": 2,
          "text": "In cases where the value of a given piece of copyrighted material is small\nrelative to the transaction costs of licensing, copyright owners may employ\ncollective administration of the licensing process (Besen and Kirby, 1989b) . For\nexample, the American Society of Composers, Authors and Publishers (ASCAP)\nand Broadcast Music Incorporated (BMI) issue blanket licenses to radio sta-\ntions to play recorded music and to live entertainers to perform individual\nsongs in public, with the proceeds of the license fees distributed among their\nmembers. Since collective administration creates the potential for anticompeti-\ntive behavior, ASCAP and BMI have both been the subjects of government and\nprivate antitrust suits. Both now operate under court-administered consent\ndecrees in which the government suits were settled in return for changes in\nlicensing procedures."
        },
        {
          "bbox": [
            99,
            379,
            551,
            560
          ],
          "label": "para",
          "reading_order": 3,
          "text": "Similarly, the Copyright Clearance Center is an organization that central-\nizes photocopying authorization and royalty collection for literary material.\nFounded in 1977 as a non-profit entity, the Center obtains permission from\ncopyright owners to grant licenses permitting users to photocopy registered\ntitles at fees set by the owners and indicated by a notation printed on the\nmaterials; for example, 50 cents per page. The Center may issue a license on a\ntransaction basis and require detailed records of copying or it may issue a\nblanket license based on a sample audit period. The royalties paid by users,\nmainly libraries and corporations, are distributed to the copyright owners.\nSeveral lawsuits by publishers against photocopiers have been settled following\nthe agreement of the user to register with the Center."
        },
        {
          "bbox": [
            99,
            560,
            552,
            740
          ],
          "label": "para",
          "reading_order": 4,
          "text": "A work made “ for hire ” is another important instance in which the transfer\nof copyright is governed by different rules. If a work is determined to be one\nmade “ for hire, ” the employer takes the copyright in the material prepared by\nthe employee. Then the duration of protection of a work becomes the lesser of\n75 years after publication or 100 years from the date of creation (Hardy,\n1988). $^6$ Industry practices vary with regard to the uses of the “ work for hire ”\nprovisions, yet there have been no economic studies of these practices. How-\never, it appears that in cases when a commissioned work is to be treated as a\nwork for hire, courts sometimes make assumptions about relative bargaining\npower and prevailing rates and fees that are unsupported by any evidence or\nanalysis."
        },
        {
          "bbox": [
            100,
            751,
            551,
            792
          ],
          "label": "fnote",
          "reading_order": 5,
          "text": "5Besen and Kirby (1989a), Johnson (1985), Liebowitz (1985), and Novos and Waldman (1984) all\ncontain analyses of the effects of private copying. For a model of library borrowing that deals with\nmany of the same issues, see Ordover and Willig (1978)."
        },
        {
          "bbox": [
            100,
            792,
            551,
            841
          ],
          "label": "fnote",
          "reading_order": 6,
          "text": "b A recent Supreme Court opinion held that in the case of a commissioned work, the author\npresumptively is entitled to the right, absent an express written designation of the commissioning\nperson as the owner of the copyright. Community for Creative Non-Violence v. Reid, 109 S. Ct.\n2166 (1989)."
        }
      ]
    },
    {
      "page_number": 14,
      "elements": [
        {
          "bbox": [
            78,
            55,
            291,
            73
          ],
          "label": "header",
          "reading_order": 0,
          "text": "16 Journal of Economic Perspectives"
        },
        {
          "bbox": [
            77,
            116,
            317,
            135
          ],
          "label": "sec_1",
          "reading_order": 1,
          "text": "Copyright and Incentives for Innovation"
        },
        {
          "bbox": [
            77,
            135,
            529,
            184
          ],
          "label": "para",
          "reading_order": 2,
          "text": "By expanding and restricting the protection given to copyright, courts\nalter the incentives accorded to a potential innovator. The development of new\nproducts may be impeded by a legal rule that overprotects existing works."
        },
        {
          "bbox": [
            77,
            184,
            529,
            331
          ],
          "label": "para",
          "reading_order": 3,
          "text": "Among the basic rights granted the copyright owner is the right to prepare\na derivative work, defined as a work based on one or more preexisting works.\nOthers must obtain permission from the owner to prepare a derivative work\nfrom copyrighted material. The statute gives as examples of derivative works a\ntranslation, musical arrangement, and motion picture version. There may be\nmore than one tier of derivative works as, for example, when a three-dimen-\nsional toy or a T-shirt picture is made of a character in a motion picture version\nof a novel. The independent preparer of a derivative work obtains no rights in\nthe preexisting material."
        },
        {
          "bbox": [
            76,
            331,
            529,
            543
          ],
          "label": "para",
          "reading_order": 4,
          "text": "A substantial legal literature has probed where the line of protection\nshould be drawn for derivative works. One view is that creators of initial or\nunderlying works should have broad protection to have the maximum incen-\ntive to produce. On this view, infringement occurs if there is substantial\nsimilarity between the underlying work and a recast, transformed version. In\naddition, Landes and Posner (1989) have argued that granting control over\nderivative works to creators encourages early release of the underlying work\nsince otherwise creators might delay release while they prepare derivatives to\ngain a marketing advantage over other producers. The other view would give\nnarrower protection to the original work and accord the producer of the\nderivative work a zone of freedom from infringement as an incentive to\nproduce new variations. Here, the theory is that the societal interest is better\nserved by providing the incentive for others to create derivative works."
        },
        {
          "bbox": [
            77,
            543,
            529,
            705
          ],
          "label": "para",
          "reading_order": 5,
          "text": "Economic analysis would illuminate the social choices. In one recent case, a\nmanufacturer of framed pictures purchased copyrighted volumes of an art\nhistory book, clipped the photographed illustrations, and mounted them for\nsale as framed pictures. In Mirage Editions, Inc., v. Albuquerque A.R.T. Co.,\n(856 F.2d 1341 [9th Cir. 1988]), the court protected the copyright owner of the\nbook, by holding that the framed pictures infringed the copyright. The owner\nof the book apparently never saw the market opportunity for framed pictures\nduring the half dozen years the book was being sold. The person who saw that\nopportunity and who paid the asking price for the protected book was effec-\ntively denied any economic reward for entrepreneurship."
        },
        {
          "bbox": [
            77,
            705,
            529,
            772
          ],
          "label": "para",
          "reading_order": 6,
          "text": "A similar example with more serious technological implications involves\nthe copyright provision (Sec. 117 ) that restricts the copying of computer\nsoftware to archival uses. $^7$ Restricting duplication solely to archival uses makes\nit an act of copyright infringement for a programmer, whether independent"
        },
        {
          "bbox": [
            77,
            795,
            528,
            835
          ],
          "label": "fnote",
          "reading_order": 7,
          "text": "7In the case of Vault Corp. v. Quaid Software, Ltd., 847 F.2d 255 (5th Cir., 1988), the court gave a\nbroader interpretation, permitting destruction of the manufacturer's anticopying code to make a\ncopy for archival purposes."
        }
      ]
    },
    {
      "page_number": 15,
      "elements": [
        {
          "bbox": [
            321,
            52,
            550,
            70
          ],
          "label": "header",
          "reading_order": 0,
          "text": "Stanley M. Besen and Leo J. Raskind 17"
        },
        {
          "bbox": [
            99,
            115,
            553,
            247
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "contractor or employee, to copy a protected program for the purpose of\nmodifying it to the particular needs of a user. Some consider this an undue\nrestriction on the role of programmers as well as users (Stern, 1985) . Making it\nillegal to copy for innovative uses, such as analysis and study for the purpose of\nimproving routines and enhancing functions, serves to inhibit and restrict an\nimportant activity associated with the advance of this new technology (Braun-\nstein, Fischer, Ordover, and Baumol, 1977) , and thus raises the cost of subse-\nquent innovation."
        },
        {
          "bbox": [
            99,
            247,
            552,
            315
          ],
          "label": "para",
          "reading_order": 2,
          "text": "The legal literature has tended to focus on restricting the protection of the\nunderlying work. Economic analysis could contribute here by analyzing the\nimpact of changing the relative costs and returns of initial creators and subse-\nquent derivative work producers."
        },
        {
          "bbox": [
            100,
            335,
            512,
            352
          ],
          "label": "sec_1",
          "reading_order": 3,
          "text": "An Illustration: Computer Operating Systems and Interface Standards"
        },
        {
          "bbox": [
            99,
            352,
            553,
            531
          ],
          "label": "para",
          "reading_order": 4,
          "text": "The issue of how to protect computer operating systems and screen\ndisplays provides an example of extending traditional copyright principles to\nnew technology. These computer interfaces are of increasing importance to the\nindustry, because of their potential for standardizing menu displays, keystroke\nusage, and operating systems. The Copyright Office has announced as its\nposition that all the copyrightable expression embodied in a computer pro-\ngram, including screen displays, is to be considered as a single work (53\nFederal Register, 21817-20, June 10, 1988). By reversing its earlier position of\naccepting screen displays for separate registration and deposit, the Office has\nplaced itself at odds with the courts $^8$ and with some commentators (Menell,\n1989)."
        },
        {
          "bbox": [
            99,
            531,
            552,
            663
          ],
          "label": "para",
          "reading_order": 5,
          "text": "Computer users may benefit from the existence of standardized interfaces\nin a number of ways (Farrell and Saloner, 1985; Katz and Shapiro, 1985a) . The\ngreater the degree of standardization, the larger is the array of complementary\ninputs (software, repair services, and the like) available to users, and the easier\nit is to switch from one system to another. These forces also create a tendency\nfor only a small number of standardized features of interfaces to exist at any\none time, and make the introduction of new interfaces more costly and difficult\n(Farrell, 1989) ."
        },
        {
          "bbox": [
            99,
            663,
            552,
            780
          ],
          "label": "para",
          "reading_order": 6,
          "text": "Much litigation has occurred and is pending over the copyright protection\nof both computer operating systems and computer screen displays. However,\nthis litigation does not seem likely to refine the analysis of visual displays. In\nApple's suits against Microsoft and Hewlett-Packard, for example, the court\nfound that the alleged infringing use of Apple's visual displays was covered by\nApple's software license to the defendant (Apple Computer, Inc. v. Microsoft\nCorp., 717 F. Supp. 1428 [N.D. Cal. 1989]). Xerox's suit against Apple is"
        },
        {
          "bbox": [
            99,
            796,
            550,
            836
          ],
          "label": "fnote",
          "reading_order": 7,
          "text": "8For example, see Manufacturers Technologies, Inc. v. Cams, Inc., 704 F. Supp. 984 (D. Conn.\n1989); Digital Communications Associates v. Softklone Distributing Corp., 659 F. Supp. 449 (N.D.\nGa. 1987)."
        }
      ]
    },
    {
      "page_number": 16,
      "elements": [
        {
          "bbox": [
            79,
            56,
            291,
            74
          ],
          "label": "header",
          "reading_order": 0,
          "text": "18 Journal of Economic Perspectives"
        },
        {
          "bbox": [
            77,
            116,
            529,
            299
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "pending a further hearing, but it is unlikely to require analysis of the scope of\nprotection since Xerox does not allege infringement, but rather seeks to have\nApple's copyright declared invalid, a novel copyright remedy (Xerox Corp. v.\nApple Computer, Inc., D.C. N.Cal. CCH Copy. Rep. Par. 26, 556). A recent\ndecision extending copyright protection to the menu command structure of a\npopular spreadsheet program has rekindled the controversy over the protec-\ntion of screen displays (Lotus Development Corp. v. Paperback Software Intn'l.,\n740 F. Supp. 37 [D. Mass. 1990]). Most troublesome is the protection of the\ninput command words (such as Move, Copy, Print) and the court's rejection of\nthe defendant's argument that these familiar components of a screen display\nshould be considered an unprotectible, de facto industry standard."
        },
        {
          "bbox": [
            76,
            299,
            529,
            479
          ],
          "label": "para",
          "reading_order": 2,
          "text": "Proponents of independent protection of screen displays have argued that\nsubstantial expenses are involved in developing interfaces and that without\nlegal protection, too few resources will be devoted to this activity (Clapes,\nLynch, and Steinberg, 1987) . In response, it has been argued that many\nstandardized interfaces result from arbitrary choices among a number of\nequally good and widely-known alternatives, or conversely, that there may be\nonly a single way to accomplish a given objective. In either case, providing\nintellectual property protection would grant considerable market power to the\nowner of the right to control the standardized interface. For this reason, Menell\n(1989) has argued that courts should give only “ thin ” copyright protection to\nscreen displays by finding infringement only on a showing of actual copying."
        },
        {
          "bbox": [
            77,
            479,
            527,
            561
          ],
          "label": "para",
          "reading_order": 3,
          "text": "An alternative approach is to require the developer of the interface to seek\nprotection under the patent system. Since copyright protection does not re-\nquire novelty or non-obviousness, using copyright to protect computer inter-\nfaces might cause insignificant advances to receive a high degree of protection,\nwith risks that widespread use of innovations in this industry will be delayed."
        },
        {
          "bbox": [
            76,
            561,
            529,
            772
          ],
          "label": "para",
          "reading_order": 4,
          "text": "Strong intellectual property protection might also create the possibility for\npatent or copyright races, as discussed earlier. Because of the potentially large\nreturns to winning in the race to develop a broadly used interface standard, an\nexcessive amount of resources may be devoted to this activity. $^9$ If protection\nwere more limited, this effect would be attenuated. Alternatively, the degree of\nprotection could be limited by requiring that compulsory licenses be made\navailable on reasonable terms. Indeed, some standards organizations have been\nable to impose such licensing requirements as a condition for selecting a\nparticular technology as a standard, and user groups have succeeded in\nlowering royalty fees by threatening not to support a standard. IBM and Unisys\nwere recently forced to reduce their proposed fees for licensing patents needed\nfor the manufacture of modems that conformed to a new standard (Lefton,\n1990)."
        },
        {
          "bbox": [
            76,
            795,
            527,
            836
          ],
          "label": "fnote",
          "reading_order": 5,
          "text": "9 There is probably less need to be concerned about resources spent in efforts to develop trivial\nvariation on an existing standard. Even if those variations were to receive protection under the\ncopyright law, trivial changes would be less likely to dominate the marketplace."
        }
      ]
    },
    {
      "page_number": 17,
      "elements": [
        {
          "bbox": [
            200,
            52,
            548,
            70
          ],
          "label": "header",
          "reading_order": 0,
          "text": "Introduction to the Law and Economics of Intellectual Property 19"
        },
        {
          "bbox": [
            98,
            114,
            323,
            135
          ],
          "label": "sec_1",
          "reading_order": 1,
          "text": "Semiconductor Chip Protection"
        },
        {
          "bbox": [
            98,
            149,
            550,
            232
          ],
          "label": "para",
          "reading_order": 2,
          "text": "The semiconductor chip has become the principal building block of con-\ntemporary electronics technology. By the mid-1970s, U.S. and European chips\nwere being copied and distributed by foreign competitors (Stern, 1986). In\n1978, the industry appealed to Congress for protection and hearings were\nbegun."
        },
        {
          "bbox": [
            98,
            232,
            550,
            380
          ],
          "label": "para",
          "reading_order": 3,
          "text": "The resulting Semiconductor Chip Act of 1984 is the newest addition to\nthe intellectual property system. The Chip Act is sometimes erroneously de-\nscribed as a piece of special or sui generis legislation, implying that the special\nnature of the technology made it ineligible for copyright protection. It is more\naccurately characterized as legislation within the copyright regime, a\ncopyright-like statute that is fine-tuned to reflect the particular needs of this\nindustry. 10 Thus it provides a 10-year term, shorter than either patent or\ncopyright, codifies the industry practice of reverse engineering, and provides\nfor more limited remedies."
        },
        {
          "bbox": [
            97,
            380,
            550,
            577
          ],
          "label": "para",
          "reading_order": 4,
          "text": "The two subjects eligible for protection under the Chip Act are the\nsemiconductor chip products and the mask work. The first are integrated\ncircuits containing transistors, resistors, capacitors and their interconnections,\nfabricated into a tiny, single piece of semiconductor material. A mask work is\ndefined as a set of images, however fixed or encoded at a later stage of\nmanufacturing, that produces the circuitry of the final chip product; essentially,\nthese are the blueprints of the chip. For domestic producers, protection\nattaches on fixation and commercial exploitation. Protection for foreign prod-\nucts can be granted by the president upon a finding that a foreign nation\nextends to U.S. nationals the same protection as the United States accords to\nthe foreign nationals. The obvious aim of this provision is to induce other\ncountries to enact chip protection measures."
        },
        {
          "bbox": [
            97,
            577,
            550,
            691
          ],
          "label": "para",
          "reading_order": 5,
          "text": "As in traditional copyright, the Chip Act imposes a condition of “original-\nity” for protection to attach, but the Chip Act standard is expressly set some-\nwhat higher. The Chip Act states that a mask work design is not original if it is\nstaple, commonplace, or familiar in the semiconductor industry. Although a\nmask work is eligible for protection upon fixation, the right may be forfeited by\nfailure to register within two years after the first commercial exploitation.\nClearly, this is unlike traditional copyright law."
        },
        {
          "bbox": [
            97,
            691,
            550,
            773
          ],
          "label": "para",
          "reading_order": 6,
          "text": "Two basic rights are given the owner of a protected mask work: the right to\nbar reproduction of the mask work by optical, electronic, or any other means;\nand the right to import or distribute a semiconductor chip product in which\nthe mask work is embodied. Accordingly, importing a pirated chip is an\ninfringement of the owner's importation right."
        },
        {
          "bbox": [
            98,
            794,
            549,
            836
          ],
          "label": "fnote",
          "reading_order": 7,
          "text": "10Statement, Leo J. Raskind, testimony before the House Subcommittee on Courts, Intellectual\nProperty, and the Administration of Justice, Oversight Hearings on Computers and Intellectual\nProperty, p. 3, November 8, 1989."
        }
      ]
    },
    {
      "page_number": 18,
      "elements": [
        {
          "bbox": [
            79,
            53,
            291,
            70
          ],
          "label": "header",
          "reading_order": 0,
          "text": "20 Journal of Economic Perspectives"
        },
        {
          "bbox": [
            78,
            113,
            530,
            229
          ],
          "label": "para",
          "reading_order": 1,
          "text": "Reverse engineering, like fair use in copyright law, is a defense to a claim\nof infringement. Reverse engineering differs from the fair use defense in two\nmaterial respects. First, the reverse engineering provision was expressly drafted\nto provide exemption from infringement liability despite proof of unauthorized\ncopying and striking similarity, so long as the resulting chip product was the\nresult of study and analysis and contained technological improvement, like\ndecreased chip size, lower thermal output, or enhanced speed."
        },
        {
          "bbox": [
            78,
            229,
            531,
            443
          ],
          "label": "para",
          "reading_order": 2,
          "text": "The second difference is one of scope. Under fair use, the extent of\neconomic injury is the primary concern. But injury is irrelevant under reverse\nengineering; what matters is that more than a trivial improvement was made.\nIn the course of these hearings, legislators pressed various witnesses for guid-\nance in distinguishing piracy from reverse engineering. The uniform industry\nresponse was that in a case of piracy, the copier would not be able to show a\n“ paper trail ” of initial flow charts, time sheets, computer simulations, or an\nimproved chip (Sen. Rept. No. 425). By comparison, a firm that had done\nreverse engineering would have copious records of analysis and experimenta-\ntion as well as a new chip with improved performance capabilities. As courts\ngrapple with determining the scope of protection in computer programs and\nscreen displays, the approach of the Chip Act may serve as a model for courts\nto find infringement only in cases of piracy (Raskind, 1985)."
        },
        {
          "bbox": [
            79,
            443,
            530,
            540
          ],
          "label": "para",
          "reading_order": 3,
          "text": "Once infringement is established, the mask work owner has the traditional\nbattery of remedies associated with copyright protection, with two exceptions.\nFirst, criminal penalties are not available. Second, the amount of permissible\nstatutory damages for mask work infringement is five times greater ($250,000)\nthan the maximum amount ($50,000) of statutory damages for copyright\ninfringement."
        },
        {
          "bbox": [
            79,
            540,
            531,
            670
          ],
          "label": "para",
          "reading_order": 4,
          "text": "As the newest addition to the intellectual property regime, the Chip Act is a\ngood candidate for further study by economists. To date, only one case has\nbeen decided under this statute. And in the case of Brooktree Corp. v.\nAdvanced Micro Devices, Inc. (705 F. Supp. 491 [S.D. Cal. 1988]), the plaintiff\nwas denied a preliminary injunction. A study of research and development in\nthis industry would contribute to resolving the present debate over whether the\nChip Act was a necessary or worthy form of intellectual property protection\n(Risberg, 1990)."
        },
        {
          "bbox": [
            79,
            699,
            167,
            719
          ],
          "label": "sec_1",
          "reading_order": 5,
          "text": "Trademarks"
        },
        {
          "bbox": [
            79,
            733,
            530,
            832
          ],
          "label": "para",
          "reading_order": 6,
          "text": "Trademark protection differs from the other regimes of intellectual prop-\nerty both in its legal basis and its economic function. Unlike patents and\ncopyrights, there is no constitutional foundation for trademark protection. In\nfact, there are no federally created rights in trademarks at all; the federal\nframework provides a system of registration and of enforcement of marks\nwhose genesis is in state law (McCarthy, 1984; Landes and Posner, 1987)."
        }
      ]
    },
    {
      "page_number": 19,
      "elements": [
        {
          "bbox": [
            316,
            50,
            544,
            67
          ],
          "label": "header",
          "reading_order": 0,
          "text": "Stanley M. Besen and Leo J. Raskind 21"
        },
        {
          "bbox": [
            94,
            113,
            546,
            180
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "Although trademark protection did not originate as an incentive for innovation\nor creativity, it now provides an economic incentive. The primary function of\ntrademarks is to provide rules of orderly marketing by identifying products\nand their sources."
        },
        {
          "bbox": [
            94,
            180,
            546,
            327
          ],
          "label": "para",
          "reading_order": 2,
          "text": "State law attaches protection to trademarks (and other devices to identify\nproducers) when they are adopted and used. Protection is given by the branch\nof tort law governing unfair competition. By registering a trademark with the\nPatent and Trademark Office, the registrant gains access to the federal courts\nand can stake out a national claim to the registered mark, a result that cannot\nbe achieved by state law. Beginning in 1989, a trademark owner who has not\nyet used a mark in commerce may apply for registration of intended use and\nsupport that claim by actually using the mark within six months and filing a\nstatement at that time."
        },
        {
          "bbox": [
            94,
            327,
            546,
            574
          ],
          "label": "para",
          "reading_order": 3,
          "text": "The origin of trademark protection is usually associated with the medieval\nguild practice of affixing an identifying mark to a goblet or like product.\nAccordingly, the initial purpose of trademark protection was to make it illegal\nto pass off the goods of another artisan as those of a guild member. As modern\nmanufacturing and marketing practices made the consumer remote from the\nsource of the product, however, trademarks took on the function of product\nidentification and differentiation, as well as source identification. Protection was\nextended from the trademark, an arbitrary and distinctive designation, to\ninclude a tradename, a surname or descriptive word, a service mark, a collec-\ntive mark (like “ union made ” ), as well as packaging and product features. Over\ntime, the legal theory of protection was adapted to prevent a second entrant\nfrom unfairly appropriating the value of a successful trademark, service mark,\nor trade dress. Thus, the protection of trademarks has evolved as a form of\nindirect protection of the consumer by insuring that purchasing decisions are\nbased on marks that properly identify the product and its source."
        },
        {
          "bbox": [
            95,
            574,
            546,
            672
          ],
          "label": "para",
          "reading_order": 4,
          "text": "The value of the trademark is enhanced both by the quality of the product\nand the public familiarity with it. A trademark may impose costs of advertising\nand establishing a reputation upon a prospective entrant to a market. More-\nover, trademark protection may dampen competition by limiting the ability of\ncompetitors to copy a successful mark or packaging design, even though these\nfeatures are not protected by copyright or patent."
        },
        {
          "bbox": [
            95,
            672,
            546,
            835
          ],
          "label": "para",
          "reading_order": 5,
          "text": "Patents require novelty; copyright requires originality; the counterpart of\nthese terms for trademark is distinctiveness. The Lanham Act provides that no\nmark by which the goods of the applicant “may be distinguished from the\ngoods of others” shall be refused registration. In this context, “distinctiveness”\nmeans that the claimed work must not be a generic description. Thus, “orange”\nis not eligible for protection as applied to citrus fruit or its extract. Also\nineligible are geographic names to designate location, or even an actual sur-\nname if the attachment to a product would be likely to confuse or deceive\nconsumers. Similarly, merely descriptive terms are also ineligible, like\n“pasteurized” as applied to milk."
        }
      ]
    },
    {
      "page_number": 20,
      "elements": [
        {
          "bbox": [
            84,
            58,
            296,
            75
          ],
          "label": "header",
          "reading_order": 0,
          "text": "22 Journal of Economic Perspectives"
        },
        {
          "bbox": [
            82,
            118,
            536,
            349
          ],
          "label": "para",
          "reading_order": 1,
          "text": "A further condition for the registration of trademarks is that the proffered\ntrademark use terms that are either arbitrary or fanciful as applied to a good or\nservice. “ Kodak, ” as applied to photographic film, is the classic example of an\narbitrary term being associated with a product. A term or phrase that is not\ndistinctive or otherwise eligible for registration — like “ Big Red ” as applied to\napples — may qualify for registration as applied to a hand tool, if it is found to\nhave acquired “ secondary meaning. ” Secondary meaning is a doctrine that\nallows protection to attach to a word or phrase that is geographically or\notherwise descriptive, requiring the claimant to prove that those words identify\nthat product to consumers. Secondary meaning may be proven by survey\nevidence, for example by showing that some statistically significant segment of\nthe consumers in a given geographic market will state that the phrase — “ Big\nRed ”— means to them a screwdriver manufactured in New Haven, Connecticut\n(Stern and Hoffman, 1962)."
        },
        {
          "bbox": [
            82,
            349,
            536,
            659
          ],
          "label": "para",
          "reading_order": 2,
          "text": "Trademark law recognizes that a term that is not distinctive at the outset\nmay become so through usage. If an arbitrary mark becomes successful enough\nto become part of the language, that mark may lose its protection because\ngeneric terms are not protectible. “Aspirin” and “Thermos” are examples of\ntrademarks that have lost protection by becoming generic (Folsom and Teply,\n1980). The board game “Monopoly” also lost protection for a time, based on\nsurvey evidence that 65 percent of respondents wanted the game without\nreference to who made it. Congress reversed this decision in 1984 by modifying\nthe grounds for cancellation of a generic mark to require that the test be, in the\nwords of 15 U.S.C. § 1064(3) [1984], “the primary significance of the registered\nmark to the relevant public rather than purchaser motivation.” The new statute\neffectively withdraws the significance of secondary meaning as a test of becom-\ning generic. The concept will remain only as a basis of granting protection. But\nhow the courts will determine “primary significance” and secondary meaning\nremains to be seen. They seem to be groping for some analytical statement in\nterms of the function of these protected symbols in the competitive process\n(Stern and Hoffman, 1962; Dreyfuss, 1990). Law in this unsettled state invites\neconomic analysis of how trademarks affect product differentiation and con-\nsumer protection."
        },
        {
          "bbox": [
            84,
            659,
            535,
            822
          ],
          "label": "para",
          "reading_order": 3,
          "text": "To prove trademark infringement, it is not necessary to prove actual\nconfusion of specific customers. Proof of the likelihood of confusion in the\nmarket circumstances satisfies the requirement, so that similarity between two\nmarks in physical design, in sound or in commercial connotation can make the\ncase for infringement. Strictly speaking, the Lanham Act does not grant legal\nrights in trademarks beyond registration. However, Section 43 provides a\nfederal law regulating unfair trade practices involving trademarks and product\ndesignation. Section 43 broadens the tort rule against “passing off,” by making\nactionable any false statement of fact or any statement likely to deceive, when\nmade in a competitive context."
        }
      ]
    },
    {
      "page_number": 21,
      "elements": [
        {
          "bbox": [
            194,
            52,
            543,
            71
          ],
          "label": "header",
          "reading_order": 0,
          "text": "Introduction to the Law and Economics of Intellectual Property 23"
        },
        {
          "bbox": [
            93,
            114,
            545,
            214
          ],
          "label": "para",
          "reading_order": 1,
          "text": "Like the other branches of intellectual property law, the traditional reme-\ndies of injunction, damages, and fees and costs are available to the successful\nlitigant. A successful plaintiff in a trademark infringement action is entitled to\ninjunctive relief, to recover the defendant's profits and to receive damages for\nlost sales. These penalties can be further increased if there is a deliberate use of\na counterfeit mark."
        },
        {
          "bbox": [
            93,
            244,
            194,
            263
          ],
          "label": "sec_1",
          "reading_order": 2,
          "text": "Trade Secrets"
        },
        {
          "bbox": [
            93,
            279,
            545,
            477
          ],
          "label": "para",
          "reading_order": 3,
          "text": "Trade secret law covers specific business information transmitted by per-\nsons, firms, and markets (Grossman and Stiglitz, 1976; Kitch, 1980) . A trade\nsecret has alternatively been described (Milgrim, 1989) as “any formula, pat-\ntern, device or compilation of information which is used in one's business, and\nwhich gives him an opportunity to obtain an advantage over competitors who\ndo not know or use it.” Or in the words of the Uniform Trade Secrets Act, §1(4)\n(1979) , as “information including a formula, pattern, compilation, program,\ndevice, method technique, or process, that: (i) derives independent economic\nvalue, actual or potential, from not being generally known to, and not being\nreadily ascertainable by proper means by, other persons who can obtain value\nfrom its disclosure or use, and (ii) is the subject of efforts that are reasonable\nunder the circumstances to maintain its secrecy.”"
        },
        {
          "bbox": [
            93,
            477,
            544,
            591
          ],
          "label": "para",
          "reading_order": 4,
          "text": "Trade secret law differs from patent law in three respects. First, it is\ngrounded in state law, so that aside from the uniformity prevailing in the 16\nstates that have enacted the Uniform Trade Secrets Act, the scope of protection\nvaries among the states. A few states rest trade secret protection on a property\ntheory, while the majority of states invoke doctrines of tort, contract, construc-\ntive trust, or unjust enrichment as a basis of trade secret protection. In\naddition, 25 states have made it a crime to steal a trade secret (Kitch, 1980)."
        },
        {
          "bbox": [
            93,
            591,
            545,
            772
          ],
          "label": "para",
          "reading_order": 5,
          "text": "Second, trade secret law is also outside the inducement/disclosure frame-\nwork of patent and copyright law. Protection is granted to a patent and\ncopyright owner in return for the disclosure of the subject matter to the public.\nTrade secrets are, by definition, not disclosed. They are protected against\ndiscovery by “improper means,” but not against discovery of the trade secret by\nindependent means or by reverse engineering. The incentive to “create” trade\nsecrets, such as customer lists or chemical formulae, and to incur costs of\nprotecting them, is derived from their value. Of course, trade secret protection\nmay serve as an ancillary incentive for the firm to perfect a process that might\nbe eligible for patent protection. But given the more limited prospects for\nprotection of trade secrets, the patent affords a far more powerful incentive."
        },
        {
          "bbox": [
            93,
            772,
            544,
            821
          ],
          "label": "para",
          "reading_order": 6,
          "text": "A third difference between trade secret law and patent law is the subject\nmatter and duration of protection. While protection is granted only for subject\nmatter that represents some creative efforts under the copyright and patent"
        }
      ]
    },
    {
      "page_number": 22,
      "elements": [
        {
          "bbox": [
            83,
            58,
            296,
            76
          ],
          "label": "header",
          "reading_order": 0,
          "text": "24 Journal of Economic Perspectives"
        },
        {
          "bbox": [
            83,
            120,
            535,
            253
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "regimes, trade secret protection rests solely on the commercial value of the\nmatter to the claimant (Kitch, 1980) . Thus, trade secret law includes a wider\nsubject mater. The duration of trade secret protection is limited only by the\nhappenstance of independent discovery or by improper disclosure. This poten-\ntial for perpetual protection serves as an incentive to avoid the disclosure\nrequirements of the patent regime. There is also an abusive potential in trade\nsecret protection if the subject matter of a valuable but little-known expired\npatent were to be given further protection as a trade secret."
        },
        {
          "bbox": [
            83,
            253,
            535,
            465
          ],
          "label": "para",
          "reading_order": 2,
          "text": ". When a competitor has used “ improper means ” of discovery, or an\nemployee has breached the confidential condition under which a trade secret\nwas disclosed, the available remedies are injunctive relief and damages. The\nUniform Trade Secrets Act makes illegal both the use of “ improper means ” to\ndiscover the trade secret and the “ misappropriation ” of improperly discovered\nmaterial. Under the UTSA Sec. 1(1-2) (1979), improper means include “ theft,\nbribery, misrepresentation, breach or inducement of a breach of duty to\nmaintain secrecy, or espionage through electronic or other means ” while\nmisappropriation is defined in part as “ acquisition of a trade secret of another\nby a person who knows or has reason to know that the trade secret was\nacquired by improper means. ” Thus, the focus of trade secret law is “ fair\ndealing ” between competitors and between employer and employee with re-\ngard to the uses of specific business information."
        },
        {
          "bbox": [
            83,
            465,
            535,
            596
          ],
          "label": "para",
          "reading_order": 3,
          "text": "Since trade secret law is enmeshed both with the competitive process and\nthe internal decisions of the firm, economic analysis of the properties and\nconsequences of trade secret protection would illuminate important public\npolicy interests. One possibility might be to examine the workings of the\ncommercial espionage industry. A systematic investigation of the litigated trade\nsecret cases would provide useful data (Miller, 1989) . In this issue, Friedman,\nLandes, and Posner provide a starting point by arguing that existing trade\nsecret law appears to be consistent with considerations of economic efficiency."
        },
        {
          "bbox": [
            83,
            596,
            535,
            695
          ],
          "label": "para",
          "reading_order": 4,
          "text": "Economic analysis might also illuminate the judicial task of applying trade\nsecret protection. In our view, judges are presently too concerned with the\n“ dirty trick ” aspects of competition. We believe that optimal administration of\nthe trade secret laws requires more emphasis on the private and social costs\nand benefits of trade secret protection, and on economic efficiency, and corre-\nspondingly less concern with norms of fair commercial conduct."
        },
        {
          "bbox": [
            83,
            739,
            209,
            761
          ],
          "label": "sec_1",
          "reading_order": 5,
          "text": "Misappropriation"
        },
        {
          "bbox": [
            83,
            773,
            535,
            824
          ],
          "label": "para",
          "reading_order": 6,
          "text": "Misappropriation is a legal doctrine that functions outside of trade secret\nlaw as a general common law property right against some takings of informa-\ntion of commercial value. The doctrine is derived from a Supreme Court"
        }
      ]
    },
    {
      "page_number": 23,
      "elements": [
        {
          "bbox": [
            315,
            52,
            543,
            70
          ],
          "label": "header",
          "reading_order": 0,
          "text": "Stanley M. Besen and Leo J. Raskind 25"
        },
        {
          "bbox": [
            93,
            116,
            546,
            382
          ],
          "label": "half_para",
          "reading_order": 1,
          "text": "opinion, International News Service v. Associated Press (248 U.S. 215 [1918]),\nbarring the use of uncopyrighted news reports. During World War I, the\nHearst news gathering agency copied Associated Press dispatches on the East-\nern seaboard and transmitted them by wire to their midwest and west coast\npapers ahead of their receipt by Associated Press subscribers there. Although\nthe relief granted by the court was limited to protection during the period of\ninitial dissemination, the reasoning of the opinion launched a broad principle\nof unfair competition law by stating (at p. 240), “ . . . defendant . . . admits that it\nis taking material that has been acquired by complainant as the result of\norganization and the expenditure of labor, skill, and money, . . . and that . . . in\nappropriating it and selling it as its own is endeavoring to reap where it has not\nsown. ” This doctrine has been adopted by state and federal courts as a general\nrule of unfair competition, sometimes granting protection to material otherwise\nappropriately outside the reach of intellectual property laws (Baird, 1983).\nHowever, this doctrine has been repeatedly criticized for its lack of analytical\ncontent (Raskind, 1991)."
        },
        {
          "bbox": [
            93,
            429,
            250,
            450
          ],
          "label": "sec_1",
          "reading_order": 2,
          "text": "Concluding Thoughts"
        },
        {
          "bbox": [
            93,
            464,
            545,
            580
          ],
          "label": "para",
          "reading_order": 3,
          "text": "Increased interest in the economics of intellectual property is timely. The\npace of technological change during the last few decades has forced intellectual\nproperty law into unknown areas and hard cases, straining the capabilities of\ncourts and legislatures. How should innovations related to semiconductor chip\nor computer software be protected? Should genetically engineered life forms be\npatented? Under what conditions should videotaping a television show for\nhome use infringe the rights of program producers?"
        },
        {
          "bbox": [
            93,
            580,
            545,
            662
          ],
          "label": "para",
          "reading_order": 4,
          "text": "These and other issues have forced a searching re-examination of many of\nthe premises of the intellectual property system during the last decade. Some\nauthors have called into question some of the basic underpinnings of the law in\nthis area, while others have concluded that the system is fundamentally sound.\nThe papers in this symposium provide examples of both of these views."
        },
        {
          "bbox": [
            93,
            662,
            545,
            728
          ],
          "label": "para",
          "reading_order": 5,
          "text": "Research along these lines could play a key role in affecting America's\nfuture standard of living and economic competitiveness. After all, a nation's\nregime of intellectual property law sets the stage and establishes the incentives\nfor innovation and technological change."
        },
        {
          "bbox": [
            93,
            771,
            545,
            822
          ],
          "label": "foot",
          "reading_order": 6,
          "text": "■ This paper was prepared for the Symposium on Intellectual Property Law, funded by\nthe RAND Corporation and The John P. Olin Foundation. The Symposium took place\nOctober 24, 1989."
        }
      ]
    },
    {
      "page_number": 24,
      "elements": [
        {
          "bbox": [
            88,
            56,
            299,
            75
          ],
          "label": "header",
          "reading_order": 0,
          "text": "26 Journal of Economic Perspectives"
        },
        {
          "bbox": [
            87,
            117,
            155,
            135
          ],
          "label": "sec_1",
          "reading_order": 1,
          "text": "References"
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    },
    {
      "page_number": 26,
      "elements": [
        {
          "bbox": [
            6,
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          ],
          "label": "fig",
          "reading_order": 0,
          "text": "![Figure](figures/figure_000.png)",
          "figure_path": "/tmp/output/markdown/figures/figure_000.png"
        }
      ]
    }
  ],
  "metadata": {}
}