Friday, July 24, 2009

"Microsoft's Five Fatal Flaws"

The "five fatal flaws" refer to problems ("fatal flaws") in the decision by the CFI [the European Court of First Instance] in the Microsoft case. In a law review article titled "Microsoft's Five Fatal Flaws" [ Alan Devlin and Michael Jacobs, 2009 COLUM. BUS. L. REV. 67 }, one has the text:

Nevertheless, we cannot confidently assert that the CFI was mistaken. Although the duty to share arises only with respect to the most valuable inventions, the pecuniary rewards flowing to the inventors of such technologies are apt to be far larger than those accompanying more modest discoveries. If an inventor has already earned a sufficiently high return to have spurred the relevant activity ex ante, there is weaker normative ground for providing him with yet further monopoly returns. On this parsimonious approach to the appropriate rewards for invention, the CFI would be correct to facilitate interoperability if the dominant company has already earned, or will earn, a "sufficient" return in spite of the duty to share, assuming of course that a workable consensus can form around the notion of "sufficiency."

IPBiz: Huh? Duty to share? The patent process as to invention is the quid pro quo: public disclosure for right to exclude. The public gets the information written down and publicly available on the front end, and gets to use the knowledge for free on the back end, after the "right to exclude" ends. Once issued, the patent enters the marketplace, which sets the value, a different matter than the patent issuance process. The marketplace defines the "most valuable inventions," not the patent office.

Note the text:

Microsoft's strongest argument may have been that its refusal to supply intellectual property-protected information was justified by the need to protect its incentives to innovate. n103 But the Commission's reaction to this argument was dismissive and unsettling. It concluded that "the central function of intellectual property rights is to protect the moral rights in a right-holder's work and ensure a reward for the creative effort. But ... [a] refusal by an undertaking to grant a license may ... be contrary to the general public good." n104

Such deontological conceptions of intellectual property have no place in U.S. law n105 - and for good reason. In particular, moral rights theories not only fail to yield reliable policy predictions, they fail to even provide a guiding, normative framework. n106 Although a teleological economic approach can be legitimately criticized for sometimes failing to yield black-letter policy conclusions, n107 its underlying conceptual framework is at least coherent and susceptible to unanimous agreement. Moreover, the moral rights tradition faces a serious reconciliatory problem with the un-questionable social costs that would follow a legal regime that departs from the utilitarian framework.


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