Associate Professor

Professor David Olson Talks about Intellectual Property opportunities at BC Law.

Boston College Law School Webcast Archive

David Olson Talks about Intellectual Property at BC Law

Boston College Law Review

Foreword

There is debate among scholars as to whether patent law provides more benefit than harm. Some studies of the patent system purport to show that patents do not increase invention that much and therefore the monopoly effects of patents cause more harm than the benefit from the additional invention that patents incentivize. But even studies casting doubt on patent law’s efficacy generally tend to find that in the area of pharmaceuticals,1 patent law has a large, positive effect on social welfare by providing incentive for significant levels of drug development that otherwise simply would not occur. While some patent protection is beneficial, too much protection can be socially harmful. The optimal level of patent protection is enough protection to incentivize a substantially beneficial level of new drug development, but not so much as to allow monopoly pricing of new drugs once the initial investment (including adequate returns to investors for the risks and costs incurred) has been adequately recouped. Every year of patent protection beyond what is necessary to adequately incentivize drug production results in higher prices to insurers, employers, patients, and hospitals.The deadweight loss to society from monopoly prices on drugs beyond the time needed for adequate incentive is not only costly, but it means some patients simply will not have access to certain drugs, and will suffer the adverse health consequences that could have been treated. It is thus critically important to find the right amount of patent protection (in terms of breadth and duration) that encourages adequate drug development but does not provide inefficiently long monopolies. There are several avenues of legal reform that could assist in protecting this balance, including the pending CREATES Act, the practices known as “pay for delay” and “evergreening,” and the subject of “patent thickets.”

Boston College Law School Faculty Papers

Congressional Testimony: Intellectual Property and the Price of Prescription Drugs: Balancing Innovation and Competition

This Article proposes a novel solution to part of the problem that large patent portfolios can cause. Both so-called "patent trolls" and firms that commercialize the patents that they own can accumulate and then abuse large patent portfolios, even if most of the patents in the portfolio are of little value. Instead of suggesting reforms to better determine the value and boundaries of individual patents, as many others have already done, this Article proposes that the U.S. Patent and Trademark Office (PTO) multiply the amount owed to keep a patent in force (patent maintenance fees) based on the size of a patent holder's overall patent portfolio. Patent owners themselves will primarily benefit from this reform, as they will have an incentive to determine the value of their patents and to let lapse those patents that are of low value. A second benefit is that it will require patent owners to disclose their practiced and non-practiced patents. The reform proposed in this Article helps alleviate problems in software and high-technology patenting without significant negative effect in other industries, such as pharmaceuticals or biotechnology. It is simple, and the PTO can easily adopt it, or Congress can enact it.

Removing the Troll from the Thicket: The Case for Enhancing Patent Maintenance Fees in Relation to the Size of a Patent Owner's Patent Portfolio

Courts, the Patent Office, and commentators are in vigorous disagreement about what types of innovation should be patentable, and what, if any, innovation should remain off limits to patenting. This Article shows that the disarray in the area of patentable subject matter results from a widespread failure to take the utilitarian policy underlying patent law seriously. Despite near-universal agreement that patent rights exist to provide incentives for innovation by allowing inventors to recoup their costs of research and development, courts have expanded patentable subject matter to many new fields without first demanding evidence that the newly patentable fields suffer from lack of incentives to innovate. The failure to ask the threshold question of whether patents are needed in a particular field to achieve efficient levels of innovation has resulted in both incoherent case law on patentable subject matter and costs to society from increased patent monopolies. This Article explains that the sensible basis for determining patentable subject matter is to determine whether innovation is unlikely in the absence of patents. Part II of the Article sets forth an explanation and model showing that there is no reason to expand patentable subject matter into fields where innovation is already healthy due to other incentives such as low research and development costs, leadtime, or reputation benefits from innovation, or other legal protections such as trade secret and copyright law. To the extent that others argue for patentability even where there is no market failure in innovation, they are not following the utilitarian rationale for patent law, and inefficiency results. Part III of the Article demonstrates how courts historically considered the issue of innovation market failure, at least implicitly, in their decisions as to what types of inventions were unpatentable. But with the advent of software and the Information Age, the courts’ patentable subject matter tests no longer fit. Rather than reworking their tests to serve patent law’s underlying rationale, they instead slowly abandoned their role as gatekeepers of patentable subject matter, resulting in the current inefficient regime in which almost all innovation is patentable. The courts’ failure to grapple with the utilitarian rationale for patentability means that current judicial consideration of patentable subject matter continues to be misdirected. Part IV applies the model and explanation from Part II to the sample case of business methods - one of the most harmful areas of patenting - showing an example of a field in which patents are not efficient. Part V draws out the implications from the analysis presented in this Article, and suggests solutions - most prominently, that the courts or Congress should revive the patentable subject matter gatekeeper function. The Article concludes in Part VI.

Taking the Utilitarian Basis for Patent Law Seriously: The Case for Restricting Patentable Subject Matter

We are at a crossroads with respect to the under-developed equitable defense of copyright misuse. The defense may go the way of its sibling, antitrust-based patent misuse, which seems to be in a state of inevitable decline. Or – if judges accept the proposal of this Article – courts could reinvigorate the copyright misuse defense to better protect First Amendment speech that is guaranteed by statute, but that is often chilled by copyright holders misusing their copyrights to control other’s speech. The Copyright Act serves First Amendment interests by encouraging authors to create works. But copyright law can also discourage the creation of new works by preventing subsequent creators from using copyrighted work to make their own, new speech. Courts have long recognized this inherent tension, and have also recognized that the conflict should sometimes be decided in favor of allowing a subsequent speaker the right to make unauthorized use of others’ copyrighted works. Accordingly, courts created, and Congress codified, the fair use defense to copyright infringement, which allows unauthorized use of copyrighted works under certain circumstances that encourage speech and creation of transformative works. The problem with fair use, however, is that the informational uncertainties and transaction costs of litigating the defense make the fair use right unavailable to many as a practical matter. Subsequent creators are left open to intimidation by copyright holders threatening infringement suits. By decoupling the copyright misuse defense from its basis in antitrust principles and basing it in First Amendment speech principles, the legal protections for fair use shift from theoretical rights to practical rights for many. Copyright misuse has two deterrent features that will allow fair use as a practical right. First, a copyright holder’s misuse of its copyrights against anyone can be used to prove the defense of misuse. Second, once misuse is found, the copyright owner loses its ability to enforce its copyright against everyone, at least until the misuse is cured. Thus, by defining as copyright misuse the unjustified chilling of speech that some copyright holders perpetrate, the misuse defense will encourage important speech rights that are currently under-protected.

First Amendment Based Copyright Misuse

Copyright law exists to encourage the creation of works of authorship by granting exclusive rights. But copyright’s incentive function seems in tension with the public’s First Amendment interests to use and freely hear copyrighted speech. Conventional wisdom holds, however, that copyright law serves to encourage much more speech than it discourages, and resolves First Amendment concerns with protections internal to copyright law like the fair use defense and the idea/expression dichotomy. This Article argues that the conventional wisdom no longer holds given the unprecedented expansion of copyright’s scope and cor-responding drastic diminution of the public domain in the last three decades. This Article extends the U.S. Supreme Court’s reasoning in Eldred v. Ashcroft, which rejected the notion that courts should never subject copyright laws to First Amendment analysis, to read First Amendment accommodations into copyright laws where use of copyrighted materials implicates significant speech interests.

First Amendment Interests and Copyright Accommodations

The Supreme Court certified two questions in Golan v. Holder: (1) Does section 514 of the Uruguay Round Agreements Act (“URAA”) violate the Progress Clause of the Constitution? (2) Does the URAA violate the First Amendment? This Essay argues that section 514 violates the Progress Clause’s requirement that copyright laws “promote the Progress of Science.” This is because the statute bequeaths copyright status without in return achieving any net increase in the creation or dissemination of creative works. Even if the Government relies on other constitutional authorities to justify section 514—such as the Commerce Clause or the Treaty Power—the limitations of the Progress Clause still must apply. Since First Amendment analysis turns, in part, on whether the speech restriction in question violates any constitutional limitations on the federal power under which the law is passed, this Essay argues that the URAA must fail. Any law that violates constitutional restrictions on federal power cannot, by definition, serve a legitimate government interest.

A Legitimate Interest in Promoting the Progress of Science: Constitutional Constraints on Copyright Laws

This piece offers commentary on two essays in the current volume of the Cornell Law Review: James Bessen and Michael J. Meurer’s The Direct Costs from NPE Disputes and David L. Schwartz and Jay P. Kesan’s Analyzing the Role of Non-Practicing Entities in the Patent System. Schwartz and Kesan’s essay critiques Bessen and Meurer and offers some further thoughts on the role of empirical work regarding non-practicing entities (NPEs). Before I begin my substantive comments on the two pieces, I must say that these two essays, which engage each other fulsomely, carefully, and respectfully, are models of how academic debate should be conducted. They provide great value to the reader in their thoughtful responses to each other’s arguments. The pieces are each individually made more useful to the reader concerned about patent policy because they take opposing positions on a number of issues but do so in a way that illuminates both commonalities and differences in their analyses and arguments. This type of policy debate is exactly what the numerous policy disputes and empirical questions in patent law need.

On NPES, Holdups, and Underlying Faults in the Patent System

Foreword to a special issue of Boston College Law Review focusing on patent law.

Copyright law exists to encourage the creation of works of authorship by granting exclusive rights. But copyright’s incentive function seems in tension with the public’s First Amendment interests to use and freely hear copyrighted speech. Conventional wisdom holds, however, that copyright law serves to encourage much more speech than it discourages, and resolves First Amendment concerns with protections internal to copyright law like the fair use defense and the idea/expression dichotomy. This Article argues that the conventional wisdom no longer holds given the unprecedented expansion of copyright’s scope and corresponding drastic diminution of the public domain in the last three decades. This Article extends the U.S. Supreme Court’s reasoning in Eldred v. Ashcroft, which rejected the notion that courts should never subject copyright laws to First Amendment analysis, to read First Amendment accommodations into copyright laws where use of copyrighted materials implicates significant speech interests.

First Amendment Interests and Copyright Accomodations

This Article applies a new paradigm from the field of computer science—inconsistency robustness (IR)—in order to analyze the competing ways in which the Supreme Court and Federal Circuit craft patent law standards and rules. The IR paradigm is a shift from the previous paradigm of inconsistency elimination. The new IR paradigm recognizes that modern, complex information systems must perform notwithstanding persistent and continuous inconsistencies. The focus on IR encourages system designers to recognize the reality of persistent inconsistency when building robust systems that can perform reliably. Legal systems regularly process a great deal of complexity and inconsistency, and thus, by necessity, have always been structured to be inconsistency robust. Accordingly, applying insights from the formal IR paradigm is helpful in analyzing the effective functioning of legal systems.
This Article is the first legal article to formally utilize IR in analyzing the legal system. By using IR analysis, the article identifies and analyzes a previously under analyzed persistent pattern within patent law. Specifically, the article shows via example in five separate areas of patent law that the Federal Circuit and Supreme Court repeatedly diverge on the adoption of rules versus standards in patent law. The Article shows that this pattern can be explained by viewing the two courts as rational systems administrators attempting to maintain an inconsistency robust patent system from each of their perspectives as systems administrators. The Article further shows that if the courts adopt a holistic view of IR, they can craft more optimal patent law by taking into account the costs and benefits of the law to all participants and administrators of the patent law system.

Rules versus Standards: Competing Notions of Inconsistency Robustness in Patent Law

This Article argues that the evolution of software—and the looming age of the “Internet of Things”—will allow manufacturers to make use of consumer monitoring technologies and restrictive software licenses to price discriminate more perfectly. First, the increasing communication between software and its producers gives more opportunities to monitor consumer behavior and characteristics. Second, attaching restrictive copyright licenses to software—and to goods containing software—enables producers to restrict use and resale of their products. By combining monitoring and restrictive licensing, producers will have increasingly better ability and opportunities to price discriminate among their consumers.This Article explains that increased monitoring and price discrimination will not always happen because, in some cases, it will be against the manufacturers’ financial interests. But in other cases, manufacturers will indeed restrict use of products to facilitate price discrimination. The Article argues that the low marginal cost of distribution of software makes it more likely that price discrimination of software-enabled goods will be welfare enhancing and will result in cross-subsidization from rich to poor so that poor consumers can get more products for lower prices. The Article also demonstrates that the traditional policy reasons to disallow restraints on personal property do not apply to software-enabled devices. We conclude that rather than discouraging the use of restrictive software licenses, the law should adapt to better facilitate such licenses and the more perfect price discrimination that goes with them.

Hello Barbie: First They Will Monitor You, Then They Will Discriminate Against You. Perfectly.

Twenty Years After ProCD: Has Private Law Has Trumped Public Law in Intellectual Property?
Sponsored by Boston College Law School and the UCC Reporter Digest
Co-Sponsored by the Boston Bar Association
Panel 2:
Vestiges of “Sale” versus “License” (“Exhaustion”) (4:00-5:30 pm) Professor Ann Bartow (University of New Hampshire) Professor David S. Olson (Boston College) Professor Jason M. Schultz (Absent- New York University)
Moderator: Professor Michael J. Meurer (Boston University)

Twenty Years After ProCD (Panel 2)

This essay argues that the current system of music licensing must be completely overhauled. At this time, songwriters are paid a mere pittance when their work is played through Internet streaming services. The paper traces the evolution of compulsory licensing from the early 20th century, when Congress put this system in place due to concerns over the monopolization of the player piano industry, to today. This essay shows how the separation between copyrights for compositions as opposed to public performances contributed to blanket licensing through royalty-collecting organizations like ASCAP and BMI, which — together with government intervention into pricing based on antitrust concerns via consent decrees — has led to an inflexible and tightly controlled market in this context. Last, the essay demonstrates how the focus on classifying streaming services like Pandora based simply on whether they are "interactive" or not relies on a misunderstanding of the substitution effects and hence decline in music sales that Pandora creates. Eliminating compulsory licenses would allow individual songwriters to set their own prices and negotiate with streaming services, including in ways that would allow for price differentiation grounded in factors such as song popularity. Giving songwriters the same control that copyright owners outside the music context already possess will ensure songwriters' ability to continue providing the public with the works it loves.

A Sustainable Music Industry for the 21st Century

Twenty Years After ProCD: Has Private Law Has Trumped Public Law in Intellectual Property?
Sponsored by Boston College Law School and the UCC Reporter Digest
Co-Sponsored by the Boston Bar Association
Panel 1:
From Software Sold as a UCC “Good” to Contracts Limiting Use (“License”) (2:30-4:00 pm) Stephen Y. Chow, Lecturer (Boston University) Professor Michael Rustad (Suffolk University) Professor Rebecca Curtin (Suffolk University)
Moderated by Michael Meurer (Boston University)

David S. Olson

Works

David Olson Talks about Intellectual Property at BC Law

Foreword

Congressional Testimony: Intellectual Property and the Price of Prescription Drugs: Balancing Innovation and Competition

Removing the Troll from the Thicket: The Case for Enhancing Patent Maintenance Fees in Relation to the Size of a Patent Owner's Patent Portfolio

Taking the Utilitarian Basis for Patent Law Seriously: The Case for Restricting Patentable Subject Matter

First Amendment Based Copyright Misuse

First Amendment Interests and Copyright Accommodations

A Legitimate Interest in Promoting the Progress of Science: Constitutional Constraints on Copyright Laws

On NPES, Holdups, and Underlying Faults in the Patent System

Foreword

First Amendment Interests and Copyright Accomodations

Rules versus Standards: Competing Notions of Inconsistency Robustness in Patent Law

Hello Barbie: First They Will Monitor You, Then They Will Discriminate Against You. Perfectly.

Twenty Years After ProCD (Panel 2)

A Sustainable Music Industry for the 21st Century

Twenty Years After ProCD (Panel 1)

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