This Workshop has been cancelled and will be rescheduled at a later date. 

The Health Law Ethics & Policy Workshop Series
 

presents

Intellectual Property, Prizes, and Marginal-Cost Pricing

Thursday, January 13, 2011

12:30 – 2:00

Faculty of Law, University of Toronto

CANCELLED

 Everyone is welcome to attend, no registration is required.

ABSTRACT

Over the past decade there has been an explosion of scholarship on the use of prizes as an alternative to intellectual property from promoting private investments in R&D. Under a prize system, the government rewards innovators with a prize instead of an intellectual property right, such that innovations fall immediately into the public domain. It is generally assumed that eliminating intellectual property rights would result in prices closer to marginal cost, thereby reducing deadweight loss. The standard objection to prize proposals is that the government might offer the wrong reward for innovation. In his article:  “Intellectual Property versus Prizes:  A Policy-Lever Analysis”, Prof. Roin examines this literature and reaches several conclusions about the choice between intellectual property and prizes. First, the proponents of the prize system have made a respectable case that the government could acquire sufficient information about innovations to calculate an appropriate prize. Several scholars have taken this argument too far, however, concluding that prizes are superior to intellectual property in part because they offer better incentives for innovation. This argument is mistaken because any mechanism to calculate rewards under a prize system could also be used to supplement or tax profits under intellectual property, resulting in the same outcome.  The prize system therefore cannot be justified as a way to improve the incentives for innovation provided by intellectual property. Second, government mismanagement of prize payouts may distort the incentives for R&D under a prize system. Assuming that prizes are paid out of general tax revenue, there is a significant danger that the government will try to underpay innovators; and the allocation of prize money will likely be affected by rent-seeking and excessive bureaucratic control. Third, although prize advocates generally agree that the core justification for replacing intellectual property with prizes is to set consumer prices more efficiently, the existing scholarship glosses over the likely impact of prizes on consumer prices. A prize system would almost certainly move prices closer to marginal cost, but in some circumstances that movement would be only modest. Moreover, there may be other ways of setting consumer prices near marginal cost without eliminating intellectual property, such as government price controls.

BIOGRAPHY

Professor Roin is a Hieken Assistant Professor of Patent Law.  He graduated from Amherst College in 2000; and from Harvard Law School in 2005.  He clerked for judge Michael McConnell on the 10th Circuit Court of Appeals in the United States from 2005-2006.  Between 2006 and 2008, Prof. Roin was an academic fellow at the Petrie-Flom Center for Health Law Policy, Biotechnology and Bioethics at Harvard Law School.  He began teaching at Harvard Law School in 2008.   

For other upcoming Seminars please visit the Seminar webpage or contact m.casco@utoronto.ca

The Health Law Ethics and Policy Workshop series brings local, national, international scholars and policy makers as guest speakers to the Faculty of Law, University of Toronto to stimulate discussion of issues related to the intersection of law with health care and related ethical and social issues.  It is organized by the Faculty’s Health Law group and sponsored by the CIHR Training Program in Health Law, Ethics and Policy.  The program funds graduate students in the unique multi-disciplinary field of Health Law, Ethics and Policy based at four top universities in Canada.  For more information on the program, please visit our website at:  www.healthlawtraining.ca