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14.Chandler, Scale and Scope.
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15.Freeman, Technology Policy.
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16.Mowery, “U.S.National Innovation System”; Chesbrough, “Organizational Impact.”
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17.There is some dispute about how much these firms would have unbundled on their own without antitrust enforcement.Regardless of the motivation, the U.S.outcome was very different from that in other countries.See Ussfilman, “Unbundling IBM.”
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18.For example, the vice president for electronic component development at Western Electric, which licensed out AT&T’s semiconductor technology, explained, “We realized that if this thing [the transistor] was as big as we thought, we couldn’t keep it to ourselves and we couldn’t make all the technical contributions.It was to our interest to spread it around.If you cast your bread on the water, sometimes it comes back angel food cake.” Tilton, International Diffusion, pp..75–76.
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19.Appleyard, “How Does Knowledge Flow?”
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20.Khan, Democratization of Invention.
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21.The U.S.auto industry long made “knowledge work” the sole domain of professional engineers.Engineers designed the cars, and factory workers made them.Many engineers never set foot on the factory floor; factory workers rarely had meaningful opportunity to correct design errors that made the cars harder to assemble and more prone to defects or reliability problems.In contrast, the Japanese auto industry, especially Toyota, recognized that ordinary factory workers acquired significant knowledge about design and manufacturability on the job.Assembly-line workers participate on Japanese design teams.Moreover, when an assembly worker defects a problem, the worker can stop the assembly line until it is solved; that sort of power was unheard of in Detroit.Japanese automotive engineers begin their employment working on the factory floor and subsequently spend one month a year rotating into alternative jobs.In this way they gain an understanding of the entire process of producing a car.Needless to say, this cultivation of knowledge learned through experience in production allowed the Japanese auto makers to design cars faster with fewer engineering hours, to produce them with less labor, and to make them of higher quality, all at the same time.See Womack, Jones, and Roos, Machine That Changed the World.
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22.Mike Masnick, “Hacking Society: It’s Time to Measure the Unmeasurable,” Techdirt (blog), April 27, 2012.
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23.This bias features prominently in the argument by Michele Boldrin and David K.Levine, “Case against Patents.”
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24.Litman, “Revising Copyright Law”; Litman, Digital Copyright.
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25.Buchanan and Tullock, Calculus of Consent; Olson, Logic of Collective Action.
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26.Paul Krugman,“Barons of Broadband.” New York Times, February 16, 2014.http://www.nytimes.com/2014/02/17/opinion/krugmanbaronsofbroadband.html?hp&rref=opinion&_r=1.
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27.Scherer, “Political Economy”; Ja.e and Lerner, Innovation and Its Discontents; Henry and Turner, “Court of Appeals”; Nard and Duffy, “Rethinking Patent Law’s Uniformity Principle”; Dourado and Tabarrok, “Public Choice and Bloomington School.”
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28.First Street, “Lobbying the America Invents Act,” CQPress, 2011, http:// firststreetresearch..les.wordpress.com/2011/11/firststreetreportlobbyingthe-americainventsact.pdf.
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29.Judge Paul Michel, speaking at the National Academy of Sciences on February 12, 2013, cited $300 million in lobbying and campaign contributions.
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30.President Obama himself recognizes that the bill did not adequately deal with the problem of patent trolls; see http://www.whitehouse.gov/blog/2013/06/04 /takingpatenttrollsprotectamericaninnovation.
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31.See Zach Carter, “The Spoilsmen: How Congress Corrupted Patent Refirm,” Hu.ngton Post, August 4, 2011, http://www.hu.ngtonpost.com/2011/08/04/patentrefirmcongress_n_906278.html?view=print&comm_ref=false.Subsequently, Senator Schumer recognized the value of this proceeding to other industries and introduced the Patent Quality Improvement Act (S.866), which would extend the same review proceeding to all business method patents, not just financial ones.
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32.The America Invents Act (AIA) changed the rules to make it harder for patent trolls to.le lawsuits against many unrelated defendants.This means that for some purposes the number of lawsuits might not be the best measure of patent troll activity.Another measure is the number of defendant firms sued.Although the number of defendants declined in 2012, after a sharp spike in 2011 as patent holders sought to file multi-defendant lawsuits prior to the AIA, the number of defendants also rose in 2013 again (by 11 percent), continuing the trend of the previous decade.See James Bessen, “Patent Trolling Was Up 11 Percent Last Year,” Washington Post, The Switch (blog), January 31, 2014, http://www.wash ingtonpost.com/blogs/theswitch/wp/2014/01/31/patent-trolling-was-up-11-percent-last-year/.
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33.See James Bessen, “How Patent Trolls Doomed Themselves by Targeting Main Street,” Ars Technica, September 12, 2013, http://arstechnica.com /tech-policy/2013/09/op-ed-how-patent-trolls-doomed-themselves-by-targeting-main-street/.
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34.Executive Office of the President, “Patent Assertion and U.S.Innovation,” June 2013, http://www.whitehouse.gov/sites/default/.les/docs/patent_report.pdf.
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35.Mullin, “How the Patent Trolls Won in Congress.”
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36.Graddy, “Toward a General Theory of Occupational Regulation.”
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37.Fox-Grange, “Scope of Practice.”
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38.Jen DiMascio, “Defense Goes All-in for Incumbents,” Politico, September 27, 2010, http://www.politico.com/news/stories/0910/42733.html.
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