Vol # THE PROBLEM OF UNIFORMITY COST response has been to grant and administer rights under patent and copyright law. Such rights give the innovator the r to exclude or inhibit direct competition, which yields potential power over price. If demand is sufficient, the innovator can use that power to earn a positive return on investments in innovation While addressing underproduction, intellectual property rights also impose social costs. Professor Lemley nicely summarizes these as follows First, intellectual property rights distort markets away from the competitive norm, and therefore create static inefficiencies in the form of deadweight losses. Second intellectual property rights interfere with the ability of other creators to work, and therefore create dynar inefficiencies. Third, the prospect of intellectual property rights encourages rent-seeking behavior that is socially wasteful. Fourth, enforcement of intellectual property right research and development is itself distortionary > Stment in imposes administrative costs. Finally, overinve B The problem of Uniformity Cost Economic analysts generally agree that these social costs must be minimized, and intellectual property rights should be no more robust than necessary to induce the desired level of investment in cultural and technological innovation. However, in both the economic and the law- MARKET STRUCTURE AND ECONOMIC PERFORMANCE 622(3d ed 1990); See, e.g, Mark tellectual Property, and Fr 054-55(2005)[hereinafter Lemley, Free Riding lan E Novos Michael Waldman The Effects of Increased Copyright Protection: An Analytic Approach, 92 J. POL. ECON 236,237(1984) Lemley, Free Riding, supra note XX, at 1058-59 See, e.g., Lunney, Quiet Revolution, supra note XX, at 5(arguing that patent protection should be provided only to the precise extent necessary to secure each individual innovations ex ante profitability and acknowledging that this level will have to account for unsuccessful research efforts); William W. Fisher Ill, Property and Contract on the Internet, 73 CHI.-KENT L. REV. 1203, 1249(1998)(arguing that the goal of copyright law is to give creators enough entitlements to induce them to produce the works from which we all benefit but no more"). The canonical version of this argument was voiced by lord Macauley, who argued that a grant of copyright was a grant of an evil monopoly and that [for the sake of the good we must submit to the evil; but the evil ought not to last a day longer than is necessary for the purpose of securing the good. Thomas Babington, Lord Macaulay, A Speech Delivered in the house of Commons on the 5th of February, 1841Vol. ##] THE PROBLEM OF UNIFORMITY COST 7 response has been to grant and administer rights under patent and copyright law. Such rights give the innovator the power to exclude or inhibit direct competition, which yields potential power over price. If demand is sufficient, the innovator can use that power to earn a positive return on investments in innovation. While addressing underproduction, intellectual property rights also impose social costs. Professor Lemley nicely summarizes these as follows: First, intellectual property rights distort markets away from the competitive norm, and therefore create static inefficiencies in the form of deadweight losses. Second, intellectual property rights interfere with the ability of other creators to work, and therefore create dynamic inefficiencies. Third, the prospect of intellectual property rights encourages rent-seeking behavior that is socially wasteful. Fourth, enforcement of intellectual property rights imposes administrative costs. Finally, overinvestment in research and development is itself distortionary.17 B. The Problem of Uniformity Cost Economic analysts generally agree that these social costs must be minimized, and intellectual property rights should be no more robust than necessary to induce the desired level of investment in cultural and technological innovation.18 However, in both the economic and the law- MARKET STRUCTURE AND ECONOMIC PERFORMANCE 622 (3d ed. 1990); See, e.g., Mark A. Lemley, Property, Intellectual Property, and Free Riding, 83 TEX. L. REV. 1031, 1054-55 (2005) [hereinafter Lemley, Free Riding]; Ian E. Novos & Michael Waldman, The Effects of Increased Copyright Protection: An Analytic Approach, 92 J. POL. ECON. 236, 237 (1984). 17 Lemley, Free Riding, supra note XX, at 1058-59. 18 See, e.g., Lunney, Quiet Revolution, supra note XX, at 5 (arguing that patent protection should be provided only to the precise extent necessary to secure each individual innovation’s ex ante profitability and acknowledging that this level will have to account for unsuccessful research efforts); William W. Fisher III, Property and Contract on the Internet, 73 CHI.-KENT L. REV. 1203, 1249 (1998) (arguing that the goal of copyright law “is to give creators enough entitlements to induce them to produce the works from which we all benefit but no more”). The canonical version of this argument was voiced by Lord Macauley, who argued that a grant of copyright was a grant of an evil monopoly and that “[f]or the sake of the good we must submit to the evil; but the evil ought not to last a day longer than is necessary for the purpose of securing the good.” Thomas Babington, Lord Macaulay, A Speech Delivered in the House of Commons on the 5th of February, 1841