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48 B.C. L. Rev. 111 (2007)
Engineering a Deal: Toward a Private Ordering Solution to the Anticommons Problem

handle is hein.journals/bclr48 and id is 121 raw text is: ENGINEERING A DEAL: TOWARD A
PRIVATE ORDERING SOLUTION TO THE
ANTICOMMONS PROBLEM
F. SCOTT KIEFF*
TROY A. PAREDES**
Abstract: The problems of the intellectual property (IP) anticom-
mons are infamous. Many people fear that the potential for vast num-
bers of IP rights to cover a single good or service will prevent an enter-
prise from even attempting to launch a business for fear of being
unduly taxed or retarded or simply held up. This Article offers a solu-
tion based on private ordering within the context of existing laws. This
approach uses a limited liability entity structured so that IP owners are
given an actual stake in the operating business and thus an incentive to
participate in the enterprise; and yet at the same time, the IP owners
face a number of constraints that mitigate their interest in acting oppor-
tunistically by holding out. Through careful attention to IP owner pay-
offs and self-restraint, the proposed structure is designed to coordinate
behavior among relevant IP owners, thus overcoming the anticommons
problem. This approach is designed to help lawyers serve their role as
transaction cost engineers who can structure relationships in ways that
get deals done.
* Associate Professor of Law at Washington University School of Law and Research Fel-
low at Stanford University's Hoover Institution. Correspondence may be sent to
fskieff91@alum.mit.edu (permanent address).
** Professor of Law at Washington University School of Law.
The authors gratefully acknowledge contributions from fellow presenters and other
participants at the 2005 conference on Commercializing Innovation at Washington Uni-
versity School of Law, a 2006 faculty workshop at Washington University School of Law, a
2006 faculty workshop at St. Louis University School of Law, a 2006 J. Thomas McCarthy
Institute Lecture at the University of San Francisco School of Law, the 2006 conference on
Patent Policy in the Supreme Court and Congress co-sponsored by the Berkeley Center of
Law and Technology at Boalt Hall School of Law of the University of California at Berkeley
and the High Technology Law Institute of Santa Clara University School of Law, the 2006
symposium on Owning Standards held at Boston College Law School, and the 2006 Inter-
national Consortium on Agricultural Biotechnology Research (ICABR) conference held
in Ravello, Italy. The authors also thank Bill Bratton, Eric Claeys, lain Cockburn, Larry
Cunningham, Manya Deehr, David Franklyn, Melinda Griffith, Nicholas Groombridge,
George Jen, Len Jacoby, Dan Keating, Pauline Kim, Matt Lesnick, Chuck McManis, Frank
Partnoy, Tom Pasternak, Bob Richardson, Jennifer Rothman, and Josh Sarnoff for their
helpful insights and comments.

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