![handle is hein.journals/bulron100 and id is 1 raw text is: RIGHT ON TIME:
NOT QUITE RIGHT ON ECONOMICS
DOUGLAS W. ALLEN*
Oliar and Stern develop an economic framework to understand the timing and
nature of a first possession rule to establish property, apply this framework to
the acquisition of intellectual property, and consider various policy and legal
implications.1 At the most general level, I think their approach has merit and the
applications are reasonable. However, the economic framework is muddled and
incorrect. Here I will only comment on their economic framework, where I
arguably have a comparative advantage.
Oliar and Stern intuitively see time as a fundamental factor in the matter of
first possession and begin their framing of the question with a theoretical
timeline:
[A] chronology that begins with the first actions a person may take having
any relationship to a resource . . . [proceeding to] actions necessary for a
person to derive a benefit from the resource: preparations for its pursuit;
pursuit itself; the successful completion of pursuit by bringing the resource
within one's control; cultivation and improvement to enable beneficial use;
and finally actual use . . . .2
Such a chronology begs the question: What is the optimal time at which
ownership should be established? Their economic answer: when the marginal
costs and benefits of waiting are equal. In their words the fundamental trade-off
is early awards [have] the risk that a claimant will fail to proceed
successfully ... [and] late awards [have] the potential for prolonging costly
multiparty races and disincentivizing race participation.3 In other words, early
possession might give property to the wrong person, someone who cannot
complete the task of ownership, and late possession either ends up with too much
dissipation or no one trying.
Oliar and Stern use an iconic marginal benefit/marginal cost graph in Figure
1 to argue for an optimal time t* of possession.4 Unfortunately, Figure 1 is
incongruous with their reasoning. For example, they assume marginal benefits
Burnaby Mountain Professor of Economics, Simon Fraser University.
1 See generally Dotan Oliar & James Y. Stern, Right on Time: First Possession in Property
andIntellectual Property, 99 B.U. L. REv. 395 (2019).
2 Id. at 404.
3 Id. at 417.
4 Id. at 407 fig.1.
1](ViewImageLocal?handle=hein.journals/bulron100&div=1&collection=&method=preview&ext=.png&size=3)
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