Tragedy of the anticommons

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The tragedy of the anticommons is a neologism coined by Michael Heller to describe a coordination breakdown where the existence of numerous rights holders frustrates achieving a socially desirable outcome. The term mirrors the older term tragedy of the commons used to describe coordination breakdowns arising from insufficient rights holders. The concept provides a unifying framework for a range of coordination failures including patent thickets, submarine patents, nail houses, and more generally bureaucratic red tape. Overcoming these breakdowns can be difficult, often violent, but there are assorted means including eminent domain, Laches, patent pools or other licensing organizations.

The term originally appeared in Heller's 1998 article[1] and is the thesis of his 2008 book.[2] In a 1998 article[3] in Science, Heller and Rebecca Eisenberg argue that biomedical research was one of several key areas where competing patent rights could actually prevent useful and affordable products from reaching the marketplace. Proponents of the theory claimed that too many property rights could lead to less innovation. The purported counter effect of the tragedy of the anticommons, the increased usefulness of a resource as the result of many individuals using it, has been dubbed the "comedy of the commons" by Carol M. Rose in a 1987 article that appeared in the University of Chicago Law Review. It is related to the concepts of network effects and non-rivalrous goods.

Contents

Classic example

In Heller's 1998 Harvard Law Review article[1], he noted that after the fall of Communism, in many Eastern European cities there were a lot of open air kiosks, but also a lot of empty stores. Upon investigation, he concluded that because many different agencies and private parties had rights over the use of store space, it was difficult or even impossible for a startup retailer to negotiate successfully the use of that space. Even though all the persons with ownership rights were losing money with the empty stores, and stores were in great demand, their competing interests got in the way of the effective use of space.

Patents

Patents often are cited as examples of the tragedy of the anticommons because a patent owner has exclusive rights over the use of the patented technology. If the creation of a certain product involves the use of many techniques and components patented by different people or different companies, then it can be very difficult to negotiate effectively with all the patent holders at once, and the result may be that one has to pay so many license fees that it becomes too expensive to create the desired product. Thus, a product that is in great demand may not be produced because costs associated with patents are too high.

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