MINISTERO DELL'ISTRUZIONE, DELL'UNIVERSITĄ E DELLA RICERCA
DIPARTIMENTO PER LA PROGRAMMAZIONE IL COORDINAMENTO E GLI AFFARI ECONOMICI - SAUS
PROGRAMMI DI RICERCA SCIENTIFICA DI RILEVANTE INTERESSE NAZIO NALE
RICHIESTA DI COFINANZIAMENTO

(DM n. 20 del 19 febbraio 2002)
PROGETTO DI UNA UNITĄ DI RICERCA - MODELLO B
Anno 2002 - prot. 2002137581_005


Parte: I
1.1 Programma di Ricerca di tipo: interuniversitario

Area Scientifico Disciplinare: Scienze economiche e statistiche (60%)
Area Scientifico Disciplinare: Scienze giuridiche (40%)

1.4 Responsabile Scientifico dell'Unitą di Ricerca

CAFAGGI FABRIZIO  
(cognome) (nome)  


Professore ordinario 04/12/1962 CFGFRZ62T04H501T
(qualifica) (data di nascita) (codice di identificazione personale)

Universitą degli Studi di TRENTO Facoltą di ECONOMIA
(universitą) (facoltą)
IUS/01 Dipartimento di SCIENZE GIURIDICHE
(settore scient.discipl.) (Dipartimento/Istituto)


cafaggi@jus.unitn.it
(prefisso e telefono) (numero fax) (E-mail)


Parte: II
2.1 Titolo specifico del programma svolto dall'Unitą di Ricerca
THE GOVERNANCE OF KNOWLEDGE BETWEEN PROPERTY AND CONTRACT

2.2 Settori scientifico-disciplinari interessati dal Programma di Ricerca
  • IUS/01 - DIRITTO PRIVATO
  • IUS/02 - DIRITTO PRIVATO COMPARATO
  • SECS-P/01 - ECONOMIA POLITICA

2.3 Parole chiave

KNOWLEDGE ; CONTRACTUAL INCOMPLETENESS ; NETWORKS ; TELECOMMUNICATIONS ; INTELLECTUAL PROPERTY


2.4 Base di partenza scientifica nazionale o internazionale
 
The expression 'knowledge economy' is commonly used by economic scholars to comprehend the current changes within the industrialized countries. The main aspects of these changes arise from the evolution of the mechanisms of knowledge production, distribution and use. The emphasis put by the most recent analyses on these aspects may seem exaggerated, especially if it is considered that at any historical time the economic systems have faced the innovation and distribution problem with respect to information. Within the past centuries many technological revolutions can be seen as a continuous search for new and more reliable communication systems (CHANDLER e al. 2000). However, it is well known that, within the last decade, the use of information technology has determined a fundamental change in the behavior of firms, consumers and institutions. The direction and the extent of this change are still hard to understand. Two elements appear of particular interest to the research. First, the number of production processes and final products that require an intensive use of knowledge tends to increase. Second, a huge number of organisations and individuals are involved in innovative activities (DAVID e FORAY 2002).
Both the aforementioned aspects have many implications for the economic system and the institutions. The reversed relation between fixed capital and intangible resources deeply changes the internal structure of the firm as well as its external relations. The boundaries of the firm are no more influenced by the control power over the equipment and machinery. Indeed, they are largely dependent on the incentive structure that strenghtens the ties between the firm and the holders of pivotal knowledge (RAJAN e ZINGALES 2000). Moreover, today a big innovation attitude is a prerequisite in order to get control over relevant market shares. In a recent past this attitude was linked with vertical integration. By contrast, the technological changes have favoured a trend towards complex relations among groups and institutions, due to promote a continuous process of information production and exchange. Outsourcing, firm networks, strategic alliances and co-operations agreements between private and public institutions are among the most apparent signs of a search for new organizational assets. Although the de-verticalization process is not solely due to technological factors (LANGLOIS 2001), it is clear that knowledge management is the most relevant problem within a redefinition of the relations among and within the firms.
The interest of economic scholars for the causal explanation of the link between technology and organization tends to obscure the influence of the institutional context. Although the policies enacted in favor of innovation are continuously considered within the continental debate, at regional and national level, it is hard to get relevant results about the relation between the institutional choices in each field and the outcomes obtained (MALERBA 2002; CORIAT, WEINMAN 2002). The number of factors which affect on the information production and distribution is certainly one of the reasons against an appropriate definition of the incentives given by the legal rules. A further obstacle is the contextual presence of different regulation systems, often based on incompatible logics. Intellectual property law, labour law, corporate law, contract law, competition law contribute to define the institutional framework in which the innovation producing activities are performed. The economic and legal scholars do not seem to have theorethical tools to define hyerarchical or coordination criteria for conflicts between different groups of norms. For example, it is still debated whether the incentives to innovation, arising from the enlargement of intellectual property rights, should be protected through the reduction of antitrust control or, on the contrary, the more significant problems with respect to antitrust situations require a stricter intervention (ULLRICH 2001). The same issue arises in the approach followed by the American antitrust authorities with regard to the joint ventures set up in the research field.
The lack of adeguate analysis about the relationship among technology, organisations and institutions is not solely due to the difficulty in empirical researches. In fact, especially in studies about intellectual property, a deep contrast emerges about the aims that should be pursued by the regulation of the forms of knowledge. At a first level two approaches can be drawn: on the one hand, the position emerging before the information technology revolution, as adopted by the neo-classical scholars and reviewed within either the neo-institutional and part of the law and economics approach; on the other hand, the economic and legal literature, which proposes an alternative view of knowledge production and distribution.
The two approaches represent the poles of a debate which crosses the different sectors of the information society. The research project intends to analyse the institutional effects of the comparison between appropriability and distribution of knowledge within the relations among firms. The main lines of the research are drawn below.

2.5 Descrizione del programma e dei compiti dell'Unitą di Ricerca
 
The two, above mentioned, theories about the mechanisms of knowledge production and distribution provide different inputs with regard to the institutional choices for promoting innovation.
The former approach, which can be defined as traditional, does not distinguish between information and knowledge, but recognizes in both the features of public goods: high exclusion costs and non rivalry in use. Starting from this, a clear policy option arises: the only way of creating adequate incentives for innovation and creating a technology market is the introduction of rights which guarantee an high level of appropriability of profits obtained from inventions. The reference model is represented by the market of tangible assets. The creation of exclusive property rights is considered one of the conditions upon which the market is based. A similar pattern is therefore suggested for the non-tangible assets market (TEECE 2000).
The neoinstitutional approach is based upon the same premise with regards to the the new co-operation forms among forms. The sharing of knowledge can lead to opportunistic behaviours consisting in appropriating others' inventions. This danger especially arises if a strong protection of property rights is lacking. Therefore, governance would tend to hierarchy when the institutional context and technological tools do not allow to appropriate a profit share proportional to the investment in innovation. A contractual approach could be preferred as the law presents adequate guarantees against opportunism (OXLEY 1999, ARORA e MERGES 2001, SAMPSON 2001).
An alternative view is proposed by the authors who put an emphasis on the difference between information and knowledge. Only the former would present the features of a public good because resulting in instructions which are easily conveyed. By contrast, knowledge is strictly used with regards to cognitive capacities which are not directly reducible in keys, but are pivotal in order to elaborate information already codified (COWAN e al. 2000, STEINMUELLER 2002). The production, elaboration and conveyance of this know-how requires a complex network. The different co-operation forms among firms could be considered a first aid to govern this kind of knowledge. If the traditional approach assumes that innovation can be appropriated by the single firm, the alternative approach underlines the importance of sharing ability and complementarity of knowledge, as a pivotal aspect of the cognitive enhancing process of a firm. In other words the knowledge is not just an output but also an input. Moreover, it cannot be produced in isolation, but requires the access to a network which allowed to share complementary knowledge (DAVID e FORAY 1996, ANTONELLI 2001).
The traditional approach views property rights in information as the only way to ensure adequate incentives for the production of new knowledge. The alternative approach favors institutional structures and communication channels which allow knowledge-sharing. From this point of view, strong property rights could be counterproductive. Moreover, the complementarity between innovation and istitutional structure should not be forgotten (PAGANO 1999, PAGANO e ROSSI 2002). The existing allocation of property rights over intellectual assets may exert an enduring influence on the direction of technological development. Because of the pervasive, yet easily overlooked, influence exercised by the institutional environment the innovation process could lead to the adoption of an inferior technology.
The hypothesis from which this project moves is that the governance of knowledge might be situated in the middle ground between property and free access. Actually, investment in innovation should not be always considered dependent by the granting of property rights. Commodification might reduce innovation due to the lack of complementary information. As regards institutional choices, the key issue is finding an equilibrium between private benefits for inventors and social benefits deriving from knowledge and its allocation.
This research will focus on both the two models of knowledge governance, that is property and contract.
On the basis of these premises, the research aims to analyse the forms of co-operation among firms. The model which more stimulate the attention is that of networks. In this context, it is possible to compare the neo-institutional approach, which insists on opportunism as a cost of contract relationships, and the approach which considers the network as the way for knowledge production without increasing transaction costs (HELPER et al. 2000, BARNETT 2000, POWELL et al. 1999). It seems to be a clear contrast between the same existence of contractual relationships in contexts characterised by big uncertainty and asset-specificity and the upshots of neo-institutional theory. Also relevant is the consideration of the value in terms of reduction of transaction costs which derive from the creation of networks with the participation of public scientific institutions and non-profit institutions (DAVID et al. 1999, CASSIER 2002).
Attention must be reserved to the rules that might incentive or reduce innovation in districts (RULLANI 2001). Some suggestions are given by article 7, Law 192/1998 on outsourcing in general, which assigns to the contractee the property of the project, even if this rule doesn't solve the question of the allocation of rights in the invention made during the relation through the efforts of both parties.
More generally, the existence of outsourcing contractual relationships reveals the intention to create communication channels that maximise the incentives to invest in innovation (INNOCENTI 2001). Further famous examples of district economics are Silicon Valley and Route 128, which seem to confirm that the major source of success in networking is the circulation of knowledge and not the strong protection of intellectual property rights.
The relation between property and contract might be studied also in the perspective of an eventual change of roles. The tradition is in the sense that intellectual property rights are granted to the end of regulating the relation between authors and third persons not involved in the creation process. The increase of co-operation in knowledge production suggests now to consider the regulation of the relation between co-operators as one of the major objectives of intellectual property (COOPER DREYFUSS 2000a). Property model of governance seems to be closer to the contract one. In the mean time, contract appears directed to move in the opposite direction, by extending intellectual property protection beyond the constraints given by copyright.
The Uniform Computer Information Transaction Act, approved in July 1999 by the National Conference of Commissioners for Uniform State Laws and opened to signature by the states, offers a complete regulation of software utilisation. This Act is clearly directed to make the protection of property rights stronger. In other words, contract should reduce the costs of exclusion more efficiently than intellectual property. Yet, this argument risks to decrease the possibility of access to knowledge that is necessary for producing further information (COOPER DREYFUSS 2000b; ELKIN-KOREN 2001).
The use of contract to realise a property-like exclusivity imposes to reflect on knowledge production and distribution mechanisms. In traditional markets, protection of property may sometime be performed through contractual forms. The owner may use for restitution actiones in personam easier than actionem in rem. Yet, , the UCITA provides the owner with the faculty to oppose to third buyers the restrains agreed upon with the first user. The systematic consequences of this solution are not completely clear. As regards material goods, it is maintained that the multiplication of entitlements erga omnes risks to increase information costs (MERRIL-SMITH 2001). The same might be said with regard to intangible goods.
In the European system what emerges is a different balance of interests. The Directive 2001/29/CE and the proposal Directive of 20/2/2002 show the intention to increase the protection of authors and inventors but without reducing open access to idea and information.
Such conflict between innovation and open-access may be found in the debate about network externalities in the new economy (see, in general, SHAPIRO & VARIAN 1999). Property rights in standard may constitute a barrier to entry for new actors where the majority of users decided to use that standard. Monopoly costs should however be compared with social benefits from the standard itself. To prohibit to the owner the right to benefit from network externalities risks to decrease incentives to invest in new technologies production.
But this argument is object of big debate. Someone invokes antitrust law and the doctrine of essential facilities for obliging the owner to give the others the right to use the standard (see PARDOLESI & RENDA 2000, OPI 2001).
A similar issue is presented in the sector of telecommunication networks, where the doctrinal trend is in the sense to oblige the dominant operators to open the networks to competitors (NOAM 2001, CAVE - PROSPERETTI 2001, LAROUCHE 2000).
Both for intellectual property and for telecommunications networks it becomes of crucial relevance the individuation of intermediary forms of access to knowledge, which guarantee simultaneously both incentives in innovation and access to information useful for the production of complementary information.