3/12: Controlling Secondary Markets - from Planing Machines to T-GURTs

March 12, 2007 12:30 pm

Stefan Bechtold graduated from the University of Tuebingen Law School, Germany, in 1999. In 1999 and 2000, he was a Visiting Scholar at the University of California at Berkeley School of Law. In 2001, he received a Dr. iur. (legal Ph.D.) from the University of Tuebingen Law School. Supported by a Fulbright scholarship, he received a master's degree (J.S.M.) from Stanford Law School in 2002. Since 2002, he is a non-residential Fellow at the Center for Internet and Society at Stanford Law School. From 2002 to 2004, he was a law clerk ("Referendar") at the regional court ("Landgericht") of Tuebingen, which is a mandatory part of German legal education. As part of this training, he spent a three-month internship at a telecommunications law unit of the European Commission's Directorate General Information Society in summer 2004. Since January 2005, he is a Senior Research Fellow at the Max Planck Institute for Research on Collective Goods in Bonn, Germany. At the Max Planck Institute, he is writing his
"Habilitation", which is a post-doctoral thesis that is required to become a law professor in Germany. In the fall of 2005, he was a Visiting Scholar at the Institute for Information Law at the University of Amsterdam.
In many areas of the economy, firms offer durable goods at low prices, while charging high prices for compatible spare parts, accessories, as well as maintenance and repair services. A classic example is the cheap razor and the expensive blades. Such business strategies only make sense if the firm can restrict or eliminate competition on the secondary market. In addition to well-known strategies such as refusals to deal, tying and exclusive dealing, rebate programs and the introduction of technical incompatibilities, firms increasingly use intellectual property rights in order to control secondary markets. While, in 1850, the debate about such strategies focused on planing machines, today we are talking about challenge-response protocols and radio communications within computer printers and about trait-specific genetic use restriction technologies (T-GURTs) in biotech. Using a (behavioral) law and economics analysis, the talk assesses the impacts of controlling secondary markets. Analyzing U.S., European and German law, the talk evaluates the extent to which antitrust, design protection, patent, copyright, trademark and unfair competition law succeed in transforming economic insights into an operable legal framework. Thereby, the talk analyzes possibilities of and limitations to incorporating economic theories into antitrust and intellectual property law.

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