proceedings sometimes taking years to resolve. Before these lawsuits are completed, it is not known who controls the right to use what resource. Property rights are incomplete.

Efforts by inventors and creators, and by those who might wish to contract with them, might overcome these practical problems. For example, clarifying who has what rights early on, at the time inventor might seek to contract with others, is potentially valuable. These efforts run into difficulties. Patent and trademark offices are understaffed (certainly so in the US) and not eager to work with outsiders who would like to understand the precise rights which have been allocated. “Opposition” systems, by which outsiders object to patents and get clarification early are different across different countries, but nowhere really clarify rights. Rules about the revelation of information about patents often leave secret what has been claimed until the patent is granted. While this protects the privacy of inventors who are not going to get a patent, it reduces the amount of information in the broader economy about legal rights. Other aspects of information revelation are incomplete as well. Legal rights to the same invention in different countries can vary considerably.

The effect of all of these elements – each of which has a real justification – is to make property rights incomplete. At the moment a new inventor or creator would like to contract with others, and society would like contracts to go forward, property rights in a specific invention are highly incomplete. Adding certainty to complete them is very difficult at that key moment.

The clearest conflict between competition policy and legal protection for inventors or artists arises when the scope of property rights is unclear. Creators who have one legally protected right may seek to gain other property rights in ways that limit competition. A creator may, for example, seek to expand the scope of their protection to cover substitutes for their product in order to lessen competition. Or, they may seek to expand the scope of their legal protections to complements in order to earn rents associated with the complements or, sometimes, to reduce competition. The general label that sweeps all these phenomena together is actions by creators to expand the scope of their legal protection. It is particularly important to consider this when the scope of the legal protection awarded to an inventor or a creator is not given and exogenous, but instead depends on actions they might take or on their market position, such as lobbying governments or bringing lawsuits.

The same uncertainty limits the ability of the private economy to contract around limitations on patents. Uncertainty about the scope of legal rights is a transaction cost in contract, unless all parties in the economy have the same, objective, estimate of the probability that a given legal right has a particular scope.

Unfortunately but not surprisingly, much of the recent difficulty with resolving the scope of legal protections and making them clear at the time of invention arises in connection with the economy’s newest and most technologically vibrant areas. Trouble arises in areas like patentability for living organisms, database patents, software patents, patents for tools and for the objects the tools make, business methods patents, and so on. Further, several of the most important modern innovative industries, such as information technology and biotechnology, are general purpose technologies that undergo continued improvement over a long period of time. That brings the problem of protection for general purpose technologies and for applications, and the problem of protection for early