- Derek Khanna, Yale Law Visiting Fellow
Regulation can be a significant barrier to innovation, protecting incumbents and making it harder to bring new goods and services to market. Determining the appropriate regulation is all the more difficult when accelerating technology is creating many new opportunities as well as potential dangers. Can the administrative state itself innovate to promote beneficial innovation? Topics to be considered here will be the nature and scope of cost-benefit analysis, the use of experiments to guide regulation and prizes as an alternative to top-down regulation.
This program was presented on February 20, 2015, as part of the 2015 Federalist Society National Student Symposium.
On March 31, 2015, the Supreme Court heard oral argument for two cases: Commil USA, LLC v. Cisco Systems and Kimble v. Marvel Enterprises. In Commil, the question is whether a defendant's good-faith belief that a patent is invalid is a defense against a claim of induced patent infringement. In Kimble, the issue concerns whether the Court should overturn a long-standing precedent under which a patent-holder cannot obtain royalty payments beyond the expiration of the patent.
To discuss these cases, we have Prof. Gregory Dolin, Associate Professor of Law and Co-director, Center for Medicine and Law, University of Baltimore School of Law.
In the innovation economy, entrants often confront increased regulatory hurdles, particularly on a state level, as they enter the marketplace and disrupt previously tightly regulated industries, such as hospitality and transportation. In California, for example, legislators have proposed rigorous insurance requirements, drug testing, and new background checks on Uber and Lyft drivers that traditional taxicab drivers do not face. Airbnb faces scrutiny in New York, with critics accusing it of violating rent control laws by creating an underground rental market, threatening public safety and driving up rental prices. In New Jersey, Tesla sales have been shut down after licensing restrictions prevented direct-to-consumer sales of electric vehicles, bypassing franchised dealers. While the entrants contend that these restrictions only serve to restrain competition and protect special entrenched interests, the critics maintain that consumer protection and maintaining a level playing field are the true goals in their regulatory policies. What’s the proper balance between innovation and regulation? Will these new entrants incentivize innovation or will existing regulatory capture only succeed in maintaining the status quo? Are state regulations the greatest impediment to innovation, or do federal regulations also impede progress?
This panel was part of the 2015 Annual Western Chapters Conference held on January 24, 2015, at the Ronald Reagan Presidential Library in Simi Valley, CA.
The Ronald Reagan Presidential Library
Simi Valley, CA