Learning to Live with Patents: A Evolving Norms in Response to Legal Institutional Change

Fiona Murray, MIT Sloan School of Management Massachusetts Institute of Technology, and Scott Stern, Kellogg School of Management Northwestern University

10/25/2011
(Original Publish Date: 11/1/2010)

In accounts of the daily practice of scientists significant disagreement arises as to whether and how law, specifically institutions support intellectual property (IP) rights, shape scientific work. On the one hand, patents are considered to be intrusive legal instruments. On the other, it has been argued that collective social norms emerge to manage intellectual property rights and other accessrelated issues. In this paper we examine the role of social norms and ask whether they serve as a complement to or substitute for formal legal institutional arrangements. We posit that in response to legal change, two key mechanisms "acquiescence and adaptation" arise both of which require a shift in social norms: acquiescence arises rapidly at the level of individuals and organizations while adaptation operates over the long run, at the community-level, and only becomes the dominant response with time. In a quantitative analysis of this thesis we examine the causal impact of expanding IP rights on participation in the life sciences knowledge community. We find that while IP initially engenders rapid acquiescence, over time adaptation exerts an ever larger influence, facilitating participation through the development of norms that outweigh the specific details of IP rights.