A Century of Experimentation

• DOI: 10.1177/0003603X17735194
• Author: Elena Voinikanis,Alexey Ivanov
• Date: 01 December 2017
• Published date: 01 December 2017

Article
The Antitrust Bulletin
2017, Vol. 62(4) 752-769
A Century of Experimentation:
ª The Author(s) 2017
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DOI: 10.1177/0003603X17735194
Knowledge Production in
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Russia from 1917 to 2017 and
Their Implications for IP and
Competition Equilibrium
Alexey Ivanov* and Elena Voinikanis**
Abstract
The Soviet system of knowledge production based on cooperation, knowledge sharing, but also
intense competition was already an inspiration for innovation policymakers in the U.S. and in Europe
back in the 1950 and 1960s. Nowadays, as the global economy is moving towards a new mode of
production, the Soviet case may still play an important role to help to frame a better institutional
approach to innovation. With the dramatic challenges already brought by the fourth industrial rev-
olution and the tectonic economic and social shifts it is expected to cause around the world, the
Soviet case with all its pros and cons is becoming more and more relevant for this debate as it
provides necessary empirical data to consider other institutional approaches to innovation distinct
from the established property-focused model. In this context, intellectual property and competition
law scholars hopefully would better understand the Soviet innovation system through further aca-
demic studies.
Keywords
innovation policy, IP and competition policy, knowledge production, Soviet innovation system,
institutional experimentation, Socialist competition, global competition
*HSE-Skolkovo Institute for Law and Development at the National Research University – Higher School of Economics,
Moscow
**HSE-Skolkovo Institute for Law and Development at the National Research University – Higher School of Economics,
Moscow
Corresponding Author:
Alexey Ivanov, HSE-Skolkovo Institute for Law and Development at the National Research University - Higher School of
Economics, Moscow, Russian Federation.
Email: a.y.ivanov@gmail.com

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Ivanov and Voinikanis
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I. Introduction
Innovation has become a highlight of policy reforms around the world, as global economic compe-
tition has been slowly but steadily reduced to an ability to harness a dynamic technological and social
change.1 In this context, innovation policy as a scholarly field is becoming extremely vague while
embracing a broad range of topics—from educational and immigration policies to environmental
regulations, taxation, and capital markets.2 But it would still be fair to say that the foundations of
any institutional approach to sustaining knowledge production in the most advanced economies are
primarily defined by the legal regimes of intellectual property (IP) and competition law as both the
property regime and economic competition represent the key elements of market-driven knowledge
production. Both IP and competition law, as it is now widely recognized, define innovation as their
common objective.3 Based on this shared vision, the discussion about the interface of IP and compe-
tition law today is focused primarily on finding an optimal combination of incentives for economic
agents to intensify their innovative activities—innovation carrots provided by the exclusivity regime of
IP rights, and innovation sticks coming from the potent economic competition that should be guar-
anteed though the effective enforcement of competition laws.4
As this debate has evolved, a number of more fundamental questions have also arisen in an attempt
to find a mode of knowledge production that can improve economic and social development. To a
certain extent, we are witnessing another iteration of the debate starting back in the 1960s and
commonly associated with the names of leading economists of that time, Kenneth Arrow5 and Harold
Demsetz.6 As it is perceived now, the principal choice is between two main institutional approaches:
the one based on the exclusivity regime for knowledge and information and apparent incentives to
innovate that such a regime creates, and another one based on access to knowledge and information
and a more vigorous economic competition in knowledge production stimulated through different
public policies, including prizes and procurements.7 As the legal instruments used for promoting
1. As emphasized by the recent World Economic Forum report, “Indeed, across all industries, there is clear evidence that the
technologies that underpin the Fourth Industrial Revolution are having a major impact on businesses.” Klaus Schwab, The
Fourth Industrial Revolution: What It Means, How to Respond, WORLD ECONOMIC FORUM REPORT (Jan. 14, 2016), https://
www.weforum.org/agenda/2016/01/the-fourth-industrial-revolution-what-it-means-and-how-to-respond/. See also KEITH
MASKUS, PRIVATE RIGHTS AND PUBLIC PROBLEMS: THE GLOBAL ECONOMICS OF INTELLECTUAL PROPERTY 1 (2012) (“Politicians
and pundits everywhere agree: We live in a global knowledge economy and the key to ‘winning the future’ is to excel at the
turning what we discover and learn into marketable new products and technologies. Innovation, adaptation and the use of
these new technologies are the primary drivers of growth within economies and across international borders.”).
2. See, for instance, THE GLOBAL INNOVATION INDEX (Soumitra Dutta, Bruno Lanvin, & Sacha Wunsch-Vincent eds., 2017),
https://www.globalinnovationindex.org/gii-2016-report. Also see Jakob Edler, Abdullah Gök, Paul Cunningham, & Philip
Shapir, Introduction: Making Sense of Innovation Policy, in HANDBOOK OF INNOVATION POLICY IMPACT 1–17 (Jakob Edler et al.
eds., 2016).
3. See, for instance, Frédéric Jenny et al., Competition Law, Intellectual Property Rights And Dynamic Analysis: Towards a
New Institutional “Equilibrium?” 4 CONCURRENCES REVIEW 13 (2013), http://awa2014.concurrences.com/academic-articles-
awards/article/competition-law-intellectual.
4. On this debate, see, for instance, Ioannis Lianos, A Regulatory Theory of IP: Implications for Competition Law (CLES
Working Paper Series No. 1/2008, Nov. 2008, 3), https://www.ucl.ac.uk/cles/research-paper-series/research-papers/cles-1-
2008 (“Public authorities should also strike a balance between the need for invention and creation, on the one hand, and the
need for diffusion and access”).
5. Kenneth J. Arrow, Economic Welfare and the Allocation of Resources for Invention, in THE RATE AND DIRECTION OF INVENTIVE
ACTIVITY: ECONOMIC AND SOCIAL FACTORS (Richard Nelson ed., 1962).
6. Harold Demsetz, Information and Efficiency: Another Viewpoint, 12 J.L. & ECON. 1, 14 (1969).
7. For this discussion, see Amy Kapczynski, The Cost of Price: Why and How to Get Beyond Intellectual Property Internalism,
59 UCLA L. REV. 970 (2012), https://ssrn.com/abstract=2103821. See also Michael Kremer & Heidi Williams, Incentivizing
Innovation: Adding to the Tool Kit, in 2 INNOVATION POLICY AND THE ECONOMY (Adam B. Jaffe et al. eds., 2002), http://www.
nber.org/chapters/c10785.

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The Antitrust Bulletin 62(4)
exclusivity or encouraging a wider dissemination of innovation are quite diverse, there is space for
institutional experimentation. A number of recent scholarly publications in the field are showing a
growing interest in exploring new institutional approaches to knowledge production aiming to over-
come the known shortcomings of the existing legal framework for innovation.8
The mainstream model of the knowledge production in the most advanced economies of our time
still primarily relies on property-like exclusivity as an incentivizing mechanism accompanied with a
limited competition law intervention acting essentially as a balancing tool to overcome market flaws in
the knowledge production. This institutional approach is compared in the literature to such alternative
settings as commons-based production, prize systems, and government procurements putting more
emphasis on diffusion and dissemination of knowledge rather than an exclusivity regime. All these
institutional alternatives are now seriously considered as possible ways for innovation policies
development.9
At the same time, the existing legal framework both at the national and international levels creates a
substantial obstacle for serious experimentation with the institutional approaches to innovation. The
property-like exclusivity regime for knowledge and information is embedded in the global economic
order though the World Trade Organization (WTO) Agreement on the Trade-Related Aspects of the
Intellectual Property Rights (TRIPS) and supported through a number of other legal mechanisms like
bilateral and multilateral free trade and investment agreements aiming to reinforce this exclusivity
regime by all available means.10 The regulatory abilities of states, even the most powerful ones, are not
producing the same regulatory result as in the past. Noam Chomsky underscores this problem by
stating that
privatization and globalization, working together, have transferred democratic decision-making on policy
from the public arena of the nation-state to the masters of the new economy who can use their global
information systems to tame public interest movements like antitrust and to replace the regulatory rhetoric
with a new rhetoric of free markets and private power. Hence, free trade arrangements facilitating world
trade and capital mobility operate without public supervision and control.11
The lack of effective practical institutional experimentation of a material scale in the major jur-
isdictions in its turn blocks creation of the empirical data necessary to support an...