Tragedy of the Anticommons

Michael Heller

The tragedy of the anticommons is a type of coordination breakdown, in which a single resource has numerous rightsholders who prevent others from using it, frustrating what would be a socially desirable outcome. It is a mirror-image of the older concept of tragedy of the commons, in which numerous rightsholders’ combined use exceeds the capacity of a resource and depletes or destroys it.

The concept covers a range of coordination failures including patent thickets, submarine patents, and nail houses. Overcoming these breakdowns can be difficult, but there are assorted means, including eminent domain, laches, patent pools, or other licensing organizations.

To construct roads, railroads, and similar transportation arteries, eminent domain has long been considered necessary. Although the benefit to society from the transportation route may be substantial, without eminent domain, every single property owner along the way must agree for the route to be built. This provides conditions for the tragedy of the anticommons, as even if hundreds agree, a single landowner can stop the road or railroad. The ability for one person to veto the construction drastically increases the transaction costs for such projects.

The term originally appeared in Colombia law professor Michael Heller’s 1998 article of the same name and is the thesis of his 2008 book. In a 1998 article in ‘Science,’ Heller and lawyer and tech writer Rebecca Eisenberg, while not disputing the role of patents in general in motivating invention and disclosure, argue that biomedical research was one of several key areas where competing patent rights could actually prevent useful and affordable products from reaching the marketplace. Proponents of the theory claimed that too many property rights could lead to less innovation.

In Heller’s 1998 ‘Harvard Law Review article,’ he noted that after the fall of Communism, in many Eastern European cities, there were a lot of open air kiosks, but also a lot of empty stores. Upon investigation, he concluded that because many different agencies and private parties had rights over the use of store space, it was difficult or even impossible for a startup retailer to negotiate successfully for the use of that space. Even though all the persons with ownership rights were losing money with the empty stores, and stores were in great demand, their competing interests got in the way of the effective use of space.

In the same way, competing use of copyright can prevent a product from coming to the marketplace at a reasonable price, resulting in lost royalty income for the copyright holders. For example, ‘WKRP in Cincinnati’ was one of the most popular syndicated sitcoms of all time, and many television shows from that era have been successfully released on DVD. However, for many years, ‘WKRP’ was not available on DVD. When it was a television program, an agreement was in place between television producers and music licensing organizations such as ASCAP and BMI wherein a standard licensing fee was paid for each song that was played on a television show. As such, the producers could determine how much money would be paid for their use of music clips and budget accordingly. However, there is no similar standard agreement for use of music on DVDs (which ASCAP and BMI do not control), and producers of programs from that era (and into the present) are now faced with the prospect of negotiating individually with several dozen composers. The current owner of the show, 20th Century Fox, released the show on DVD starting in the first half of 2007, using ‘soundalike’ versions of music for which they could not obtain rights.

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