A Review of Ryan Calo’s “Code, Nudge, or Notice?”

In the intro lecture of our Regulation of Internet Communications class, we got to play Lessig’s “dot game,” brainstorming and categorizing solutions to the “kids drive too fast in my neighborhood” problem.  We came up with various options, including increasing police presence, posting signs with speeding fines, driver education, autonomous cars, speed bumps, vigilantism and the “fake deer”…  We then categorized our solutions into Lessig’s four regulatory constraints: architecture, the market, the law, and norms.

In this recent article, Ryan Calo adds a new element to Lessig’s “dot game,” inviting us to go one step further by providing a framework to assist in choosing among different regulatory interventions.  Calo’s mode of inquiry deviates from prior art (Lessig, Thaler & Sunstein etc.) in that he considers the overlaps among the different constraints, and argues that perhaps we shouldn’t get too caught up in the differences between code, nudging, and notice, as the nuances may not be as pronounced as they appear at first glance.  Calo further argues that “whether regulators employ code, nudge or notice, there is almost always the deeper choice between helping citizens and hindering them.”

In selecting among alternative interventions, Calo argues that policymakers ought to favor “facilitation” over “friction”, in particular where procedural safeguards are missing in action.  Calo defines “facilitation” as “helping citizens develop and consummate their intentions”… “helping people arrive at their preferred outcome.”  In contrast, he defines “friction” as “creating barriers – physical or otherwise – to the conduct citizens would otherwise carry out.”

What I wonder is – absent instances of shared interest among regulators and citizens – whether regulators would be motivated to adopt a facilitation approach, and risk that citizens may arrive at outcomes that are not in line with the regulators’ own interests.  The self interested nature of policymakers creates an incentive for them to apply at least some measure of manipulation to ensure that citizens arrive at outcomes that are consistent with their own interests.

Facilitation suggests a shift towards self-regulation, which may lead to an increased risk of regulatory capture. Under the facilitation model, citizens must be given access to information to make decisions.  Such information will likely come from industry, which is by nature self-interested.  Will government intervene to place limits on the information that industry may pass on to people?  If it does, then it is engaging in a subtle form of manipulation by selecting between the messages that people can receive (which moves us towards friction).

Calo’s analysis adds a new and exciting dimension to our familiar dot game scenario…   Anyone up for playing “dot game 2.0”?


On the occasion of the U.S.’s upcoming switch to the first-to-file patent system

On March 16th, 2013 the U.S. will be joining the ranks of the majority of countries by switching from the first-to-invent to the first-to-file patent system.  The change is part of a broader set of patent system reforms comprising the Leahy-Smith America Invents Act that was signed into law in 2011.

Under the outgoing first-to-invent system, patent protection is awarded to the party that first conceives of the invention and reduces it to practice (by filing a patent application or building a working prototype).  If one party (Inventor A) comes up with an invention but a second party (Inventor B) reduces it to practice before Inventor A does so, then Inventor A is still awarded the patent so long as reasonable diligence is exercised in reducing the invention to practice up to the date when Inventor B achieves reduction.

Under the new first-to-file system, patent rights are awarded to the party that is first to file a patent application.  In our earlier example, if Inventor B files a patent application for an invention that was earlier conceived of by Inventor A, then Inventor B will get the patent.

The first-to-file system reflects the bargain that the patent system is intended to strike by requiring public disclosure through the filing of a patent application in exchange for granting exclusive monopoly rights over the invention.  In contrast, under the first-to-invent system, it is possible for an inventor to develop an invention and sit on it until someone else comes along and files a patent application, and then come forward and receive patent rights based on the prior invention date.

All this is by way of saying, inventors get ready to start your engines and join the rest of the world in the race to the patent office.  U.S., welcome to the first-to-file system… What took you so long?