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UC Law Journal

Dana R. Wagner

Abstract

This Article identifies and analyzes an emerging trend in the legal regulation of high-technology industries. The Article begins by distinguishing between conventional forms of computer technology and "systems technology," the architectural technology that defines computing environments and determines the products with which they can interface. It argues that a doctrinal shift is occurring in the laws that regulate the competitive behavior of systems-technology innovators: a shift away from exclusionary entitlements and towards a system of liability-rule protections. As evidence of this shift, the Article examines recent legal disputes involving microprocessor technology and computer bus design.

The Article then argues that the emergence of the doctrinal shift can be understood as a response to the particular characteristics of systems- technology industries. Specifically, the combination of network externalities, interconnectivity, rapid innovation, and excludability in these industries creates a situation in which conflicts over technological access are likely to occur. The same market characteristics suggest that protecting innovators' entitlements with liability rules is an appropriate method for resolving those conflicts, and that the doctrinal shift towards a liability regime may therefore be appropriate, despite its potential costs.

Having examined the appropriateness of the shift from an economic perspective, the Article next examines its appropriateness from a doctrinal perspective-that is, it examines whether the shift can be justified under the established legal doctrines. It argues that a number of those doctrines support the movement towards liability rules, most notably the monopolization doctrine and the common-carrier doctrine.

The Article concludes by discussing the implications of its analysis for the current litigation between the Justice Department and Microsoft Corporation.

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