A Theory of Sequential Innovation

Abstract: When creators and innovators take up a new task, they face a world of existing works, inventions, and ideas that are governed by intellectual property rights. This presents a choice: Should the creator pay to license those rights or innovate around them? This Article formulates the innovate/borrow decision as the fundamental feature of sequential creativity and innovation, and it maps the various factors that affect how creators are likely to make them. Importantly, creators will be influenced by more than just formal intellectual property rights. We identify three other sets of factors—Technological & Artistic, Market, and Behavioral—that can also affect the path of sequential innovation. Our approach offers a richer, but more complex, account of the nature of sequential innovation and, in so doing, yields insights into its efficient legal regulation.