Histone H1 Reduces the Frequency of Initiation in Xenopus Egg Extract by Limiting the Assembly of Prereplication Complexes on Sperm Chromatin

Somatic histone H1 reduces both the rate and extent of DNA replication in Xenopus egg extract. We show here that H1 inhibits replication directly by reducing the number of replication forks, but not the rate of fork progression, in Xenopus sperm nuclei. Density substitution experiments demonstrate that those forks that are active in H1 nuclei elongate to form large tracts of fully replicated DNA, indicating that inhibition is due to a reduction in the frequency of initiation and not the rate or extent of elongation. The observation that H1 dramatically reduces the number of replication foci in sperm nuclei supports this view. The establishment of replication competent DNA in egg extract requires the assembly of prereplication complexes (pre-RCs) on sperm chromatin. H1 reduces binding of the pre-RC proteins, XOrc2, XCdc6, and XMcm3, to chromatin. Replication competence can be restored in these nuclei, however, only under conditions that promote the loss of H1 from chromatin and licensing of the DNA. Thus, H1 inhibits replication in egg extract by preventing the assembly of pre-RCs on sperm chromatin, thereby reducing the frequency of initiation. These data raise the interesting possibility that H1 plays a role in regulating replication origin use during Xenopus development.

The challenge of contracting for technological information

Contracting to provide technological information (TI) is a significant challenge. TI is an unusual commodity in five ways. (i) TI is difficult to count and value; conventional indicators, such as patents and citations, hardly indicate value. TI is often sold at different prices to different parties. (ii) To value TI, it may be necessary to “give away the secret.” This danger, despite nondisclosure agreements, inhibits efforts to market TI. (iii) To prove its value, TI is often bundled into complete products, such as a computer chip or pharmaceutical product. Efficient exchange, by contrast, would involve merely the raw information. (iv) Sellers’ superior knowledge about TI’s value make buyers wary of overpaying. (v) Inefficient contracts are often designed to secure rents from TI. For example, licensing agreements charge more than marginal cost. These contracting difficulties affect the way TI is produced, encouraging self-reliance. This should be an advantage to large firms. However, small research and development firms spend more per employee than large firms, and nonprofit universities are major producers. Networks of organizational relationships, particularly between universities and industry, are critical in transmitting TI. Implicit barter—money for guidance—is common. Property rights for TI are hard to establish. Patents, quite suitable for better mousetraps, are inadequate for an era when we design better mice. Much TI is not patented, and what is patented sets fuzzy demarcations. New organizational forms are a promising approach to contracting difficulties for TI. Webs of relationships, formal and informal, involving universities, start-up firms, corporate giants, and venture capitalists play a major role in facilitating the production and spread of TI.

An economic analysis of unilateral refusals to license intellectual property

The intellectual property laws in the United States provide the owners of intellectual property with discretion to license the right to use that property or to make or sell products that embody the intellectual property. However, the antitrust laws constrain the use of property, including intellectual property, by a firm with market power and may place limitations on the licensing of intellectual property. This paper focuses on one aspect of antitrust law, the so-called “essential facilities doctrine,” which may impose a duty upon firms controlling an “essential facility” to make that facility available to their rivals. In the intellectual property context, an obligation to make property available is equivalent to a requirement for compulsory licensing. Compulsory licensing may embrace the requirement that the owner of software permit access to the underlying code so that others can develop compatible application programs. Compulsory licensing may undermine incentives for research and development by reducing the value of an innovation to the inventor. This paper shows that compulsory licensing also may reduce economic efficiency in the short run by facilitating the entry of inefficient producers and by promoting licensing arrangements that result in higher prices.