Edited by Ugo Mattei and John D. Haskell
Chapter 30: The propertization of intellectual property
The three main branches of intellectual property – patents, copyright and trademark – started as laws with the specific aim of advancing a country’s economy. For patents, it was to establish new industries; for copyright, to disseminate knowledge; and for trademark, to prevent consumer confusion. However, today these laws appear to be suboptimal in supporting the appropriate type of investment in innovative and creative activity. Instead of encouraging right holders to invest in activities that contribute to economic development, these laws encourage right holders to allocate more resources in policing their property right and managing potentially infringing activity by market competitors. The social and economic effects of current intellectual property laws and market practices show that there is a significant departure from the initial purposes of having patent, copyright and trademark laws and that this departure has had an adverse effect on market economies. This chapter traces these departures and concludes with the normative position that intellectual property laws should encourage openness, transparency and reasonableness to ensure the success of the globalized economy. A widespread assumption about intellectual property law in economic theory is that these laws are necessary to encourage entrepreneurial and talented individuals to invest and engage in socially productive activities. Inventive, creative and trade pursuits have been widely perceived by economists to generate novel ideas and useful information, which in turn spur technological development.
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