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Intellectual Property Rights

Innovation, Governance and the Institutional Environment

Edited by Birgitte Andersen

Intellectual Property Rights is cutting edge in addressing current debates affecting businesses, industry sectors and society today, and in focusing not only on the enabling welfare effects of IPR systems, but also on some of the possible adverse effects of IPR systems.
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Chapter 8: Public and Private Institutions in the Governance of Intellectual Property Rights

Eric Brousseau and Christian Bessy


Eric Brousseau and Christian Bessy ABSTRACT Based upon a comparative institutional analysis of the institutional frameworks involved in the governance of intellectual property rights (IPR) systems in France and in the US, both in the domain of patents and copyrights, we demonstrate that the differences of performances among contrasted systems of property rights do not only depend upon the wording of the law, but also result from the governance mechanisms that implement and complete the law. In particular we show that there are essential complementarities between public and private institutions designed by the owners of IPRs. Institutions allow agents to reduce the costs of settling and defending exclusive rights of use over intangible goods by collectivizing the related operation. Collectivization can however generate maladaptation costs since the management of these rights cannot be customized. We then show that the optimal ‘division of labour’ between public institutions, private institutions and individuals varies according to the type of IPR infringement and according to the diffusion strategy used by the owner(s) of the IPRs. We conclude by pointing out that the design of the organization of the institutional framework should be more carefully taken into account when dealing with the optimal design of IPR systems to solve the protection/diffusion dilemma. Keywords: Patent, Copyright, Institutional design, Protection/diffusion dilemma 1 INTRODUCTION The governance of intellectual property rights (IPRs) is becoming a crucial question for economic policies because activities related to intangible 243 244 Institutions of intellectual property rights governance resources represent a growing share...

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