Introduction to Ip Law

THEORY/POLICY

A. Intellectual property vs. real property

1. Non-rivalrous consumption – more than one person can use at same time

2. Non-excludability – out there for all to see

3. Public goods quality – like defense, environment

a. Inventor takes great risk that he may not be “compensated” for investment

B. PURPOSES:

1. Allow creator to appropriate benefits of his creation

2. Protection – incentive to invent – R & D

3. Prevent free-riding; unfair competition

4. Encourage follow-on innovation, more uses, transformative and competitive works

5. Benefit the public and consumer

C. Alternatives to IP:

1. Government subsidy of creation

a. National Endowment of the Arts model – impossible to match amt. of subsidy w/ actual

social benefit conferred; costs associated w/ deciding who is funded; political element

b. Taxes: tax on tape goes back to musicians to compensate for decreased sales due to copying

c. IP is a govt. subsidy w/out the middleman; cheaper than tax system; allows market to determine

value of goods; BUT – some things will only come into being if subsidized

D. JUSTIFICATIONS

1. Locke’s labor theory: Entitled to fruits of one’s efforts

2. Utilitarian: existence of property rights increases number of socially useful creations

3. Hegel (personhood): Property rights help fulfill themselves

4. Breyer: Author always has lead time over copiers (so = natural form of appropriation); ISSUE: does

lead time give enough profit to provide incentive to create?; can recoup investment by bundling –

linking ideas to physical assets

5. Machlup: Patents only valuable at some times

6. Radin (personhood approach): Two types of property

a. Fungible – replaceable, compensable by money...