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The dominant Law and Economics paradigm regarding “Intellectual Property" – a vehicle or an obstacle for innovation, growth and progress?

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  • Salzberger, Eli

    () (University of Haifa)

Abstract

The term "intellectual property" is a relatively a modern term, first used in its current meaning when the UN established the World Intellectual Property Organization (WIPO) in 1967. Beforehand laws around the world protected various aspects of informational goods - inventions and creations - using separate legal concepts, such as copyright, patents and trademarks, which were not perceived as property rights. This linguistic aspect is by no means anecdotal or marginal as it can be argued that the term "intellectual property" constituted its contemporary meaning including the economic analysis of informational goods and services, as can be demonstrated by the recent call to treat trade secrets not as a contractual agreement but as intellectual property (Epstein, 2005). This paper focuses on the normative analysis of IP rights and criticizes the implicit shift in economic analysis of IP from the incentives paradigm, which is founded upon the public good analysis of neo-classical micro-economic theory, to the new propriety paradigm, which is intellectually founded upon the tragedy of the commons literature. It further criticizes the dominant contemporary Law and Economics writings in this field as pre-assuming information to be an object of property, overlooking its fundamental differences from physical property and thus focusing on its management and maximization of value for its "owners" rather than on its initial justifications and its social value and contribution to innovation, growth and progress.

Suggested Citation

  • Salzberger, Eli, 2011. "The dominant Law and Economics paradigm regarding “Intellectual Property" – a vehicle or an obstacle for innovation, growth and progress?," Ratio Working Papers 177, The Ratio Institute.
  • Handle: RePEc:hhs:ratioi:0177
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    References listed on IDEAS

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    1. Boldrin,Michele & Levine,David K., 2010. "Against Intellectual Monopoly," Cambridge Books, Cambridge University Press, number 9780521127264.
    2. Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc.
    3. Pakes, Ariel S, 1986. "Patents as Options: Some Estimates of the Value of Holding European Patent Stocks," Econometrica, Econometric Society, vol. 54(4), pages 755-784, July.
    4. Mark A Lemley, 2004. "Ex Ante versus Ex Post Justifications for Intellectual Property," Levine's Working Paper Archive 122247000000000492, David K. Levine.
    5. Frischmann Brett M., 2007. "Evaluating the Demsetzian Trend in Copyright Law," Review of Law & Economics, De Gruyter, vol. 3(3), pages 649-677, December.
    6. Landes, William M & Posner, Richard A, 1989. "An Economic Analysis of Copyright Law," The Journal of Legal Studies, University of Chicago Press, vol. 18(2), pages 325-363, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Law; intellectual property; growth; incentives;

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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