The Trade-Off Of Intellectual Property Rights Reconsidered: Technological Knowledge As An Essential Facility
Intellectual property rights have a twin effect on the economic system. On the one hand they favor the introduction of new technological knowledge. On the other they reduce competition and eventually may limit the rate of introduction of new knowledge. A trade-off takes place between such positive and negative effects. The application to the economics of knowledge of the notions of essential facility and liability rule can correct the balance of the trade-off and contribute the rate of advance of technological knowledge and its effective use in the economic system. The tuning of exclusive property rights makes it possible to minimize knowledge rents and favor the dissemina tion and use of knowledge in the economic system taking advantage of its intrinsic cumulability and complementarity.
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