The Right of Integrity in Software: An Economic Analysis

Abstract

The paper proposes a new framework for analysis of recent judicial trends in IP-related licensing and post-sale restrictions. It suggests that recent decisions have allowed IP holders to use such restrictions in order to expand the scope of their IP rights, and that such expansion has been allowed without examining its effects on innovation and creativity - and, subsequently, on competition in the market. The paper focuses on one instance of such expansion; the recognition of a right of integrity in software in the U.S. v. Microsoft decision. Following a brief presentation of the special characteristics of the software industry and the history of the right of integrity under U.S. law, the paper proceeds to present the main economic justifications for an abstract right of integrity and, building on these justifications, proposes a set of substantive tests that should be applied by courts before a right of integrity is applied to new subject matter. The paper then applies these substantive tests to demonstrate the undesirability - from an economic perspective - of the application of a right of integrity to software.

Keywords: Microsoft, Integrity, Moral Rights, Intellectual Property, Antitrust, First Sale, Software Licensing, Servitudes