28 Pages Posted: 20 Jul 2012 Last revised: 17 Jul 2016
Date Written: July 20, 2012
Economic theory has struggled to produce a coherent narrative justifying the implementation of intellectual property regimes, although a variety of rationales have been advanced as explanations. The most prevalent justification characterizes the subject matter of intellectual property in terms of public goods, which are nonrivalrously and nonexclusively consumed and thus likely to be underproduced due to free-riding problems. On this view, intellectual property regimes are intended to provide an incentive for investment in valuable intangible goods. But because the social costs of intellectual property may be significant, this explanation is not an entirely persuasive justification. Consequently, other rationales, such as incentives to disclosure, or coordination of resources, have been advanced. Given the vast variety of innovative and creative activities subject to intellectual property protection, it may be that no one explanation is adequate but rather that different rationales, or different combinations of rationales, apply in different industries.
Keywords: patent, copyright, trademark, trade secret, public goods, intellectual property, economic analysis
JEL Classification: H41, O31, O34
Suggested Citation: Suggested Citation
Burk, Dan L., Law and Economics of Intellectual Property: In Search of First Principles (July 20, 2012). UC Irvine School of Law Research Paper, 2012-60. Available at SSRN: https://ssrn.com/abstract=2113975 or http://dx.doi.org/10.2139/ssrn.2113975
By Dan Burk