63 Pages Posted: 17 Mar 2016 Last revised: 1 Jul 2017
Date Written: February 1, 2016
This Article challenges a standard proposition in intellectual property theory: creators are risk averse and, by extension, IP risk is undesirable. The interdisciplinary field of creativity research suggests that this proposition is wrong. A willingness to take risks appears to be an essential part of the creative personality, and creative individuals may even prefer risk to certainty. Creativity research also indicates that risk might be an environmental factor facilitating creativity, whether or not creators themselves prefer it. As a result, IP scholars should not generally assume that creators are risk averse; instead, the most plausible starting point is that creators are risk seeking, at least compared to the general population and perhaps even in absolute terms. More generally, IP scholars must take a more nuanced approach to the impact of IP risk than the simplified risk-preference approach they have pursued thus far.
The analysis here has significant implications for many persistent questions in IP law and policy. Uncertain doctrines, like the fair use defense in copyright law, might not be as problematic as ordinarily assumed. And efforts to make IP more predictable, like the Supreme Court’s recent opinion in Nautilus v. Biosig, may have hidden costs. Most fundamentally, the analysis suggests that patents and copyrights — rewards of uncertain value — are better able to stimulate creativity than more predictable mechanisms like grants or salaries.
Keywords: intellectual property, patent, copyright, creativity, risk, uncertainty, psychology, decision making, law and economics, behavioral economics
JEL Classification: D81, H41, K00, K39, O31, O34
Suggested Citation: Suggested Citation