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Ex Ante Versus Ex Post Justifications for Intellectual Property

University Chicago Law Review, Vol. 71, p. 129, 2004

UC Berkeley Public Law Research Paper No. 144

67 Pages Posted: 16 Feb 2004 Last revised: 6 Feb 2011

Mark A. Lemley

Stanford Law School

Multiple version iconThere are 2 versions of this paper

Date Written: February 2, 2011

Abstract

The traditional theory of IP is that the prospect of future reward provides an ex ante incentive to innovate. An increasingly common justification for longer and more powerful IP rights is ex post - that IP will be "managed" most efficiently if control is consolidated in a single owner. This argument is made, for example, in the prospect and rent dissipation literature in patent law, in justifications for expansive rights of publicity, and in defense of the Bono Copyright Term Extension Act. Taken to an extreme, this argument justifies perpetual protection with no real exceptions. Those who rely on this theory take the idea of IP as "property" too seriously, and reason that since individual pieces of property are perpetually managed, IP should be too. But IP isn't just like real property; indeed, it gives IP owners control over what others do with their real property. The ex post justification is strikingly anti-market. We would never say today that the market for paper clips would be "efficiently managed" if put into the hands of a single firm. We rely on competition to do that for us. But that is exactly what the ex post theory would do.

In this paper, I explore the sub rosa development of this ex post theory of IP. I argue that the basis for continued control is the assumption that the value of IP rights will be dissipated if they are used too much. This argument is fundamentally at odds with the public goods nature of information. It stems from a particular sort of myopia about private ordering, in which actions by individual private firms are presumed to be ideal and the traditional role of the market in disciplining errant firms is ignored.

Suggested Citation

Lemley, Mark A., Ex Ante Versus Ex Post Justifications for Intellectual Property (February 2, 2011). University Chicago Law Review, Vol. 71, p. 129, 2004; UC Berkeley Public Law Research Paper No. 144. Available at SSRN: https://ssrn.com/abstract=494424 or http://dx.doi.org/10.2139/ssrn.494424

Mark A. Lemley (Contact Author)

Stanford Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

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