IPR justifications Flashcards
Overview of classification
"[Bently & Sherman] exclusive rights over intangibles. justifications 1. moral arguements 2. instrumental arguements" "[Machlup & Penrose] Moral: natural rights + just rewards Justification: incentives + technological benefit"
Natural rights: “Man has natural property rights in his own ideas, since the product of one’s labour must be recognised as one’s property”
Lockean tradition of Natural Rights - property right as a right in the state of Nature. Such property rights arise from man exerting his labour (which belongs to him) upon common goods. This property right entitles individuals to dispose of their provisions as they think fit.
Hughes links this theory to IP- since IP is the result of an inventor mixing his intellectual labour with the common pool of resources, it therefore becomes his property which he can dispose of as he thinks fit, notably excluding others from usage.
Therefore, appropriation by third parties must be condemned as stealing. Society is morally obligated to recognise and protect this exclusive property right. The only appropriate way for society to recognise this property right would be the enforcement of exclusivity in the use of a patented invention.
Natural Rights
Critics: difference between tangible and intangible property
“While tangible property can be clearly defined, much difficulty arises when one attempts to demarcate the extent of an IP right.
Honore’s eleven property rights, only a small number of these rights appear to be relevant to IP whereas all eleven apply to tangibles. If intangible property cannot be the same as physical property then the proposition that the same rights should arise from its creation does not stand”
Natural Rights
Critic: very idea of Natural Rights
“Bentham - rejects the idea of natural rights.
As Plomer notes, this Benthamite critique of natural rights as ‘nonsense upon stilts’ was extended to patents when Macfie, a vocal patent abolitionist and severe critic of natural property rights in inventions
• similarly declared it nonsense and that
• at the very most, there only a natural right for an inventor to use his invention, rather than have exclusive use.”
Just rewards
“Protection in the name of fairness to secure inventor his just reward
“
“Protection in the name of fairness to secure inventor his just reward
Mill:
• Justice requires that an inventor receive (& society secure to him) reward for his services in proportion as these services are useful to society
• ““would be a gross immorality of the law to set everybody free to use a person’s work without his consent, without giving him an equivalent””
• Especially since inventors render useful services
• Most appropriate way to secure to inventors rewards commensurate with their services
○ Exclusive patent rights in their inventions”
Just rewards
“Critiques :over-compensation and alternative methods of reward.”
“• Luck
- technological advancements have stumbled into by accident, there is an element of luck in authorship which confounds this right to reward.
Eg. Penicillin was created almost entirely by accident, how much skill, labour and judgement can be attributed to this accidental creation?
Ricardo: No need to reward him who might be lucky enough to be the first to hit on the thing required.
“
“ • Built on work of others
The moral intuition of reward theory does not ring true when the owner of IP rights can be so wildy over compensated.
Newton ‘standing on the shoulders of giants’; a statement as an admission that genius in the field builds on the work of their predecessors.
Souza:
““Inventor is not operating in a vacuum””
““There is a history on which he is creating New history””
““Building blocks which were given to the inventor and on which he developed further””
At most he is entitled to the marginal product of his labour. Not entitled to private property in invention because invention is a function if previous intellectual development. If property rights are to be given they must be given jointly to the historical contributors as much as the current contributor.”
Incentives (Individual economic justification)
Patent protection as best inducement for invention and utilization of invention
“• Industrial progress is desirable to society
• Inventions and their exploitation are necessary to secure industrial progress
List & McCullouch:
• Neither invention nor exploitation of invention will be obtained to any adequate extent unless inventors and capitalists have hopes that successful ventures will yield profits which make it worth their while to make their efforts and risk their money.
• ““granting of patent privileges offers prize to inventive minds - hope of obtaining prize arouses mental powers””
• Simplest, cheapest and most effective way for society to hold out these incentives
○ grant exclusive patent rights in inventions”
Incentives (Individual economic justification)
“Critics : ownership and authorship are rarely the same.
It is the ““speculative capitalists”” and investors who profit the most from long terms of ownership.”
“The actual author of a work may only receive a slice of the total value of their creation therefore, IP rights do not incentivise creators but merely line the pockets of already wealthy owner’s copyrights and patents.
A large percentage of the value of America’s largest corporations lies not in their capital and cash reserves but in the patent office. (eg. Samsung, apple owning thousands of patents worth billions), while inventors, who are employed by the capitalist sell their patents to them for a pittance - House of Commons debate in 1800s but still evident today.
Rogers notes that this separation of interests between inventor and exploiter weighs heavily against the theory that inventive activity requires a special incentive, because the current patent system can hardly be incentive to their activity, if inventors hope to reap the fruits of their work.”
wider eco justification
Patent protection as means of inducing disclosure and publicity, fearing loss of inventions through secrecy
” • Industrial progress desirable to society
• To secure it at a sustained rate it is necessary that new inventions become generally known as parts of the technology of society
• In absence of protection against immediate imitation of novel technological ideas, an inventor will keep his invention secret.
• Secret will die with him and society thereby loses a new art.
• It is in the interest of society to induce the inventor to disclose his secret for the use of future generations and to become part of society’s general fund of technological knowledge.”
“• Such an ‘incentive-to-disclose”” theory is based on Rousseau conception of the social-contract theory - patent was not presented as a privilege, but as a bargain between society and inventor; a contract where inventor agrees to publicly disclose his invention and the state agreed to protect inventor against imitation.
• Achieved by:
○ Granting exclusive patent rights to the inventor in return for public disclosure of his invention”
• Furthering this argument, May and Cooper argue that IP rights spread knowledge & spur bursts of innovation, and act as the most efficient way to promote innovation
Critics of wider economic justification
Prince-smith: Patent systems encourage secrecy rather than disclosure. Because patents are only granted at a stage where they have practical use, the patent system encourages secrecy in the developmental stage. Without a patent system, inventors would hasten the publication to obtain recognition and this hastens technological progress.
“The Economist notes, in 2015
system has created a parasitic ecology of trolls and defensive patent-holders, who aim to block innovation, or at least to stand in its way unless they can grab a share of the spoils. An early study found that newcomers to the semiconductor business had to buy licences from incumbents for as much as $200m. Patents should spur bursts of innovation; instead, they are used to lock in incumbents’ advantages.”
“COUNTER- CRITICS
Machlup & Penrose suggest that patent advocates would label Prince Smith (above) as a visionary blinded by the glittering notion that non-pecuniary incentives could ever match the effectiveness of pecuniary inventive of ““patents for inventions granted in exchange for disclosure”””
Conclusion
Stiglitz proposed that IP regimes be tailored to specific countries and sectors.
