Lecture 4 - Intellectual Property Law (Theory, RIghts and Remedies) Flashcards
What economic characteristics contrast the demand for private goods with the demand for public goods?
- Exclusivity of the good
- Rivalrous or non-rivalrous nature of the good
What type of goods are private goods?
Rivalrous goods
What is an example of a Bilateral Negative Externality?
A Cournot Duopoly where both producers produce private goods which are perfect substitutes
What are examples of Public Goods?
- Intellectual Property (patents, copyright, trade marks, trade secrets)
- Public space
- Public Auto Insurance
- Workers Compensation
What type of goods are public goods?
Non-rivalrous goods
How is the supply function for public goods calculated?
The marginal social value is the vertical sum of the individual demands of the non-rivalrous public good
What is an example of a public good that is non-rivalrous?
Provision of national defense
What is an example of a public good that is non-exclusive in consumption?
Provision of parks (it is costly to exclude individuals from possessing or enjoying public goods)
What is an example of a Bilateral Positive Externality?
Auto Insurance as a “Public Good” (the “Insurance Game”)
How do people counter the “Insurance Game”?
Insurance coverages are mandatory by Law and by Contract, where some provinces treat the system of “tort compensation” for motor vehicle accidents or workplace injurers as a “public good” which is to be provided by trough public insurance.
What are the two subdivisions of Intellectual Property?
- Disclosed And Protected Information (patents, copyright, trade marks)
- Undisclosed And Protected information (trade secrets, confidential information)
Where did Intellectual Property originate?
Historically, governments sought to supply public goods such as inventions and books directly. However, economies became to big for every public good to be supplied directly by the government and Laws were passed granting protection and remedies analogous to private property rights in land and trespass. Overall, the “objective” is to counteract underproduction of the “good”
How do laws operate in Intellectual Property?
Laws assign an individual or a corporation “exclusive” rights to make and ultimately sell the “good” (essentially creating a monopoly)
What does a Monopoly result in?
Deadweight Loss: A loss of gains from trade and specialization
What does intellectual property protection attempt to reverse?
The “prisoners dilemma” effect of under supply of the “unprotected” public good
