|Title:||Intellectual property and the incentive fallacy|
|Author(s):||Johnson, E. E.|
|Citation:||Johnson, E. E. (2011). Intellectual property and the incentive fallacy.|
|Link(s):||Definitive , Open Access|
|Key Related Studies:|
|About the Data|
|Data Description:||This report comprises a presentation of the raw data from the questionnaire survey followed by analysis and initial IP awareness measures. The survey resulted in over 1700 replies from ﬁrms of all sizes and in all sectors of UK industry.|
|Data Type:||Primary and Secondary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||No|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
The enterprise of intellectual property law has long been based on the premise that external incentives—such as copyrights and patents—are necessary to get people to produce artistic works and technological innovations. This Article argues that this foundational belief is wrong. Using recent advances in behavioral economics, psychology, and businessmanagement studies, along with empirical investigations of industry, it is now possible to construct a compelling case that the incentive theory, as a general matter, is mistaken, and that natural and intrinsic motivations will cause technology and the arts to flourish even in the absence of externally supplied rewards. It follows that intellectual property law itself needs a fundamental rethinking.
Main Results of the Study
- A study commissioned by the U.K. government about the intellectual property system noted correctly that “awareness of the system is a pre-requisite for it to work.” That same study found that the firms “which form the cradle of IP,” those that are medium-sized or smaller, “are in the main effectively unaware of the IP system.”
- More than two-thirds of respondents for companies with over 250 employees either didn’t know or guessed wrongly that preapplication publication doesn’t surrender patent rights.The persons answering were generally persons in the firm who dealt specifically with intellectual property, or they were among the most senior persons in the entire company.175 For smaller companies, the percentage in the dark was even higher, ranging between 79% and 89%.
Policy Implications as Stated By Author
- Avoiding a Fashionable Fallacy. At the outset, the clearest implication of the demonstrated unsoundness of the incentive theory is that legal scholars, judges, and lawmakers should tighten their discourse. We should no longer tolerate easy assertions that intellectual goods need external incentives. Indeed, the current legal literature on intellectual property is rife with reliance on the incentive theory. It undergirds IP discourse generally. Today, as scholars weigh in about the future direction of intellectual property law, this great fallacy causes them to draw erroneous conclusions and to champion ill-considered changes in the law.
- Not Confusing the Exceptions with the Rule. There are undoubtedly exceptions. Valuable intellectual assets whose development almost certainly required the incentive of external rewards, such as those made possible by intellectual property rights, include virtually all large-budget major motion pictures, virtually all large-budget television series, and many or most new pharmaceutical compounds. The exceptions to the general rule of spontaneous creative labor, however, do not disprove the rule. Why not? The exceptions arise out of the costs of production and distribution of creative and innovative labors, not the creative labor per se.
- Sunsetting Intellectual Property Entitlements. Much of intellectual property law may ultimately be justifiable; that is, it may ultimately turn out, after data is gathered and carefully weighed, that a persuasive case can be made to justify wide swaths of entitlement-granting IP law. But, by the same token, most of intellectual property law is currently unjustified; that is, no such persuasive case has been presently put forth. The legal doctrines of patent and copyright law—in the manifold kinds of works to which they are applied and the many forms of industry in which they inhere—exist almost wholly without a careful case having been laid for their existence. In light of that, the overall prescription is that intellectual property law, in general, should be sunsetted.
- The economic centerpiece in the conventional wisdom justifying intellectual property law is a longstanding blunder. There is no broad necessity for incentives for intellectual labor. As a general matter, innovative and creative activity will thrive without artificial support.
Coverage of Study
|Level of aggregation:||Respondent|
|Period of material under study:||Not stated|