In Praise of an Incentive-Based Theory of Intellectual Property Protection
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Description
“The Congress shall have the Power. . . . To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries . . .” With knowledge production becoming increasingly significant in the economy, more attention needs to be paid to the impact of intellectual property rights on human rights, culture, and development. As the above quotation from the United States Constitution suggests, intellectual property rights are traditionally justified as a mechanism for generating incentives to innovate. Inherent in this instrumental rationale for creating private rights to exclude is the idea that the ultimate goal is the public good: promoting progress for the benefit of society. The law, in short, has long been premised on balance, balance among generations of innovators and between creators and those who would benefit from the works they produce. Thus, so long as the creative industries can capture enough return to recoup costs and earn a significant profit, the United States has always considered itself free to promote other public goals, such as health, education, and free expression. But in a study of successive international intellectual property instruments, including the World Trade Organization’s (WTO) TRIPS Agreement (TRIPS), free trade agreements (FTAs), and bilateral investment treaties (BITs), Susy Frankel and I concluded that the linkage of intellectual property with trade—and even more so, with investment—is triggering a reconceptualization of this fundamental principle at the international level. The quantitative approach underlying the incentive theory, which asked how much exclusivity is necessary to promote innovation, has given way to a qualitative approach, which treats intellectual property as equivalent to a commodity or an investment asset and considers any impairment of value a taking, with its effect largely calculated from the perspective of the right holder. Intriguingly, at the same time that commodification (through trade agreements) and assetization (through investment treaties) were eclipsing the incentive-based approach within the international community, the legal academy was beginning to challenge the idea that intellectual property incentives are necessary at all. Pointing, as one example, to the flourishing fashion industry, where intellectual property rights are ineffective and copying is rampant, theorists such as Chris Sprigman and Kal Raustiala argue that in many sectors there are other dynamics that can spur creativity and protect private gains from innovation. To these commentators, intellectual property rights can often be unnecessary. Thus strengthening them is largely misguided. Given these opposing challenges to the incentive-based approach, the time appears ripe to reconsider it. In Section I of this chapter, I examine the evidence on intellectual production outside standard intellectual property regimes. While it is easy to agree that considerable creativity occurs in that realm, I conclude that exclusive intellectual property rights remain important in the modern economy. In Section II I suggest, however, that a return to incentive theory would protect public-regarding values without unduly sacrificing the benefits derived from linking intellectual property with trade and investment in international agreements.
Source Publication
Framing Intellectual Property Law in the 21st Century: Integrating Incentives, Trade, Development, Culture, and Human Rights
Source Editors/Authors
Rochelle Cooper Dreyfuss, Elizabeth Siew-Kuan Ng
Publication Date
2018
Recommended Citation
Dreyfuss, Rochelle C., "In Praise of an Incentive-Based Theory of Intellectual Property Protection" (2018). Faculty Chapters. 1172.
https://gretchen.law.nyu.edu/fac-chapt/1172
