THEORY/POLICY
A. Intellectual property vs. real property
1. Non-rivalrous consumption – more than one person can use at same time
2. Non-excludability – out there for all to see
3. Public goods quality – like defense, environment
a. Inventor takes great risk that he may not be “compensated” for investment
B. PURPOSES:
1. Allow creator to appropriate benefits of his creation
2. Protection – incentive to invent – R & D
3. Prevent free-riding; unfair competition
4. Encourage follow-on innovation, more uses, transformative and competitive works
5. Benefit the public and consumer
C. Alternatives to IP:
1. Government subsidy of creation
a. National Endowment of the Arts model – impossible to match amt. of subsidy w/ actual
social benefit conferred; costs associated w/ deciding who is funded; political element
b. Taxes: tax on tape goes back to musicians to compensate for decreased sales due to copying
c. IP is a govt. subsidy w/out the middleman; cheaper than tax system; allows market to determine
value of goods; BUT – some things will only come into being if subsidized
D. JUSTIFICATIONS
1. Locke’s labor theory: Entitled to fruits of one’s efforts
2. Utilitarian: existence of property rights increases number of socially useful creations
3. Hegel (personhood): Property rights help fulfill themselves
4. Breyer: Author always has lead time over copiers (so = natural form of appropriation); ISSUE: does
lead time give enough profit to provide incentive to create?; can recoup investment by bundling –
linking ideas to physical assets
5. Machlup: Patents only valuable at some times
6. Radin (personhood approach): Two types of property
a. Fungible – replaceable, compensable by money
b. Personal – irreplaceable, value cannot be monetized, e.g. wedding ring, family portrait, IP
7. Attr
– Violates public policy to say once you’ve learned info. you can’t use it
– Can take general knowledge, skill, expertise in an industry
– If you make effort to memorize info – violates TS law
2. Which has value
3. Not generally known (secret) OR readily ascertainable (CA Code dropped “readily”)
4. Economic value
5. Value comes from secrecy
6. Reasonable efforts to protect the secret
a. Trade secret claim:
1. Protectable knowledge/information not generally known to all
a. Current trend: protect any valuable info. so long as can add economic value to P.
2. D. acquired info. wrongfully/misappropriated
3. P. took reasonable precautions to prevent disclosure
c. Definitions in ACT (FILL IN INFO IF NECESSARY)
