Chapter 1: Introduction
– Costs related to maintaining IP rights: acquiring patent, litigation, maintaining rights, IP rights are not well-defined, as compared to actual property rights, If you lose in IP case, may have to pay other party’s attorney’s fees,
IP is different in that it is intangible and can be possessed by many simultaneously
– Difficulty is in “owning” the intellectual property.
– More specifically that it can be shared, in cases such as drugs there can be compounded
– The recording industry’s difficulty is that it is very easy to copy the material, and the manufacturer does not know (at least not immediately)
– For every copy sold legally, nine copies are acquired unlawfully.
– In movie area, this number is probably much greater.
– One difficulty that all these industries face is that the majority do not think that this conduct is wrong.
Availability of Look-alikes and its affects on the market
– The greater the number of look-alikes, the less popularity due to the exclusivity element.
– Cheapening of the brand, if a look-alike looks raggedy then the brand name itself will look cheapened.
– When this happens, the brand can survive or die.
The value of the property is actually is the knowledge, it can further be explained as to protect an investment.
– IP has become so significant in part b/c the cost of licensing becomes nominal when you are licensing out to other companies.
– First you must have something that the public would want to buy.
– Copying usually only occurs on the hits, so what is being copied is what is most popular.
– Technology has changed in unimaginable proportions.
– So reality of enforcing the IP right has to be considered
– A rt. to ownership is embedded in the Constitution e.g. eminent domain issue. Thus tangible property is taken more seriously in the US than IP.
Laws/Const provide for protection of IP. IP protection is not funded (as such) by govt.
– However individual pursue the action by their own initiative and govt. provides protection but no direct govt. subsidiary.
– So individuals/corporation pursue protection and it is granted for a limited time, after which the invention enters the Public Domain (PD)
PD is not a public property like state or Public Park. PD is an environment to type of property where there is no owner or everyone owns and there is no one person with a greater or lesser right than other.
Sup. Ct. has said no “special property” exists. So once a protection expires, anyone, without payment or permission, may use or publish the work. E.g. Aspirin can now be made by anyone, it is in the PD.
– Museums having products on display that are already in the PD still have rts. Eg. To charge admission, restrict or limit access, etc.
– IP rights are not exclusive
– Fact that a movie is a porn or sexually explicit does not exclude it from protection (5th Circuit). Producing dirty movie is protected under the 1st Am.
– Ideas are not subject to © protection; e.g. Fast food idea by McDonald brothers; also clothing design not subject to © protection and can be copied, e.g. can look at a design by Nike and copy it; all subject to clear legal concepts like trademarks.
– © and Patent protections are statutory. Certain industries like music industries have pressured Congress to provide protection.
– © and Patents are only obtained through compliance and formalities: filing, paying patent fees; they are technical and expensive; Fairness is not an issue.
A. Philosophical Perspectives
1. The Natural Rights Perspective
§ John Locke, Two Treatises on Government
§ someone who creates something is entitled to hang on to it
§ the law does not protect someone from a bad bargain – must look out for yourself
§ just being a “creator” is usually not the only objective
o most people want to make $
§ God given right to hold on to what you create
o our government usually doesn’t see it that way
§ last ¶ – Locke makes analogy to the things people collect in nature (acorns) to asserting actual property rights over them
Comments & Questions (pg. 4-5)
– European community protects IP rights like Locke: broader time – Moral rights are non-economic rights
cy lies in balancing the social benefit of providing economic incentives for creation and the social costs of limiting the diffusion of knowledge.
· public advantage w/ private gain
· long-run = public benefit
· short-run = private profit
· provide inducement to provide to the public
· exposing technological advancements
Pg. 14 Example
Patent law gen. don’t guide/control an owner/inventor on how much to charge or whether or not to diffuse the product
Supreme Ct. holds that when you are the holder of a patent, you can choose to use or not to use the product. A reason a company may not use its product is that another one of its product may be in competition with that product or make it obsolete. Early © statue had judge discretion to place limit on price of items.
Questions and Comments (pg. 16)
One significant difference between the natural rights perspective and the utilitarian perspective relates to who is entitled to the fruits of productive labor.
– In the natural rights framework, the inventor or author is entitled to all the social benefits produced by his or her efforts.
– In the utilitarian framework, reward to the inventor or author is a secondary consideration; the principal; objective is to enrich the public at large.
In 1966, the Report of the President’s Commission on the Patent System identified 4 major economic justifications for the patent laws:
· A patent system provides an incentive to invent by offering the possibility of reward to the inventor and to those who support him.
· A patent system stimulates the investment of additional capital needed for the further development and marketing of the invention. (R&D)