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The Principal object of intellectual property is to ensure
consumers a varied variety of products at the lowest possible
price. Intellectual property law ensures private property rights
enabling individual and business to appropriate to themselves the
value of the information they produce and encourage them to
produce more.
Copyright Law attracts investments to
the production and distribution by promising authors and artists
and their publisher's exclusive rights for a limited period.
Patent Law uses property rights to stimulate
private investment in new and useful and non-obvious technologies.
Trademarks encourages business to invest in
symbolize information signifying the source of their goods and
service and prohibiting competition for using the same symbol.
Information is Intangible and the need for private property rights
is comparatively more pressing and equally important as private
property rights for tangible objects such as land and cattle. In
Tangible objects a owner can run a fence and keep his or her
property secure, whereas it is unusual for a creator of
information to be able to fence his/her product by keeping it
secret and at the same time reap economic rewards from the
information in the market place.
Put somewhat differently investment in information suffers special
problems of appropriability. The fact that information is
intangible means that absent property rights, a producer of
information will find it difficult to appropriate the
information's value in the market place. While most information
will have a little value to its producer unless he can sell it,
sale will expose the information to competitors who with absent of
property rights will be able freely replicate the information and
sell it at a lower price than the first producer who must charge
to recoup his investment in producing his information. The
critical point is that unable to appropriate the value of his
information, the producer will from the start be disinclined to
invest in producing information.
The problem of information as the object of Private property does
not end with appropriability. The fact is intangible also means
that it is indivisible; an unlimited number of users can consume a
piece of information without depleting it. For example a a motion
picture after been consumed by single person the same would be by
a million but cant be the same with tangible products like loaf of
bread. Once the information has been produced its use may benefit
an indeterminate number of users without imposing any additional
costs on the producer. Because information can be used endlessly
and by unlimited number of people and because no ones use of the
information will interfere with the owner's physical domain over
it, legislatures and courts tend to tolerate more extensive
inroads into intellectual property than they would If land or
goods were in issue.
This unique characteristic of informational goods that they are
not a scarce resource that anyone can use them without diminishing
their availability to anyone else leads to a powerful moral
intuition against intellectual property law. Since intellectual
property law enables information producers to charge for access to
their information, It inescapably withholds information from
people who cannot or will not pay the prices of admission, even
though giving them free access would harm no one else. When a
cable operator demands more rental fee, many subscribers who might
gladly have paid a smaller sum will choose not to see the film. In
the crisp calculus this is undesirable because it decreases the
welfare of one class of consumers, the excluded viewers without
increasing the welfare of another those willing and able to pay
the asking price.
It should by now be evident that the intellectual property
solution to the problem of inappropriability property rights as
private incentive inevitable conflicts with the social benefits of
indivisibility unrestricted public access. Intellectual property
as a solution to inapproriability implies that to recover its
investment, an information producer will use its property rights
to charge consumers for access to its work. Yet indivisibility
implies that ones information has been produced, its use may
confer a benefit on the consumer without imposing any additional
cost on the producer. If the producer charges for access to the
information, consumers who are unable or unwilling to pay the
price will be deprived of the information leaving them worse of
then they would be in the absence of property rights.
The dilemma is that without a legal monopoly not enough
information will be produced but with the legal monopoly too
little of the information will be used.
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Authored by Venkataramana B. Ramanathan and can be reached at
: venkattbr@yahoo.com
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