Essay on Intellectual Property

It is intended both to provide thumbnail descriptions of the various intellectual property regimes to economists working in this area and to indicate where additional economic research might be useful. The other papers in this symposium provide important examples of ongoing research on the economics of intellectual property. Suzanne Scotchmer analyzes the complex effects of patent protection when innovation is cumulative. Rather than analyzing situations in which several firms vie to develop the same innovation-the approach of the "patent race" literature-her analysis examines circumstances in which only one firm can develop an initial innovation but others can also build upon it. She focuses on how the incentive to develop both the initial and subsequent inventions may be affected by the scope of patent protection. Janusz Ordover considers ways of adjusting the patent system that may help to both provide returns to the inventor, and encourage the diffusion of the innovation in the economy. His paper is part of a line of work that explores the place of the intellectual property system among the large number of institutions that affect the amount and nature of research and development that takes place. In the final paper, David

Technology enriches our society by making widely available new and useful goods, services, and technical information . Clearly, as a society, we would want to encourage the development of technology so that we can reap the benefits they offer us. Innovators require an incentive to invent and share these technologies with the rest of society. This incentive is achieved by granting intellectual property rights (IPR) to inventors . More specifically, the incentive is usually achieved by granting patents to inventors .

In the last twenty years in the United States saw an explosive growth in the number of patents being filed. In a span of twenty years, according to the Unites States Patent and Trademark Office's Electronic Information Products Division, the number of patents filed every year has tripled, from 200,000 to over 650,000 patent applications (U.S. Patent Statistics Chart Calendar Years 1963 – 2015). With the rise in the number of patents filed and granted, comes an unexpected twist, the rise of the Non-Practicing Entity (NPE) or as we will call them The Patent Troll, which are companies that use the patents for financial extortion and do not themselves manufacture, produce or sell products. Their sole business

R&D creates externalities and is a public good, its sale or use does not preclude others using it and can be consumed by many without lessening its value (indeed we will argue that the greater the use of it, in many cases the higher its value). It is difficult to price ideas to sell since this requires revealing them and avoid the need to pay. Firms with innovations to sell are therefore unable to do so.

Before looking at the case I selected and the questions posed in this paper, what is intellectual property? Intellectual property is defined as intangible (not a physical thing, such as an idea) property, the product of human ingenuity, protected by law (Lau, Johnson, Pg. 155, 2001). It is important to have a system in place to be able to register and protect these ideas and intangible property, so that the rightful owners of this property get the proper recognition and possible rewards.

Patent law provides the strongest monopoly rights of the intellectual property (formally known as IP) system (Kratz, 2010). Patents may be thought of as a statutory monopoly right granted to an individual for their specific invention (Kratz, 2010). Two observations about the patent system may be made clear; it is often times thought of as a race, and inventions are built on the work of others (Kratz, 2010). The idea of patenting is a largely controversial debate within the realm of research; as any dispute, there are both pros and cons to each side. This paper will first look at both sides of the argument regarding the patent system; however, by the end it will be made clear that the negatives outweigh the positives of the patent system.

IP is also a key aspect of the overall U.S. Economy. With IP intensive industries accounting for more than one third of the U.S. GDP, it has become key to the country’s economic growth. Currently, U.S. IP is worth $5.8 trillion, more than the nominal

Intellectual property are the legal rights (control and ownership) of creations, such as ideas; inventions; designs, etc. for the use in commerce (Bainbridge, 2012). Intellectual law in countries seeks to deter individuals or organizations from copying or capitalizing upon another’s work. The main areas protected by protect intellectual property law include: patent, copyright, trademark, and trade secret. Intellectual Property can be categorized under the following:

Intellectual products are considered as ‘non-excludable’ and ‘non-rival’ goods. Since intellectual products neither prevents a person to enjoy the benefits of a product over others nor does the use by the first person diminish the value of the product. Therefore, if property right over creative works are vested to the society then the price of a product will be zero, the prospect of any revenue will diminish and the incentive to create will fade. As such, there was a strong reason to implement efficient copyright term of protection. However, it is wrong to assume that copyright products are public goods because copyright law can exclude others over a fee paying consumer.

As the era of technology and new innovations allows people to share ideas at a moments notice the need for laws to protect people’s ideas and inventions need to keep up. These laws are called intellectual property rights (IPR) and can include patents, copyrights, trademarks, process design and in some case trade secrets which differ from other types of IPR. This means that a company could create a monopoly on an idea that would give them a right to punish people by law if they copied that idea. For most of these forms of IP such as a patent and trademark require the idea holder to submit their process for creating the idea and documentation proving ones claim, however for copyright according to federal law any original work that is publically produced protects the rights of the creator. This is good for most people because it ensures their work can not be copied but some people who share information with the public actually want it to be free for all to know and use it without someone being able to profit off of it.

A bilateral agreement that encourages joint ventures between the U.S. and China will also help to foster a culture of IPR enforcement in China. Intellectual property lawyer Frank Lin attributes China’s dismissive attitude towards IP protection to China’s recent emergence from Communism. Private property rights in China have only existed for a generation, and joint ventures will help to accelerate a shift in cultural attitudes.

In this part, the thesis would summarize economic theories of restricting the IPR owners’ right and its impact on innovation, either static or dynamic innovation. Calabresi and Melamed's opinions on the three rules: property rule, liability rule and inalienability rule are prominent in legal studies. Intriguingly, how compulsory licensing works and the function of the eBay rule resembles “the liability rule” in Calabresi and Melamed's famous article. The thesis would analyze the pros and cons of the liability rule regime and also whether compulsory licensing works better than the liability rule.

Modern businesses cannot survive if they are unable to create, exploit, while at the same time ensure that Intellectual Property (IP) is protected; R&D efforts would be compromised, as well. In addition to the expertise provided by professionals, it is nowadays important for organizations to have an IP strategy, or an IP portfolio management process that is aligned to their business processes (Shultz 1996). A clear Intellectual Property Strategy is of significant importance as an organization seeks to develop and exploit

The core purpose of the patent system is to incentivize innovation but the current system often has the opposite effect. Patents give inventors monopolies over their inventions for a period of time in order to allow inventors to recoup the costs of research and development (“R&D”) and to generate profits that reward inventors’ efforts, encouraging future investment. In exchange, patentees dedicate their inventions to the public domain once their patents expire. The traditional model of patent licensing, whereby a company pays a patent owner to license an invention that a company legitimately uses has been appropriated by non-practicing entities (“patent trolls”) and aggressive patent holders that initiate frivolous lawsuits. Patent trolls often purchase patents from bankrupt companies, for the sole purpose of extorting licensing revenues from organizations that are actually creating new products.

In the past, economic activity was theorized to be bounded by natural resources, labor, and capital. This view ignores the value of technology, and innovation, especially that which produces intellectual property.