IPR Reform
A few good posts in the past couple of days on IPR reform…
First up here’s Nick Gruen at Club Troppo:
Our biggest mistakes often come when we’re most untroubled by our logic – even when it’s wrong! For decades we’ve been applying this syllogism: Intellectual property (IP) stimulates innovation and creativity. Therefore stronger IP generates more.
We might know it for sure, but surprisingly often, it just ain’t so.
Then there’s Alex at Marginal Revolution who posts about a new book called Against Intellectual Monopoly:
The bottom line is that that there is a Laffer curve for innovation - more appropriability increases innovation at first but innovation declines when appropriability extends too far. I agree with Boldrine and Levine that rent-seeking has put us on the wrong side of the Laffer curve for innovation. We need to reduce intellectual monopoly with patent reform, less copyright protection, and a greater use of patent substitutes like prizes. But unfortunately, when it comes to innovation there is no invisible hand theorem which moves us automatically to the top of the curve.
Finally, there’s a review at the New Yorker by James Surowiecki (author of “Wisdom of Crowds”) of another new book called ‘The Gridlock Economy’
We hear a lot about the “tragedy of the commons”: if a valuable asset (a grazing field, say) is held in common, each individual will try to exploit as much of it as possible. Villagers will send all their cows out to graze at the same time, and soon the field will be useless. When there’s no ownership, the pursuit of individual self-interest can make everyone worse off. But Heller shows that having too much ownership creates its own problems. If too many people own individual parts of a valuable asset, it’s easy to end up with gridlock, since any one person can simply veto the use of the asset.
The commons leads to overuse and destruction; the anticommons leads to underuse and waste. In the cultural sphere, ever tighter restrictions on copyright and fair use limit artists’ abilities to sample and build on older works of art. In biotechnology, the explosion of patenting over the past twenty-five years—particularly efforts to patent things like gene fragments—may be retarding drug development, by making it hard to create a new drug without licensing myriad previous patents.
Good stuff.
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