Working Paper: CEPR ID: DP3273
Authors: Michele Boldrin; David Levine
Abstract: According to a common argument, the presence of strong intellectual property rights spurs innovation, which then leads to fiercer competition, higher economic growth and increasing benefits for the average consumers. We argue that, in the case of intellectual property rights, this has lead to misconceptions and abuses. Current legislation on intellectual property confuses the protection of property rights on objects in which ideas are embodied with the attribution of monopoly power on the idea itself and, furthermore, with restrictions on the usage of such goods on the part of the buyers. This implies that both patent and copyright laws should be dramatically altered. To back up our claim we provide theoretical arguments, even for the most extreme case in which goods are produced at a positive fixed cost and zero marginal cost.
Keywords: intellectual property; monopoly power; patents; copyrights
JEL Codes: L10; L40; O31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Strong intellectual property rights (O34) | Misconceptions and abuses (Z00) |
| Strong intellectual property rights (O34) | Innovation (O35) |
| Innovation (O35) | Increased competition (L13) |
| Increased competition (L13) | Higher economic growth (O49) |
| Higher economic growth (O49) | Greater benefits for consumers (D18) |
| Confusion of property rights with monopoly power (P14) | Restrictions on usage of goods by buyers (D45) |
| Restrictions on usage of goods by buyers (D45) | Stifled competition (L12) |
| Current laws protect monopoly power of ideas (K11) | Stifled competition (L12) |
| Existing intellectual property system does not support a competitive market environment (L49) | Stifled competition (L12) |