Intellectual Property Rights and the Society

Introduction

According to the World Intellectual Property Organization (WIPO), patents “encourage innovation, which assures that the quality of human life is continuously enhanced”. In this research paper, I will try to answer the question, whether patenting and more broadly, intellectual property rights actually help achieve this great objective of enhancing human life, hence benefiting the society.

One of the major arguments against intellectual property rights is that it impedes innovation and creativity. Innovation and creativity are both critical factors in the knowledge economy and hence this problem needs to be addressed. In addition, I will address how the rise of information society and knowledge economy has affected the concept of intellectual property rights. I look into how effective intellectual property rights are for enhancing human life in the new economy.

Developed nations have a larger knowledge base, along with recent technology, and therefore more innovation compared to developing countries. Hence, intellectual property rights are more dominant in the developed countries (Persaud, 2001). But, to achieve the goal of enhancing human life, intellectual property rights should benefit the developing nations as well. In this paper, I look into whether the intellectual property rights increase the inequalities between the industrialized and the developing nations, or whether it helps to reduce the knowledge gap. This would allow me to further examine whether intellectual property rights benefit society as a whole.

I conclude by examining our need for a system of intellectual property rights that is more suited to the new economy.

What is intellectual property?

World Intellectual Property Organization (WIPO) refers to intellectual property as the creations of human mind. Intellectual property rights protect information and knowledge. These rights are divided into two categories: Industrial property and Copyright. Industrial property protects inventions. They include patents, trademarks, industrial designs, and geographic indications of source. Copyright protects literary and artistic works such as novels, poems and plays, films. The need to protect intellectual property was first recognized in the Paris Convention for the Protection of Industrial Property in 1883 and the Berns Convention for the Protection of Literary and Artistic Works in 1886. (WIPO, n.d)

The main purpose of intellectual property rights is to protect the rights of the creators of such knowledge and allow the general public to access his or her creativity. By doing so, it claims to promote creativity and innovation within the society (International Chamber of Commerce, 2005). There is an ongoing debate whether the benefits of these rights outweigh its costs (Besen & Raskind, 1991). In the past three decades, we have seen the extension of intellectual property rights to previously exempt areas such as software (Bessen & Hunt, 2007) and databases (Frow, 2007). Several critical scholars have claimed that such moves are threatening freedom of expression and inhibiting creativity (Coombe, 2004).

In the next section I will look into such claims as to whether intellectual property rights are working against the real reason they came into being in the first place: promoting creativity and innovation. If so, how well are intellectual property rights enhancing human life?

Creativity, Innovation, and intellectual property.

Proponents of intellectual property rights claim that these rights provide incentives for innovators to produce new inventions and creations, thereby creating a stream of inventions. Also, intellectual property rights place an obligation on the creators, to publish their knowledge. They claim that this allows the dissemination of ideas, creating a “virtuous cycle of innovation” (International Chamber of Commerce, 2005). These claims do not come without its critics.

One of the most criticized fields of intellectual property rights is the patenting of software. A number of organizations including League for Programming Freedom and Free and Open Source Software (FOSS) societies around the world, campaign against software patents. In a recent (May, 2007) speech at the Open Source Business Conference , Matthew Szulik, chief executive of Red Hat claimed that patents are a “challenge to innovation” (Shankland, 2007). Most criticisms lie around the fact that in the past three decades, through various court cases, the federal courts have shifted from a view hostile to software patents to a view more favourable to it (Bessen & Hunt, 2007). Scholars argue that this has caused a dramatic increase in patents that is not explained by resulting increase in creativity and innovation. Calderaro (2006) states that in the 70s, where the biggest technological advancement took place, the number of patents were few, whereas today, where most developments are based on those of 70’s, the software patents are many. Bessen and Hunt (2007) carried out an empirical analysis of software patents and concluded that this dramatic increase in software patents cannot be explained by growth in aggregate investment in software, Research and Design, employment of computer programmers or engineers, or growth in the writing of new programs. These results go against the claims that patents act as an incentive for innovation.

Another argument against intellectual property rights lie on the effectiveness of intellectual property rights to disseminate knowledge. Copyright law gives the creator not only the rights to his or her own creations, but also the rights to works that are derived from his creation (WIPO, n.d.). This incurs an additional cost on an innovator who would like to borrow or build on this idea. Therefore the innovator may simply choose to build on another idea that was not copyrighted but less creative (Besen & Raskind, 1991). In fact, Murray and Stern (2007) carried out an empirical test on how intellectual property rights over a given piece of knowledge, affect the likelihood of future researchers building upon that knowledge in their own scientific research. They show evidence that the citation rate after the patent is granted declines by approximately 10 to 20 percent, with the decline being prominent with number of years elapsed since the date of patent grant. This questions the claims of intellectual property rights promoting dissemination of knowledge and hence innovation.

Calderaro (2006) claims that intellectual property rights work against the natural paths of the development of knowledge. She cites the works of Ludwik Fleck and his description

...