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Lecture 2011.03A: Fundamentals of Intellectual Property (Digital Sustainability)
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Lecture 2011.03A: Fundamentals of Intellectual Property (Digital Sustainability)

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  • 1. Digital Sustainabilityin the Knowledge Society  Fundamentals of »Intellectual Property (IP)« Dr. Marcus M. Dapp Board OKF Germany / IT Strategist, City Government Munich 10.10.2011
  • 2. Problem with knowledge as a public good • Non­excludable • difficult to exclude people from access • Non­rival • Used not consumed • Problem • No incentive to create?!    By avatar-1 (Flickr CC-BY-SA)
  • 3. Solution: »Intellectual Property (IP, IPR)« • = time­limited exclusive rights, granted  to author/inventor • Exclusive right • To exploit invention/work • To control production/distribution • Time­limited • Rights expire after some time • Exclusive right = monopoly status   
  • 4. Whats a monopoly? By Mike_fleming (Flickr, CC-BY)   
  • 5. Monopoly? • Only one provider of a product/service • Greek: monos = one, polein = to sell • Characteristics • No economic competition • No product substitution • High barriers for new market players • Examples?   
  • 6. »Intellectual Property« wants to solve 2 problems • Incentive problem • Now/instant • Give exclusive rights on creation • Monopoly problem • Later • Let excl. rights expire after ‘some time’ • Both create new problems... • How many rights?  • How long?  
  • 7. »Framing« the IP debate: Words promote intentions • »Property« or »Rights«? • »Property« advocates promote that  protection should provide rights akin  to physical property. • »Right« advocates promote that  protection should provide rights in  temporary, limited form. • Who uses which terms? Why? • e.g., »piracy«, »unauthorized copy«, ...    WP(en): Intellectual rights (25.11.05)
  • 8. »Intellectual Property« needs balance • Balance of public and private interests • Balance of efficiency • Dynamic (over time) • Static (in space) • Analysis • Legal: utilitarism • Economic: incentive+allocative function   
  • 9. Balance private and public interests • Creation • Diffusion • Private/Individual  • Public benefit/  benefit social welfare • Foster investment  • Optimal resource  in R&D allocation • »Dynamic  • »Static efficiency« efficiency«   
  • 10. Dynamic Efficiency: Protection over time Who invests, gets the rights. »future« rationing of consumption, free access loss for public gain for public PD Monopoly Rights Public Domain time exclusive rights to individual »may prevent innovations« to commercially exploit loss of royalties 0 ∞ optimal duration? non-rival non-exclusive public benefit private benefit   
  • 11. Static Efficiency: Protection in space  Who pays, gets the rights. Boundaries of IP - Unclear for inventions - Clear for creations PD exclusive usable collectively, free of charge protection Crossing the »fence«    - get exclusive rights - expiration of rights
  • 12. Legal Analysis of »IP« • Why risk monopolies? • Society wants/needs technical  progress/arts » utilitarism • Assumption: »nobody invents/creates  without incentives« • Aim • Balance private benefit & public benefit • Deal between society and individual   
  • 13. Economic analysis of »IP« • Incentive function • To counter public good nature • Balance dynamic and static efficiency • Allocative function • Efficiency (transaction costs) • Marketability • »Who values them most, gets them«   
  • 14. Example: US constitution, section 8, clause 8 • »Congress shall have Power ... to promote the  Progress of Science and useful Arts, by securing  for limited Times to Authors and Inventors the  exclusive Right to their respective Writings and  Discoveries;« • Think about it: • Congress does not have to. • Are there alternative ways?   
  • 15. Possible alternatives to »IP« • Aim • Let new knowledge for society be  created • Situation • Knowledge is Non­rival & hard to  exclude • Question • How to foster its creation without using  the concept of »IP«?    Interaction
  • 16. Alternative solutions to »IP« • Subsidies or prizes (awards) • By government, how to finance them? • »culture flat rate« • Paid by all, used by all. Fairness? • Trade secrets • Hide discoveries, erect physical barriers • How useful is non­diffusion for society?   
  • 17. Literature on »IP« (freely available) • Lévêque & Ménière, The Economics of Patents  and Copyright • www.cerna.ensmp.fr/PrimerForFree.htm • Y. Benkler, Coase’s Penguin, or Linux and the  Nature of the Firm • www.benkler.org/CoasesPenguin.html • P. Menell, Intellectual Property: General Theories  (Encyclopedia of Law & Economics) • users.ugent.be/~gdegeest/tablebib.htm  • W. Fisher, Theories of Intellectual Property • cyber.law.harvard.edu/people/tfisher/iptheory.pdf