A World Without Any Intellectual Property Rights

Prolog

Here is an interesting article along the lines of my blog. Here is an interesting website dealing with this issue.

Here is the link to my earlier blog post on intellectual property.

What Is Wrong With Existing Intellectual Property Rights?

·         It is a government granted exclusive, artificial monopoly for extended periods of time

·         Too many frivolous, trivial patents

·         Terms of protection are way too long in many cases

·         Patent trolls

·         Lawsuits to intimidate competitors or to interfere with competition

·         Impediment to human progress

To use hyperbole, what are Apple and Samsung fighting over in court? Rounded square button icons?

Reverse Engineering

In a competitive world with intelectual property rights one has to suspect that competitors are constantly reverse engineering any new or modified product or service from any other competitor as soon as it hits the market or even earlier, which, I suppose, is a legal activity.

I suppose also that competitors quickly try to replicate new and successful features etc. to the extent as not to infringe on intellectual property rights.

Tabula Rasa

I like thought experiments and to start with a blank slate given a thorny issue like intellectual property rights in the 21^st century. Unfortunately, I am not an expert in the history of such rights and how they came about over the centuries.

Whatever were the reasons that governments became involved in granting and enforcing such exclusive monopoly rights, the question is whether from today’s perspective such rights still make sense and can be justified.

Do intellectual property rights improve human progress and technological innovation more than what would be the case without it? Do we have empirical data to corroborate that?

Benefits Of No Intellectual Property Rights

·         Cheaper products

·         Less government bureaucracy and litigation

·         More intense competition

·         Possibly more and better competitors

·         Possibly more specialization and differentiation among competitors

·         Possibly more dynamic markets

·         Better first mover and inventor advantage

·         Accelerated innovation and technological progress

·         Free market contractual protections instead of government granted one size fits all monopolies

Clearly, the first mover would be ahead of its competitors for some time before they catch up. The first mover would also have a strong incentive to keep improving or differentiate their products and to sell other services etc. related to their original invention. Similar holds true for authors and artists.

A Two Way Street

In a world without intellectual property rights any competitor can imitate anything another competitor has come out with and, very important, vice versa.

Once a competitor adopted a new feature by imitation, the competitor then can try to add new variations or a completely different feature and be the first to market and so on.

Counter Arguments

Capital as well as research & development investments by Companies would be reduced. In my estimation this is a myth or a red herring. Before a first mover can sell a new product on the market before anyone else, the first mover needs to make some kind of investment.

The profit motivation would be eliminated or greatly reduced. In my estimation this is another myth or a red herring. A first mover will in most cases make some profit or he can sell his invention to the highest bidder etc. The inventor or author has expert knowledge that his rivals very likely do not have to the same extent for some time.