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Isaac, Alan G.; Park, Walter G. --- "On Intellectual Property Rights: Patents versus Free and Open Development" [2004] ELECD 115; in Colombatto, Enrico (ed), "The Elgar Companion to the Economics of Property Rights" (Edward Elgar Publishing, 2004)

Book Title: The Elgar Companion to the Economics of Property Rights

Editor(s): Colombatto, Enrico

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781840649949

Section: Chapter 18

Section Title: On Intellectual Property Rights: Patents versus Free and Open Development

Author(s): Isaac, Alan G.; Park, Walter G.

Number of pages: 31

Extract:

18 On intellectual property rights: patents versus
free and open development
Alan G. Isaac and Walter G. Park


Introduction
Intellectual property rights (IPRs) encompass a broad array of legal protec-
tions, including patent rights, copyrights, trademark rights, plant breeders'
rights, protection of trade secrets, industrial designs, layout designs for inte-
grated circuits, and geographical indications (regarding the origin of goods
and services). These legal protections serve diverse purposes and functions,
and the institutions supporting them are also quite distinct. In this chapter we
focus on the patent system.
Patents are a primary instrument by which commercial firms secure legal
rights to inventions. In the United States, the core economic justification of
patents is that they improve welfare by stimulating discovery, disclosure and
dissemination. However, patent systems generate both economic benefits and
costs. In principle, the theoretical effects of patents on innovation depend on
the institutional environment and on the nature of technology. Both academ-
ics and policy makers are aware of circumstances in which patents can
adversely affect innovation. For example, in some situations, the patent sys-
tem has the potential to create a thicket of fragmented, overlapping property
rights which raises the costs of innovation.
This chapter explores one alternative to the reliance on patents: `free and
open' development. We refer to a system that relies on free and open develop-
ment as an `open innovation' system. Open innovation systems side-step the
patent thicket problem by not asserting patent rights to inventions. Open
innovation systems rely on the ...