The Economics of Intellectual Property in a World without Frontiers: A Study of Computer Software

A legal revolution is assisting owners of intellectual property to protect their ideas and wrest royalties from rivals. The concept of intellectual property takes on special urgency in high-technology businesses because innovation is their stock in trade and many fortunes have been made and lost over the ownership of ideas ( Alster 1988). As global competition in IT intensifies, battles over intellectual property will increase. In March 1988, Apple Computer sued Hewlett-Packard and Microsoft Corporation for copying "the look and feel" of the user-friendly programming of the Macintosh. Millions of dollars hinge on the law of intellectual property. For example, Texas Instruments won $191 million in 1987 for licensing fees for its integrated circuits and miniature electronic calculator. For its dynamic random access memory (DRAM) chips, Texas Instruments collected $300 million in royalties from the Japanese companies Fujitsu, Toshiba Corporation, and Mitsubishi through 1990.

Many firms in industrialized countries are becoming aware of the legal framework protecting intellectual property and are claiming fees for licensing technology. Judicial support for such protection has raised some basic issues on how far such protection should extend. Computer software is protected by copyright. The structure

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