Academic journal article Boston University Law Review


Academic journal article Boston University Law Review


Article excerpt

How will intellectual property law change as the economy becomes dominated by services and ideas? This Essay explains why the interest groups and other forces that brought about an expansion of property rights over the last century or two are reconfigured in an economy dominated by ideas. This reconfiguration makes prizes - including grants, subsidies, and various contractual promises - more likely and more attractive than property rights as the means of encouraging innovation. The theory predicts an increase in the use of subsidies and other prizes, rather than patents. These prizes can be of the ex ante kind, offered before innovations come about, as well as of the ex post sort, used to reward success but also to encourage innovators with the promise of future gains. The discussion then moves from patent law to copyright, and from machines and pharmaceuticals to the troubled newsgathering industry, where the iPrize Revolution is likely to be immediate and dramatic because of the low cost of digital delivery.


Advanced modern economies depend more on ideas than on manufactured goods. Even their artistic endeavors and exports are now more about creativity and personality than about particular books, pieces of music, or art objects. This fundamental change is likely to bring about and require a new mix of legal rules. In the years since the Industrial Revolution, intellectual property rights, primarily patents and copyrights, have encouraged innovation. These rights, however, may not be well suited for an economy propelled and distinguished by ideas rather than by things. One hundred years ago, success came to the economy that developed a new and better engine. Today it comes to economies that have the best ideas about how to organize production, how to educate the citizenry, and how to sell music. My argument in this Essay begins with the notion that the forces that brought about an expansion of property rights, and especially intellectual property rights, weaken as an economy becomes dominated by services and ideas. The increasing market share and importance of ideas has created pressure to reexamine the traditional distinction in patent law between "devices," which gain protection under the law, and "ideas," which do not. Part I explores how to rethink this distinction and the treatment of mere ideas in intellectual property law in an idea economy. Part II advances the claim that a revolution in the treatment of intellectual property is in progress and is generated, at least in part, by the tension between ideas and devices. The discussion suggests that interest groups will favor "prizes," by which I mean a variety of direct inducements to innovators, over property rights. The analysis suggests a reduction in the pressure to expand property rights in favor of the utilization of prizes. The change has already begun, but this iPrize Revolution is likely to be dramatic. Part III moves from patents to copyright, where prizes might be increasingly attractive because of the low cost of digital delivery.

I. Do Things or Ideas Require More Protection?

A. The Idea -De vice Distinction

Every student of intellectual property and every ambitious innovator knows that ideas, however extraordinary, are available to everyone who comes across them. These valuable assets are in the commons, and are not easily brought into the domain of private property. Albert Einstein, for example, could not have patented ? = mc. Patents are similarly unavailable to one who discovers a natural cure, no matter how much effort or "sweat of the brow," as it is called in intellectual property circles, might have gone into such a discovery.1 In many instances, such ideas or discoveries cannot be commercially exploited and also kept secret, because the profit-seeking discoverer is subject to imitation. This limitation regarding patent eligibility extends to copyright law.2 If the patentless scientist who discovers a natural cure writes a book about the cure she discovered, the copyright monopoly available to her covers only the expression of the idea. …

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