The Upside of Intellectual Property's Downside

Abstract

Intellectual property law exists because exclusive private rights provide an incentive to innovate. This is the traditional upside of intellectual property: the production of valuable information goods that society would otherwise never see. In turn, too much intellectual property protection is typically viewed as counterproductive, as too much control in the hands of private rightsholders creates more artificial scarcity and imposes more costs on future innovators than the incentive effect warrants. This is the traditional downside of intellectual property: reduced production and impeded innovation. This article turns the traditional discussion on its head and shows that intellectual property’s putative costs can actually be benefits. It does so by recognizing that innovation is not always good—that there are certain industries that society may prefer to suppress. If intellectual property reduces production and impedes innovation in those industries, then its protection would be a net gain for society. We examine a handful of such industries (tax planning, biotech, fashion, and pornography) and demonstrate that keeping (or bringing) them under the intellectual property umbrella may be the best way to stifle them. In short, we describe the circumstances under which intellectual property’s downside is society’s upside. * Professor of Law, University of Richmond. The authors would like to acknowledge the help of Dawn-Marie Bey, Hamilton Bryson, Dan Burk, Tim Holbrook, Corinna Lain, Mark Lemley, Mark McKenna, Shari Motro, Dan Murphy, Kristen Osenga, Rafael Pardo, Jack Preis, Rod Smolla, and participants in the 2009 Intellectual Property Scholars Conference, 2009 SEALS Conference, Spring 2009 Virginia Junior Faculty Forum, 2007 What If Conference at Michigan State, and faculty colloquia at University of Richmond School of Law, Seattle University School of Law, and the University of Washington School of Law. ** Professor of Law and Director of the Intellectual Property Institute, University of Richmond. In addition to the individuals mentioned above, Jim would like to thank his own personal upside, Jane Savoca. All errors is Chris’s. The Upside of Intellectual Property’s Downside