Property, Intellectual Property, and Free Riding

Author:

Lemley Mark

Abstract

Courts and scholars have increasingly assumed that intellectual property isa form of property, and have applied the economic insights of HaroldDemsetz and other property theorists to condemn the use of intellectualproperty by others as "free riding." In this article, I argue that thisrepresents a fundamental misapplication of the economic theory of property.The economics of property is concerned with internalizing negativeexternalities - harms that one person's use of land does to another'sinterest to it, as in the familiar tragedy of the commons. But theexternalities in intellectual property are positive, not negative, andproperty theory offers little or no justification for internalizingpositive externalities. Indeed, doing so is at odds with the logic andfunctioning of the market. From this core insight, I proceed to explain whyfree riding is desirable in intellectual property cases except in limitedcircumstances where curbing it is necessary to encourage creativity. Iexplain why economic theory demonstrates that too much protection is justas bad as not enough protection, and therefore why intellectual propertylaw must search for balance, not free riders. Finally, I consider whetherwe would be better served by another metaphor than the misused notion ofintellectual property as a form of tangible property.

Publisher

Center for Open Science

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