Concluding remarks

This contribution attempts to systematize the law and economics theory as it relates to intellectual property rights, while at the same time suggesting new perspectives for analysis.

An economic analysis based on these premises - though as yet fragmented and non-systematic - might reveal a different overall balance of welfare for the individual rights and therefore lead to different regulatory and policy indications. In particular, it would appear necessary to consider the peculiar social and productive attributes of the various markets of ideas, which require an ad hoc analysis, whereas reliance on a universal theory seems increasingly inadequate and conducive to inefficient economic results.

Notes

1. I am grateful to Hal Varian for his kind hospitality at the School of Information Manage­ment and Systems, University of California, Berkeley, where this chapter was drafted. I am equally greatly indebted for comments, suggestions and/or intellectual stimuli to Anna Maffioletti, Ahmed Silem, Francesco Silva, Vittorio Valli, several PhD students in law and economics at the universities of Siena, Trento and Carlo Cattaneo, and the members of the Ministero dell’Instruzione, dell’Universita e della Ricerca, Italy, research groups on trade­mark and on intellectual property rights.

2. We set aside, for the time being, the questions raised by certain authors as to the effective exclusivity of trade secrets, which will be discussed subsequently.

3. For a general overview, see Hardin (1968), Besen and Raskind (1991), David (1993), Besen (1998), Menell (1999) and Gordon (2003). On the possibility of alternative solu­tions to the private ownership of knowledge, see Arrow (1962).

4. For example, on intellectual property in Chinese culture, see Alford (1995). Again, on the problem of extending the Western doctrine to other cultures, with particular reference to Australian aboriginal society, see Blakeney (1998).

5. See supra n. 3.

6. And necessarily so, because it was only with Smith that economics emerged as a separate discipline in its own right.

7. On the theory of public goods and the dilemma of appropriability, a good review is given in Jha (1998, ch. 4).

8. For a historical (and dramatic) exposition of the modern theory of intellectual property rights, see the ‘tragedy of the commons’ by Hardin (1968). See supra n. 3.

9. For a more modern treatment connected with growth models, see Romer (1990).

10. See, again, Hardin (1968) and recently Heller (1998).

11. For a comparative presentation, see, for example, Metaxas-Maranghidis (1995) and Fawcett and Torremans (2001).

12. On this topic, see the Special Issue TRIPS (1998) of the Journal of International Eco­nomic Law and, in critical vein, Ryan (1998).

13. We avoid here a detailed legal explanation of the rights, referring the reader to the abundant literature available (see, for example, Bently and Sherman, 2001. See also Besen (1998) and Menell (1999) for a presentation focusing on economic analysis, but from a US perspective. Somewhat dated, but still of interest, is the contribution by David (1993).

14. For a concise but excellent introduction to the economic role of patents, see Oz (1995, pp.

15. For a more in-depth analysis, see Gordon and Bone (1999) and Watt (2000).

16. For example, in the case of databases, protected in Europe subsequent to Directive 96/9/ EC, the originality lies exclusively in the organizational format of the data.

17. In general such rights are of an economic character (so-called ‘pecuniary rights’), that is, right of reproduction, right of distribution, right of public performance, right of public display, right of preparing derivative works; and of a moral character (moral rights), that is, right of paternity, right of publication and right of integrity (see, for instance, Bently and Sherman, 2001). On the (highly uncertain) role of such rights from a law and economics perspective, see Rushton (1998) and Hansmann and Santilli (1997).

18. See Ramello (2001).

19. As a rule, economic analysis deals with significantly shorter time horizons, which in no case extend beyond the lifetime of the individuals. One could of course argue that a perfectly informed copyright owner would be able to anticipate the expected profits, and recover them within his/her lifetime by selling the right in exchange for a remuneration. However, perfect information is by no means a feature of these markets where, on the contrary, the utmost uncertainty and asymmetry of information appear to reign (see, for example, Silva and Ramello, 2000; Lessig, 2001; Ramello, 2003).

20. For a more in-depth analysis, see Friedman et al. (1991) and Friedman (1998).

21. See Samuelson (2000) in particular n. 146 for a detailed discussion of the various posi­tions taken in the debate on this point.

22. The different owners of the same trade secret must by definition be few in number and unaware of the fact; otherwise the protected information would effectively be disclosed, and hence not a valid subject matter for a trade secret.

23. In fact, in the case of multiple paternity the patent is attributed in the United States to the first who invents and in the EU to the first who registers.

24. The differentiation strategies are in fact pursued by economic actors in order to secure a certain amount of market power. For an introduction to the topic, see, for example, Oz (1995, ch. 7). For an application to the case of trademarks, see Sappington and Wernerfelt (1985).

25. With a few exceptions that cast doubt only on the efficiency of the market, but not on its underlying structure, as in the case of excess innovation (see the historic contribution by Hirshleifer, 1971).

26. For the copyright industries, see, for example, Marvasti (2000) for the film industry, Silva and Ramello (2000) for the recording industry, and Armstrong (1999) for pay-TV. In general, see OECD (1998).

27. The equating of intellectual property with market power is certainly not automatic, as has been affirmed by the European Court of Justice (Deutsche Gramophon GmbH v. Metro- SB-Grossmrkte GmbH, 78/80, 8 June 1971, ECR 487) and by the US US FTC and DOJ (1995), Antitrust Guidelines for the Licensing of Intellectual Property.

28. The causal relation with interchangeability is still accepted in the US Guidelines (sect. 2.2) and in the European legislation, see supra n. 27.

29. See again Ramello (2003, p. 123).

30. 110 F. Supp. 295, D. Mass, 1953, aff’d per curiam, 347 US 251, 1954.

31. Although the first case in which a conflict between exclusive intellectual property rights arose was United States v. Paramount Pictures Inc., 334 US 131 (1948).

32. COMP D3/38.044. This debate was launched by the ‘Magil’ case (Radio Telefis Eireann (RTE) v. Commission of the European Communities (C-241/91 P e C-242/91P, 6 April 1995).

33. ‘Microsoft argues that the licence restrictions are legally justified because, in imposing them, Microsoft is simply “exercising its rights as the holder of valid copyrights” Appel­lant’s Opening Br. at 102... The company claims an absolute and unfettered right to use its intellectual property as it wishes: “[I]f intellectual property rights have been lawfully acquired,”, it says, then “their subsequent exercise cannot give rise to antitrust liability.” Appellant's Opening Br.

34. A&M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896 (N.D. Cal. 2000); A&MRecords, Inc. v. Napster, Inc., US Court of Appeals (9th Circ., 2001).

35. See, for example, Ramello (2001).

36. Lessig (2001, p. xvi) explicitly upholds the thesis of ‘limiting the control that legal structures such as copyright give to the industries of yesterday to ensure that they can't use the law to constrain the creation of tomorrow'.

37. An OECD report (1998, p. 1997) states that ‘IPR protection in some sectors (notably biotechnology) and countries may be so broad that it actually inhibits innovation'.

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