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HAMLINELAW REVIEWIntellectual Property: a Non-Posnerian Law and Economics ApproachTorn G. PalmerVolume 12Spring 1989Number 2INTELLECTUAL PROPERTY: A N palmer-non-posnerian-hamline-v12n2NON-POSNERIAN LAW AND ECONOMICS APPROACH*Tom G. Palmer**This essay is divided into four main sections: a brief description of the “Posnerian” approach to intellectual property rights; a historical look at the origins of intellectual property rights and of the relationship between property rights and palmer-non-posnerian-hamline-v12n2 technology; an examination of the economics of property rights and of public goods, and criticism of some typical applications of this theoretical mapalmer-non-posnerian-hamline-v12n2
chinery to intellectual property; and a description of the functioning of markets for non-tangible economic goods in the absence of intellectual propeHAMLINELAW REVIEWIntellectual Property: a Non-Posnerian Law and Economics ApproachTorn G. PalmerVolume 12Spring 1989Number 2INTELLECTUAL PROPERTY: A N palmer-non-posnerian-hamline-v12n2ransmitting, and manipulating “ideal objects,” or non-tangible economic goods,1 The new technologies include personal computers, digital encoding, optical storage, virtually instantaneous electronic communication, photocopying, optical scanning, computerized databases, and many more. Like the introd palmer-non-posnerian-hamline-v12n2uction of millions of other inventions before them, their arrival on the economic scene has brought to many industries a storm of what economist Joseppalmer-non-posnerian-hamline-v12n2
h Schumpeter called “creative destruction.”• I wish to thank many individuals for their helpful comments on individual drafts, including my colleaguesHAMLINELAW REVIEWIntellectual Property: a Non-Posnerian Law and Economics ApproachTorn G. PalmerVolume 12Spring 1989Number 2INTELLECTUAL PROPERTY: A N palmer-non-posnerian-hamline-v12n2titive Enterprise Institute, and Milton Mueller, Wendy Gordon, M.L. Rantala, David Friedman, Mark Brady, Roger Meiners. Andrew Melnyk, Stephen Eagle, Hannes Gissurarson, Edward J. Damich, David Schmidtz, Timothy Brennan, Mario Rizzo, and the members of the Austrian Economic Colloquia at New York Uni palmer-non-posnerian-hamline-v12n2versity and George Mason University. 1 am aware that I have missed others who provided useful comments or suggestions; to the many such people, I offepalmer-non-posnerian-hamline-v12n2
r my sincere thanks. Financial support for the research was provided by the Competitive Enterprise Institute in Washington, D.c.•• Institute for HumanHAMLINELAW REVIEWIntellectual Property: a Non-Posnerian Law and Economics ApproachTorn G. PalmerVolume 12Spring 1989Number 2INTELLECTUAL PROPERTY: A N palmer-non-posnerian-hamline-v12n2rary products and are contrasted with tangible objects like chairs, land, and apples in their capacity to be infinitely multiplied, or “instantiated,” without concomitant diminution of size or quality. Despite this difference from tangible goods, such Ideal objects remain economic goods because they palmer-non-posnerian-hamline-v12n2 are scarce,'i.e.. they most be produced, and they are valuable.V261262HAMUNE LAW REVIEW(Vol. 12Not only have these new technologies radically changedpalmer-non-posnerian-hamline-v12n2
many industries; they have contributed to the explosive growth of a new “industry” among economists and lawyers, as well. Much of this work is characHAMLINELAW REVIEWIntellectual Property: a Non-Posnerian Law and Economics ApproachTorn G. PalmerVolume 12Spring 1989Number 2INTELLECTUAL PROPERTY: A N palmer-non-posnerian-hamline-v12n2roperty law is its contribution to aggregate utility, and that the legal regime governing ideal objects should aim explicitly at a utilitarian result, maximizing net utility by balancing off the welfare gain from innovations induced by intellectual property rights against the welfare losses resultin palmer-non-posnerian-hamline-v12n2g from the restrictions on the dissemination of such innovations.One of the most explicit of the proponents of this view is Judge Richard Posner. In spalmer-non-posnerian-hamline-v12n2
pite of his criticism of Jeremy Bentham,* Posner remains in his jurisprudence strongly indebted to Bentham. Although Posner significantly parts companHAMLINELAW REVIEWIntellectual Property: a Non-Posnerian Law and Economics ApproachTorn G. PalmerVolume 12Spring 1989Number 2INTELLECTUAL PROPERTY: A N palmer-non-posnerian-hamline-v12n2ation, Posner offers “wealth maximization.”* This change, however, takes place within a framework that remains decidedly Benthamite; judges are still exhorted to aim at an explicit overall goal other than seeking justice in particular cases. Wealth is substituted for utility as the maximand, but the palmer-non-posnerian-hamline-v12n2 jurisprudential approaches remain consistent. As Posner remarks, “The basic function of law in an economic or wealth-maximization perspective is to apalmer-non-posnerian-hamline-v12n2
lter incentives.”6 In other words, the role of law is construc-tivistic and interventionistic, an attempt to reorder economic institutions to attain aHAMLINELAW REVIEWIntellectual Property: a Non-Posnerian Law and Economics ApproachTorn G. PalmerVolume 12Spring 1989Number 2INTELLECTUAL PROPERTY: A N palmer-non-posnerian-hamline-v12n2xtent the principal features of copyright law can be explained as devices for promoting an efficient allocation of resources” and to show that “the principal legal doctrines” are “reasonable efforts to maximize the benefits from creating additional works minus both the losses from limiting access an palmer-non-posnerian-hamline-v12n2d the costs of administering and enforcing copyright2.R. Posner. The Economics of Justice 13-47 (1981).3.For Bentham's attitudes to the common law. sepalmer-non-posnerian-hamline-v12n2
e G. Postema. Bentham and the Common Law Tradition (1986).4.R. Posner, supra note 2. 48-87, 88-115. For criticism 0Í wealth maximization as a normativHAMLINELAW REVIEWIntellectual Property: a Non-Posnerian Law and Economics ApproachTorn G. PalmerVolume 12Spring 1989Number 2INTELLECTUAL PROPERTY: A N palmer-non-posnerian-hamline-v12n2 maximization as a descriptive principle, see K. Scheppelle. Legal Secrets: Equality and Efficiency in the Common Law (1988).5.R. Posner, supra note 2, at 75.261JINTELLECTUAL PROPERTY263protection.”6 Landes and Posner offer both explicit positive analysis of the law (purporting to show how it promot palmer-non-posnerian-hamline-v12n2es economic efficiency) as well as exhortations to judges to apply the law so as to attain this end. For example, in discussing difficulties in applyipalmer-non-posnerian-hamline-v12n2
ng the “idea versus expression” distinction central to copyright law to computer programs (to which the distinction is problematic), they state:We hopHAMLINELAW REVIEWIntellectual Property: a Non-Posnerian Law and Economics ApproachTorn G. PalmerVolume 12Spring 1989Number 2INTELLECTUAL PROPERTY: A N palmer-non-posnerian-hamline-v12n2ring the deadweight costs of allowing a firm to appropriate what has become an industry standard with the disincentive effects on originators if such appropriation is forbidden.7 8 9As Jules Coleman responds, “The alternative and I believe commonsense view is that the responsibility of a judge is to palmer-non-posnerian-hamline-v12n2 determine which of the litigants in a dispute has a relevant legal right.”6 Further, “adjudication primarily — or always — concerns rights rather thapalmer-non-posnerian-hamline-v12n2
n the promotion of some useful social policy while at the same time it provides a substantial and meaningful role for economic argument.”In the courseHAMLINELAW REVIEWIntellectual Property: a Non-Posnerian Law and Economics ApproachTorn G. PalmerVolume 12Spring 1989Number 2INTELLECTUAL PROPERTY: A N palmer-non-posnerian-hamline-v12n2legitimate property rights, but of illegitimate state-granted monopoly. In so far as my approach is a law and economics approach, it is influenced by the more mainstream law and economics of the jurist Bruno Leoni* and the economist F. A. Hayek,10 rather than by the “wealth maximization” approach of palmer-non-posnerian-hamline-v12n2 Judge Posner. Although the bulk of the article offers an alternative model of the development of intellectual property, it is implicitly a criticismpalmer-non-posnerian-hamline-v12n2
of the Pos-nerian/Benthamite approach.6.Landes & Posner. An Economic Analysis of Copyright Law, 17 J. Legal Stud.--------(forthcoming June 1989).7.Id.HAMLINELAW REVIEWIntellectual Property: a Non-Posnerian Law and Economics ApproachTorn G. PalmerVolume 12Spring 1989Number 2INTELLECTUAL PROPERTY: A N palmer-non-posnerian-hamline-v12n2m the economic standpoint." Id. at 41.8.J. Coleman, supra note 4. al 131.9.8. Leoni. Freedom and the Law (1972). Sts also Aranson, Bruno Leoni In Retrospect, 11 Harv. J.L & Put. Pol'y 661 (1988) and Liggio & Palmer, Freedom and the Law: A Comment on Professor Aranson’s Article, II Harv. J.b. & Pub. palmer-non-posnerian-hamline-v12n2POL’y 714 (1988).10.See. e.g; Law. Legislation, and Liberty (1973, 1976, 1979). In contrast to Judge Posner's pursuit of the clearly articulated goalpalmer-non-posnerian-hamline-v12n2
of wealth maximization, Hayek and Leoni argue that a liberal legal order is a spontaneous order that aims at no particular end, but rests on general rHAMLINELAW REVIEWIntellectual Property: a Non-Posnerian Law and Economics ApproachTorn G. PalmerVolume 12Spring 1989Number 2INTELLECTUAL PROPERTY: A NGọi ngay
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