How Effective is the System in Terms of Social Welfare? The Dimensions of the Problem

• Author: Rémi Lallement
• Profession: Charge of Mission (policy analyst), France Stratégie, France
• Pages: 29-43

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How Effective is the System

in Terms of Social Welfare?

The Dimensions of the Problem

If we move from the microeconomic dimension to a more

aggregate level – especially sectors or countries – the analysis of the

incentivizing effects of intellectual property tools cannot remain

limited to the point of view of the individual entitled party. It must

also integrate the resulting effects on third parties. This second type of

effect is a priori significantly less positive. Taking into consideration

that the value of an intellectual property right is based on its ability to

exclude, the assertion of this exclusive right runs the risk of imposing

substantial costs on third parties. Consequently, the issue is to know

how and to what extent we can minimize these costs and then

maximize the global effect of intellectual property on a societal level.

3.1. Intellectual property rights as a second-best solution

In relation to intellectual property rights, and patents in particular,

there is a certain tension between a logic of reservation through the

conferment of temporary monopoly rights aiming to drive innovation

and, on the other hand, the need for arrangements focused on

promoting the dissemination of knowledge and leading to new

possibilities for competitors to enter the market.

Intellectual Property and Innovation Protection: New Practices and New Policy Issues,

First Edition. Rémi Lallement.

© ISTE Ltd 2017. Published by ISTE Ltd and John Wiley & Sons, Inc.