INTRODUCTION

• Date: 27 April 2004
• Published date: 27 April 2004
• DOI: https://doi.org/10.1016/S1048-4736(04)01510-3
• Pages: IX-XVI
• Author: Gary D. Libecap

INTRODUCTION

Although issues of intellectual property rights would seem to be ones of interest

only to obscure groups of academics and lawyers, they have become topics of ev-

eryday discussion among the regular population. Alleged copyright infringements

by teenagers downloading music from the internet and accompanying threats

of prosecution as well as charges of strategic patenting to harm competitors in

recent high profile antitrust cases have placed intellectual property into public

and political debate.

Property rights to more tangible assets, such as land, have long been the source

of economic and legal investigation as well as of public policy. Ownership of real

property is relatively uncontroversial in an economy and society based upon pri-

vate property. Indeed, much of the early legislative and legal structure of the U.S.

was focused on the definition and support of property rights to natural resources

and other real assets.1Intellectual property, especially patents, was recognized

as important in the U.S. Constitution as critical for stimulating technological

progress. Nevertheless, intellectual property did not become prominent until the

mid-20th century as technology assumed a commanding role in productivity

growth. As the search for new technology and its adoption became more important

for lowering costs and providing new and refined products and services, the

provision and protection of intellectual property became critical. The incentive

effects of secure property rights for promoting research and development,

investment, production, and exchange are well known. And these are the major

arguments for patents, copyrights and other forms of intellectual property. Con-

cerns about infringement on patents and copyrights from unauthorized production

in other countries and downloading from the internet within the U.S. reflect,

at least in part, worries about whether such activities will erode property rights

sufficiently to reduce investment and production. Recently, there has been another

concern, however, about the strategic use of patenting by companies as a means

of blocking entry into markets, and here the overall social welfare effects are

less apparent.

The papers in this volume represent some of the leading work on intellectual

property. They address the question of how to create incentives to develop new

technologies and how to protect those technologies once developed from theft.

They also ask when valuable property might be developed even under weak

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