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Chandra: Intellectual Property Rights as “exceptions to market mechanisms”

Rajshree Chandra, Knowledge as Property: Issues in the Moral Grounding of Intellectual Property Rights (Oxford & New York, Oxford University Press, 2010), p. xiv, n.1:

The basic public policy rationale for intellectual property laws is that they protect the rights of the inventor, author, or creator. IPRs have been conceived as a tool to reward innovators and creators, for their contributions to society, for a statutory period of time.They are intended to provide the necessary incentives to the generation and dissemination of knowledge as well as to encourage the transfer and diffusion of technology. IPRs constitute exceptions to market mechanisms as competition and free access were not considered adequate enough to provide incentives for innovation and development. It is typically suggested, usually by IP theory, that free market with no exclusive rights will lead to too little production of intellectual works. The economic rationale for IPRs is that unless invention or creation is compensated, invention and creation will be underprovided and economic development, even the development of science, will suffer. It is also designed to combat the ‘free rider’ problem, given that recent changes in technology have made replication and duplication much simpler. Individuals and firms will hesitate to make costly investments in innovation if imitators can reproduce these at a fraction of the cost and technological progress will be hampered.

See also Intellectual Property Advocates Hate Competition and IP Law and “Market Failure”.

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