Intellectual Property for Market Experimentation

Innovation and Economic Growth and Intellectual Property

Article Snapshot

Author(s)

Michael B. Abramowicz and John Duffy

Source

GWU Legal Studies Research Paper No. 396; New York University Law Review

Summary

This paper argues intellectual property law should (and does, somewhat) protect the results of market experimentation.

Policy Relevance

The paper provides some support to doctrines that encourage market experimentation, such as business method patents and less generous treatment of patent trolls.

Main Points

  • Intellectual property (IP) law encourages innovation in part by protecting investments in the production of created works and goods from copycats.

 

  • Information about whether new goods or services succeed or fail is not directly protected by patent law, even though the core economic logic of IP law applies just as much to market information as to technological information.

 

  • The first firm to offer a new product has an advantage in being the first to enter the market. But this might not be enough, since other firms can learn so much about consumer demand by watching the first.

 

  • Disparate areas of intellectual property law—including especially trademark law and trade secret law—can be justified as helping to augment first-mover advantages.

 

  • Directly protecting information about new goods and services might increase economic growth by reducing the risks new firms take.

 

  • This has not happened because trying to create rights in information about new markets would be difficult, given limitations of institutions such as patent offices.

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