Intellectual Property

Granting control over intellectual creations to creators and owners through the use of intellectual property rights is not a guarantee of promoting innovation or creativity and indeed may hinder the achievement of these objectives.  Critically evaluate the extent to which this statement is accurate. 

Granting creators and owners control over their intellectual creations through the use of intellectual property rights (IPRs) is recognised as essential to the achievement of promoting innovation and creativity in the United Kingdom (UK). In 2008, investment of UK businesses in intangible assets was estimated at £137 billion, and globally, trade in Intellectual Property (IP) licences is valued at £600 billion every year, a notable 5% of world trade.^[1] A strong legal framework may be seen as the most economically important incentive for these investments to be made in IP creations, yet the interests of businesses are not the legislature’s only concern. Due consideration must be paid to the wider interests of societal progress as a whole, and the guarantee that the promotion of future innovation and creativity will not be hindered by the use and grant of current IPRs is expected.

IP laws in the UK reflect the utilitarian assumption that, as self-interested individuals, incentives to innovate and create must be offered to inventors and creators if they are to produce intellectual creations, thus IPRs and their assurance of remunerative security are born.^[2]  The perpetual, inalienable and spiritual nature of natural rights was regarded as “nonsense on stilts” by Bentham, the founding father of Utilitarianism.^[3] It therefore comes as no surprise that IPRs under a utilitarian justification are not concerned with personalist or moral explanations for their existence; it is merely incidental that the objective utility of granting an individual IPR is the best way to provide the “greatest happiness for the greatest number”, that is, the most efficient way of promoting the innovative and creative progress of society as whole.^[4] 

An IPR ensures the receipt of adequate remuneration for the investment of time, money, research and development (R&D) into intellectual creations. Without the monopoly afforded by IPRs, it is feared that free riding and cheap imitations would prevent profitable returns.^[5] IPRs can therefore be seen as a restriction of competition at the production level in order to promote economic incentives for healthy competition at the levels of innovation and creativity.^[6] However, the restriction of competition at the production level is only desirable for so long as it is necessary to achieve these objectives, as a lengthier period will instead hinder further innovation and creativity by suppressing protected works where they would otherwise be used as an essential input towards generating future IP creations.^[7] Macaulay viewed the monopoly granted by IPRs as an evil, but contended that “for the sake of the good we must submit to the evil; but the evil ought not to last a day longer than is necessary for the purpose of securing the good”.^[8] The justification for granting IPRs therefore fades when a return on the initial investment into an intellectual creation has been rewarded to the owner, and it is here that the circumstances of greatest utility incline towards allowing the subject matter to be freely appropriable to all.