Introduction
There are various theories of intellectual property rights as to who should be given the right over their intellectual property and on what basis the right of intellectual property is given. Various scholars have mainly propounded these theories, and they became the basis and core of intellectual property rights. They are as follows:
Natural Rights Theory
History and Philosophy
Natural Rights Theory is one of the most foundational justifications of Intellectual Property Rights (IPRs) and is influenced by John Locke’s philosophy of “Labor Theory of Property”, which states :
“Every man has a property in his person. The labour of his body and the work of his hands are properly his.”
John Locke (1632–1704) was a famous British philosopher whose ideas on physical property, labour, and ownership were developed in his famous work, “Two Treatises of Government” (1689), which argues that ownership arises when an individual mixes their labour with a resource, making it their own. His ideas on physical property were extended to ideas of intellectual property by legal scholars and policymakers.
Natural Rights Theory and Intellectual Property
Individuals have an inherent right to own their creations, which are developed through their labour, and benefit from them. As intellectual creations require significant time, skill and intellect, creators naturally deserve exclusive ownership and control over their inventions, writings, and artistic works as a reward for their efforts. For example – A researcher who finds a new drug should own rights to it as compensation for their work.
Criticisms and Challenges to Natural Rights Theory in IP
While it has a reasonable philosophical foundation, Natural Rights Theory face serious criticisms when applied to intellectual property compared to physical property in regards to its usage for intangible goods, non-rivalrous nature, knowledge exchange, and issues of monopolization. Unlike physical property, in which the owner loses access when owned by another, intellectual property does not deprive the original owner when the work is used or copied, which fails to justify exclusive ownership. Furthermore, excessive protection of knowledge and ideas will hinder the exchange of information and innovation rather than promote it, which will slow down societal progress and development. For example, scientific discoveries are based on previous knowledge, and non-sharing of them will prevent researchers from expanding their ideas. Likewise, excessive protection of pharmaceutical products will prevent timely access to life-saving drugs to patients, increasing the mortality rate. Thus, open access to knowledge will be more beneficial. As innovation is based on previous knowledge, should the person who patented the idea first own the exclusive ownership or group of people who created that idea? This was another criticism faced as a “first appropriation” problem. Another significant criticism is how long-term monopolies on IP can harm and discourage creation. For example, drug firms maintain high prices, which at times make life-saving medication out of reach for patients, which is not moral, and health should not be prioritized over private ownership. Likewise, large software companies use patents to exploit IP laws rather than protection and promotion to block competition and sue other companies patenting the same idea, aka patent trolling. It also prevents copyright extensions due to long-term protection of artistic or literary works even after the death of that creator, which will prevent older works from getting into the public domain, thus limiting cultural growth.
Justification for Intellectual Property under Natural Rights Theory
Intellectual property requires a lot of investment of time, skill, and effort from a creator, just like a farmer owns the crops he produces through his labour. Not giving creators their ownership would be unfair to the work they created and will not be of moral value as well. Without protection, creators will feel discouraged from producing useful works or performing innovation due to a lack of security over their own work, which is getting used or copied without any acknowledgement or compensation.
Alternative Views on Natural Rights and IP
With all the criticism and justification, natural rights theory can be modified rather than abandoned with an argument that ownership rights must be balanced against public interest and knowledge sharing. IP protection must be temporary and should not be monopolized for the long term so that innovation can be encouraged and creators feel motivated to progress in their domain rather than being discouraged. This is in accordance with Locke’s Proviso, which states “that property rights should not deny others access to shared resources”. Companies must be allowed for compulsory licensing to utilize patented inventions in return for reasonable remuneration and benefit the public by permitting the manufacture of generic versions of vital medicines. Open access models such as Creative Commons licenses can strike a balance between creator rights and public access, whereas some companies can use cross-licensing agreements to share patents instead of restricting innovation.
Utilitarian (Economic Incentive) Theory
History and Philosophy
The Utilitarian Theory, also known as the Economic incentive theory, is rooted in the utilitarian philosophy and economic principles of Jeremy Bentham and John Stuart Mill, which states that granting exclusive rights and incentives for intellectual creations to innovators will benefit society and economic growth, promoting creativity and inventions.
According to Jeremy Bentham’s (1748-1832) utilitarian principle, intellectual property rights are a way to benefit society through innovations and ideas rather than being just an inherent right as specified in Natural Rights Theory. Bentham believed that laws should be made to produce the “greatest happiness for the greatest number” to promote innovation by ensuring financial support.
On the other hand, John Stuart Mill refined Bentham’s principle by stating that laws should be designed such that they encourage innovation without restricting access to knowledge so that economic and public welfare is balanced.
Utilitarian Theory and Intellectual property
The core idea behind the theory is that without financial reward and IP protection, there will be no or less encouragement to develop, invent or invest in new research and knowledge, minimizing public welfare; therefore, financial incentive is a way to encourage and continue creation. For example, Pharmaceutical industries invest billions in developing a drug, and if no protection is sought, then why will they invest funds and time to do research? Likewise, technology companies depend on IP protection to protect their software essentials and maintain their position in competitive markets.
IP will engage more businesses and investors to fund research and will be interested in sharing information rather than keeping it secret, allowing others to explore further and innovate.
Without IP protection, competitors can copy or exploit innovations with negligible contribution. Therefore, the grant of short-term monopoly ensures that inventions receive rewards in the form of financial incentives as fair compensation.
Criticism and Challenges to the Utilitarian Theory
IP protection could lead to abused monopolies by companies to increase unnecessary prices of essential goods or medicines, thus limiting their access to the public. The protection could also hinder public disclosure of knowledge and educational resources, barring the students behind the paywalls.
For example, pharmaceutical firms are making minor modifications to drugs and extending the patent to keep the prices high. Likewise, big technological firms are patenting software algorithms to prevent competitors from developing similar software.
Justification for Intellectual Property under Utilitarian Theory
Despite the criticisms and challenges faced by the theory, the utilitarian principle is a dominant justification for IPR in economic policymaking by balancing public welfare and incentives.
Case Studies on the Effects of IP Incentives on Innovation and Public Welfare
In 1990, the prices of life-saving HIV/AIDS drugs were high, which was not affordable by the public. After the protests, pharmaceutical companies relaxed the patents, which allowed the manufacture of drugs at affordable prices. A compromise was reached that benefitted both the company and profits and the public by offering drugs at affordable prices. Likewise, Tesla released their EV vehicle and made it affordable to the public at reasonable prices to benefit both industry and the public, accelerating the pollution-friendly innovation.
Personality Theory (Hegelian Justification)
History and Philosophy
The Personality Theory (Hegelian Justification) of IPR is rooted in the philosophy of Georg Wilhelm Friedrich Hegel (1770–1831), a German idealist philosopher. The philosophy is reflected in his work “Philosophy of Right” (1820), which states that intellectual creations are the extension of an individual’s self-expression, freedom and personality and that they should have control over their intellectual property as a moral and emotional connection.
Personality Theory and Intellectual Property
IP protection ensures that intellectual creators get control over their work, which is developed through their minds, will, and efforts. The protection through copyright, trademark or patent law prevents unauthorized modifications such as plagiarism or copying and misuse of the work which could misinterpret the original creator’s image or intent and can distort the reputation. For example, if a book written by a novelist is adapted into a film with significant changes that distort its original meaning and intent, then it would be a violation of his work.
Criticisms and Challenges to Personality Theory in IP
The theory is mainly limited to artistic, literary, and expressive works but less applicable to patents related to inventions and trademarks. For example – Pharmaceutical patents are primarily related to public welfare and incentives rather than personal identity. According to theory, if creations are seen as individual self-expression, then strong IP protection could prevent knowledge sharing and progress in societal development. Furthermore, the theory does not take into account economic considerations, which are significant in incentivizing innovation.
Justification for Intellectual Property under Personality Theory
The rationale of personality theory is in contrast to other theories, which focus more on economic incentives and efforts rather than individual self-expression.
Social Planning Theory
Social Planning Theory and Intellectual Property
Unlike other theories, Social Planning theory focuses on collective good for society rather than individual incentives, natural rights and self-expression. The main principle is to shape society in a way that promotes innovation, creativity, and fair knowledge sharing, thereby balancing social rights and intellectual rights. For example, many software companies adopt open-source licensing to allow people to collaborate and innovate. Policies like compulsory licensing, open access and fair use will ensure that societal benefits are maximized and monopolistic exploitation is prevented. The IPR should be flexible according to societal needs; it should not be fixed or static. Therefore, IP policies are assessed on a periodic basis to serve best according to the public interest rather than just enjoying incentives.
Criticism & Challenges of Social Planning Theory in IPR
The most major criticism is how to define “Social good” because different societies have different priorities. Some may prioritize economic growth, while some may focus more on cultural preservation, making it too complex to decide as the benefits to society are significantly influenced by subjective and political views. With such lenient IP protection, creators would feel demotivated for new research and inventions, which should be balanced with appropriate incentives. Such weak IP protection enforcement can lead to piracy, harming the creator’s effort. Global trade agreements such as TRIPS are inclined towards strong IPR protection. Therefore, it isn’t easy to adapt socially oriented IPR policies.
