For whom does IP work?

One of the major questions Professor Sunder’s book asks is whether IP works for the people who make it. This is a question that US law does not grapple directly with, but assumes and then glosses over. It is an important question. As Molly Van Houweling mentions, drawing on Julie Cohen’s fantastic article on IP as corporate property, IP certainly works for some companies some of the time. Insofar as companies are intermediaries (distributors of IP protected goods) and the licensees of the creators of those goods (either through work for hire or assignment), firms can and do make some of their money from IP revenues, which IP is generated by individuals working alone or in groups.

The story of Solomon Linda is an example of what can go wrong from the initial creation to the widespread distribution of creative expression that has commercial value. Firms will say that without intellectual property, they cannot harness or nourish the creativity to reproduce, commercialize and distribute it, that the conditions of their productive and distributive business require exclusive rights in the intangible goods. (I think this in part right, but it is largely overstated in light of the the many other ways in which companies make money, such as first to market, complementary products, contracting for services, reputation. And the extent to which the company depends on IP is industry specific.) Individuals will say that the best environment for their creative work is a situation in which autonomy and collaboration are optimized. Individuals want time and space to do their work, and they need some funding to pursue it, but that funding may come from a day or night job that does or does not directly relate to their creative or innovative activity. Ideally, the way the individuals earn a living derives from the creative or innovative work they do, and if that is the case, they still seek autonomy and collaboration, which are often at odds with corporate structure and IP exclusivity. Sunder’s book points out many of these conflicts between individual welfare and corporate welfare. My puzzle, these days, is why there must be such inconsistency. How (when and why) does the corporate interest so greatly diverge from the individual’s interest and what, if anything, can be done about it to maximize IP’s functionality in our global system of creative and innovative production? Sunder’s book goes a long way to putting these issues front and center.

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2 Responses

  1. A.J. Sutter says:

    Apropos of “How (when and why) does the corporate interest so greatly diverge from the individual’s interest[?]”: the short answer is that under the current Zeitgesit, corporations are run for the benefit of their shareholders. Power to vote shares, earn dividends, and to earn capital gains from their sale, is concentrated in a relatively small number of organizations and individuals. Moreover, the sums at stake in the financial economy — even in the economy of equity securities alone — is far huger than the part of the economy to which IP directly contributes. (See my comment to Maxine Eichner’s September 10 guest post on this blog for a few specifics.) This situation is something IP law isn’t at all sufficient to change, even in conjunction with company law — it involves the politics of wealth and much else.

    From another point of view, one could say it’s the wrong question. I think one might extrapolate from Prof Sunder’s book that we shouldn’t be worried only about reconciling corporate and individual interests, but also include societal interests at several levels. Or else, à la the Machiavelli of the Discorsi, we should just accept that these various interests will usually conflict, and try to find ways to keep that conflict bounded and even fruitful. Again, too big for IP law alone. Surgeons are said to think that cutting people is always the way to make them well; IP academics might do well to avoid their own version of that professional fallacy.

  2. that's vaptastic says:

    Just a technical comment: this post needs the “goods to a good life” tag that the others have, so that it displays along with all the other symposium posts. Thanks!