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Intellectual property which creates property rights over intangibles such as ideas, inventions and signs differs from conventional property that establishes rights over tangible resources. Compared with the traditional property rights in land and tangible resources, the legitimacy of which is based on the scarcity or limited availability of such resources and the impossibility of sharing, intellectual creations are non-rivalrous, meaning that they can be invented, possessed and used by many individuals concurrently, so traditional rationales for property are problematic when applied to intellectual property.1 It is also argued that ideas as “common currency of thought, speech and language should be left in the public domain for others.” 2 Justifications must be given for intellectual property in the face of past and continuing criticisms.
In section 2, three general categories of justifications for intellectual property including natural rights arguments, reward arguments and utilitarian arguments will be presented at the beginning. Natural rights arguments and reward arguments focus on one’s private interest in the creation while utilitarian rationales concentrate on the public interest. Then the theories will be examined in detail in three subsections dealing with copyright, patents and trade marks separately. The legal protections of copyright, patents and trade marks will be justified by slightly different rationales in turn. And a conclusion will be drawn in section 3.
- Justifications for intellectual property
- L S Paine,Trade Secrets and the Justification of Intellectual Property: A Comment on Hettinger,  Philosophy and Public Affairs, Vol. 20, No. 3, 247, 247.
- L Spooner, The law of Intellectual Property, (Weston, MA: M&S Press, 1971), 37-38.
According to Article 2, paragraph viii, WIPO Convention (1967), the definition of intellectual property includes the rights relating to:
literary, artistic and scientific works; performances of performing artists, phonograms, and broadcasts; inventions in all fields of human endeavor; scientific discoveries; industrial designs; trademarks, service marks, and commercial names and designations; protection against unfair competition and all other rights resulting from intellectual activity in the industrial, scientific, literary or artistic fields.
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This definition refers to the general area of law that comprises copyright, patents, designs, and trademark, as well as a number of related rights. Accordingly, intellectual property law grants property rights to individuals over a wide and diverse range of intellectual things such as novels, genetically modified objects and logos. Compared with the conventional property rights in land and the tangible resources, the legitimacy of which is based on the scarcity or limited availability of such resources and the impossibility of sharing, intellectual creations are non-rivalrous, meaning that they can be invented, possess and used by many individuals simultaneously.3 So it is always asked by legal and political philosophers why intellectual property rights should be justified in the form they currently take? 4
One of the justifications that have been given for intellectual property is premised on natural rights which are propounded in Locke’s labour theories stated in The Second Treaties on Government. “…intellectual property is, after all, the only absolute possession in the world. . . The man who brings out of nothingness some child of his thought has rights therein which cannot belong to any other sort of property.”5
More detailed discussion on labour theories will be presented in section 2.1.1.
- A D Moore, Intellectual Property and Information Control: Philosophic Foundations and Contemporary Issues, (Transaction Publishers, 2004), 7.
- See A Moore (ed.), Intellectual Property: Moral, Legal and International Dilemmas, (Rowman & Littlefield Publishers, 2000).
- Z Chaffee, Reflections on the Law of Copyright,  Columbia Law Review, vol. XLV, No. 4, 503, 506.
The second justifications are called the reward arguments. This theory employed a variant of natural rights arguments, it regards intellectual property as a legal expression of gratitude to the creator who has invested labour, skill and judgment in creating an intellectual work and given the work to public.
The third frequently called upon arguments are utilitarian justifications, the focus of which is on the public interest. This theory presupposes that the long-term aim of granting intellectual property rights is to stimulate innovation, production and thereby for public good. 6 For example, copyright protection promotes creativity, social exchange and interaction; patent protection stimulates new research initiatives and advances dissemination of useful information and knowledge;
The chief difficulty is to strike a balance between incentives and access, as the Commission on Intellectual Property Rights states “the conferring of intellectual property rights is an instrument of public policy, which should be designed so that the benefit to society outweighs the cost to society.” 7
The theories will be examined in detail in the following sections dealing with copyright, patents and trade marks.
- Justifications for the legal protection of copyright
Not everyone considers copyright as a good thing. For example, the Austrian school of free market liberal economics believes that no copyright is required at all for an efficient functioning market and that being first in the market provides sufficient appropriability that no legal protection is required. 8 Recently, with the advent of internet technology, it is argued that copyright law gives undue credit to authors and
- C Colston, K Middleton, Modern Intellectual Property Law, (2nd edition, Routledge Cavendish, 2005), 34.
- Integrating Intellectual Property Rights and Development Policy, Report of the Commission on Intellectual Property Rights, (London, September 2002), 10.
- A Plant, The Economics of Copyright  Economica 167, 95.
investors, and functions to restrict the free flow of information that would otherwise benefit everyone. 9 In response to these copyright criticisms, three basic arguments are proffered for conferring exclusive rights to the expression of an idea: natural rights arguments, reward arguments and utilitarian arguments. Although the three arguments are relatively distinct in philosophical paradigm, they are typically deployed side by side.10
- Natural rights arguments
Natural rights arguments are framed in two ways: the personality theory which is associated with European traditions and Locke’s labour theory which is strongly represented in the American literature. It is suggested that the latter one is not complete without the support of the former one. 11 The personality theory such as the one proposed by Hegel regards a creation as an extension of its creator’s individuality or person, belonging to that creator as part of his or her selfhood. Hegel’s normative relationship between property and personhood is reformulated by Radin. She argues that intellectual property rights are justifiable as manifestation of one’s personality in one’s intellectual creation, “the more closely connected with personhood the stronger the entitlement”. 12 With this understanding, intellectual property is protected because intellectual products, even the most technical, are a receptacle of personality. 13
- S Trosow, The Illusive Search for Justificatory Theories: Copyright, Commodification and Capital,  16 Canadian Journal of Law and Jurisprudence 271.
- L Bentley & B Sherman, Intellectual Property Law, (2nd edition, Oxford University Press, 2001), 33-37.
- J Hughes, The Philosophy of Intellectual Property  77 Geo. L.J. 287, 329.
- M J Radin, Property and Personhood  34 Stanford Law Review, 957, 986.
- J Hughes (n10), 340.
Locke’s labour theory argues that the people have natural rights to enjoy the fruits of their labour by creating something from raw material even when labours are intellectual. 14
According to Locke’s labour theory, labour justifies a penetration of a physical item into the labourer’s ambit in the sense that the labour adds value to the raw material. 16 But the exercise of labour’s natural rights is not unconditional, it is subject to the “no-harm principle”17, the “enough and as good proviso” 16and the “non-waste proviso” 18. The “no-harm” principle ensures that the labour’s natural property rights are protected only if it does not conflict with social norms and common good. The “enough and as good” principle secures that property acquisition harms no one and intellectual commons are accessible to everyone. The non-waste principle prohibits Man to spoil or destroy anything made by god, so a labourer may appropriate only the amount that he can come to use.
The Lockean provisos were reconstructed by Nozick. Under his reconstruction, the exclusive rights of an intellectual property owner over his idea would better off the public, because other good and services developed from that idea are still available on the market. 19 If so, there is no need for the idea/expression dichotomy. 20
- Baird, Common Law Intellectual Property and the Legacy of International News Service v. Associated Press,  50 U. CHI. L. REV., 411, 415.
- J Locke, Two Treaties of Government, edited with an Introduction and Notes by P Laslett (2nd edition, Cambridge University Press, 1988), 265-428.
- W J Gordon, A Property Right in Self-Expression: Equality and Individualism in the Natural Law of Intellectual Property  12 Yale Law Journal 1533, 1544-1545.
- J Locke (n14), Chapter V. Section 27.
- Ibid, Chapter V. Section 31.
- R Nozick, Anarchy, State and Utopia, (New York-Oxford: Basic Books, 1974), 180.
- The idea/expression dichotomy is criticised by some commentators, it is argued that why a work that requires skill in its implementation should be better protected than creative element in the human mind. See D I Bainbridge, Intellectual Property, (6th edition， Pearson Education, 2006), 48.
Some commentators have suggested that Locke actually assented to a personality theory. 21 With this understanding of Locke’s labour theory, the difference between these two theories may be minimal.
- Reward arguments
Reward arguments employed a variant of natural rights arguments and consider copyright as a legal expression of gratitude to an author who has invested labour, skill and judgment in creating a work and given the work to public. 22 The copyright allows the general public to decide the degree to which the copyright owner should be rewarded by the consumption or appreciation of the work.
- Utilitarian arguments
The utilitarian theories can be traced back to the first modern copyright law, the Statute of Anne 1709. The statute is prefaced by this sentence “An Act for the Encouragement of Learning, by vesting the Copies of Printed Books in the Author’s Purchasers of such Copies.” 23
In contrast with the natural rights and reward arguments which focus on the creator’s private interest, the incentive-oriented theories emphasise on public interests.
The rationales argue that copyright protection which stimulates the production and public dissemination of intellectual works is an important activity and socially
- Rapaczynski, Locke’s Conception of Property and the Principle of Sufficient Reason,  42 HIST. IDEAS 305, 307.
- In Designers Guild v. Williams  FSR 21, paragraph 2 (HL), Lord Bingham said that “anyone who by his or her own skill and labour creates an original work of whatever character shall, for a limited period, enjoy an exclusive right to copy that work.”
- 8 Anne, C.19 (1709).
Furthermore, there is a need for artificial incentive to rectify the market failure. The reason is while copyright works are often very expensive to produce, the nature of public goods renders them vulnerable for being duplicated and exploited by free riders. The purpose of granting exclusive rights of authorship is to avoid such economically inefficient outcome. Without copyright, the situation could resemble the prisoner’s dilemma: for every winner, there is a loser. More specifically, if Publisher A felt free to copy without paying Publisher B who paid royalties to their own authors, it is difficult, if not impossible, for Publisher B to reap its investment, and this will adversely affect the creation of socially beneficial intellectual works; but if the costs of creation incurred in both publishers, then each could do moderately well and more books would be available in the pubic domain.
For copyright law to promote economic efficiency, its principal legal doctrines must maximise the profits from producing additional works, minus both the losses from restricting access and cost of administrating copyright protection. 25 The central difficulty is to strike a correct balance between providing an incentive to production by means of copyright protection and allowing for access to products in order to secure the social benefits. 26
- Justifications for the legal protection of patents
Nearly every country has chosen to adopt patent system because it stimulates technical progress in at least four aspects. First, it encourages research and invention; secondly, it acts as incentives to individuals and organisations to disclose information
- S Breyer, The Uneasy Case for Copyright: A Study in Books, Photocopies and Computer Programs,  84 Harvard, L Rev, 282.
- W Landes & R Posner, An Economic Analysis of Copyright Law  18 Journal of Legal Studies 325, 326.
- D A Wittman (ed.), Economic Analysis of the Law: Selected Readings, (Blackwell Publishing, 2002), 84.
which may have otherwise remained secret; thirdly, inventors are offered sufficient reward for developing inventions to the commercially practical state; fourthly, it provides an inducement to invest a great deal of time, money and effort in new lines of production which might not be profitable if many competing producers embarked on them concurrently. 27
There are four justifications for the grant of patent proposed by Machlup: natural rights arguments, reward arguments, incentive-based arguments and exchange-for-secrets arguments. 28 Each one will be considered in turn.
- Natural rights arguments
The natural arguments for patents are similar to those for copyright law treated in section 2.1.1. Each individuals should have a right of property over the product resulted from his mental labour and this right should be protected from being exploited by others. 29
- Reward arguments
This theory argues that inventor’s ingenuity in making useful invention should be rewarded by the grant of patent protection which guarantees sufficient recompense for his or her contribution. 30
- Incentive-based arguments
- Aldous J in Chiron Corporation v. Organon Teknika Ltd (No 10)  FSR 325, 332.
- F Machlup, Essays on Economic Semantics, ed. M. Miller. (Englewood Cliffs: Prentice-Hall, 1963.)
- F Machlup and E Penrose, The Patent Controversy  10 J Economic History 1, 11-17.
- Ibid, 17-21.
As Aldous J said “it is in the public interest that patent monopolies are enforced.” 31
In Asahi, Lord Oliver said:
the underlying purpose of the patent system is the encouragement of improvements and innovation. In return for making known his improvement to the public the inventor receives the benefit of a period of monopoly during which he becomes entitled to prevent others from performing his invention except by his licence. 32
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But the monopolies granted by patent system should be limited in duration and scope to avoid the abuse of rights and be balanced against right holders’ economic aspirations and power. 33 The central problem is to balance “the utility gains from increased incentives for innovation” and “the utility losses incurred for monopolisation of innovations and their diminished diffusion.” 34
Moreover, sufficient rewards are offered to inventors by patents for developing inventions to the commercially practical state. As Samuelson observed, the chief justification for intellectual property law in the Anglo-American tradition is economic35, without it inventors would have too little incentive for the production of new inventions. Take pharmaceutical industry for example, with the advent of new technology and its increasing complexity, the costs expended in research and development (R&D) are incredibly substantial. Without the patent protection which
- Aldous J, (n27), 333.)
- Asahi Kasei Kogyo  RPC 485, 523.
- J Bentham, A manual of Political Economy (NY: GP Putnam, 1839), cited in P S Menell, “Intellectual Property: General Theories” in B Bouckaert & G de Geest (editions), Encyclopaedia of Law and Economics: Volume II (Edward Elgar: Cheltenham UK, 2000), 71.
- T G Palmer, Are Patents and Copyrights Morally Justified? The Philosophy of Property Rights and Ideal Objects  13 Havard Journal of Law and Public Policy 817, 849-850.
- P Samuelson, Should Economics Play a Role in Copyright Law and Policy [2003-2004] 1 University of Ottawa Law & Technology Journal, 1.
guarantees a profitable return on investment, no companies and organisations would take risks of funding the development of new inventions.
However, such an incentive cannot be achieved by legal means only, the stimulus is also governed by various and independent factors such as marketing skills, the level of demand for the invention, the availability of alternatives and the reliability of the invention itself. 36 Some even argued that inventive activity, for the most part, is spontaneous rather than being inspired by the prospect reward guaranteed by patent protection. 37
The incentive-based theory is a looking-forward approach, investors will be stimulated to make more inventions and to invest the necessary time and money because the patents assure the successful exploitation of inventions.
- Exchange-for-secrets arguments
As was presented above, what the patent system does is to grant a twenty-year period of protection in return for the inventor’s agreement to reveal details of his invention or innovation and ultimately to abandon his property right in it. In essence, protection is given for information. Historically, the information function has been patent’s strongest justification.38 The public interest although might be jeopardised by the grant of limited exclusive right is secured by the disclosure of technical information that may have otherwise remained secret. 39 In addition, patent information is self-upgrading and avoids replication of effort and economic waste. 40
- H Kronz, Patent Protection of Innovations: A Model  EIPR 178,206.
- A C Pigou The Economics of Welfare (4th edition, London: Macmillan and Co., 1932), Part II, Chapter 9, paragraph II.IX.11.
- F-K Beier & J Strauss, The Patent System and its Information Function-Yesterday and Today  8 International Review of Industrial Property and Copyright, 387.
- D Davies, The Early History of the Patent Specification  50 LQR 86.
- C Colston, K Middleton (n5), 47.
This function was strengthened by the 1977 Patents Act and the EPC41, which emphasise the need for the invention to be disclosed in a manner that it could readily be put into practical application. In Falconer J`s words, there must be an enabling disclosure. 42
While admitting patent system’s important role in generating and circulating information, it is questioned whether the grant of an exclusive property right is the best way of gathering information. 43 Since there is no consistent patent system across different jurisdictions, problems with classification, with language, with replication, and with accessibility do exist. In addition, the patent specification does not give access to further know-how which might be critical to the practical use of the invention. 44 But it is pointed out that patent offers relevant information more quickly and in a greater amount than other sources such as technical and research literature. 45
- Justifications for the protection of trade marks
Trade marks can be regarded as serving three main goals: first, a registered trade mark is an item of property which protects the proprietor’s commercial reputation and goodwill; secondly, it helps to maintain a highly competitive and prosperous economy by providing consumers with increasing choices of goods and services; thirdly, by indicating the source of goods and services, a trade mark prevents the buying public from purchasing inferior goods and services in the mistaken belief that they originate from or produced by another firm; fourthly, the legal protection of trade marks is a
- PA s. 14(3), s.72 (1)(c)/EPC Art. 83.
- Genetech Inc’s (Human Growth Hormone) Patent  RPC 613, 629.
- T Eisenschitz, “The Value of Patent Information”, in J Philips (ed.), Patents in Perspective: A Collection of Essays, (ESC Publishing: Oxford, 1985).
- C Colston, K Middleton (n5), 47.
- C Oppenheim, Information Aspects of Patents, in J Philips (ed.), Patents in Perspective: A Collection of Essays, (ESC Publishing: Oxford, 1985).
means of promoting fair competition and preventing unjust enrichment.
Although some consider the legal protections for trade marks as self-evident because the existence of trade marks “converts social distrust into mutual understanding,” 46 a number of criticisms have been made against the enormous market power conferred by such trade marks as COCA-COLA.
The rationales adopted to justify the legal protection for trade marks can be divided into three ways: natural rights arguments, reward arguments, utilitarian arguments.
- Natural rights arguments
It is argued that the natural law arguments used to justify the legal ground for copyright and patent do not apply to trade marks. 47 As was discussed above, natural rights theories concentrate on the protection of creator’s labour and personality involved in the creation of the intellectual properties. As far as trade marks are concerned, while the identifiable indication of commercial reputation is an integral part of a business and thereby owned by its proprietor, it is as much created by the consumers and the public. 48 Consequently, it is hard to justify trade marks or goodwill which results from combination efforts of the trade marks proprietors, the customers and the public as creations.
- Reward arguments
The reward rationale argues that the inventor’s investment in producing an identifiable trade mark should be rewarded by means of legal protection. Trade mark
- H Link, The Social Significance of Trademarks  38 TM Rep 622, 625.
- L Bentley & B Sherman (n9), 699.
law helps to ensure a producer that it will reap both financial and reputation-related rewards associated with a quality product. 49
- Utilitarian arguments
The public justifications for trade marks differ from those for copyright and patent because trade marks do not function as a legal device for stimulating the production of commodities.
Utilitarian arguments are threefold. First of all, as Lord Nicholls of Birkenhead said in Scandecor Developments AB v. Scandecor Marketing AB “inherent in this definition is the notion that distinctiveness as to business source (the goods of one understand) is the essential function of a trade mark today.” 50 This source-distinguishing function of trade marks creates incentives for undertakings to produce products of desirable qualities in a competitive economy, and the public will benefit from the choice. 51 And competitiveness is equated to success of capitalism. The importance of trade marks to the UK economy is proved by a study carried out by Higgins and James, which concludes that the higher the level of trade marking activity is, the more prosperous the economy is. 52
Secondly, trade marks enhance the market efficiency by enabling consumers to evaluate the quality of an item quickly by referencing to advertising, to previous experience, to recommendation and other knowledge of the marks. In addition, trade marks facilitate and enhance the marketing of products not merely in a large scale but also in foreign markets without loss of identity, and thus saved consumer’s costs of
- Qualitex v. Jacobson Products 115 S Ct 1300 (1995).
- Scandecor Developments AB v. Scandecor Marketing AB  FSR 122 at paragraph 133.
- N Economides, The Economics of Trademarks  78 TM Rep 523, 525.
- D M Higgins and T J James, The Economic Importance of Trade Marks in the UK (1973-1992): A Preliminary Investigation, (Intellectual Property Institute: London, 2002).
shopping indirectly. 53
Thirdly, the legal protection of trade marks is a means of promoting fair competition and preventing unjust enrichment. In other words, why a person should be allowed to reap where he has not sown? But this ethical justification is premised on the condition that only the proprietors of trade marks have sown in the process of creation. As was discussed in section 2.3.1, trade marks result from combination efforts of the trade marks proprietors, the customers and the public, so why the owners of trade marks should be allowed to take all the credits? It is also argued that the role of law is to control trade mark infringement which is “a sister of forgery, fraud, counterfeiting.”54 But it is not always easy to assess whether there is an infringement of trade marks especially where consumers are not confused. 55
As was presented above, the legal protections of copyright, patents and trade marks are justified from different angles.
For copyright, three basic arguments are proffered for conferring exclusive rights on the expression of an idea: natural rights arguments, reward arguments and utilitarian arguments. Natural rights arguments are framed in personality theory which regards a creation as an extension of its creator’s individuality or person and Locke’s labour theory which argues that the people have natural rights to enjoy the fruits of their labour by creating something from raw material. It is suggested that Locke actually assented to such a personality theory into his labour theory. If so, the difference between these two theories may be minimal. Reward arguments consider copyright as
- C Colston, K Middleton (n5), 53.
- B Pattishall, Trade Marks and the Monopoly Phobia  42 TM Rep 588, 600.
- M. Spence, Pass Off and the Misappropriation of Valuable Intangibles,  112 LQR 472, 472.
a legal expression of gratitude to an author who has invested labour, skill and judgment in creating a work and given the work to public. Utilitarian theories which are based on an idea of public interest justify the copyright law from its functions in stimulating the production and public dissemination of intellectual works, rectifying market failure, preventing free riding and generating market efficiency.
The natural rights arguments, reward arguments and incentive-based arguments for patents are similar to those for copyright. In addition, the utilitarian justifications are reinforced by exchange-for-secrets justifications which argue that the public interest lies in the information function of patent system: protection is given for information.
Natural arguments for trade marks do not apply as successfully as those for copyright and patents because it is hard to justify trade marks or goodwill which results from combination efforts of the trade marks proprietors, the customers and the public as creations. The reward arguments for patents are similar to those for copyright and patents. The public justifications for trade marks differ from the pervious two categories because trade marks function as a legal device for creating a competitive economy, enhancing the market efficiency, promoting fair competition and preventing unjust enrichment rather than a stimulus for the production of commodities.
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