Stanford’s Mark Lemley writes: Property, Intellectual Property, and Free Riding
Courts and scholars have increasingly assumed that intellectual property is a form of property, and have applied the economic insights of Harold Demsetz and other property theorists to condemn the use of intellectual property by others as free riding. In this article, I argue that this represents a fundamental misapplication of the economic theory of property. The economics of property is concerned with internalizing negative externalities – harms that one person’s use of land does to another’s interest to it, as in the familiar tragedy of the commons. But the externalities in intellectual property are positive, not negative, and property theory offers little or no justification for internalizing positive externalities. Indeed, doing so is at odds with the logic and functioning of the market.
