IP and Other Regulations

Posted by Social Science Research Network

IP and Other Regulations Mark A. Lemley (Stanford Law School)

Abstract: Intellectual property (IP) is a form of regulation. Once we understand IP laws as government social policies that seek to alter market outcomes, we can start to think of those laws as part of a broader tapestry of government rules that affect innovation in a complex variety of ways. Sometimes governments encourage innovation by rewarding it. Sometimes they encourage innovation by restricting market entry, giving incumbents supracompetitive returns by insulating them from competition. IP does both of these at various points.

Market-entry regulation is a troubling way to encourage innovation, because in many cases it is competition, not monopoly, that drives technical progress. But a third type of regulation can actually open rather than close markets, and offers the prospect of encouraging innovation not by impeding competition but by encouraging it. Antitrust and net neutrality may fit within this last category.