Mark Lemley, ‘IP in a World Without Scarcity’

Abstract:
Things are valuable because they are scarce. The more abundant they become, they cheaper they become. But a series of technological changes is underway that promises to end scarcity as we know it for a wide variety of goods. The Internet is the most obvious example, because the change there is furthest along. The Internet has reduced the cost of production and distribution of informational content effectively to zero. In many cases it has also dramatically reduced the cost of producing that content. And it has changed the way in which information is distributed, separating the creators of content from the distributors.

More recently, new technologies promise to do for a variety of physical goods and even services what the Internet has already done for information. 3D printers can manufacture physical goods based on any digital design. Synthetic biology has automated the manufacture not just of copies of existing genetic sequences but any custom-made gene sequence, allowing anyone who want to create a gene sequence of their own to upload the sequence to a company that will “print” it using the basic building blocks of genetics. And advances in robotics offer the prospect that many of the services humans now provide can be provided free of charge by general-purpose machines that can be programmed to perform a variety of complex functions. While none of these technologies are nearly as far along as the Internet, they share two essential characteristics with the Internet: they radically reduce the cost of production and distribution of things, and they separate the informational content of those things (the design) from their manufacture. Combine these four developments – the Internet, 3D printing, robotics, and synthetic biology – and it is entirely plausible to envision a not-too-distant world in which most things that people want can be downloaded and created on site for very little money.

The role of IP in such a world is both controverted and critically important. IP rights are designed to artificially replicate scarcity where it would not otherwise exist. In its simplest form, IP law takes public goods that would otherwise be available to all and artificially restricts their distribution. It makes ideas scarce, because then we can bring them into the economy and charge for them, and economics knows how to deal with scarce things. So on one view – the classical view of IP law – a world in which all the value resides in information is a world in which we need IP everywhere, controlling rights over everything, or no one will get paid to create. That has been the response of IP law to the Internet so far.

But that response is problematic for a couple of reasons. First, it doesn’t seem to be working. By disaggregating creation, production, and distribution, the Internet democratized access to content. Copyright owners have been unable to stop a flood of piracy with 50,000 lawsuits, a host of new and increasingly draconian laws, and a well-funded public education campaign that starts in elementary school. Second, even if we could use IP to rein in all this low-cost production and distribution of stuff, we may not want to. The point of IP has always been, not to raise prices and reduce consumption for its own sake, but to encourage people to create things when they otherwise wouldn’t. More and more evidence casts doubt on the link between IP and creation, however. Empirical evidence suggests that offering money may actually stifle rather than drive creativity among individuals. Economic evidence suggests that quite often it is competition, not the lure of monopoly, that drives corporate innovation. The Internet may have spawned unprecedented piracy, but it has also given rise to the creation of more works of all types than ever before in history, often by multiple orders of magnitude …

Lemley, Mark A., IP in a World Without Scarcity (March 24, 2014).

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