Rivarly and technological complementarities in computer software (original) (raw)
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Non rivalry and complementarity in computer software
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In this paper we contend that -contrary to what argued by a vast part of the literature -computer software and, more in general, digital goods (i.e. symbolic strings on an electronic medium with some economic value) do not present the characteristics of a public good as they do not suffer from lack of rivarly and excludability any more than other durable goods which are regularly allocated on competitive markets. We argue instead that the "market allocation problem" -if any -with digital goods does not arise from their public nature but from some peculiar characteristics of the production technology. The latter presents the nature of a typical problem solving activity as far as the production of the first unit is concerned, this means that innovative activities in computer software are characterized by high degrees of interdependencies, cumulativeness, sequentiality, path dependence and, more in general, sub-optimality arising from imperfect problem decompositions. As far as the production of further units is concerned, we observe instead high (but not infinite) expansibility and perfect codification (lack of any tacit dimension) which make diffusion costs rapidly fall. Given such claims, we argue that a standard "Coasian" approach to property rights, designed to cope with the externalities of semi-public goods may not be appropriate for computer software, as it may decrease both ex-ante incentives to innovation and ex-post efficiency of diffusion. On the other hand the institutional definition of property rights may strongly influence the patterns of technological evolution and division of labor in directions which are not necessarily optimal.
2006
This interdisciplinary paper focuses on an evolutionary and problem-solving approach to intellectual property rights in order to discuss some controversial issues in the European legislation on computer software and in some recent competition law case (e.g. the Microsoft case). Given such claims, we argue that a standard "Coasian" approach to property rights, designed to cope with the externalities of semi public goods may not be appropriate for computer software, as it may decrease both ex-ante incentives to innovation and ex-post efficiency of diffusion. On the other hand the institutional definition of property rights may strongly influence the patterns of technological evolution and division of labour in directions which are not necessarily optimal. Taking the European legislation on computer software and some recent competition law cases as an example, this paper intends to show that a more careful balancing of costs and benefits, both in static and dynamic terms should be suitable for a pro-innovation IP regime and competition policy.
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INTELLECTUAL PROPERTY, INNOVATION, AND SOCIAL PROGRESS: THE CASE AGAINST INCENTIVE BASED ARGUMENTS
After a brief introduction to the subject matter of intellectual property, an internal and external critique of Anglo-American systems of intellectual property protection will be offered. Internally, it will be argued that incentive-based social progress justifications for intellectual property fail – alas, if we are to conduct a cost benefit analysis it appears that a different model or a different set of rights would be better than our current system. Social progress incentive-based arguments do not justify current copyright, patent, and trade secret models of intellectual property protection. Moreover, even if these arguments could be modified, they would seem to require allowances for multiple patents for the “same” intangible work, not patent monopolies. Externally, it will be argued that consequentialism – more specifically, rule-utilitarianism – is beset with numerous seemingly insurmountable difficulties and cannot provide an adequate foundation for intellectual property. If the internal or external arguments succeed, then we will have to either find a different justification or abandon systems of intellectual property protection altogether.