The Four Horsemen of the IP Apocalypse – Conclusion

By Joren De Wachter

The relationship between Intellectual Property and technology is a complex one. It is not clear how the causality runs – does Intellectual Property arise as a consequence of the Industrial Revolution, operating as a mechanism that slows down innovation and reverses redistribution of wealth (effectively ensuring that capital investment earns a much higher return that it would in a free market, where copying is the norm)? Or is Intellectual Property, as is often claimed without much empirical evidence, a key contributor to superior innovation, through the enforcement of limited exclusive rights in the market?

The impact of Information Technology is a game-changer for the Intellectual Property system. In this case, it is clear how the causality runs: technology is having a major impact on the Intellectual Property system.

The four horseman of the IP-Apocalypse are having the combined effect of increasing the cost and decreasing the capability of obtaining Intellectual Property, reducing the return on investment, and making enforceability much more difficult, insecure and expensive.

As a result, the value and importance of Intellectual Property, in its current form, will continue to decline. While there are some indicators that this may actually increase the rate of innovation, the jury is still very much out on this question.

But, and that is the key conclusion: the question whether IPRs promote or tax innovation doesn’t really matter anymore. Other causes are speeding up technological innovation, and pushing technology and business models beyond the social or business need for Intellectual Property. Nobody waits for, or invests in, a monopoly that is very hard and expensive to obtain, and almost impossible to enforce.

So, unless fundamental changes occur in the IPR system, it is doomed to further whither away into insignificance. That won’t happen overnight. And chances are it won’t go down quietly, or without a fight. But – without significant changes – go down it will.

[This post originally appeared at JorenDeWachter.com.]