A Critical Evaluation Of The Incentive And Market Failure Justifications Underlying Ip Systems
- IJLLR Journal
- Feb 24
- 1 min read
Drishti Banerjee, Student, LL.M. (Intellectual Property Law and Management), National Law University, Delhi
ABSTRACT
Intellectual property fosters economic growth. It encourages innovation and regulates markets. In the absence of such “rewards”, there will be no creation, and eventually the markets would fail. Economic theories form the rationale behind why intellectual property rights exist and how they function. These theories often place the subject matter of intellectual property as public goods, which are non-rivalrous and non-exclusive, but consider the human intellect in refining them to be exclusive. Without protection, the refined labour of human intellect faces free riding problems, and without disclosure, society does not progress in the long run. Therefore, in a complex socio- economic set-up, IPR balances private reward with public benefit. This paper critically examines the dynamic efficiency of intellectual property while exploring Locke’s Labour Theory, utilitarianism, Schumpeter’s creative destruction, and the tragedy of the anticommons, among others. In conclusion, it acknowledges that information abundance must be harmonised with equitable diffusion to prevent market failures. The State must incentivise the creators, while controlling monopolistic distortions at the same time.
