Innovation and Intellectual Property – a controversy?”


Earlier this year I posted a blog relating to competition innovation and intellectual property rights. One of the things I noted was that there is some debate about the extent to which intellectual property rights actually stimulate innovation. Recent consensus/received wisdom among enforcers is that it does – for example the recent EU Technology Transfer Guidelines (March 2014) say “Innovation constitutes an essential and dynamic component of an open and competitive market economy. Intellectual property rights promote dynamic competition by encouraging undertakings to invest in develop[ping new or improved products and processes.” (para 7)

At the time of my blog I suggested that we might ask some economists to comment on the issue, in part because within the regulatory agencies and at the Court level it is not clear how much weight is actually given to the long term incentives offered by Intellectual Property when weighed against the shorter sharper shock tactics of existing competition and active competition enforcement.  So far we haven’t quite got around to arranging for someone to guest on that topic (but do feel free to volunteer if you are interested!).

In the meantime, those who are particularly interested could have a look at recent posts on the US blog “Truth On The Market”. An interesting spat has broken out between some of those commenting on that blog and others, principally those at The Mercatus Center. The initial debate appears to have arisen in the context of copyright and has some particularly  US aspects, but it is worth reviewing for those who  take a close interest in the relationship between IP rights and innovation, whether it actually exists and how direct it is – something that is, of course, relevant to policy choices made by competition enforcers.

The particular dialogue in the US seems likely to run and run given the heat on both sides (see some of the comments on the blog post) and we will be watching it, given the importance of the issue – we may even find a future “CLIP of the Month”.