Acton Commentary

Intellectual Property Rights: Handmaids of Innovation in Service to All


The world has become more connected through advances like the Internet, and software and technology innovators have found a welcome market. As they scramble to achieve market position, their rush to patent and copyright their works or products has renewed interest in the issue of intellectual property rights.

This interest reached a peak when the Clinton administration proposed that the protective time period for patents be reduced to a mere 18 months (depending on the patent, the current time limits are set at 20, 16, and seven years). A multitude of computer- and Web-based entrepreneurs cried this would suppress incentives and devastate the business that their hard work generated, by allowing rivals to duplicate their products in less time.

With a religious interest in the morality of the marketplace, we should consider the effects of intellectual property rights on persons and on society. A recent statement by John Paul II is germane:

“Finally there is work, which today more than ever recalls the biblical command that obliges man to transform the world. Just as the public authorities have duties towards life, the family and the school, so they must, by every means, help people to express their creative potential: it would be a serious fault to remain indifferent and to confine the younger generation to a creative idleness that mars the dignity of the person and the citizen, now recognized by all.” (Address to the Italian President, Oct. 19, 1999)

Recognized in the U.S. Constitution, patents, copyrights, and trademarks (all can be referred to as intellectual property rights) have provided citizens incentive for innovation since the early republic. According to the U.S. Patent and Trademark Office (USPTO), “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvements thereof” may be patented. Because of the emphasis on usefulness, claims Deborah Coppula of the American Society of Engineers, patented inventions often have market value. Add to that the fact that once a patent is approved the inventor has exclusive permission to market it for up to 20 years, and true incentive for innovation evolves. As such, creative people can detect a demand for a certain type of product, and--counting on the financial recuperation a patent would bring them--seek to provide that product to consumers through their own creativity and effort.

The free market offers an ideal setting for rewarding useful inventions, displaying the mutually beneficial relationship between trading partners. Entrepreneurs are able to provide innovative products to consumers who need them. The protection of intellectual property rights assists in the innovative spirit, as improvements to existing products are continually sought instead of their mere duplications. This makes for a strong economy. In his book, Intellectual Property Policies for the Twenty-First Century, Hisamitus Arai argues that a strong patent system leads to remarkable industry and private sector advantages, as well as a strong trading performance. He points to the innovations among a broad spectrum of goods that ultimately benefit the entire economy, and that intellectual property rights afford both financial incentives (exclusive right to produce the good) and personal incentives (attributing the creation of the good to each inventor).

As important as the protection of intellectual property rights is, so too is the lifting of that protection after a given time. After the market advantage is granted to the inventor for this time, the free market should operate with full information of that product. The inventor will have prospered from his/her hard work during this time, and if a demand for such a good still exists afterward, consumers will be offered more product choices. Of course, some companies choose not to patent their products and instead go to great lengths to protect their trade secrets. Coca-Cola has not patented its “secret formula” for the soft drink and thus has not had to reveal its recipe (a patent on Coke® would have expired years ago). As such, little innovation has been achieved in the cola market, even though Coke does face competition from other firms.

Intellectual property rights have come into question recently with the explosion of Web technologies. According to Teri Willey of the University of Chicago, “there has been more intellectual property legislation in the past five to 10 years than in the last 200.” This is largely due to the fact that copyrighted materials are placed on the Web, which is commonly considered a public resource. This dynamic new medium clearly calls for creative new application of old principles of protection. New web experiments with copyrightable materials are being launched daily: witness author Stephen King’s decision to publish and sell his newest project exclusively online. Only with stable incentives in place for innovation worldwide will web-based information entrpreneurs seek to stay ahead of the market curve for useful products.

Countries where intellectual property rights are not respected are often very poor. Strong property rights of all kinds serve to counter the “creative idleness that mars the dignity of the person and the citizen,” of which John Paul warned. Christians should welcome the protection of intellectual property rights as a means to economic development, and to stimulate creative potential in the service of bringing more and more people of the earth into what the pope calls “the circle of exchange.”