Information Costs in Patent and Copyright
Why do we have more than one form of intellectual property rights? Why are the structures of patent and copyright forms so different? What factors influence the optimal structure of each form? We can move toward addressing some of these enduring puzzles and understanding the effects of the differences between intellectual property forms by examining the presence and distribution of information costs in the propertarian relationship. In this article, I explore the relationship between the nature of protected intellectual goods and differences in the structures of patent and copyright. Intellectual property rules in patent and copyright can make it easier or more difficult for parties to gather and comprehend information regarding protected goods. The literature on the law of organizations has recognized that it is most efficient to align transactions, which differ in their attributes, with organizational forms, which differ in structural ways, so as to minimize transaction costs. I argue that similarly, when intellectual property forms are structured to minimize information costs they are more efficient, all else equal, than when they are not so structured. Examining the presence and distribution of information costs can suggest ways in which we might increase efficiency in intellectual property.
Keywords: Intellectual property, patent, copyright, information costs