The Economics of Improvement in Intellectual Property Law

Abstract

A number of doctrines in modern copyright and patent law attempt to strike some balance between the rights of original developers and the rights of subsequent improvers. Both patents and copyrights are limited in duration and in scope. Each of these limitations provides some freedom of action to subsequent improvers. Improvers are free to use material that is in the public domain because the copyright or patent has expired. They are free to skirt the edges of existing intellectual property rights, for example by taking the ideas but not the expression from a copyrighted work or "designing around" the claims of a patent. However, improvers cannot always avoid the intellectual property rights of the basic work on which they wish to improve. Some improvements fall within the scope of the preexisting intellectual property right, either because of an expansive definition of that right or because economic or technical necessity requires that the improver hew closely to the work of the original creator in some basic respect. Here, the improver is at the mercy of the original intellectual property owner, unless there is some separate right that expressly allows copying for the sake of improvement.