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November 22, 2004
Judging IP Policy on Its Merits
Cory beat me to the punch, but this new column by James Boyle is too good not to risk redundancy. The theme, as Cory writes, is "the crazy way that IP policy gets made" -- that is, without proof that it works for its intended purpose (providing a necessary incentive for innovation). The particular object of Boyle's scorn is copyright-like protection for databases -- something Europe had adopted and we in the US have rejected, but only by the skin of our teeth.
Imagine a process of reviewing prescription drugs which goes like this: representatives from the drug company come to the regulators and argue that their drug works well and should be approved. They have no evidence of this beyond a few anecdotes about people who want to take it and perhaps some very simple models of how the drug might affect the human body. The drug is approved. No trials, no empirical evidence of any kind, no follow-up. [...]
Even the harshest critics of drug regulation or environmental regulation would admit we generally do better than this. But this is often the way we make intellectual property policy.
So how do we decide the ground-rules of the information age? Representatives of interested industries come to regulators and ask for another heaping slice of monopoly rent in the form of an intellectual property right. They have doom-laden predictions, they have anecdotes, carefully selected to pluck the heartstrings of legislators, they have celebrities who testify - often incoherently, but with palpable charisma - and they have very, very simple economic models. The basic economic model here is "If you give me a larger right, I will have a larger incentive to innovate. Thus the bigger the rights, the more innovation we will get. Right?" Well, not exactly.
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