Subject: Re: The term "intellectual property" considered useful
From: "Stephen J. Turnbull" <>
Date: Wed, 03 May 2006 22:35:17 +0900

>>>>> "A" == A Pagaltzis <> writes:

    A> Well, depending on whether the "intellectual property" you are
    A> referring to is a copyright, a trademark, a patent, or
    A> whatever, the answer would change dramatically, no?

That's right.  "No."  The VC doesn't know or care.  He just wants it
*all*.  The extensive definition of *all* is your legal staff's
problem.  If the answer is not "yes; here's the report from our legal
staff", or he doesn't trust you, maybe the next question is "exactly
what IP do *we* have, and what are *you* doing to protect it?"  But if
it gets to that point, Mr CTO, you may as well grab your golden
parachute because you are about to get fired.

Note that our VC will accept but not look at the report; he'll hand it
to *his* staff for verification.  He just doesn't care about the
species, only the genus.

Let's put it this way.  The term "intellectual property" is useful for
the same kinds of reasons that the term "application programming
interface" is useful.  Patents and copyrights are as different as SWIG
and Ada, but there are aspects that are usefully unified by the terms
"IP" and "API" respectively.

In a separate post, you suggest:

    A> It is probably long past the opportunity to rename the umbrella
    A> term to "intellectual monopolies" to cast it properly and frame
    A> discussions about it correctly ... but, assuming its broad
    A> adoption as a thought experiment, wouldn't it address the
    A> problems with the "intellectual property" term?

No.  "Intellectual monopoly" is not what Larry wrote, and it would be
inaccurate for the purposes "intellectual property" is used for.
Consider the "ransom license" business model, which depends on an
intellectual monopoly---software that exists only in your head.  An
NDA also might create an intellectual monopoly, but it is quite
different from intellectual property.

A good term for this purpose is "franchise" rather than "monopoly".
This word has been well-known to economists and lawyers in this
connection for more than a century (that I know of), but it's not very
often used (by economists, anyway) because it's not very important in
practical analysis.[1]

"Property", however, is.  "Property" (in economics, and I believe in
law) denotes a transferable asset.  A "lump of property" is often
decomposable into subsidiary rights, each of which becomes property in
its own right.  And this is precisely what happens with intellectual
property.  The optimal use of the various subsidiary rights (either in
a profit-maximizing sense or a social welfare-maximizing sense) is a
crucial point in economic or business analysis.

It is precisely this ability to refer to a bundle of partitionable,
transferable, and licensable rights in one simple phrase that makes
"intellectual property" a useful idea.  Those three properties are
equally applicable to copyright, trademark, and patent, though the
intangible entities protected and the content of the rights involved
are very different.

Furthermore, intellectual property need not be a legal franchise (ie,
granted by the state).  It might be property created by a license (if
for example it is transferable).

[1]  The economist's common use of "franchise" is with respect to the
monopoly granted to public utilities, or use of a trademark granted by
a large company to small businesses.  However, the franchise is, in
some sense, the definition of the company; although the owners can
sell their stock, it's generally not useful to split the monopoly
franchise from the physical capital the company owns.

With patents, this was sorta true for RSA, but most patents can easily
be traded separately from the rest of the company.  The "heavy,"
"non-portable" connotations of "franchise" are not appropriate here.

Graduate School of Systems and Information Engineering   University of Tsukuba        Tennodai 1-1-1 Tsukuba 305-8573 JAPAN
        Economics of Information Communication and Computation Systems
          Experimental Economics, Microeconomic Theory, Game Theory