Intellectual Property as Property: Delineating Entitlements in Information

Intellectual Property

Article Snapshot


Henry Smith


Yale Law Journal, Vol. 116, No. 8, pg. 1742-1822, 2007


This paper develops and applies an information cost framework for comparing IP and the law of tangible property.

Policy Relevance

Like the law of tangible property, copyright and patent law rely to some extent on modular boundaries to manage the complexity of coordinating activities surrounding markets involving information. Because uses of inventions tend to be more costly to evaluate patent law inclines towards more owner control than odes copyright.

Main Points

  • Information has the properties of public goods.  Many people can share information without depleting the information; as is well known, information is “nonrivalrous.” People can’t be fenced out of information the same way they can be fenced out of physical property (information is somewhat “nonexcludable.”).

  • IP law creates a legal fence that stops some people from using intellectual assets (“exclusion”) at a cost.  Exclusion is supplemented with governance regimes consisting of rules of proper use. The benefit of exclusion is that it employs a low-cost proxy that allows for appropriation from complementary rival inputs (labor, lab space, etc.).

  • IP assets and their uses can be hard to define. The role that exclusion plays in keeping the system of entitlements over information modular--allowing information to be hidden behind metaphorical boundaries--is both its strength and its weakness.

  • The Article uses this information-cost theory to explain some of the basic differences between the more tort-like copyright regime and the more property-like patent law. Because uses have until recently been easier to delineate separately in expression than with inventions, copyright law relies more on governance regimes and does not need to give control to the owner to the same degree as patent law.  With inventions, uses are harder to define and so patent law resembles tangible property law more; relative to copyright more exclusivity is needed in patent law to keep costs low.   

  • Ultimately, whether and what kind of intellectual property rights are the lowest-cost method of making sure innovation continues is an empirical question.

Get The Article

Find the full article online

Search for Full Article