The Acceptable Face of Intervention: Intellectual Property in Posnerian Law and Economics

Date01 September 2006
AuthorDavid Campbell,Sol Picciotto
DOI10.1177/0964663906066895
Published date01 September 2006
Subject MatterArticles
REVIEW ARTICLE
THE ACCEPTABLE FACE OF
INTERVENTION: INTELLECTUAL
PROPERTY IN POSNERIAN LAW
AND ECONOMICS
W. M. LANDES AND R. A. POSNER, The Economic Structure of Intellectual Property
Law. Cambridge, MA: Harvard University Press, 2003, 442 pp., ISBN 0–674–01204–6,
$39.95.
DAVID CAMPBELL AND SOL PICCIOTTO
University of Durham, UK, and Lancaster University, UK
INTRODUCTION
OVER THEIR long and incredibly prolif‌ic publishing careers, William
Landes and Richard Posner (hereinafter L & P) have independently
and jointly published what for mere mortals would be a large
number of papers on intellectual property (hereinafter IP). Nevertheless, IP
evidently is only a relatively minor interest to Posner. He has published
merely 20 or so substantial papers on it, about half of which were written
with Landes (pp. 3–4), whereas his total output now runs to about 300 books
and substantial papers, written at a rate of almost 10 a year since 1969, and
during this time he has also written around 150 other pieces and served as an
appeal court judge. In The Economic Structure of Intellectual Property Law,
L & P have now brought together and reworked many of their papers on IP
(p. 425) to give the most extensive commentary upon it from the ‘Posnerian’
law and economics perspective. With the striking exception of a sustained
treatment of the unusual remedies extended to the protection of IP (p. 7),
most of the issues raised by IP are somewhere discussed in the papers now
combined in this book, and, to some extent, a new framework for this
SOCIAL &LEGAL STUDIES Copyright © 2006 SAGE Publications
London, Thousand Oaks, CA and New Delhi, www.sagepublications.com
0964 6639, Vol. 15(3), 435–452
DOI: 10.1177/0964663906066895
discussion is given at the beginning of the book. The gist of L & P’s position
is that, though they to some extent agree with the widely held belief that
copyright holders in particular (Chapters 2 and 3), but also patent holders to
a lesser extent (pp. 310–26), now enjoy excessive rights (p. 9), they generally
approve of intellectual property: ‘We do . . . f‌ind pretty solid economic
support for a degree of trade secrecy protection close to what we have and
for a degree of copyright and patent protection as well, but possibly a lesser
degree than we have’ (p. 9).
In this review we will argue that L & P’s defence of intellectual property
is not reconcilable with the stance they have elsewhere taken towards govern-
ment intervention. IP rights are government interventions in market alloca-
tions, and their justif‌ication is in terms of optimizing the social welfare
function. As such, they should be subject to many of the criticisms L & P
have levelled at other interventions, but they are not. Ref‌lection on this
paradox leads to interesting insights into the nature of Posnerian ‘eff‌iciency’
and ‘welfare maximization’. More broadly, it once again illustrates the way
in which Posnerian law and economics are an interaction of mutually rein-
forcing economic and legal formalisms (Campbell and Picciotto, 1998). A
truly critical approach to both the law and the economics of IP could contrib-
ute to a fundamental re-evaluation of the social consequences of IP law,
especially as it has developed in the recent past, and to some radical propos-
als for change. But L & P merely apply a hackneyed formula to yet another
body of law, and so provide no more than a few ideas for tinkering with
details of IP; despite being, as we will see, conscious that the entire edif‌ice
rests on the weakest of foundations.
L & P’SARGUMENT FOR IP
As the title of their book, and, of course, the nature of their entire work, lead
one to expect, L & P’s account of IP law is economic. Quickly dismissing
‘other perspectives . . . besides the economic’ (p. 4), L & P put forward ‘an
analysis and evaluation of intellectual property law . . . conducted within an
economic framework that seeks to align that law with the dictates of economic
eff‌iciency’ (p. 4). As with their earlier work on, for example, tort law (p. 10;
cf Landes and Posner, 1987), L & P’s aim is to cut through the complexities
of the legal doctrines to enhance understanding of the ‘economic structure’ of
IP, revealing the ‘deep commonality, as well as signif‌icant differences, among
the various f‌ields of intellectual property law, and between intellectual
property law and the law governing physical property’ (p. 10).
But whereas L & P are conf‌ident that their work on tort does show a
‘generally eff‌icient’ ‘unity’ to the law it studies, they concede from the start
that IP does not have such a unity, and consequently there is a ‘degree to
which economic analysis of intellectual property remains inconclusive, if not
indeterminate’ (p. 10). Consequently, in order to bring such unity and struc-
ture to the f‌ield as is possible, they promise a novel departure from the
436 SOCIAL & LEGAL STUDIES 15(3)

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