Is the knockoff economy a knockout for intellectual property? Reflections on Kal Raustiala and Christopher Sprigman, The Knockoff Economy: How Imitation Sparks Innovation, Oxford, Oxford University Press, 2012
| Author | Ejan Mackaay |
| Position | Emeritus Professor of Law, Université de Montréal |
| Pages | 163-170 |
Ejan Mackaay
2012
163
1
Is the Knockoff Economy a Knockout for
Intellectual Property?
Reflections on Kal Raustiala and Christopher Sprigman, The
Knockoff Economy: How Imitation Sparks Innovation, Oxford,
Oxford University Press, 2012, 272 p.; ISBN 978-0195399783
by Ejan Mackaay, Emeritus Professor of Law, Université de Montréal;
Fellow, CIRANO; ejan.mackaay@umontreal.ca
© 2015 Ejan Mackaay
Everybody may disseminate this ar ticle by electroni c means and make it available for downlo ad under the terms and
conditions of the Digita l Peer Publishing Licence (DPPL). A copy of the license text may be obtaine d at http://nbn-resolving.
de/urn:nbn:de:0009-dppl-v3-en8 .
Recommended citation: Ejan Mack aay, Is the Knockoff Economy a Knockout for Intellec tual Property? Refle ctions on Kal
Raustiala and Christopher Spri gman, The Knockoff Economy: How Imi tation Sparks Innovation , Oxford, Oxf ord University
Press, 2012, 272 p.; ISBN 978-0 195399783, 6 (2015) JIPITEC 163 para 1.
A. Introduction
1
Conventional wisdom has it that copyright is
essential to ensure that creative efforts will be
directed at producing cultural creations of various
kinds. Without this or some other stimulus, creative
talent would be deployed elsewhere in endeavours
where it will earn proper rewards. In the course
of history various techniques have been used to
create such a stimulus: rst mover advantage,
secret, favouritism by the powerful, employment
contracts, pensions, state procurement contracts,
state subsidies, sponsorships, lotteries, to name just
a few.1
2
As a stimulus, copyright, which will concern us here,
and intellectual property generally, are thought
to outperform these other techniques. Copyright
is meant to be granted without discretion once
its predened conditions are fullled, is entirely
decentralised (does not depend on any one person’s
view of the value of the creation) and procures a
reward that is a function of how much different
consumers are willing to pay for the product
or service it protects. For this scheme to work,
copyright holders have to have control over who can
use their creation. Without such control, consumers
would free ride, i.e. consume without paying for it.
All cultural creations are information goods which
can be used by many persons without diminishing
their utility for anyone else – a feature which
economists refer to as characteristic of “public
goods”. Information goods are not naturally scarce
in the economic sense, though the talent to create
them is.
3
For physical goods, whose consumption by one
person prevents consumption by another, control
over usage is ensured by some form of “fence” that
shuts out anyone but the title holders and persons
admitted by them. Fences can take a variety of
forms: ditches, locks, armoured doors, electronic
registration for software that triggers automatic
updating, contractual schemes, etc.2 Where no
effective fence can be put in place, the objects in
question risk being left in open access and hence
over-consumed and under-produced, as the
examples of sh in the open sea and unpolluted air
illustrate. This risk is known as the “tragedy of the
commons” following Hardin’s article of that title.3
4
For information goods, “fences” are more difcult to
put in place because of their “public good” character.
Once you share an information good with someone
else, there is little to stop it from spreading to third
persons: copying it is becoming ever cheaper and
does not deprive the original holder of use. Besides
the danger of consumers free riding, one must also
expect competitors to copy the good and bring to
market a lower-priced version of it competing with
the original, thus undermining the client base of the
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