Author(s): Robert P. Merges
Abstract: Not everyone believes in the desirability of Intellectual Property (IP) rights for individual creators, but almost everyone believes that even when these rights make sense the cost of moving them around is a major headache. One aspect of anti-commons theory is the observation that the cost of assembling and aggregating property rights (including IP) is an important and often hidden downside of the logic of individual ownership. Put simply, no one has much of a good word to say about transaction costs. I begin with the conventional point that sometimes the benefits of disaggregated production of IP-covered works are worth the cost. But then I go further and argue that the benefits of individual autonomy and small team production are substantial enough that, in some cases, society ought to encourage this type of production even when the net measurable costs of this arrangement are slightly negative. Transaction costs, in other words, are sometimes the byproduct of production arrangements that serve important normative values (autonomy and independence, for example), and when this is so they ought to be tolerated.
Keywords: intellectual property, transaction costs, property rights theory