Creating an Appropriate Institutional Environment for Intellectual Property Rights: Current Private Reward System and Alternative Institutional Solutions
Abstract: This paper investigates the question of appropriate institutional environment for intellectual property rights that would stimulate innovativeness within a country. First, efficiency and appropriateness of the current system of intellectual property rights protection, called “current private reward system”, are being critically analyzed. Arguments that support or criticize the current system of intellectual property rights protection are based on economic and philosophical perspectives. Own empirical research based on the most recent data from the EU and other countries support the substantial importance of strong intellectual property protection for innovativeness. However, the results cannot stipulate whether the old “reward system” is the best alternative. Second, alternative mechanisms to stimulate innovativeness and technological progress are introduced and analysed. They are grouped in two types: a) amendments within the present private reward system and b) totally new public intellectual property systems. These are possibilities that would encourage innovation without providing (excessive) monopolistic rights to inventors.
