AC640 Government, Public Policy, and the Law (Political Communication) :Law and Ethics [4]
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economy where the market cannot provide goods or services
on a viable basis. In the event of market failure, states often provide those goods and
services that markets cannot: for example, defense, health care, and employment
insurance. Intellectual property is an example of a massive market failure in Western
economies because it represents a considerable violation of conventional market
practices. This violation primarily takes the form of the monopoly over a given product—
whether a cancer drug or Mickey Mouse’s image—that holding a patent, trademark, and
copyright gives to a particular individual or corporate owner. Normally, neo-liberal
economic doctrine—the orthodoxy in economics today—is hostile to monopolies
because they represent an obstacle to the play of market forces.
Neo-liberal economics has made an exception in the case of intellectual property
because of the vital importance of these knowledge monopolies to corporate power. In
other words, the value of IP is too crucial to allow ideology to overrule it. Intellectual
th
century Venice among glassworkers who wanted to
property law first appeared in 15
protect their specialized knowledge from others. As intellectual property laws developed,
and the triad of patent (for inventions), copyright (for creative and intellectual works), and
trademark (for brands, slogans, goods) protection took mature form, the law changed its
character. Where it was originally intended to protect the rights of individual inventors—those glassworkers and the generations of ingenious people who toiled in their garages,
th
century intellectual property law increasingly became
attics, and simple labs—in the 19
a special interest of corporations.
A particular stimulus for the corporate takeover of intellectual property law was the late
nineteenth century public reaction against the power of giant corporations such as
Standard Oil and AT&T. Before the creation of the Sherman Antitrust Law of 1890, a
U.S. law that forbade major corporations from colluding in suppressing competition, U.S.
firms regularly violated the rights of individual inventors and used their discoveries
without payment. But the antitrust law—antitrust means anything opposed to
monopolistic business practices, “trust” being another word for a cartel or a small group
th
of companies that knowingly cooperate in manipulating markets—scared late 19
century capitalists into employing another
strategy. Forbidden from cooperating as
individual entities to benefit themselves and each other, large corporations began a
massive wave of mergers in the late nineteenth century. The result was that big
companies became much larger, and they began to pool their historically small research
and development efforts in the form of large corporate labs.
With this greater attention to research and development among these newly merged
firms, the legal need to protect this research became clear. In 1885, only 12% of patents
were taken out by corporations (the majority being individual inventors); by 1950
approximately 75% of patents were held by corporations. The ability of corporations to
hold patents was significantly eased by the controversial amendment to the U.S.
constitution that conferred on corporations the same legal status as individuals, thus
allowing corporations to evade previous rulings that restrained them from controlling
intellectual p
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