A New Market for Unprotected Ideas: Analyzing the Economic Efficiency of Trading Ownerless Ideas
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A New Market for Unprotected Ideas: Analyzing the Economic Efficiency of Trading Ownerless Ideas Maria Alejandra Echavarrı´a-Arcila . Julio C. Correa . Ana Marı´a Pe´rez-Go´mez
Published online: 22 September 2020 Max Planck Institute for Innovation and Competition, Munich 2020
Abstract Certain ideas are not legally protected but are commercially exchanged. These ideas, as ownerless creations, can be freely used by anybody. Nevertheless, when the innovation and creation processes are developed collaboratively, the ideas are externalized and flow continuously, enabling their commercialization. Even if these ideas are not protected by the intellectual property system, they are, in fact, traded on a contract basis. In this context, the market for unprotected ideas emerges. Due to the lack of legal protection of these ideas, the disclosure needed for the exchange implies an appropriation risk and high transaction costs. These non-optimal conditions prevent commercial transactions and lead to an economic inefficiency in the market. This paper follows the methodology of economic analysis of law in order to describe and study the emerging market. Also, the effects of trading this type of legally unprotected assets are analyzed. A sui generis legal right for commercial ideas is then proposed as a possible solution to the legal and economic challenges within this specific marketplace. The interdisciplinary methodology used and the results presented can form the basis for further studies. They could also lay the groundwork for legislative initiatives and public policies in the intellectual property field. This research was partially undertaken by the corresponding author during her stay at the Max Planck Institute for Innovation and Competition (MPI), Munich, Germany, with a generous scholarship granted by the MPI. M. A. Echavarrı´a-Arcila (&) Law Faculty, Universidad Pontificia Bolivariana, Medellı´n, Colombia e-mail: [email protected] J. C. Correa Mechanical Engineering Faculty, Universidad Pontificia Bolivariana, Medellı´n, Colombia e-mail: [email protected] A. M. Pe´rez-Go´mez Faculty of Law, University of Nantes, Nantes, France e-mail: [email protected]
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A New Market for Unprotected Ideas: Analyzing the Economic …
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Keywords Market for ideas Intellectual property Information asymmetries Transaction costs Legal economics Innovation management
1 Introduction For instance, in one pitch meeting, Griffin Mill asks, ‘‘What have you got for me?’’; in another he asks, ‘‘What’s your pitch?’’; and in that same meeting, he concludes ‘‘[i]t’s an intriguing idea …. Let it sit with me for a couple of days …. Let me get back with you.’’ Suppose Griffin Mill never calls, but instead hires a writer to draft a screenplay based upon the idea-man’s pitch. Will the idea-man be protected? (…) What if copyright does not provide adequate protection? Each of these questions raises very real problems for not only the studio executive and the idea-man, but also every company or person that receive
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