Chapter 1(b): Theories of Property; Justification and Philosophy of the IP Regime
Property refers to a legal right that grants individuals control over a resource, whether tangible or intangible. The owner (proprietor) has the right to use, enjoy, and exclude others from using the property. However, this right is not absolute—its exercise is subject to legal, social, and environmental limitations.
Types of Property:
- Movable Property: Items that can be physically relocated (e.g., wristwatch, vehicle).
- Immovable Property: Fixed and permanent assets (e.g., land, buildings).
- Intellectual Property (IP): Intangible creations of the mind, such as copyrights, trademarks, patents granted exclusive rights for a limited duration.
Philosophical and Legal Justifications for Property and IP
Different theories justify why individuals or entities should have property rights, including those over intellectual creations. Below are the four major theories that shape the philosophy of property rights in general, and IP rights in particular:
1. Natural Rights Theory (Lockean Justification): Property arises from a person's natural right to the fruits of their labor.
Origin:
- Philosopher John Locke argued in his Second Treatise of Government that individuals own their body and labor.
- When they mix their labor with resources from nature, they acquire property rights over the result.
Application to IP:
- A creator or inventor, by investing time, skill, and labor, naturally deserves exclusive control over their creation.
- IP rights, then, are a moral entitlement to what one has personally developed.
2. Utilitarian Theory: Property rights—including IP—should exist if they produce the greatest good for the greatest number.
Origin:
- Associated with Jeremy Bentham and John Stuart Mill, who emphasized outcomes and public benefit.
- Property protection is justified because it encourages creativity and innovation, which ultimately benefits society.
Application to IP:
- Granting limited monopolies (like patents) provides incentives to create useful inventions or works.
- After the IP protection expires, the work enters the public domain, increasing access and societal benefit.
3. Personhood Theory: Property is essential for an individual's self-expression, identity, and autonomy.
Origin:
- Advanced by Georg Wilhelm Friedrich Hegel and later developed by legal philosopher Margaret Jane Radin.
- Some possessions are closely tied to a person’s dignity or personality, making control over them fundamental.
Application to IP:
- Intellectual creations are expressions of an author’s personality or selfhood.
- Therefore, creators should have rights not just for economic gain, but to protect the integrity and authorship of their work (e.g., moral rights in copyright).
4. Economic (Incentive) Theory: Property rights are a mechanism to solve the free-rider problem and ensure economic efficiency.
Origin:
- Based on Law and Economics scholars like Richard Posner and William Landes.
- In absence of IP protection, creators may not invest in innovation due to fear of copying without compensation.
Application to IP:
- IP rights provide economic incentives for creators by enabling them to recoup investment costs.
- The temporary monopoly encourages innovation and market competition.
Summary
| Theory | Core Idea | Application to IP |
|---|---|---|
| Natural Rights | Labor = ownership | Creators deserve rights over their intellectual labor |
| Utilitarianism | Greatest public good | IP promotes innovation that benefits society |
| Personhood | Expression of identity/self | Works are part of the creator’s personality; need moral protection |
| Economic Theory | Incentive to create and invest | IP rights prevent free-riding and encourage innovation via market rewards |
Chapter 1(c): Needs and Competing Rationale for Legal Protection of Intellectual Property (IP)
Intellectual Property (IP) refers to creations of the human mind—such as inventions, artistic works, trademarks, designs, and trade secrets. Unlike tangible property, IP can be infinitely reproduced and easily copied, making legal protection essential to preserve the rights of creators and to promote innovation, economic growth, and cultural development.
International frameworks like the TRIPS Agreement (1994) and the WIPO Convention (1967) provide the foundation for IP protection across countries.
Needs for Legal Protection:
1. Preventing Unauthorized Use or Infringement
- Without legal protection, creators and inventors have no control over how their work is used, copied, or modified.
- Protection helps prevent piracy, counterfeiting, and plagiarism, which can cause financial and reputational harm.
2. Encouraging Innovation and Investment
- Legal IP protection provides economic incentives by granting exclusive rights for a limited time.
- This motivates research and development in sectors such as pharmaceuticals, technology, agriculture, and entertainment.
Article 7 of TRIPS: The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology…
3. Rewarding Creativity and Labor
- Protecting IP ensures that creators receive fair recognition and reward for their mental effort and skill.
- Encourages sustained creative and inventive activity.
4. Promoting Cultural and Economic Development
- A strong IP system supports the growth of creative industries such as film, publishing, music, and fashion.
- Helps countries monetize cultural assets and participate in the global economy.
5. Balancing Private Rights and Public Interest
- IP protection ensures creators benefit from their work, but also includes limits (e.g., time-bound protection, fair use) to allow public access and further innovation
Competing Rationales or Justifications for IP Protection: Theories of property are the rational to protect the IP.
| Theory | Core Justification |
|---|---|
| Natural Rights | Moral entitlement based on labor |
| Utilitarianism | Maximizing overall social benefit |
| Personhood Theory | IP as part of personal identity |
| Economic Theory | Prevents free-riding and boosts efficiency |
Relevant Case Laws:
1. Madan Prasad Lamsal vs. Repsona Publications Pvt. Ltd.
(Supreme Court Decision No. 8686 NKP, 2068 B.S.)
Decision: The Supreme Court of Nepal ruled that only registered trademarks receive legal protection under Nepalese law. Mere usage of a trademark even if it has been used for a long period does not, by itself, establish exclusive ownership rights. In this case, since Madan Prasad Lamsal had formally registered the trademark, the Court upheld his exclusive right to use the title, regardless of any prior use by others. Significance: Reinforces the first-to-file rule under Nepalese trademark law.
2. Kansai Nerolac Paints Ltd. vs. Rukmini Chemical Industries Pvt. Ltd.
NKP 2077, Decision No. 1056
"If a registered trademark and another mark presented by copying the same letters, or by adding a few elements in the middle or at the end, results in a pronunciation that is largely similar with minor differences, and if, at a glance, the letters and symbols appear the same, such similarity is referred to as deceptive similarity."
Significance: Affirms protection of well-known foreign trademarks and rejects fraudulent registrations under Nepalese law obligations to the Paris Convention and TRIPS.
© Prepared by Madhu Dahal.
