Question

Consider the case of intellectual property rights, such as the ownership of a copyright by an author of a book. Would you characterize the copyright as a non-rivalrous good? However, is such a copyright also non-excludable? Justify your answer with economic reasoning

Answer 1

Copyright is a law that gives the owner of a work (for example, a book, movie, picture, song or website) the right to say how other people can use it. Copyright laws make it easier for authors to make money by selling their works. ... With copyright, a work can only be copied if the owner gives permission.

Copyright, along with patents and trade-marks are the three types of intellectual property you have probably heard about. But did you know we also have statutes that cover industrial design, integrated circuit topography and plant breeders’ rights.

Explaining the nature of “intellectual” property,” like answering the question “what is copyright?” in just a few words is challenging because intellectual property is an abstraction. In other words, intellectual property is intangible since it consists entirely of ideas. Perhaps it’s helpful to contrast intellectual property with physical property such as your shoes or my pen. Two qualities of intellectual property that distinguish it from physical property are its non - rivalrous and its non excludable nature.

We say something is non - rivalrous when its use by one person doesn’t reduce the ability of anyone else to use it in the same way. Think of music, poems, plays and paintings that were created hundreds of years ago. We can still enjoy all of them today with no reduction in their quality despite the passage of time and enjoyment by countless individuals before us.

Since intellectual property doesn’t get used up or become degraded with repeated use, we say it is non - rivalrous. In contrast, the nature of physical property, such as my pen or your shoes, is rivalrous because they will become worn out with repeated use and will eventually no longer be usable by anyone.

We say something is non-excludable when it lacks a natural means to prevent everyone from accessing or enjoying it. Some examples are air, sunshine, street lighting and public radio, since there’s no easy way to put fences around them or limit their use only to those who pay a fee or obtain permission.

Intellectual property is non-excludable in the sense that once it is known to someone, they can’t simply remove it from their memory. After you write a poem, it’s unlikely that you could then forcibly exclude it from your mind. But physical property like pens and shoes are easily excludable. For example, if your shoes are in your gym locker on campus and you happen to be at home, you are excluded from being able to wear them right now

Because intellectual property such as copyrighted works are non - rivalrous and non - excludable, they are “property” in a sense that is distinctly different than physical property. It’s therefore problematic to talk about intellectual property as though it’s equivalent to physical property. If I take your only pen, you will have nothing to write notes with, but I cannot actually take your poem away from you. If I were to claim that I wrote your poem, that would not deprive you of your copyright owner’s rights or leave you with no poem, even though making such a claim would be unethical.