Intellectual Property & Charity Law

Intellectual property and charity law are typically considered distinct and unrelated bodies of law. But as I have observed, they are structurally similar, because both are intended to use indirect subsidies to solve market failures in public goods. The prevailing theory of intellectual property holds that it is justified because it solves market failures in innovation caused by free riding (and transaction costs) by giving inventors and authors certain exclusive rights in their discoveries and works of authorship. And the prevailing theory of charity law holds that the charitable contribution deduction is justified because it solves market failures in charitable goods caused by free riding (and transaction costs) by indirectly subsidizing charitable contributions. I believe this structural similarity suggests that intellectual property and charity law are complementary. Unsurprisingly, promoting innovation is typically considered a charitable purpose.

In any case, Mark Lemley recently published a controversial essay titled Faith-Based Intellectual Property, which argued that consequentialist and deontological theories of intellectual property are fundamentally incompatible. The tension between consequentialist and deontological moral theories will be familiar to nonprofit law scholars. For what it’s worth, I recently posted an essay reflecting on Lemley’s argument, suggesting that Lemley’s article was controversial at least in part because it observed that consequentialist and deontological theories of intellectual property are not merely in tension, but fundamentally incompatible. My essay considers Lemley’s argument in light of Isaiah Berlin’s essay The Question of Machiavelli, and argues that the incompatibility of consequentialist and deontological theories of intellectual property can be resolved by adopting consequentialist public theories and deontological private theories.

Of course, this insight was largely informed by charity law, which is all about reconciling different values. I think there is a lot of opportunity for productive conversation between intellectual property and charity law scholars, given their common goals.

Brian L. Frye