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CS Professional · Intellectual Property Rights - Law and Practice · Introduction to Intellectual Property

A pharmaceutical start-up in Hyderabad justifies the grant of a time-limited patent monopoly on the ground that without exclusivity, rivals would copy its drug cheaply, and no firm would invest in costly research, leaving society worse off. Which theory is this, and what is its central premise?

This is the utilitarian or incentive theory. It holds that temporary exclusive rights are justified because they encourage investment in innovation, which produces the greatest overall benefit to society, rather than because of any natural entitlement of the inventor.

  1. AUtilitarian or incentive theory; exclusivity encourages innovation for the greater social goodCorrect
  2. BPersonality theory; inventions embody the inventor's will
  3. CLabour theory; effort alone creates a natural right
  4. DNatural rights theory; rights exist independently of law

Explanation

The utilitarian (incentive) theory, linked to Bentham, justifies IP rights as a means to maximise social welfare by rewarding and encouraging creation. The reasoning about under-investment without exclusivity is the incentive rationale. The labour and personality theories rest on natural entitlement rather than social outcomes.

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