Intellectual property rights provide the foundation for building and extending markets for new technology. Economists and policymakers are progressively realizing that to manage and encourage technological progress, there is a need of a framework of legal institutions that promotes its benefits but also limits its excess. The paramount difficulty of companies and individuals engaging in development of new technology of any kind is appropriating the fruits of their labor. In developed market economies, in spite of the presence of substantial intellectual property rights, the widespread imitation of intellectual property deems them imperfect and inadequate. Lax enforcement of domestic laws and regulations, and the absence of international treaties concerning the protection of international property rights further aggravate the problem.
The framework and implementation of intellectual property rights shapes the success of major industries ranging from computer software, biotechnology to entertainment as it determines how they can market their products. Intellectual property is expensive to create but easy to reproduce. The fixed cost of producing intellectual property is high, but its marginal cost is low. For example, the research and development of a drug can cost billions of dollars, but its reproduction can easily be done at low costs. Lack of protection gives rise to free riding on the innovator’s production and kills the innovator’s incentive to produce more.
Registering a trademark is facile, but protecting one is a Sisyphean task. The impression is often created that intellectual property rights implementation is a conflict between the intellectually strong and weak and between the rich and the poor. But the real conflict is the fight to prevent profits by competitors by unethical means. The idea is to create a mutual win-win situation between the producer