Dynamic Inefficiencies of Intellectual Property Rights from an Evolutionary/Problem-Solving Perspective: Some Insights on Computer Software and Reverse Engineering

This interdisciplinary paper focuses on an evolutionary and problem-solving approach to intellectual property rights in order to discuss some controversial issues in the European legislation on computer software and in some recent competition law case (e.g. the Microsoft case). Given such claims, we argue that a standard “Coasian” approach to property rights, designed to cope with the externalities of semi public goods may not be appropriate for computer software, as it may decrease both ex-ante incentives to innovation and ex-post efficiency of diffusion. On the other hand the institutional definition of property rights may strongly influence the patterns of technological evolution and division of labour in directions which are not necessarily optimal. Taking the European legislation on computer software and some recent competition law cases as an example, this paper intends to show that a more careful balancing of costs and benefits, both in static and dynamic terms should be suitable for a pro-innovation IP regime and competition policy.