The supposed neutrality of IP law
The aim of intellectual property (IP) law is the promotion of innovation and creation (Menell et al., 2023). Normative theories justifying IP protection focus on defining the appropriate allocation and scope of IP rights. Generally, IP law theory refrains from passing a normative judgment about the type of technology it aims to foster. The demand and thus the nature of technology, is determined by the market (Lev-Aretz & Strandburg, 2020). For example, patent law is agnostic about whether an invention improves society (Buccafusco & Weinstein, 2024, pp. 646-648). It is deliberately technology-neutral – “patent rights shall be available and patent rights enjoyable without discrimination […] as the field of technology” (Art. 27(1) TRIPS ). While patent law does envision exclusions from patentability based on protecting the public order or morality (Art. 27 (2) TRIPS), the exception is narrowly applied, usually in connection with biotechnology. Apart from situations where the use of invention interferes with the internal objectives of patent law to both foster innovation and enable its dissemination in society (see: Menell et al., 2023), it is usually left of the fields external to IP law and regulation to both establish whether IP rights and their exploitation has undesirable impacts on the society and establish constraints to the use of IP protected technology.
In this blog post, I argue that IP law’s value-neutrality is fictional. Rather, IP law expresses a normative preference for Schumpeterian creative destruction, a concept at the root of contemporary patent justifications. Creative destruction “refers to the phenomenon of economic change through the creation of new ways of doing things that endogenously destroy and replace the old ways” to drive the capitalist economy (Ulgen, 2013, p. 281).
According to the predominant utilitarian theory of patents, inventions are public goods. Their production is costly, but copying, inexpensive. In the absence of patent rights that allow an innovator to control the dissemination and pricing of the invention, she is unable to recoup the costs of producing the invention, leading to a market failure of underinvestment in R&D (Menell et al., 2023). The utilitarian patent justifications align with the economic approaches to competition law, wherein interventions are justified by the presence of a market failure (see Monti, 2012, pp. 56-57). Both fields of law play a complementary role in fostering innovation-stimulating dynamic competition: IP law, by incentivizing innovation and competition law by exerting competitive pressure (EC Technology transfer guidelines, 2014, para. 7).
The value of creative destruction
The idea of dynamic competition traces itself back to the Schumpeterian concept of creative destruction (see Which & Bailey, 2024, p. 8). For Schumpeter, entrepreneurial innovation is the impetus of endogenous capitalist progress that enables the emergence of new economic structures by destroying the old ones (Schumpeter, 1950, pp. 82-83, 87-88, 90). Patents, trade secrets, and contracts allow to secure entrepreneurs’ investments (Schumpeter, p. 88) and thus profit from R&D (Ulgen, 2013). In the Schumpeterian theory on capitalism, the concept of creative destruction holds a positive connotation (Tonak & Savran, 2023) associated with driving economic growth (Uctu, 2024). The concept originates from Marxist economic theory, wherein devaluation and destruction of existing modes of production through wars and crises is deemed inherent to capitalism and a precondition of creating new wealth (Marx & Engels, 1848, Ulgen, 2013).
I argue that the concept of creative destruction carries an unacknowledged, yet heavy normative weight in IP law.[1] While it gives room for arguments in favor tailoring IP law to sustain follow-on innovation (see Wernick, 2021, p. 31-32), it reinforces the IP law’s reluctance to assess the normative value and impacts of innovation. However, the reverie for creative destruction is far from value-neutral. It presumes unlimited time and resources for innovation activity. It also assumes the capacity of an economic system to recover from the destruction through new means of production, while giving little account to the impacts that the disruptive innovations may have on wider society and its institutions. I argue that it is unsustainable to oversee such normative values attached to IP law and their material effects and offload assertions about the impacts of IP law and technologies protected by IP law completely to other fields of law.
In the presence of the polycrisis of climate emergency, wars, and the aftermath of the Covid-19 pandemic. (Lawrence et al., 2024), both time and resources are scarce. Innovation is often discussed as a means to alleviate the effects of global warming (UN Climate Change, Technology Executive Committee, n.d.), but how much of it is a consequence of exploitation facilitated by the IP, such as limitations to repair rights and planned obsolescence (see Maggiolino, 2019; Buccafusco &Weinstein, 2024, p. 622)? Emerging scholarship and legislative initiatives address the establishment of exceptions and limitations to IP rights for the purposes of urgencies, pandemics (COM 2023, 224) and circular economy and right to repair (Directives 2024/1799; Regulation 2024/1781; Montagnani, 2023; Rongstand, Pihlajarinne, Mähönen, 2025).
However, it would be important for the IP law scholarship to gain and maintain broader awareness as to how IP law, as a part of civil law, contributes to the processes of extraction and plays a role in the phenomena of assetization (Yoon Kang, 2020), commodification, financialization (Pistor, 2020, pp.108-143; Cohen, 2019; Käll, 2023), digital dispossession (Noto la Diega, 2022; Tusikov, 2019; Fairfield, 2017 ) or reinforcing technological solutionism (Morozov, 2013) or existing power structures (Cohen, 2019). The interplay of IP law and technology regulation becomes ever more complex due to technologic convergence, characterized, inter alia by increased integration of technologies such as artificial intelligence, robotics, and neurotechnology. Technology is increasingly displaying capabilities for surveillance and dual-use (Helbing & Ienca, 2024) while being covered by a growing amount of IP rights (Noto la Diega, 2022) and overlapping technology regulation. It is necessary to engage in further interdisciplinary and empirical research to account for the unacknowledged values that the IP law and IP system reinforce and its impact on society.
The role of IP in technology regulation
Alas, I am not to say that IP scholarship has not addressed problems associated with the overexpansion of IP rights and their abusive or unjust exercise. For example, one of the most restrained versions of the incentive theory, the investment protection theory would allocate an IP right only in the event where it is the only means for an innovator to recoup their investments from the market, considering the viability of other ways to compete (Hilty, 2006). It is far more conservative towards propertization than IP justifications such as the prospect theory (Kitch, 1977). To date, this approach has been accommodating to establish more balanced access rights to IP, including the adoption of compulsory licenses (Wernick, 2021) and pose arguments against establishing a property right to data (Drexl et al., 2016) and resist arguments for upfront IP protection of AI (Hilty et al., 2021; Drexl et al, 2021. Furthermore, scholarship on the interface of IP rights and human rights has boomed in recent decades (See Helfer, 2017; Torremans, 2020; Geiger, 2015)
Nevertheless, there are several reasons to reflect on the higher-order theories of IP law with respect to the normative values that they carry over to our innovation systems.
First, the investment theory responded to the challenges posed by the technological cycle (Kuhn, 1970) characterized by the spread of telecommunications networks, the Internet, and ICT technology. Yet, we have a technological cycle propelled by the adoption of AI, and a likely new era of creative destruction (Uctu et al., 2024). Then disruptive effects of AI adoption may move yardsticks as to what is deemed as the desirable allocation of IP rights, their scope, incentives, and remunerations as well as bring forward novel iterations of IP justifications.
AI converges with a wide range of life sciences and R&D processes (Arnold & Porter, 2024). It represents a wider process of convergence between AI and other technologies that blurs the boundaries between digital, physical, and biological realms. These environments become subject to ubiquitous sensing and computing capabilities as well as presents scalable impacts, that may be hard to detect (Helbing & Ienca, 2024). Such technologies thus intertwine with our lives ever more intimately yet present impacts on an ever wider scale.
The EU law has responded to this development with fundamental rights (Bradford, 2023) and risk-based (De Gregorio & Dunn, 2022) regulatory approach, emphasizing ex-ante regulation of technology, passing laws on data protection, digital platforms, and artificial intelligence, to mention a few. In parallel, in numerous fields of law, by-design obligations and risk or impact assessments are proposed as fitting instruments to mitigate unwanted effects of technology and business (See Bartl et al., 2024; Djeffal, 2024; Wernick, 2024) with calls for more general law to regulate the design of code (Purtova & Huyskes, 2024).
Where does IP law stand in the face of these new patterns of legal design (see Koulu & Pohle, 2024)? Is IP, as a fundamental right protected by the EU, only one of the normative vectors shaping the development, design, or adoption of technology? Or does it constitute a boundary which these regulatory efforts should be balanced against? Of course, novel EU technology regulations also feature explicit norms on their relationship with IP law and possible exceptions. But the ever-intensifying technological convergence demands IP scholars to look beyond them to account for the impact and interactions between overlapping clusters of IP rights and regulatory frameworks.
Creative self-destruction
The world has changed since the conclusion of the TRIPS Agreement, drafted during the peak of globalization. Since then, we have entered the post-globalist era characterized by increased protectionism, populism, and erosion of human rights (Flew, 2017; Kornprobst & Wallace, 2022). IP scholars should also maintain awareness of the tensions between democratic and autocratic systems. This trend is reflected in the competition between regulatory systems, with the European approach being distinctly rights-driven as opposed to the market-driven approach of the US and the state-driven approach of China (see Bradford, 2023).
What is the role of IP law in the European rights-driven regulatory approach and the broader interplay between democracy, IP, and technology? Do we presuppose innovations to flourish in democratic systems only? If data-driven technologies may undermine the democratic order, what is the role of IP law in contributing to or avoiding that? Competition law’s sole focus on consumer welfare is challenged by the neo-Brandeisian school, stressing the importance of fair competition and upholding democratic values (Wu, 2019) and the need for checks and balances against private economic power amassing political power that entrenches their dominance (Khan, 2018). Should IP law also account for a broader set of normative values than incentivizing innovation? The emerging scholarship is exploring the role of values such as fairness and responsibility in IP law and beyond is moving to this direction (see for example Scheuerer, 2023; Kur, Lee & Tischner, 2024; Utpreti, 2024.)
The advancement of sciences, art, and technology is undoubtedly a critical societal value and goal. These advancements may drive the emergence of novel scientific paradigms (Kuhn, 1970) and radical innovations that may disrupt existing modes of production (Ulgen, 2013). I do not argue against the necessity of supporting or incentivizing these processes. However, it would be irresponsible and near-sighted not to investigate, when and how IP law, including the normative values it carries, contributes to processes that are unsustainable from the perspective of planetary health as well as democratic order – in essence, where it ends up fostering the creative self-destruction. On a more abstract level, there is a need for theories of harm that account for instances where disruptions stemming from innovation and technology can no longer be assumed to be self-correcting or better left for other fields of law to address.
[1] For the sake of clarity, this blog post will not deal questions of whether monopolies, SMEs or competition are key drivers of innovation.
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