What’s the Future of Competition in the Intangible Economy?

By: Adrian Künzler (Oxford Business Law Blog)

We live in a period which is marked by a transformation from an economy based on physical scarcity to one that is grounded in intangible rarity, that is, an economy in which tangible property is increasingly marginal in economic exchange relationships and is gradually replaced by direct relationships between firms and consumers. This transformation brings about a sharp reduction in the cost of production and distribution of all sorts of things and the disentanglement of informational content from physical goods. Take the availability of 3D printers, synthetic biology, and robotics as examples. Here, more than one person can simultaneously possess the same informational content about a physical good, and use that good at different times in different places. Only the legal ability to exclude others from copying that work or to require permission from the original owner to incorporate it into another can assure its sustained shortage and guarantee that the initial labour will be rewarded in correspondence with its worth. In a forthcoming article, I identify three basic repercussions that this transformation has on how the law interacts with new technologies:

First, in an economy where information production is key, product manufacturers are increasingly concerned with the protection of the exclusivity, uniqueness and scarcity of their physical goods and services to preserve the manner in which traditional markets function. In fact, competition and intellectual property laws are working to conserve conventional notions of scarcity and product exclusivity already. In competition law, one recent strand of case law is concerned with limiting competitors’ access to a product manufacturer’s distribution channels online. This enables manufacturers of everyday consumer goods to invest in, and preserve, product exclusivity. The doctrine originates from trademark scholarship. Today, trademarks no longer necessarily need to designate any specific commodity so as to grant protection. Rather, trademark law sometimes protects the trade symbol itself as opposed to all other trade symbols in the marketplace against uses that may undermine the symbol’s own distinctiveness. The idea is to put product manufacturers in a position to protect experiences that differentiate their goods in consumers’ minds rather than the goods themselves. The doctrine has also been employed to expand trademark law’s scope to enable product manufacturers to speak to a wide variety of sensory stimuli—tactile, olfactory, visual, etc. In all these cases, the law works against the gradual removal of the natural scarcity of goods by helping product manufacturers to gain control over the sale and commodification of non-material relationships and experiences…

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