Protect and share innovative service as a commons

This paper examines the ideal intellectual property right (IPR) that can promote service innovation. Patenting services often does not benefit the public, because the diffusion of the service is delayed. Furthermore, economic efficiency is generally propelled when companies are allowed to implement and improve innovations developed by others. Therefore, a new type of IPR that can help in more efficient protection and sharing of service innovations must be designed. This paper investigates how to promote service innovation by striking a proper balance between controlling it by law and sharing it as a commons. To foster service innovation, I propose a new type of IPR that I call "Originators' right" based on the principle of commons. The right reduces the search cost for an originator, whereby the originator can enjoy a greater first-mover advantage. The right could protect inventions of service, promote the sharing of the innovative service, restrict free riding, and provide minimum incentives for inventions and investment.