A New Market for Unprotected Ideas: Analyzing the Economic Efficiency of Trading Ownerless Ideas

Certain ideas are not legally protected but are commercially exchanged. These ideas, as ownerless creations, can be freely used by anybody. Nevertheless, when the innovation and creation processes are developed collaboratively, the ideas are externalized and flow continuously, enabling their commercialization. Even if these ideas are not protected by the intellectual property system, they are, in fact, traded on a contract basis. In this context, the market for unprotected ideas emerges. Due to the lack of legal protection of these ideas, the disclosure needed for the exchange implies an appropriation risk and high transaction costs. These non-optimal conditions prevent commercial transactions and lead to an economic inefficiency in the market. This paper follows the methodology of economic analysis of law in order to describe and study the emerging market. Also, the effects of trading this type of legally unprotected assets are analyzed. A sui generis legal right for commercial ideas is then proposed as a possible solution to the legal and economic challenges within this specific marketplace. The interdisciplinary methodology used and the results presented can form the basis for further studies. They could also lay the groundwork for legislative initiatives and public policies in the intellectual property field.