Lesson 2: Property Rights and Intellectual Property

Objective 1:

Students will recognize what are property rights.

Aims:

1. Students will identify what are property rights.
   
2. Students will identify in what ways society protects property rights.  (The discussion of how society limits property rights is too grand and should be left for another lesson after passing mention here.)
   
3. Students will predict what life would be like if society did not protect property rights.

Materials:

Chalkboard, paper, pens

 

Lesson Procedure: 

Have the class make a timeline.

• First, ask the students to discuss and list on the timeline what they would do if tomorrow there were no laws against taking whatever you wanted to take from anyplace.  Responses may vary, but the idea is that you could have any bike, car, clothes, food, or house that you could imagine.
  
• Next, ask the students to discuss and list what would happen next week on the timeline when people who are bigger, stronger, or better armed than you decide that they like what you have.  (Obviously, we end up with a more violent world than today.)
  
• Finally, one month or one year farther out on the timeline, ask who will have stores that "sell" anything? Who will make any merchandise or grow any food?  Who will transport anything to places or locations where you can get it?  In a society with no property rights, how long would it take for this final stage to occur?
  
• In the end, in a society with no rules about what you can take, do we end up with more material goods or fewer material goods, a higher standard of living or a lower?
  
• Why? Answers should focus not just on the idea that the strong would dominate the weak, but also on the point that in a society with no property rules, nobody would be willing to grow, produce, manufacture, or transport anything.  Indeed, in such a system, nobody could afford to put time, effort, and materials into any of these productive efforts because they would get nothing in return.
  
• How do we, in our society, prevent this breakdown?  What property rules do we have?

Objective 2:

Students will understand the value and importance of legally protecting ideas (intellectual property).

Aims:

1. Students will explain the purpose behind the government’s granting patents and copyrights.
   
2. Students will display an understanding of how the spirit of innovation is linked to the protection that patents offer.

Materials: 

Chalkboard, paper, pens, index cards

 

Lesson Description:

U.S. Constitution, Article I, Section 8

Albert Pope in Time Game (Many liberties have been taken to make this point.  Pope acquired a variety of patents; we have simplified the issues)

If necessity is the mother of invention, who is the father?

 

Lesson Procedure:

"The patent system added the fuel of interest to the fire of genius."

— Abraham Lincoln, the only U.S. President to hold a patent

Ask the students to consider what Lincoln meant by this. To what type of interest does Lincoln refer?

Read Article 1, Section 8, of the U.S. Constitution. Why did the framers of the Constitution include this language? What were they trying to encourage? Is money the only reason people invent things? (Answer: No, but what if you could not make a living trying to invent something? What if you could not even regain the expenses you laid out to develop your invention?)

 

Play patent game:

• Divide the class into groups of four or five. 
  
• Using index cards, create 4 patent cards for each group.  Make enough cards so each group has one patent card for each of 4 different parts of the bicycle:  the frame, the pneumatic tires, the pedal and chain assembly, and the handlebar and steering mechanism.
  
• Distribute the cards so each type of card is held by one student in each group:
  
   Student #1 holds a patent for the bicycle frame
   Student #2 holds a patent for pneumatic tires
   Student #3 holds a patent for the pedal and chain assembly
   Student #4 holds a patent for the handlebar and steering mechanism
   Student #5 holds no patents but has money to invest
  
  
• Review with students the Facts of Life — simplified but immutable:

1. Bicycles sell for $25 apiece.
2. The cost to produce each bicycle is $15.
3. The factory can produce only 1,000 bicycles per year.
4. Competition reduces bicycle prices:  Every time a new bicycle maker enters the market, subtract $2 off the price.
5. Efficiencies are achieved when patents are consolidated:  Every time patents are consolidated (patents are consolidated when a person already holding one or more patents acquires another), subtract $1.25 off the production cost of the bicycle.
6. Credit and interest rates are not an issue.
7. All patents are needed in order to make a commercially viable bicycle.

• Ask students to answer questions about two different scenarios:

Scenario #1: Patents are valid for 20 years.

1. What options do the patent holders have?
   (Answer: Cooperate and produce bicycles together or begin to buy up other patents.)
2. In which situation do the patent holders reap the greatest rewards?
3. How does society gain or lose in each situation?
   (The same number of bicycles and the same price are set at the beginning, but as the unit cost declines, more bicycles or lower prices could result.  And there are fewer problems if fewer people are required to cooperate to produce a bicycle.)

Scenario #2:  The law does not recognize the validity of patents.

1. Add another bicycle maker and figure out how much profit there is.
2. Continue to add bicycle makers and figure out the profit.
3. How many bicycle makers need to be added before nobody is making a profit?
4. Student #5 has an idea to put gears and shifts on bicycles to create 10-speed bikes, but this would cost several thousand dollars to develop. Does he develop the 10-speed bike?  Why or why not?
5. Examine these questions: Do inventors get rewarded? Does society do better or worse? Can we tell?  (It's not clear whether anyone would produce bicycles or any improvements would be made.)

Lesson 1 - The Concept of Property in Our Society

Lesson 2 - Property Rights and Intellectual Property

Lesson 3 - How Inventions Change the Way We Live

Lesson 4 - Current Issues in Intellectual Property Law

Patent Timeline

Patent Vocabulary