THE FOUNDATIONS OF INTELLECTUAL PROPERTY RIGHTS: UTILITARIANISM OR NATURAL RIGHT?

THE FOUNDATIONS OF INTELLECTUAL PROPERTY RIGHTS: UTILITARIANISM OR NATURAL RIGHT?

BY TANNU MISHRA

ABSTRACT

This article explores the theoretical foundation of intellectual property rights through the theories of utilitarianism and natural rights. The article is an examination of legal structures and associated Indian case laws, which point out the tension between the interests of society and the rights of the creator. The article goes ahead to express that the old theories cannot be used in the digital era, and new conceptual frameworks are required.

KEYWORDS

Intellectual Property Rights, Utilitarianism, Natural Rights, Public Welfare, Innovation, Moral Rights, Temporary Monopolies.

INTRODUCTION

Intellectual Property Rights include intangible works of human creativity. The most well-known types of intellectual property are trade secrets, patents, copyrights, geographical indications, and trademarks. They are accorded legal protection, and under this, they can make a profit, and their inventions are recognized. The IP system encourages creativity and innovation while balancing innovators' interests and the general public interest.

In India, the evolution of IP rights passed through four phases; the pre-colonial communal systems, where the guilds and Ayurveda enforced the protection and sharing of knowledge; the colonial period, whereby the British established patent laws, copyright and trademarks, resulting in a break in indigenous productions; the post-independence period, whereby the government had implemented reforms to the intellectual property regime particularly the Patents Act, 1970 which included the protection of innovations and traditional knowledge; and the age of globalization since 1991, the compliance with WTO-TRIPS, the recognition of the product patents, and National IPR Policy (2016) placed India in line with the global standards and, simultaneously, making sure that innovation does not contradict the protection of traditional knowledge. This is the direction that India has adopted by establishing an internationally integrated IPR system.

This historical analysis promotes exploration of the theoretical basis of intellectual property, particularly the two most popular theories of intellectual property: natural rights and utilitarianism. These theories determine how IP safeguards fuel creativity and how IP rights are viewed from both perspectives. This article will examine the basis of the current intellectual property (IP) law regime by applying these theories. It will also analyze how these theories give special consideration to whether the IP rights should be a natural right or whether the waiver of the rights will be justifiable in accordance with the utilitarian theory.

UTILITARIANISM THEORY

Utilitarianism is a theory founded by Jeremy Bentham that holds that an action (or kind of action) is right when it is likely to increase happiness, and wrong when it is likely to decrease happiness, not only to the actual performer but also to others in general. This theory seeks to answer the practical question, "What ought a person to do?" The answer is that a person should act to maximize happiness or pleasure while minimizing unhappiness or pain. At the core of this theory is a famous quote by Jeremy Bentham, which is "it is the greatest happiness of the greatest number that is the measure of right and wrong." This essentially highlights that any act can only be defined as morally correct if it provides the greatest happiness to the greatest number.

One of the key theories used to explain intellectual property rights is the utilitarian theory, which explains the need for IP regimes on the premise of their contribution to the maximization of social welfare. This view advocates for the encouragement of individuals to invest time and effort in creating original works and inventions by granting them exclusive rights to this work and ensuring compensation for their effort. This protection is helpful to an individual creator, but is also good to society in general, as the distribution and the ultimate availability of these works to the general population facilitates cultural, scientific, and technological advancement. In this sense, the Utilitarian argument of Intellectual Property Rights justification upholds the belief that the momentary monopolies are eventually in the interest of the wider common good. The reason IPR is justified from the Utilitarian perspective is:

Temporary Monopoly for Societal Benefit

From a utilitarian view, intellectual property rights are justified because they are used to maximize societal welfare by encouraging innovation and providing eventual access to the people. By giving authors and inventors a modest right to ownership, it is possible to create valuable intellectual works such as novels, software, or medication because it will reward their effort and investment. These are short-term rights encouraging innovation, being useful to society as a whole. In the long run, limitations like expiration of patent protection and provision of fair use ensure that the safeguarded works, like generic drugs, open source technologies, or literary works, become available, thereby contributing to the development of public knowledge and culture. In the absence of these protections, creators might have low motivation, and investment into research and development might weaken, which negatively affects social progress.

In summary, intellectual property rights are based on their ability to contribute towards maximum social welfare due to their ability to balance individual interests as well as social interests. The temporary monopolies benefit the creators, encourage innovation, and make sure that the valuable works eventually benefit the general society.

NATURAL RIGHTS THEORY

The social contract theory was founded by thinkers like Thomas Hobbes, John Locke, and Jean-Jacques Rousseau. This is an essential theory because it introduced natural rights as inalienable rights that are significant in the legal systems and the formulation of policies. This principle resonates well with intellectual property rights. If an eight-year-old is asked who possesses a drawing, their answer will be automatically the one who drew it, and this is a direct reflection of the natural connection between creation and possession. In this sense, the IP rights are the extension of natural justice. This belief is supported by two theories: Locke’s labor theory and Kant’s interpretation of personhood theory. With these theories, the moral and philosophical importance of intellectual property as a natural right is enhanced.

1. Locke’s Labor Theory

This theory, also commonly known as the labor theory of ownership, advocates that individuals who labor voluntarily, produce, and think are justifiably entitled to the benefits of their labor. A property right is created in association with a previously unowned thing. The fundamental principle here is that it is the individual’s right to own whatever they create using their intelligence and effort. When labor is added to an object, the right of the laborer is natural and rightful. The theory is based on the premise that individuals possess their bodies and, through them, their labor. So, the rights are applied to the creations when an individual changes the elements of the commons into original works. With this in mind, it is intuitively and philosophically natural that the creator of the given work of art should possess intellectual property rights to their work.

1. Kant’s Personhood Theory

Personhood theory is a prominent feature in nearly all theoretical justifications for intellectual property rights. This theory is commonly attributed to the philosophical ideas of Hegel and Immanuel Kant. This theory argues that the authors are attached to their works and showing respect to their identity requires them to be given certain continuous control of their works. It provides a moral rationale of intellectual property rights that focuses on the understanding of creative works as the extension of rational will and communicative independence of the creator. He emphasizes that, for instance, a book is not a physical object but a tool through which the author speaks. The fact that the authors have rights to their work therefore protects their integrity, since no one should be authorized to take over their intellectual expression or distort it. This interpretation forms the basis for the moral rights tradition in IP law, where the creators have an inalienable right over their creations and their further transformation or interpretation. However, this theory has certain drawbacks too. It is not as protective of nonliterary or derivative works, prefers original authors, and is not easily adapted to the commercial exploitation that is necessary in modern IPR systems to balance the moral rights and economic incentives.

The natural rights approach provides an effective justification of intellectual property rights by grounding them in both human nature and the value of work. According to Locke, people get the legitimate right to ownership of anything created by their labor. In contrast, according to Kant, the personhood theory states that anything created represents the will and identity of the creator and thus deserves protection as a continuation of human dignity. These views prove that the intellectual property, along with fulfilling economic purposes, is also about moral rights, which are based on autonomy and respect for the creator. IP as a natural right, therefore, upholds the law that protects the fruits of human labor and the integrity of individual expression.

PRACTICAL APPLICATIONS

The philosophical understanding of intellectual property, in particular with the natural rights and utilitarian theories, becomes practical when viewed through the perspective of legal frameworks and landmark cases. Laws such as the Indian Copyright Act, the Berne Convention, and the TRIPS Agreement put these theories into practice by striking a balance between moral rights, public interests, and economic utilization. This application, through judicial interpretations in the landmark cases of Novartis, Rameshwari Photocopy Service, draws on utilitarian objectives of access and benefit to society, and Amarnath Sehgal’s case emphasizes the protection of IP rights from the natural rights perspective. These applications demonstrate the way abstract theories influence outcomes of the law in the real world.

1. Legal Frameworks

The practical application of natural rights theory is seen in the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) 1995. This is a landmark international agreement under the World Trade Organization (WTO) that sets minimum standards for intellectual property protection for all member countries. Additionally, the Berne Convention of 1887 is an international treaty that provides copyright protection for literary and artistic works across member countries. Both these treaties incorporate the recognition of the inherent rights of authors and inventors regarding their works. The Berne Convention focuses on moral rights to make sure that authors have the right to assert authorship of their works, prevent misuse with respect to their works, and guarantee the personal relationship between the author and the creation. Similarly, TRIPS, though being more of a trade-oriented program, interprets the natural rights by providing a minimum standard of protection of patents, copyrights, and other related rights, therefore endorsing the theory that intellectual creations are worth protection and exclusive rights as an extension of human labor and personality. These legal instruments help in illustrating the philosophical relevance of natural rights theory as being converted into enforceable international obligations.

From a utilitarian perspective, the TRIPS Agreement and the Berne Convention are seen as frameworks aimed at ensuring maximum social interest by striking a balance between the interests of creators and society. TRIPS, for instance, in the pharmaceutical industry, where patent protection encourages firms to invest in expensive research and development (R&D), while at the same time creating a threat of limiting access to necessary drugs in developing nations. The utilitarian approach aims to balance these conflicting interests by designing patent law to attain the "greatest good," such as the different pricing of drugs or incentives targeted to drugs that treat endemic diseases. Similarly, the copyright protection under the Berne Convention guarantees that the creators are compensated for their work, and encourages creativity that adds value in the form of cultural works. Both frameworks, therefore, have a utilitarian rationale, in which temporary monopolies are a practical means to have innovation, creativity, and eventually social welfare.

The Indian Copyright Act of 1957 acknowledges the author as the first owner of copyright and protects their moral rights and assigns that the creative works are an extension of the personality and dignity of the author. This coincides with the theory of Locke on labor and the Kantian view of personhood. Simultaneously, the Act represents a utilitarian rationale as it ensures that copyright protection can benefit wider societal interests. The balancing of the rights of the individual and the common good can be seen in the provision about compulsory licensing (ss 31-32B), statutory licensing (ss 31B-31D), fair dealing, and in the exceptions to copyright. In this way, the Act secures the natural rights of authors, and at the same time, it incorporates utilitarian principles to maximize social benefit by enabling copyright law in India to not just be a defense of authors, but also a measure to enhance education and innovation.

To conclude, TRIPS, the Berne Convention, and the Indian Copyright Act represent the dynamic approach of shaping the natural rights with the ideas of utilitarianism, through upholding the rights of the creator and the welfare of society. Through these frameworks, the theories are applied in a practical sense.

1. Case Studies

A practical understanding of the theories of intellectual property can be gained through judicial interpretations. This is seen in the following case studies, explaining why the courts have invoked natural rights and utilitarian reasoning when deciding on cases.

1. Novartis AG v. Union of India [2013] 13 S.C.R. 148

The case began when Novartis wanted to patent its beta crystalline form, Imatinib Mesylate, better known as Glivec, based on its improved bioavailability and stability. The question in this case was whether such a change could be a matter of novelty, subsections 2(1)(j) and (ja) of the Patents Act, 1970, or whether this change is prohibited by section 3(d) which does not allow a new form of known substance to be patented except upon the basis of increased therapeutic effect. The Supreme Court of India, in its judgment, denied granting a patent and called it invalid because the alleged improvements failed to satisfy the efficacy requirement, and ruled that protecting such inventions would constitute evergreening. Notably, the rationale behind the Court’s judgment was utilitarian: it would lead to a scenario where millions of people would be denied access to life-saving drugs, the same ones, because such patents are granted, and this would go against the very essence of innovation that is supposed to serve humanity. This historic ruling was pronounced by a bench of two judges, and these judges asserted that the intellectual property law ought to strike a balance between creating incentives for innovations and fulfilling the needs of society.

1. Rameshwari Photocopy Service v. Oxford University Press & Others (2016) 13 Indian Journal of Law and Technology 170

The case started with the protest of publishers of academic books against the preparation of cheap course packs by a photocopy shop at the Delhi School of Economics, claiming copyright violations. The publishers contended that reproduction of their texts puts them in direct competition with the publishers’ books, while the defendants, supported by the University and student groups, claimed that the copying was only for educational purposes and fell within the exceptions under Section 52(1)(i) of the Copyright Act, 1957. The Delhi High Court dismissed the allegations of the publisher and affirmed the fact that copyright is a statutory right, which is limited, and reproduction to facilitate instruction in learning institutions is an exemption. This ruling also noted that the academic texts of the publishers were costly to most of the students to buy or even rent, and finally, the course packs photocopied were a necessary measure towards attaining equity in access to education. In this way, the judgment demonstrated a utilitarian perspective by promoting access to affordable education over rigid enforcement of monopolistic rights and reiterated that the motivation of copyright is not just to provide a reward to the authors, but also to enhance learning among the masses.

1. Amarnath Shegal v. Union Of India 2005 (30) PTC 253 (Del)

It is a landmark case, which was decided by the Delhi High Court, in which, for the first time, the moral rights of the author were upheld by the Indian Copyright Act,1957. This case is regarding the dispute with the Indian government commissioning Sehgal to create a monumental bronze mural on a public building in Delhi, but the government removed and poorly stored it, which led to severe damage and loss of parts. Sehgal filed a suit on the ground of the violation of his moral rights of attribution and integrity under Section 57 of the Copyright Act, 1957. The Delhi High Court found that the government owed a duty of care to the cultural works in its possession, and the mural being destroyed or mutilated was a violation of the moral right of the artist. The Court noted that creative works constitute the Indian cultural heritage and should be respected at all times.

The stance adopted by the Court is that of natural rights, perceiving creative works as the continuation of the personality of the author, which should be safeguarded in all situations and not only in connection with economic interests. In upholding the rights of Sehgal to avoid the destruction of his mural, the Court took authorship as an entitlement. This confirms the personhood view of Kant as the judgment is based on human dignity, in defending Sehgal's mural as a personal expression and national cultural heritage, thus emphasizing and affirming the natural rights, as well as the Kantian paradigm in its handling of moral rights.

In conclusion, the above analyzed cases and legal frameworks demonstrate that intellectual property law in practice encompasses both utilitarian and natural rights theory. While the Novartis and Rameshwari Photocopy cases demonstrate the utilitarian perspective of protecting the public’s welfare through access to medicine and educational opportunities, Amar Nath Sehgal’s case demonstrates the underlying natural rights and Kantian view of authorship. Essentially, it illustrates how intellectual property law is about finding a balance between the incentivizing of creativity and safeguarding the moral rights of the creator, while also finding ways to make that creation impact society whenever required.

COMPARATIVE ANALYSIS

The intellectual property law has been justified by utilitarianism and natural rights theory, which offer different but complementary justifications. Both theories lay the groundwork for the existence of IP systems, but have different rationales and different goals. Following is a comparative analysis of both the theories and their respective interpretations:

1. Philosophical Basis

Utilitarianism views IP as a tool to promote social welfare. As per this perspective, rights are granted not because authors are entitled to these rights, but because granting authors temporary monopolies will encourage innovation for the benefit of society. On the other hand, natural rights theory is rooted in moral entitlement for authors. Based on Locke’s labor theory and Kant’s personhood, this interpretation states that individuals possess claims over their creations because of it being a reflection of the creator's labor, will, and dignity.

1. Legal Frameworks

The combination of these two theories is exemplified in TRIPS (1995), the Berne Convention (1887), and the Indian Copyright Act (1957), as the natural rights of authors and inventors are not ignored, but at the same time, they should be used in the service of people, through the utilitarian understanding. TRIPS has minimum standards on patents, copyrights, but also provides flexibility, including mandatory licensing, to protect the benefits granted to society. The Berne Convention focuses on the moral rights to make sure that the author has autonomy over their creations, but the Indian Copyright Act interprets both views. According to the moral rights Section 57, the author has a right to have his dignity, and, on the other hand, the right to access to his work is provided in Section 57.

1. Judicial Interpretations

Indian Courts have adopted interpretations of both theories as per the requirements in each case. Cases such as Novartis and Rameshwari Photocopy Services have followed a utilitarian approach, and in the case of Amar Nath Sehgal, the interpretation of the moral rights of the artist was maintained. Both views have represented the balancing approach Indian law adopts while deciding upon cases of Intellectual Property Rights.

AUTHOR'S PERSPECTIVE

I believe that both utilitarianism and natural rights theory are essential theories influencing the foundation of the Intellectual Property system. Both provide a different rationale; one is based on maximizing the benefit of society, and the other, on ensuring that the creators of original works are respected with their rights being secured. As fundamental as these traditional theories are, they have drawbacks as far as their applicability in modern times is concerned. The evolution of artificial intelligence and algorithmic creativity contests such theories since they are based on human authorship, individual creation, and ethical ownership. In an artificially generated artistic and literary world, where contents are repeated and repackaged across media, the issues of originality and ownership are unclear.

The assertions regarding the intellectual property law, therefore, seriously need to be reconsidered. IP in today’s time is no longer about who owns a creation, but it has evolved to include what in a digital ecosystem is meant by the term create. The IP system needs to become sustainable enough to support non-human creativity without forgetting the principles that the IP law was established to safeguard: innovation, integrity, and fair access.

CONCLUSION

The question of whether intellectual property rights are most appropriately justified under utilitarianism or natural rights is too subjective. There is a natural linkage of creation and possession, as sometimes, IP rights seem to be more natural than utilitarian. Such philosophical conflict helps to emphasize the fact that intellectual property should be based on interpretations of context, values, and evolving times.

However, these essential foundational IP theories have their own limitations in the contemporary world. Today, the fast-changing digital environment is full of artificial intelligence and algorithmic creativity and decentralized authorship, highlighting the inconsistencies in the traditional theories, because when it comes to the challenge of non-human creation, these theories have no opinion regarding it.

To find solutions to these evolving challenges of the digital era, there is a necessity to develop theoretical standpoints that would unite the ethical aspects with the pragmatic requirements arising out of algorithmic production and global connectivity of accessibility. A suggestion to resolve this dilemma is through the adoption of an interdisciplinary approach consisting of legal scholars, technologists, ethicists, and creators who need to address these challenges and develop frameworks that are philosophically entrenched and technologically sound. It is only at this point that the intellectual property law could become a system that safeguards creativity, honors dignity, and survives the digital disruption.

FOOTNOTES:

1. Ramaswamy M, “Evolution of Intellectual Property Rights (IPR) in India: A Historical Overview” [2025] Advance 3-8 <https://doi.org/10.31124/advance.174884616.69325471/v1>
2. West and others, “Utilitarianism | Definition, Philosophy, Examples, Ethics, Philosophers, & Facts” (Encyclopedia Britannica, October 11, 2025) <https://www.britannica.com/topic/utilitarianism-philosophy>
3. Bentham J and Harrison R, A Fragment on Government (1988) <https://doi.org/10.1017/cbo9781139163675>
4. Moore AD, “Personality-Based, Rule-Utilitarian, and Lockean Justifications of Intellectual Property” (John Wiley & Sons, Inc 2008) Pg 17 <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1980852>
5. Purwandoko PH and Imanullah MN, “Application of Natural Law Theory (the natural right) to protect the Intellectual Property” (2017) 6 Yustisia Jurnal Hukum <https://doi.org/10.20961/yustisia.v6i1.11516>
6. The Copyrights Act 1957, s 17
7. The Copyrights Act 1957, s 57
8. The Copyrights Act 1957, s 52
9. Novartis AG v. Union of India [2013] 13 S.C.R. 148
10. Rameshwari Photocopy Service v. Oxford University Press & Others (2016) 13 Indian Journal of Law and Technology 170
11. Amarnath Shegal v. Union Of India 2005 (30) PTC 253 (Del)