Intellectual property and capitalism go together like bread and butter – foundationally assisting the other in achieving the path of economic relations that is the squo

A second element of situating the history of intellectual property within the history of capitalism is uncovering the development of how this area came to play a constitutive role in important junctures of the structure of modern economic relations. The rise of intellectual property was not limited to the creation of a mechanism for the market exchange of information as a consumer good. In various ways, intellectual property rights acquired a deeper structural role in the organization of economic relations. As Michael Zakim observes: “The knowledge economy is not . . . a ‘post-industrial,’ and certainly not a ‘postcapitalist,’ development.” 146 In other words, the growth and transformation of business in the nineteenth century was, in fact, the first information age with “the capital of mind” playing a major role in it.147 This was true of applied knowledge pertaining to the material world that was the basis of the physical infrastructure of capitalism: everything from innovations such as railroads, telegraphy, and telephony that constituted the transportation and communication revolutions, to the designs of the new machines and chemical processes that powered factories.148 It was also true of new knowledge of manip– ulating the social and commercial spheres such as accounting and filing systems, business statistics, or financing schemes that constituted the business revolution.149 Ownership under intellectual property rights was potentially relevant for all of those infrastructural assets. In some cases, this meant straightforward extension of proprietary rights, most commonly patents and trade secrets.150 Other cases, such as business statistics 151 or accounting systems, 152 involved struggles, sometimes resulting in incomplete commodification. The point is that intellectual property rights came to play a structural role on this deeper level of the system’s knowledge infrastructure. Commodification of information unfolded not just with respect to consumer markets but also as a regulative principle of the system’s infrastructure. Intellectual property rights also played a structural role with respect to business organization. Until after the Civil War, assignment of patent shares played a major role in structuring business partnership around innovative technologies. 153 In the absence of general incor– poration that became available only around the mid-century, assigning patent shares was the direct vehicle for molding business structure.154 Similarly, geographical licensing supplied the foundations for a form of territorial franchising in an age where nation-wide operation by a single business entity was rare.155 Somewhat later, patent pools that created schemes for licensing a multitude of rights necessary for particular technologies began to play a broader organizational role in shaping and regulating the operation of entire industries.156 Both share-assignments and pools, rather than limited to being mechanisms for overcoming transaction costs in transferring ownership or permissions from sellers to buyers, were more fundamental important instruments of structuring business. Around the turn of the twentieth century, business organization mushroomed dramatically in scope and scale with the corporate R&D lab becoming a central mode of innovation.157 In this context, patents, which now were often held in portfolios, became instruments of corporate security.158 Firms used such portfolios to try to obtain predictability and “rationality,” draw the borderlines of their zones of operation and negotiate industry-wide arrangements.159 As a top official of an AT&T subsidiary put it in 1926, referring to patent licensing arrangements: The regulation of the relationship between two such large interests as the American Telephone & Telegraph Co. and the General Electric Co. and the prevention of invasion of their respective fields is accomplished by mutual adjustment within “no man’s land” where the offensive of the parties as related to these competitive activities is recognized as a natural defense against invasion of the major fields.160 In copyright, the structural role of rights in business organization was developed later. As relevant industries as well as the applicable copyright framework grew more complex, this structural role became more significant. One early example is the music industry, where early in the twentieth century right portfolios were the vehicle of maneuvers to try to control the industry161 and where later organizational patterns of businesses and intermediaries came to revolve around the copyright framework.