IP Norms in Online Communities : How User-Organized Intellectual Property Regulation Supports Innovation

In many online communities, users reveal innovative and potentially valuable intellectual property (IP) under conditions that entail the risk of theft and imitation. When there is rivalry and formal IP law is not effective, this would lead to underinvestment or withholding of IP – unless user-organized norms compensate for these shortcomings. In exploring the characteristics and functioning of such a norms-based IP system in the setting of anonymous, large-scale, and loose-knit online communities for the first time, we use data on the Threadless crowdsourcing community obtained through netnography, a survey, and a field experiment. On this basis, we identify an integrated system of well-established norms that regulate the use of IP within this community. We analyze the system’s characteristics and functioning, and we find that the “legal certainty” it provides is conducive to cooperation, cumulative effects, and innovation. We discuss the similarities and differences between this norms-based IP system and the corresponding systems in offline communities as well as the key variables determining its remarkable effectiveness, and we provide a contingency view of such systems in online communities. In this way, we not only contribute to the streams of research on norms-based IP systems and online communities, but also offer advice for the management of crowdsourcing communities