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Despite the tremendous value in well-written legal clauses, legal clauses enjoy little property rights protection under intellectual property law such as copyright. For example, in most jurisdictions, legislation is excluded from copyright protection. And even if they are technically covered under crown copyright as in the United Kingdom, licensing requirements may be waived and there is no legal repercussion for reusing partly or wholly such legal documents. Even in drafting legal agreements, lawyers tend to reuse clauses from templates and precedents. Commonly, sharing of such legal clauses is the norm rather than the exception. This article examines the relevant copyright law in the United Kingdom, the United States and Malaysia on this subject matter. It then looks at the economic justification for the lack of property rights recognition in legal clauses, such as efficiency and public goods argument. High transaction costs may partially account for the absence of property rights, but other economic considerations such as network effect may also be at play.
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