Intellectual Property 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 could lead to underinvestment or withholding of IP, unless user‐organized norms compensate for these shortcomings. This study is the first to explore the characteristics and functioning of such a norms‐based IP system in the setting of anonymous, large‐scale, and loose‐knit online communities. To do so, 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 generalize our findings from the case by developing propositions aimed to spark further research. These propositions focus on similarities and differences between norms‐based IP systems in online and off‐line settings, and the conditions that determine the existence of norms‐based IP systems as well as their form and effectiveness in online communities. In this way, we contribute to the literatures on norms‐based IP systems and online communities and offer advice for the management of crowdsourcing communities.