The starting point of this presentation will be the Property Rights Theory. The Property Rights Theory will be presented as the fundamental principle of private ownership in market economies and also as the fundamental principle of Intellectual Property Rights. One central idea in Property Rights Theory states that private ownership is paramount to economic efficiency, and, in contrast, public ownership is inefficient due to lack of incentives. We will put this theory to the test by examining two basic propositions. First, to what extent is the Property Rights Theory applicable to Intellectual Property Rights? Second, taking into account the rapid development in software technology, will the central ideas still hold true? In trying to answer these questions, we will examine the genesis of the operating system Linux.