Copyright and patent laws attempt to

Copyright and patent laws attempt to encourage innovation by ensuring that inventors are paid for creative work, so it would be ------- if expanded protection under these laws discouraged entrepreneurial innovation by increasing fears of lawsuits.
(A) desirable (B) coincidental © ironic (D) natural (E) sensible
Is (E) the correct answer? If not then why?

I think it’s a prime example of irony: not only would these laws completely miss the mark, but they would have the exact opposite effect - they would discourage innovation by creating new hurdles, namely lawsuits.

Who is entrepreneurial innovation? Is it inventor?

No, it’s not,
Here’s the definition:
thefreedictionary.com/innovation

Why “fears of lawsuits” will increase?