The Supreme Court handed down this term’s final four decisions today: Christian Legal Society Chapter v. Martinez, on public university limitations on a Christian student group’s rights of association; the McDonald v. Chicago case incorporating the Heller gun decision against the states (Huebert’s discusssion); Free Enterprise Fund v. Public Co. Oversight Bd. (a Sarbanes-Oxley decision); and Bilski v. Doll, a much-anticipated patent case.

Patent law is mind numbingly arcane, technical, and boring, so let me simplify as much as possible. This case was about what the legal test should be to determine whether certain processes can be possibly eligible for patent protection. For typical practical technical or industrial processes, it’s not a difficult question. But for “business-related” methods, such as the one here–which had to do a way for commodities buyers and sellers in the energy market to hedge against the risk of price changes by following a certain mathematical formula–the question gets trickier. Courts are leery of opening the door all the way because then we’d be swamped in even more ridiculous patents than we are now (such as the attempt by Dustin Stamper, President Bush’s Top Economist, to secure a patent regarding an application for a System And Method For Multi-State Tax Analysis, which claims “a method, comprising: creating one or more alternate entity structures based on a base entity structure, the base entity structure comprising one or more entities; determining a tax liability for each alternate entity structure and the base entity structure; and generating a result based on comparing each of the determined tax liabilities”).

The Court of Appeals for the Federal Circuit (CAFC) tried to do this by adopting a more rigid test than had been used before. They said that a process could be patented only if it (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing–this is the “machine-or-transformation test.” Based on this test, the claimed business method was rejected. The problem is, this test is not in the Patent Act. So the Supremes had to take a crack at it. Now I have mentioned this case before, in The Arbitrariness of Patent Law; Supreme Skepticism Toward Method Patents; and Radical Patent Reform Is Not on the Way. This is one of these cases that had patent lawyers crying crocodile tears, gnashing their teeth, acting as if this was just part of the terrible and radical–radical!–movement to scale back patent rights. Anyway, I predicted:”I suspect the Court will choke back a bit on software and business method patents–but not too much.” It was obvious from the oral arguments that the Court saw how ridiculous it would be to have an open test that allowed a lot more types of processes be eligible for protection. You could have patents on anything. So they want to choke back on this, and so did the CAFC. Unfortunately, the patent law is there. And the judges have to interpret this mess. It’s not their fault, really. I don’t blame them for this impossible task. As I noted in a recent post,

As I noted in Another Problem with Legislation: James Carter v. the Field Codes, there is a fascinating paper published in 1884 by James C. Carter, The Proposed Codification of Our Common Law: A Paper Prepared at the Request of The Committee of the Bar Association of the City of New York, Appointed to Oppose the Measure. This paper was an attack on David Dudley Field’s attempt to (legislatively) codify New York’s common law. Carter opposed replacing case law with centralized legislation. Carter notes that caselaw precedents are flexible and allow the judge to do justice (see also John Hasnas’s classic The Myth of the Rule of Law), while statutes are applied literally, even where injustice is done or the legislator did not contemplate this result. Thus, Carter argues, one of the worst effects of legislatively codifying law–replacing organically developed law with artificial statutes–is that it changes the role of courts and judges from one in which the judge searches for justice into mere squabbles over definitions of words found in statutes. As he said at pp. 86-86:

At present, when any doubt arises in any particular case as to what the true rule of the unwritten [i.e., judge-found, common-law developed] law is, it is at once assumed that the rule most in accordance with justice and sound policy is the one which must be declared to be the law. The search is for that rule. The appeal is squarely made to the highest considerations of morality and justice. These are the rallying points of the struggle. The contention is ennobling and beneficial to the advocates, to the judges, to the parties, to the auditors, and so indirectly to the whole community. The decision then made records another step in the advance of human reason towards that perfection after which it forever aspires. But when the law is conceded to be written down in a statute, and the only question is what the statute means, a contention unspeakably inferior is substituted. The dispute is about words. The question of what is right or wrong, just or unjust, is irrelevant and out of place. The only question is what has been written. What a wretched exchange for the manly encounter upon the elevated plane of principle!

Or, as I note in “Legislation and the Discovery of Law in a Free Society,” Journal of Libertarian Studies 11 (Summer 1995), “Thus, previously, law was thought of as a body of true principles ripe for discovery by judges, not as whatever the legislator decreed. Nowadays, however, legislation has become such a ubiquitous way of making law that ‘the very idea that the law might not be identical with legislation seems odd both to students of law and to laymen.’” [Bruno Leoni, Freedom and the Law]

The point is, the judges here are merely interpreting arbitrary words of an artificial law, a statute–a written down edict of the legislature, a bunch of words that have no inner harmony, no guarantee of consistency, no relationship to justice. So you can’t really criticize the courts too much for how they construe these legal abominations.

Back to Bilski. So the Court rejected the CAFC’s holding that the “machine-or-transformation test” was the sole test for determining patent eligibility. They said that while this test “may be a useful and important clue or investigative tool, it is not the sole test for deciding whether an invention is a patent-eligible ‘process.’”But they had to find a way to strike down this patent, so they did so based on an older test, one that just said you can’t patent “abstract ideas.” So, the Court was able to reject the narrow test of the CAFC, without having to allow this business method patent. But they wanted to encourage the CAFC that they could try to find yet other ways to limit questionable method patents: “In disapproving an exclusive machine-or-transformation test, we by no means foreclose the Federal Circuit’s development of other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text.” I.e., they punted: you guys figure out a better way to shut the doors a bit more, consistent with this statute.

So what do we have: we have a very slight narrowing of patent eligibility by re-use of an old “abstract idea” test; a rejection of the more bright-line, narrower but unstatutory test of the CAFC; and more legal uncertainty. And while the patent bar will use the slightest modification of patent law to cry that the sky is falling, it’s not. Unfortunately.

(H/t Anita Acavalos for suggestions re the title.)

[Mises; AM]

A recent CNET video on “Intellectual property rights vs. journalism” shows a Stanford University’s Innovation Journalism conference on June 7, with a panel discussion by various mainstreamers discussing the quesion “Is intellectual property protection a threat to journalism?” The lack of libertarian principle and sound economics has these commentators floundering as they discuss various cases where IP infringes free speech and freedom of the press. Lacking any principled approach they retreat to legal positivism, talking about how the Constitution protects both freedom of the press and speech as well as IP rights, so some “balance” must be made. Without Austrian economics and libertarian principle, even well-intentioned people, who sense that something is wrong, are helpless before the state’s propaganda and onslaught of legal positivism.

[Mises; AM]

I recently attended at the Fifth Annual Meeting of the Property and Freedom Society in Bodrum, Turkey (see my Bodrum Days and Nights: The Fifth Annual Meeting of the Property and Freedom Society: A Partial Report). I delivered a speech entitled “Ideas are Free: The Case Against Intellectual Property.” The speech following mine was by one Terence Kealey, a biochemist at the University of Buckingham and author of Sex, Science and Profits and The Economic Laws of Scientific Research. Kealey is a fantastic speaker and his fascinating, riveting talk, “Science is a Private Good – Or: Why Government Science is Wasteful” (video; audio), perfectly complemented my anti-IP talk–in fact his book Sex, Science and Profits has a chapter calling for the abolition of patents. (The other PFS speeches (see the Program) are being uploaded and will be linked here.)

[Mises]

Earlier this month, I spoke at the Fifth Annual Meeting of the Property and Freedom Society in Bodrum, Turkey (see my Bodrum Days and Nights: The Fifth Annual Meeting of the Property and Freedom Society: A Partial Report). My topic was “Ideas are Free: The Case Against Intellectual Property,” though a better title might be something like “Ideas Are Not Property:  The Libertarian IP Mistake and the Structure of Human Action.” It is now available in audio and video. (I also participated in a Q&A Discussion Panel featuring “Hoppe, van Dun, DiLorenzo, Kinsella, Daniels, Kealey”- video.) The other speeches (see the Program) are being uploaded and will be linked here.

Update: Transcript of the speech.

PFS 2010 – Stephan Kinsella, Ideas are Free: The Case Against Intellectual Property Rights from Sean Gabb on Vimeo.

[Mises; AM]

Dear Mr. Bourne,

I’ve been enjoying your commentary on various Twit network podcasts for a while now. On the recent MacBreak Weekly, I found your exchange with Merlin Mann about open source interesting. I detect a whiff of libertarianism in your remark about the force of the state being used to enforce taxes–which I appreciate, as I’m a libertarian myself. I’m also a patent attorney and have written extensively about why patent and copyright law are anti-free market and unlibertarian (my reasons may be found at The Case Against IP: A Concise Guide, available at http://www.stephankinsella.com/publications/#IP).

You are right, in a way, that the free market will come into play here–but the power of patent and copyright holders is not a free market power. It is an artificial and unjust monopoly given to them by the state, which they then use in the courts to get the force of the state (as with tax collection) to extort money from third parties. So, given this monopoly power, yes, the free market will temper somewhat how much they can extort from people, but still, it’s unjust and greatly distorts the market. It also leads to hostility against the free market when people wrongly identify this state monopoly granting practice as part of the free market.

That said, I agree with you that there is no “religious” reason for a given individual or firm to use open source over non-open — whatever works better and is the better deal for you, of course. And in fact the “open source” model is not without problems: it also relies on copyright, and has insidious aspects — that’s one reason I, as an anti-copyright type, prefer public domain or creative commons attribution only instead of the share-alike/GNU type model (which I explain in Copyright is very sticky!, Eben Moglen and Leftist Opposition to Intellectual Property, and Leftist Attacks on the Google Book Settlement).

Well, back in 1995, that is See his post Bye-Bye for IP, an excellent short critique of “intellectual property.” As I noted in the comments, I think I tied him in coming to my senses about IP: I believe my first published piece against IP was in 1995 as well in the IOS Journal. There may have been something earlier; I’m not sure. I may have presented something a bit earlier at some Federalist Society meetings in Philadelphia; the next thing I can find that I published was in 1998 for the Pennsylvania Bar Association Intellectual Property Newsletter (later republished in a Federalist Society online forum).

The 1995 publication followed on the heels of my taking the patent bar exam in 1994. I had been thinking about IP for a long time, since 1987 or so at least, because Rand’s defense of IP had always bugged me. I started thinking about it harder in 1992 or so, when I started practicing IP law.

Good times.

As I noted previously, I was interviewed recently for a promising new documentary by lawyer-philosopher David Koepsell and filmmaker Taylor Roesch, “Who Owns You?” (Here’s the first trailer, on Vimeo.) Here’s an email I just received from Taylor:

Hello Family and Friends,

As you may or may not know, for the last eight months, I have been filming a documentary on the subject of human gene patenting with David Koepsell, philosopher and author of the book Who Owns You? The Corporate Gold Rush to Patent Our Genes.  We have made great progress since last October, filming numerous interviews with genetic counselors, patent attorneys, and the one and only James Watson.  Currently, we have over 35 hours of footage and expect to film another 35 hours this summer.  Below is a link to the trailer for the documentary:

Who Owns You? – Trailer

Our film has nicely dove-tailed with the recent court case between the Myriad Genetics, patent holder of genes BRCA1 and BRCA2 (which contribute to breast cancer), and the ACLU as well as numerous individuals and clinical organizations.  At the beginning of April, the honorable Judge Sweets of the Federal District Court in New York, ruled in favor of the ACLU, making Myriad’s patents invalid.  Initially, this was great news!  Not only had the ACLU won this case, but my film had an ending.  My celebration was premature because Myriad has decided to appeal the decision.  The case is currently in the Appellate Court and both sides intend on taking it to the US Supreme Court.  It will be years before a final decision is reached.  If we can spotlight this issue in the public square, it will help build public support for the lower court’s decision, and perhaps the Appellate Court and Supreme Court will uphold the recent ruling.

But there is more at stake than this one case, over 20% of the human genome has been patented.  While the ACLU case highlights this problem, there are still many questions about whether it will invalidate all of these sorts of gene patents.

We have some great people willing to help us as you can see from our trailer but there are still a lot of costs involved in finishing the film. We need additional funds to conduct more interviews in Chicago, Washington DC, Berkeley CA, and The Netherlands. After we finish filming this summer, post production will begin and a final product should be ready by December 2010. We have financed much of the work ourselves, but we will need at least $3,000.00 to complete this important film. Any money you can contribute will go a long way to getting this documentary done and this issue heard.  Please feel free to send this email along to anyone you think might be interested in helping us out.

Below is a link to our Kickstarter website where you can easily donate to our project:

Your Genes Have Been Patented – A Feature Documentary titled Who Owns You?

Thank you very much,

Taylor Roesch
(757) 817-5052
TaylorRoesch@gmail.com

And, in the words of Groundhog Day’s Ned Ryerson, “It’s a doosy”.

As noted previously (see Stop the ACTA (Anti-Counterfeiting Trade Agreement)), this treaty was being negotiated in secret and is an attempt to extend the reach of the west’s horrible and draconian IP (patent and copyright) regimes to other countries. As I noted, the

ACTA is also similar to another arcane law, the Digital Millennium Copyright Act (DMCA), which, under the guise of protecting “property rights,” snuck in provisions that criminalize even the mere possession of technology that can be used to circumvent digital protection systems (see, e.g., my post TI Uses Copyright Law to Attack TI Calculator Enthusiasts). Likewise, under the guise or protecting property rights in inventions and artistic works (patent and copyright), it “seeks to provide legal authority for the surveillance of Internet file transfers and searches of personal property”. As one group notes, “ACTA goes way, way beyond the TRIPS (the copyright/patent/trademark stuff in the World Trade Organization agreement), creating an entirely new realm of liability for people who provide services on the net”. More invasion of personal liberty and property rights in the name of false, artificial property rights.

The draft text has now been released, under pressure from the European Parliament (see Declan McCullagh’s post, ACTA treaty aims to deputize ISPs on copyrights; see aslo Michael Geist’s analysis of the draft text). As I suspected, the text (available here) reveals, as McCullagh notes, that ACTA “seek[s] to export controversial chunks of U.S. copyright law to the rest of the world,” such as the DMCA’s “‘anti-circumvention‘ section, which makes it illegal to bypass copy protection even to back up a Blu-Ray disc” (see, e.g., my post TI Uses Copyright Law to Attack TI Calculator Enthusiasts). This is a horrible US law that was snuck in the DMCA that may now become part of other countries’ laws. It prohibits not only copyright infringement but also makes it illegal to sell devices that could be used to circumvent encryption of DRM’d information.

Now, the DMCA also contained a “safe harbor” for ISPs that probably would not pass now (since it gave ISPs an exemption for liability that turned out to be broader than initially realized when the DMCA was enacted in the 1990s). I was concerned that ACTA would contain the anti-circumvention provisions but not the ISP safe-harbor rules–but some version of this does, at least, seem to be contemplated in the ACTA text (see pp. 20-21).

In any case, this horrible treaty needs to be stopped.

[Mises; AM]

A new documentary is out, Patent Absurdity: how software patents broke the system:

Patent Absurdity explores the case of software patents and the history of judicial activism that led to their rise, and the harm being done to software developers and the wider economy. The film is based on a series of interviews conducted during the Supreme Court’s review of in re Bilski — a case that could have profound implications for the patenting of software. The Court’s decision is due soon…

With interviews from Eben Moglen, Dan Bricklin, Karen Sandler, Richard Stallman and others…

I discuss Bilski in Supreme Skepticism Toward Method Patents and The Arbitrariness of Patent Law, and Moglen and Stallman in Leftist Attacks on the Google Book Settlement and Eben Moglen and Leftist Opposition to Intellectual Property. The film is worth watching.

But interestingly, the site for a film about patent absurdity contains this notice: “Movie copyright © 2010 Luca Lucarini.”

Consistency FAIL!

[AM]

From Stefan Molyneux’s post on the Mises forum:

The Freedomain Radio Book Club had a great discussion with Stephan about intellectual property which I thought you might enjoy…

FDR1616 Stephan Kinsella on Intellectual Property from Freedomain Radio

Play Now

We did this yesterday, Mar. 20, 2010. It was about an hour and was a nice, intelligent discussion of IP and related libertarian issues. (Local MP3 file — 59MB)

[Mises; AM]

So says Big Copyright, which adopted the term for copyright infringers because of “its suggestions of theft, destruction, and violence.” But now, the “pirates”have  “co-opted the term, adopting it with gusto and hoisting the Jolly Roger across the Internet (The Pirate Bay being the most famous example).”

I agree. Copyright infringers should not be called pirates. A pirate is a robber, plunderor, predator. The term much better describes the patent and copyright lobbies, which use state monopoly grants to plunder and rob the masses.

[Mises; AM]

Korean War Memorial during day

As noted in Justin Levine’s post, Dissent of the Day, a recent decision of the Court of Appeals for the Federal Circuit holds “that a U.S. stamp which depicts a view of a public Korean War memorial violates the copyright of the sculptor who designed it.” The case involved the sculptures made by Gaylord, a photograph of them made by John Alli (a “derivative work”), and a stamp made using Alli’s photograph. Alli and the USPS did not get Gaylord’s permission. Gaylord sued for copyright infringement.

The lower court had made three determinations:

1. “Mr. Gaylord was the sole author of the soldier sculptures” (the government was not a joint author);

Korean War Memorial during snow

2. “his sculptures were not exempt from copyright protection under the Architectural Works Copyright Protection Act (AWCPA)”, and

3. “the stamp made fair use of Mr. Gaylord’s work.”

Thus, although points 1 and 2 went Gaylord’s way, the USPS still won in the lower court since it had the fair use defense.

On appeal, the CAFC upheld the lower court’s rulings on points 1 and 2, and reversed on 3: they said the stamp was not a fair use. Now I can’t say I am outraged at an agency of the federal government being hampered by federal copyright law. And I am not especially interested in whether the CAFC and lower court were right regarding the first two points (though Judge Pauline Newman, in dissent, was none too happy about it). And while I think the CAFC’s holding on fair use seems defensible based on the language of the fair use statute, it’s instructive to read the court’s reasoning on the “fair use” claim, to get an idea of how obviously artificial and unlibertarian copyright law is. (I’ve written on “Fair Use” before: see World’s Fair Use Day; IP: The Objectivists Strike Back!.)

To decide whether an unauthorized use of a copyrighted work is permissible as a “fair use,” the court has to consider four “factors”:

1. The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes
2. The nature of the copyrighted work
3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole
4. The effect of the use upon the potential market for, or value of, the copyrighted work.

Korean War Memorial stamp

Now, it is quite obvious that this is purely artificial law, motivated by unprincipled, utilitarian considerations, and that these factors are completely unobjective, vague, and have nothing to do with justice or rights. Consider how the CAFC “applied” these factors (and ended up with a result opposite to the lower court). First, the court informs us, “Fair use is a mixed question of law and fact.” and “Because ‘the doctrine is an equitable rule of reason, no generally applicable definition is possible, and each case raising the question must be decided on its own facts.’” Ah. Well that sounds like objective law to me. So, the court has to review the 4 “factors,” and “Each factor is ‘to be explored, and the results weighed together, in light of the purposes of copyright.’” Weighed together? Interpersonal utility value comparison FAIL. The court then tries to apply each of the 4 factors to the stamp to determine whether it was fair use. The court notes that the first factor can turn on whether the derivative work is “transformative”: “whether the new work merely ‘supersede[s] the objects’ of the original creation or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is ‘transformative.’” More objective law with precise boundaries! The lower court held that the stamp was transformative:

The court determined that “while both the Stamp and ‘The Column’ are intended to honor veterans of the Korean War, the Stamp is transformative, providing a different expressive character than ‘The Column.’” … It explained that Mr. Alli transformed the three-dimensional sculpture with his photograph by “creating a surrealistic environment with snow and subdued lighting where the viewer is left unsure whether he is viewing a photograph of statues or actual human beings.” … The court determined that the Postal Service further transformed The Column by “making it even grayer, creating a nearly monochromatic image. This adjustment enhanced the surrealistic expression ultimately seen in the Stamp by making it colder.” … The Court of Federal Claims concluded that the stamp was “a transformative work, having a new and different character and expression than Mr. Gaylord’s ‘The Column.’”

But no, the CAFC disagrees:

As a preliminary matter, we note that the inquiry must focus on the purpose and character of the stamp, rather than that of Mr. Alli’s photograph. The stamp does not reflect any “further purpose” than The Column. … As the Court of Federal Claims found, both the stamp and The Column share a common purpose: to honor veterans of the Korean War. … We conclude that the stamp does not transform the character of The Column. Although the stamp altered the appearance of The Column by adding snow and muting the color, these alterations do not impart a different character to the work. To the extent that the stamp has a surreal character, The Column and its soldiers themselves contribute to that character. Indeed, the Penn State Team suggested that the Memorial have a “dream-like presence of ghostly figures.” Capturing The Column on a cold morning after a snowstorm—rather than on a warm sunny day—does not transform its character, meaning, or message. Nature’s decision to snow cannot deprive Mr. Gaylord of an otherwise valid right to exclude.

Gottta love that last touch: “Nature’s decision to snow cannot deprive Mr. Gaylord of an otherwise valid right to exclude.” O, the majesty of the copyright law! The court the applies the other three factors, holding that two of them “weigh against” fair use, while the last one, “market impact,” favors a fair use finding. So, I guess if you have 3 out of four, the 3 “weigh” more than the fourth!

Weighing the factors, we conclude that the government’s use of The Column in the stamp was not a fair use. Even though the stamp did not harm the market for derivative works, allowing the government to commercially exploit a creative and expressive work will not advance the purposes of copyright in this case.

Who can really believe such unprincipled, vague “factors” have anything to do with justice? Yet you will see pro-IP libertarians trot this out all the time. Why? Because if you apply IP law itself–copyright or patent–wild injustices result. So to blunt the edges and make the law more palatable, exceptions are made–ad hoc, unprincipled exceptions to a draconian, unjust, unprincipled legislative scheme. Libertarians usually support IP because they have accepted the state’s propaganda lumping IP in with regular property, and so they tend to assume the various exceptions are also legitimate. Until you call them on it, and point out how they pretend to support IP for principled reasons yet are supporting a utilitarian-grounded exception, whereupon they will usually sheepishly back down; but this leaves them with a dilemma, since the law they favor, absent its rickety patches, is even more manifestly unjust.

TCLP 2010-02-24 Interview: Nina Paley

[AM]

This is an amazing animation by Nina Paley, “America’s Best-Loved Unknown Cartoonist” (and creator of the amazing animated (and free online) film Sita Sings the Blues, given rave reviews including 4 stars by Roger Ebert). Entitled “All Creative Work Is Derivative” (and blogged here on her blog), and concluding “All creative work builds on what came before,” the video is built from images of of statues and paintings at the Metropolitan Museum of Art in New York. As she explains on All Creative Work Is Derivative (Minute Meme #2),

Copyright control extends not just to verbatim copies, but to “derivative works.” This has led to censorship on a grand scale. For example, the seminal German silent film “Nosferatu” was deemed a derivative work of “Dracula” and courts ordered all copies destroyed. Shortly before his death, author J.D. Salinger convinced U.S. courts to censor another author who transformed his characters. And so on.

The whole history of human culture evolves through copying, making tiny transformations (sometimes called “errors”) with each replication. Copying is the engine of cultural progress. It is not “stealing.” It is, in fact, quite beautiful, and leads to a cultural diversity that inspires awe.

I learned of Nina’s work when she sent me a nice email, an edited version of which follows:

Hello Stephan,

I recently read “Against Intellectual Property” and liked it very much. It reminded me of some things I’ve written: Intellectual Property is Slavery and Redefining Property: Lessons from American History; also My Official Position on Copyright.

I especially enjoyed your unique twist on Trademark, that trademark suits should be brought by consumers against frauds, rather than by trademark “owners.” I haven’t thought it all through to form my own solid opinion yet, but I like the novel approach.

Last year I released my feature film, Sita Sings the Blues, under a copyleft license (CC-BY-SA).

I’m now artist-in-residence at QuestionCopyright.org, and do what I can to promote alternatives to copyright. (Actually I’m a copyright abolitionist, but many find that identification unpalatable.)

Anyway, thanks for the good book, I’m recommending it to my Free Culture buddies.

Update: See also this amazing, fascinating short documentary with Nina Paley, The Revolution Will Be Animated:

The Revolution Will Be Animated from Marine Lormant Sebag on Vimeo.

See also her Copying Is Not Theft “Minute Meme”:

[Mises; AM]

Jeff Tucker was interviewed yesterday by Mark Edge, as part of his “Edgington Post Interview Series,” for his Free Talk Live radio show, about the Mises Institute’s “open information” approach (see Jeff Tucker, A Theory of Open, B.K. Marcus, Mises.org on iTunes U, Doug French, The Intellectual Revolution Is in Process). The interview is lasts about 24 minutes, and starts at 2:52:07 in the Feb. 8, 2010 show. Tucker makes some great points, such as his idea that perhaps the antitrust law prevented movie studios from owning the theaters and thus may have made them less likely to be willing to consider online distribution models; and his example of how the Cantor-Cox book, which was released for free online months before the paper version, helped to create a ready-made audience for the paper book.

[Mises; AM]

An email I just received:

My name is Luke Mroz and I am a Ron Paul supporter in NYC and a fan of your work at Mises.org.  I just wanted to share a brief story with you from an event I went to last night:

Last night I attended a Comedy Central taping for a live comedian special called “Comics Anonymous” at the Union Square Theater in New York City.  It was a festive event with a fun crowd of about 500 people.  One of the performers was one of my favorite comedians named Robert Kelly.  He told a really good joke about how he rarely used the word love because it loses its strength if you use it to much.  When his wife tells him she loves him, he shrugs it off.  When his father told him he loved him, for the first time in his adult life when he graduated high school, he feigned breaking down into tears and acting like an emotional wreck.  While doing this, he feigned being hugged and sang the phrase “We are the world”.  He then went on to his next joke.

After another comedian, the taping ended.  We were informed that the crowd had to stay put because Bob Kelly had to come out and re-film a joke.  It was the joke I just mentioned.  They said it had to be re-taped because Comedy Central didn’t have the rights to the song “We Are The World”.  (My guess is it probably wasn’t worth it to them to obtain the rights, for 1 or 2 seconds of a joke).  How ridiculous is this?  FOUR WORDS!  We then had to hear the same joke, slightly modified, again, and pretend and cheer for it like we never heard it before.  I am interested in seeing the final edited product, whenever it eventually airs.

[AM]

As noted here, “Ayn Rand’s newsletters used to end with a “Horror File” of monstrous but true quotations.”

Along those lines, it’s time to collect some choice trademark horror stories in one place. The main post will be here, on the Mises Blog, but I’ll cross-post the initial post here too. But look there for updates (or to add suggestions in the comments). (Update: I might as well also list here similar examples from patent, copyright, and even trade secret. See below.)

Trademark

As noted in Trademark versus Copyright and Patent, or: Is All IP Evil?, it’s not only patent and copyright that are unlibertarian and unjust. Modern trademark law is as well. I deal with tradmark rights on pp. 58-59 of Against Intellectual Property, and also in some detail in Reply to Van Dun: Non-Aggression and Title Transfer (esp. pp. 59-63). In my view, extensions of trademark law–rights against “trademark dilution” and cybersquatting, etc.–are obviously invalid. Further, federal trademark law is problematic since it is not authorized in the Constitution.

But even if federal trademark law were abolished, as well as modern extensions such as rights against trademark dilution, even common law trademark is problematic, for three primary reasons. First, it is enforced by the state, which gets everything wrong. Second (see First), the test of “consumer confusion” is usually applied ridiculously, treating consumers like indiscriminating idiots. Third, and worst of all, the right at issue is the right of the defrauded consumer, not the competitor. Trademark law ought to be reformed by abolishing the right of trademark “owners” to sue “infringers” (except perhaps as proxy for customers, when consent can be presumed or proved–as I discuss in this interview: Free Talk Live Interview on Reducing IP Costs (Jan. 20, 2010)), and treating this as a case of the customer’s right to sue a vendor who defrauds him as to the nature of the good purchased. Some might argue that this is only a minor change, but it is not: such a change would make it clear that “knockoffs” are usually not a violation of anyone’s rights: the buyer of a $10 “Rolex” is almost never defrauded–he knows what he’s getting. Yet by giving an enforceable trademark right to the user of a mark, he can sue knockoff companies even though their customers are not defrauded and in fact are perfectly happy to buy the knockoff products.

The other fallacy is the view at work here that there is no such thing as reputation, or even identity, absent trademark law. But this is incorrect. Of course people and firms can have reputations even if trademark law is nonexistent. All that is required is that people be able to identify other people and firms, and communicate. Pro-trademark arguments often implicitly assume that this is not possible, absent state-enforced trademark law, which is ridiculous.

In any event, on to a collection of trademark outrages for the horror files (some of these are also listed in Reducing the Cost of IP Law):

• Court Says U Of Southern California Only One Who Can Use USC; Sorry U Of South Carolina
• Who Dat? America’s National Football League causes outrage over catchphrase ban
• What’s Next–Trademarking Language? Don’t be *Ridiculous*!
• South Butt David versus North Face Goliath
• Lou Carlozo, Teen’s charity name draws the McIre of McDonald’s, Wallet Pop (Jan. 17, 2010) (McDonadl’s claims Lauren McClusky’s use of “McFest” for the name of a series of charity concerts she puts on infringes its “McFamily” brand)
• Budweiser trademark dispute (see also Chip Wood, A Bully-Boy Beer Brewer, Straight Talk (Oct. 16, 2007))
• 9th Circuit Appeals Court Says Its Ok To Criticize Trademarks After All, Against Monopoly (Sept. 26, 2007)
• Kinsella, Trademarks and Free Speech, Mises Blog (Aug. 8, 2007)
• idem, Beemer must be next… (BMW, Trademarks, and the letter “M”), Mises Blog (Mar. 20, 2007)
• idem, Hypocritical Apple (Trademark), Mises Blog (Jan. 11, 2007)
• ECJ: “Parmesian” Infringes PDO for “Parmigiano Reggiano,” I/P Updates (Feb. 27, 2008)
• Mike Masnick, Engadget Mobile Threatened For Using T-Mobile’s Trademarked Magenta, Techdirt (Mar. 31, 2008)

Patent

Taken (in part) from my article Radical Patent Reform Is Not on the Way, Appendix: Examples of Outrageous Patents and Judgments:

Examples of (at least apparently) ridiculous patents and patent applications abound (more at PatentLawPractice):

• Amazon’s “one-click” patent, asserted against rival Barnes & Noble;
• Cendant’s assertion that Amazon violated Cendant’s patent monopoly on recommending books to customers (since settled);
• The attempt of Dustin Stamper, Bush’s Top Economist, to secure a patent regarding an application for a System And Method For Multi-State Tax Analysis, which claims “a method, comprising: creating one or more alternate entity structures based on a base entity structure, the base entity structure comprising one or more entities; determining a tax liability for each alternate entity structure and the base entity structure; and generating a result based on comparing each of the determined tax liabilities”;
• Apple’s patent application for digital Karaoke;
• the suit against Facebook by the holder of a patent for a “system for creating a community for users with common interests to interact in”;
• the “absurdly broad patent [issued to Blackboard] for common uses of technology if that technology is employed in the context of education” (see also Patent Office Rejects Blackboard E-Learning Patent One Month After It Wins Lawsuit, Techdirt (Mar. 31, 2008);
• Compton’s (now Encyclopedia Britannica’s) patent that “broadly cover[s] any multimedia database allowing users to simultaneously search for text, graphics, and sounds — basic features found in virtually every multimedia product on the market”;
• Carfax’s patent on a “method for perusing selected vehicles having a clean title history”;
• Acacia’s patent for putting a unique transaction number on a receipt;[26]
• Pat. No. 6,368,227, covering swinging sideways on a swing;

The Supreme Court, in the 1882 case Atlantic Works v. Brady, 107 US 192, itself lists examples of patents issued to “gadgets that obviously have had no place in the constitutional scheme of advancing scientific knowledge … the simplest of devices.” These included

• a particular doorknob made of clay rather than metal or wood, where differently shaped doorknobs had previously been made of clay;
• making collars of parchment paper where linen paper and linen had previously been used;
• a method for preserving fish by freezing them in a container that operates in the same manner as an ice-cream freezer.
• rubber caps put on wood pencils to serve as erasers;
• inserting a piece of rubber in a slot in the end of a wood pencil to serve as an eraser;
• a stamp for impressing initials in the side of a plug of tobacco;
• a hose reel of large diameter so that water may flow through the hose while it is wound on the reel;
• putting rollers on a machine to make it movable;
• using flat cord instead of round cord for the loop at the end of suspenders;
• placing rubber hand grips on bicycle handlebars;
• an oval rather than cylindrical toilet paper roll, to facilitate tearing off strips.

Below are a few notable or recent examples of large, significant, troubling, or apparently outrageous injunctions, damages awards, and the like:

• In Stent Patent War, Boston Scientific Caves (Again), Agrees to Pay Johnson & Johnson $1.725 Billion to Settle Three Cases;
• Qualcomm has been enjoined from importing chips that help conserve power in cell phones (discussion; latest developments). See also Eric Bangeman, ITC to Bar Import of New Handsets in Patent Dustup, ars technica (June 7, 2007); Nokia’s Patent-Licensing Case against Qualcomm Dropped by Dutch Court, engadget (Nov. 14, 2007); Broadcom Wins Major Injunction against Qualcomm, engadget (Dec. 31, 2007); ITC Upholds Ruling, Reiterates that Nokia Didn’t Violate Qualcomm Patents, engadget (Feb. 29, 2008).
• Texas-Sized Patent Win, Texas Lawyer (Feb. 21, 2008). A New Jersey doctor was awarded $432 Million as a “reasonable royalty” against Boston Scientific for infringing his “Method and Apparatus for Managing Macromolecular Distribution.”
• Smartphones Patented … Just About Everyone Sued 1 Minute After Patent Issued, Techdirt (Jan. 24, 2008).
• Farmer David Reaps What He Has Sown: A Patent Suit, Patent Baristas (Feb. 13, 2008) Even though “the practice of saving seeds after a harvest to plant the next season is as old as farming itself,” patents prevent farmers from saving patented seeds.
• Apple, Starbucks Sued over Custom Music Gift Cards, AppleInsider (Feb. 20, 2008) A Utah couple sue Apple and Starbucks over their “‘Song of the Day’ promotion, which offers Starbucks customers a iTunes gift card for a complimentary, pre-selected song download.” The suit is based on a patent on a “retail point of sale for online merchandising” which allows customers to buy a gift card from a brick-and-mortar store and then go home and redeem the card online.
• Apple Sued Over Caller ID on the iPhone, Techdirt (Feb. 27, 2008). The patent is on “matching up the phone number of an incoming call with a local contact database to display who is calling.”
• The new 802.11n Wi-Fi standard (which promises to significantly increase Wi-Fi speed and range) is in jeopardy due to patent threats. See Bill Ray, Next Generation Wi-Fi Mired in Patent Fears, The Register (Sept. 21, 2007).
• SanDisk Sues 25 Companies for Patent Infringement: “Suits have been filed against 25 companies by the SanDisk corporation this week, as the company looks to stop businesses from shipping products it alleges are infringing on its work. SanDisk has filed suits against everyone from MP3 player manufacturers to USB hard drive creators. The list of defendants is staggering, and MacWorld notes if Sandisk succeeds it could have repercussions outside of the courtroom.… The court … complaints could affect the prices and availability of products made by companies targeted in the suit if SanDisk wins and the companies are barred from importing products into the U.S.”
• Patent Office Upholds Tivo’s “Time Warp” Patent, EchoStar Not so Happy, engadget (Nov. 29, 2007); see also Tivo Inc. v. EchoStar Communications Corp. (S. D. Tex., Dec. 2, 2006); and TiVo Wins on Appeal: Permanent Injunction against EchoStar to be Reinstated, Patently-O (Jan. 31, 2008).
• Jacqui Cheng, U R SUED: Patent Holding Company Targets 131 Companies over SMS patents, ars technica (Nov. 13, 2007).
• The International Trade Commission (ITC) may ban imports of many popular hard drives that “are alleged to infringe on patents owned by California residents Steven and Mary Reiber related to a ‘Dissipative ceramic bonding tool tip.’” Jacqui Cheng, Hard Times for Hard Drives: US May Ban Popular Imports, ars technica (Oct. 11, 2007).
• The VoIP phone service Vonage may be put out of business by patents. Sprint recently won a patent case against Vonage in which $69.5 million was awarded in damages. Sprint had planned “to ask the court to permanently ban Vonage from using its patented technology,” but the case was subsequently settled for $80 million. However, in a separate patent lawsuit between Verizon and Vonage, the jury found that Vonage had violated three Verizon patents, and awarded Verizon $58 million in damages plus ongoing royalties. Vonage claims it has developed workarounds for two of the patents. See Kim Hart, Sprint Wins Patent Case Against Vonage: Reston Firm Awarded $69.5 Million in Second Blow to Internet Phone Company, Washington Post (Sept. 26, 2007); Peter Svensson, Vonage Settles Patent Suit with Sprint, BusinessWeek (Oct. 8, 2007). Latest: Vonage Settles with Verizon, Owes Up to $117.5 Million; Vonage, Nortel Call a Truce — No Cash Changing Hands, engadget (Dec. 31, 2007).
• Kinsella, Revolutionary Television Design Killed by Patents (2007).
• BlackBerry’s manufacturer, RIM, was forced to cough up $612.5 million after NTP used patent law to threaten to shut RIM down.
• Microsoft was on the receiving end of a $1.5 billion jury verdict for infringing an MP3 patent held by Alcatel-Lucent (which was recently overturned).
• After Kodak sought more than $1 billion in damages from Sun Microsystems for patent infringement, Kodak finally settled for $92 million. (And according to one colleague, the verdict resulted “in the immediate shutdown of Kodak’s entire instant photography division, with the immediate loss of 800 jobs. And, some say, the eventual failure of Polaroid due to lack of any real competition to keep them on their toes!”)
• In another recent case, Freedom Wireless obtained a $150 million damages award against Boston Communications Group, Inc., which at the time had revenues of only about $100 million. In this case, the judge also refused to stay the injunction issues against BCGI (and by extension, its customers) pending appeal.
• Smith International was forced to pay Hughes Tool Company $204.8 million for infringement upon Hughes’s patent for an “O-ring seal” rock bit, which led to Smith filing for chapter 11 bankruptcy protection (this was in 1986, when $200 million was considered a large patent verdict).
• As of March 2003, the top 5 patent infringement damage awards ranged from $873 million (Polaroid v. Kodak, 1991) to $204.8 million (Hughes Tool v. Smith International, 1986). The top 5 patent settlements ranged from $1 billion to $300 million. Damage Awards and Settlements, IP Today (March 2003); see also Gregory Aharonian, Patent/Copyright Infringement Lawsuits/Licensing Awards. Sadly, a $200 million verdict seems normal nowadays. The recent $156 million patent-infringement verdict against AT&T, for example — which could possibly be trebled by the judge — now looks like small potatoes.
• Other recent cases include a $1.67 billion patent infringement verdict in favor of Johnson & Johnson against Abbott; a $400 million settlement paid to Abbot, by Medtronic, regarding stent devices; and a $716 million settlement paid to Johnson & Johnson by Boston Scientific (cardiac stents again).

Copyright

Some of these are also listed in Reducing the Cost of IP Law:

• RIAA Wants $1.5 Million Per CD Copied, Slashdot (Jan. 30, 2008);
• Ford Slaps Brand Enthusiasts, Returns Love With Legal Punch, AdRants (Jan. 14, 2008) (Ford Motor Company claims that they hold the rights to any image of a Ford vehicle, even if it’s a picture you took of your own car);
• Jacqueline L. Salmon, NFL Pulls Plug On Big-Screen Church Parties For Super Bowl, Washington Post (Feb. 1, 2008) (NFL prohibits churches from having Super Bowl gatherings on TV sets or screens larger than 55 inches);
• Internet pirates could be banned from web, Telegraph (Feb. 12, 2008) (British proposal to punish individuals who illegally download music by banning them from the Internet); John Tehranian, Infringement Nation: Copyright Reform and the Law/Norm Gap, Utah L. Rev. (forthcoming; SSRN);
• Cory Doctorow, Infringement Nation: we are all mega-crooks, Boing Boing (Nov. 17, 2007);
• Court Says You Can Copyright A Cease-And-Desist Letter, Techdirt (Jan. 25, 2008);
• Kinsella, Battling the Copyright Monster, Mises Blog (June 19, 2006);
• dem, Copyright Kills Amazing Music Project, Mises Blog (Jan. 2, 2008);
• idem, “Fair Use” and Copyright, Mises Blog (Aug. 17, 2007);
• idem, Copyrights and Dancing, Mises Blog (Feb. 20, 2007);
• idem, The “tolerated use” of copyrighted works, Mises Blog (Oct. 27, 2006);
• idem, Copyright and Birthday Cakes, Mises Blog (June 16, 2005);
• idem, Heroic Google Fighting Copyright Morass, Mises Blog (June 2, 2005);
• idem, Copyright Gone Mad, Mises Blog (Apr. 14, 2005);
• idem, Copyright and Freedom of Speech, Mises Blog (Nov. 8, 2004).

See also:

• Joost Smiers & Marieke van Schijndel, Imagine a World Without Copyright, International Herald Tribune (Sat. Oct. 8, 2005);
• Jessica Litman, Revising Copyright Law for the Information Age, 75 Oreg. L. Rev. 19 (1996);
• Kinsella, Copyrights in Fashion Designs?, Mises Blog (Sep. 27, 2006);
• Kinsella, Britain’s Copyright Laws, Based on a 300-Year-Old Statute, Desperately Need Reshaping for the Digital Age, Mises Blog (Nov. 2, 2006).
• For a humorous parody of copyright abuses by the RIAA, see CD Liner Notes of the Distant Present, Something Awful (Jan. 3, 2008).

Trade Secret

Even trade secret law, the least objectionable of the four main types of IP, has been corrupted by the state.

[TBD]

[Mises; AM]

The new book Innovation, Intellectual Property, and Economic Growth, by
Christine Greenhalgh & Mark Rogers, looks interesting:

What drives innovation? How does it contribute to the growth of firms, industries, and economies? And do intellectual property rights help or hurt innovation and growth? Uniquely combining microeconomics, macroeconomics, and theory with empirical analysis drawn from the United States and Europe, this book introduces graduate students and advanced undergraduates to the complex process of innovation. By addressing all the major dimensions of innovation in a single text, Christine Greenhalgh and Mark Rogers are able to show how outcomes at the microlevel feed through to the macro-outcomes that in turn determine personal incomes and job opportunities.

From a quick skim of ch. 1 (available here), it appears to adopt a mainstream approach–finding out whether there is market failure or a public goods problem (see Hans-Hermann Hoppe’s “Fallacies of the Public Goods Theory and the
Production of Security,” in The Economics and Ethics of Private Property for criticism of the concept of “public goods”), and then asking whether we can fix it with some kind of state invervention. The same old “the market is not perfect, so let’s let the thugs with guns have more power” song and dance.

But at least they recognize you have to take costs into account (see my Reducing the Cost of IP Law; There’s No Such Thing as a Free Patent; Yet Another Study Finds Patents Do Not Encourage Innovation; and What Are the Costs of the Patent System?):

In addition, understanding whether these monopoly costs of IPRs [intellectual property rights] are less than the benefit to society emanating from the spur that IPRs give to innovation will provide a major theme for parts II and IV of this book.

My guess: they’ll conclude that some IPRs can help address the market failure/public goods issues and give rise to some kind of net benefit, but not our current IP system; so then we’ll have a laundry list of “reforms” that would tweak the current laws to reduce the cost enough so that there is a net benefit. Just a hunch. Unfortunately, at $45 even in e-book format, I don’t think I’ll read it until it comes out at a more reasonable price.

[Mises; AM]

An audiobook of my monograph Against Intellectual Property (Mises Institute, 2008; Mises Store; PDF; Scribd; HTML) has been prepared. The narrator is Jock Coats, who produced a very impressive, professional-quality product. The audiobook, about 1 hour, 54 minutes in length, is available in .mp3 format and in .m4b iTunes book format (each about 57M). The .m4b file has chapter breaks built in. It’s also available in a Mises.org version and on iTunes U.

[Mises; AM]

In Authors: Beware of Copyright, Jeff Tucker warns authors to be careful with their publication agreements not to alienate their books and other works. A good illustration of this peril is found in the case of Buddy Holly and his recording contract with Decca. As reported in Buddy Holly’s secretly recorded contract negotiation with Decca,

In 1956, Buddy Holly traveled to Nashville to record several songs. One of the songs he recorded was “That’ll Be The Day”, but the producer assigned to his sessions (Owen Bradley) hated rock n’ roll, and did a terrible job on the song. After that, Buddy traveled to New Mexico and re-recorded “That’ll Be The Day” (the version that became the monster hit) at a different studio with his own (superior) arrangement, but according to his contract with Decca, he couldn’t release it, because Decca owned all rights to his music. He decided to call Decca, to try reason with them, and he secretly taped his conversation. They refused to give him the rights to his own song, but he went ahead and violated his contract. Here is the conversation he secretly taped.

Listening to Holly pleading with the masters he has alienated his rights to is heartbreaking. Decca had dropped him, apparently, but had the rights to sit on his recordings for 5 years. Although they had no intention of releasing the songs, they also would not give Holly permission to do so–the cigar-chomping executive kept saying “well, we got a lot of money tied up in them, Buddy!” But Holly offered to reimburse those costs; no dice.

Authors: do not let this happen to you. When you publish a book, consider publishing it yourself on Amazon/Kindle (or, soon, iBooks/iPad) or LuLu. Or persuade the publisher to let you post an online version for free. At least make sure the publisher will offer a kindle and ebook version. Negotiate, at the very least, the right to post the work online for free after, say, 3 or 4 years, when sales have petered out.

[Mises; AM]

Free-market economist Professor William F. Shughart II attempts to defend the need for IP in “Ideas Need Protection,” The Baltimore Sun (Dec. 21, 2009) (previously published in the Christian Science Monitor). Subtitled “Abolishing Intellectual-property, Patents Would Hurt Innovation: A Middle Ground Is Needed,” the piece suffers from flaws found in others defenses of intellectual monopoly and pattern privilege. For example, Professor Shughart writes:

Article I, Section 8, of the Constitution explicitly delegates to Congress authority “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

While it is true that copyright and patent are constitutional, this does not make these laws just. What the artificial law-writing coup-leaders wrote a document designed to help the state seize more power is simply not relevant to the normative question of whether there should be IP.

Pro-patent law arguments rest on the assumption that the patent system generates overall wealth–that its benefits are greater than its costs–without ever making this case. Instead, they point to ways that the patent system benefits some people, and never bother to even try to tally up the costs to make sure it’s a net positive. In other words, they don’t even take their own justifications seriously. Shughart makes the same mistake:

Developing and successfully commercializing new products and technologies typically requires large investments of time and treasure. Most research and development (R&D) investments end in failure.

Granting a temporary monopoly to the rare breakthrough is necessary, therefore, to provide its inventor with an opportunity to earn a return on the investment that led to the new idea–and to encourage additional such investments. Such protection is especially important in the pharmaceutical industry, where, in its absence, new drugs could be duplicated by competitors, and the incentive to invest would disappear, stifling the discovery process.

The word “therefor” is unwarranted; this is a non sequitur. Later on in the piece, he writes:

Incentives matter. Although there may be a passionate few who don’t require payment for contributing to the common pool of knowledge, technological advancement will be much more rapid if an explicit economic payoff is available.

Much more rapid–? How much more? Who knows? The IP advocates don’t. So how do they know it justifies the cost?

I found this to be an refreshing admission of the stifling effect mercantilist intellectual monopoly has on the spread of ideas:

To paraphrase the late economist Joan Robinson, patents and copyrights slow down the diffusion of new ideas for a reason: to ensure there will be more new ideas to diffuse …

Unfortunately, he supports these laws anyway. Shughart also candidly and explicitly admits the monopoly character of of patent and copyright:

Granting a temporary monopoly to the rare breakthrough is necessary…

(Some IP advocates get very irked when patents are called monopolies. For example (as noted in Are Patents “Monopolies”?), patent attorney Dale Halling, in a piece entitled “The Myth that Patents are a Monopoly,” writes, “People who suggest a patent is a monopoly are not being intellectually honest and perpetuating a myth to advance a political agenda.” But it is common for IP advocates to acknowledge this. For example, Richard Epstein writes “Patented goods are subject to a lawful monopoly created by the state in order to induce their creation … The legal monopoly granted by the patent is the only mechanism that allows the producer to recover those fixed costs….” And  Objectivist IP attorney Murray Franck has argued that “if the creator’s rights are not protected, his survival is jeopardized. If another can market his creation, the creator is deprived of the money he would otherwise earn.” See also my comments here, noting that even the Supreme Court and other federal courts slip up and admit the monopoly character of IP on on a regular basis.)

Consider this argument our author makes:

It is true that other means exist for creative people to profit from their effort. In the case of copyright, authors can charge fees for reading their works to paying audiences. Charles Dickens did this, but his heavy schedule of public performances in the United States, where his works were not protected by copyright, arguably contributed to his untimely death.

Can Shughart really be arguing that we need copyright, for otherwise another potential Charles Dickens might drop dead early? (This reminded me of a bizarre argument made by patent attorney Gene Quin, noted in this post. In an online discussion, IP opponent David Koepsell had mentioned “that in the 19th and early 20th centuries, two of the most innovative countries on earth (The Netherlands and Switzerland) had no patent systems at all.” In response, Quinn says: “Thank goodness the Swiss did have a Patent Office. That is where Albert Einstein worked and during his time as a patent examiner came up with his theory of relativity.” So … we need a state-granted monopoly system … so that Albert Einstein could have had a job in Switzerland. What does one even say in response to such an “argument”?)

Professor Shughart continues:

The hard questions are: What kinds of ideas should be eligible for patent and copyright protection, and how long should that protection last?”

What’s needed is a middle ground. Even if we can all agree that intellectual property is an important social commodity, one size doesn’t fit all in the modern Digital Age.

While a 20-year monopoly may be appropriate for new drugs, it may not be appropriate for software, a new electronic game or, as Justice Sonia Sotomayor seemed to suggest during questioning in the Bilski case, a new “speed-dating service.”

A 20-year patent monopoly on a method for speed-dating may not be appropriate?! How would Justice Sotomayor know, really?

As for there being “hard questions”–who can answer them? And if “we need a middle ground”–even though we have no evidence to know where the “optimum” is–how can we achieve this? Who can do it? Shughart’s answer: Congress and the courts:

Rather than abolishing patent and copyright protection for some categories of intellectual property, Congress and the courts should consider varying the length for which exclusive monopoly privileges are granted, depending on the expected commercial vitality of the creative work. [emphasis added]

The state is neither benevolent nor competent (well, they are good at two things: destruction, and propaganda). There is no reason to believe Congress or the courts want, or are equipped, to find the “right” answers to such questions. (As J.H. Huebert observes about government courts: “In general, judges and those who appoint them have no reason to want to limit government. … Have not judges been responsible for some of the most outrageous expansions of government power? And, after all, are judges not a product of the same political system that gives us legislators and presidents? What president would appoint judges who would tell him he cannot do anything he wants? What Senators would confirm a judicial candidate who tells them that everything they have ever done in office is unconstitutional? The whole enterprise of libertarian constitutional theory ignores all we have learned from public choice economics about the incentives of government actors.”) There is no reason to trust state employees to determine the optimum length of patent and copyright monopolies for various types of inventions and artistic works, much less by using “the expected commercial vitality of the creative work” as a test.

Appendix:

N.B: My original draft was done in very sarcastic style. At the urging of some friends, I ultimately decided to rewrite it in more standard, serious, respectful, straight style. But for those who like a bit of humor, here’s the original sarcastic post:

Shughart’s IP Parody

In “Ideas Need Protection,” subtitled “Abolishing Intellectual-property, Patents Would Hurt Innovation: A Middle Ground Is Needed,” free-market economist William F. Shughart II has penned a wickedly funny parody of typical arguments in favor of IP. Brilliantly, he somehow managed to slip it by the editors of The Baltimore Sun as well the Christian Science Monitor, where it was first published, without either publication realizing it was a parody.

Shughart mocks the arguments typically given in defense of intellectual monopoly and pattern privilege, such as appeals to authority and positive law, when he writes:

Article I, Section 8, of the Constitution explicitly delegates to Congress authority “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

Ha ha! As if what the artificial law-writing coup-leaders wrote a document designed to help the state seize more power is relevant to the normative question of whether there should be IP. Good one, Professor.

He goes on, mercilessly lampooning the intellectual monopolists:

Developing and successfully commercializing new products and technologies typically requires large investments of time and treasure. Most research and development (R&D) investments end in failure.

Granting a temporary monopoly to the rare breakthrough is necessary, therefore, to provide its inventor with an opportunity to earn a return on the investment that led to the new idea–and to encourage additional such investments. Such protection is especially important in the pharmaceutical industry, where, in its absence, new drugs could be duplicated by competitors, and the incentive to invest would disappear, stifling the discovery process.

I like this. First, he demonstrates how pro-patent law arguments rest on the assumption that the patent system generates overall wealth–that its benefits are greater than its costs–without ever making this case. Instead, they point to ways that the patent system benefits some people, and never bother to even try to tally up the costs to make sure it’s a net positive. In other words, they don’t even take their own justifications seriously. The point is reinforced by the totally unwarranted word “therefore” inserted above, in a blatant example of non sequitur. Revisiting this theme later on in the piece, our author writes:

Incentives matter. Although there may be a passionate few who don’t require payment for contributing to the common pool of knowledge, technological advancement will be much more rapid if an explicit economic payoff is available.

Much more rapid–? How much more? Who knows! The IP advocates don’t! “What are they jabbering about? How do they know?”, Shughart seems to be saying, if you read between the lines.

Professor Shughart has no doubt noted that although it gives IP advocates a case of the vapors if you call IP a “monopoly,” too many hapless IP advocates just seem unable resist admitting this. Thus, he writes:

To paraphrase the late economist Joan Robinson, patents and copyrights slow down the diffusion of new ideas for a reason: to ensure there will be more new ideas to diffuse … Granting a temporary monopoly to the rare breakthrough is necessary…

This is just a perfect impression of the typical blunder made by patent and copyright proponents when they inadvertently acknowledge the stifling effect mercantilist intellectual monopoly has on the spread of ideas. This is a very common faux pas of the monopolists, who forget to hide the fact that IP is, in fact, a monopoly. When IP’ers stray from the reservation like this, it really irks the organized pro-patent forces. For example (as noted in Are Patents “Monopolies”?), patent attorney Dale Halling, in a piece entitled “The Myth that Patents are a Monopoly,” writes,

People who suggest a patent is a monopoly are not being intellectually honest and perpetuating a myth to advance a political agenda.

But, as Shughart demonstrates, all too often the pro-monopoly forces can’t help themselves and inadvertently let the truth tumble out of their mouths. For example, we have pro-patent Richard Epstein (see Epstein and Patents), noting that

Patented goods are subject to a lawful monopoly created by the state in order to induce their creation … The legal monopoly granted by the patent is the only mechanism that allows the producer to recover those fixed costs….

And here we have Objectivist IP attorney Murray Franck arguing that “if the creator’s rights are not protected, his survival is jeopardized. If another can market his creation, the creator is deprived of the money he would otherwise earn.”

And see my comments here, noting that even the Supreme Court and other federal courts slip up and admit the monopoly character of IP on on a regular basis:

“Section 154 and related provisions [e.g. Sec. 271] obviously are intended to grant a patentee a monopoly only over the United States market….”; “Congress made the policy choice that the “carrot” of an exclusive market for the patented goods would encourage patentees to commercialize the protected inventions so that the public would enjoy the benefits of the new technology during the patent term in exchange for granting a limited patent monopoly. In other words, the public expected benefits during ‘the embarrassment of an exclusive patent as Jefferson put it.’”; “We hold that the disputed royalties provisions do not inappropriately extend the patent monopoly to unpatented parts of the patented system”; “A patentee, in demanding and receiving full compensation for the wrongful use of his invention in devices made and sold by a manufacturer adopts the sales as though made by himself, and therefore, necessarily licenses the use of the devices, and frees them from the monopoly of the patent.”; “The Florida statute is aimed directly at the promotion of intellectual creation by substantially restricting the public’s ability to exploit ideas that the patent system mandates shall be free for all to use. Like the interpretation of Illinois unfair competition law in Sears and Compco, the Florida statute represents a break with the tradition of peaceful coexistence between state market regulation and federal patent policy. The Florida law substantially restricts the public’s ability to exploit an unpatented design in general circulation, raising the specter of state-created monopolies in a host of useful shapes and processes for which patent protection has been denied or is otherwise unobtainable. It thus enters a field of regulation which the patent laws have reserved to Congress. The patent statute’s careful balance between public right and private monopoly to promote certain creative activity is a “scheme of federal regulation . . . so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it.”; “Whatever weight is attached to the value of encouraging disclosure and of inhibiting secrecy, we believe a more compelling consideration is that a process patent in the chemical field, which has not been developed and pointed to the degree of specific utility, creates a monopoly of knowledge which should be granted only if clearly commanded by the statute. Until the process claim has been reduced to production of a product shown to be useful, the metes and bounds of that monopoly are not capable of precise delineation. It may engross a vast, unknown, and perhaps unknowable area. Such a patent may confer power to block off whole areas of scientific development, without compensating benefit to the public. The basic quid pro quo contemplated by the Constitution and the Congress for granting a patent monopoly is the benefit derived by the public from an invention with substantial utility. Unless and until a process is refined and developed to this point — where specific benefit exists in currently available form – there is insufficient justification for permitting an applicant to engross what may prove to be a broad field.”; “I agree with the Court that the question before us is a narrow one. Neither the future of scientific research, nor even the ability of respondent Chakrabarty to reap some monopoly profits from his pioneering work, is at stake. Patents on the processes by which he has produced and employed the new living organism are not contested. The only question we need decide is whether Congress, exercising its authority under Art. I, 8, of the Constitution, intended that he be able to secure a monopoly on the living organism itself, no matter how produced or how used.”

Anyway, Shughart must have noticed this habit of inadvertently admitting the true nature of the patent grant–a habit that makes fellow IP advocates grimace and exclaim, “Damn! He admitted it too!“–and imitated it here to perfection. “Those crazy patent guys,” Shughart seems to be saying, with a sly smile and a twinkle in his eye, “can’t get their story straight.”

Here’s another patentism Professor Shughart tackles. Sometimes IP advocates trot out the most ridiculous arguments when they have no other response available, such as this bizarre argument by patent attorney Gene Quinn (noted in this post). In an online discussion, IP opponent David Koepsell had mentioned “that in the 19th and early 20th centuries, two of the most innovative countries on earth (The Netherlands and Switzerland) had no patent systems at all.” In response, Quinn says:

Thank goodness the Swiss did have a Patent Office. That is where Albert Einstein worked and during his time as a patent examiner came up with his theory of relativity.

You got that? We need a state-granted monopoly system … so that Albert Einstein could have had a job in Switzerland. I mean, what does one even say in response to this, which is not even a pretense at serious argument? Our observant author must have noticed this and other such arguments, which he is clearly mocking here:

It is true that other means exist for creative people to profit from their effort. In the case of copyright, authors can charge fees for reading their works to paying audiences. Charles Dickens did this, but his heavy schedule of public performances in the United States, where his works were not protected by copyright, arguably contributed to his untimely death.

See? We better have copyright–you don’t want another potential Charles Dickens to drop dead early, do you?

Professor Shughart continues:

The hard questions are: What kinds of ideas should be eligible for patent and copyright protection, and how long should that protection last?”

What’s needed is a middle ground. Even if we can all agree that intellectual property is an important social commodity, one size doesn’t fit all in the modern Digital Age.

While a 20-year monopoly may be appropriate for new drugs, it may not be appropriate for software, a new electronic game or, as Justice Sonia Sotomayor seemed to suggest during questioning in the Bilski case, a new “speed-dating service.”

The IP advocate is here portrayed as unable to even definitively object to a 20-year patent monopoly on a method for speed-dating–”it may not be appropriate”! And the part about “these are hard questions” … who can answer them, oh who?– and “we need a middle ground”–even though we have no evidence to know where the “optimum” is. But wait for it–Congress might know! –

Rather than abolishing patent and copyright protection for some categories of intellectual property, Congress and the courts should consider varying the length for which exclusive monopoly privileges are granted, depending on the expected commercial vitality of the creative work. [emphasis added]

Shughart is so right here: the proponents of intellectual monopoly, like all interventionists, do indeed have an utterly misplaced, naive faith in the state’s benevolence and competence. Why, let’s have Congress should figure this out! Oh, I’m in stitches. And the courts–yeahhhhh, they’ll do a great job–the same courts witheringly described here by J.H. Huebert:

In general, judges and those who appoint them have no reason to want to limit government. … Have not judges been responsible for some of the most outrageous expansions of government power? And, after all, are judges not a product of the same political system that gives us legislators and presidents? What president would appoint judges who would tell him he cannot do anything he wants? What Senators would confirm a judicial candidate who tells them that everything they have ever done in office is unconstitutional? The whole enterprise of libertarian constitutional theory ignores all we have learned from public choice economics about the incentives of government actors.

I will close by noting my favorite line of this sparklingly humorous essay: to determine the right length of patent and copyright monopolies for various types of inventions and artistic works, Congress should be not only trusted to want to do this, but should use “the expected commercial vitality of the creative work” as the test! Oh, man. I’m crying.

[Mises; AM]

Patent lawyer Gene Quinn has been sued

by Invention Submission Corporation (dba Invent Help) in the United States Federal District Court for the Northern District of New York.  The complaint … alleges that I have engaged in false and misleading advertising that has cost Invent Help business.  They apparently do not like the fact that I have written about invention submission scams and have recounted the many stories that I have heard from inventors who feel they have been taken advantage of by Invent Help.

Quinn is a notorious (but inarticulate and inept) defender of the patent system; see Gene Quinn: Patent Twit of the Week; Koepsell – Quinn “Debate” on Gene Patents; Gene Quinn the Patent Watchdog; Patent Lawyers Who Don’t Toe the Line Should Be Punished!. Still, it’s sad to see him victimized by someone using an unjust law–these laws are basically types of IP laws, in that they are in effect based on rights in reputations. Reputation rights are not usually classified as IP rights, but they are similarly unjust, and similarly based on the idea that if you “create” “something” “of value,” then you should own it–patents cover created inventions, copyright covers created works of art, and a variety of laws (trademark, defamation, misleading advertising) protect rights in one’s reputation, which one is said to have “created” as well. Quinn favors people having the right to use the state courts to sue and damage people based on artificial intellectual “rights.” And that’s what’s being done to him now.

[Mises; AM]

As Huebert notes in his post Fighting IP Absurdity: The South Butt Strikes Back, the saga of The North Face Apparel corp. vs. The South Butt continues. As noted on his attorneys’ website,

The South Butt is the local case of a Missouri teeanager, Jimmy Winkelmann, frustrated with his classmates’ sheep-like following of a popular clothing line.  Jimmy came up with his own parody apparel and now faces a lawsuit for trademark infringement.

The North Face filed the lawsuit, claiming that The South Butt is confusingly similar to The North Face, in violation of North Face’s trademark rights.

Now Jimmy has filed a biting and hilarious response. In the response, he mocks The North Face, its products and customers (para. 23, II.5-7), its hypocrisy (North Face’s owner, VF corporation, “formerly known as Vanity Fair Corporation, not to be confused with the Conde Naste publication of the same name), and its contentions that the public can’t tell a butt from a face, calls them “socialist” (para. 37) and bully-like (para. III.2), trumpets “freedom of speech,” “the American Way,” and the “pursuit of the American Dream” (para. III.2),  thanks The North Face for the free publicity (para. 50), and he mentions that he “has initiated an Internet challenge through Facebook designed to hone the skills of the general purchasing public to discern the difference between a face and a butt” (see North Face Lawsuit Against South Butt Going Viral With Facebook App).

Good for Jimmy, and here’s hoping he triumphs–though, unfortunately, the trademark cause of action known as “dilution” does not require a showing of consumer confusion, as noted on the Patently-O blog. This is yet another reason why not only patent and copyright law have to go: trademark law is flawed too. As I discuss in Against Intellectual Property (pp. 58-59), the only sound basis for trademark law is fraud. But this would mean that it is the defrauded consumer who has the cause of action, not the trademark holder. Even if you say that the trademark holder has implicit consent of the class of defrauded consumers to sue on their behalf, (a) this would cover only cases of true consumer fraud, not knockoffs where the consumer knows full well she is buying a fake rolex or purse; and (b) it would not include antidilution rights. If Jimmy loses here, it will probably be because of the antidilution cause of action; this is one reason I recommend abolishing it in my list of IP reforms in Reducing the Cost of IP Law.

(For further discussion of problems with trademark law, see n. 46 to Reducing the Cost of IP Law; and Trademark versus Copyright and Patent, or: Is All IP Evil?. For further criticism or discussion of the North Face case, see Peter Klein, IP as a Joke: South Butt Edition; South Butt Creator Fires Back at North Face, law.com; Mike Masnick, North Face Didn’t Get The Message; Sues South Butt, Techdirt.)

[Mises; AM]

In response to my Reducing the Cost of IP Law, my friend and ex-colleague (and mentor) Steve Mendelsohn, a patent lawyer in Philadelphia, wrote me the following. N.B.: Steve is not a libertarian but is honest and smart, unlike patent shills (he’s also an excellent patent attorney, if you need one). Here’s an edited version of his comments, posted with his permission (for comments from another honest patent lawyer, see here):

I agree with much of what you say and don’t necessarily disagree with most of the rest.  For example, I agree with you that we don’t know whether the patent system is doing what it says it’s doing as far as adding more than it’s subtracting.  (You might know the answer to that question, but I agree that “we” don’t know.)  I do believe that the system can be significantly improved without getting rid of it completely.  Again, it is possible that the world would be better off without a patent system, but I’d rather see it improved first.  (I think that our federal government needs a lot of improvement, too, but that doesn’t mean that no government is better.  I can’t help but look at Somalia as an example of a country with no centralized government.  But perhaps you’ve got a better example to point to.)  (For now, I’d better stick to patents per se and not use them as a metaphor for government in general.)  To me, the biggest problem with the current U.S. patent system is the granting of patents for inventions that are not novel and non-obvious due to the incompetence of the U.S. patent office.  Just last week I was advising a client that I didn’t think that their invention was patentable.  I had to qualify my advice by explaining that that did not mean that I didn’t think we could get a patent for the invention, just that I thought we shouldn’t be able to get a patent for the invention.  I can’t tell you, but I suspect you’ve experienced this yourself many times, how many patent applications I’ve prosecuted over the years where I get the U.S. patent issued only to have the European, Japanese, or Korean patent office subsequently find better prior art and apply that art with a more-accurate understanding and appreciation about what it takes for there to be a patentable improvement over that art.  The result is either an issued foreign patent with claims of much-reduced scope or an abandoned foreign patent application.  Either way, there remains an issued, presumptively valid U.S. patent of unknown value.  The presumption of validity is legitimate only if the U.S. patent office is doing a good job.  Since the U.S. patent office is not doing a good job, I agree with you that the presumption of validity should be eliminated.

For years I have been wondering what the EPO, JPO, and KIPO are doing right that the USPTO is not and why can’t the USPTO look and see what the EPO, JPO, and KIPO are doing to figure it out and then adopt it.  It reminds me of the time that Bush’s first crony appointment to head the PTO came to our PIPLA meeting and told us “We’ve got the best patent office in the world.”  In reality, we wouldn’t even get the bronze metal.  Our typical American chauvinism prevents us from looking elsewhere for improvement.

I am one of those many patent lawyers who would hate to have to provide search results and explain how my clients’ inventions were patentable over those search results.  Nevertheless, perhaps the default (an invention is assumed to be patentable until the patent office proves otherwise) needs to be reversed.

Until the PTO gets its act together, one way to challenge some of these bad patents is through the ex parte reexamination procedure.  It’s certainly not perfect and not free, but I’d bet it’s a lot cheaper than litigation as a way to defeat bad patents on a case by case basis.  I’m only now in the midst of working on my first ex parte reexam for a client who is trying to knock out a competitor’s bad patent.  The particular claim at issue is incredibly ridiculous.  The client managed to knock out claims (in a first reexam) directed to a particular type of device having [an Oscillator Type A], a particular configuration for oscillators that has been around for about 60 years.  The remaining claim is directed to devices that do exactly the same thing using [an Oscillator Type B], another particular configuration for oscillators that has been around for about 80 years!  Because the main reference didn’t happen to discuss [an Oscillator Type A], the Examiner allowed those claims, presumably without any knowledge or appreciation for the interchangeability of those different types of oscillators.  It’s too early to tell whether we will prevail.

Steve Mendelsohn
Mendelsohn, Drucker, & Associates, P.C.

[Mises; AM]

No, not me. Michael F. Martin, a patent attorney with Drinker Biddle. The March 2010 issue of Liberty (which also features a letters exchange regarding my December 2009 Liberty article, Intellectual Property and Libertarianism) features the following guest reflection by Mr. Martin:

Sane and sound — “The hallmark of sanity is to remain firmly tethered to reality,” said the federal judge to the parties of a patent infringement litigation between a large Canadian computer company and a small, patent holding company (a.k.a. “patent troll”) after a jury had found the computer company liable for infringement. The computer company in question? Research In Motion, makers of the Blackberry. The case finally settled for $612.5 million.

That was March 2006. In May 2006 there followed the Supreme Court’s announcement of its decision in the case of eBay v. MercExchange. In eBay, the Supreme Court overturned the Federal Circuit rule that permanent injunctions should issue against patent infringers “absent exceptional circumstances.” Many large companies in the software industry, which tend to be defendants, have hoped that eBay would put an end to “patent trolls” and their own patent infringement liability. Indeed, since eBay only a handful of injunctions have issued to patent owners who do not practice their invention. “But,” wrote the Supreme Court in eBay, “traditional equitable principles do not permit such broad classifications.” And thus, just over three years later, on Dec. 22, 2009, the Federal Circuit upheld an injunction and award of $290 million in damages for patent infringement — this time to a small Canadian startup, i4i Inc. The defendant was Microsoft Corporation, maker of Microsoft Word, which had incorporated into its software an XML editor patented by the startup.

The difference between the cases? Unlike the “patent trolls” in the earlier cases against RIM and eBay, one of the inventors behind the i4i patents, Michael Vulpe, was also an entrepreneur, who had started a business to commercialize the patented concepts.

Although Vulpe’s apparent victory should be an occasion for rejoicing by libertarians (most of them, anyway) and other believers in strong property rights, one wonders what reality is faced by inventors without the desire or skill to become entrepreneurs.

Some might say the law has, at least for the moment, achieved a delicate balance between the exclusivity needed to encourage investment in new technology and the access needed to spread that new technology around. Others might say that a better way to determine what “reality” is most “sane” is to rely on private negotiations based on the principle of strong property rights. The eBay decision discouraged negotiation; the recent decision may lead to more negotiation and less litigation. — Michael F. Martin

Martin writes as if oblivious of the fact that libertarians are increasingly opposed to IP rights (see my Have You Changed Your Mind About Intellectual Property?; Against Intellectual Property; and other material here); as when he writes, “Vulpe’s apparent victory should be an occasion for rejoicing by libertarians (most of them, anyway) and other believers in strong property rights…” Vas…? We should rejoice that i4i was able to use the state-granted patent monopoly to impose millions of dollars of cost on Microsoft? Why? This presupposes that IP rights are legitimate “property rights.” (Not to excuplate Microsoft from charges of hypocrisy: see my post Microsoft Wants Galactic Patent. The recent case mentioned by Martin is i4i v. Microsoft.)

Let me go through Martin’s post in a bit more detail. First, his post implies that patent trolls are problematic (a patent troll was behind the $612.5 million Blackberry settlement), while actual inventors who have “commercialized” their own patent are good guys (Vulpe, the i4i inventor in the Microsoft case) and are justified in using their state monopoly grants to (legally) extort money from others. But patent trolls are not the problem at all (see my posts Patent Trolls and Empirical Thinking; Facebook Threatened by a Non-Patent Troll). The patent system does not require the patent owner to practice the patented invention or even to make an actual working model (see my “Reducing the Cost of IP Law“, where I recommend imposing working and reduction-to-practice requirements on patentees, which would reduce patent trolling; I don’t see Martin recommending this). Martin implies it’s good–and libertarian, supposedly–that “the recent decision may lead to more negotiation and less litigation”. What is libertarian about this? If the legal system grants clear, strong rights to a patentee to allow him to (legally) extort money from his victims, of course that may lead to “more negotiation” and “less litigation.” Why is this good? If the legal system makes it crystal clear that the victim will lose in court, thus reducing the need for wasted time in litigation, this is not good, if the victim’s losing is unjust.

In fact, this is exactly what happened in the Blackberry (RIM) case that Martin holds out as an example of injustice. In that case (see my post Woops, sorry, Blackberry!; also The Age of Technocide: RIM Pays Out Again Over Patents), RIM coughed up $612.5 million because of the possibility an injunction issuing–even though the patents in question were being re-examined at the US Patent Office. But even though it appeared likely they might be declared invalid a few months later, the courts were then operating under pre-eBay caselaw which made an injunction easy to get. In other words, the court in the RIM case was about to issue and order shutting down the Blackberry itself, even though the underlying patents’ validity was in question and being re-examined at the PTO. This would have ruined RIM. So it caved, paying a huge ransom to save the company. If there had not been a threat of injunction, RIM would certainly have just fought the case–instead of paying almost a billion dollars!–and maybe the patents would have been declared invalid, and they would have walked away $612.5 million richer. That’s why eBay was a good decision–for libertarians, at least, since it made injunctions less automatic, harder to get (see Woops, sorry, Blackberry!; I also discuss the eBay case in Radical Patent Reform Is Not on the Way). And that’s why in Reducing the Cost of IP Law I recommended the abolition of patent injunctions. Martin acts as if he opposes the Blackberry settlement, blaming it on patent trolls (but without advocating a working or reduction to practice requirement, which would limit trolling), while favoring the granting of injunctions which was the real cause of the outrageous injustice done to RIM. (For a discussion of the pro-patent approach of patent attorneys, see “The Silent Bar” section of Reducing the Cost of IP Law.)

I see here a libertarian patent lawyer who is taking it for granted that patents are legitimate property rights–presumably because he believes the law should grant a monopoly license to provide “the exclusivity needed to encourage investment in new technology.” Patents are not legitimate property rights. They are mercantalist, monopolistic abominations. Libertarians, including libertarian patent attorneys, should oppose the patent system.

[Mises; AM]

My article “Intellectual Property and Libertarianism” was published in the December, 2009 issue of Liberty; the March 2010 issue features the following exchange in the “Letters” section.

Philosophizing IP

Thanks to Stephan Kinsella for questioning the justice of intellectual property (“Intellectual Property and Libertarianism,” December 2009). Like many libertarians, he posits property rights as the foundation of libertarian political theory, and suggests that because it is a derivative concept, we stop calling the nonaggression principle an “axiom.” So far so good. But Anthony de Jasay suggests that the concept of “property” itself should in turn be considered derivative, from the still more fundamental principle of liberty of contract. De Jasay also defines “rights” and “liberties” more carefully and usefully than most libertarians, who use these loaded words all too loosely — Kinsella included. (See de Jasay’s “Choice, Contract, Consent,” or “Before Resorting to Politics,” reprinted in “Against Politics.”)

Kinsella’s attempt to show that no well-formulated property rights can apply to pure information seems dubious. Yes, information can escape physical confines and reproduce in ways that physical objects can’t, but so what? Perhaps the real question is not whether IP should be classified ontologically with other forms of  “property,” but whether voluntary agreements can be reached (without the help of legislatures) that would make revelation, or publication, or mishandling of information a tort. Clearly some can; what of contracts to protect trade secrets, and other nondisclosure agreements?

Never mind that the concept of “self-ownership” has philosophical problems that Kinsella does need to take more seriously. I’ve been suspicious of “property rights reductionism” ever since I noticed that it led Rothbard to believe in his own IP rights as an author of copyrighted writings, even as he disparaged the IP rights of professional inventors. At least Kinsella avoids this inconsistency (if that’s what it is).

Kinsella is right to seek the philosophical foundations of the IP question; let’s hope he keeps digging.

Lew Randall
Freeland, WA

What Would Edison Do?

It was a pleasure reading Stephan Kinsella’s piece “Intellectual Property and Libertarianism.” I’m in agreement with its content as regards the nature and source of property rights. What I find impossible to accept is the view that there is no good utilitarian argument in support of legislated patent and copyright law. Would Thomas Edison and his financial backers have invested so much time, effort, and money just for the pleasure of exercising intellectual creativity? I certainly wouldn’t, and I suspect I’m not alone. Having said this, in a free society, would it be a legitimate government function to establish rights where none “naturally” exist, even if the consequence of such legislation would foster an improvement in the quality of human existence? By establishing such rights, or should I say “privileges,” wouldn’t the freedom of action of others be curtailed? Formulated this way I opt for principle over utility, as the slippery slope comes to mind.

Howard Shafran
Shelter Island, NY

The Property of the Mind

Before finally getting around to the topic of his article on intellectual property, Stephan Kinsella trumpets the proposition that each person “owns” his own body; he “inhabits” it; he is its “occupant” — and Kinsella uses those very words. He dismisses as “silly wordplay” the objection that each person just is himself or his body. But who is perpetrating wordplay? Who is tainting sound political philosophy with dubious metaphysics?

Kinsella echoes the old mind-body dichotomy, the notion of the self as “the ghost in the machine” (Gilbert Ryle’s derogatory description of Descartes’ dualism). On the contrary, each person’s mind and consciousness are functions, remarkable functions, of his body and specifically his brain. Does Kinsella really mean that the self is distinct from the body? Does the one survive dissolution of the other? (Does the self exist even before its body is born?) Does Kinsella believe in ghosts or angels? What evidence, beyond very dubious evidence, can he cite? If Kinsella does not really mean what he says, he should use more exact words.

The self-ownership slogan finds some resonance in libertarian circles. But libertarians should go beyond displaying their authenticity to each other; they should try to persuade nonlibertarians. They should avoid irrelevant metaphysics. They should put their best foot forward, not their worst. I do not mean that they should dilute their libertarianism; rather, they should present it attractively.

Perhaps Kinsella could find some (feeble) excuse for his metaphysics, but he would still be putting a worst foot forward.

Leland Yeager
Auburn, AL

Copy Shop

Stephan Kinsella’s argument against IP is seriously flawed. For instance, he states that copyright is “received automatically, whether you want it or not, and is hard to get rid of.” Copyright, that is, the right to make copies of your work, is inherent in the creation of the work. It is not “received” by law. You can waive your copyright easily by simply making copies and distributing them without the required copyright notice. Copyright law recognizes, defines, and controls to some extent your rights to control the copying and dissemination of your work.

He also states that “We libertarians already realize that . . . the right to a reputation protected by defamation law” is illegitimate. This libertarian does not realize such illegitimacy. The libertarian principle is that no person has the right to initiate aggression against another. Spreading lies or untruths to destroy the reputation of another person is clearly within the definition of aggression.

Kinsella makes a number of references to “homesteaders,” mainly, I believe, to emphasize the difference between property that you can hold in your hand, i.e., the soil from your farmland, and the more ephemeral IP which is snatched out of thin air and dissipates in the wind, i.e., the sound of a melody. However, this comparison overlooks the intellectual content of real estate (property) improvement. A farmer who homesteads a parcel of land must decide what crop will be successful on that land. A pineapple ranch in North Dakota will not succeed. Once the crop is chosen, the farmer must implement a plan for the planting and harvesting of the crop. In the case of, say, music, running a melody over in your head or tinkering on a piano is just the beginning of the creative process. It must be transcribed and carefully inspected to make sure that each note is properly chosen and placed. Then you can make your copies, register the copyright and begin selling copies of your work. With a little luck, someone may make a successful recording.

Patents are similar. You come up with the idea, develop it into a saleable product, manufacture copies and sell them. When a buyer buys a copy of your work, either invention or literary work, what does he buy? Under the law, he buys that one copy of your invention. Defining what is embodied in that one copy can get messy because the human mind is messy, but the buyer does not buy anything other than that one copy. He cannot make copies and distribute them.

So what can you do with your copy of the work or invention? You can write a critique of the song or story, quoting reasonably from the work itself to illustrate your points of argument. You can read the story or sing the song to your friends for their enjoyment. You can take your copy of an invention and modify it to suit your needs. You can strip it of unnecessary decoration that does not make it work better. You can take it apart to see how it works, or to repair it or to improve the design so much that you feel justified in applying for a patent on your improvement. You can sell it to someone else. You cannot, however, begin manufacturing the item and selling it. That is true whether the item is a widget, a book, a sheet of music, or a recording.

David Kirkpatrick
Klamath Falls, OR

Body of Work

Although Stephan Kinsella’s article on intellectual property moves smoothly enough from premises to conclusions, those conclusions are (to me at least) so counterintuitive that the argument acts as a reductio ad absurdum, undercutting his premises rather than proving his conclusions.

Let us say that a given work exists only in the memory of the author’s computer. At this time the work could not be more obviously the author’s; in a keystroke he can change it in any way, or abolish it forever. Overnight a hacker invades the machine, copies the work, and reproduces it. This is theft, is it not? If so, then the author retains ownership of the work even after it has left his hard drive. Why, then, would his ownership suddenly be reduced to naught at the instant that he sends it off to a prospective publisher? Reportedly, a British firm offered to publish “Lolita” if Nabokov would consent to the removal of four sentences. Nabokov refused, and the book was not released in Britain until a year later, by a different publisher. Surely this was right.

Kinsella takes it as axiomatic that one’s property rights begins with one’s own body. I think that many authors would consider their ownership of their works as more intimate, and more obvious, than their ownership of their bodies.

Jamie McEwan
Lakeville, CT

Kinsella responds: Mr. Randall asks whether trade secret and nondisclosure agreements could be used to construct a form of IP. I do not believe they can, because such agreements cannot bind third parties. Only by assuming that knowledge is a form of property can you bind third parties, but this assumes there is IP. I address this in further detail in the “Contract vs. Reserved Rights” section of “Against Intellectual Property,” available at StephanKinsella.com. As for philosophical problems with the notion of “self-ownership” — self-ownership just means that you have the right to decide who touches or uses your body, not some other person. What could be more libertarian, or less controversial or problematic?

Mr. Shafran is no doubt right that Edison or other patentees may have benefitted from the patent monopolies granted to them by the state. But the utilitarian case requires a benefit to the economy as a whole, not merely to particular beneficiaries of wealth redistribution. Studies almost universally conclude that there is no such gain — that patents actually restrict innovation. See the post at tinyurl.com/pat-innov for more information on these studies.

Professor Yeager misunderstands my comments. I am, like him, nonreligious. Viewing the mind as distinct from (though not unrelated to or independent of) the brain, and the self as distinct from the body, does not imply a soul or ghosts or angels. It does not imply that there can be a self without the body, or a mind without the brain. It merely implies a distinction. One may think of the mind as an epiphenomenon of the brain, but it is not the brain itself. Likewise I can run and remember with my body but running and remembering are not the same as my body. The “silly wordplay” I referred to is the use of the trite observation that we “are” our bodies (in some real sense) to object to the idea of self-ownership. But atheism is not contrary to self-ownership. Self-ownership is the libertarian idea that you have the say-so over who uses your body — that others need your permission. Self-ownership is the rejection of slavery and aggression. It is perfectly compatible with the idea that there is no soul; that you die when your body dies. In any event, Yeager’s atheism does not prove there are intellectual property rights, or that we are not self-owners.

Mr. Kirkpatrick upbraids me for stating that copyright is received automatically. He asserts that copyright may be waived “by simply making copies and distributing them without the required copyright notice.” Wrong. Copyright notice is not required at all, nor is copyright registration. See Sections 102 and 401 of the Copyright Act, or the “Copyright Basics” brochure at copyright.gov. Copyright notice has not been needed since 1989, when the law was amended per the Berne Convention.

As for reputation rights, Murray Rothbard explained in “The Ethics of Liberty” why there can be no reputation rights: your reputation is merely what third parties believe about you. You do not own their brains or what they think about you; they are entitled to change their minds about you. Kirkpatrick writes, “If I grow a potato in my back yard, it is my potato. If I write a song in my kitchen, it is my song. They are both my property.” By such reasoning one could argue that you own your wife, your parents, and your country (note the possessive pronoun!); if you discover that the earth is round then “it is my discovery” and you could own that fact. The mistake here is in failing to realize that not every “thing” that one can conceptually identify is an ownable type of thing. Scarce resources are capable of being owned because of the possibility of conflict over use of such things. Other things, such as “songs,” information, and patterns are not ownable things at all. In acting, humans select scarce means to achieve desired ends. Their choice of ends, and means, is guided by information. To successfully act, the scarce resources employed as means need to be owned, because by their nature as scarce resources only one person may use them; but the actor need not “own” the information that guides his choice of means, since he can use this information even if thousands of other people also use this information to guide their own actions.

Mr. McEwan is correct that the hacker is a thief, since he is using the author’s property (his computer) without his permission. But this does not mean that the information he gains access to is property. If the author revealed some private fact — say, that he had a glass eye — and the hacker discovered this and revealed it to the world, the author would have no right to demand that everyone forget this fact or not act on it. Likewise if the information was a novel, musical composition, recipe for a nice soup, or schematic for an improved mousetrap.

[Mises; AM]

From the comments to Reducing the Cost of IP Law (see also my post The Non-Aggression Principle as a Limit on Action, Not on Property Rights):

Russ:

“…You are (in effect) assuming that only scarce (and hence physical) entities can be “property” in order to “prove” that ideas and patterns cannot be “property”.”

I agree, Stephan. In Randian terms, you are smuggling in as an assumption that which is to be proved; that only scarce goods can qualify as property. In your own terms, you’re begging the question, every bit as much as you accuse others of doing.

Kerem: “How is, “IP is not valid because it infringes on the property rights of others” is an independent argument when it depends on the never proven but often assumed assertion that only scarce things can be property?”

It does not assume that ONLY scarce things are property, but it assumes that scarce things ARE property–don’t we all agree on this? The one that is up for debate is property in anything else. My contention is that assigning rights in non-scarce things necessarily undermines rights in scarce things. Since we all agree with rights in scarce things, we should oppose the type of rights-inflation that undermines this.

Surda:

any theory of property restricts the way some people may act.

Let’s be precise here. It is the nature of scarcity that restricts how people may act. Consider Guido Hülsmann’s comments in his 1997 article Knowledge, Judgment, and the Use of Property, p. 28:

There can be no doubt that the effect of the increased scarcity of tin will rapidly spread throughout the whole economic system and influence not only all the uses of tin but also those of its substitutes, etc. This process is, however, not best characterized by a coordinative function of prices.

The fundamental fact of scarcity implies that not every demand for tin can be satisfied. Some people have tin whereas others do not. An increased scarcity of tin implies that some market participants who otherwise could have benefited from tin are now of necessity prevented from using it. If a quantity of tin is sold, then the seller cannot sell it again, regardless of the exchange rate. There is simply no more of this tin left. Whether the seller takes notice of this or not is immaterial. He cannot sell what is no longer in his possession. Moreover, tin does not become scarcer and then this fact can come to be known to someone and lead to adaptations. Rather it is the other way around. The very fact that demand increases means that someone already knows of a more value-productive employment of tin.

(I discuss this also at note 9 and accompanying text of my Knowledge, Calculation, Conflict, and Law.)

Now, the fact of scarcity is part of the world. It is this which limits how we can act. The fact is that if there is a scarce resource, A and B cannot both use it at the same time. If they can, there is no scarcity, and no conflict. Conflict can only arise when there is scarcity, and conflict can only be conflict over the use of scarce resources. People say there is conflict over religion, etc., say–nonsense. Religion is the reason why A wants to kill or control B’s body, perhaps, but the conflict is over B’s body–a scarce resource.

The only question is whether the use of scarce resources will be conflict-free or not. If there are no property rules then the use of scarce resources is precarious and people will waste time in violent struggle rather than in productive use of resources.

To avoid such conflict and permit peaceful, productive use of scarce resources, property rules can assign ownership to identifiable individuals. As I have explained in What Libertarianism Is, all political and legal systems assign property rights–someone is assigned the legal right to control each particular scarce resource. The libertarian approach is unique in that the assignment is based on a consistent desire to avoid conflict, and so we follow a Lockean type of property assignment rule–the first user of a resource has a better claim, ceteris paribus, than later claimants. Now this is not a complete argument for the libertarian case, and in a libertarian forum where we all agree with this one need not argue for it–but you can see that the very nature and purpose of any property system is to permit the conflict-free use of scarce resources, and that the libertarian approach is the one most consistent with this purpose and nature.

So: it is not a theory of property that restricts how people may act. It is the omnipresent, undeniable fact of scarcity. A theory of property permits peaceful use of resources, by prohibiting violent struggle over them, which is not productive. The only question is whether the property rules are just or not. If they are all assigned to Donald Trump or the State, then this would technically allow conflict to be avoided but at the cost of injustice. The libertarian thus favors a just rule: assigning property rights in a given scarce resource to the first appropriator thereof.

This is not a restriction on action. It permits the resource to be used peacefully, and justly.

Now even the advocates of IP, such as Silas, are too happy to admit that they don’t really favor property rights in mere abstract “ideas”. No, they readily admit it’s only in physical instantiations of the idea. That is, they admit that what they want in their IP theories is to grant to A property rights in all the physical media (say) owned by B1, B2, … Bn. So the real dispute is always about scarce resources. If B owns a piece of plastic (a blank DVD) then the IP advocate wants A to have some property rights in B’s disk. He wants A to have a veto over B’s use of B’s own disk.

Now, there are many non-libertarian property rights theories–theories that undercut or are contrary to the libertarian-Lockean first-use-first-own rule. This is just one of them. It is not “circular” to point this out. It is not “circular” to be a libertarian, any more than it’s “circular” to be a socialist, communist, theocrat, or IP advocate. They all advocate property assignment rules that differ from the libertarian’s Lockean homesteading rule.

The attempt to analogize this to the gun shooting or murder prohibition example fails. If A is prohibited from murdering B, this is just a way of restating one application of the libertarian conception of rights: it is saying that B owns his body, and that A’s actions of shooting bullets into it violate’s B’s rights in that scarce resource. To say A is limited in what he may do is to recognize property rights in scarce resources.

In other words, the libertarian idea is that we do not live by permission. We live by right. We may do anything we wish in life, perform any action, unless it is an unconsented-to use of another’s property. In other words, unjustified interpersonal violence–conflict–is prohibited for the sake of establishing a regime where peaceful, productive use of scarce resources may occur. I can use my gun for anything one can think of: the possibilities are open ended–anything except narrow cases where it would be an act of aggression against others. But it is not as if there are 1,136 permissible things I can do with the gun, each one a “right,” and 17 things I cannot do with the gun. Rather, it’s as if there is an ocean of liberty–open-ended, infinite, with small islands of things that I may not do. (This is one reason the Ninth Amendment was added: because all our rights cannot be specified–so the first 8 amendments of the Bill of Rights is incomplete; so the Ninth recognizes that just because some rights are enumerated in the Constitution, this doesn’t deny or disparage the infinite, open-ended set of unenumerated–and unenumerable–rights that we have. For example I don’t need to specify that I have a right to wake at 7:03 a.m., another right to wake at 7:03:08 a.m., and so on; I have the right to do anything except violate others rights.) The IP advocate has to view us as living by permission: you have those 1,136 things you may do with your gun, and only those things. It is a finite list, fixed at some moment in time. If B thinks of way number 1,137 to use a gun, then he owns this way-to-use-guns. That is to say, he owns all guns in the universe, to the extent they are used for method 1,137. And, they say, this does not harm owner A, since he never had that right in the first place. It doesn’t take away his right to use his gun for method 1,137; he only had homesteaded the first, known, 1,136 ways to use it. In fact, the IP fascist says, A is now better off, since he can learn from 1,137, and get permission for a small fee from B to use his gun in a new way. Everyone wins!

Except this is the totalitarian way of looking at things. We do not live by permission. Rothbard has explained that there is no right to free speech; it’s just one implication of property rights. In my Against Intellectual Property (p. 53), this is precisely why I pointed out that

We do not have to have a “right to copy” as part of a bundle of rights to have a right to impose a known pattern or form on an object we own. Rather, we have a right to do anything at all with and on our own property, provided only that we do not invade others’ property borders. We must not lose sight of this crucial libertarian point. If I own a 100-acres of land, I can prance around naked on it, not because the land is imbued with some “right-to-prance-naked,” but because I own the land and it does not (necessarily) violate the property rights of others for me to use my property in this fashion.

I am restricted in my use of my gun to murder B only because of property rights in scarce resources. Unless you can point to such an act of aggression (trespass), I can use my gun as a means for any action whatsoever. I don’t have to find an enumerated right #1,132 in my bag-of-rights, in my “permissions”, to do it. I can do any action, so long as it is not a use of another person’s property.

And this is precisely why this is not analogous to the IP case. Pointing out the above as an implication or explication of how libertarian property rights is not circular. It does not assume there are only property rights in scarce resources; rather, it unwinds a theory about allocating property rights in scarce resources. The nature of such a system is what implies that assigning rights in “ideal objects” is really simply a different way of assigning rights in scarce resources–an assignment rule that differs from the libertarian-Lockean one; this is exactly why in my 2000 LRC article on IP explicitly opposed “the Second Homesteading Rule.”

The IP advocate’s argument is dishonest. He says, well, my IP rule limits your property rights, but so do all property rights. So what’s the big deal? The big deal is that the only limits we recognize are that you may not violate others’ property rights! Murder or normal theft or trespass is obviously an instance of this. But using my own property peacefully is not! The IP advocate needs to show that my use of my own DVD somehow interferes with his own property in his own scarce resources. Obviously, it cannot. So, it fall back on IP itself: it says, well, it doesn’t violate B’s physical property, but it does violate his intellectual property. Hellooooo–THIS is the circularity. The circular reasoning is done by the IP advocates, NOT by the libertarian who is simply a consistent opponent of aggression.

Published: January 22, 2010 10:58 AM

[AM]

I was interviewed yesterday by Mark Edge, as part of his “Edgington Post Interview Series,” for his Free Talk Live radio show, about my Mises Daily article, “Reducing the Cost of IP Law.” The interview is lasts about 35 minutes, and starts at 2:02:36 in the Jan. 20, 2010 show (MP3). Edge conducted an excellent interview–very informed and interesting. And, like many others, he’s come around to the anti-IP position.

[Mises; AM]

As I note in my article “Radical Patent Reform Is Not on the Way,” Mises Daily (Oct. 1, 2009), there is a growing clamor for reform of patent (and copyright) law, due to the increasingly obvious injustices resulting from these intellectual property (IP) laws. However, the various recent proposals for reform merely tinker with details and leave the essential features of the patent system intact. Patent scope, terms, and penalties would still be essentially the same. In the second article of this two-part series, “Reducing the Cost of IP Law,” Mises Daily (Jan. 20, 2010), I propose various reforms to the existing patent system–short of abolition–that would significantly reduce the costs and harm imposed by the patent system while not appreciably, or as significantly, reducing the innovation incentives and other purported benefits of the patent system. I list these changes below in generally descending order of importance, without elaboration, as they are discussed further in “Reducing the Cost of IP Law”:

Patent Law

• Reduce the Patent Term
• Remove Patent Injunctions/Provide Compulsory Royalties
• Add a Royalty Cap/Safe Harbor
• Reduce the Scope of Patentable Subject Matter
• Provide for Prior-Use and Independent-Inventor Defenses
• Instantly Publish All Patent Applications
• Eliminate Enhanced Damages
• Add a Working/Reduction to Practice Requirement
• Provide for Advisory Opinion Panels
• Losing Patentee Pays
• Expand Right to Seek Declaratory Judgments
• Exclude IP from Trade Negotiations
• Other Changes
  • Increase the threshold for obtaining a patent
  • Increase patent filing fees to make it more difficult to obtain a patent
  • Make it easier to challenge a patent’s validity at all stages
  • Require patent applicants to specify exactly what part of their claimed invention is new and what part is “old” (e.g., by the use of European-style “characterized in that “claims)
  • Require patent applicants to do a search and provide an analysis showing why their claimed invention is new and nonobvious (patent attorneys really hate this one)
  • Limit the number of claims
  • Limit the number of continuation applications
  • Remove the presumption of validity that issued patents enjoy
  • Apportion damages to be proportional to the value of the patent

Copyright

• Radically reduce the term, from life plus 70 years to, say, 10 years
• Remove software from copyright coverage (it’s functional, not expressive)
• Require active registration and periodic re-registration (for a modest fee) and copyright notice to maintain copyright (today it is automatic, and it is often impossible to determine, much less locate, the owner), or otherwise make it easier to use “orphaned works“
• Provide an easy way to dedicate works to the public domain — to abandon the copyright the state grants authors
• Eliminate manifestly unjust provisions of the Digital Millennium Copyright Act (DMCA), such as its criminalization of technology that can be used to circumvent digital protection systems
• Expand the “fair use” defense and clarify it to remove ambiguity
• Provide that incidental use (e.g., buildings or sculptures appearing in the background of films) is fair use
• Reduce statutory damages

Trademark

• Raise the bar for proving “consumer confusion”
• Abolish “antidilution” protection
• In fact, abolish the entire federal trademark law, as it is unconstitutional (the Constitution authorizes Congress to enact copyright and patent laws, but not trademark law)

[Mises; AM]

The upcoming documentary, Copyright Criminals, shows how copyright has outrageously criminalized the use of sampling, which has been disproportionately popular in hip hop music. In this, it calls to mind the racially disproportionate impact of drug laws on minorities…

Copyright Criminals – Trailer from IndiePix on Vimeo.

[Mises; AM]

(Hat tip Jules Jeffrey)

[Mises; AM]

In this talk Larry Lessig explains how copyright law chokes creativity … but that copyright abolitionists are wrong and extremists. Hunh?

This is a wonderful article announcing the opening of the Mises Institute’s iTunes U:

The Mises Institute is pleased to announce that the multimedia content on Mises.org — many thousands of hours of audio and video — is now available through iTunes U, a dedicated area within the iTunes Store (www.itunes.com).

iTunes U carries lectures from top academic minds on every topic, freely available, elegantly organized, and beautifully presented. Users enjoy easy access to material ranging from ancient-language studies to particle physics.

This shows what can be done with the open-information vision and mentality. A few great quotes excerpted below. Not only that, the Mises Institute multimedia files on its iTunes U page include lectures criticizing intellectual property, and free-market material criticizing monopoly in general.

Also appearing on Mises Daily today is my article “Fifteen Minutes that Changed Libertarian Publishing,” about the genesis of Libertarian Papers, another open-information project of the heroic Mises Institute.

Here are some choice quotes from the iTunes U article:

“We are seeing the future of education: straight from great minds to individual users around the world.”

“With iTunes U, the entire body of scholarship accumulated in the minicivilization of Mises.org can enjoy the widest possible distribution.”

“We are on the cutting edge of user-friendly educational technology.”

“As more and more colleges experience digital media, many prestigious institutions have come to realize that universal distribution of their content is not a threat to their mission; it is the very fulfillment of the educational ideal. This is certainly the case with the Mises Institute, which is why the site has been made completely open source and completely free.”

“Over the years, hundreds of appreciative emails and blog comments from fellow Mises.org listeners have let me know that I am among a vast multitude of Austrolibertarian audiophiles.”

“Economists like Carl Menger, F.A. Hayek, and Ludwig von Mises were devoted to getting their ideas out. They accepted as many travel invitations as possible in the hope of reaching new audiences. Mises himself was particularly aware of the need to teach outside the academy. Rothbard’s own desire to reach the multitudes — by writing for every possible venue — left us with an immense literary legacy.”

“with digital media they now make the globe their lecture hall — and anyone can be their student.”

“Murray Rothbard died in 1995, just as web browsers were hitting the mainstream. He might not have imagined this possibility of global, instant distribution. But anyone who has listened to the hundreds of hours of audio on Mises.org can know for sure that Rothbard would be shouting for joy.”

“including Doug French, president of the Mises Institute, who has encouraged and supported this venture, considering it essential to the future of liberty; under his leadership, we have joined the highest ideals with the most advanced technology.”

[AM post]

From 2005:

IP Trends

In a previous post, I noted the arbitrariness of copyright law in prohibiting editing a DVD to take out objectionable scenes, when presumably it would be legal to accomplish the same thing by other means–e.g., as I pointed out in a legal forum, by providing instructions to users to use to program a special DVD player that edits out the bad scenes “on the fly” in the user’s home.

From my comment on Jeff Tucker’s post, A Theory of Open:

Jeff: “Mainly, I think, this comes from an exaggerated reliance on IP and a belief that it is the key to success.”

MIchael: “Do IP advocates understand that the system may very well make it a better bet to produce patents than products? Why go through the hassle of producing products for finicky customers when you can wait for someone to go through the trouble of making a successful product and threaten to sue them?”

I am not sure if non-practitioners realize exactly what goes on in patenting. Quite often medium to large sized companies hold “patent mining” sessions. They are usually not trying to come up with ideas that they might use in their business. What you do is you get 5-10 engineers to sit around a coffee table, and they are led by a “facilitor” (often a patent attorney). They talk about what they’ve been working on, and try to find little twists or aspects of a design that they can file a patent on. Or, they’ll sift thru a bunch of patents in an area that competitors are practicing in, and just brainstorm, thinking of things they can file patents on. Not because they intend to use these ideas. But just to build up a thicket of patents that they can use against another company, either defensively (i.e., a countersuit if the competitor sues them); or to extract royalties or to squelch competition.

For example, the attorney shows a powerpoint with diagrams from a bunch of patents or product designs. The engineers throw ideas out there. Most of them are ridiculous. Someone is taking notes. One of them might say, “How about if we had two channels of information there, in parallel, instead of one? Do you think competitor B might some day do that? After all, dual-channels are becoming popular right now; they’ll probably have to do this some day.” The patent attorney says, “Say that sounds alright. What’s your name? Bob? Okay, you’re ‘an inventor’. Anyone else contribute to this? Jim, didn’t I hear you say something like, ‘yeah, that might work?’ Okay, you’re the second inventor. Let’s file a patent on this puppy. You each get a $3,000 bonus.”

So, for about 3 minutes of brainstorming, a patent emerges. Maybe a dozen patent applications are filed from that meeting. These are not flashes of genius. They are not sweat of the brow. It’s just a bunch of engineers torn away from their actual design work to brainstorm ways to hamper their competition. So maybe half the patents are abandoned half-way through “prosecution,” a couple years later, after it’s clear even to the bumbling patent office that they are sh*t. Of course about $20-30k was spent on each of the now-abandoned applications, or about $150k. No matter. PTO employees and patent lawyers have to put food on the table.

The other half might finally issue as patents. Most or all of them are probably sh*t too, but now they are issued, and have a “presumption of validity.” Now we’re up to $30-40k or so per issued patent. Got to recoup those expenses and justify the patent budget, eh? And say, it sure looks like company B’s products are … kinda close to the claims in 2 or 3 of the patents. Let’s send them a friendly cease and desist letter.

Company B’s patent attorney is then called into action. He’s hired to draft 3 or 4 “non-infringement opinions” for, say, $30k each. Why? Just in case B is sued, and loses… so that they can at least plead that the infringement was not “wilful”. They still have to pay damages (or stop selling the accused product), but it won’t be trebled… if the judge believes the opinions were “sincere” and “relied on” by the defendant so that, although they were infringing, it was not “wilful” since they were after all following a lawyer’s advice.. .the lawyer they paid $120k to tell them that … they are not infringing … even though it later turned out that they were. No matter, The $6 million B has to pay in damages is at least not trebled $18 million, so that the measly $120k spent on the patent opinions, plus the $1 million spent on patent litigators, was well worth the $12 million saved! B is better off (well, except for the $6 million verdict), its patent attorneys are better off. As for the patentee company, well, their few hundred grand in patent acquisition fees yielded them $6 million, and reduced competition! A win for everyone… right?

This abomination is what pro-patent libertarians thing is just? They think this is compatible with rights and liberty? They think this is productive, innovative behavior? Give me a break.

Update: From comments on AM cross-post:

[Comment at 01/10/2010 07:04 AM by Stephan Kinsella]

[Comment at 01/10/2010 09:05 PM by Stephan Kinsella]

[Comment at 01/17/2010 10:17 AM by Stephan Kinsella]

In my post above, I tried to just mention one aspect of the real patent system–to show that it’s not this idealized system that laymen are led to believe. They–and many libertarian IP advocates–have this romanticized notion of the patent system. They think of it as the just reward given to the diligent inventor toiling away for years to produce some amazing, insightful, flash-of-genius, clever contraption that we would not have without his effort. And yet, as noted above, probably less than 1% of all issued patents even remotely qualify for being classified as this type of invention. The vast majority of patents are junk of one type or another: they are trivial; or obvious if we could only find enough art (or if the examiners were competent; or the standards for obviousness were objective); or duplicative; or represent innovations that already exist, or that others “skilled in the art” would come up with in the course of designing products that meet current market demands. This whole patent system is nothing but a mercantilist grant of monopolies that saps and transfers and destroys wealth for the benefit of privileged classes, and is tolerated by the masses because they do not understand the system and place unjustified trust the power-regime elite.

So a few patent agents and attorneys weigh in (also on facebook here), not to mention shills like Gene Quinn and Dale Halling, with either cruddy arguments (Halling and Quinn) or irrelevant, off-topic points. They say that I am wrong to imply that there are patent mining sessions, junk patents, etc.–oh no, why, a search has to be done and a careful review by the attorney. When I say no, searches are not always done, they claim that it’s routine and “old school,” to imply that I’m lying or don’t know what I’m talking about. They assert that it’s good practice (which I never denied) and that I must now know this. I usually do searches; in my practice I recommended them often esp. in the case of an independent or small inventor. But I have been around enough to know it’s not always done and while some companies do it routintely others have a policy against it. Some small-time or part-time practitioners who have only represented a few small clients or worked at one company that happened to emphasize searching might not be aware that it’s not always done that way; but all this is irrelevant. The system permits it; searching is not always done; and patent attorneys howl with outrage at proposals to require searches. And even if they were required it would not improve quality overmuch.

They imply that they have never heard of these patent mining sessions I speak of. Gasp, it’s just not done! Nonsense. Many companies push inventors to submit disclosures–they pay them thousands of dollars in bonuses to incentivize this–and for many of companies it is, at least in part, at least a numbers game. It is very common for a weak application to be filed just to see if even a narrow patent is issued–hey, maybe it’ll slip by the examiner. And it “counts” as another patent on our stack, don’t it? We all know that the patent standards of obviousness and novelty are ambiguous, non-objective and vague; that it’s not possible to be sure you have found all the relevant prior art; that the PTO is just an incompetent government bureaucracy (in fact it’s widely observed among patent lawyers in the US that the European patent examining corps. is (for some reason–maybe because it’s in Germany) much more competent than the US one).

As for the ridiculous contention that patent mining sessions as I describe are the stuff of fantasy–I’m loath to have to even go through the tedious work of demonstrating what is widely known in the patent bar but, sigh, okay. Here are just a few I dug up with easy searching in my own files.

Take for example a patent strategy book I have, Stephen Glazier’s Patent Strategies for Business (I have an earlier edition; the current one is here). Just skimming its table of contents gives one a taste of the wide variety of strategies companies and their patent professionals engage in–most of them are quite obviously market distorting, protectionist, extortionist, and so on.

For example, Chapter 1 lists “Five goals of patents”:

1. Protection of a Company’s Products, Services, and Income
2. Generating Cash by Licensing Patent Rights to Others
3. Obtaining a Legitimate Monopoly for Future Exploitation
4. Protecting Research and Development Investments
5. Creating Bargaining Chips

Chapter 3 is “Invent Around your Competitor’s Patent (and the Antitode), and Other Patent Strategies”, and covers, inter alia,

• The Picket Fence Strategy
• The Toll Gate Strategy
• The Submarine Strategy: Old and New
• How to Submarine a Picket Fence
• The Counter-Attack Strategy
• The Stealth Counter-Attack
• The Cut Your Exposure Strategy
• The Bargaining Chip Strategy

Chapter for teaches you how to “Prevent Product Re-Use With Patents,” and Chapter 7 has topics such as “Three Practical Tips: 1. A competitive Advantage” and “Due Diligence as Industrial Espionage.” Chapter 9 discusses “Patent Litigation As A Business Tool.”

Do these corporate shenanigans sound like the kind of creative, innovative activity most people have in mind when they think of the patent system?

And of course there are various methods companies employ to drum up invention disclosures. From p. 3:

A Nine Step ProgramDeveloping a strategic intellectual property management program can be accomplished in nine basic steps. The following discussion focuses on patents, but analogous steps apply to copyrihts, trade secrets, confidential information, and trademarks.

1. Obtain Disclosure of Inventions. One effective way for some companies to encourage employees or consultants tp disclose their ideas for inventions is to offer a program of cash incentives. This is typically a one-time paymetn or a regularly paid percentage of the income resulting from an invention. In some companies, patent disclosure forms are distributed periodically as a way of soliciting useful ideas regarding inventions.

Another effective method has been for patent counsel to meet with a company’s technical people to ferret out together innovations that may yield patents of value in the marketplace. It can be particularly useful to do this with a focus on a new product or service just before its market introduction. With companies with a particular intense product development schedule, scheduling regular monthly meetings of the sort can yield good results in identifiying important opportunities.

Glazier’s advice is very good–he is talking about how to exploit, use, and navigate this artificial, state-created mercantilist system.

Such techniques and strategies are widespread. That’s one reason companies have in-house patent departments and hire outside patent law firms. For example, one presentation of services a patent firm was pitching to me included:

Recommended patent strategy:

• Analyze current/future business directions
• Identify targets
• Identify defensive risks
• Develop patent portfolio management strategy aligned with business strategy
• Tune your claim drafting strategy to your business objectives

Another part of their presentation, on “Harvesting and Mining Invention Disclosures,” listed these services:

Harvesting

• Train management and engineers with written materials
• Lead Blue Sky and disclosure harvesting sessions

Another service is “Portfolio Analysis For Licensing/Assertion

“.

Another patent attorney I know of has what he calls a “market-domination approach to patent law”.

Another book is Strategic Patenting, by Robert Fish (I have the pre-publication version): it covers topics such as

I. B) Cost-Effective Patenting Produces The Broadest And Strongest Patents. (1) Focus On Patenting As A Critical Component In Defining Goals And Resources.(2) Choose The Market With Patentability In Mind [NSK: obvious market distortion caused by the patent system]

(3) Target Patent Strategies To The Choke Points [NSK: protectionism...]

As for ginning up invention disclosures, the book has this section:

II. B) Gathering Information • (1) Invention Disclosure Forms (Memos of Invention) • (2) Information Gathering Discussions

Some elaboration from the text (of my draft copy):

(1) Information Gathering DiscussionsThe lazy-man’s way of drafting a patent application is to have the inventor draft a lengthy disclosure, and then beef up the disclosure with a few claims. Don’t do that. That process almost always results in bad patents.

The better practice is for the patent attorney to (a) discuss preferred embodiments with the inventor in considerable depth, and then (b) go on to brainstorm alternative embodiments with the inventor. My experience is that the patent attorney should obtain a brief understanding of what the inventor thinks he invented, conduct a search of the field, and then have a lengthy discussion with the inventor to identify the scope of the invention. Shorter discussions can then be used as follow up on particular points. The lengthy discussion is usually needed because it takes awhile, sometimes an hour or more, to guide the inventor into a mental state where he is focusing on possibilities rather than preferences and actual embodiments.

The process can be rather uncomfortable for inventors. It is difficult to get the inventors to help us brainstorm the outer edge of the invention. They typically say “this is what I have invented,” and hold up their drawings or model of a preferred embodiment. When I ask how the embodiment differs from what is known in the field, they usually say that it is unique – that no one else has solved the problem in the same way they have. Well that doesn’t help us at all. I can’t claim a “unique” device. I need to know how the device is unique. I need to identify what is the smallest subset of elements that distinguishes what the inventor thinks is his invention from the prior art.

One strategy I have employed successfully with research companies is to gather together several researchers in a room for a morning, afternoon, or even an entire day. I start the meeting by identifying problems in a field of interest, and then take suggestions on what is needed in that field. To focus the group on an interpersonal level, it is usually very helpful to have a marketing person in the room, and engage the researchers in a tête-à-tête with the marketing person. The goal is to stimulate thought on what can be claimed in a patent application that would provide the company with a competitive advantage, and then work backwards to figure how those goals can be accomplished. Typically the problems are quite difficult to solve, and the solutions proffered at the meeting are only minimally practical. But I try to classify the solutions in some manner, and then figure out how to describe the classes of solutions. As long as I can conceptualize one member of a class of solutions, I can usually claim the entire class. I then go back to the office, run patentability searches on the classes of solutions, and begin drafting claims. If the claims seem broadly patentable, and useful to the company, I then go back and work with the inventors to run experiments that provide examples that support the broad claims. A good meeting usually produces half a dozen or more patentable inventions.

Yep–inventions created during the meeting, on paper only. No working models, etc. N.B., I am not criticizing Fish at all; his advice is professional and competent. These are rational responses and ways to navigate the system Congress and its corporate allies have foisted on us.

And here are some routine comments I found in some patent mining materials I have, in a book review:

“Whether patented ideas will ultimately help or hinder innovation is still under debate (see Owning the Future).In Rembrandts in the Attic, however, authors Kevin Rivette and David Kline get down to business, offering practical advice for competing in today’s intellectual property arena.

Their advice ranges from the simple to the sublime. First, they suggest, take stock of the patents you already own. Many companies are sitting on unused patents that could be worth millions. For example, IBM licensed its unused patents in 1990, and saw its royalties jump from $30 million a year to more than $1 billion in 1999, providing over one-ninth of its yearly pretax profits. And if you can’t find buyers for your unused patents, then look for companies that are infringing upon them–companies that might owe you a piece of their profits. Rivette and Kline offer “patent mining” techniques to spot such potential infringers that can also reveal where your competitors are headed and help you get there before they do. Overall, Rembrandts in the Attic is a crafty and practical guide for companies that may have untapped riches in storage. –Demian McLean

Fish’s book also goes into other strategies:

(1) Choose The Market With Patentability In MindA thorough goals/resources analysis invariably leads to a number of different markets that can be attacked. The question is, which ones should be chosen and which ones passed up. Here it is useful to map out potential growth of different markets with respect to the degree of patent protection available. In the chart below growth is mapped against patentability. The best markets are those that have both high growth and are open to patentable subject matter. High growth markets where there is little chance of securing broad patent protection will likely be inundated with competition. An example might be the wheelchair market. There will certainly be an increase in market as the population ages, but there are relatively few patentable improvements that are likely in that field. Unless there are other barriers to entry, the product will be subject to commoditization, and the margins will be weak. Markets where broad patents are likely, but have little chance of growth, will have good margins but weak sales. In this category I might find an invention that helps window washers handle work in high rise buildings. No matter how great the invention is, the market is likely to be extremely limited.

Figure 11 Choosing The Market Based On Growth And Patentability

(2) Target Patent Strategies To The Choke Points

Once a market is selected, the next step is to figure out where the choke points lie. Consider the market below, in which there are four dominant technologies, A-D. Here a contemplated patent portfolio would effectively block or render technologies A and C obsolete, but have no effect on technology B. Technology D is also blocked, but a derivative technology circumvents the patent. This market is probably a poor prospect for a new entrant. The contemplated patent portfolio, even if it could be obtained, would fail to secure a dominant position for the patent holder.

All of this, of course, harkens back to the original goals with respect to dominance in the market. An applicant can be very successful being niche or merely significant player.

Figure 12 Target Patent Strategies Based On Choke Points

The patent system encourages companies to seek state-granted monopolistic protectionism.

Again, such strategies are common. How patent practitioners can deny all this with a straight face is beyond me. From the table of contents of another book on my shelf, “Strategic Patent Planning for Software Companies: A Look at Some Current Patent and Licensing Strategies at Both Ends of the Software Spectrum: Microsoft and Apache,” by Eric Stasik (2004), for example:

The Strategic Patenting Objectives of Software Companies3.1 The Business Needs of Software Companies

---

3.1.1 Technology Exchange

---

3.1.2 Near-Term Competitive Protection

---

3.1.3 Litigation Avoidance

---

3.1.5 Royalty Income

---

3.1.6 Out-License Technology to non-Competitors

---

3.1.7 Acquire Complementary Technology from non-Competitors

---

3.1.8 Minimize Royalty Payments to non-Competitors

---

3.1.9 Product Clearance

---

3.1.10 Promulgate Open Standards

---

3.1.11 Promote Interoperability

---

3.1.12 Deter the Development of Alternative Technologies

---

3.1.13 Strengthened Position in VAR and OEM agreements

---

3.1.14 Preserving Future Options

Again, we see what the patent system is really for: it’s protectionisn; it’s to generate income, by extorting it from other companies by the threat of litigation; it’s to cross-license with other big companies: the cost is the patent attorney fees they have to pay to acquire their patent arsenal, but the advantage is the erection of a huge barrier to entry because small and new players have little defense against the patent threats.

[AM]

A friend of mine is going to be a panelist at this event, World’s Fair Use Day, which

is a free, all-day celebration of the doctrine of fair use: the legal right that allows innovators and creators to make particular uses of copyrighted materials. WFUD will take place at the Newseum in Washington D.C. on Tuesday January 12, 2010, and will be organized by Public Knowledge (PK), a Washington D.C.-based non-profit, consumer-advocacy group. PK works to ensure that communications and intellectual property policies encourage creativity, further free expression and discourse and provide universal access to knowledge. As part of its campaign to return balance to copyright law, PK hopes to use WFUD to educate the public about the importance of fair use in an information society.

Enhancing the fair use exception is all to the good, but it does not go far enough. Fair use is a vague, ad hoc, utilitarian legislative exception designed to blunt some of the edges of copyright law so as to help masque its manifest injustice. An analog would be a slavery law that permitted a judge to allow the slave a month of temporary freedom if he can demonstrate to the judge that his master has been mistreating him according to a balance test in which the judge weighs four “factors” to make this determination. Or an exception to tax law that says a judge can reduce your tax rate by 1% for one year, if you can persuade him of a “hardship” as proved by weighing four legislatively enshrined “factors.” If the law is unjust and needs its edges blunted by ad hoc, unprincipled exceptions–the law itself is the problem and should be abolished.

This event is produced by the group Public Knowledge, which appears to be generally IP-skeptical (“Our first priority is promote innovation and the rights of consumers, while working to stop any bad legislation from passing that would slow technology innovation, shrink the public domain, or prevent fair use”; and they seem to be appropriately skeptical of the horrible DMCA), although their approach is somewhat ad hoc and unprincipled, and intermixed with the standard pro-democracy (and pro-Democrat), pro-”consumer,” pro-network neutrality (see my A Libertarian Take on Net Neutrality) sentiments, and so on. Still, another ally in the fight against pattern privilege and intellectual monopoly.

[Mises, AM]

There are various ways to explain what is wrong with IP. You can explain that IP requires a state, and legislation, which are both necessarily illegitimate. You can point out that there is no proof that IP increases innovation, much less adds “net value” to society. You can note that IP grants rights in non-scarce things, which rights are necessarily enforced by physical force, against physical, scarce things, thus supplanting already-existing rights in scarce resources. (See, e.g., my Against Intellectual Property, “The Case Against IP: A Concise Guide” and other material here.)

Another way, I think, to see the error in treating information, ideas, patterns as ownable property is to consider IP in the context of the structure of human action. Mises explains in his wonderful book Ultimate Foundations of Economic Science that “To act means: to strive after ends, that is, to choose a goal and to resort to means in order to attain the goal sought.” Or, as Pat Tinsley and I noted in “Causation and Aggression,” “Action is an individual’s intentional intervention in the physical world, via certain selected means, with the purpose of attaining a state of affairs that is preferable to the conditions that would prevail in the absence of the action.”

Obviously, the means selected must therefore be causally efficacious if the desired end is to be attained. Thus, as Mises observes, if there were no causality, men “could not contrive any means for the attainment of any ends”. Knowledge and information play a key role in action as well: it guides action. The actor is guided by his knowledge, information, and values when he selects his ends and his means. Bad information–say, reliance on a flawed physics hypothesis–leads to the selection of unsuitable means that do not attain the end sought; it leads to unsuccessful action, to loss. Or, as Mises puts it,

Action is purposive conduct. It is not simply behavior, but behavior begot by judgments of value, aiming at a definite end and guided by ideas concerning the suitability or unsuitability of definite means.

So. All action employs means; and all action is guided by knowledge and information. (See also Guido Hülsmann’s “Knowledge, Judgment, and the Use of Property,” p. 44.)

Causally efficacious means are real things in the world that help to change what would have been, to achieve the ends sought. Means are scarce resources. As Mises writes in Human Action, “Means are necessarily always limited, i.e., scarce with regard to the services for which man wants to use them.”

To have successful action, then, one must have knowledge about causal laws to know which means to employ, and one must have the ability to employ the means suitable for the goal sought. The scarce resources employed as means need to be owned by the actor, because by their nature as scarce resources only one person may use them. Notice, however, that this is not true of the ideas, knowledge and information that guides the choice of means. The actor need not “own” such information, since he can use this information even if thousands of other people also use this information to guide their own actions. As Professor Hoppe has observed, ” in order to have a thought you must have property rights over your body. That doesn’t imply that you own your thoughts. The thoughts can be used by anybody who is capable of understanding them.”

In other words, if some other person is using a given means, I am unable to use that means to accomplish my desired goal. But if some other person is also informed by the same ideas that I have, I am not hindered in acting. This is the reason why it makes no sense for there to be property rights in information.

Material progress is made over time in human society because information is not scarce and can be infinitely multiplied, learned, taught, and built on. The more patterns, recipes, causal laws that are known add to the stock of knowledge available to actors, and acts as a greater and greater wealth multiplier by allowing actors to engage in ever more efficient and productive action. (It is a good thing that ideas are infinitely reproducible, not a bad thing; there is no need to impose artificial scarcity on these things to make them more like scarce resources; see IP and Artificial Scarcity.) As I wrote in “Intellectual Property and Libertarianism“:

This is not to deny the importance of knowledge, or creation and innovation. Action, in addition to employing scarce owned means, may also be informed by technical knowledge of causal laws or other practical information. To be sure, creation is an important means of increasing wealth. As Hoppe has observed, “One can acquire and increase wealth either through homesteading, production and contractual exchange, or by expropriating and exploiting homesteaders, producers, or contractual exchangers. There are no other ways.” While production or creation may be a means of gaining “wealth,” it is not an independent source of ownership or rights. Production is not the creation of new matter; it is the transformation of things from one form to another — the transformation of things someone already owns, either the producer or someone else.

Granting property rights in scarce resources, but not in ideas, is precisely what is needed to permit successful action as well as societal progress and prosperity.

This analysis is a good example of the necessity of Austrian economics–in particular, praxeology–in legal and libertarian theorizing (as Tinsley and I also attempt to do in “Causation and Aggression“). To move forward, libertarian and legal theory must rest on a sound economic footing. We must supplant the confused “Law and Economics” movement with Law and Austrian Economics.

[Mises; AM]

It is clear to anyone who pays attention that IP is under assault–both institutionally, as digital copying, encryption, distributed information, the Internet, and the inherent impotence of IP policing make attempts to monopolize information patterns increasingly futile; and intellectually, as more and more people, especially libertarians–and especially younger libertarians–see the injustice of IP made manifest and obvious. There is a growing body of work that explodes the myths–moral and utilitarian, principled and empirical–of the IP proponents (see the works listed at the final section of “The Case Against IP: A Concise Guide”). There has been a noticeable and growing migration of libertarians toward the anti-IP position. I have lost count of the number of people who have personally told me they have seen the light on the IP cause in recent years. Among the radical and principled libertarians I know, there is a lot of debate about a lot of things–abortion, federalism, activism, “thickism,” left- vs. right-, etc.–but on two issues there is a striking degree of agreement: these are anarchy, and intellectual property. That the state, and IP, are unjust, seem obvious to them after a little reflection. More and more libertarians are realizing that the case for IP being part of legitimate property rights is a hollow one that never needed to be accepted (see Have You Changed Your Mind About Intellectual Property?).

So it is no surprise that Objectivists would be distressed by this phenomenon. Not only are they among the most ardent modern advocates of intellectual property (in addition to Andrew J. Galambos [see Against Intellectual Property], and perhaps J. Neil Schulman), but Rand in a sense built her entire philosophical edifice on IP: to-wit, Rand incredibly said that “patents are the heart and core of property rights” and Objectivist law professor Adam Mossoff explicitly claims that “All Property is Intellectual Property” (see Objectivists: “All Property is Intellectual Property”). And so, realizing Rand’s arguments for IP are deeply flawed, and that fewer and fewer people are buying it, they are starting to fight back.

Let’s survey a few. I’ve already mentioned neo-Objectivist (?) J. Neil Schulman’s logorights; I have pointed out problems I see in his view in On J. Neil Schulman’s Logorights and Reply to Schulman on the State, IP, and Carson. I think some of the mistakes Schulman makes are echoed in the tentative IP views of Machan; a problem with both is that they seem to think that any conceptually identifiable “thing” is ownable. For more on this, see Rand on IP, Owning “Values”, and “Rearrangement Rights”; my comments in the thread of the post Intellectual Products and the Right to Private Property; New Working Paper: Machan on IP; Owning Thoughts and Labor; this comment to “Trademark and Fraud”; Libertarian Creationism; also  Elaborations on Randian IP and Objectivists on IP.

Another one was Objectivist IP attorney Murray Franck’s defense of IP and his reply to my response in the IOS Journal, back in 1995 (I also discuss Franck’s views in Inventors are Like Unto …GODS… and Regret: The Glory of State Law). Here we can see glimmers of the idea that “all property is intellectual property”–or, at least, that IP is the most important type of right (just as Galambos held).

There is Greg Perkins’s piece, Don’t Steal This Article!“, from 2006. I’ve noted deficiencies in his or similar arguments in various publications, such as Perkins on Pursuing Insufficiently Abundant Intangible “Values”; Against Intellectual Property; Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors; Elaborations on Randian IP; An Objectivist Recants on IP; “Intellectual Property and Libertarianism” (in particular see here and the section on Libertarian Creationism); Rand on IP, Owning “Values”, and “Rearrangement Rights”; Libertarian Creationism; Inventors are Like Unto …GODS…; Intellectual Products and the Right to Private Property; New Working Paper: Machan on IP; Owning Thoughts and Labor; and Objectivists on IP; and in media, I discuss problems with Rand’s view at length on the Peter Mac show and at the Mises University this year; also The Intellectual Property Quagmire, or, The Perils of Libertarian Creationism.

Then there’s Objectivist law professor Adam Mossoff who is writing a defense of IP, as mentioned in the Objectivist “Noodlefood” blog post An Objectivist Recants on IP??. Roderick Long informs us that “the Ayn Rand Society session at the APA is also devoted to intellectual property”–indeed it is, with the topic “The Normative Foundations of Intellectual Property:  Two Perspectives,” having as speakers Adam Mossoff and Eric R. Claeys, both of George Mason University Law School, and chaired by Allan Gotthelf (University of Pittsburgh), on Dec. 28, 2009 (sadly, I’ll miss it, since I’m here skiing in Steamboat, Colorado. Wait, not so sadly). I’m eager to see Mossoff’s paper (and curious to see what Claeys has to say), but suspect it will be built on the fallacies and errors noted in posts above such as this Objectivist blog post and Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors.

Also noted in Roderick Long’s post is his upcoming Molinari Society IP symposium at the APA later this month (Dec. 29 , 2009), including Bob Schaefer’s “Response to Kinsella: A Praxeological Look at Intellectual Property Rights.” I’ve taken a look at Schaefer’s piece, and it’s not pretty. It’s just a mess. Roderick Long ably dissects just a few of its glaring flaws here.

(Aside: Long’s comments are really superb and insightful. A few comments. Discussing the IP comments of another author, Long writes, “a strong case can be made for thinking that Lockean principles must be substantially distorted in order to press them into service on behalf of IP”. Long backs this up very ably. In the same article he makes an illuminating distinction between three conceptions of “capitalism” that helps to dispel the confusion among both right and left in addressing this issue.)

The Objectivist approach is mired in a number of problems. It anchors property rights to the idea of “creation”; it requires legislation, and the state; it believes in some intrinsic value and some property right in value; it advocates utterly arbitrary and/or unprincipled, utilitarian finite lengths for IP; it rests on an arbitrary distinction between discovery and innovation. In a world where we took the ideas of the IP advocates seriously patent and copyright would have to have infinite duration. And the gaps in coverage would be fixed, and the state’s arbitrary exceptions fixed, such as the “fair use defense” to copyright. At present patent and copyright cover a statutory class of “inventions” and artistic works, respectively. Many logos, idea-patterns, “creations,” values are not protected at present. These include: perfume smells, the fashion industry, food recipes, certain business methods, databases (unoriginal but useful collections of information), abstract ideas such as mathematical algorithms, proofs, and techniques and physical laws. Under the ideas of the IP fanatics, there is no reason not to grant state-monopolies to these patterns too. And the term should not expire in 20 or 100 years–does your property to your house expire after some time limit? And why the utilitarian fair use exception? No principled case for IP could tolerate it.

I would love to see libertarian IP advocates have to live in a world that truly implemented their IP views fully, consistently–it would be like a communist USSR stripped of its power to ape Western price structures, to ameliorate the effects of communism. They would either die out, as the material world was strangled by an impossible nettle of ghostly IP-rights tendrils, or they would cry uncle. Even today, one imagines the cognitive dissonance of Objectivists living in our digital age–cutting and pasting, linking, learning and reworking ideas of others–all the while maintaining that all the things they themselves cannot but help engage in are “immoral” or some such tedious nonsense. I think of modern do-gooder environmentalists–they must feel pangs of guilt while flying on a jumbo jet to a friend’s wedding 2000 miles away, or to attend  UN conference or job posting on another continent. They must wring their hangs in agonized guilt and indecision about whether to use styrofoam, paper, or a washable coffee cup. They must feel tremendous guilt whenever they discard a scrap of soiled napkin instead of recycling it. Environmentalist parents must feel terrible pangs of guilt at using disposable diapers (or they suffer by using cloth ones: either way, I am pleased by the thought of their discomfort). Likewise, when an Objectivist emails a vandalized picture of an apostate like Alan Greenspan to a friend they must be conflicted–wait, no, there’s a fair use exception! Thank Rand for the State and its wise laws!

Addendum:

Book Essay: The strange world of Ayn Rand

Control freak
One striking feature of Objectivism is it outspoken support of intellectual property. A key scene in Atlas Shrugged is where metallurgist genius Hank Rearden is compelled by the government to hand over his intellectual rights to his innovative metal alloy, and Ayn Rand acted in kind. She passionately used the copyright on her works to bar people from forming “John Galt Societies”, citing that the name John Galt is her creation and her intellectual property.

For a person bent on propagating her ideas to the maximum extent possible, this would seem eerily counterproductive. Stealing an object from someone is obviously depriving the original owner of his property, but copying it isn’t. It may or may not be harmful to potential income, but that income remains potential, in the realm of the unprovable. This is a debate that incites extreme passion.

While Objectivists, libertarians and conservatives strongly agree on the principle of physical property rights, the picture is much more divided when it comes to ‘intellectual property’, a catch-all phrase for several different items, including patents, copyright and trademarks. In a landmark essay by Stephan Kinsella, Against Intellectual Property, argues that ‘Intellectual property’ is not only meaningless and harmful, it is in direct violation of the general principle of private property, and primarily constitutes a state-sanctioned creation of artificial scarcity, leading ultimately to poverty, not job creation and wealth.

The wider libertarian movement accepted the argument, put it into action (see www.mises.org/books) and moved on. Objectivists, on the other hand, maintain that what Ayn Rand spoke and practiced on the subject remains the unalterable truth.

(See also on this Jeff Tucker, If You Believe in IP, How Do You Teach Others?.

[Mises; AM]

Regarding David Levine’s post about drug reimportation, assembled below are various posts I’ve made on this topic:

• Intellectual Property and Think Tank Corruption
• Pilon on Patents
• Patents, Prescription Drugs, and Price Controls
• Re: Cato on Drug Reimportation
• Cato Tugs Stray Back Onto the Reservation
• Epstein and Patents
• Protectionist Cato?
• Palmer on Patents
• Richard Epstein on “The Structural Unity of Real and Intellectual Property”

I was recently reminded of “The Reluctant Anarchist,” a wonderful piece by the great columnist Joseph Sobran about his intellectual journey from conservatism to strict constitutionalism to anarchist–thanks to Rothbard and Hoppe. Highly recommended.

[Mises; AM]

[Please reply to this at the original Mises Blog post]

It’s my impression that in the last 5-10 years, there has been a striking movement towards the anti-IP camp among libertarians and Austrians. This is a result of the mounting everyday evidence of injustice resulting from the digital age magnifying the baleful effects of IP that have always existed; and the mounting scholarship, from a pro-property rights, pro-free market perspective, against both the moral and principled case and the utilitarian case for IP (resources listed in the final section of my “The Case Against IP: A Concise Guide“).

I’m personally aware of dozens of people who have changed their minds or seen the light on this issue–including, say, myself, Jeff Tucker, and many others. For some things I’m writing and just for general curiosity it would be interesting to get a better idea of this trend. Please feel free to add a brief comment to this post specifying whether you have moved toward the anti-IP position in recent years.

Update: Some here may also find of interest the Patent Rights Web Poll I did a while back, pasted below. Feel free to take it if you haven’t:

***

On a patent practitioner email list I posted the following:

It seems to me that many small/medium companies live in fear of a big patent lawsuit. Even if they had their own IP, I suspect many companies would gladly give up forever their right to sue for patent infringement, in exchange for some kind of immunity from patent liability–at least, if they could eliminate the threat of an injunction, so that the worst penalty they might face is some kind of mandatory royalty. Surely IBM et al. would not take this deal, but I bet a lot of other companies would. What do you think?

Second, in view of this, does this mean there is some kind of market for a service that would let a bunch of companies get together and “pool” their IP and have some kind of agreement (a) never to sue each other; (b) to have access to this pool of patents to countersue any company that sues any of the members.

This post drew some interest so I am doing a simple webpoll. I think the results might be interesting. (DIGG it here.)

Patent Rights

Would you give up your right to sue others for patent infringement in exchange for immunity from all patent lawsuits? Yes No Current Results

In Seen and Unseen Costs of Patents, Jeff Tucker notes, “Intel’s CEO spoke for many when he said he would be glad to cut patents to a tenth of its current rate provided that others did the same.”

Against Intellectual Property has been translated into Italian by Mr. Robert Newson: Contro La Proprietà Intellettuale (.doc file). Translations into Spanish, Polish, Portugese and Georgian have been made as well.

[Mises; AM]

I was a guest on the Bill Handel Show today discussing the libertarian perspective on blackmail, with reference to the Tiger Woods and other cases. (See my post Blackmail should be legal: the case of David Letterman.) We also touched on common law versus legislation [see my Legislation and the Discovery of Law in a Free Society], intellectual property, reputation rights and defamation law, prostitution, and extortion. Handel, though apparently not a libertarian, was a very smart and fair host. The file is here [13:33, 10.4MB, .m4a; mp3]. It it will be up later on the Bill Handel Show podcast.

Someone put up YouTube versions:

[Mises; AM]

John Perry Barlow‘s 1994 Wired article, “The Economy of Ideas: A framework for patents and copyrights in the Digital Age,” tagged: “(Everything you know about intellectual property is wrong.)”, is a classic. Written at the dawn of the Internet, it’s amazing how non-dated it is. It’s a fascinating, well-written, and insightful paper about the problems of applying classical notions of IP to the digital age. A few choice nuggets:

Intellectual property law cannot be patched, retrofitted, or expanded to contain digitized expression any more than real estate law might be revised to cover the allocation of broadcasting spectrum (which, in fact, rather resembles what is being attempted here). We will need to develop an entirely new set of methods as befits this entirely new set of circumstances.

Most of the people who actually create soft property – the programmers, hackers, and Net surfers – already know this. Unfortunately, neither the companies they work for nor the lawyers these companies hire have enough direct experience with nonmaterial goods to understand why they are so problematic. They are proceeding as though the old laws can somehow be made to work, either by grotesque expansion or by force. They are wrong.

… the increasing difficulty of enforcing existing copyright and patent laws is already placing in peril the ultimate source of intellectual property – the free exchange of ideas.

… when the primary articles of commerce in a society look so much like speech as to be indistinguishable from it, and when the traditional methods of protecting their ownership have become ineffectual, attempting to fix the problem with broader and more vigorous enforcement will inevitably threaten freedom of speech. The greatest constraint on your future liberties may come not from government but from corporate legal departments laboring to protect by force what can no longer be protected by practical efficiency or general social consent.

… Since it is now possible to convey ideas from one mind to another without ever making them physical, we are now claiming to own ideas themselves and not merely their expression. And since it is likewise now possible to create useful tools that never take physical form, we have taken to patenting abstractions, sequences of virtual events, and mathematical formulae – the most unreal estate imaginable. In certain areas, this leaves rights of ownership in such an ambiguous condition that property again adheres to those who can muster the largest armies. The only difference is that this time the armies consist of lawyers.

… To the extent that law and established social practice exists in this area, they are already in dangerous disagreement. The laws regarding unlicensed reproduction of commercial software are clear and stern…and rarely observed. Software piracy laws are so practically unenforceable and breaking them has become so socially acceptable that only a thin minority appears compelled, either by fear or conscience, to obey them. When I give speeches on this subject, I always ask how many people in the audience can honestly claim to have no unauthorized software on their hard disks. I’ve never seen more than 10 percent of the hands go up.

Whenever there is such profound divergence between law and social practice, it is not society that adapts. Against the swift tide of custom, the software publishers’ current practice of hanging a few visible scapegoats is so obviously capricious as to only further diminish respect for the law.

… In the hick town I come from, they don’t give you much credit for just having ideas. You are judged by what you can make of them. As things continue to speed up, I think we see that execution is the best protection for those designs which become physical products. Or, as Steve Jobs once put it, “Real artists ship.” The big winner is usually the one who gets to the market first (and with enough organizational force to keep the lead).

A few quibbles: Barlow does not seem to find classical IP as applied to material property to be very problematic; he seems to think it’s problematic only when applied to digital information. But as the latter is his focus, this is only a minor quibble. The article starts to get more metaphorical, less rigorous, when he tries to develop “A Taxonomy of Information,” but even this section is still insightful.

And though, as alluded to above, the article is not as dated as one might expect, there is a line that might be revised with the benefit of hindsight:

All of the broadcast-support models are flawed. Support either by advertisers or government has almost invariably tainted the purity of the goods delivered. Besides, direct marketing is gradually killing the advertiser-support model anyway.

The subsequent success of Google’s ad-dominated business model calls this bit into question. Still, a great piece.

[Mises post; AM post]

So says Adam Mossoff, Objectivist law professor, here:

Just FYI, I am just about to complete my first draft of my article, tentatively titled, “A Value-Based Theory of Intellectual Property,” in which I explain why intellectual property rights are a fundamental property right. In fact, my thesis can be summed up as: All Property is Intellectual Property. As far as I’m aware, this will be the first full-length academic treatment of IP that is not only based on Rand’s ethical and political theory, but also contextualizes this IP theory vis-a-vis both the Lockean labor theory of property and the utilitarian scarcity theory of property.

Of course, Kinsella and the other scarcity-based advocates for property rights with the libertarian movement, such as Timothy Sandefur, are appropriately taken down in my paper. I’m presenting my draft at the APA meeting at the end of this month in NYC, and, hopefully, I’ll have a draft up on the SSRN website by the spring. So, people will either have to come to the APA meeting or they’ll have to wait a few more months to download a draft.

I discussed Mossoff before in Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors. This was posted as a comment to An Objectivist Recants on IP??, a post by Objectivist Greg Perkins, who previously wrote DON’T STEAL THIS ARTICLE: On the Libertarian Critique of Intellectual Property (discussed in my post Elaborations on Randian IP). Perkins’s post was a response to the Mises post An Objectivist Recants on IP; as I noted there, and in response to him on his post:

Greg,

For those interested, I’ve laid out why I think the entire Objectivist case for IP is flawed and unlibertarian in various articles and posts. I list these below; I encourage those Objectivists seriously interested IP to consider these arguments.

Articles: “Intellectual Property and Libertarianism” (in particular see here and the section on Libertarian Creationism); also “The Case Against IP: A Concise Guide”; for an alternative to the Randian approach to rights and politics, see What Libertarianism Is.

Media: I discuss problems with Rand’s view at length on the Peter Mac show and at the Mises University this year; also The Intellectual Property Quagmire, or, The Perils of Libertarian Creationism.

Blog posts: Rand on IP, Owning “Values”, and “Rearrangement Rights”; Libertarian Creationism; Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors; Inventors are Like Unto …GODS…. Also these blog posts: Intellectual Products and the Right to Private Property; New Working Paper: Machan on IP; Owning Thoughts and Labor; also Elaborations on Randian IP; and Objectivists on IP.

I’m not surprised has to claim that all property is intellectual property; this is at the root of the more consistent, but extreme and absurd, views of IP, such as those of Rand and Galambos. As I noted in Rand on IP, Owning “Values”, and “Rearrangement Rights”:

In Jeff Tucker’s superb article If You Believe in IP, How Do You Teach Others?, he notes Rand’s increasing focus on exalting the creator and elevating “intellectual rights” to such a height that they totally trump real rights. This is no exaggeration. As I noted in Against Intellectual Property, Rand actually, incredibly said that “patents are the heart and core of property rights.” See also my post Inventors are Like Unto …. GODS….., noting Objectivist IP attorney Murray Franck approvingly repeating this quote: “intellectual property is after all the only absolute possession in the world.”

And Galambos believed that man has “primary” property rights in his thoughts and ideas, and secondary property rights in tangible goods; see Against Intellectual Property. So, for those who take IP seriously, they have to relegate property in real things to lowly secondary status, and exalt patterns, information, ideas, “values,” reputations, labor, a right to profit from labor, etc. etc. So no, it’s no surprise Mossoff, trying to defend this system and take it seriously, ends up concluding that all rights are intellectual property.

As noted in the various posts and articles linked above, rights in “value,” patterns, reputation rights, a Marxian-type labor theory of value, etc., all arise when rights to ideas are made primary.

Of course, as Rand herself knew, men are not ghosts; as she said, “Only a ghost can exist without material property.” When she was thinking clearly she also knew that there cannot really be property rights in values or “creations”; as she once wrote:

The power to rearrange the combinations of natural elements is the only creative power man possesses. It is an enormous and glorious power—and it is the only meaning of the concept “creative.” “Creation” does not (and metaphysically cannot) mean the power to bring something into existence out of nothing. “Creation” means the power to bring into existence an arrangement (or combination or integration) of natural elements that had not existed before.

She should have realized that this means there cannot be property rights in value since this would have to mean property rights in arrangements or patterns, which would then give the owner of the arrangement rights in other people’s already-owned property. If she had kept her focus on the fact that rearranging already-existing property can indeed make that property more valuable, she would have realized that creation (rearrangement) is not an independent source of property rights: if you rearrange your own property, even if this makes it more valuable, you already owned the property that you have rearranged (made more valuable). Yet this does not give you rights in other people’s property. You can re-word the Randian view as follows: if you make your property more valuable, it gives you additional property rights–the right to prevent other people from making their own property more valuable. And this makes it all the more obviously flawed.

More on this in Rand on IP, Owning “Values”, and “Rearrangement Rights”. The Randian system, however, applied consistently, would lead to stagnation and death, total absurdity from the point of view of justice. No action in the real world would be possible, as IP would be much broader in scope and term than now–no reason to limit IP to original artistic works (copyright) or practical inventions (patents), it would also have to cover not only reputation (another way we “create value”) but abstract ideas, clothing designs, philosophical systems, anything you can imagine that “has value” … and the term would have to last forever; it couldn’t stop at 20 or 120 years. After all, property rights don’t expire.

And so we would end up with a stagnant, dead society where no one was allowed to do anything, because every action would have to employ knowledge and implement patterns someone else thought of… man would be trapped in a prison of having to ask permission for every single action worse than imaginable even in the most totalitarian regime. Life would be by permission, not by right; and it would be impossible to obtain the millions of permissions needed. As I noted in Against Intellectual Property, pp. 27-28:

By widening the scope of IP, and by lengthening its duration to avoid making such arbitrary distinctions as Rand does, the absurdity and injustice caused by IP becomes even more pronounced (as Galambos demonstrates). And by extending the term of patents and copyrights to infinity, subsequent generations would be choked by ever-growing restraints on their own use of property. No one would be able to manufacture—or even use—a light bulb without getting permission from Edison’s heirs. No one would even be able to build a house without getting permission from the heirs of the first protohuman who left the caves and built a hut. No one could use a variety of life-saving techniques, chemicals, or treatments without obtaining permission of various lucky, rich descendants. No one would be able to boil water to purify it, or use pickling to preserve foods, unless he is granted license by the originators (or their distant heirs) of such techniques.

Such unbounded ideal rights would pose a serious threat to tangible-property rights, and would threaten to overwhelm them. All use of tangible property would by now be impossible, as every conceivable use of property, every single action, would be bound to infringe upon one of the millions of past, accreted IP rights, and the human race would die of starvation. But, as Rand noted, men are not ghosts; we have a spiritual aspect, but also a physical one.[54] Any system that elevates rights in ideas to such an extreme that it overrides rights in tangible things is clearly not a suitable ethical system for living, breathing human beings. No one living can actually act in accordance with such an unrestricted view of IP. The remaining advocates of IP all qualify their endorsement by limiting the scope and/or terms of IP rights, thus adopting the ethically arbitrary distinctions noted above.

In other words, if you take a principled approach to IP, you endorse a system that condemns society to stagnation and death. So most proponents, like Rand, realizing this, start making ad hoc, unprincipled, utilitarian exceptions to avoid the most obvious, harsh consequences of a principled implementation of their confused IP ideas.

[Mises post; AM post]

From my comment on this thread:

Re the issue of the prices charged for things like apples etc.–see my post Imagining the Fate of Copyright in a Future World.

Imagine 1000 years from now, if we still have these ridiculous IP laws ….  Say you need some music–to play in your department store’s elevators, to go with a scene in a movie, etc.–you can choose between an almost infinite supply of older, public domain work, or pay for a new tune that is still under copyright. That will force new works’ price to be almost zero.

One concern I have is that the IP socialists would at that point come up with a new IP right–basically a renewal of copyright held by someone who “rediscovers” older work forgotten in the almost infinite pile of public domain work. Imagine living in a world where Michael Jackson’s work, or the music of the 70s, had been basically forgotten and lost, a needle in a haystack, surpassed by all the music over the ensuing centuries … then some DJ starts playing it, people rediscover it anew.. shouldn’t he get credit for this? After all, it takes a lot of work to loook thru all the old stuff and find “what to recommend” (a lot of IP law is based on the Marxian labor theory of value, the idea that you should be rewarded if you labor on something, as in the old “sweat of the brow” copyright law doctrine). Shouldn’t the discoverer be rewarded for this? After all, if he’s not, you consumers would never have heard of Michael Jackson, would not have the pleasure of knowing what (free) tracks to play at your party. What’s the harm of awarding the DJ a monopoly? After all, you would never have found that needle in an infinite haystack, so no one is worse off, and everyone is better off. Copyright can never die; it only gets reincarnated. O brave new world! That has such laws in’t!

[Mises post]

Well, not exactly, but this delightful anecdote by Taki has a quasi-Galambosian ring to it (Galambos, you may recall, was the hyper-IP libertarian fringe personality from “California”).

When the Marx Brothers announced in 1946 that their upcoming film was called A Night in Casablanca, Warner Bros threatened to sue for breach of copyright. Warner had produced the great hit “Casablanca” four years earlier, and insisted the funny men were trying to cash in on it. But Groucho was no slouch. He had his lawyer threaten Warner Brothers with breach of copyright for using the word brothers. The Marx boys won, as they were brothers before the Warners had formed the company. A Night in Casablanca turned out also to be a great hit.

On the Mises blog, I noticed one of the frequent commentators on IP-related blog threads, one Bala, used to defend the IP position but of late had been taking an anti-IP position. We discussed this privately and I asked him to give me a short write-up about his thought process as he changed his mind on this issue. I find such “conversion” stories interesting, and have seen it in others as well–myself, Jeff Tucker, etc. He sent it to me; I append it below.

Pro-IP to Anti-IP:
The Transformation of an Objectivist

by S Balasubramanian

[The author resides in Chennai, India, and has a B Tech (Aerospace Engineering)--Indian Institute of Technology (IIT) Madras ('94), PGDM (equivalent of an MBA)--Indian Institute of Management (IIM) Ahmedabad ('98). He is a businessman, running a test prep company that trains students for competitive examinations for admissions to institutions of higher education, especially for those aspiring to get into the top B-Schools in India. He also recently started a pre-school which he hopes to build into a full-fledged school.]

It was in August of 2009 that I stumbled, or rather fumbled, my way into mises.org. I was guided to LvMI by none other than the Ayn Rand Institute, which referred LvMI as the place to go to if I wanted to get any understanding at all of economics, especially capitalism. As a long-time fan of Ayn Rand, having read a lot of her fiction as well as non-fiction and actually applying the basic principles of Objectivism in my daily life, I decided to take the tip seriously.

Pretty much to my shock, almost the first thing I came across was a little Rand-bashing and, worse, a denunciation of an idea Rand had explained as being the cornerstone of property rights – that of Intellectual Property.

The ideas I came in with

My ideas on intellectual property were formed almost completely based on Rand’s arguments justifying the idea. It all begins with the fundamental premises that:

1. Ideas are legitimate property;
2. Ideas owe their existence to the person who originated or “created them” and hence morally “belong” to the creator.
   1. It is important for a reader to understand that Objectivists use the term “morally” differently. Morality, to an Objectivist, is a code of values that guides man’s actions in the face of choices. It is rationally derived starting with recognition of the Objective reality that we are a part of. It is not a set of edicts or diktats from a higher authority.
   2. Those who copy ideas deprive the creators of the value that should rightfully accrue to them and are hence guilty of stealing (the emphasis is on “rightfully” as it flows from point 2 above).
   3. It is the fundamental responsibility of government to protect individual rights, property rights being the most important of man’s rights.
   4. A system of patent & copyrights is a way by which creators register their claim to creating ideas, a means by which they inform all interested parties as to whose property an idea is
   5. Infringement of patents and copyrights is a violation of property rights and government enforcement of patent & copyright laws is legitimate protection of property rights.

Questions that troubled me

In the course of some heated discussions, a few interesting questions came up for which I had to reach deep inside to find the answers

1. How do you reconcile the facts that recognising and enforcing IP essentially gives some people a right to the physical property of others?
2. How can ideas and patterns be property?
3. How do you propose to enforce IP except through the State machinery? Considering that the State has never demonstrated any tendency other than for evil, how is this consistent with the advancement of Liberty?

What made me realise the error in my (and the “orthodox” Objectivist) position on IP

To cut a long thing short, the moment I realised that there is a conflict between rights to intellectual property and rights to physical property, I also realised that something is wrong about the whole thing. Such a contradiction usually means that something is wrong with the premises of the person facing the contradiction – me.

Restricting a person from giving physical shape to an idea he has in his mind is clearly a violation of his Liberty and Property Rights. However, this is precisely what implementation of IP means. IP proponents typically tent to retort saying that what I am calling “violation of Liberty and Property Rights” is actually implementation of the property rights of the owner of the idea/pattern that is the subject of the IP.

If it is true that in the name of protecting Intellectual Property Rights, one is actually violating the Liberty of some individuals, in effect one is also saying that the holders of Intellectual Property have an undefined lien on the Liberty of the individuals of the other part. Translated, this gives some individuals the right to enslave others by virtue of being holders of Intellectual Property rights. This made the notion all the more bizarre to me. It was in direct contradiction of the most basic principles of Objectivism that no man may claim the right to initiate force against another.

This led me to realise that there is a fundamental problem in the way different people were defining the concept “property”. At least, the way Objectivists seem to be defining “property”, they are setting themselves up for a conflict between the right to physical property and the right to Liberty on one side and the right to Intellectual Property on the other.

The answer, to me, was to obtain clarity on the relationship between the Right to Liberty and the Right to Property. The question I was trying to answer was “Which of the 2 rights is more fundamental to human nature?”. If Liberty is more fundamental to human nature, it would be futile to define Property independent of Liberty because such a definition is bound to lead to a contradiction.

Liberty or Property – Which is more fundamental?

To me, the answer was obvious – Liberty. The Right to Liberty is a logical corollary of the Right to Life and is in fact a restatement of the latter focusing on a specific part of it. The Right to Liberty, as per Objectivism, is nothing more than the freedom to act as per the judgement of one’s rational mind. Action being essential to life and in fact being an integral and inviolable part of the definition of the concept “Life” (a sequence of self-generated self-sustaining actions), violation of the Right to Liberty is a violation of the Right to Life itself.

Once again taking from Rand herself, value is that which you act to gain or keep. Thus, gaining or keeping value is impossible unless one is free to act. Thus, it is futile to place “property”, which is nothing more than the value one acts to gain or keep with the aim of sustaining one’s life, above that which is a prerequisite to the process of gaining or keeping value, i.e., action. Translating this into a simple inequality,

Right to Life > Right to Liberty > Right to Property

Therefore, the choice was clear – to define the concept “property” in terms of the more fundamental concept “liberty”. The outcome is bound to be a non-contradictory system of Property Rights where it is possible for Liberty and Property Rights to coexist.

Defining the concept “Property”

(The most fundamental premise I used in this discussion is that initiating force against another is a violation of his Right to Liberty. As per my limited understanding of Objectivism, this is how Ayn Rand defined Liberty.)

Objects exist in 3 states – existent, possession and property. An apple exists. When I hold the apple in my hands, it is in my possession. When my possession is morally justified, i.e., when the apple “ought” to be in my possession, it is deemed my “property”.

Clearly, not every “possession” is “property”. That raises the question how and when a “possession” becomes “property”. The answer to the question is to be found by a study of the morality of the actions that went into gaining and keeping “possession”. If you obtain possession the “right” way, it is morally yours, i.e., you are better off with it than without. On the other hand, if you did something “wrong” in the process of gaining possession, it is not morally yours, i.e., you are better off without it than with it. Objectivists in particular should have no difficulty evaluating issues from a moral perspective and to talk of issues like “right” and “wrong” because they ought to be used to deriving these logically from reality, which they consider absolute.

From an Objectivist perspective, there is only 1 “wrong” that a man can commit in the process of gaining possession of an existent – that is to initiate force against other men in the process. Thus, possessions to gain which man has to necessarily initiate force against others will not get moral sanction. Such possessions cannot be considered property.

Equally fundamental to the concept “property” is the right to exclude others from total or partial enjoyment of the value that the property holds. Exclusion of others requires specific actions from the person in possession of an object. The nature of the actions one needs to undertake in order to exclude others from one’s possessions also influences the moral status of the possession in question. If excluding others requires retaliatory force only, such exclusion would be a morally sound action. If, on the other hand, exclusion itself involves initiation of force, it would naturally be immoral and the author cannot exclude and be right at the same time. Such possessions that create contradictions by their very nature cannot and should not be deemed property.

Applying this idea to the 2 broad categories of property – physical and intellectual, physical possessions clearly justify the use of the term “property” to denote their ownership. The taking possession of or the exclusion of others from physical objects does not necessarily involve initiation of force. On the other hand, the taking away of a physical good without the consent of the legitimate owner always involves the initiation of force. Thus, the statement “no man shall take away the physical property of another man without his consent” is equivalent to saying that “one man may not initiate force against another”. In this sense, it is no different from the basic Objectivist principle of non-initiation of force.

Ideas and patterns, on the other hand, presented a problem when I tried to treat them as “property”. While there is no denying the value of ideas in human advancement, exclusion of other individuals from an idea or pattern necessarily involves the initiation of force. For instance, how else is A to prevent B from incorporating A’s idea in his B’s product other than to force himself upon B’s property and coerce B to prevent him from doing so, thus violating B’s Liberty? In effect, recognising ideas and patterns as property is tantamount to saying that A has a moral right to initiate force against B simply because he has coined an idea. Thus, as an Objectivist, classifying ideas and patterns as “property” takes me into dangerous territory where I am ready to label the initiation of force as legitimate.

Even worse than the above is to codify IP into law and giving the State and its machinery additional legitimacy engage in rampant violation of Liberty. As an Objectivist, I hate the State as much as anyone else can. To see the State as an ally just because it is the only agency capable of enforcing Intellectual Property Rights is downright immoral. I realised that once there, there was no turning back. I become as evil as the very collectivists and statists that I am trying to condemn and fight against.

I am now left with a very moral choice – do I or do I not recognise ideas and patterns as “property”. If I should remain true to my Objectivist roots (which I value for good reason), my only option is to apologise to Rand for disagreeing with her strongly and telling her that she was wrong on this one and that I am not ready to apply the label “property” to ideas and patterns.

(While in the above analysis, I might appear to be going in circles around essentially 1 idea, the non-initiation of force, given that that principle is the most important Objectivist social principle, the one that defines how an individual ought to deal with the society he lives in, I do not think I am guilty of circular reasoning. Rather, I am making my axioms clear and validating all my conclusions against my axioms.)

Conclusions

An Objectivist cannot and should not support the notion of Intellectual Property because it violates fundamental Objectivist principles. Rejecting the validity of “Intellectual Property” does not mean that one is rejecting Objectivism. Anyone who claims otherwise needs to be reminded of Ayn Rand’s warnings against package deals. He who wishes to say “Rand said otherwise” needs to be reminded of Rand’s other very important point – that no human may consider himself or any other human being to be infallible, not even Ayn Rand herself.

[Mises crosspost; AM crosspost]

Jeff Tucker’s Bonfire of the Missalettes is fighting the IP forces inside the Catholic Church!

Someone recently told me “I just ran across a few of your interviews and writings. I was particularly impressed with the point that IP creates scarcity where none existed before. Despite its obviousness, it is characteristic of IP that had not occurred to me before.”

So I thought I would elaborate a bit on this. The “artificial scarcity” insight is indeed a good one, but it is not mine. From pp. 33-34 of Against Intellectual Property:

Ideas are not naturally scarce. However, by recognizing a right in an ideal object, one creates scarcity where none existed before. As Arnold Plant explains:

It is a peculiarity of property rights in patents (and copyrights) that they do not arise out of the scarcity of the objects which become appropriated. They are not a consequence of scarcity. They are the deliberate creation of statute law, and, whereas in general the institution of private property makes for the preservation of scarce goods, tending . . . to lead us “to make the most of them,” property rights in patents and copyrights make possible the creation of a scarcity of the products appropriated which could not otherwise be maintained.[64]

Bouckaert also argues that natural scarcity is what gives rise to the need for property rules, and that IP laws create an artificial, unjustifiable scarcity. As he notes:

Natural scarcity is that which follows from the relationship between man and nature. Scarcity is natural when it is possible to conceive of it before any human, institutional, contractual arrangement. Artificial scarcity, on the other hand, is the outcome of such arrangements. Artificial scarcity can hardly serve as a justification for the legal framework that causes that scarcity. Such an argument would be completely circular. On the contrary, artificial scarcity itself needs a justification.[65]

Thus, Bouckaert maintains that “only naturally scarce entities over which physical control is possible are candidates for” protection by real property rights.[66] For ideal objects, the only protection possible is that achievable through personal rights, i.e., contract (more on this below).

[64] Arnold Plant, “The Economic Theory Concerning Patents for Inventions,” p. 36. Also Mises, Human Action, p. 364: “Such recipes are, as a rule, free goods as their ability to produce definite effects is unlimited. They can become economic goods only if they are monopolized and their use is restricted. Any price paid for the services rendered by a recipe is always a monopoly price. It is immaterial whether the restriction of a recipe’s use is made possible by institutional conditions—such as patents and copyright laws—or by the fact that a formula is kept secret and other people fail to guess it.” [For more on Mises's view of IP, see Mises on Intellectual Property.]

[65] Boudewijn Bouckaert, What Is Property? (text version) in “Symposium: Intellectual Property,” Harvard Journal of Law & Public Policy 13, no. 3 (Summer 1990), p. 793; see also pp. 797–99.

[66] Bouckaert, “What is Property?” pp. 799, 803.

Bouckaert’s paper, What Is Property? (text version), is, by the way, superb and highly recommended.

Update: Jeff Tucker’s article and recent speech had me thinking about something that ties into this post well. People want to impose artificial scarcity on non-scarce things because they think scarcity is good. But they have it backwards. If anything, we should want material things to be non-scarce.

In Tucker’s talk, he was pointing out the difference between scarce resources and non-scarce, infinitely reproducible ones. Yes, they are different, but I think we also need to combat another fallacious view: people seem to implicitly think it’s bad that ideas are infinitely reproducible. This is a “problem” we need to combat by making them artificially scarce. But it’s a good thing.

i.e., at least ideas are non-scarce; but unfortunately, material things are scarce. But it would be good if material things were more abundant. So imagine that some benevolent genius invents a matter-copying device that lets you just point it at some distant object, and instantly duplicate it for free for you. So I see a coat you are wearing, click a button, and now I have an identical copy. I see you having a nice steak, and duplicate it. Etc. This would make us all infinitely wealthy. It would be great. Of course people would fear the “unemploymetn” it would cause–hey, I want to be unemployed and rich! And the rich would hate it because they would now not be special. They couldn’t lord their Rolls Royces and diamonds over the poor; the poor would have all that (it would be similar to how audiophiles were irked by the advent of the CD so tried to find granite turntables etc. to pretend they were still better). So imagine a rich guy suing a guy who “copied” his car…. imagine farmers suing people who copied their crops to keep from starving… how absurd! And what damages would they ask for? Not monetary damages–the defendant could just print up wealth to pay him off! So the only remedy he could want would be to punish or impoversih the defendant… for satisfation, to once again feel superior. How sick.

As my friend Rob Wicks noted, you could imagine a short story based on this in which judge orders a famine as a remedy to crop-copying.

[Mises cross-post; Am crosspost]

Rebellion in the Red: Manifesto (google translation) notes Spanish legislation allowing the suspension of Internet service to users “to safeguard the rights of intellectual property” has caused a huge backlash. Journalists, bloggers, users, professionals and Internet developers have put forth a statement “In defense of fundamental rights on the Internet”, which includes:

1. Copyright can not be above the fundamental rights of citizens, including the right to privacy, security, the presumption of innocence, to effective judicial protection and freedom of expression.

People are beginning to recognize the growing conflict between individual rights and “intellectual property”–and, if forced to choose, are choosing real, individual rights over IP. Hopefully it won’t stop here.

(HT to Keith Krauland for the link)

[Mises cross-post; AM cross-post]

On the latest This Week in Tech, guest panelist and sci-fi author Jerry Pournelle has an interesting anecdote about his involvement with a copyright squabble between Fox and Universal in the 1970s concerning Star Wars and Battlestar Galactica. As noted on Wikipedia:

Battlestar Galactica was finally produced in the wake of the success of the 1977 film Star Wars. In fact, 20th Century Fox sued Universal Studios (the studio behind Battlestar Galactica) for copyright infringement, claiming that it had stolen 34 distinct ideas from Star Wars. Universal promptly countersued, claiming Star Wars had stolen ideas from the 1972 film Silent Running (notably the robot “drones”) and the Buck Rogers serials of the 1940s.

Pournelle says [go to about 1:15:45 of the TWiT episode] that after Universal was sued by Fox, he was paid $20,000 by Universal to help show that BG was not too similar to Star Wars. Pournelle says that to write a brief showing there was no plagiarism. He says,

I looked at it, and said, why, that’s easy. If you ask me which is the better movie, then no question, Star Wars is the better one. But if you ask me which is the most original, there ain’t an original frame in either one of ‘em! They’re both derivative from fiction that was published centuries ago–for instance the male-pair bonding between Han Solo and Luke Skywalker was echoed in Battlestar Galactica–I said, yeah, and they both got it from Homer, didn’t they?

(See also Battlestar Galactica Dubbed “Too Expensive” and “Star Wars Ripoff”; The Top Five Most Ridiculous Legal Disputes Involving Lucasfilm, the latter of which lists the #1 most ridculous lawsuit as follows: “Star Wars blatantly rips off Universal’s Silent Running. Universal’s Battlestar Galactica overtly steals from Star Wars. No one acknowledges that every sci-fi movie is a variant of other sci-fi movies. Lawsuits are filed.”)

[Mises blog cross-post; AgainstMonopoly cross-post]

As I mentioned in Radical Patent Reform Is Not on the Way, in in In re Bilski, the Court of Appeals for the Federal Circuit (CAFC) modified previous holdings regarding the patentability of software or business-method patents in upholding the rejection of patent claims involving a method of hedging risks in commodities trading. The case was appealed to the Supreme Court and oral arguments were heard earlier this month. This entire area of patent law is very arcane, but the main issues and the oral arguments are explained very well by the heroic IP-abuse reporter Joe Mullin in Bilski v. Kappos Oral Arguments: Supreme Skepticism Toward Method Patents.

Take a look at Mullins’ discussion of the oral arguments–it’s fascinating seeing the Justices grapple with the absurdity of patent law. A few choice excerpts:

Across the board, the justices indicated a deep skepticism toward the invention described in the patent application at issue, which was rejected by the U.S. Patent and Trademark Office and describes a method for trading commodities. Some of the justices went even further—expressing both a fair amount of disdain for the idea of granting broad “method” patents and a concern that ruling in favor of the petitioners would lead to patent grants on fundamental ways of conducting business or organizing human behavior. …
Based on the justices’ attitude during the arguments, it not only seems extremely unlikely that Bernard Bilski will ever get the patent at issue, it also seems clear that the court is poised to establish a new, and most likely stricter, test of what is patent eligible.

One after another, the justices prodded Bilski’s lawyer, Michael Jakes of Finnegan Henderson, Farabow, Garrett & Dunner, in search of some idea about where to draw the line. The thrust of the questions: Does absolutely everything fall within the domain of the U.S. patent system?

“So, an estate plan?” asked Justice Ruth Bader Ginsburg. “A tax avoidance method? How to resist a corporate takeover? All of these are patentable?”

“They are eligible for patenting under section 101,” replied Jakes, referring to the section of the 1952 patent statute that governs what is patent-eligible subject matter.

… “Your argument is that anything that helps business succeed is patentable,” Breyer said. Would the framers of the Constitution, he asked, really have wanted everyone with a new idea to run to Washington to get a patent, in the process enabling them to “stop the wheels of progress” unless competitors got permission?

“Why not patent a method of speed dating?” Justice Sonia Sotomayor asked.

There are a few, limited areas, Jakes said, where patent protection isn’t available; he pointed to the fine arts as one example. Otherwise, he argued, patents encourage people to innovate, and it is via the patent system that they disclose their new creations to the public.

… Justice Sotomayor took issue with Jakes’s suggestion that patents are always a manifestation of innovation.

“A patent limits the free flow of information,” she said. “It requires licensing. You can’t argue your position is enhancing the free flow of information.”

Jakes replied: “It does, because of the disclosure requirement.”

“Even though the public can’t use [the patented invention],” noted Scalia.

“That’s our system,” said Jakes. “We do grant exclusive rights in exchange for disclosure.”

Time and again, Jakes refused to draw a line that ruled anything off-limits to the patent regime. His position left the justices questioning whether he was advocating the “ownership” of basic human activities.

“Let’s take training horses,” said Justice Antonin Scalia. “Don’t you think that some people, horse whisperers or others, had some … insights into the best way to train horses? Why didn’t anybody patent those things?”

“I think our economy was based on industrial processes,” responded Jakes.

“It was based on horses, for Pete’s sake!” said Scalia.  “I would really have thought somebody would have patented that.”

… Chief Justice Roberts pushed back on an inconsistency in Stewart’s briefing of the case. On the one hand, he said, the government claims Bilski’s method just describes a way of doing business, and therefore isn’t patentable—but then posits that a computer with an “interactive website” doing the same thing might be. “That’s like saying if you use a typewriter to type out the process, then it’s patentable,” said Roberts.

If the website scheme was part of a computer program, Stewart said, “the computer would be at the heart of the innovation.”

“No, no,” said Roberts. “That’s just saying instead of looking in the Yellow Pages, you look on a computer.”

I suspect the Court will choke back a bit on software and business method patents–but not too much, as I argued in Radical Patent Reform Is Not on the Way. One reason is that although the law is, as the Justices seem to be realizing, completely unjust and absurd, it is the law. Or, as Bilski’s lawyer said, “That’s our system … We do grant exclusive rights in exchange for disclosure.” Yes, we do. And when you implement such an abomination, that’s what you get: absurd, unjust results, such as granting monopolies on “fundamental ways of conducting business or organizing human behavior” (and yes, patents are monopolies, despite the shrill denials by patent shills and other pro-monopolists).

[Mises blog cross-post; Against Monopoly cross-post]

I was invited to be a guest on The Peter Mac Show last night and ended up staying on for both hours. It was a pretty in-depth interview. The host asked impressively intelligent questions for someone who had just started coming around to the anti-IP position (after reading my Intellectual Property and Libertarianism just the day before (!)). The MP3 files are here: hour 1; hour 2 (on Peter’s site, hour 1, hour 2). [Local files: hour 1; hour 2]

Defenders of patents commonly say they are against innovators’ ideas being “stolen” or “plagiarized.” This implies that patents simply permit an innovator to sue those who copy his idea. This position betrays either disingenuity or ignorance about patent law. Let me explain.

Under copyright law, someone who independently creates an original work similar to another author’s original work is not liable for copyright infringement, since the independent creation is not a reproduction of the other author’s work. Thus, for example, a copyright defendant can try to show he never had access to the other’s work, as a defense. The reason for this is that the fundamental copyright is, well, a right to copy one’s original creative work. By the nature of creative works that are subject to copyright, it is very unlikely someone would independently create the same novel, say, or painting, as another author. (And if copyright only protected literal copying, it would be much less a problem; but unfortunately it protects a bundle of rights including also the right to make “derivative works“.) But, in the rare case where author 2 independently creates a work very similar to that of author 1, it is not an infringement of author 1′s copyright, since author 2 did not copy anything.

Patent law is different. Very different. Most defenders of IP do not seem to be aware of this difference–one reason they should not be opining in favor of legal regimes they know little about. When patent defenders say that patent abolitionists are in favor of plagiarism and idea theft, they imply that patent law is like copyright law–that it simply prevents people from copying others’ ideas.

Not so. To prove copyright infringement you have to show an actual copying of the work. But to prove patent infringement, the patentee need only prove that the accused infringer makes, uses, sells, or offers to sell, or imports the patented invention–that is, a device or method that is described in at least one of the “claims” of the patent. It doesn’t matter if the infringer invented it independently. It doesn’t even matter if the infringer invented it before the patentee. Got that? Someone who previously invented the same thing and is using the idea in secret can actually be liable for infringing the patent granted to the second inventor. If a later person independently invents the same idea that was previously patented by another, this is also no defense. Prior use or independent invention are not a defense.

Obviously, it should be. The Intellectual Property and Communications Omnibus Reform Act of 1999 did add a limited first inventor (prior user) defense for prior commercial users of “business methods“–see 35 U.S.C. § 273–but not a general one. Justice obviously requires that, at the very least, a general independent inventor defense be added to the patent system. To blunt its sharp, unjust edges. In particular, a defense should be provided for those who are prior users of, or who independently invent, an invention patented by someone else. This would greatly reduce the cost of the patent system since one difficulty faced by companies is that they do not know what patents they might infringe. If someone learns of an invention from another’s patent, at least they are aware of the risk and can possibly approach the patentee for a license. But quite often a company independently comes up with various designs and processes while developing a product, which designs and processes had been previously patented by someone else. If the goal of patent law is to reward invention, it should be sufficient to permit patentees to sue people who actually learned of the idea from the patent—just as copyright infringement exists when someone reproduced another’s work but not when it is independently created. A broad prior user right defense should be established, as well as an independent inventor defense that even a later inventor could use. (Pending patent reform legislation originally proposed to broaden the existing prior user defense by eliminating the business method patent limitation so that users of all types of inventions would have been able to use the defense, but this was removed from later versions of the bill. The Council on Foreign Relations study, “Reforming the U.S. Patent System: Getting the Incentives Right,” recommends a prior-user right be adopted; James Bessen & Michael J. Meurer, Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk (Princeton University Press, 2008), recommend an independent inventor defense–see the Introduction.)

Even pro-IP libertarians usually reluctantly agree that independent invention should be a defense, once you dispel their ignorance about the system they for some reason support (well, the reason is not that hard to see–it’s lingering state-indoctrination, or some form of statism such as minarchism, or some unprincipled, incoherent grounds like utilitarianism). This is one of the aspects of arguing IP policy that infuriates me. Whenever you point one of these things out to a libertarian defender of IP, he will usually say, “well, I don’t support that.” So you say, “well, what do you support?” The answer is basically, “Hey, I’m not a patent lawyer; that’s just a detail.” I.e., they are in favor of some ideal patent system; not the current, statist one (though they oppose abolishing it or weaking it!), but a “libertarian” one (as if one could imagine a patent system concocted by decentralized courts without legislative power! [on this see my Legislation and the Discovery of Law in a Free Society]). In other words, they don’t know what in the heck they are even talking about. They can’t describe the system they favor, and are not willing to abandon a statist system they admit is unjust.

And they seem blithely unaware that removing the obvious, “problematic” features of patent law would largely gut it, resulting in an emaciated, weak patent system–a change that would be attacked by mainstream IP advocates as “harming innovation,” in the same way that these libertarian patenteers criticize us patent abolitionists. Libertarian IP advocates are schizophrenic. They shy away from the obvious injustices of patent law, and would favor reforms that most normal IP proponents would recoil in horror from; while they try to maintain the facade that they support IP because they support innovation and inventors’ “rights”, even though they cannot tell you what their ideal libertarian patent system even looks like.

Don’t believe me that providing an (obviously just) “independent inventor” defense would gut the patent system? I’ve been practicing patent law since 1993. I have lost count of the number of times I’ve been called upon by a client to analyze a patent that has come to the client’s attention, that concerns it. What typically happens is this. Company A is producing or developing a product. They hear a rumour from a customer “Hey, I think that Company B has a patent on something similar to this.” Or, they get a letter from Company B saying, “Hi, we attach a copy of our latest patent for your interest! If you want to discuss licensing, give us a call! <smiley face! we’re all friends! it’s all good! Don’t file a declaratory judgment action against us, please! We wouldn’t want to give you cause to sue us first, robbing us of the chance to choose the venue! <double-smiley-face> Love, Company B”. So Company A calls me, says, “can you take a look at this patent? Are we in trouble? Are we infringing? Is the patent valid? If so, can we change our design to get around it? We’ll be happy to pay your $30k fee for an analysis and opinion.” Such a productive use of precious capital!

Now, what I want to emphasize here is that: in all the umpteen times I’ve done this over the last 15 or so years, I have never, ever, even once, seen a case where the client’s engineers copied the patented invention. In every case that I can recall, the company designed its product on its own–using available technology, to meet the market demands–and then only later were made aware of some patent buried among millions in the bowels of the patent office. Then they panic, worrying that they might be shut down by an injunction by a competitor, or sued into the ground (for examples see my Radical Patent Reform Is Not on the Way).

No doubt in some cases there is copying. An entrepreneur espies a popular product, and makes a similar one; lo and behold, it turns out there were some patents, and so he is sued. Still unjust–what is wrong with emulation, competition, and learning?!–but still, sure, in some cases, there is copying. But there can be no doubt that millions and millions of dollars are lost on attorneys’ fees alone, not to mention the cost of changing designs to avoid infringement, or foregoing development in a field crowded with patents or rife with uncertainty, in cases where the victim was not copying or even learning anything from the company that just happens to hold a red-ribbon adorned manilla certificate issued by a technocratic bureaucracy of the criminal central state. Add an independent inventor defense, and a lot of the work done by lawyers like me would dry up–meaning a more efficient economy, lower priced goods, more competition and innovation, more innovative freedom, more breathing room.

This is a type of reform that most libertarian patent advocates, in my experience, begrudgingly agree to. And it would gut the patent system. The caterwauling of the patent bar, deprived of half their federal law-sponsored teats, would reach a deafening crescendo. Large companies that rely on the inchoate threat of patent lawsuits to squelch competition and keep small innovators down, would increase their bribes to DC, fearful of barriers to entry falling.

So why not come all the way with us, my fellow libertarians? You see the injustices of the patent system, and usually agree with our concrete criticisms of them. You are not sure of what a good patent system would even look like. The current one is undeniably a mess. And it’s just an arbitrary fake-law scheme enacted by an obviously incompetent, evil, illegitimate, and criminal state. Why in the world would a libertarian support this? Besides, by advocating such reforms you are going to be lumped in with us “enemies of innovation” by the vested IP interests. So if you are doing the time, you might as well do the crime.

Update: See Mike Masnick’s excellent posts, Calling For An Independent Invention Defense In Patents and If Patents Are Supposed To Support The Independent Inventor, Why Isn’t There An Independent Invention Defense?, the latter of which mentions a great post by Joe Mullin, Patent defendants aren’t copycats. So who’s the real inventor here?

[Mises blog cross-post; AgainstMonopoly cross-post]

I posted the following comment to Cory Doctorow’s BoingBoing post Competition and Google Book Search:

Cory, Google is not perfect but the attacks on them for attempting this seem to me to be demonizing the wrong party. The problem is copyright law–a state legal system. The state is, as usual, to blame. Why some people are trusting the same state that foists IP law on us to protect is us mystifying. In attacking Google they are allying with the state (see my post Google Digital Library Plan Opposed by German Chancellor), which is the real enemy. I don’t see any choice for google to accomplish the quasi-digital libertarian of orphan and other works other than its creative legal-settlement route.

Lohmann writes:

“Nobody likes this “only-for-Google” aspect of the settlement–in fact, Google has said that it would support orphan works legislation that would empower the Registry to make the same deal (or even a better deal) with others who want to use these unclaimed works.”

I am not sure I see the concern here–seems to me only someone who cares about copyright would object to this.

“The settlement agreement even has a provision that makes it clear that the UWF can license others “to the extent permitted by applicable law”–what amounts to an “insert orphan works legislation here” invitation.”

I’m not sure what is wrong with this. Even partially libertaring orphan works from the confines of copyright law would be good.

“But absent some legislative supplement to the revised Settlement 2.0, it still seems that any other company would have to scan these books, get sued, and hope for a class action settlement. That, of course, is the kind of barrier to entry that any monopolist would envy.”

Again, it seems to me that Google is doing it the only way they see possible, given the terrible state regime.

“…But we shouldn’t be satisfied with antitrust law here.”

This line really bothers me. The EFF and others supposedly concerned with individual rights should recognize the state as the enemy. They should recognize antitrust law is completely unjustified; the real monopoly is the state, which arrogates a true monopoly to itself. This line implies that antitrust law is okay; it’s not. It’s immoral and unjustified. All antitrust law should be of course abolished.

See my An Open Letter to Leftist Opponents of Intellectual Property: On IP and the Support of the State and Eben Moglen and Leftist Opposition to Intellectual Property.

[Mises blog cross-post; Against Monopoly cross-post]

Truly fantastic speech by Jeff Tucker on the problems of intellectual property.

In Jeff Tucker’s superb article If You Believe in IP, How Do You Teach Others?, he notes Rand’s increasing focus on exalting the creator and elevating “intellectual rights” to such a height that they totally trump real rights. This is no exaggeration. As I noted in Against Intellectual Property, Rand actually, incredibly said that “patents are the heart and core of property rights.” See also my post Inventors are Like Unto …. GODS….., noting Objectivist IP attorney Murray Franck approvingly repeating this quote: “intellectual property is after all the only absolute possession in the world.”

So, yes, Objectivists focus on the creation of value, and thus in rights in value, and explicitly drop the connection between property rights and scarcity. As I note in footnote 76 of Against Intellectual Property, Objectivist David Kelley wrote:

Property rights are required because man needs to support his life by the use of his reason. The primary task in this regard is to create values that satisfy human needs, rather than relying on what we find in nature, as animals do. . . . [T]he essential basis of property rights lies in the phenomenon of creating value. . . . Scarcity becomes a relevant issue when we consider the use of things in nature, such as land, as inputs to the process of creating value. As a general rule, I would say that two conditions are required in order to appropriate things in nature and make them one’s property: (1) one must put them to some productive use, and (2) that productive use must require exclusive control over them, i.e., the right to exclude others. . . . Condition (2) holds only when the resource is scarce. But for things that one has created, such as a new product, one’s act of creation is the source of the right, regardless of scarcity. [emphasis added]

Letter on Intellectual Property Rights, IOS Journal 5, no. 2 (June 1995), pp. 12-13 (including: David Kelley, “Response to Kinsella,” IOS Journal 5, no. 2 (June 1995), p. 13; and Murray I. Franck, “Intellectual and Personality Property,” IOS Journal 5, no. 3 September 1995), p. 7.

Thus, Objectivists will talk about man creating values. For them “a value” is a thing that exists; it’s what you “create”. For the Austrian and Austro-libertarian, you don’t talk about “a value” as if it’s an existing thing that you create. I don’t make a value. For us, it’s more of a verb: we value things as ends or as means to ends. We can make something more valuable by transforming it, but we do not create new property when we do this. As discussed in Intellectual Property and Libertarianism, creation is an important means of increasing wealth. As Hoppe has observed,

One can acquire and increase wealth either through homesteading, production and contractual exchange, or by expropriating and exploiting homesteaders, producers, or contractual exchangers. There are no other ways. [Hans-Hermann Hoppe, "Banking, Nation States and International Politics: A Sociological Reconstruction of the Present Economic Order," Review of Austrian Economics 4 (1990): pp. 55-87, p. 60. Emphasis added.]

While production or creation may be a means of gaining “wealth,” it is not an independent source of ownership or rights. Production is not the creation of new matter; it is the transformation of things from one form to another — the transformation of things someone already owns, either the producer or someone else.

By viewing “values” as things that we create, Objectivists then think there should be property rights in values. They are things, after all, right? But this is a fundamental mistake. As I noted in Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors, a common mistaken belief is that one has a property right in the value, as opposed to the physical integrity of, one’s property. For elaboration, see pp. 139-141 of Hoppe’s A Theory of Socialism and Capitalism; also see my comments re same to Patents and Utilitarian Thinking. This assumption sneaks into or lies at the basis of many fallacious notions of property rights, such as the idea that there is a right to a reputation because it can have value. It ties in with the (especially Randian) notion of “creation” as the source of rights, and the confusing admixture of the “labor” idea, when we talk about using our labor to “create” things of “value” (like reputations, inventions, works of art). As Hoppe notes in The Economics and Ethics of Private Property:

According to this understanding of private property, property ownership means the exclusive control of a particular person over specific physical objects and spaces. Conversely, property rights invasion means the uninvited physical damage or diminution of things and territories owned by other persons. In contrast, a widely held view holds that the damage or diminution of the value (or price) of someone’s property also constitutes a punishable offense.As far as the (in)compatibility of both positions is concerned, it is easy to recognize that nearly every action of an individual can alter the value (price) of someone else’s property. For example, when person A enters the labor or the marriage market, this may change the value of B in these markets. And when A changes his relative valuations of beer and bread, or if A himself decides to become a brewer or baker, this changes the value of the property of other brewers and bakers. According to the view that value damage constitutes a rights violation, A would be committing a punishable offense vis-à-vis brewers or bakers. If A is guilty, then B and the brewers and bakers must have the right to defend themselves against A’s actions, and their defensive actions can only consist of physical invasions of A and his property. B must be permitted to physically prohibit A from entering the labor or marriage market; the brewers and bakers must be permitted to physically prevent A from spending his money as he sees fit. However, in this case the physical damage or diminution of the property of others cannot be viewed as a punishable offense. Since physical invasion and diminution are defensive actions, they are legitimate. Conversely, if physical damage and diminution constitute a rights violation, then B or the brewers and bakers do not have the right to defend themselves against A’s actions, for his actions – his entering of the labor and marriage market, his altered evaluation of beer and bread, or his opening of a brewery or bakery – do not affect B’s bodily integrity or the physical integrity of the property of brewers or bakers. If they physically defend themselves nonetheless, then the right to defense would lie with A. In that case, however, it can not be regarded as a punishable offense if one alters the value of other people’s property. A third possibility does not exist.

Both ideas of property rights are not only incompatible, however. The alternative view – that one could be the owner of the value or price of scarce goods – is indefensible. While a person has control over whether or not his actions will change the physical properties of another’s property, he has no control over whether or not his actions affect the value (or price) of another’s property. This is determined by other individuals and their evaluations. Consequently, it would be impossible to know in advance whether or not one’s planned actions were legitimate. The entire population would have to be interrogated to assure that one’s actions would not damage the value of someone else’s property, and one could not begin to act until a universal consensus had been reached. Mankind would die out long before this assumption could ever be fulfilled.

Moreover, the assertion that one has a property right in the value of things involves a contradiction, for in order to claim this proposition to be valid – universally agreeable – it would have to be assumed that it is permissible to act before agreement is reached. Otherwise, it would be impossible to ever propose anything However, if one is permitted to assert a proposition – and no one could deny this without running into contradictions – then this is only possible because physical property borders exist, i.e., borders which everyone can recognize and ascertain independently and in complete ignorance of others’ subjective valuations.

Rand did have insights that militated against property rights in “values”; as she once wrote:

The power to rearrange the combinations of natural elements is the only creative power man possesses. It is an enormous and glorious power—and it is the only meaning of the concept “creative.” “Creation” does not (and metaphysically cannot) mean the power to bring something into existence out of nothing. “Creation” means the power to bring into existence an arrangement (or combination or integration) of natural elements that had not existed before.

She should have realized that this means there cannot be property rights in value since this would have to mean property rights in arrangements or patterns, which would then give the owner of the arrangement rights in other people’s already-owned property. If she had kept her focus on the fact that rearranging already-existing property can indeed make that property more valuable, she would have realized that creation (rearrangement) is not an independent source of property rights: if you rearrange your own property, even if this makes it more valuable, you already owned the property that you have rearranged (made more valuable). Yet this does not give you rights in other people’s property. You can re-word the Randian view as follows: if you make your property more valuable, it gives you additional property rights–the right to prevent other people from making their own property more valuable. And this makes it all the more obviously flawed.

This is where the Misesian approach to subjectivist value makes sense: things have value to a valuer; values do not exist independently as free-floating things that can themselves be owned. And again, Rand should have recognized this; e.g., she once wrote, “Material objects as such have neither value nor disvalue; they acquire value-significance only in regard to a living being—particularly, in regard to serving or hindering man’s goals.” (For more on the compatibility between Objectivism and Austrian economics, see Mises and Rand (and Rothbard); Randian Hoppe(?), Austrian Rand(?).) So she should have realized that if rearranging owned property makes the owner or potential buyers value the object more, it does not mean there is any additional thing created for which we need to find an owner.

I think a similar mistake is made by Tibor Machan. Rand slips into thinking of values as ownable things because she thinks of values as created things, rather than thinking of it as a verb: people value things (and demonstrate this preference or valuing in action). I’m sure Machan would disagree with my way or framing his argument, but his argument, to me, seems to say that if you can have a concept for some”thing”, or a name or word for “it,” then it’s an ontological “type of thing,” and after all, if you create this thing, why shouldn’t you be “its” owner? The problem with this is it does not first ask: what is an ownable type of thing? Surely you can’t just say that any type of thing you can conceptualize or come up with names for is therefore ownable. I don’t own my wife just because I say she is “mine”; language does not determine normative reality. It is just a useful tool. If I use the word “poem” to describe a pattern of words that I wrote, and if I refer to the poem as an “it” and say things like “I created it” to mean that I moved my pencil in such and such a way on paper resulting in a certain configuration of letters, just because we arrange our concepts and words in this manner does not mean the poem is a “thing” that can be owned. In my view, all talk about “ontology” is just a fancy way of dressing up the fact that we understand the world conceptually, and use words of a language to denote those concepts. It does not imply that any thing I can happen to come up with a word or concept for is ownable. I have a concept of running; who owns “running”? There is math; who owns math? It is “a truth” that WWII began in a certain year. Who owns that fact? The point is that saying that you own the poem because you create it presupposes we are asking who the poem’s owner is. If that’s the question, then sure, the creator is a natural answer. But you only get to this question if we need to find an owner for the poem; if it does or can have an owner; if poems are ownable types of things. In my view, only scarce resources are ownable things. Something does not qualify for this status just because of the words we use–and saying something is “an ontological type of thing” doesn’t change this. (For more on this, see my comments in the thread of the post Intellectual Products and the Right to Private Property; New Working Paper: Machan on IP; Owning Thoughts and Labor; this comment to “Trademark and Fraud”; Libertarian Creationism; also  Elaborations on Randian IP and Objectivists on IP.)

Update: I will paste below some of my comments found on some of the above links. First: Intellectual Products and the Right to Private Property:

NSK:

FYI, a previous version of this paper was discussed on the Mises blog in the comments of this thread, New Working Paper: Machan on IP (http://blog.mises.org/archives/005960.asp), and my comments in Trademark and Fraud (http://blog.mises.org/archives/007409.asp), where I wrote:

Well, let me say that in a way I agree–one source of disagreement lies in differences over whether rights come from scarcity, or from “creation” (Rand’s “man’s needs” type of argument).

I’ve tried to show that it’s a mistake to think of creation as a source of ownership of property. Often it’s said that you can find/appropriate something, create it, or buy/receive it from a previous owner. But “creation” is not really a third way of acquiring ownership. In fact, it’s neither necessary nor sufficient. Appropriation of unowned goods, and contractual acquisition of goods from previous owners, are the only ways to acquire property rights in things. I discuss this in detail in the section “Creation vs. Scarcity” et pass. of Against Intellectual Property. Also, note that if you say that we have property rights to “things we create,” you indeed open the door to a horrible pandora’s box of things that people have monopolistic rights to, which would entangle and ensnare all use of scarce resources, thus leading to the entire human race dying out. See, e.g., the examples of Galambos and Schulman, noted in my article, who advocate protection of a very broad range of mentally “created” patterns, ideas, “logos,” what have you.

Tibor Machan has alluded to this in some of his writings, where he basically wants to say that there are all kinds of “things” that “exist”–poems, trucks, etc.–and since “The tangible-intangible distinction is not a good one for what can and cannot be owned”, then we need to focus on “intentionality”–things we intentionally create or produce, whether they be “tangible” or “intangible”–indeed, intangible things like poems, computer games/programs, novels, songs, arrangements, etc. are more completely “intentional” and “created” than are tangible goods. I.e., Machan’s theory seems to be that any “ontological type of thing” that we can identify, and that was intentionally created or produced by man, is owned by man. For more on this, see: New Working Paper: Machan on IP; also see the criticism and discussion in the comments (e.g., those of Carl Johan Petrus Ridenfeldt at November 30, 2006 4:59 PM); see also Owning Thoughts and Labor and related comment thread; and the comments in The Copyright/Baseball Analogy. I think if you review the criticisms of Machan’s view here (and my discussion of “Creation v. Scarcity” in my longer paper noted above), you’ll begin to see the magnitude of problems that accompany looking at property in this way.

***

In Owning Thoughts and Labor, I wrote:

I think Machan also makes the mistake of implicitly assuming that that any “thing” you can conceptualize or name “exists” and “thus” can be owned. Such as a novel, or poem, or invention. And if these things are ownable, naturally, the person with the best connection to or claim to this thing is its creator. As Machan notes,

the status of something as private property appears to hinge on its being in significant measure an intentional object—its status as a private owned entity has to do with in what mental relation is stands with an agent. But then it would seem that so called intellectual stuff is an even better candidate for qualifying as private property than is, say, a tree or mountain. Both of the latter only come to be related to human intentions, whereas a poem or novel cannot have their essential identity without having been intended (mentally created) by human beings.

(This is somewhat reminiscent of what Rand did when she actually elevated patents over mere property rights in tangible goods, when she wrote that “patents are the heart and core of property rights.” See. p. 18 of my Against Intellectual Property article linked above.)

The problem here is it just assumes any “thing” you can identify conceptually may be owned. One problem with this is that it seems to make reality depend on the way we name or conceptually identify things. If I call or understand your output as a “novel,” then the “novel” is the unit. But just because this suffices for conceptual understanding of the world does not mean there is some “ontological” class of entities called “novels” that may be owned. In fact our concepts are use to refer to many phenomenon in or aspects of reality–truth, love, the-fact-that-I-woke up this morning, the age of the earth, my favorite drink. Are these things ownable just because they are “things” that can be conceptually identified? I don’t think so.

When you ask what things are ownable, before asking who the owner is, you realize the criteria is bound up with the purpose of property rights, which is to assign owners to avoid conflict; that is, they pertain to the types of things over which there can be conflict–that is, to rivalrous (scarce) resources. Clearly not to facts or memories or recipes or patterns or information. So you never get to the question of who owns a poem. It is simply not part of the class of ownable things. Call it a thing if you like; say it “exists”; fine by me. But it’s not an ownable thing.

If you restrict the ownership inquiry to scarce resources, you see the question of “creation” never really comes up, strictly speaking: as I have noted before, the focus on “creation” as an independent source of ownership is confusing and flawed. Actually, it is first use that is the key (as elaborated in my article How We Come To Own Ourselves). This is sufficient to allocate title to any particular scarce resource in question (the body is a special case). Creation, it turns out, is neither necessary nor sufficient: for example, if I am the first to homestead an apple, I own it even though I didn’t create the apple (yeah, you can torture language to try to say you “created” it in a sense since your creative efforts or “labor” were needed to recognize the opportunity etc., but let’s face it: you didn’t create the apple). So creation is not necessary. And if you create a statue in someone else’s granite slab, you don’t own it–so creation is insufficient. By contrast, if you create a statue in your own granite, you own the resulting statue, but not because you created it–because you already owned the granite, but merely changed its form.

Randians justify rights based on man’s “need” to be “productive” etc. I find this a very flawed and non-rigorous approach. It is what leads them to focus on creation as the touchstone of ownership; and this is why they are so eager to grant rights in IP–because yes, these things are “created” moreso than unowned scarce resources in the wild that are found and homesteaded.

Also, see my Powerpoint presentation at the Austrian Scholars Conference 2008 for some brief criticism of some Objectivist views on “creation” as the source of property rights, esp. in the context of intellecutal property (slides 91-97 in particular).

***

John Armaos:
“And what would be accomplished from the abandonment of legal protections for intellectual property rights?

“It would destroy the following industries that produce billions of dollars and millions of jobs.

“Music, movies, television, books, pharmaceuticals, etc.”

I realize this is a common belief, but I do not believe it is true. Pharmaceuticals are hampered by the FDA. If you removed these shackles, and high state taxes, the “need” for them to have a patent monopoly (also grated by the state) would be much lower, no? Why have the state grant a monopoly to make up for other penalties imposed by other state actions (taxes, FDA regulation, etc.)?

“What is the incentive to create if someone can just mooch off of your ideas?”

I thought the Randian argument was a moral, principled one, not utilitarian. Anyway, using words like “mooch” and the possessive “your” (as if it’s similar to ownership) is question-begging, is it not?

Shouldn’t the case for patent rights be principled? But who can come up with a principled argument for a 17-year patent monopoly administered by a state-run bureaucracy?

***

Tibor wrote: “As far as IP is concerned, my point may be summed up as that whenever someone creates something of value, one owns it. Even some values not created by one but constituting one (say, one’s life or liberty) belong to one so others, in order to gain from it, must obtain one’s consent. If one creates a novel, it belongs to one; same with a poem or song or game. How one will protect what one owns is a subsequent problem–just as it is with the right to one’s life or liberty. The protection of these is a problem that arises only once the right is acknowledged to exist. It is furthermore clearly an intervention in one’s life to have others obtain one’s creations, products without one’s consent, be these a home, a car, a computer, a song, a design for some device, etc. Such taking would be no less theft that any other kind of taking to which the owner hasn’t agreed.”

Tibor, Re your latter comment about “theft”–under the patent system as it exists now, there is NO requirement to show that you “took” anything from the creator of a given patented invention. Even if someone independently invents the same thing; even if they invented it FIRST, this is not a defense. Now, pro-IP libertarians who make arguments like yours, it seems to me, will have difficulty squaring such a system with their basis for IP (though Rand tried to). So I assume you would object to independent or prior inventors being restricted by someone else’s patent for the same invention, so long as the person didn’t learn about (“steal”) it from the patentee, correct?

Now I think this is thoroughly reasonable. However, such a position, in my view, would undermine the patent sytsem (which I think would be a good thing). In any event, if you claim to advocate patent-like rights in inventions, yet agree with the unjustness of lack of a prior use/independent invention defense, then I am really not sure what system you advocate. It’s not clear at all. So I am not sure what to agree, or disagree, with, or what criticisms to make. If every particular criticism I make is met with agreement by pro-IP libertarians — “Oh, of course, I’m not in favor of THAT” — then I am not sure what else to say.

As for your coment, “whenever someone creates something of value, one owns it,” this is where I disagree, because this statement is too sweeping, for several reasons. First, note that all rights are considered enforceable–which means, in terms of physical force. If I sue you to stop you from using “my” invention, what that means is if I win, I can use physical force, against your physical property–e.g., an injunction preventing you from using your own physical property in a certain way, or a damages award giving me title to some of your money. So the dispute in this case is always about who can use, or own, a particular piece of physical property.

I think saying you have rights in any “thing” you create, that has “value,” is problematic for other reasons. First, it seems to me that what “things” are in this sense depends on our labels and concepts. And it leads to things like reputation rights, which of course most Objectivists agree with (Tibor, I can’t recall your view on this). I also do not think things “have” value; rather, some things are valued. I value my wife’s love for me and my child, but does that mean I “own” this love? does anyone own it? I think some things are not ownable at all; and this question is the one skipped over by taking about owning any created thing. The question has to be asked: is the thing of the type that can be owned? IF we keep in mind the fact that any dispute alwyas boils down to tangible things, and the propriety of physical force used to defend or use a given tangible thing, it seems clear that such tangible things are what are ownable; this is what the disputes are *about*.

IF you view it like this, then you see (in my view) that arguments “I created this pattern [invention, song, poem, whatever]” are merely arguments for control of a given tangible thing. If I argue that it is legitimate for me to use force against you, to stop you from using your own trees and logs to build a log cabin on your own land, “because” I “invented” the idea of building a log cabin to live in, then I am basically arguing that I really own (or partly own) your already-owned property (land, logs, body). I am arguing that my innovation gives me a better claim to your property. And that this innovation trumps your first-use (Lockean homesteading) of these things. IN other words, all IP claims undermine the idea of homesteading unowned natural resources. It means that the person who first appropriates an unowned resource is not its real owner: he is only its temporary, limited, conditional owner: he owns it fully only until some third party thinks of some way to use his own property. I think this is perverse and non-libertarian, impractical, unworkable, confused, etc. Not surprisingly, attempting to implement such a system–by empowering a state agency, no less–leads to manifestly unjust results.

***

Dwyer:

Here is Rand’s justification for rights:

“The right to life is the source of all rights — and the right to property is their only implementation. Without property rights, no other rights are possible. Since man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life. The man who produces while others dispose of his product, is a slave.” (“Man’s Rights”, VOS)

What’s flawed and non-rigorous about that?

Well… I am not sure what a “right to life” is, any more than a right to free speech. These it seems to me are derivative of your right to your body and things you homestead.

In your linked article on intellectual property, you say that property rights are applicable only to scarce resources, on the grounds that if resources aren’t scarce, then no conflicts can arise over their use, and that since intellectual property is not “scarce,” there should be no property rights governing its use. Does that mean that if I produce a non-scarce resource, I have no right to it and that you can rightfully deprive me of it without my consent?

This is the whole point: if it’s not scarce, no one can “deprive” you of it. As Jefferson said, it’s like someone lighting their candle from yours: you still have your flame. Likewise, if you think of a way to use your property–configure it into some design or apparatus; think of a way to use it (method)–for example, a way to modify your fuel injector to get better gas mileage, then if someone else uses the same technique on their own car, it does not deprive you of your technique.

You also say, “Ayn Rand mistakenly assumes that the first to file [instead of "first-to-invent"] has priority (and then she is at pains to defend such a system).” I think Rand would agree that ideally the first to invent should have priority. The problem is, how do you establish this priority legally?

Why do you assume Rand would agree with this? She never says this, and explicitly defends the first to file idea. Second, how would it be done? Like it’s done here. There is a system in place, called “interference,” to figure this out. Of course, it’s based on an arcane and arbitrary set of state-invented rules about “conception,” “due diligence,” and “reduction to practice,” but there are ways to do it. Rand was simply ignorant of it and in fact apparnetly did not even realize the US *has* a first to invent system alreayd.

“You do so through a filing process.”

Well, any patent system is a filing system, I suppose–but it can be either based on first to invent, or first to file. Moreoever, some here seem to think that the essence of patent infringement, is “stealing”–which means presumably copying and using someone else’s idea without their permission. Now a similar requirement is the case in copyright law–independent creation *is* a defense, there–but it’s not in patent law. So it seems that most pro-IP libertarians really favor some “copyright” based system even for protecting inventions–that is, patent would collapse into copyright (Rotbhard has a similar argument). But copyright is NOT a “filing” system. You get a copyright *automatically* in created works of authorship the moment they are “fixed” in a tangible medium of expression.

I really think most libertarian advocates of IP have no idea of the way the real system works, and of the bizarre system they are defending.

***

Arthur:

“You seem to have a notion that there is no such a thing as the fruits of one’s mental, physical or financial effort, and that they are not entitled to trade the fruits of that effort for a value.”

I believe you have a right to own (control) your body, and any ownable resources that you homestead from the state of nature or acquire from a previous owner. You can do whatever you want with your body or property, except invade the borders of others’ property–that is to say, except use others’ property without their consent.

With these rights, you can of course engage in trade with others to obtain things you want. You can “sell” your labor, which really means, entering into a contract with an “employer” who agrees to transfer title to some of their money, IF you perform certain services. Your ownership of your body is sufficient to allow you to do this. Just as your ownership of your property is sufficient to allow you to have “free speech” or “freedom of press” rights.

“Of course there is value created from taking granite and altering it into a statue. If you bought that statue, are you just paying for the value of a hunk of unsculpted granite?”

Technically, you don’t pay for value. You pay for certain rights to be transferred to you–namely,t he rights to control a particular hunk of matter. The *reason* you pay for it is you value the statue.

But so waht if you “create value” by altering granite into a statue? Either you own the granite that you are altering, or you do not. If you do, then you already owned the matter that you re-shape into something that “has more value.” If you don’t own the granite–say, it’s someone else’s; you are working under contract, or you stole the granite–then creating a statue does NOT give you ownership of it. Again: creation is neither necessary nor sufficient.

“Why do you think a sculpted piece of granite has a higher price than a hunk of unsculpted granite? Physical and mental effort was exerted in producing that finished product of a sculpted granite statue,”

Sure. There’s a reason people expend labor to transform their property. So what?

“something that the sculpter is entitled to the fruits of that mental and physical exertion”

I don’t know what this means. What “entitlement” is this exactly, other than the right to sell things you’ve transformed and improved?

***

Steve: “Answer: taxes and regulations are irrelevant to this discussion (unless you want to admit into the fellowship of the immoral and perverted). I’m not a patent attorney, however it appears to me that an individual or group of individuals file for a patent or copyright for the protection of their creation. The state is not granting them a monopoly. The state is recognizing their right to first use and benefit. If the state were blind to the rights of creators then there would be no use in creating. And certainly no use for a state.”

I agree with your last sentence.

The state is of course blind to true individual rights, is it not? It is an enemy of rights. Who can deny this?

***

Ed Thompson: “Unowned scarce resources in the wild aren’t homesteaded by being “found.” If that were true, then American Indians (Native Americans) would own America outright. In order to homestead something, from the Objectivist point of view, you have got to mix your labor with it for a productive purpose. The purpose needn’t be utilitarian (whatever is “supposed” to be good for many if not most folks), but it does need to be productive. Just like man needs to be productive — a natural need that won’t ever go away.”

I don’t disagree. Lockean homesteading doesn’t say you just “find” something. You have to emborder it, transform it, publicly mark it as “yours”. Sure. Who said otherwise? I argue this too in How We Come To Own Ourselves; Defending Argumentation Ethics.

“Stephan, could you produce a logical syllogism justifying man’s rights?”

I’ve done my best in the articles cited, and others they link to. In my view, rights are justified by showing that the denial of rights is incompatible with the pro-peace, pro-civilization norms necessarily presupposed by any participants in discourse about this issue. This technique is similar to the way Rand argued (proving some “axioms” by showing that its denial is self-contradictory); and also her recognition that all rights are “hypothetical” since they depend on one choosing to live, which choice is itself pre-moral or a-moral. Likewise, if one does not choose to be civilized, no discussion is possible with him; Peikoff made a similar point in OPAR about how you discourse with someone determined to be irrational: you don’t. In like manner, we simply have to regard uncivilized, irrational, criminal people as outlaws, as not really human. And deal with them as a technical problem. We who care about justification realize we are justified in treating them this way b/c of the logic of the entire ethical enterprise.

***

Dennis Hardin:

“The problem here is it just assumes any “thing” you can identify conceptually may be owned. One problem with this is that it seems to make reality depend on the way we name or conceptually identify things. If I call or understand your output as a “novel,” then the “novel” is the unit. But just because this suffices for conceptual understanding of the world does not mean there is some “ontological” class of entities called “novels” that may be owned. In fact our concepts are use to refer to many phenomenon in or aspects of reality–truth, love, the-fact-that-I-woke up this morning, the age of the earth, my favorite drink. Are these things ownable just because they are “things” that can be conceptually identified? I don’t think so.”

Rand is very clear about the fact that an idea or concept as such cannot be legally protected until it has been given a specific physical form. It is this specific form which endows it with value because that had to be created, and property rights apply only to that material form—e.g. books, magazine articles, audiotapes, etc. This material form cannot be reproduced without permission and/or compensation.

I find this reasoning flawed for several reasons. First, as I’ve noted to others here, it assumes that patent is like copyright–that it goes to “copying” (reproducing) others’ inventions. It does not. That is not the patent systme. It has nothing to do with knowledge, access, learning, copying: the patent right is basically absolute. Independent invention, hell, even PRIOR invention, is NOT a defense! If you reject this part of the patent system, you basically reject the patent system, just as I do, since, as any mainstream patent advocate will tell you, the system would be utterly useless and collapse, if these were defenses. So you seem basically to be thinking of some copyright-based system (a system designed to protect original works of authorship, NOT practical inventions) would extend to inventions too. I have no idea what such a system would look like, and I don’t think any of its implicit advocates do either; i.e., they don’t know what they are talking about, quite literally; they are not clear on what they are advocating. They object to critics of IP; yet they agree with most or many of our concrete criticisms of IP. They do not seem clear on what they are in favor of, yet seem determined to be in favor of it anyway. IF any libertarian wants to set forth an actual vision of the IP system he is in favor of, it can be discussed.

“When you ask what things are ownable, before asking who the owner is, you realize the criteria is bound up with the purpose of property rights, which is to assign owners to avoid conflict; that is, they pertain to the types of things over which there can be conflict–that is, to rivalrous (scarce) resources. Clearly not to facts or memories or recipes or patterns or information. So you never get to the question of who owns a poem. It is simply not part of the class of ownable things. Call it a thing if you like; say it “exists”; fine by me. But it’s not an ownable thing.”

This is a typically libertarian approach to rights, implying that the only issues involved are purely practical and dropping the context of the moral basis of rights. In Objectivism, rights are conditions of existence required by man’s nature for his proper survival. Man survives through the use of his mind, and property rights amount to a legal codification of the connection between mental effort and material values. They assure that the material products of a man’s mental efforts will be his to dispose of as he see fits—to serve his life and needs. It is a kind of contract which the creator of a novel or article or poem or invention—all of which are very much “ownable”–makes with anyone who might use it to agree to compensate him for his efforts.

A kind of contract? If I think of a way to use my property, when did I enter into any contract with others, that lets me sue them if they use their property in a similar way–esp. if they independently think of this way too??

As for dropping the moral context: I want to remind you of Rand’s comment from Galt’s speech: “Whatever may be open to disagreement, there is one act of evil that may not, the act that no man may commit against others and no man may sanction or forgive. So long as men desire to live together, no man may initiate–do you hear me? No man may start–the use of physical force against others.”

Note how this presupposes the simplicity of, the self-evidence of, what aggression is, and why it’s wrong. This is what any civilized person does. This is what it means to be civilized. We are all civilized, who discuss these matters; we all take for granted the basic civilized norms.

Man must create the values his life requires, but it would be absurd to say that he can only own those things which are entirely of his own creation. The monetary compensation he receives for his material creations can then be used in exchange for goods created or produced by other men (e.g., food products which must be grown, farmed or manufactured).

I find the idea that we “create values” to be confused. We don’t create values. Valuing is a relationship–you value something, and you demonstrate this in action, as Mises noted (and as Rand recognized in her idea that value is something you ACT to gain and/or keep). We don’t create values; we create things, we create wealth; we transform things into more “valuable” (i.e,. more valued) things. Sure.

Your approach is purely utilitarian: rights are to be assigned in a way that best reduces conflict. The objective requirements of human life have nothing to do with it.

I don’t thinks is correct. Note Rand’s inquiry is based on the implicit ethical assumptions or presuppositions of those who have chosen to live. Likewise, my argument is based on the implicit ethical presuppositions of those who have chosen to be civilized–including in particular those who debate or inquire into these issues; those who engage in argumentative justification of norms in the first place. We are all libertarians in the political sense here–we share certain views in common. What are these views? I think we all share the idea that peace and cooperation, civilization, are *good*. We choose to be civilized, just as we choose to live. Why do we make this choice? Who can say. But the choice has some implications. Those of us with a decent grasp of economics realize 98% of libertarian political views, simply by applying basic econoomics, and some logical consistency, to our presupposed basic norms of peace and cooperation. We see that most of our fellow men go astray not b/c they want to be wicked, but b/c they are confused–their advocacy of government intervention and aggression is *inconsistent with* their stated pro-civilized norms, right? don’t we all here agree that our fellow men are mostly confused and inconsistent? So we try to point this out to them. We say, look, if you are really in favor of prosperity and peace, you can’t favor taxes or anti-discrimination laws, since these undermine peace and prosperity. Thati s all I”m doing; it’s what we all do.

NOte you do not make the same arguments to an aggressor–someone trying to club me over the head, say, or rape me: you shoot them, if you can.

“Unless we define rights from the objective moral perspective of the requirements of individual surivival, the all-powerful state will continue to grow and thrive, and libertarianism will have helped pave the way to tyranny.”

I’ll say thi: most Objectivists favor the state, at least a minimal state. Yet there is no minimal state in the world; and there never has been one. The ones that have been even close (and I would disagree taht the US ever was really close) all devolve into worse states, and tyranny of one type or another. So why Objectivists think a limited government is even *possible* is beyond me. In my view, it is advocacy of the state at all that helps pave the way for tyranny. Tyrants can’t get away with it but for consent of the populace. I don’t grant them my consent. Some Objectivists do, even if unwittingly.

***

Steve:

Stephan: ‘The state is of course blind to true individual rights, is it not? It is an enemy of rights. Who can deny this?’

I’ll deny it.

Now you sound like a libertarian.

Thanks.

The state is not necessarily the enemy of individual rights. Government, as far as I can tell, is a just an enforcer of rules. Because of mans need for social interaction, or mans desire to interact, there much be some objective and separate agent to provide protection.

Hatred and distrust of a government is fine. Hatred and distrust of government is irrational, in my opinion.

Well, hold on. Humor me. First, let’s say not all states are necessarily bad. Isn’t it enough that EVERY state in the world today is terrible? Do you disagree that this is the case? Do you agree that the US federal government, to take one state, is in the year 2008 an enemy of rights, or not? I think it is manifestly obvious that it is.

And let me ask you this. Would you agree there has never been a truly minimal/limited state, and certain never one that lasted, that didn’t devolve into a rights-violating, criminal organization? And if you do agree, then how can you say it’s irrational to distrust all states? Even if it is based on some flawed reason, is it really irrational? After all, it’s easy to make a prima facie case out–all states are tyrannical; they have always been; all experience indicates that this is the case. Why is it “irrational” to conclude from this that all states will always be corrupt and unjust? Isn’t a bit of an unfair overstatement to say this view is necessarily irrational?

***

[Robert: "Name ONE government that one can love and trust - NOT in theory, but in practice..."]

Teresa: “I’m sure there are lots of local governments who’ve earned that response, Robert.”

Such as…..?

And even if you find a local town, say, that somehow merits this response, this example is limited to a very small population, and also probably exceptional b/c many other functions of government are provided by higher levels–so that the local gov’t that “merits” respect, is not a complete state. The challenge is to find ANY (full, complete) state that deserves this respect and love.

***

Ted Keer:

“During the middle ages, if your neighbor invented a better plow, you could look over the hedge at him tilling his field and copy his design. There was nothing that he could do to prevent this except to try to plow only at night or simply not to use his invention. The idea of offering patents came about when political thinkers saw that a limited form of monopoly granted for a limited period and backed up by political force would benefit all parties. If you knew that by inventing a better plow you could apply to the king for a patent and get a fee from those who wanted to license your idea you could invest the time in plow-research confident in the notion that your hard work would be rewarded.

In the state of nature, the idea of patents is unthinkable. One either hides one’s secrets (like the formula for Coca Cola) or shares one’s recipes or simply doesn’t innovate. But if a state apparatus already exists, and the state can offer you a limited monopoly for a fee (you get royalties, the state gets taxes, the public gets the benefit of your invention, and free use of your idea after some period has elapsed) then all benefit and none is harmed.”

Well, this is the theory, but there is no proof to back it up. Even if you swallow the problematic utilitarian rationale of this idea (it is utilitarian: clearly, it’s not the case that *no one* is harmed–some people are harmed, badly; RIM had to pay $600M recently after extortion from NTP; so the argument is that on net, we are all better off), most studies conclude the patent system is a net drain on the economy, or are inconclusive. I’ve estimated that the system costs at least $31 billion a year in net losses.

Pro-IP people who deny this ought to tell us exactly what are teh costs, and benefits, of the system, so we can figure out the alleged net gain. They never do–they do not know. Yet they act as if they do. I find this to be dishonest.

***

Steve:

I agree that every state currently in existence is shameful. I’ll admit that the US government is disgraceful, but this was not always so.

It’s more than “shameful” or disgraceful–it’s criminal. Do I sense a reluctance here to call a spade a spade. From an Objectivist? Say it ain’t so!

Thinking that the state must become corrupt and unjust is irrational. Since some institution is necessary for the protection of rights, it does not follow that this institution must become unjust. If you disagree and think that it is unessential to have a government at all you had better put that in a new thread.

I disagree. The state by definition is corrupt and unjust, since by its nature it either taxes, or outlaws competition. Either of these actions is corrupt/unjust. I don’t see that “an entity that taxes or outlaws competition” is the institution necessary to protect rights. In fact, by its nature, it infringes rights.

Capitalism requires a government because it requires freedom. There can be no freedom if one man my steal another mans creation. There is only one rational way to deal with this issue, as I see it. There must be an agent who can respond to force. That agent is the state.

Do you think the case for IP depends on there being a state?

Your arguments are great for a libertarian. Unfortunately for libertarians, that makes them great arguments for anarchists.

Of course, I am an anarchist, since I oppose aggression, and since the state is necessarily aggressive.

But this is not the issue. The issue is whether is it rational to hate government of all forms. If someone wants to use what he has created, he had better choose a government that will protect his right to do so.

I don’t know waht you mean by “government.” The question is whether *the state* is justified.

***

Dwyer:

“This is the whole point: if it’s not scarce, no one can “deprive” you of it. As Jefferson said, it’s like someone lighting their candle from yours: you still have your flame.”

Suppose I don’t want them to light their candle from mine. If it’s my flame, why can’t I deny them access to it?

Sure! But if you don’t, then the information gets out. As Tucker said, “You want your invention to yourself? Then keep it to yourself.”

I wrote, “You also say, ‘Ayn Rand mistakenly assumes that the first to file [instead of "first-to-invent"] has priority (and then she is at pains to defend such a system).’ I think Rand would agree that ideally the first to invent should have priority. The problem is, how do you establish this priority legally?”

“Why do you assuem Rand would agree with this? She never says this, and explicitly defends the first to file idea.”

She defends it, but not in opposition to the idea of “first-to-invent.” She sees the filing process only as a way of making public one’s invention so as to ensure a mechanism for its legal protection. If there were a better way to do this, I don’t think she’d object to it.

I am not sure you understand how the patent system works. The US system has a filing process. It happens to be based on first to invent, rather than first to file. So I am not sure what you are talking about.

“Second, how would it be done? Like it’s done here. There is a system in place, called “interference,” to figure this out. Of course, it’s based on an arcane and arbitrary set of state-invented rules about “conception,” “due diligence,” and “reduction to practice,” but there are ways to do it. Rand was simply ignorant of it and in fact apparnetly did not even realize the US *has* a first to invent system already.”

Okay, but that lends further credence to the idea that if she were aware of it, she would not have had any strong objection to it.

This makes no sense to me. The US system at the time was based on first-to-invent. Rand assumed it was first to file and she wrote a defense of it. She was doubly wrong. I don’t understand how this logic redeems her.

Well, any patent system is a filing system, I suppose–but it can be either based on first to invent, or first to file. Moreoever, some here seem to think that the essence of patent infringement, is “stealing”–which means presumably copying and using someone else’s idea without their permission. Now a similar requirement is the case in copyright law–independent creation *is* a defense, there–but it’s not in patent law. So it seems that most pro-IP libertarians really favor some “copyright” based system even for protecting inventions–that is, patent would collapse into copyright (Rotbhard has a similar argument). But copyright is NOT a “filing” system. You get a copyright *automatically* in created works of authorship the moment they are “fixed” in a tangible medium of expression.

Okay, but there has to be some way of making one’s invention or creation public knowledge, and for that you need a legal system with certain rules that must be adhered to. I think you are quibbling over non-essentials.

Fine, but I find such comments to be maddeningly frustrating. I have no idea what you guys are *for*. You tend to agree with me on my concrete critiques. But what are the specifics of the system you are for? I don’t know.

I really think most libertarian advocates of IP have no idea of the way the real system works, and of the bizarre system they are defending.

Perhaps, but this has little if any bearing on the issue of intellectual property rights.

It seems to me if you are advocating a state-implemented system of rights, it’s incumbent on you to advocate what the hell you are talking about. This is similar, in my view, to the Objectivist critique of theism–theists are notoriously irrational in debate. They often say they believe in “God,” but if you ask them what “God” is, they crawfish and say that no one can know, his nature is not definite, they are not sure, it’s this and that contradictory thing, etc. I think IP advocates are actually similar to theists.

***

John:

Stephan I don’t understand this view of rights. If someone can’t deprive you of something, it doesn’t mean you still don’t have a right to it.

Why do you need a right to something you can’t be deprived of? Anyway, I was responding to an argument that said that it’s wrong to deprive people of something. I countered that if you do the same thing with your property that someone else is doing with theirs, this doesn’t deprive them of anything. IF you think “deprivation” is not essential to a rights violation claim, then don’t make this argument.

And I would disagree that someone doesn’t have the ability to deprive you of an abundant resource.

“Scarcity” here is economic scarcity–non-rivalrousness. Not mere lack of abundance.

That you repudiate then intellectual property rights because they are not scarce resources as your basis of what should determine is a right to property doesn’t make much sense to me either.

I repudiate them for this reason. To enforce a legal right *always* means to do something to or with someone else’s *tangible property*. Thus, to grant rights in IP or any non-scarce resource, *necessarily means* granting or transferring rights in tangible things. I think the Lockean homesteading rule is sufficient; IP brings in a second rule that trumps it. All criminal or socialist ethics are incompatible with the Lockean homesteading rule, just as the property rule implicit in IP is.

Only Rand wrote Atlas Shrugged. In that sense I would regard that to be a very scarce resource.

Copyright covers not only the right to literally reproduce, but non-literal reproduction, and various “derivative rights.” So by some accounts we could not even have this discussion. Or, you would be prevented from writing “John Armaos’s Prometheus Blinked: A Sequel to Ayn Rand’s Atlas Shrugged”–that is, if you wanted to write your own novel, with your imaginary rendering of what the characters might do next–you are physically prevented from doing so. Do you not see this as manifestly and obviously absurd and unjust?

Then you would be paying for a value! Right? Trading money, something the sculpter values, in exchange for the sculpted statue, something you value.

Some thing that I value is not “a value.” It’s a thing I value.

Yes, and that addition of more value is because the sculpter spent his mental and physical labor giving it more value, which is what he owns. He owned that physical and mental labor.

No, no one “owns” labor. Labor is just an action–something you do with your body. You own your body–that’s enough.

But creation requires labor, both physical and mental, and as you seem to agree, you don’t get to steal that either, correct?

Creation requires innumerable things–it requires that we have time, that there not be a storm, etc. Do we own every necessary condition of creating things?

Unless slavery is ok with you?

Some slavery is of course justified–jailing or punishing criminals, for example. But innocent people have a right to their own bodies. That rules out slavery. You don’t need to then talk about owning labor, any more than owning memory or emotions or ideas.

If it’s your labor, physical and mental, you get to dictate the terms on how you want to trade that physical and mental effort.

Sure–because you own your body an can choose what to do with it. But you don’t own your labor. This is a mystical, metaphorical confusion.

So when Rand wrote Atlas Shrugged, she owns the fruit of that physical and mental effort, namely a “novel”

Your “so” doesn’t follow. Question begging.

and can dictate the terms of that transaction, including not being able to reproduce her novels without her consent or compensation to her.

This is yet another confusion: you are attempting to say that copyright and patent could be based on private contractual arrangements. They cannot, since private contracts don’t affect third parties; but IP necessarily does.

What do you mean so what? So you have a right to your labor, whether that be physical or mental, and you have the right to trade that how you wish to. You seem to suggest by denying we have a right to intellectual property means I don’t have a right to dictate how I can offer my intellectual efforts?

Not so; you own your body, and your property; you can do whatever you want with them.

I.e. my mental effort, or in the case of the contractor his expertise. That has a value, that is intellectual property,

More question begging.

***

John:

I agree but you still have the right to sell your idea of how you changed your property to someone else. For example I could invent a product, and sell you the design. You don’t have a right to steal that design, i.e. take it without my consent. Because that design was mine.

Well, a contract between A and B is fine. But IP requires that third parties–C–be bound. Suppose A has a design for a house, and “sells” it to B. Now somehow someone leaks the design, or it gets independently invented, or widely known, whatever. Everyone knows about the design now, just as people knw of FallingWater’s design, or the general plot and characters of Star Wars, even if they have never seen the movie. How is C bound by the contract or sale between A and B?

I don’t think I ever recall economic scarcity defined this way. I believe economic scarcity means the supply of a product or resource cannot meet the demand.

Just look up non-rivalrousness, and you’ll see what I mean.

So basically you are saying no one should be able to sell their ideas, or expertise? I can’t sell you the design for my invention? I can’t sell you my novel?

Technically, no; practically, it depends. Let’s take the classic employment contract as an example. I don’t think you “own” your labor, so you don’t technically “sell” it. What happens is a laborer or employee and employer agree that the employer will pay $X for certain services, if the employee performs them. This is really a unilateral agreement: Employer simply agrees to pay, IF employee does certain things. This does not require the awkward presumption that one “owns” one’s labor. It’s just that being in control of one’s body allows one to profit off of using it.

I’m sorry I’m not arguing with currently how copyright laws work, we are or at least I thought we were engaging in a discussion of whether there is such a thing as intellectual property rights. I thought your position also includes that I don’t have the right to copyright my literary piece even from a literal reproduction without my consent?

If you are not endorsing current copyright law, then I am not sure exactly what “intellectual property rights” you are in favor of. This is typical of libertarian advocates of IP: they deny they favor current IP law, but are devoid of specifics of what they do favor. Again, it’s reminiscent of the tactics used by theists when cornered.

Again you’re just quibbling over a non-essential. With the premise that one own’s his own body, the logical extension of that is you own what your body can do. When an employer hires an employee, the employee doesn’t just trade his body for a specific period of time. He isn’t just some motionless robot sitting in the corner doing nothing, like “Ok you have my body, do what you want with it for 8 hours”. The employee moves his body and uses his mind, thus producing something fruitful, i.e. something of value (please, don’t quip back you can’t value a value, when I mean something of value I mean something that someone values, ok?).

I think the title-transfer theory of Evers-Rothbard is basically correct. A contract is a way to transfer title to things that are owned (ownable). The employment agreement is what I specified above: it’s usually simply a one-way, unilateral, conditional transfer of the employer’s property to the employee. It’s triggered by, conditioned on, the employee’s doing certain tasks. I don’t see that this is all that complex nor does it imply “ownerhsip” or one’s “labor.” I find this talk to be very slippery, non-rigorous, metaphorical–the kind of talk that would be engaged in by liberal arts majors

“That is his labor, and he owns that labor can trade it for something in return.” I guess you can look at it this way, if you must, if you are unable to comprehend what a conditional, unilateral title transfer is. Whatever helps you.

Well we own what our bodies can do, so that of course means we own our own time, and our own labor.

This is a great example of the absurdity that results from overreliance on metaphor. You think we “own” our own “time”…? What the heck does this mean??

“You can own your own mind and body and what it can do. And what it can do can be traded obviously as I said before.”

I can trade… what my mind can “do”, because I “own” it? … this is so confused.

Of course you own your own labor and this is not some mystical or metaphorical confusion.

Really? Can you leave it to someone in your will?

Let me guess: you think we own our actions too. Do we own our intentions? Our love? Our memories?

“So when Rand wrote Atlas Shrugged, she owns the fruit of that physical and mental effort, namely a “novel”"

your “so” doesn’t follow. Question begging.

Please explain.

It’s question-begging to assume that she owns the fruit of her labors. That’s the question here.

“and can dictate the terms of that transaction, including not being able to reproduce her novels without her consent or compensation to her.”

this is yhet another confusion: you are attempting to say that copyright and patent could be based on private contractual arrangements. They cannot, since private contracts don’t affect third parties; but IP necessarily does.

This is a non-sequiter. A private contract between two parties also doesn’t mean a third party can steal the product. If I sell you a car, that doesn’t mean Bill gets to steal that car from you because he wasn’t a party to that contract.

That’s because the car is an ownable, an owned, thing. The question is whether IP is.

I don’t need a contract with all third parties stating they can’t take my property without my consent. So likewise if I sell you a novel and retain a copyright to that novel, I’m saying that I am only selling you the book itself with the words printed in it, I’m not selling you the right to reproduce those words.

This is essentially Rothbard’s argument. The thing is, a car is owned. If a third party uses it without the owner’s consent, he’s a trespasser, even if he’s an innocent one.

But suppose I think of a way to use my own property in a more efficient way. How is this even possibly a trespass on the “idea” of some other guy who registered his similar idea with a state agency? Or suppose I am shopping at Wal-Mart an