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When intellectual property rights stifle output The New Yorker has an interesting article about the risk that excessive granting of patents and copyrights can reduce, rather than increase, the potential level of goods and services. The article is very fair-minded and worth a look.
The issue of patents and IP generally remains a really tough one for me to work out what my own views are. I tend to take the view that state-granted patents are a bad idea, and think it is entirely arbitrary to work out whether a patent should run for X or Y number of years before expiry. But notwithstanding the arguments of the likes of Lessig and other “open source” folk, I can see the case for giving people some financial incentive for coming up with an idea and trying to make money from it. This seems particularly so in areas like drugs, where the costs of research and development are very high, for example.
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The intellectual property (IP) system is a diverse and diffuse array of laws, standards, practices and policies – it could even be misleading to describe or conceive of it as one system. While there are clear sets of interests, and clear sides in certain debates, the IP ‘system’ is not as monolithic or as rigid as it sometimes seems in policy discussion. After all, the same copyright ‘system’ is used by major multinational companies, by individual musicians, by creators working in protected commons, by small software houses, by blogger – to be sure, for very different purposes, commercial and defiantly non-commercial. The values and interests of these different users are incredibly diverse, and even the technical legal standards that apply – even within the international framework – vary considerably.
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kimrennin
Wyoming Treatment Centers
Oddly enough JP I was discussing this very thing last night with the missus.
’bout ten years ago I was told by a pharma person that the bear minimum cost of bringing a new drug to market was at least a billion quid. So definitely they need protection by law.
I’m not sure about the arbitary thing. It can be. Disney keeps getting rolling extensions on it’s early stuff. It seems to me that there is a span in time, length roughly a lifetime, after which anything created (which is still worthwhile) becomes public domain, and indeed is now part of the wider culture.
It should be protected before that legally.
What bothers me more is absurdities like companies trying to patent genes they discovered (not invented) or look and feel law-suits and the patenting of concepts and such like.
Neither me nor the missus have more than a cursory knowledge of IP law BTW.
And also. I find annoying dog in the mangerism. The Home of the Underdogs provides free downloads of abandonware games. This includes some very ancient PC games but not all. Some are still fiercely protected by their owners despite being totally unsaleable these days. Their interest is mainly as curios and historical artifacts.
OK, fair does to the companies in question. It’s their game and up to them. I am not questioning their rights here. I’m just saying it’s annoying.
But what really bugs me and does I feel doesn’t help innovation is illustrated by my example of Disney. Disney being a media 800lb gorilla can lobby more effectively than Nick’s Animation Shed. The big guys seem able to get more protection than the little guys.
Because we all know that from little acorns…
As you say it’s a balancing act. AC1 reckons that as a state-protected monopoly, IP rights should be subject to Land Value Tax, but, as Kimrennin points out, the whole system is infinitely complicated and I’m not sure whether such a tax would ever be enforceable.
I’ve had many a heated debate as to the rights and the wrongs of forcing companies to give up their rights to control the price and distribution of life saving drugs – especially HIV drugs. Thorny issue.
Would it not be correct to state that IP rights and patents stifle output in the same way as private ownership of property stifles public works – and wasn’t the libertarian view here that ownership trumped all? I think it is incredibly inconvenient that I can’t do exactly what I want with my iPhone or my music collection, but without patents and IP protection, Apple may not have made the product. Very difficult subject – further complicated, in the case of medications, when it is advocated that expensive antiviral/antibiotics are given to populations designed to foster resistant strains…so not only is your product being given away for less than market value, the very act of giving it away reduces its future value.
Anyone got a Grand Unified Theory of IP? Perry? Anyone?
I think there’s a huge difference between the concepts of patents (limited monopoly rights in something tangible one has invented, ignoring the ridiculous extensions noted by Nick M) and copyrights (protected use of something one has written or composed). In the case of patents, yes it is possible that a multiplicity of patents on closely related matters can lead to “gridlock”, but that speaks more to the improvidence of granting patents for tiny improvements or things (such as gene fragments) which shouldn’t be patentable at all than to a problem with patents in general (which I strongly support). Such gridlock will eventually be overcome (if only by the expiration of the patents), so in the worst case the only detriment is a slight retardation in the relentless march of technological advance. In my view that’s a small price to pay for protecting the intellectual property rights of the inventor.
In the case of copyrights , however, no one “needs” to use someone else’s work as a part of his own; there is no “overlap” of rights as can occur with patents. That’s why the two are treated so differently under US IP law: IIRC it’s 17 years for patents and 75 years after the death of the author for copyrights. In my view that’s not an unreasonable compromise.
One observation concerning the linked article: In the penultimate sentence Surowiecki makes a totally unsupported (by anything which had preceeded it) leap from patents and copyrights to privatization, thereby conflating two wholly unrelated concepts in an obvious attempt to discredit the latter by association with the former. Earlier, he had spoken approvingly of government-controlled “patent pools”. Even though this article is nominally on The Financial Page, you can see where the author’s political sympathies lie. Anybody who relies on the New Yorker for objective information deserves what he gets.
It would be quite correct, Nick. And ownership should trump all, libertarians or not. I am amazed time and again that this even comes up as a question.
Nick M, re genes: they shouldn’t own the genes, but they should be able to own the information. Of course enforcement is a separate subject. Once the genie is out of the lamp, tough luck. Ideally, if someone wants to profit from exclusive information, they should distribute it under contract. You cannot tell the world where the gold is, and expect to get a cut every time someone digs some of it out, unless you gave this info away subject to clearly defined conditions.
Got smited – sigh.
nick wrote:
‘Would it not be correct to state that IP rights and patents stifle output in the same way as private ownership of property stifles public works . . . ‘
and I almost agree – except that it should say ‘IP rights and patents stifle public output . . . ‘
and, for the most part, having the state involved in matters which require the exploitation of IP is a bad thing.
Patents and copyrights protect the intellectual property of one private individual or entity from being exploited by others private individuals or entities.
At the very worst, patents and copyrights do not ‘stifle’ output so much as they delay it – all patents expire evntually, at which point, their content is in the public domain and free for all to use. The alternatives are either rigid monopolies based on closely-guarded secrets, or a stifling of inventive works simply because the inventor will not be able to profit from his invention.
Also often overlooked is that a patent is a piece of property. Those who dislike patents and the like, always present the image of a mean & nasty inventor holding off all comers, cackling ‘No! It’s Mine! You Can’t Use It!’ In reality, of course, patent-holders get their patents because they think their ideas are valuable and exploitable – and they will sell or license their inventions if the price is right.
Where there is no copyright, nothing new worth reading is published, because neither the author nor the publisher will make a penny off copy # 2 of the book. Where there are no patents, nothing new of use is brought to market, for the same reasons.
I also dislike the wilder excesses of the patent process, such as the patenting of genes, methods of doing business, and so forth. But you have to be careful of babies and bathwater. And I tjhink you have to be as careful as all get-out when you start suggesting that governments should be in the business of deciding whether or not IP rights are enforced, becasue governments will always make such decisions based upon political motives – property rights and even the larger public good will always be secondary.
Statement of interest – I am the inventor of a number of US patents, and may therefore be biased in this regard.
llater,
llamas
Smit also. I wonder why?
llater,
llamas
From the article:
A little bit of expert central planner mentality slips through here. “The commons leads to overuse and destruction;” which would be as determined by the co-owners of that commons. “the anticommons leads to underuse and waste.” as determined by covetous non-owners. The assumption is that private property must be used for the common good. If it is not, then it must be collectivized. That is fascism, but I doubt Surowiecki considers himself that.
Well, yeah. And restrictions on property right and right-of-way limit squatters’ abilities to usurp and build on my land. Once again, a fascist-collectivist stand. I am not using ‘my’ property for the best common good.
Notice he can’t bring him self to say “private property” and has to resort to “divided property”. Notice it is
privatedivided property that is to blame for the shortage of ‘Green’ energy. Last I checked, though, all electricity needed wires, not just the Green kind. And notice the biggest give away, the problem isn’t even so much “divided property”, it’s “owned by individuals”, (shudder).“The point isn’t that private property is a bad thing” See, he is able to say “private property” when stating that it being a bad thing is beside the point. The point is that private property must serve the common good. Incredibly, somehow invention and creativity have quietly become “science and culture”, and unless we quit allowing people to own “science and culture”, AKA their inventions and creative products, we make it “more difficult we make it for people to do business and to build something new.” and “Innovation, investment, and growth end up being stifled.”
He goes on to say “But the effects of underuse created by too much ownership are often invisible.” His automatic assumption is that the operator of the property is not entitled to decide how to use it. It must be managed for the common-good. This guy is a stark raving fascist. He does not believe in any private property, only property administered for the common good. He probably thinks he is a socialist who acknowledges some capitalist features can be useful. Which last I checked was accurately called fascism.
My apologies Johnathan, I didn’t read on. But hopefully this discussion will be good.
For reasons that should be clear from my previous comment, I avoid pragmatic justifications for property rights. They cannot help but devolve into intrinsically fascist, common-good based systems. A little tweak here to ‘help’ software development, a bit of a modification to ‘encourage’ drug development, a slight change to make recorded music ‘more available’ . . . They all smack of central planning and ultimately, the common good and fascism.
For whoever asked for a Grand Unified Theory of IP, it is quite simple but at the same time, unperfectable.
IP protects your thoughts until somebody else would have thought of it. That is why copyrights run very long and patents run very (comparatively) briefly. But it must be based on an estimated alternative reality. The moral basis for the varying time frames is an averaged guess. There is much precedent for using averaged guesses in establishing legal frameworks. One example is ‘age of majority’. Nobody seriously believes that something magical happens at 12:01AM on your 18th birthday. It is just a best guess of mental maturity.
Adjustments to the lengths of various IPs are fine as long as they are based on refining the best guess to reflect improved understanding or changes in the velocity of the growth of knowledge.
Trademarks are founded a little bit differently. They are treated as a piece of real estate, of land. Somebody develops an as yet unused design/name/product association and stakes it out. They retain ownership on that trademark as long as (like property) they continue to do things to maintain ownership of it. This can be things like simply defending it. It is also conceivable that this particular form of IP could be made subject to property taxes but I really don’t like the idea of property being taxed at the National level so I hope we can fight any efforts in that direction.
Alisa makes a very true point that the unquestionable means of protecting ideas is in contracts and that only by requiring contracts from everybody in the entire chain of provenance of every single product based on IP can we have a guaranteed just system.
The purpose of the IP protection system is to encourage people to be more open with their ideas by offering limited protection if the ideas are released according to defined rules. That system has worked quite well and most of the failures have not come from the structure of the system but rather (surprise surprise) from the political administrators of it. But if we payed as careful attention to the surveying of IP as we do to the surveying of real property, we would not be having these problems. If your real property surveyors missed by as much as the patent office typically does, they would be decertified instantly.
As for IP in a hypothetical advanced libertarian society, I tend toward anarcho capitalism whenever that option appears workable and in this case it is quite simple. People would have the option of joining into open contracts and those contracts would contain the terms for IP rights. Which ever contracts of association were best at protecting invention and creativity would draw the most inventors and creators and all of the wealth that comes with them.
To a strong degree this has been the source of the wealth and power of the US and other states with strong IP protection. It has also been the source of weakness of states that do not protect IP (or other property). And to those of you who say that people outside the contract will steal the good ideas, well as I recall, the Soviet Union gave that approach as good a try as ever has been done and, well, how’s that worked out for them?
And as Nick M points out, patenting discoveries is (an unfortunately permitted) abuse of the purpose. This seems to be obvious to everyone except the people administering the system. The mere thought that somebody could hold a patent on a sequence of DNA that I was born with is preposterous.
I’m waiting for a quantification of the term “excessive”… and who should make the decision when that quantification is reached.
Many commenters have been talking about patents and copyright being things that protect intellectual property. They aren’t. They are things that create intellectual property as a concept.
IP is inherently counter-intuitive. The notion that when I paint a picture and show it to other people, those other people should be restricted by the state in what they can do with the knowledge of what they saw, is on the face of it utterly daft.
An idea is simply not in the class of things that can be owned.
At the same time, we can all agree that the pharmaceutical industry only exists in its current beneficial form because IP exists. Without modern IP it is likely that universities and doctors and other would have created new drugs, but probably not on anything like the scale or sophistication of modern pharma.
On the other hand, current copyright law is seriously stiffling. This is mainly because all rights are reserved by default, and it is often impossible to contact rights owners to get their permission to use things. For example, imagine finding a fantastic album cover from an unknown 60’s group. You want to use this image in a book on graphic design. But the band, the record company, the promotion company and the artist all went bust or died decades ago. How can you get rights to use this image? Which bank or holding company now controls the rights? It’s impossible to find out. And no-one will risk using un-cleared images, so that’s it, this image is effectively lost.
I don’t think it is subject to “quantification”; in many respects it’s a qualitative judgment whether a new device is merely an extension of existing technology, or is “obvious” or pre-existing, or is truly something new and deserving of legal protection. That seems to be where the Patent Office has fallen down on the job: their default position seems to be to grant the patent and let the courts sort it out later. Patent examiners are supposed to be people with technical expertise; I don’t think it’s asking too much that they be expected to exercise some judgment in the performance of their duties. However, there are whole areas (such as gene fragments, and “discoveries” rather than “inventions”) which should be considered more carefully than has been the case up until now (and, in my opinion, denied patent protection).
Copyrights are different. There is no need for “quantification” there, as (again, in my opinion) it is not an area which has been abused or is even reasonably capable of abuse in the way patents have been.
Smite Control is working overtime! That’s twice today, and I haven’t posted much. (Maybe I inadvertently used one of the “double-secret” words?)
J, IP can be counter-intuitive only to a person who has never created anything new and original.
It is daft, and that is not what IP, or property in general is about.
You could say the exact same thing about physical property. What this means is that human rights derive their meaning solely from their enforcement. What this means, in turn, that it is OK to steal, kill and rape if the police are too busy to notice.
J, it doesn’t bother me in the least that you are precluded from making commercial use of “some old album cover from a forgotten 60’s group.” You have no need to use their art (not that your “need” has any bearing on your right to take someone else’s property); you just want to do so, for your own profit, and since you can’t locate the owner you are mildly inconvenienced. Tough. Find some other artwork instead (and pay the owner for its use). That’s a small price to pay for ensuring that the people who use their time and talent to create literary, artistic and musical works don’t have their “intellectual property” (and no, that is not a “counter-intuitive” concept!) stolen by people like you.
You can dig a hole; you can build a house; you can bake a pie; you can do all sorts of physical things which (in the right circumstances) create value. Everyone from libertarians to marxists seems to agree that a man is entitled to the fruits of his physical labors. But it is his intellectual labor which creates the greatest, and ultimately longest-lasting, value. Intellectual property law is what seeks to protect this most fundamentally human of labors.
Ok.
As a simple minded scribbler, I own the rights to my simple minded copy.
I ring an Editor, who agrees, or not, to accept my stuff.
If he does, then he is contracted to pay for it.
Whether it gets published or not, is nothing to do with me.
The point is I get paid either way.
That is the contract. But I retain copywrite for any future use.
How long I retain the right is, it seems, up to the current laws.
Lord Clifford of Colestomy bag, and Sir Mick have managed to secure their copyright beyond their lifetimes (which seems only fair to me, if that is your main income source. Thank god mine no longer is)
In fact I have no problem with someone like Sal Rushdee, or whoever, leaving their copyright in trust to their relatives in much the same way you would leave your house.
You earned it, why not be able to pass it on?
We all know about piracy.
That’s standard.
But If you are any good at what you do, you will be making a decent living already.
Getting famous in India or China, for free, is a bonus.
That may generate income for you and yours later…
Who knows!
I am a bit relaxed about this issue.
Seeing what I do as tomorrows chip wrappers.
I have a half-way solution to this puzzle. A landowner should be absolute on the owned land, even if others agreeing to your ownership is a form of Intellectual Property. If you, on your property, want to make a copy of something you have bought, you can decide your own copyright laws.
However, I think that we will always have some form of local government, even if it is just a road-owning company which is open to the public. (This is a point that Anarcho-Capitalists never address- someone will end up owning the roads, and thus standing in for local governments, so why not just convert them into companies open to all who dwell within their borders?)
These public utilities will set laws for the use of their lands. They would have the right to issue licences for the airwaves that cross their lands. Public Intellectual Property would give the holder the right to advertise on public property, and would be the one version of a product that public authorities would use. So my idea is P.I.P. (PUBLIC Intellectual Property).
Have fun tearing the idea to shreds!
That’s how copyright times are set in the US: it’s all about keeping Steamboat Willie out of the public domain.
Trademark can get even sillier. Harley-Davidson tried to claim that the sound of their engines was their own distinct trademark. Then they actually tried to sue (Honda?) over that. I don’t remember the final disposition, but I imagine that they were told that the competition is still allowed to make large, underpowered V-twins with bad mufflers.
The really important question in my humble opinion is: should Honda riders be allowed to wear a potty on their head, and has the size of their female companions’ breasts been likewise trademarked? And what about the tattoos?
‘their’ meaning ‘Harley riders’, of course. Do I have to explain everything?
Not at all. The only thing they will be able to control is our behavior on their roads. They will not collect taxes (only usage fees), they will have nothing to do with our food, education, healthcare, etc. If they start pocking their noses into things other than their roads, or generally piss people off, people will stop using their roads, and competition will build alternatives. I am not saying that there will not be problems, but they will be different from the ones we are having now, with different solutions.
Umm, Alisa, you can say it, but you’d be disingenuous. Property rights arose to deal with economic goods – if I steal your money, your axe, your car, then you cannot benefit from using them. Not quite so with your song. Counter question to you: is it okay to kill and rape if nobody gets killed and raped? To say that the poor struggling musician, artist, or programmer will starve unless the government grants him/her a monopoly bears an uncanny similarity to Bastiat’s candlemakers’ arguments. Starvation is well-deserved, if you need government protection and litigation to make your competitive advantage sustainable – refer to SCO’s now-infamous business strategy. In the pharma business many fret about, the the companies that survive and prosper are the ones with the best pipelines – the ones that keep inventing – not the ones who score a Lipitor or another blockbuster.
Plamus wrote:
‘Umm, Alisa, you can say it, but you’d be disingenuous. Property rights arose to deal with economic goods – if I steal your money, your axe, your car, then you cannot benefit from using them. Not quite so with your song.’
Yes, exactly so with your song. If you copy my song, or my book, or my picture, then I cannot benefit from it – or, at the very least, I lose the exclusive benefit if it and must compete with others for a share of the total benefits it provides.
How would you feel if you owned a taxi, but the law said that you must let anyone drive it – and collect the fares – that wants to, any time they want to?
Much as it pains many people – most of whom want to reap for free, the benefits that others have worked for – intellectual property is just that – property – and deserving of the same rights as any more-tangible peice of property.
The limited monopolies of patents ASF are not granted to preserve the livelihoods of artists and inventors, as you suggest – their actual function is ‘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’, as the US Constitution has it – and that is what they do – very effectively, I might add.
You then wrote:
‘In the pharma business many fret about, the the companies that survive and prosper are the ones with the best pipelines – the ones that keep inventing – not the ones who score a Lipitor or another blockbuster.’
The part about ‘keep inventing’ is true – but the only reason they keep inventing (given the horrendous cost of discovering and developing new drugs) is because the US patent system effectively protects their investment in new products and allows them to recoup their development cost in the most-lucrative market in the world – North America. Were it not for the North American market with its unique combination of solid patent protection and huge market share, most of the ‘Big Pharma’ companies would simply close their R&D operations – the game is simply not worth the candle. With the biggest players spending upwards of 25% of their total revenues just on R&D to develop new products, the patents are all that protects them – to remove that protection, but still demand the same levels of development would be the equivalent of requiring them to give away 25% of their income a year to their competitors. How’s that for an unsustainable business model?
The second part of your comment makes no sense – it is the ones that ‘keep inventing’ that score the “blockbusters” – it’s not either/or, it’s both.
With all IP protections, society trades off a short-term loss (the limited monopoly) for the long-term benefit – the expansion of knowledge, which is both immediate (anyone may read the patent on the day that it is issued, and learn from it) and longer-term (after the monopoly expires, anyone may practice the art of the patent without limit). It’s the worst trade-off that you could possibly imagine – except for all the others. If you have a better idea for sustaining new discoveries, let’s hear it.
llater,
llamas
Plamus:
I never said that. True, it is the current situation, and it is much better than nothing (as llamas has shown), but far from the best. The best way to go, as I have already pointed out, would be private agreements. Then the only thing the government has to enforce are those contracts.
Alisa, what do you think would happen to the roads if a country suddenly adopted Anarcho-Capitalism wholesale? It sounds like they would be left to rot!
I imagine that a country would become freer in stages. Power would devolve once a libertarian party got into power, so that the center became just a convention center, in political terms. Thus local governments would become the most important tier of government, and we could devolve them further by giving all local citizens (who have chosen to be citizens, naturally!) a direct share in all law-making processes. Thus counties and shires should get fees only from the licences they issue to use public properties, or for using public services like power and water, etc. I think we could have confederations, not federations, because I think we are social individuals, meaning that we like to choose which gangs we will join. Simply converting existing structures would be simpler, and easier to justify to the electorate.
Nick: right now I don’t have the brain energy to actually think about it now, but what I can see is that you are talking about how to get there, while I was talking about how I would like it to look once we are actually there. So we are in no argument, yet…
Alisa, listen to the Torah, and don’t go all the way! I think if we decentralise to the point where this libertopia looks like a series of gated communities, that will be good.
I am all in favour of volunteer activities, such as firefighting, to bring communities together, and this is how we could socialise, as well as integrate newcomers into our groups.
Nick, going all the way does not have to mean no socializing – on the contrary: one of the main reasons the nanny state bugs me so much is that it has taken over what used to be the realm of voluntary communities. What the state basically does is divide and conquer, not abroad, but rather within its own borders. It does the ‘divide’ part by setting up a system of different entitlements for different groups, while at the same time gradually reducing the extent to which these different groups depend on each other, replacing these various traditional dependencies with the dependency of all of them on the state. This grossly contributes to resentment between the various groups, and breaks down traditional relationships, as well as preventing the formation of new ones.
Exactly right, Alisa. It’s what for a long time I’ve been calling “Laird’s corollary to Gresham’s Law”: bad charity drives out good. Specifically, state-run “charity” (in quotes because giving away someone else’s money doesn’t qualify as true charity) usurps the role, and ultimately eliminates, private charity.
Nick: “Anyone got a Grand Unified Theory of IP? Perry? Anyone?”
Don’t know if you’d call it that, but check out my Against Intellectual Property monograph, and other articles here. FWIW, I’m a libertarian patent attorney.
Stephan, are you conflicted? You work in patent law, but your arguments are against Intellectual Property, which is patent law. Or are you an AntiPro BECAUSE of your experiences?
Alisa, I have an idea- why don’t we work to bring about regime change at the smallest levels of our governments? Australia has Counties and Shires (Sutherland Shire, where I live, calls itself ‘The Shire’, because it has Kurnell, where Captain Cook first came ashore.) Any libertarians in The Shire should join me, and we can take office, and deregulate within the shire, perhaps scrapping speed limits, as a German city did recently.
That would then be a model for other libertarians to detaxify the country, one shire at a time!
Couldn’t the same thing happen in Israel? Start small, and work up, instead of deregulating from the top.
Nick, it might work in Oz – I know next to nothing about your political culture, so I cannot judge. In the US it would merely mean a return to the philosophy of the Founders. This trend is still supported by many conservatives there, although seemingly increasingly fewer conservative politicians (if they can still be called that). I don’t think that this approach is very likely to work in Israel though, as it is way too small. For one thing, a very large percentage of our local budgets comes from the central government. Another thing is that historically we have too much socialism in our collective psyche. But still, something to think about. Never say “never”, I guess.