Libertarian Perspectives on IP

0:00Against Intellectual Property by Stefan Kinsella Libertarian Perspectives on Intellectual Property The Spectrum Libertarian views on IP range from complete support of the fullest gamut of IP imaginable to outright opposition to IP rights. Most of the debate about IP concerns patent and copyright, As discussed below, trademark and trade secret are less problematic. Therefore, this article focuses primarily on the legitimacy of patent and copyright. Pro-IP arguments may be divided into natural rights and utilitarian arguments.

0:46Libertarian IP advocates tend to adopt the former justification. For example, natural rights, or at least not explicitly utilitarian, libertarian proponents of IP, include, from more to less extreme, Kalambos, Schulman and Rand. Among precursors to modern libertarians, Spooner and Spencer both advocated IP on moral or natural rights grounds. According to the natural rights view of IP held by some libertarians, creations of the mind are entitled to protection just as tangible property is. Both are the product of one's labour and one's mind, because one owns one's labour, one has a natural law right to the fruit of one's labour.

1:36Under this view, just as one has a right to the crops one plants, So one has a right to the ideas one generates and the art one produces. This theory depends on the notion that one owns one's body and labour, and therefore its fruits, including intellectual creations. An individual creates a sonnet, a song, a sculpture by employing his labour and body. He is thus entitled to own those creations because they result from other things he owns. There are also utilitarian pro-IP arguments. Federal Judge Richard Posner is one prominent utilitarian, although not libertarian, IP advocate. Among libertarians, anarchist David Friedman analyzes and appears to endorse IP on law and economic grounds, a utilitarian institutional framework.

2:33The utilitarian argument presupposes that we should choose laws and policies that maximize wealth or utility. With respect to copyright and patent, the idea is that more artistic and inventive innovation corresponds with or leads to more wealth. Public goods and free rider effects reduce the amount of such wealth below its optimal level, i.e. lower than the the level we would achieve if there were adequate IP laws on the books. Thus, wealth is optimized or at least increased by granting copyright and patent monopolies that encourage authors and inventors to innovate and create.

3:20On the other hand, there is a long tradition of opposition to patent and copyright. Modern Opponents include Rothbard, McElroy, Palmer, LePage, Bucquart and myself. Benjamin Tucker also vigorously opposed IP in a debate in the 19th century individualist anarchist periodical Liberty. These commentators point out the many problems with conventional utilitarian and natural rights arguments given to justify IP rights. These and other shortcomings of standard pro-IP arguments are surveyed below. Utilitarian Defenses of IP Advocates of IP often justify it on utilitarian grounds. Utilitarians hold that the end of encouraging more innovation and creativity justifies the seemingly immoral means of restricting the freedom of individuals to use their physical property as they see fit.

4:26But there are three fundamental problems with justifying any right or law on strictly utilitarian grounds. First, let us suppose that wealth or utility could be maximized by adopting certain legal rules. The size of the pieside is increased. Even then, this does not show that these rules are justified. For example, one could argue that net utility is enhanced by redistributing half of the wealth of society's richest 1% to its poorest 10%. But even if stealing some of A's property and giving it to B increases B's welfare more than it diminishes A's, if such a comparison could somehow be made, this does not establish that the theft of A's property is justified.

5:15Wealth maximization is not the goal of law, rather the goal is justice, giving each man his due. Even if overall wealth is increased due to IP laws, it does not follow that this allegedly desirable result justifies the unethical violation of some individual's rights to use their own property as they see fit. In addition to ethical problems, utilitarianism is not coherent. It necessarily involves making illegitimate interpersonal utility comparisons, as when the costs of IP laws are subtracted from the benefits to determine whether such laws are a net benefit. But not all values have a market price. In fact, none of them do. Mises showed that even Even for goods that have a market price, the price does not serve as a measure of the goods' value.

6:12In a footnote, the author expands, Mises states, Although it is usual to speak of money as a measure of value and prices, the notion is entirely fallacious. So long as the subjective theory of value is accepted, this question of measurement cannot arise. On the measurement of value in The Theory of Money and Credit, by H. E. Batson, 1912, reprint Indianapolis, Liberty Fund, 1980, page 51. Also, money is neither a yardstick of value nor of prices. Money does not measure value, nor are prices measured in money. They are amounts of money. Ludwig von Mises, Socialism and Economic and and Sociological Analysis, 3rd Revised Edition, Translated by J. Kahana, Indianapolis, Independent Liberty Press, 1981, p. 99. And see also, Human Action, p. 96, 122, 204, 210, 217 and 289.

7:20Finally, even if we set aside the problems of interpersonal utility comparisons and the It is not at all clear that IP laws lead to any change, either an increase or a decrease, in overall wealth.

7:42It is debatable whether copyrights and patents really are necessary to encourage the production of creative works and inventions, or that the incremental gains in innovation outweigh

8:22There are undoubtedly costs of the patent system. As noted, patents can be obtained only for practical applications of ideas, but not for more abstract or theoretical ideas. This skews resources away from theoretical research and development. In a footnote, the author quotes Plant, The Economic Theory Concerning Patents for Inventions, page 43, It is by no means self-evident that patents encourage an increased absolute quantity of research expenditures, but certainly patents distort the type of research expenditure being conducted. Research expenditures are therefore overstimulated in the early stages before It is not clear that society is better off with relatively more practical inventions than those of the modern society.

9:23In addition, some inventions are considered patentable, while others are not. The patent system then has the further effect of artificially stimulating research expenditures in the patentable areas, while artificially restricting research in the non-patentable areas. It is not clear that society is better off with relatively more practical invention and relatively less theoretical research and development. Additionally, many inventions are patented for defensive reasons, resulting in patent lawyers' salaries and patent office fees. This large overhead would be unnecessary if there were no patents. In the absence of patent laws, for example, companies would not spend money obtaining or defending against such and the use of force against others' property have to satisfy a burden of proof.

10:27We must remember that when we advocate certain rights and laws and inquire into their legitimacy, we are inquiring into the legitimacy and ethics of the use of force. To ask whether a law should be enacted or exist is to ask, is it proper to use force against certain people in certain circumstances? It is no wonder that this question is not really addressed by analysts of wealth maximization. Utilitarian analysis is thoroughly confused and bankrupt. Talk about increasing the size of the pie is methodologically flawed. There is no clear evidence that the pie increases Problems with IP Rights. Further, Pi growth does not justify the use of force against the otherwise legitimate property of others. For these reasons, utilitarian IP defenses are unpersuasive.

11:24Some Problems with Natural Rights Other libertarian proponents of intellectual property argue that certain ideas deserve protection as property rights because they are created. Rand supported patents and copyrights as the legal implementation of the base of all property rights, a man's right to the product of his mind. For Rand, IP rights are, in a sense, the reward for productive work. It is only fair that a creator reap the benefits of others using his creation. For this reason, In part, she opposes perpetual patent and copyright because future unborn heirs of the original creator are not themselves responsible for the creation of their ancestors' work.

12:14One problem with the creation-based approach is that it almost invariably protects only certain types of creations unless that is every single useful idea one comes up with is subject to ownership. More on this below. But the distinction between protectable and the unprotectable is necessarily arbitrary. For example, philosophical or mathematical or scientific truths cannot be protected under current law on the grounds that commerce and social intercourse would grind to a halt where every new phrase, philosophical truth and the like, considered the exclusive property of its creator. For this reason, patents can be obtained only for so-called practical applications of ideas, but not for more abstract or theoretical ideas. Rand agrees with this disparate treatment in attempting to distinguish between an unpatentable discovery and a patentable invention. She argues that a scientific or philosophical discovery which identifies a law of nature, A principle or a fact of reality not previously known is not created by the discoverer.

13:29But the distinction between creation and discovery is not clear-cut or rigorous. Here the author expands in a footnote, Plant is correct in stating that the task of distinguishing a scientific discovery from its practical application which may be patentable is often baffling to the most subtle lawyer. The Economic Theory Concerning Patents for Inventions, pages 49 to 50. On a related note, the US Supreme Court has noted that the specification and claims of a patent constitute one of the most difficult legal instruments to draw with accuracy. Topliff versus Topliff in an 1892 Supreme Court decision.

14:16Perhaps this is because patent law has no moorings to objective borders of actual tangible property and thus is inherently vague, amorphous, ambiguous and subjective. For the latter reason alone one would think that objectivists, ardent self-proclaimed defenders of objectivity and opponents of subjectivism, would oppose patent and copyright. Nor is it clear why such a distinction, even if clear, is ethically relevant in defining property rights. No one creates matter. They just manipulate and grapple with it according to physical laws. In this sense, no one really creates anything. They merely rearrange matter into new arrangements and patterns.

15:05An engineer who invents a new mousetrap has rearranged existing parts to provide the function not previously performed. Others who learn of this new arrangement can now also make an improved mousetrap. Yet the mousetrap merely follows laws of nature. The inventor did not invent the matter out of which the mousetrap is made, nor the facts and laws exploited to make it work. Similarly, Einstein's discovery of the relation E equals MC squared, once known by others, allows them to manipulate matter in a more efficient way. Without Einstein's or the inventor's efforts, others would have been ignorant of certain causal laws of ways matter can be manipulated and utilized.

15:53Both the inventor and the theoretical scientist engage in creative mental effort to produce useful new ideas, yet one is rewarded and the other is not. In one recent case, the inventor of a new way to calculate a number representing the shortest path between two points, an extremely useful technique, was not given patent protection because this was merely a mathematical algorithm. But it is arbitrary and unfair to reward more practical inventors and entertainment providers, such as the engineer and songwriter, and to leave more theoretical science and math researchers and philosophers unrewarded. The distinction is inherently vague, arbitrary and unjust.

16:41Moreover, adopting a limited term for IP rights as opposed to a perpetual right also requires arbitrary rules. For example, patents last for 20 years from the filing date, while copyrights last, in the case of individual authors, for 70 years past the author's death. No one can seriously maintain that 19 years for a patent is too short and 21 years too long any more than the current price for a gallon of milk can be objectively classified as too low or too high. Thus, one problem with the natural rights approach to validating IP is that it necessarily involves arbitrary distinctions with respect to what classes of creations deserve protection and concerning the length of the term of the protection.

17:34Of course, one way to avoid this difficulty is to claim that everything is is protectable by IP with perpetual, infinite terms. Spooner, for example, advocated perpetual rights for patent and copyright. Schulman advocates a much broader concept of creations or ideas protectable by IP. He argues for property rights called logo rights in any logos that one creates. The Logos is the material identity or identity pattern of created things. The owner of a Logos would own the order or pattern of information imposed upon or observed in material substances.

18:20The most radical of all IP proponents is Andrew Joseph Chalambos, whose ideas, to the extent that I understand them, border on the absurd. Calambos believed that man has property rights in his own life, primordial property, and in all non-procreative derivatives from his life. Since the first derivatives of a man's life are his thoughts and ideas, thoughts and ideas are primary property. Since action is based on primary property, ideas, actions are owned as well. This is referred to as Secondary derivatives such as land, televisions and other tangible goods are produced by ideas and action. Thus, property rights in tangible items are relegated to lowly secondary status as compared with the primary status of property rights in ideas.

19:16Even Rand once elevated patents over mere property rights intangible goods in her bizarre notion that patents are the heart and core of property rights. Can we really believe that there were no property rights respected before the 1800s when patent rights became systematized? Halambos reportedly took his own ideas to ridiculous lengths, claiming a property right in his own ideas and requiring his students not to repeat them, dropping a nickel in a fund box every time he used the word liberty as a royalty to the descendants of Thomas Paine, the alleged inventor of the word liberty, and changing his original name from Joseph Andrew Chalambos, Jr. presumably, to Andrew Joseph Chalambos, to avoid infringing his identically named father's rights to the name.

20:14By widening the scope of intellectual property 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 Chalambos demonstrates. And by extending the term of patents and copyrights to infinity, subsequent generations would be choked by ever-growing restraints on their use of property. No one would be able to manufacture or even use a lightbulb 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 proto-human who left the caves and built a hut. No one could use a variety of life-saving techniques, chemicals or treatments without obtaining permissions of various lucky rich descendants.

21:06No 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. 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.

22:03No 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. A deeper problem for the natural rights position lies in its undue emphasis on creation instead of scarcity as giving rise to property rights as discussed below.