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Mossoff: Patent Law Really Is as Straightforward as Real Estate Law
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Mossoff: Patent Law Really Is as Straightforward as Real Estate Law

Over on Patently-O, Dennis Crouch discussess pro-IP Objectivist law professor Adam Mossoff’s latest attempt to rescue patent law. He says some people criticize patent law because its boundaries are not as clear as those of real property. He says it’s unfair to say that real estate trespass is clearer than patent infringement is. His contorted argument:

One common refrain [from patent critics] is that patents fail as property rights because patent infringement doctrine is not as clear, determinate and efficient as trespass doctrine is for real estate. This essay explains that this is a fallacious argument, suffering both logical and empirical failings. Logically, the comparison of patent boundaries to trespass commits what philosophers would call a category mistake. It conflates the boundaries of an entire legal right (a patent), not with the boundaries of its conceptual counterpart (real estate), but rather with a single doctrine (trespass) that secures real estate only in a single dimension (geographic boundaries). Estate boundaries are defined along the dimensions of time, use and space, as reflected in numerous legal doctrines that secure estates, such as adverse possession, easements, nuisance, restrictive covenants, and future interests, among others. The proper conceptual analog for patent boundaries is estate boundaries, not fences. Empirically, there are no formal studies of how trespass or even estate boundaries function in litigation; thus, complaints about the patent system’s indeterminacy are based solely on an idealized theory of how trespass should function; it’s the nirvana fallacy. Furthermore, anecdotal evidence and related studies suggest that estate boundaries are neither as clear nor as determinate as patent scholars assume it to be. In short, the trespass fallacy is driving an indeterminacy critique in patent law that is both empirically unverified and conceptually misleading.

This is all a huge bundle of confusion, of course. Mossoff is trying to justify IP, since Ayn Rand failed at it, but he is as doomed as she was in this task. Rand should have sensed she was wrong when she recognized that no one creates any new ownable things; they just rearrange already-owned objects into more valuable configurations. Thus, production, or transforming already-existing, already-owned scarce material, into more valuable arrangements, does in fact create wealth—since the owner or potential customers might value (note: a verb) the rearranged item more than they would in its previous shape—but this does not mean that the act of creation or production or transformation gives rise to any new property rights. It just transforms already-owned things. This is Rand’s big mistake.  (Rand on IP, Owning “Values”, and “Rearrangement Rights”Locke, Smith, Marx and the Labor Theory of Value.) In addition to her incoherent attacks on anarchy (forget that Galt’s Gulch was anarchist). She should have stuck with her rearrangement view. Then she would have realized state-granted monopoly patent privileges are totally incompatible with this view.

Mossoff is wrong, because the fundamental problem with patents is not that they are not similar to real property rights. It is that they are state-granted anti-competitive monopoly privileges that violate pre-existing property rights.

Now, it is true that it is quite ridiculous to view patents as similar to real property rights (by “real” I don’t mean “real property” or land; I mean legitimate, pertaining to material, scarce objects—you know, the whole purpose of property rights?). As noted by law professsor Robin Feldman in a recent book, Rethinking Patent Law, it makes no sense to view patents are defining “property rights” (see Feldman: Patents don’t define property rights; they are an “opportunity to bargain.” Don Corleone nods).

But even if patents are “similar” to property rights in land: so what? After all, there used to be property rights in other humans, and today there are innumerable property rights and entitlements like the right to not be discriminated against in employment or the right to receive welfare payments, which are unlibertarian (see Classifying Patent and Copyright Law as “Property”: So What?). Showing that you “can” have a working patent system that is crammed into the existing property-based legal system proves very little about the legitimacy of the legislation foisted on the populace by a bunch of politicians.

The problem with the patent system is not that it is absurd to analogize it or patent claims to real property metes and bounds (though it is; trust me). The problem is not that you can’t force this system onto a semi-capitalist economy; apparently you can. That, and taxes, regulations, and the like. The problem is not low-quality patents, nor patent trolls, nor software patents, nor unclear nonobviousness standards, nor an incompetent PTO, nor too-long patent terms, nor inadequate prior art databases—though these are all problems. The problem is good patents, high quality patents, issued to cover existing products of existing companies, who use them to bash their competitors over the head.

The problem is not that there are inadequate analogies between artificial state-legislated monopoly privilege schemes and legitimate property; for even if there are, this does not justified these laws. The problem is that IP rights are state-granted negative servitudes, that is, a grant by the state giving A the right to restrict how B may use his already-owned property (called a negative or appurtenant easement in the common law). B has to get A’s permission to use B’s own property as B sees fit, even though B never agreed contractually with A to limit his rights (a contractual, voluntary servitude), and even though B never committed any kind of tort or trespass invading the borders of A’s property rights. B has not agreed to grant a negative servitude to A, nor has B violated A’s property rights. There is no excuse for forcing B to grant A a negative servitude; yet patent and copyright do this. It is very similar to rent control, i.e. forcing B to rent an apartment he owns to A at some below-market price. It is similar to a state decree forcing a factory owner to let the workers have a say (union laws). It is similar to taxes (taking B’s property to give it to A). A negative servitude or easement is a property right. It is legitimate only if the owner grants it to someone else by contract. In the case of patent and copyright, the state grants a negative servitude to patent and copyright holders, to control the property of third parties. (See Intellectual Property Rights as Negative Servitudes.)

This is the problem with IP law, and it is this that IP apologists like Mossoff do not justify, by saying that patent infringement is similar to real estate trespass. The question is not whether the enforcement of real estate law is similar to patent law. The question is whether it’s just for the state to grant negative servitudes to innovators and artists. And: it’s not. That is a property right that the state has no right to wrest away from someone. It should only be granted by contract, voluntarily. Not taken by legislative decree.

Update:

Patent attorney Dennis Crouch posts about this here:

Libertarians and Patents: Kinsella vs Mossoff

Libertarian writer and patent attorney Stephen Kinsella has written a critique of Prof. Mossoff’s Trespass Fallacy paper.  LINK.  Libertarian thought on intellectual property is somewhat unsettled.  Kinsella is one of the thought leaders of the modern anti-patent libertarians while Mossoff represents the pro-patent side.

One of Kinsella’s basic arguments stems from the traditional libertarian support for individual liberties and strong private property rights.  When some third party holds a patent, that patent limits what I can do with my scarce private property as well as my individual freedoms.

Update: The following reply to a comment on that thread will for some reason not post (probably too many links), so here is is below:

Curious:

“”I did explain it. For there to be a right, it is legally enforceable. Force. Force. Physical force. Applied by the court. To enFORCE the award. The force is always applied… physical force… against other scarce (physical) things, like the body or factory of the defendant.”

“I don’t see much of an explanation here. You seem to assert that force can only be applied to “scarce” things – which you imply must be physical things. However, good ideas are scarce.”

If you will try to come up with an example of how force can ever be used against any nonscarce thing, such as an idea, you will see the problem. Try to find an example. (And by the way, even if you can–do you really want to use force against ideas?)

As for “good ideas” being scarce–I hear this over and over. This is a confusion. Scarcity as used in the technical economic sense, and as I used it and explicitly defined it, means rivalrous. Ideas do not have the quality of rivalrousness. Every economist acknowledges this.

” The fact that many can be easily copied doesn’t take away from the fact that the original idea is scarce and valuable. Your distinction is one that few people see and less people care about.”

Be that as it may, the fact is that the purpose of property rights is to allocate scarce (rivalrous) resources, and ideas are not such things. They are “valualbe,” yes. That is because information is needed to guide human action.

Look. I realize this is not an easy topic. Espeically when we are barraged from our childhood with confused notions about the purpose of property and law; and when we live in an IP-ridden world in which we take its legitimacy for granted. I took me years of hard thinking about this to finally figure it out, but when I did, it broke down so many barriers to clear understanding of other legal and property issues. Let me try to explain, as simply but plainly and accurately as possible, why the arguments in defense of IP are wrong.

All human action is aimed at attaining a desired end; this is done by employing scarce (rivalrous) means to causally bring about the end. A means is a real, scarce thing in the world, and it is causally efficacious at interfering with other things in the world. Property rights assign ownership in such scarce means, so that individual human actors in society can use the means peacefully and productively, without conflict or violence. This is why scarce means are valuable: they help to achieve ends. The ends may or may not be a scarce resource: I may want to get a fish, so I build and employ a net. The net is the scarce means; the fish is another scarce means, though it is the end of action (its purpose is to satisfy yet another end: hunger). If we were magical and did not ever need to employ means to acheive desired ends, means would not be valued and there would be no property rights in them. Similarly, if we lived in a world of infinite plenty, like the Garden of Eden, again property rights would make no sense. Imagine a simple world in which humans need only bananas, but bananas are in infinite supply; you can reach your hand up and grab one. In such a world, there would be no need for property rights in bananas. In fact it would not make any sense. There woudl be no such thing as “stealing.” First, why would you want to take my banana from me–you can get your own at your whim. Second, why would I care if you did take my banana? I could just replace it in a flash. The point is: we need means, we value means, and property rights are socially necessary in means so that they may be used productively, cooperatively, and peacefully by human actors to achieve their goals, without violent interference or squabbling over the means from other actors.

Now what about information, or knolwedge? It is valuable too. It is useful. It is essential. Why is this? Becaue: to select the end you want, you also need knowledge about possible ends, about how the world is; and you need causal knowledge too: knowledge of what means exist and how they causally affect other things. But knowledge is not rivalrous, so you do not need a property right in it to be able to employ it. Unlike a scarce means like a fishing net. With the net, unless I own it, I cannot use it free of violent conflict with others; only one person can use the net. But the knowledge-of-fishing, or the knowlege of how to make a net–I need only have this knowledge. I do not need to have exclusive use of this knowledge, in order to employ it: to guide my actions.

I.e., human action is guided by knowledge, to employ scarce means, to causally achieve a desired end. The means are subject to property rights in a human society to permit productive use thereof; knowledge, being non-rivalrous, is not subject to property. In fact, the large the body of knowledge, the better off everyone is, as our knowledge about the world, about possible ends, about causal laws and the operation of means, is enriched and expanded, making richer, more diverse, and more efficient action possible. This is why there is social progress: because the body of human knowledge grows and is added to every generation.

IP laws attempt to restrict the use of knowledge. Think about how crazy this is. Here we have two important components of successful action: knowledge, and scarce means. The former is ever-expanding (with human society, over time) and infinitely reproducible; people can learn from each other and distribute information. Once one person konws how to make a net, everyone can. and so on. And then we have scarce means, things in limited supply, and yet the free market, if allowed to operate, produces tremendous abundance despite the fundamental fact of economic scarcity. The free market tries to create abundance, and tries to overcome the fundamental fact of scarcity. In effect, the market is tending to the ideal of nonscarcity: trying to make things as abundant as possible; and the limit of abundance is superabundance, i.e. nonscarcity (re the banana example). Yet knowledge already has this character: it is nonscarce already, which permits the gradual social accmulation of knowlege, and learning and emulation. And IP laws swoop down and try to artificially impose scarcity on knowlege, to impede the transmission of knowledge. It is truly antisocial and insane. (And, yes, IP proponents admit this purpose of IP law: “Governments adopt intellectual property laws in the belief that a privileged, monopolistic domain operating on the margins of the free-market economy promotes long-term cultural and technological progress better than a regime of unbridled competition.”

Intellectual Property Advocates Hate Competitionhttp://archive.mises.org/17767/intellectual-property-advocates-hate-competition/

and “To paraphrase the late economist Joan Robinson, patents and copyrights slow down the diffusion of new ideasfor a reason: to ensure there will be more new ideas to diffuse …” http://archive.mises.org/11559/shugharts-defense-of-ip/

(for more information on the above property theory, see my Intellectual Freedom and Learning Versus Patent and Copyright http://libertarianalliance.wordpress.com/2011/01/18/stephan-kinsella-on-intellectual-property/ ; see aso on this Hoppe, Ethics and Economics of Private Property, http://www.mises.org/daily/1646, and Hoppe, ch. 1 and 2 of A Theory of socialism and Capitalism, available at http://www.hanshoppe.com.)

 

“”or against the money in his bank account.”
Money in a bank account? You mean that digital representations of pieces of paper that themselves are representations of an alleged scarce material?”

The current system of fiat money created by the state is not a good example. I was speaking of real money in a free market: actual scarce gold material held in a bank and owned by the depositors.

 

” If you can apply “FORCE” against digital zeros and ones, I would say you can apply FORCE against intellectual property.”

 

You cannot apply force to digits; I had in mind a system of actual ownership of actual gold.

“”Communism is central (state) ownership of the mean of production.”
“Communism has the commune (i.e., everybody) owning everything. This is the same thing you are advocating.”

no; in communism, the group owns some essential, ownable, scarce thing: the means of production. In an IP-free free market which respects actual property rights, knowledge is not owned at all, since it is not ownable. You do realize we are all beneficiaries and inheritors of the accumulated body of human knowledge, practices, and institutions, right? Even in your IP view, the vast bulk of invnetions and scientific discoveries and artistics works are all IP-free, right? the language we use, the legal institutions we have, the cultural practices, math, physics, chemistry, shakespeare’s works, Plato’s, etc. would you say we have “communism” in all these things? I would not–these things are not ownable things. Nobody owns them. Information is not an ownable thing.

Conversely, you could say everyone owns them, if by own you mean “has a his disposal”–but this is okay because my having it does not prevent your having it. So while communims is a disaster in the allocation and use of scarce means (because of information and other problems, it cannot efficiently decide what to do with these scarce means — see on this Mises and Hayek), it is not possible to misallocate infinitely reproducible ideas and knowledge–whatever you do with your informaito, I am free to do what I want with the same information. If we both have shakespeare at our disposal we can each do what we want with it. I can read it to my child, you can make a movie based on it. whatever.

” Everybody (i.e., the community) owns all the intellectual property. Again, you attempt to make distinctions that doesn’t amount to anything. Communism is about removing individual ownership of property. You also advocate removing individual ownership of property.”

I think you can see now, given my explanation, how confused this is.

“Do you understand *&&%$$^&*(*)(*&? No? It’s because it is meaningless gibberish. I pretty much feel the same reading your writings. I’m really cannot take a philosophy seriously when that philosophy is disconnected from how the real world works.”

The property theory I describe above in fact is extremely realistic: it recognizes the fact that teh world does have scarcity; it recognizes the importance of knowledge; it recognizes the reproducible nature of knowledge and hte possibility of human accumulation and expansion of the body of knowledge over the genreations, and the possibility of learning, and of the way that competition on a free market necessarily involves learning from others and emulating and copying them; and it recognizes the importance of property rules for scarce means so that social cooperation is possible instead of interpersonal violence.

What is unrealistic is the idea that a central state can issue monopoly privilege grants and expect this not to harm economic production and innovation and human freedom and property rights..

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{ 17 comments… add one }

  • spiritsplice August 17, 2012, 8:58 pm

    I think Rand knew she was full of shit on IP, but like when she was broke and applied for Social Security, she simply caved and justified it because it benefited her. The vast majority of people that I debate with about IP all have a financial stake in the idea. They are for IP because they benefit from it (or might), not because it makes sense.

  • Crosbie Fitch August 18, 2012, 2:27 am

    “a contractual, voluntary servitude”

    As peculiar as libertarians who recognise state granted monopolies as natural rights, there are some who recognise liberty as alienable (able to be abridged/surrendered in contract).

    Liberty ain’t what it used to be. http://www.law.indiana.edu/uslawdocs/declaration.html

    • Stephan Kinsella August 19, 2012, 6:56 am

      Crosby, cryptic as ever. Are you thinking by “servitude” I mean bondage or something? I do not. Servitude is a civil law term meaning basically easement. As I explained in the post.

  • Crosbie Fitch August 19, 2012, 5:20 pm

    I can call you Stephen if you want. ;-)

    I’m glad you aren’t one of those peculiar libertarians who recognise people can surrender their liberty to copy a book in a contract.

  • Ford August 20, 2012, 1:58 pm

    Does it matter to you at all that, rather than having the patent or copyright system forced on us by a “bunch of politicians” we had them provided as one of the elements of our constitution? Or is this one of those “any act by government is illegitimate” whether it’s a restriction on our acts by the government to prevent us from harming others or a restriction to prevent us from harming them?

  • Crosbie Fitch August 20, 2012, 4:33 pm

    Ford, the US Constitution mentions neither copyright nor patent. That these privileges were granted by law subsequent to the Constitution shouldn’t lead you to conclude that the Constitution empowered Congress to grant them. See http://culturalliberty.org/blog/index.php?id=289

    • Ford August 20, 2012, 6:40 pm

      I feel compelled to disagree with that analysis. Even if they didn’t work out the precise statutory language detailing the entirety of patent or copyright law, it’s clear that they wanted the advancement of our arts and sciences to be a fundamental aspect of our nation.
      I’m failing to see how bookmarking something to be addressed later, perhaps after the more pressing elements of founding a nation are addressed, indicates that there isn’t an interest in drafting the law in the first place.

      • Dale B. Halling August 20, 2012, 11:36 pm

        “exclusive rights of inventors” is pretty clear in the Constitution

        • Crosbie Fitch August 21, 2012, 2:22 am

          Yes Dale, but are you clear as to the difference between rights and privileges? Governments are instituted among men to secure our natural, inalienable rights, not to grant privileges that abridge our liberty.

          • Ford August 21, 2012, 8:28 am

            Why is your right to use the creative output of someone else without compensation a right and their right desire a privilege?

          • Crosbie Fitch August 23, 2012, 2:30 am

            Ford, we, like Shakespeare, are naturally at liberty to retell and evolve the stories we read or hear, or like the brothers Grimm, to collect tales together and print them. It takes a law made in the interests of a few (private legislation – privi-lege), such as the Statute of Anne 1709, to derogate our right to copy from our right to liberty (to annul from the law, the law’s recognition of our right to copy). See http://culturalliberty.org/blog/index.php?id=291

  • Dale B. Halling August 20, 2012, 11:34 pm

    Instead of explaining his position, Kinsella takes pot shots at his detractors and assumes his conclusions. For example, “This is all a huge bundle of confusion, of course. Mossoff is trying to justify IP, since Ayn Rand failed at it, but he is as doomed as she was in this task.”
    And
    “Mossoff is wrong, because the fundamental problem with patents is not that they are not similar to real property rights. It is that they are state-granted anti-competitive monopoly privileges that violate pre-existing property rights.”

    Kinsella assumes his conclusions. This is exactly the same technique used by the left, including our president.
    The fact is that patents do not fit the definition of a state granted anti-competitive monopoly. But Kinsella is not concerned with definitions nor does it fit the facts.
    Kinsella’s concept of property rights is that they are just a convenient tool for allocating scarce resources. A “right” is not a convenient tool. A right is something that exists because of the nature of man, not because it is convenient. See the Declaration of Independence.

    Libertarians’ argument that patents create artificially scarcity is also incorrect. The material to create inventions are scarce, the talent to create inventions is scare and the market for inventions are scare. Kinsella’s arguments have much more in common with Marxists arguments against property than free market theory. In fact, if you substitute property rights for patents in Kinsella’s arguments, you end up with the same arguments Elizabeth Warren and Obama “You didn’t create that” becomes “you didn’t invent that.”

    • PeaceRequiresAnarchy August 23, 2012, 7:17 pm

      “…the talent to create inventions is scare…”
      No it’s not. People don’t “create” inventions, but rather “discover” that material property can be arranged in certain ways to achieve desirable effects. A person’s knowledge of how to arrange property in these ways is not scare because when other people gain the knowledge the first people do not lose it. Soon everybody has the knowledge to “create inventions” as you say. They are only limited by the scare material resources. The knowledge to rearrange those scare material resources are not scare as one person does not lose the knowledge just because another person gains it.

      • PeaceRequiresAnarchy August 23, 2012, 7:20 pm

        Note: When I said “They are only limited by the scare material resources” I meant that the production of the inventions is only limited by the scare material resources to build the invention, not by the knowledge to produce the invention because that knowledge can be shared with others without diminishing it in the people who first had it, unlike when you share scarce material resources.

    • Peter Šurda January 9, 2013, 4:18 pm

      Dale,

      Kinsella clearly explained his position 12 years ago in Against Intellectual Property. The impossibility of intellectual property is a simple consequence of impossibility of immaterial enforcement. It is actually even stronger than that, because there also cannot be any immaterial human action or any immaterial empirical knowledge for that matter.

      Deontological IP-ism is based on the assumption that an un-observable non-action can create or extinguish interpersonal conflict. Its utter nonsense. But instead of addressing that, IP proponents resort to rhetorical tricks (like you just did with “scarce talent” right now) and broken window fallacies. They accuse Kinsella of “assuming” that their beliefs are nonsense. If Kinsella was wrong, it would be trivial to refute him, by presenting a counterexample. Failure to do that is a strong hint that they do not understand what they are talking about.

  • David Koepsell August 21, 2012, 7:54 am

    Dale, what is it that you think makes laws regarding real property “just”? Surely you don’t think a state could devise laws that contradict rights to private property justly. If you do, then what made the Soviet system worse than ours? If not, and I believe you don’t view laws as infinitely mutable justly, then what “grounds” the moral claims to property that make the positive law of real property just? I believe that the ground of justice of laws regarding real property stems from the necessity for some sort of violence to dispossess a possessor of real property. It’s exclusivity, that is. Prior to any law, the exclusivity of real property makes legal systems that guard our rights to that property just, and these rights stem from fundamental rights of self-ownership and thus defense. This is fundamentally not the case with “intellectual property” because no violence ensues when someone copies an idea. Similarly, rights of contract stem from pre-legal phenomena accompanying the acts of promising and acceptance (see Searle or Reinach for fuller explications). The law is just inasmuch as it defends the rights that stem from these pre-legal phenomena. If you don’t think something constrains just lawmaking, then you must defend your choice of legal system on some utilitarian grounds. Or what exactly is your theory of law and justice? I’m curious.

  • PeaceRequiresAnarchy August 23, 2012, 7:11 pm

    “B has to get A’s permission to use B’s own property as B sees fit, even though B… never committed any kind of tort or trespass invading the borders of A’s property rights.”

    I agree with your position, Stephan, but aren’t you begging the question here? IP advocates would say that B did invade the borders of A’s property rights–“intellectual property” rights that is. Of course this does not prove that IP is genuine property either, but my point is just that your above argument does not prove that B did not violate A’s property rights due to the fact that it assumes the very thing it is trying to prove–that IP is not genuine.

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