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Law and Intellectual Property in a Stateless Society

Note: An updated and revised version of this article appears as chap. 14 of Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023).

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My article “Law and Intellectual Property in a Stateless Society,” has just been published in Libertarian Papers vol. 5 (1) (2013), pp 1-44. This is my first publication in the journal I started in 2009. It is also the most comprehensive piece I’ve done on IP since Against Intellectual Property. It incorporates a lot of the material from AIP and integrates a lot of things I’ve written in the 12 or so years since that piece was published.

This article was originally going to be part of a symposium in the Griffith Law Review (Griffith University, Australia), edited by Gary Chartier, on “Law and Anarchy: Legal Order and the Idea of a Stateless Society.” Among the other authors were to be Tom Bell, Walter Block, Peter Leeson, Dan D’Amico, Roderick Long, Ed Stringham, Charles Johnson, and Bruce Benson. Amazing that Chartier was able to get a mainstream law review to consider such a radical subject, and to include such radical authors.

But my participation was not to be.

The journal first insisted that we assign our copyright to it. Bell and I both refused. I insisted on a CC-BY license, and the GLR agreed to accept this option.

Next, however, came a barrage of reports from referees who  seemed baffled by my principled IP-abolitionist stance. Both wanted me to make pointless changes, to water my thesis down, or to adopt an essentially utilitarian-empirical approach. I refused to do this; my paper was out. I am sorry that, like me, several other potential authors (e.g., Leeson, D’Amico, and Block, who also ended up bowing out) encountered problems related to the symposium. But I appreciate Chartier’s hard work in putting this together. I’m glad that pieces by such authors as Bell, Long, and Benson will still be appearing.

(The papers that appeared in the symposium are here.)

I append below the referee reports and my response to them.

The Abstract is below.

Abstract: An ethic of self-ownership combined with Lockean homesteading of external resources provides a plausible grounding both for anarchist opposition to the state and for an attractive anarchist legal order. Such an ethic can be understood as specifying that each person prima facie has the right to control his or her own body; and that Lockean homesteading, under which the owner of any scarce resource is its first user (or his contractual transferee), should provide the basis for property rights in such previously unowned goods. Given these rules, monopoly privileges like patent and copyright (intellectual property, or IP) cannot be justified, as they infringe on self-ownership-based body-rights and/or property rights in external resources. In this article, I explain why IP rights are inconsistent with the moral grounds for a stateless society’s legal order, and speculate about the practices or laws that might prevail in the absence of IP in such a system.

Update: Print version available from Lulu.com.

Referee Reviews

Review 1 of “Law and Intellectual Property in a Stateless Society”

 Referee Report

Law and Intellectual Property in a Stateless Society

Thank you for the opportunity to review this work.

This is a work that needs significant attention before it is publishable. At present the work does not have a coherent focus and clear thread. In effect, it is a perspective on libertarianism that is then briefly applied in the context of copyright and patent. While this approach could be interesting and insightful, the present work merely ambles across a fairly narrow array of the literature (relying very heavily on the work of Kinsella) and does not reach any new ground. This was a shame as there is much fertile research to be done at the boundaries of property in intellectual property. With great respect, this is just another of the series of papers “libertarianism and …” that delivers something new about neither libertarianism nor intellectual property. Most disappointingly, the work addressed briefly how creators could be rewarded in an IP-free market, but the superficial analysis that follows does not address the counters to the proposals that have been extensively addressed in the broader IP literature. While there is merit in the author’s suggestions they need to be presented with a lot more analysis to be credible.

For this reader this was also a disappointing work because the libertarian perspective was very generalised and did not deal in enough detail with the intangible aspects of existing property theory. With great respect intellectual property does not easily fall within the general discussions of physical, tangible property. Further, this reader was confused by the additional materials presented in the footnotes so that in the end it was not entirely clear how the author’s conception of property translated to copyright and patent (noting that other more contentious forms of intellectual property were not addressed) and why a libertarian perspective revealed something interesting or insightful.

Review 2 of ‘Law and Intellectual Property in a Stateless Society’

This paper is not publishable in its present form.  To begin with it needs to improve its depth of research.  For example, the opening sentence refers to the importance of property rights in the development of Western states.  There is important debate about this (see the work of Douglas North and more recently Acemoglu on extractive and inefficient forms of property).  The other sentences in the paragraph then assert that IP rights have been accepted as a legitimate part of property for about two centuries.  This is simply wrong.  As Machlup and others have extensively documented there was a huge controversy in the 19th century about the patent institution.  Some European countries such as the Netherlands repealed the system and others like Switzerland took a long time to enact a system and when they did they made it more or less unworkable.  I recommend the author read Eric Schiff , Industrialization without National Patents, Princeton University Press, Princeton, 1971.

The second sentence in the second paragraph states that patent terms are about 17 years – the standard term is 20 (see the TRIPs Agreement) and patent term extension applies to pharmaceuticals.  I am not about to go through this article on a line-by-line basis since it is not my job to rewrite it and supply the missing references.  I simply make the point that the level of research needs considerable improvement.

The paper is written from a libertarian perspective.  I think it would be useful for readers if the paper said something more about the libertarian tradition and where the paper’s critique is located in that tradition.  Some libertarians reject the state and some, for different reasons, accept a minimal state.  Where does this article sit in that spectrum?  Nozick had things to say about the patent system.  Given his importance in the libertarian tradition it is strange there is no mention of him. The author may have good reason for not engaging with Nozick’s argument – the readers need to know what it is.

I found that the arguments were developed with too much haste.  The author says that is “easy to see that ‘creation’ is neither necessary nor sufficient as a source of ownership” (see the page on which fn 59 begins).  This argument is then made out using a block of marble as an example.  However, it must be a contingent question as to whether creative labour can be a source of ownership of an abstract object.  This cannot be settled by reference to physical objects since they are different kinds of objects.  If you bring an abstract object such as an algorithm into existence it is at least an open question as to whether or not this mental act of creative labour grounds a right of ownership in the abstract object.  Granting such a property right may have consequences for property rights in physical objects.  Much depends on the kind of right that is designed.

I am actually somewhat sympathetic to the author’s end goal.  IP rights do not deserve the status of property rights – they are better thought of as monopoly privileges and they are better kept out of free markets.  But what this paper needs is more careful argument and evidence to support that conclusion.  For example, we have lots of evidence that the most important kind of protection for companies is secrecy.  On this point see David Encauoua, Dominque Guellec and Catalina Martinez, ‘Patent Systems for Encouraging Innovation: Lessons from Economic Analysis’, 35 (2006) Research Policy , 1423 and Wesley M. Cohen, Richard R. Nelson, and John P. Walsh, ‘Protecting their Intellectual Assets: Appropriability Conditions and why U.S. Manufacturing Firms Patent (or not)’, NBER Working Paper Series, Working Paper 7552, 2000.  My view is that the capacity of the free market to reward innovation has been radically underestimated.  The last section of this paper – Imagining an IP-Free World – ignores just how much evidence we do have for the free market being sufficient (on this point see Michele Boldrin and David K. Levine, Against Intellectual Monopoly). There may be a case for IP rights that have a consumer information function (eg trade marks) or that protect the integrity of works (eg the author’s rights system), but the case for patents or copyright is close to non-existent.

Summing up – it would be good to have a paper that demolished IP from a libertarian perspective. Unfortunately this paper does not do this.  It needs a lot more work.

Kinsella’s Response to Referee Reports

Dear Ed:

Thank you for the email. I appreciate the time the reviewers took to comment on my submission.

However, I disagree with the reviews and with the suggestions for change. Neither referee seems to recognize that my approach is radical, unique, and not utilitarian. This is exactly why I set out very explicitly and clearly my libertarian perspective on property rights and tried to show why it makes sense and is superior to other approaches. Once this is done, it is not very hard to see why IP law is completely unjustified–and I explained this too.

Referee number 1 says it is not coherent or clear; I disagree. The application to patent and copyright is not “brief”; it is given is due weight, after the initial “heavy lifting” is done of clearly setting out my propertarian principles. This is something most IP writers never do. He says I reach no new ground, and rely too heavily on Kinsella; this is precisely because my case is, unlike that of most authors, who are unprincipled and utilitarian, or anti-property/leftists, unique and actually is a fresh and radical approach to this entire issue. And unlike most authors, I am a practicing IP attorney so know very well how the system works and this permeates my analysis.

The referee writes:

“Most disappointingly, the work addressed briefly how creators could be rewarded in an IP-free market, but the superficial analysis that follows does not address the counters to the proposals that have been extensively addressed in the broader IP literature. While there is merit in the author’s suggestions they need to be presented with a lot more analysis to be credible.”

This entire comment takes for granted a utilitarian approach: that unless I can show how a free world will work, it cannot be justified. It should be clear from my paper that I do not share such a utilitarian view of morality. I will not change my views or paper to suit this referee’s view about how moral reasoning ought to be done.

“For this reader this was also a disappointing work because the libertarian perspective was very generalised and did not deal in enough detail with the intangible aspects of existing property theory.”

But I explained very explicitly and clearly why I do not believe intangible things are property.

“With great respect intellectual property does not easily fall within the general discussions of physical, tangible property.”

Yes, and this is one reason I reject it as a legitimate type of property. I am very clear about this in the paper.

“Further, this reader was confused by the additional materials presented in the footnotes so that in the end it was not entirely clear how the author’s conception of property translated to copyright and patent (noting that other more contentious forms of intellectual property were not addressed) and why a libertarian perspective revealed something interesting or insightful.”

The most contentious forms of IP are patent and copyright. I dealt with these. The application to other types of IP–trademark, trade secret, boat hull designs, moral rights, defamation, semiconductor maskwork protection, database rights, and so on — I referred in n. 3 to a longer treatment; for this paper I cannot address every form of IP, so I dealt with the two most controversial and important: patent and copyright. I stand by this choice.

Review 2 pettifogs on my assertion that IP has been around in modern form for 200 years, by saying that there was a debate about this and some countries took a while to get where we are now; he cites Machlup. Of course, I cite Machlup as well so am aware of this. But going into detail about this is beside my point: I am simply establishing that IP law in modern form (patent and copyright) has been around for a couple centuries, and I am challenging the arguments in favor. That the Netherlands had limited patent protection for some time is totally irrelevant. I also realize there have been controversies about IP in the past, but most of them have been utilitarian debates; my own argument is not primarily utilitarian but principled and based on property rights.

“The second sentence in the second paragraph states that patent terms are about 17 years – the standard term is 20 (see the TRIPs Agreement) and patent term extension applies to pharmaceuticals.”

The term is not 20 years. The patent term is 20 years from the date of filing, but it does not start until issuance of the patent—which typically takes 2-3-4 years. That leaves … about 17 years of patent term. As I stated. In any case, the precise details are irrelevant; my argument is against any arbitrary, finite patent term (or infinite for that matter) for reasons as specified in my article. To focus on whether the patent term is 17 or 18 or whatever, and whether there are extensions, is distracting and beside the point. Totally irrelevant. I did not mention it because I am well aware of this and do not want to confuse laymen or non-IP specialists with useless patent law details that are utterly irrelevant to the soundness of my argument.

The suggestion that I should mention Nozick is bizarre. Nozick had no theory of rights, and had almost nothing of value or interest to say about IP. My libertarian theory is heavily influenced by Mises, Rothbard, and Hoppe, as I explicitly mention, and I do my best to present libertarian principles as I understand them. They do not draw on Nozick. This comment appears to be one from an academic whose main exposure to libertarianism is Nozick; he seems to be unaware that Nozick is almost irrelevant to most actual libertarians, especially Austrian-anarchist-Rothbardian types. He says:

“Nozick had things to say about the patent system. Given his importance in the libertarian tradition it is strange there is no mention of him. The author may have good reason for not engaging with Nozick’s argument—the readers need to know what it is.”

There are any number of libertarian luminaries who have little of value to say on IP that I could mention. It is bizarre to ask me to list people I do not discuss and explain why. Nozick may be “the libertarian” for academics who know nothing else about libertarianism, but for libertarians he is not “the libertarian” at all.

The author says I should write more about the libertarian tradition. Why? This paper is not about libertarianism. I have already been criticized by referee #1 for devoting not enough time to IP. I believe I have the right balance: I set out my coherent (and somewhat unique) understanding of property and political norms, which is heavily influenced by Mises, Rothbard, and Hoppe (Austrian economists all, and the latter two also being radical libertarian theorists, with Mises also being a classical liberal), in a way sufficient to illustrate and sketch a justification of why the Austro-libertarian approach to law and property is coherent and even superior: then I explain how, given this approach, patent and copyright must fall. The paper is systematic, careful, and in my view strikes the right balance of setting up the background approach and then applying it to the issues at hand, without getting bogged down in excessive and unnecessarily legal detail that is totally irrelevant to the approach taken.

Referee 2 also says:

“The paper is written from a libertarian perspective. I think it would be useful for readers if the paper said something more about the libertarian tradition and where the paper’s critique is located in that tradition. Some libertarians reject the state and some, for different reasons, accept a minimal state. Where does this article sit in that spectrum?”

Yet in the article, I was not unclear at all: I wrote: “For these reasons, the consistent libertarian, in opposing aggression, is also anarchist.”

And yet I did not dwell on this, as the libertarian case against IP does not rest on anarchist assumptions or conclusions; even minarchists ought to oppose IP—for the reasons I set forth.

“I found that the arguments were developed with too much haste. The author says that is “easy to see that ‘creation’ is neither necessary nor sufficient as a source of ownership” (see the page on which fn 59 begins). This argument is then made out using a block of marble as an example. However, it must be a contingent question as to whether creative labour can be a source of ownership of an abstract object. This cannot be settled by reference to physical objects since they are different kinds of objects.”

Well I disagree, but my argument was clear why I do. The referee seems to disagree with my anti-IP stance. That is his right, but it does not mean my paper is deficient. My entire argument is a sustained account of just why property rights only adhere to scarce resources and why attempts to assign them in other things are incoherent and unjust.

“I am actually somewhat sympathetic to the author’s end goal. IP rights do not deserve the status of property rights—they are better thought of as monopoly privileges and they are better kept out of free markets. But what this paper needs is more careful argument and evidence to support that conclusion.”

Then we disagree. I have shown very clearly and I believe persuasively why monopoly privileges should not be granted by the legal system

“For example, we have lots of evidence that the most important kind of protection for companies is secrecy. On this point see David Encauoua, Dominque Guellec and Catalina Martinez, ‘Patent Systems for Encouraging Innovation: Lessons from Economic Analysis’, 35 (2006) Research Policy, 1423 and Wesley M. Cohen, Richard R. Nelson, and John P. Walsh, ‘Protecting their Intellectual Assets: Appropriability Conditions and why U.S. Manufacturing Firms Patent (or not)’, NBER Working Paper Series, Working Paper 7552, 2000. My view is that the capacity of the free market to reward innovation has been radically underestimated. The last section of this paper – Imagining an IP-Free World – ignores just how much evidence we do have for the free market being sufficient (on this point see Michele Boldrin and David K. Levine, Against Intellectual Monopoly). There may be a case for IP rights that have a consumer information function (eg trade marks) or that protect the integrity of works (eg the author’s rights system), but the case for patents or copyright is close to non-existent.”

These are all utilitarian/empirical approaches. My argument does not depend on such analyses nor does it require me to show that trade secret law is a “good alternative.” The referee seems to be unaccustomed to my type of principled argument, that is not utilitarian.

For the foregoing reasons, I am not willing to or interested in—or even able to—make the changes suggested by the referees.

If you would like to publish my paper as is, please let me know. Otherwise I will publish it elsewhere.

Sincerely,
Stephan Kinsella

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A month later:

Dear Stephan,

Apologies for the delayed response to this email.

Given the peer-reviewed nature of our journal, if you are unwilling to even engage and respond to the concerns raised by the reviewers we are unable to accept your manuscript for publication.

Kind Regards,


Ed Mussawir & Tim Peters
Managing Editors – Griffith Law Review

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My reply:

Thanks. I understand. I hereby withdraw the article from consideration by GLR. Best, Stephan

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To the extent possible under law, Stephan Kinsella has waived all copyright and related or neighboring rights to C4SIF. This work is published from: United States. In the event the CC0 license is unenforceable a  Creative Commons License Creative Commons Attribution 3.0 License is hereby granted.