From the Mises blog; archived comments below.
The recent case of the lost next-generation iPhone prototype can help illustrate the absurdity of intellectual property rights. The basic idea of IP is that information can be owned–patterns, recipes, methods, designs, and so on. Even Rothbard, in The Ethics of Liberty, makes this assumption in arguing for a type of contractual copyright:
A common objection runs as follows: all right, it would be criminal for Green to produce and sell the Brown mousetrap; but suppose that someone else, Black, who had not made a contract with Brown, happens to see Green’s mousetrap and then goes ahead and produces and sells the replica? Why should he be prosecuted? The answer is that, as in the case of our critique of negotiable instruments, no one can acquire a greater property title in something than has already been given away or sold. Green did not own the total property right in his mousetrap, in accordance with his contract with Brown—but only all rights except to sell it or a replica. But, therefore Black’s title in the mousetrap, the ownership of the ideas in Black’s head, can be no greater than Green’s, and therefore he too would be a violator of Brown’s property even though he himself had not made the actual contract.
Note how Rothbard, in order to defend a type of copyright that “contractually” ensnares third parties (which is essential if there is to be anything like IP), has to assume that ideas are separable from things they are embodied in and somehow separately ownable. I discuss this interesting and uncharastic mistake of Rothbard’s at pp. 47- of Against Intellectual Property. The “Farmer Jed” example on pp. 54- provides an illustration of the obvious absurdity of ownership of knowledge:
Farmer Jed discovers oil under his land. No one for miles around knows about the black gold. Jed plans to buy his neighbors’ property for a song; they’ll sell it cheap, too, since they don’t know about the oil. In the middle of the night, his nosy neighbor Cooter, suspicious over Jed’s recent good spirits, sneaks onto Jed’s land and discovers the truth. The next morning, at Floyd’s barbershop, Cooter spills his guts to Clem and the boys. One of them promptly runs to a pay phone and gives a tip to a reporter at the Wall Street Journal (who happens to be his nephew). Soon, it is common knowledge that there is oil in the vicinity. The neighbors now demand exorbitant prices for their land, thus spoiling Jed’s plans.
Let us grant that Cooter can be prosecuted for trespass and harms flowing therefrom. The question is, can Jed’s neighbors be prevented from acting on their knowledge? That is, may they be forced to somehow pretend that they do not know about the oil, and sell their land to Jed for what they “would have” sold it when in ignorance? Of course they may not be so forced. They own their land, and are entitled to use it as they see fit. Unlike tangible property, information is not ownable; it is not property. The possessor of a stolen watch may have to return it, but so long as the acquirer of knowledge does not obtain that knowledge illicitly or in violation of a contract, he is free to act upon it.
Note, however, that according to the reservation-of-rights view, the neighbors would not be permitted to act upon their knowledge because they obtained it ultimately from Cooter, a trespasser who had no “title” to that knowledge. Thus, they could not have obtained “greater title” to it than Cooter himself had. Note also that others, such as geological surveyors mapping oil deposits, cannot include this information in their maps. They must feign ignorance until given permission by Jed. This imposed ignorance correlates with the unnatural scarcity imposed by IP. There is clearly no warrant for the view that reserved rights can somehow prohibit third parties from using knowledge they acquire.
I was reminded of this by the recent lost iPhone story. Surely there are first-gen iPhone and iPhone 3G owners who have been planning to buy the iPhone 3GS, the current top of the line iPhone model. And surely there are some people out there who were planning to buy their first iPhone in the next few weeks or month. There can be no doubt that a number of these people will hold off on that purchase, now that they know a new iPhone model is going to come out probably in the upcoming months. They’ll wait for the new iPhone instead. This means Apple will lose sales, or at the very least that sales will be delayed.
According to IP advocates, Apple owned the lost iPhone and also its IP–the designs, the trade secrets, the very information that a new iPhone was coming out. If you take IP seriously, then the Gizmodo employees had no right to the “knowledge” they gleaned from the iPhone prototype (we can safely assume here that they were aware it was Apple’s property and that they were dissecting and using this device without Apple’s consent–a form of trespass). Gizmodo had no “title” to these ideas. And, as Rothbard argues in the case of the mousetrap, we masses who have heard about this incident have no title to these ideas either–after all, we got the ideas from Gizmodo, but it’s a well known legal maxim, as Rothbard relies on, that you cannot receive greater title than the person you receive the thing from. Thus we have no title to these ideas either. That means we have no right to use this information. If I was going to buy an iPhone 3GS next week, I must still go through with it. If I don’t, I am committing trespass against Apple by using their property (the information about the existence of the new iPhone prototype) without Apple’s consent. No, Apple is entitled to that sale. As Jeff Tucker remarked to me, in discussing this, I’d be committing “insider refraining from buying” if I acted on information I don’t own. (Note that the idea of being entitled to a sale underlies the notion of defamation law and also trademark law. If Big Burger spreads lies about Giant Burger then Giant Burger sues because it “lost business”–business it was presumably entitled to. Same thing if Big Burger uses a mark too similar to Giant Burger’s trademark.)
But no worries that I’ll buy the new iPhone and feel bad about my purchase–even doing this would be using the information, and I have no right to do this. So I must be glad about my new purchase. To fail to do so violates Apple’s proprietary rights in patterns and information.
This is all nonsense, of course. But it’s one of the many absurd results you get if you treat information as ownable. As I discuss in Intellectual Property and the Structure of Human Action, human action employs means to achieve ends. Action is guided by knowledge and information–your knowledge about what means are suitable to achieve your ends, say. To take a simple example, suppose you and I each want to bake a cake. We can both make a cake at the same time using the same recipe (ideas), but not using the same eggs (scarce means). That’s precisely why there are property rights in scarce resources and only in scarce resources. Where there is scarcity, the things have to be rationed and assigned to particular owners so that these things can be successfully employed as means in action. If eggs were in infinite abundance at the snap of a finger no one would need to take anyone else’s eggs, and if they did, it would not matter. You could conjure up eggs and make your cake, or if you take my eggs I can just conjure up more and make my cake. There’s no scarcity problem to solve. When there is scarcity, we assign property rights so that there can be peaceful and prosperous use of these things in action. But for things that are not scarce, such as information, the question of property rights does not arise, and makes no sense.
In other words, for scarce things, property rights are assigned so that these scarce things can be used. Property rights help address a limitation of things in the real world. For ideas, IP assigns property rights in something that is infinitely abundant, in a bizarre attempt to make these things scarce, or less abundant. In the case of scarce things, property rights are a response to the problem of scarcity. In IP, property rights are assigned to create a problem of scarcity that did not exist before. The goal should not be to make abundant things limited and scarce; but, if anything, to make valuable scarce things as abundant as possible.
April 27, 2010 at 2:31 am
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Whilst these ideas are interesting, as a minarchist, I have a different idea. I believe that property rights can be applied without injustice. I think that local public land should be ruled by locals, like a private company which just happens to own roads and broadcast rights through the roads and public lands. Just as you and I should be able to do with our land what we like, so local counties should be able to licence what is broadcast over their properties. I think of this as Public Intellectual property. If you invent a better mousetrap, you should be able to copyright the design on, or over, Public property. If you do, your neighbour might still copy your ideas on his or her own land, but only you would be able to advertise on radio or TV, over public property.
April 27, 2010 at 3:20 am
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This is one of the dumbest arguments for IP socialism yet.
“Note how Rothbard, in order to defend a type of copyright that “contractually” ensnares third parties (which is essential if there is to be anything like IP), has to assume that ideas are separable from things they are embodied in and somehow separately ownable.”
Here Rothbard doesn’t need to assume anything, he is pointing put what is That is the point of the whole IP thing really. And you can not argue against it by assuming it away.
Ideas are separable from things they are embodied in and separately ownable. The difference between “Human Action” and “Harry Potter” is not the difference in the atoms making up the paper, and the ink. The two books aren’t only different because they have different number of pages and that there is different amount of ink imprinted on them.
And the rest of the post the oil example and the IPhone example has nothing to do with any of this anyways.
You are just bundling the problem of “restitution” or “generally dealing with a crime”, after the crime has taken place, where the aggression against property has already been committed. This has nothing to do with the crime itself.
The question is, whether the unauthorized interaction that takes place between a person and the IP, is right or wrong.
I can make up of a case that involves Person A slapping Person B, and then describe how absurd and wrong it would be for Person B to cut Person A’s hand. But that wouldn’t have anything to do with the question of whether slapping someone is right or wrong.
April 27, 2010 at 4:20 am
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Dear Kerem,
you miss the point of the argument, which is that IP is an attempt to control causality. The point is not whether a restitution should take place (which Stephan answers in the affirmative, as physical theft and possibly a breach of contract occurred), but what people it should affect. IP necessitates that it should affect all the living beings everywhere, merely because their actions were influenced by the theft.
Ideas are separable from things they are embodied in and separately ownable.
First of all, even if we assume this, there are still a lot of necessary conditions that you need to prove in order to arrive at the conclusions you are promoting. They all boil down to the metaphysical identity of the immaterial: what is it’s scope, both on abstraction level (similarity axis) and chronologically (causality axis)? You are completely oblivious to this. If I use a reductio ad absurdum argument and iterate on both axes, the first human to think of the most abstract social concept (human action) would have a claim on all subsequent human action of everyone else.
The two books aren’t only different because they have different number of pages and that there is different amount of ink imprinted on them.
Yes, they are different not only because of their physical differences, but also because of the presence/absense of the causality relationship. You are implicitly assuming there is none. If Rowling was “inspired” by Mises, your theory necessitates that this makes Harry Potter “a copy” of Human Action, even though if there would be no measurable change in the content of the book.
April 27, 2010 at 8:11 pm
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Wow. Exactly to the point!
Congrats!
April 27, 2010 at 9:28 am
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So, Kerem, if the idea is separable and ownable, then Gizmodo had no title to that information; and thus you and I, who now have this information, also have no title to it. Right? So we may not “use” it without Apple’s consent; use of information means basing a decision on it. So you have no right to forego purchasing an iphone, if you were going to buy one anyway, right? You have no right to take the knowledge of the new iPhone into account in your actions right?
But, alas, you are using your knowledge of the iPhone prototype in this very conversation; surely you would not have this conversation with me if you were unaware of the iphone prototype. So every time you reply to me, you violate Apple’s IP. Amazing!
April 27, 2010 at 7:11 pm
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Haha nice reply Stephan.
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You are using a situation that arises after the act of aggression, as way to legitimize the aggression itself.
For someone not being able to completely forget the information he gathered immorally, is not a reason to legitimize the act of gathering information without the consent of the owner.
After you rape someone, no matter what happens, effects of that aggression can not be undone. Not for the rape victim, nor by you, the rapist. However you deal with the situation after the fact, one thing is for sure. You can not go back to a time this never happened. Victim would be scarred for life, and you would still have your sick pleasure of having raped someone. Does that make the act of rape ok? Does treating rape as an aggression and trying to compensate for this crime an act of control of someone by others? Maybe the victim can not make you forget the sick pleasure you had but he or she can make you pay, and should make you pay.
All your alleged “control of others actions” can only come after the unauthorized interaction between you and the said IP (the immoral act, the aggression), thus the allegation of “control” is a farce.
But no matter all the logical fallacies what it boils down to is this,
You know a certain individual created some pattern of information, you acknowledge you yourself haven’t created it, you acknowledge it was not a nature given unowned thing. You acknowledge all that, and you claim you (and not only you but all the society) have a right to consume it.
And that my friend makes you an advocate of inter-species parasitism also known as socialism.
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Again, a type of reply I’ve come to expect of you, avoiding confrontation and dragging the discussion into the irrelevant. You pretend Stephan justifies act of aggression by denying restitution, but you have the implication backwards, and, what’s more important, misses the point. IP necessitates that all acts causally related to property violation are illegitimate. For example, you reading Stephan’s post is causally related to the theft of the “IP of Apple’s phone” and therefore you can be sued. You using the word “rape” is causally related to the existence of actual rape, and therefore rape victims can sue you too for violating their “IP”.
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Kerem, this is a confused post. The inability to own information does not mean that the underlying aggression that revealed and publicized secret information is itself legitimate.
The point is a reductio ad absurdum. It shows that if you take IP seriously then you give property rights in information, and here is an example of doing it consistently.
“For someone not being able to completely forget the information he gathered immorally, is not a reason to legitimize the act of gathering information without the consent of the owner.”
And we are not saying that it does. If you believe in IP then you believe ideas are ownable separately from tangible things. In this case Apple owned the ideas embodied in its iPhone prototype (according to the IP mentality), and still owns it. You now have those ideas in your head. This is the case with all forms of IP: you are aware of the plot of Star Wars, and of how to make a patetented three-legged stool (say). Yet the copyright and patent laws you IP socialists support prevents you from using the information that you already possess. You are prevented from acting on it. Likewise, you have information about the new iPhone prototype, and can be prevented from acting on it too. Even if you can’t forget it, you can be barred from acting on it, from using it.
You know a certain individual created some pattern of information, you acknowledge you yourself haven’t created it, you acknowledge it was not a nature given unowned thing. You acknowledge all that, and you claim you (and not only you but all the society) have a right to consume it.
Once again you are speaking of things you are very ignorant about. IP law does NOT only prevent you from using patterns that I copy from others who “create” it. Patent law for example forbids you from using a given pattern EVEN IF you created it yourself, EVEN IF you created it BEFORE the guy who got a patent on it. Now you either defend this in which case you reveal that you support obviously outrageous policies (and you undermine your “defense” above); or you object to this, which means you too are criticizing IP law, like us. Which is it?
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Kerem does not support the independent discovery problem or the division of IP into copyrights and patents. Rather, he claims there is only one IP, based on the the concept of “copying” (which he, of course, has not defined).
Nevertheless, Stephan, with the rest of the comment, you are exactly right. Kerem at the same time denies exceptions, while failing to address the reductio ad absurdum arguments.
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In this blog entry Stephan aims directly at the core issue with IP proponents: they want to control causality and redistribute its outcomes. I suspect many IP proponents reading this, just like Kerem above demonstrated, will completely miss the obvious and complain about aspects of argument which Stephan merely used to paint the full picture.
Nevertheless, I still have problems with the scarcity arguments. I agree that the concept of property developed because of scarcity, and if there was no scarcity, it wouldn’t have developed. However, as I said elsewhere (and Stephan appears to agree), the question is not the source of rights but their content.
April 29, 2010 at 5:37 pm
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Isn’t that what socialists want to do in general — control causality and redistribute its outcomes?
April 27, 2010 at 8:10 am
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Just amazing, that the police state gets pulled into this. Gizmodo isn’t making me less likely to get an iPhone, but Apple and California sure are.
April 27, 2010 at 8:23 am
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I disagree, to an extent.
The gizmodo employees still had no right to the information pertaining to that particular iPhone not because they had no right to the information pertaining to it, but because they knew that the item was stolen and yet proceeded to purchase it anyway.
http://news.yahoo.com/s/ynews/20100426/ts_ynews/ynews_ts1791
The story seems to be indicating that the actual crime here is referring to the willful movement in stolen goods. Gizmodo employees knew that the iPhone 4.0 was stolen, and then proceeded to pay a $5,000 bounty from the source to acquire it. So after fully aknowledging that it was clearly stolen property, they proceeded to acquire something which they had no legitimate title to and then physically broke it open.
I will concur that stealing their computers to ensure that the OS was not dumped is silly. Apple loses nothing from them doing this in particular. I mean think about it, anything that Chen or the Gizmodo folks do the the OS they dumped Apple can easily render ineffective given that they actually control those machines. But Chen certainly deserves to be punished for the clear trespass that he participated in. It is obvious that this is true given the response from gawker media: they are arguing that since he is a journalist he has a right to participate in theft in order to get a story to enrich himself and his employer. They cannot possibly argue that he did not participate in the movement of stolen goods, so they had to use a fundamentally stupid legal protection to even try and argue their case.
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My post was not about whether the raid of Gizmodo was justified (arguably it is). I am assuming for the sake of argument here that Gizmodo’s complicit employees committed a form of trespass and have no right to have acquired the information they did, etc. Let’s assume that. Now, you and I have knowledge of the new iPhone. Suppose I was about to sell some Apple stock. Now I think that the new iPhone will be great for Apple stock in the coming months, so I decide NOT to sell the stock. I am using the information to make my decision. Do I have a right to do this or not? As always, for IP, the question is not what “second” parties (contractees; tortfeasors) are limited in doing–it’s what innocent third parties are limited in doing with information or knowledge they possess.
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Agreed.
You and I would be perfectly within our natural rights to act on that information. Indeed, in practical terms it would be impossible for regulators to know unequivocally what are actions would have been without the new knowledge. Any attempts to even try to enforce something like that would be wildly arbitrary and entirely unjustified.
April 27, 2010 at 9:53 am
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The phone was actually abandoned – not stolen. It was left at a bar by an employee, and Apple claimed it was a Chinese knockoff when the person that found the phone tried to return to Apple.
http://www.theregister.co.uk/2010/04/26/iphone_gizmodo/April 30, 2010 at 2:29 am
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Why would the people at Apple Care know that it was a prototype iPhone 4G? Just because it was “abandoned” (I use this word loosely because Gizmodo had no problem finding and posting the personal information of its owner) does not mean it is theirs. For example, you get drunk and drop your keys. Have you abandoned your car? Oh, but your tried calling Pep Boys and they didn’t want it so it must be yours now. No, you return it to the lost and found at the bar.
April 27, 2010 at 10:02 am
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Interesting application of IP.
That said, I am not sure that scarcity is the term to compare eggs and information. Information, like eggs, is actually scarce too. I mean there is a lot of information we wish we had, but is hard to collect, and therefore we don’t have.
For example, we don’t have the “recipe” for teletransportation, we don’t know exactly how many people there is, we don’t have enough literature or music that matches my tastes in a specific genre or from a great author who’s dead, …So it seems that information differs from eggs, not because of scarcity, but because of non-rivalry. If I get the information, I am not taking it from someone else.
Information access is non-conflictual, that is until we try and monopolise and control it thru IP ownership laws.April 27, 2010 at 12:58 pm
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If I have an egg, I still (ultimately) need a chicken to get a second egg. If I have information about say the shape of an egg, I can make a million copies of this information without anything extra. Thus, in the main sense, information is not scarce.
What you seem to be referring to as scarce is different varieties of information. If I have information about a chicken egg, I still don’t have information about a frog egg. You seem to be calling information scarce because of this, but this sounds absurd. If we made a machine to duplicate eggs at virtually zero cost, we wouldn’t still say that eggs were scarce just because this machine couldn’t produce a frog egg when given a chicken egg.
The thing in common with eggs is a significant cost for producing a new type of egg/new variety of information. Unless the creator of either is held at gunpoint, he can decline to create this new variety unless the buyer makes an acceptable offer.
April 28, 2010 at 12:08 am
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“scarcity” and “non-rivalry” are synonyms.
April 27, 2010 at 10:32 pm
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I think this article misses the point of IP. Stephan equates the parameters of IP and physical property; that is, he assumes physical property rights should be protected in the same manner as IP rights. This seems flawed given the success of today’s laws. Physical property rights are enforceable against everyone (if someone takes your car you have recourse), however, IP rights are enforceable only against businesses. Copyrights and patents protect only the business value of an idea. If Maytag creates and patents some super laundry machine the current laws only prevent a competing business to profit ($) from this discovery. There is no law against a single consumer obtaining the “idea of the schematic” and using this idea to create their own washing machine for their own personal benefit.
Given the current laws then there would be no reason to hold the individual consumers liable for “insider refraining from buying” or failing to sell their homes at an ignorant price. Now what about a competing business that decides to launch their new phone before Apple’s based on the information given? This question is again answered by current law. Unless Apple had patented: “the idea of bringing an updated model to market” (a laughable proposition) there would be no recourse against a business profiting from this concept.
The current laws seem to do a fantastic job of balancing the global right of ideas and creating incentive for inventors.
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IP rights are enforceable only against businesses
As far as I know, there is no such limit present in current IP laws.
The current laws seem to do a fantastic job of balancing the global right of ideas and creating incentive for inventors.
No they don’t.
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I would appreciate it if you would extend upon your view that the current IP laws do not balance the global right of ideas and the creation of incentive for inventors.
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I have an objection to the word creation of incentive, since it promotes the assumption that there is no incentive in the absence of IP, which is demonstrably incorrect. It would be more accurate to say altering of incentive. Personally, I am not very interested in the utilitarian aspects of IP, rather in the theory (or the lack thereof). From praxeological point of view, you cannot “balance rights”. For utilitarian issues, I recommend Boldrin & Levine: Against Intellectual Monopoly.
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Jordan: “I think this article misses the point of IP.” not likely.
“Stephan equates the parameters of IP and physical property; that is, he assumes physical property rights should be protected in the same manner as IP rights.”
No; it is IP socialists who want ideas protected like physical property. That is the problem.
Your entire comment is confused and fallacious.
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Stephan, I was not insinuating that you personally believe ideas should be protected like personal property; I stated that you equated the parameters. I understand your entire article is aimed at exposing the ridiculousness of treating IP rights like property rights, however, the foundation of your argument is made of two fallacies. First, you create a false dilemma. The two horns of your dilemma are: IP rights enforced like property rights* and a free exchange of IP rights. Certainly there is middle ground (as we have it today in the form of business exceptions noted above). Your second fallacy is an extension of your first as you commit argumentum ex silentio. Your only real support for your apparent thesis: “The goal should not be to make abundant things limited and scarce; but, if anything, to make valuable scarce things as abundant as possible” is by disproving its polar opposite. This offers no legitimate support.
I would appreciate it if you could point out my fallacies and confusion; the result being a more logical discussion.
* I additionally disagree with the apparent definition of “IP” as presented in this article. To me, IP is not the “what” or “who” of an idea, but the “how.” Apple does not own the knowledge of the existence of a next generation iphone, it owns the process by which it is constructed (the schematic). I encourage debate on this subject.
April 28, 2010 at 11:45 am
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I figured they’d release another one this summer anyway. That’s their trend. (Also, my contract expires in November.) Seeing this made me reconsider on giving up on iPhone. So now, I’m required to get an Android phone?
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Stephan, I’m curious about whether you think using the same trademark(s) as an established business would be a form of theft or (at least) fraud.
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