From the Mises blow; archived comments below.
Tyler Cowen has an interesting post up, What determined the playing length of an audio CD? Turns out Sony wanted a smaller diameter CD at first, but soon settled on a 120mm diameter so that the 74 minute version of Beethoven’s Ninth Symphony (the favorite piece of a Sony VP’s wife) could fit on a single CD. Interesting story, but the 74 minute length, and corresponding physical diameter of the CD, is not really arbitrary.
This reminded me of the quirky origins of the patent term. The patent term is currently approximately 17 years–20 years from the date of filing, once the patent issues (which typically takes about 3 years from filing to issue). The English Statute of Monopolies of 1623 (enacted 1624), one of the main historical basis for modern patent law, provided for a fourteen year patent term (the Statute of Anne of 1709 (enacted 1710), the first modern copyright statute, also provided a copyright of fourteen years; modern copyright lasts 70 years past the death of the author). Why fourteen years? As explained by Fritz Machlup in An Economic Review of the Patent System (p. 9):
The duration of patents has been determined by historical precedent and political compromise. The 14-year term of the English patents after 1624 was based on the idea that 2 sets of apprentices should, in 7 years each, be trained in the new techniques, though a prolongation by another 7 years was to be allowed in exceptional cases.1
In other words, the patent term’s origin is utterly arbitrary and bizarre, and has no bearing on anything to do with modern life. The current patent term of about 17 years, and the current copyright term of roughly 100 years, are also completely arbitrary. There is no evidence whatsoever that these are optimal terms; that there even are any optimal terms. It seems obvious that IP terms should either be zero, or perpetual: the former, if IP is not really property; the latter, if IP is really a libertarian property right. People familiar with my views know which side I would take.
[Mises post]
April 4, 2011 at 12:29 pm-
Stephan,
You use the word “arbitrary” as an invective.
The terms of both patents and copyrights are arbitrary, and that is why they have been subject to legislative reform. Since property is a human device, it is subject to human judgment, which is fallable.
The relationship to the apprentice term is no more arbitrary than the width of rail lines, which can be historically traced to the width of two horses’ asses pulling in tandem. Last time I looked this is no longer relevant to modern times, yet had design implications for the space shuttle.
In the SCOTA case on the Bono Act, the proposed copyright term extension was justified on the basis of the rule against perpetuities, and the 99 year lease, as each of the tree examples amount to about 100 years. Based on this similarity, the court found that 99 years had a rational basis.
I disagree with the current copyright term, and as was pointed out in an amicus brief in that case, life +70years is roughly equivalent to perpetual, which was never intended by the framers. Historical records apparently indicate that with the original term of 14 years with one renewal of the same length, very few were actually extended.
I presume this is because in the case of a living author, after 14 years the work has little economic legs left, or it never took off in the first place. I believe the last extension of the CTEA benefited almost exclusively those owners of those copyrights that were about to expire, such as Disney, etc. As I have said before, mercantilism, like rape, is always bad. I think we agree on this.
In my view, since the granting of IP rights are arbitrary anyway, and based on economic policy, it might be worthwhile to explore the following from an economics perspective:
1) Base the term on the characteristics of the economic pattern of the work, i.e. a book that is published today earns 95% of the lifetime revenue in the first 10-15 years, so perhaps the original term length makes some sense. In patent, the nature of the invention and how it operates in the economy should be a factor in setting the term.
2) The time after death should be eliminated or shortened. Since the author is dead, it is no longer possible to incentivize him to write more books. It is a matter for his estate, and so decisions about licensing, etc. should not be included in the economic interest that survives him. Perhaps a constructive trust combined with mandatory licensing, to avoid problems like the Salinger case. Although it may make sense to prohibit mandatory licensing while the author is alive, since he may have his own plans, once dead, licensing should be mandatory but negotiated by the heirs and perhaps mediated or arbitrated by the court.
With regard to prior invention, I think you make too big a deal over this. In copyrights, I suspect it rarely legitimately comes up, and only in the case perhaps of derivative works. I think the most common is in music composition, but this is a rare case and could be handled legally.
The one aspect I agree with you about is the case where an inventor is ignorant of prior art and independently develops and unknowingly infringes on a patent. Although perhaps the burden should be on the prior inventor to prove lack of access (which might prove difficult today), I still suspect the number of actual cases is small. Do you have number?
Something simple, akin to the requirement of registration and notice in copyright publishing, would be sufficient. Posting art in a public site would give notice to patent holders of contemporary invention without having to apply for patent protection. Patent holders or applicants could search for postings. New patents would be disallowed on the basis of prior art without the need for defensive patents. Perhaps a time limitation could be imposed on a patent holder to provide infringement notice or they are estopped.
In any case, like in the areas of banking, once you start looking at how the system is being misused and abused, the process of returning to first principles can proceed. Your general insistence on abolition generally curtails discussions along these lines, but I appreciate your posting on this subject here.
April 4, 2011 at 1:07 pm-
I can’t agree with you that the optimal length is either zero or infinite. Patents and copyrights create both encourage and discourage innovation, namely they have costs and benefits. The longer the term of the copyright or patent the bigger the costs. For example, the legal costs of patents increase the longer the term; longer copyrights encourage copyright-holders to live off past successes rather than create new content; and so on. And the marginal costs only increase as the term increases. A longer patent or copyright term also increases the benefit but with declining marginal return. For example, if a book makes 95% of its revenue in the first 12 years, then doubling a copyright term from 12 years to 24 years will give very little added revenue and thus very little added encouragement. Thus, the ideal length of time would give the highest differential between benefit and cost. Looked at from this perspective, it becomes pretty apparent that the ideal length of time is pretty short, if at all greater than zero.
Now, I’m in your camp, thinking that the ideal length is probably zero, but that’s just because I think the costs always outweigh the benefits.
- April 4, 2011 at 2:00 pm
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@ Joseph K April 4, 2011 at 1:07 pm
Why zero? If it was zero, then producers would ALWAYS be producing for an external economy. The question is at what cost to internalize that externality? Property rights have traditionally been developed for that purpose; to internalize costs/benefits while reducing transaction costs between parties. This is the question explored by Coase and others.
If the dual purpose of IP is incentives and disclosure, then much beyond a author/inventor’s lifetime makes no sense, or perhaps only when the “creation” is near the time of death.
Perhaps life or 20 years, whichever is greater?
Also, why do you think costs always outweigh benefits?
April 4, 2011 at 4:00 pm-
Spoken like a true central planner. Who is burdened with “internalizing [positive] external economies”? The producer or “everyone”?
- April 4, 2011 at 6:16 pm
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@ iawai April 4, 2011 at 4:00 pm
Cooperating humans come up with things like this.
What does this have to do with central planning. Are you implying I’m a communist?
Parties to a transaction have to deal with externalities, which leads to the concept of private property. When the cost of negotiation is high, property rights naturally arise. If they are low, it is generally left to bargaining between paties. See Coase.
April 4, 2011 at 6:35 pm-
“Are you implying I’m a communist?”
You have aspects of communist/socialist arguments there.
- April 4, 2011 at 6:44 pm
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I entirely support those individuals who seek mutual benefit to cooperate in coming up with rules that bind only themselves. You imply that some sort of general rule will bind all parties.
“When the cost of negotiation is high, property rights naturally arise. If they are low, it is generally left to bargaining between paties. See Coase.”
Um, transaction costs being high or low does not bear on whether solutions to disputes are based on “property rights” or “bargaining”. Coase said if there are NO transactions costs, it doesn’t matter where rights are allocated, the pareto optimum solution will be found. The Coase lesson says that when there are positive transaction costs, of whatever sort, the property rights in a dispute should be granted to the party opposite the one with lower transactions costs, to burden the least-cost avoider.
Coase said a lot of things, but I don’t see how they apply to what you are trying to say.
- April 4, 2011 at 7:08 pm
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@ iawai April 4, 2011 at 6:44 pm
You imply that some sort of general rule will bind all parties.
Property rights are a general rule, and apply to everyone within the social jurisdiction. They do not depend on privity in contract.
Um, transaction costs being high or low does not bear on whether solutions to disputes are based on “property rights” or “bargaining”.
I disagree. He demonstrates that high transactions costs imply that property rights assignemt are more efficient. Where bargaining is efficient, no property rights are required. His entier thesis is dealing with the “social cost” externalities calculation.
- April 4, 2011 at 7:36 pm
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“Property rights are a general rule, and apply to everyone within the social jurisdiction. ”
Wrong. Property rights apply to everyone. Not only within a “social jurisdiction”.
If people allow others to use their property and call that communal so be it.
But there is no such thing as “social jurisdiction” which decides what is right and what is wrong. Your standing has nothing to do with libertarianism if you put property right on a relative level.Regarding Coase: His theorem is not about what is right or wrong but about what he deems efficient. Do not mix those both parts.
- April 4, 2011 at 6:09 pm
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Oh, so you also support ideas on limiting real property rights (after all if one accepts utilitarian arguments on one field he has to accept them on others to argue CONSISTENTLY)?
On another thread I read that you believe in state property (you mentioned three property types of which one was state property). I think that says it all.
April 6, 2011 at 2:35 am-
Anti-IP Libertarian
“On another thread I read that you believe in state property (you mentioned three property types of which one was state property). I think that says it all.”
Yes. It does.
Sione
April 4, 2011 at 6:14 pm-
Wildberry,
If it was zero, then producers would ALWAYS be producing for an external economy.
As long as the property rights give everyone at least something (i.e. there is no slavery), producers always have a non-zero external economy and non-zero internal economy.
If you think otherwise, you would need to demonstrate a situation where we have IP and no external economy. Would you care to do so?
- April 4, 2011 at 6:25 pm
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@Peter Surda April 4, 2011 at 6:14 pm
You are still not actually reading my writing, but at least this is coherent.
If it was ZERO, then producers would ALWAYS be producing for an external economy.
So yes,
“As long as the property rights give everyone at least something (i.e. there is no slavery) [*i.e. IT IS NOT ZERO*], producers always have a non-zero external economy and non-zero internal economy.
So no, I do not think otherwise. Zero is slavery, which will be rejected by producers.
April 5, 2011 at 12:08 am-
Wildberry,
How can you insist that without IP producers retain no benefit from their inventions/creations? Can you even conceive of a single example in which a person created something and got absolutely nothing for it? That means they got not $1 in sales, no increased fame, no increased expertise or skill, nor even any personal satisfaction out of creating. If any one of the benefits above applies the producer is not limited to an “external economy”, they are benefiting personally from their actions, even if not to the extent you deem appropriate.
There is no need for an elaborate set of ad hoc laws and rules to internalize positive externalities… producers are perfectly capable of finding a way to benefit from their production without IP, as they have done before IP and as they have continued to do today in IP free areas like fashion.
- April 5, 2011 at 8:00 am
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@Anthony April 5, 2011 at 12:08 am
It is not necessary that the benefit be zero, only, as Mises says, “for the most part”.
You explain to me how the author will derive the benefits for authorship if mere disclosure severs that ownership.
You cannot use fashion as an example any more than you can ideas. Neither are subjects of current laws, for good reasons.
Assume you are an author with an original manuscript, say a technical manual that was very costly to produce. How do you internalize the benefit in the absence of some IP protection? Give me an example.
- April 5, 2011 at 8:50 am
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Wildberry,
as you undoubtedly know by now, I’ve been a software engineer my whole career. Yet, I cannot recall a situation where my income required that people are prevented from copying the software that I wrote. It is possible that there have been isolated occurrences where people were prevented from copying it, because my career predates my IP opposition and I was not paying attention to it, but even if they existed they would not significantly influence the outcome.
That alone refutes your nonsense.
April 5, 2011 at 11:27 am- April 5, 2011 at 1:06 pm
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@ Stephan Kinsella April 5, 2011 at 11:27 am
so… you happen to be opposed to the push to add fashion IP protection? Or will you say that there is “good reason” for fashion protection once Congress makes it so, like a good little legal positivist lapdog?
I understand the issue with fashion is one of separating the design element from the useful object, leading to an encroachment into the pubic domain of useful objects.
That rests on a policy objective that is supported by sound reasoning. Is the concept of “good reasons” now prohibited, even if they come from someone you consider a “lap dog”, whatever that means?
As I have said before, mercantilism is always bad, whether in the service of copyright extensions, or other encroachments in the public domain protection policy.
I think this position is supportable for good reasons. And you?
- April 5, 2011 at 8:45 am
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Wildberry,
You are still not actually reading my writing, but at least this is coherent.
I am reading and unlike you I am able to participate in a debate and produce a coherent argument.
You said that if patent length was zero, producers would always be producing for an external economy. I said that regardless of patent length, as long as noone is enslaved, i.e everyone has some rights, for example physical property rights, a part of the outcome of their work is external economy and a part is an internal economy. Therefore, your argument is a non-sequitur. Just like in the previous cases, you made up an empty set (zero length patents = nonexistence of internal economy) and are complaining about it.
I also posted you a question, which, when answered, would refute my argument. Again, just like in other cases, you did not answer it.
Zero is slavery, which will be rejected by producers.
So, if you have the option between performing an action and not performing it, and cannot find a way of profiting from it, it means that noone can? Also, if you think that you can only make an action X profitable if other people are prevented by force from performing action Y, does that justify that force?
April 4, 2011 at 4:33 pm-
I remember reading somewhere (?) that Thomas Jefferson recommended the 17-year term because that was the length of a generation in his time, and he felt that future generations should not be held to contracts made by the previous generation.
- April 6, 2011 at 2:38 pm
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Mike
He was discussing government debt. Jefferson said that the borrowings of govt could not morally be passed onto the shoulders of future generations for repayment. Those yet born, or those who were mere children when govt borrowed money had no influence and no power over the decision to borrow. Therefore, he thought, they should not be expected to pay for something they had nothing to do with. The debt should be put aside, unpaid.
Being consistent with application of his principles, it is clear that govt should not be able to borrow at all. The vast majority of people have nothing to do with and no control over such decisions, hence they can hardly be expected to be liable for them. Jefferson knew this and did argue along those lines. Let those who want govt to borrow give the guarantees. Let them be responsible for the repayment. leave everyone else unencumbered.
Sione
- April 4, 2011 at 6:04 pm
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@Wildberry: Do not be evasive but just answer these questions:
Why limit copyright terms? Why limit patent terms?
After all if those both were property rights, than why should there be a time limit?Why only an “IP right” to certain areas of information arrangements (eg “creating” a story)? Why shouldn’t someone who invests many hours in designing his garden in a special way have the same rights to this design as someone who invests many hours in designing a story or technical gadget?
April 5, 2011 at 12:29 am-
My reply is really quite simple, and in conformity with property rights.
I am a minarchist, and I think that local governments should remain the owners of PUBLIC property. I also think that such governments should be comprised of, and represent, volunteer citizens, who can all vote for laws over, and only affecting, PUBLIC property. Individuals who wanted to use such public properties, like the roads and the airways, would need permission or a licence (like cars now need for roads) to use it. On your own property, you set the rules; on public, or citizens’, property, the citizens vote on the rules. you could licence your garden design for public use, but not private. The public authorities would need to pay you if they really liked your design and wanted to copy it on public land. I advocate private monarchies within a public democracy- and IP would apply to the public realm. Since I think someone will end up owning the roads, and thus controlling public space, I advocate a system which incorporates this belief.- April 5, 2011 at 1:20 pm
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So you think a local aggressor called government is better than another local aggressor called crime syndicate by the government? From an individual perspective: How do you distinguish them?
How does “public property” evolve? Who is to decide what “public” property is and what not?
Or is minarchism just the same as communism, only on a smaller scale?
Btw you did not really answer any of my questions: What has IP to do with “public” property?
- April 5, 2011 at 8:21 pm
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As I tried to explain, we would be a part of the government! We would not elect politicians to rule over us, but we would all have a share in ruling! And we could do away with leaders if everything was then predicated on seniority- individuals who had been citizens for the longest time could then be called ‘leader’, or mayor, whatever. Those next longest-term would be the council, if such a body was needed. They could direct the various volunteer services, themselves having been volunteers.
What has IP to do with ‘public’ property?- it would be modified to become a licence for advertising over public property. Public services would buy and use IP-licenced products only, and would only allow such goods to be advertised over public airways. Only copyright-protected books would be found in public libraries, etc.
As for private/public borders, I use the common definition- that land is held as property, and that my house is private property, but roads are public, etc.- April 6, 2011 at 2:26 pm
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You only have to understand that there is no “we” unless it is based on free will and property rights.
Minarchism is not based on the free will and property rights of the people included. It is a form of statism.
Whether this statism includes many regulated areas or not is irrelevant for the question if it is legitimate. Theft is theft whether you take 1000$ or more.
So please answer this: What if someone does not want to accept the territorial monopoly of your government?
- April 6, 2011 at 7:33 pm
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Really? what would this mean? Is that someone an invader- the militia can deal with that! Is that someone a person who wants to use a piece of public property, like a road, but not abide by the rules of the road? Road patrols can deal with that. Is that someone a person who does not want to be a citizen? Citizenship should be voluntary, so no-one would be compelled to be a citizen. So long as that someone abided by the rules of public property, he/she could travel through public property as a guest. Citizens can vote and participate in local politics, guests can’t.
April 7, 2011 at 1:38 pm-
No, that someone is a private owner eg of land in that area.
How do you define “public property”?
How does something become “public” property?
How is your idea different from ancap?
- April 7, 2011 at 7:31 pm
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I use the dictionary definition of private versus public property. As for acquiring land for public use, governments would be just like any other company- they would have to compete to buy the land without being able to compel a ‘sale’ or an outcome- or a price. Once bought, the local government could then dictate the terms of the use of its’ property, called public property.
If someone did not want to be a citizen, one would not be compelled.
As for patents and copyright, as explained in my previous posts, local governments could control what is advertised across its’ properties, and thus could licence items and expressions of ideas, and only buy licenced goods for itself.
- April 8, 2011 at 11:19 am
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@Nuke Gray April 7, 2011 at 7:31 pm
I catch your drift, here. Let me ask, how do you deal with the issue of “balkanization” in your vision?
It seems that you have all jurisdictions being reduced to the local level, as the largest scale of social organization, and at the individual level, you have the abiltiy to opt out.
How does anyone figure out what the local laws will be, or what to expect form an individual, as one travels from point A to point B?
- April 10, 2011 at 3:23 am
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This is Nuke, from my home address (Eleutherist). I notice this amazing device in Australia, which you may have heard of, called a ‘speed sign’. It is a notice-board with a speed limit on it, and when I go from point A to point B, I utilize them. I change my car speed to suit whatever local road speed I see. Feel free to use these devices in America!
As for other rules, one could inquire at town hall, or over the internet. I am surprised more people don’t use the net, but they will, and future citizens could find out the rules from it. - April 10, 2011 at 1:14 pm
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OK, that’s good for speed limits, but what about all the other assumptions one generally makes with regard to the prevailing laws? Your response was amusing, but does not really address the issue.
The issue is size, scale and diversity of the jurisdictions, and how they manage to prevent the need to pull out the codes for an area if you are visiting another town.
The alternative is a “common code of laws” which even Rothbard acknowleged would be necessary.
- April 10, 2011 at 7:34 pm
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You mentioned ‘Balkanisation’, but I always think ‘Cantonisation’, as in Switzerland. Switzerland is a country with strong cantons, and democratic traditions, and the country manages to get along fine, despite having a weak center. Sure, they don’t speak English, but they seem to do very well. I think you would find the answer in that example.
Another possibility is to have differing grades of conferences. If Australia adopted this system, then the different counties (And Shire!) that make up the area called Sydney could send heralds and delegates to conferences to discuss common problems and to suggest solutions. These conferences could send heralds to State conventions, and the State Conventions could send delegates to National Conventions. None of these conventions would be legally binding, but they would allow common values and codes to be formulated.
And another binding element could be war-games. The individual militias could compete at various levels, regularly, replacing sport with token wars, in practice for local co-operation if the land was invaded. (And I sometimes think that if you really needed a bureaucracy, you should only hire from winners of such contests- a nobility based on proven merit, as it were.)
- See also Cato’s Simon Lester & Huan Zhu, “Rethinking the Length of Patent Terms,” American U. Int’l L. Rev. 34, no. 4 (2019): 787–806; C. Michael White, “Why a Seventeen Year Patent,” J. Pat. Off. Soc’y 38, no. 12 (December 1956): 839–59, p. 841; Dale A. Nance, “Foreword: Owning Ideas,” Harv. J. L. & Pub. Pol’y 13, no. 3 (Summer 1990): 757–74, p. 760. [↩]
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