Great post by Mike Masnick at Techdirt:

Becker & Posner: Time To Minimize Patent & Copyright Law

from the shrink-shrink-shrink dept

Famed economist Gary Becker and appeals court judge Richard Posner have long teamed up to publish The Becker-Posner Blog, in which they pick key issues and each of them discuss the same issue in separate posts. It’s a really great blog, and we’ve mentioned it in the past — in a situation where we disagreed with Posner’s suggestion that copyright should be expanded to help newspapers. More recently, we’ve noted that Posner’s been very interested in patent issues, and has been somewhat vocal on how the system is mostly broken. So it’s no surprise that patents are a recent topic on the blog.

Posner’s contribution actually touches on both patents and copyrights, both of which he admits seem to be excessive, though (somewhat surprisingly) he argues that patents are a bigger problem. I get the sense that he hasn’t spent that much time on copyright issues given some of the statements that he makes. Perhaps if he explores that issue more deeply he’ll realize that some of the problems are just as, if not more, serious in copyright law.

Posner starts with the premise that IP works in cases where there are high capital expenditures for creation/invention, with low barriers to copying — but that it doesn’t work otherwise. There’s increasing evidence that the premise is a bit faulty, and there are reasonable questions about whether or not patents and copyrights really are the best thing in those high capital expenditure cases, but his recognition that it barely works at all otherwise is welcome. He falls into the cliche of basically comparing pharma patents (which he claims works) to software patents (where they clearly don’t work) — and suggesting that it’s merely about recognizing that the costs and benefits in different industries are different. His conclusion, though, is that the “costs” probably outweigh the benefits in most cases:

The pharmaceutical and software industries are the extremes so far as the social benefits and costs of patent protection are concerned, and there are many industries in between. My general sense, however, bolstered by an extensive academic literature, is that patent protection is on the whole excessive and that major reforms are necessary.

I think if he explores the issue more deeply, he’ll realize that the different impact on different sectors is more a symptom of the problem with how the system is set up, rather than the problem itself. 

On copyrights, he recognizes problems, but seems to think it’s more limited, arguing that the law treats different industries differently (his basic suggestion for fixing patents):

For example, when recorded music came into being, instead of providing it with the same copyright regime as already governed books and other printed material, Congress devised a separate regime tailored to what were considered the distinctive characteristics of music as a form of intellectual property. Patent law could learn from that approach.

That’s a… generous retelling of copyright law. It is true that Congress has tried to duct tape on “fixes” to copyright law when innovation challenges the status quo, but it’s also created newer and bigger problems, as the different “rights” start to overlap and blur together. Is a stream a performance, a distribution or a reproduction? All three? These things get complex fast… and in part it’s because of Congress’s constant patching without recognizing the longer term impact.

Posner also has this oddity:

The problem of copyright law is less acute than the problem of patent law, partly because copyright infringement is limited to deliberate copying; patent infringement does not require proof even that the infringer was aware of the patent that he was infringing.

I think “deliberate” is a slightly sloppy word choice here. He’s correct that copyright requires (mostly) actual copying, but it need not be “deliberate” in the traditional sense. Law prof. John Tehranian has famously covered just how much we accidentally infringe on a daily basis. Posner seems to be suggesting that to infringe on copyright, you know you’re infringing. These days that is true for fewer and fewer cases. That said, he does still recognize some key problems:

Nevertheless, as in the case of patent law, copyright protection seems on the whole too extensive… The most serious problem with copyright law is the length of copyright protection, which for most works is now from the creation of the work to 70 years after the author’s death. Apart from the fact that the present value of income received so far in the future is negligible, obtaining copyright licenses on very old works is difficult because not only is the author in all likelihood dead, but his heirs or other owners of the copyright may be difficult or even impossible to identify or find. The copyright term should be shorter.

He also argues that a good solution would be a much broader and clearer definition of fair use — something we agree would be helpful:

The problem is that the boundaries of fair use are ill defined, and copyright owners try to narrow them as much as possible, insisting for example that even minute excerpts from a film cannot be reproduced without a license. Intellectual creativity in fact if not in legend is rarely a matter of creation ex nihilo; it is much more often incremental improvement on existing, often copyrighted, work, so that a narrow interpretation of fair use can have very damaging effects on creativity.

Becker, meanwhile, mostly skips over the copyright question and focuses on how to reform the patent system. Unlike Posner, Becker actually considers the idea of abolition, citing historical arguments:

The various harmful effects of the patent and copyright systems encouraged Arnold Plant, an English economist, to publish over 75 years ago two influential articles on why England and other countries would be better off without patents and copyrights. Among other things, he argued that the temporary monopoly power given to patent holders often led to inefficiently high prices and reduced output of patented goods, that many persons would continue to invent even if they could not patent their inventions, and that patents distort innovations in favor of goods and processes that can be patented and away from innovations that cannot be patented. His favorite example of the latter is basic research in the sciences that produced the theory of relativity, the theory of evolution, and in more modern times our understanding of DNA and genes. He believed that the patent system induced some creative scientists to work in areas that could be patented rather than on basic scientific research that could not be patented.

He notes that, in the end, getting rid of them entirely would upset too many apple carts, and he basically follows Posner’s reasoning that high cap-ex + low barriers to copying should get protected, while everything else should be excluded:

Probably the best solution would be to maintain the patent system on drugs and a few other products that are expensive to innovate and cheap to copy, and eliminate patents on everything else. In particular, this means eliminating patents in the software industry, the source of much of the patent litigation and patent trolling.

He admits that he’s not sure where to draw the line, and his best suggestion is to “start by eliminating the ability to patent software, and go on from there to prune the number and type of inventions and innovations that are eligible for patent protection.” That seems to be an admission that there’s a problem, but not a deep enough understanding to know how to fix the system. Once again, it seems like a case of targeting the symptoms rather than the cause.

All in all, I find that the argument from Boldrin & Levine about why the system should be done away with completely a lot more compelling. In that, they specifically note Posner’s occasional blindness to the root of the problem, and his focus on symptoms. I’d like to believe this is a question of familiarity with the subject matter, actually. The solutions and ideas that Becker and Posner speak to are similar to what we often hear from people when they see the problems of the patent system, but haven’t fully thought through the issues. One hopes that as they explore the details more thoroughly, that they might realize that the problems run deeper than they seem to believe.