I posted the following on the Mises blog and the Against Monopoly blog a couple years ago. See also here for other posts on trademark; both of these are discussed extensively in episode 93 of the excellent Complete Liberty podcast.
For other material on Trademark:
- Against Intellectual Property, “Trademark” section (I was a bit softer on trademark then than I would be now; i.e., “The matter does not appear to me now as it appears to have appeared to me then.” —Baron Bramwell, in Andrews v. Styrap (Ex. 1872) 26 L.T.R. (N.S.) 704, 706
- How to Improve Patent, Copyright, and Trademark Law
- The Velvet Elvis and Other Trademark Absurdities
- The Patent, Copyright, Trademark, and Trade Secret Horror Files
- Other Trademark-related posts at C4SIF
David–sure, it is understandable why you are “much more favorably inclined towards trademarks than other forms of intellectual property.” As you say, “It seems to me a good thing that it is possible to tell who you are doing business with, and no downside monopoly”. As I noted here, the primary justification for trademark rights is based on the notion of fraud–that the “infringer” is defrauding his customers by misrepresenting his identity and the source of the goods being sold (see pp. 43-44 of my Against Intellectual Property, pp. 59-63 of Reply to Van Dun: Non-Aggression and Title Transfer, p. 34 of A Theory of Contracts: Binding Promises, Title Transfer, and Inalienability).But this analysis would give a cause of action to customers, however, not to the holder of the mark, who is not defrauded. Moreover, it would protect the customer only when there is fraud. For example, neither the customer (nor Rolex) should be able to sue Rolex knock-off companies, because people who buy fake Rolexes for $10 are not being defrauded. They know they are buying a cheap knock-off. But trademark law does give trademark holders–not customers–the right to sue infringers, regardless of whether there is really fraud to the consumer.
So while we can condemn fraudulent sales to customers, this is not what modern trademark law prevents. Modern state-run trademark law is almost as bad as cpoyright and patent, even if it has a less-objectionable core or origin. The fundamental problem with trademark law is that it is state law–it is created and administed by the state, which is a criminal organization. To expect justice from the state is like expecting a cat to bark.
Thus we have trademark rights granted to trademark holders, instead of to customers, the real victims of fraud. Thus we have a statutory scheme establishing an arbitrary, artificial legal system and an inept bureaucracy to construe and enforce it. Thus we have ridiculous extensions of trademark to cover “anti-dilution” rights, much as the term and scope of copyright and patent are gradually increased over time. And thus we have the government’s courts used like trademark’s more infamous cousins, copyright and patent, to stifle competition and squelch free speech. See, e.g., A Bully-Boy Beer Brewer, Straight Talk; 9th Circuit Appeals Court Says Its Ok To Criticize Trademarks After All; Trademarks and Free Speech; Beemer must be next… (BMW, Trademarks, and the letter “M”); Hypocritical Apple (Trademark); ECJ: “Parmesian” Infringes PDO for “Parmigiano Reggiano”; Engadget Mobile Threatened For Using T-Mobile‘s Trademarked Magenta.
Clearly, this is just another example highlighting why the state is worse than useless; it is a harmful criminal organization.
And in fact, US trademark law is unconstitutional. While the US Constitution, to the extent it is legitimate and not just the de facto result of a successful coup d’etat, unwisely authorizes Congress to enact copyright and patent law, no provision is made for trademark law. Instead, trademark law is based on an unconstitutionally expanded reading of the Interstate Commerce clause. As James J. Kilpatrick noted in The Sovereign States: Notes of a Citizen of Virginia, in describing the Supreme Court’s illegitimate expansion of power under the guise of the Constitution’s interstate commerce clause:
It was an insidious process, conducted with the care of the cat that stalks her prey – now creeping forward, now pausing to sniff the air; now advancing, now lying still as the bird takes alarm; then edging forward again, and so, step by inexorable step, moving to the ultimate seizure.
But it started at the very beginning of the United States. Tom Dilorenzo, in The Founding Father of Constitutional Subversion, explains:
“Hamilton was also likely to be the first to twist the meaning of the Commerce Clause of the Constitution, which gave the central government the ability to regulate interstate commerce, supposedly to promote free trade between the states. Hamilton argued that the Clause was really a license for the government to regulate all commerce, intrastate as well as interstate. For “What regulation of [interstate] commerce does not extend to the internal commerce of every State?” he asked. His political compatriots were all too happy to carry this argument forward in order to give themselves the ability to regulate all commerce in America.”
So don’t stop with copyright and patent: abolish the unconstitutional Lanham Act, and its unjustifiable grant of trademark rights to trademark holders instead of defrauded customers, and maintain the link to fraud (knockoffs are fine; no anti-dilution law).
Update: See also this thread from the old Mises Yahoo Group, a discussion between me and George Reisman about trademark:
From: email@example.com [mailto:firstname.lastname@example.org] On Behalf Of Stephan Kinsella
Sent: Thursday, November 29, 2007 8:24 PM
Subject: [mises] Re: Further Reply on Intellectual Property
George, some of my replies are below, preceded by SK3.
On Nov 12, 2007 10:11 PM, George Reisman <email@example.com> wrote:
George, thanks for your thoughtful and polite comments.
Thank you, Stephan. I’m enjoying and learning from this discussion.
In this post, following your lead, I’ll use GR2 to identify my new comments.
In your post of Nov. 10, you wrote:
SK2: George, I was thinking earlier today that by your reasoning of the necessity of reputation and trademark rights, one could maybe even argue that lying is some kind of crime–merely being dishonest–because of the importance of identifying truth in dealings with others. Now it seems to me I may be right, given your comments about dishonesty above (although your comments are contextual, I grant, not unlimited).
GR2: I do not believe that lying per se is a crime. What I think is a crime is “trickery,” as you aptly put it, when used as the basis of a violation of individual rights. The use of trickery is not confined to obtaining others’ property, i.e., to fraud. As my examples of the scholar and of “Good Soup” showed, it can also be the basis of violating the right to the pursuit of happiness, which includes, as I explained, “the right to earn a living by means of producing and selling ¼ products to willing customers.” You are right in saying that there is no fraud committed against “Good Soup,” but his right to the pursuit of happiness is violated by trickery. And the trickery began with the theft of his intellectual property in the form of his label, which allowed “Bad Soup” to claim to be “Good Soup.”
SK3: George, we may be coming to an impasse here, because I am not sure how to respond to all of this. For instance, it seems to me you are sliding too easily from the particular to the general. I explained in fairly concrete terms exactly how and why lying can be part of an act of fraud, precisely because it is a means of obtaining the property of another without that owner’s genuine consent. I would not say this establishes that “lying [or trickery] is the basis of a violation of individual rights,” because this is too amorphous and imprecise, and can be used to deduce other rules that are not the same as the underlying (uncontroversial) case of regular fraud. In the standard case we would agree upon, two putative traders each own their bodies and their property. None of this is in dispute, I think. Because one of them owns his property, he may refuse to grant the other permission to have, or to use it; or, he may grant permission to the other, or even give it a way. He may also make this loan or giving conditional. If the other party is not satisfying the condition, then the consent is not effective. This is why fraud can be a species of theft, or trespass. But to go from this fairly simple, concrete, and uncontroversial outcome of a straightforward application of notions of property and consent, to the idea that there is some “right to the pursuit of happiness” that is “violated by trickery” seems to me to be a complete non sequitur.
I am not quite sure what “the right the pursuit of happiness” implies other than property rights in one’s body and in scarce resources one has homesteaded or acquired from another owner. I think it has to be merely another way of describing this. If it goes beyond it to truly be some other right, then it seems to me that, like intellectual property itself, it would violate rights to property. The reason is the same reason that liberals are wrong to believe that there is no cost to adding more and more rights to the standard natural rights. The liberals think, why not add a right to be free from discrimination? To be free from fear or want or hunger? If some rights are good, the more, the better, no? The problem is they do not realize that every such false right necessarily eats into the territory of, and dilutes or weakens, real rights. Proliferating rights has a cost in terms of real rights. It’s like rights inflation.
Likewise, if IP, or the “right to pursue happiness,” is something other than rights in property and to control our bodies, it necessarily shrinks the domain of these rights, by coopting them.
SK2: … If I understand you right, Bad Soup may be sued by its customers for fraud, *and* by Good Soup, for loss of business. This seems like double dipping to me.
GR2: When I first read this, I thought that you were probably right and that there was “double dipping.” I was comfortable with that, however, on the grounds that it would serve as a form of deserved punitive damages. However, upon further reflection, I’ve come to the conclusion that there is no double dipping. This is because in a free market both parties to an exchange gain from it. There are thus two separate, distinct gains. Therefore it should not be surprising that when a free-market exchange is prevented, as it is in this case, there are two separate, distinct losses. The buyer loses his money, because he does not get the good he wanted. The seller, “Good Soup” loses receipt of the buyer’s money because it goes to “Bad Soup.” “Bad Soup” is doing damage to both parties and should thus compensate both parties.
SK3: I see your point, but I am not persuaded by this. First, imagine that the buyer who is defrauded does get his money back from Bad Soup, and then commences to spend it on the can of Good Soup he originally wanted. Now, GS has both the profit he was going to get from the purchase by the buyer; plus, he gets a “windfall” from Bad Soup. I just don’t see what “damage” is done to GS if Buyer recovers his money, and then uses it to buy the can of Good Soup he was originally planning to buy.
And if Buyer chooses now not to buy, why is this “damage” to GS? It seems to me that calling it damage implies that GS is entitled to have Buyer spend his money on the can of Good Soup. I see only one victim here: Buyer. Buyer is free to buy from Good Soup, or not, as he sees fit.
The only way, as I see it, to say that GS is damaged is to hold that GS has property rights in things other than its own property. To essentially hold that GS has a property right in what other people do, or in the “value” of things. As I believe I have explained in previous posts (quoting or linking to Hoppe’s explanation of the fallacy of believing in a property right to value of one’s things), I disagree with this. It seems to me that in your granting some right to “pursuit of happiness” that is “violated” by a third party’s tricking a potential customer of yours, you are in effect doing this.
SK2: … Let’s take an example. Customer A pays $2 to Bad Soup for a can of mislabeled soup. Now, if A can sue Bad Soup–as I think he can–then in theory he can recover his $2. Suppose he now spends the recovered $2 on a can of Good Soup’s soup. Meanwhile, Good Soup sues for the $2 it “lost” in sales it was “entitled” to. So BAd Soup pays $2 to Good Soup in damages, and $2 to Customer A. Good Soup receives $4 total, for a $2 can of soup. Why is this just? And le’ts say A gets her $2 back and chooses not to spend it on Good Soup now. But Good Soup recovers the $2 for the “lost” sale from Bad Soup anyway. Why should it? In other words, A has the primary (and, I would say, only) right to sue Bad Soup. If A spends the recovered money on Good Soup, Good Soup is not harmed. If A does not spend the recovered $2 on Good Soup, this shows Good Soup did not lose a sale after all, and again is not harmed.
GR2: Stephan, I’m willing to put aside for the moment all of the very real practical difficulties I see in the way of such an example ever being real, and will accept your description of the case.
SK3: I agree this example is very simplistic and even unrealistic in some ways, and there must be better hypos, but my imagination or time was wanting. I think probably more realistic (but more complex) exmaples could be come up with, but I do think this illustrates the double dipping problem.
If it existed, you would be right in stating that “Good Soup” ends up with $4. But that money would not be for one can of soup. It would be $2 for the can of soup he sells now, plus $2 compensation for the can of soup he would have sold in the past but was prevented from selling by “Bad Soup’s” fraud. However, it is very questionable that “Good Soup” would receive $2 from a customer who had been defrauded. That customer would have good reason to judge “Good Soup’s” product on the basis of her unpleasant experience with “Bad Soup” posing as “Good Soup,” and therefore might very well not buy it. Your statement at the end of the last paragraph that “If A does not spend the recovered $2 on Good Soup, this shows Good Soup did not lose a sale after all, and again is not harmed” is, I’m afraid, the exact opposite of the likely truth of the case. This absence of a sale is proof precisely of the harm to “Good Soup,” not lack of harm.
SK3: I agree that in some cases, the buyer may be so turned off by the experience, that he shuns both Good Soup and Bad Soup. But for purposes of my example, we only need to be able to conceive of a case where this does not happen, to illustrate the injustice of the double dipping. Once you isolate this, it highlights the problem with thinking the defrauder violates the property rights of Good Soup * merely by the act of defrauding a potential customer of Good Soup*. I suppose we can find a better example: a guy wants to buy a $1000 De Beers diamond engagement ring for his fiance. Toohey pretends to be a De Beers agent and sells the guy a non-de Beers diamond (or maybe a cubic zirconium). So the guy is out his $1000 and doesn’t have what he bargained for; and De Beers is out a sale of a $1000 diamond. Fine. Now, the guy realizes he’s been had and one night sees Toohey and nabs him, and gets his $1000 back. After this chain of events, he proceeds to the local De Beers rep and buys the ring he had his mind set on. De Beers does not even know what had transpired in the meantime. So why should they have a right to sue Toohey now? For how much? What is their damage? They made their $1000 sale.
It seems to me that in this case, you either have to grant that De Beers has no right to sue, or that they do. If they do not, then it illustrates precisely that the victim of the fraud was *only* the buyer. If they *do*, then on what basis? How much can they sue for? What are the grounds?
It is for these considerations that I believe only the customer is the victim of fraud committed against him, not his putative seller.
SK2: In my mind, the case specified above is a type of fraud, and would be actionable by customers. Therefore, I do not think this type of fraud can be very successful or pervasive in a free market. Even if the trademark holder (Good Soup) has no independent right to sue Bad Soup, Bad Soup still faces liability from its customers. Moreover, grocery stores would stop carrying Bad Soup’s falsely labeled soups to avoid complaints of their customers. So I do not understand why there is any concern about genuine cases of fraud like this proliferating on the free market, unless the trademark holder himself has a cause of action. The cause of action on behalf of defrauded customers, and the market shunning that would occur, would marginalize such producers, it seems to me.
GR2: I n reality, an individual customer would almost certainly not sue Bad Soup, because the sum involved is too small. The same would probably often be true even if we substituted large-screen TV’s or even automobiles for cans of soup. A class-action suit might succeed, but that would entail major costs in terms of attorney’s fees and court costs. In the case of a can of soup, the individual buyer might be lucky to come out with the equivalent of a stick of chewing gum if the suit were successful.
SK3: I agree; there are non-real aspects to the hypo, but I think we merely need to find a case where the buyer does recover, and then uses his recovered money to go ahead and buy what he intended to originally buy, to show that the genuine seller is not harmed by the fraud committed against the buyer. Only the buyer is harmed.
Moreover, and more importantly, contrary to your statement that “grocery stores would stop carrying Bad Soup’s falsely labeled soups to avoid complaints of their customers,” the more likely outcome would be that they would stop carrying “Good Soup’s” soup, in response to their customers’ complaints about “Good Soup.” Please remember, the customers are buying “Bad Soup” in cans labeled “Good Soup.” The complaints that “Bad Soup” deserves for the poor quality of its product will be directed against “Good Soup,” in the customers’ conviction that they’ve bought “Good Soup.”
From what I know of how trademark law actually works, and extrapolating to a world where only defrauded buyers can sue, I do not believe that this would usually be the case. I think rather that grocery stores would have an incentive to verify the authenticity of goods they carry precisely to cater to customer demand; and that means that the store would itself be defrauded if it bought from some seller misrepresenting goods, and the store could then take legal action against the defrauder.
In any event, I grant that in some cases, something like what you describe may happen. But it seems to me that describing this as actionable damage to Good Soup is question-begging, since you are assuming rights in reputation, which is really what is behind the trademark rights at issue.
The only means that I can see for avoiding this type of outcome is to enable “Good Soup” to sue “Bad Soup” for a sum of money equal to its damages plus the costs of the suit. This is the kind of arrangement needed to marginalize producers like “Bad Soup.” Additionally, “Bad Soup” should be subject to criminal penalties for stealing “Good Soup’s label.”
SK3: The latter statement again appears to me to be question-begging, since if you call it stealing a label, you imply there are property rights in trade names, which is what is in dispute. As for your setting up some kind of system where, a la class action suits, the trademark holder has the right to sue “on behalf of” the defrauded customers of Bad Soup (and presumably would-be customers of the trademark holder, Good Soup), if you do this, it seems that to avoid double dipping the customer has to lose his right to sue (as individuals can lose their right to sue if they are part of a “class” in a class action).
But let me say this, George. My main disagreement with IP is with patent and copyright. With trademark law, my main disagreements are (a) federalizing it, since it’s unconstitutional (unlike patent and copyright); (b) expanding it with things like anti-dilution rights; and (c) suits against knockoffs *where there is no fraud* ( e.g. cheap Rolex watches).
It seems to me your main concern is with letting there be some real, practical mechanism for the bad guy to get caught for his defrauding activities. If modern trademark law merely allowed trademark holders to sue on behalf of their putative customers, as a sort of efficiency thing or even based on tacit consent of the dispersed defrauded customers, I would have almost no objection. But this justification for trademark would not justify anti-dilution rights, or even suits where there is no fraud. So, for example, Good Soup sues Bad Soup as sort of the “agent” for all those dispersed customers who were defrauded by Bad Soup. And puts BAd Soup out of business. I have little problem with this (only the niggling one that Good Soup is receiving money that the defrauded customers are entitled to; but the reality in most cases, as you note, is that they could never sue, so they are really out nothing, and probably most would be happy if Good Soup “stood in their shoes’ to sue Bad Soup, thus justifying a presumption of tacit consent for GS to be their agent).
Since you indicate below you are much less sure of the knockoff case, I think we really don’t disagree much. It’s just that our bases or rationales are somewhat different for arriving at a similar conclusion. If you believed Rolex could sue Fancy Watch for selling cheap fake Rolexes to people who are in no way defrauded, then we would have a more significant disagreement.
SK2: ¼Your reasoning here seems to apply only to cases where Bad Soup is actually deceiving its own customers (Good Soup’s prospective or thwarted customers). I cannot see how it could possibly apply to cases of cheap knockoffs of trademarked items, such as $10 “Rolex” watches being sold by a street vendor in China. Do you view such a sale as actionable by the trademark holder, even though the customer is not defrauded and Rolex is not deprived of a sale?
GR2: This is a case that I need to think more about. My inclination is to say that no crime is present if Rolex’s name is not used and the design is of long standing. But, as I say, I need to think more about cases of this kind.
SK3: Let’s be clear: the Rolex name IS used, clearly. There is a little cheap $10 watch that resembles a Rolex, has the Rolex name and symbol, but it has fake gold, cheap movement, etc. The customer knows it’s not real. So he is NOT defrauded at all. It’s hard to even assume that he “would have” bought a real $5,000 Rolex if not for Fancy Watch’s fake Rolexes. So even by your argument, I’m not see how Rolex is “damaged”; the customer is not defrauded, nor damaged; and Rolex doesn’t “lose a sale” necessarily. So the only argument left would be to argue Rolex owns a trademark right in its name–which is what we are debating.
Bottom line: for cases of genuine customer fraud, you won’t find me griping about the defrauder being sued by the trademark holder instead of (not being sued by) an amorphous and diffuse group of defrauded customers. If trademark law was limited to this, I’d be hunting bigger elephant–like patent and copyright law.
* * * * *
I turn now to the various questions I asked you.
GR2: I asked, “Do you believe that an individual has the right to sell others’ credit card numbers, bank account numbers, online passwords, and the like? …. ”
SK2: In my view, obtaining or using the property of another (say, money from a bank account) without the owner’s consent, is a form of theft or trespass, regardless of the means employed. It is the unconsented-to use of another’s property that is the crime, not the use of secret information as a means. But the use of the bank account number, say, is a means to commit a crime.
In my view also, aiding and abetting someone in committing a crime is also a crime. The aider/abettor is causally responsible for the ensuing crime.
Therefore, supplying the bank account number to someone in this context, makes both the buyer of the information (who uses it to commit theft) and the seller of the information guilty of a crime against the victim.
GR2: It seems to me that you are saying here that the use of secret information as a means to commit a crime is not a crime [paragraph 1, sentence 2], and yet is a crime [the remainder of your three paragraphs]. You conclude by clearly saying that the seller of the [secret account information] is guilty of a crime.
Now I ask, is the printer who prints “Good Soup” labels for use by “Bad Soup” not guilty of the same kind of crime?
Finally, how is it possible that these crimes— i.e., violating property rights in the use of account numbers, passwords, and labels—are not crimes with respect to intellectual property😕 For these are all rights not in the use of physical things but in the use of information. I know you may say that they are merely means to the commission of crimes, i.e., the actual taking of funds. But then would you say, for example, that the police can arrest the buyer of stolen credit-card information only when he actually uses it? Can they arrest a bomber only when he detonates his bomb or when he assembles it?
I look forward to your reply.
P.S. Please expect a post from me within the next day or so on the subject of intellectually created property and copyrights.
Update: See also archived comments for the initial post above:
But trademark law does give trademark holders–not customers–the right to sue infringers, regardless of whether there is really fraud to the consumer.
Despite my dislike for the way trademarks are currently being used, there is some argument to be made against allowing certain cheap knock-offs to use the markings of a well-known brand. The one I have in mind is cheapness. If a fake Rolex breaks at a dinner party, perhaps the wearer will be outed, but if not, it is possible for others observing the breakdown to reduce their opinion of the Rolex brand. “Rolex isn’t what it used to be,” they might say.
I would agree that, in the case of a perfect replica, there is no argument to be made for trademark dilution because there is no damage. There is also no misrepresentation if each seller properly identifies it as a fake (or a circumstance in which a buyer would easily infer), and it would be even better for the device to have some discrete but visible marking to that effect.
[Comment at 07/24/2008 10:07 PM by Mark]
[Comment at 07/25/2008 10:36 AM by Anonymous]
“Despite my dislike for the way trademarks are currently being used, there is some argument to be made against allowing certain cheap knock-offs to use the markings of a well-known brand. The one I have in mind is cheapness. If a fake Rolex breaks at a dinner party, perhaps the wearer will be outed, but if not, it is possible for others observing the breakdown to reduce their opinion of the Rolex brand. “Rolex isn’t what it used to be,” they might say.”
So what? Don’t people have a right to form whatever opinion they want of Rolex, based on however shoddy evidence?
Anon: “Trademark holders also have a claim against those who defraud customers. The trademark holder’s reputation can suffer harm by the actions of the perpetrator. The previous commetor makes much the same point.”
This all ties in together. Sure, if there are reputation rights, you can justify parts of trademark law; but reputation rights are just as illegitimate as copyright, patent, and modern statutory trademark law. See on this Rothbard, Ethics of Liberty, chapter 16, “Knowledge, True and False”, pp. 126-128.
[Comment at 07/25/2008 02:23 PM by Stephan Kinsella]
Reputation rights are needed for as long as people are easily swayed by simply repeating a falsehood enough times AND people have unequal access to the ability to market (and defend) themselves through hiring their own PR agency or similarly.Otherwise, the poor are disadvantaged and can easily be destroyed by any enemies that decide to gang up and publicly vilify them, as they’ll be unable to reply with anything like the reach and volume of their attackers. Basically, they are at a disadvantage in any shouting match, and sooner or later there will be one.
[Comment at 07/28/2008 05:00 AM by Nobody nowhere]
- Mises Economics Blog (Nov. 7, 2007) (archived comments)
NOVEMBER 7, 2007 by STEPHAN KINSELLA
An edited excerpt from my comment in an email discussion:
It seems to me that the primary justification for trademark rights is based on the notion of fraud–that the “infringer” is defrauding his customers by misrepresenting his identity and the source of the goods being sold (see pp. 43-44 of my Against Intellectual Property, pp. 59-63 of Reply to Van Dun: Non-Aggression and Title Transfer, p. 34 of A Theory of Contracts: Binding Promises, Title Transfer, and Inalienability). This would give a cause of action to customers, however, not to the holder of the mark, who is not defrauded.Now just as some a “class representative” is given the right to sue on behalf of the whole class in a class action lawsuit for efficiency/incentive reasons, the more law-and-economics minded types might say that the right to sue for such consumer fraud ought to be transferred from the diffuse group of defrauded customers, to the trademark holder himself. That is, the trademark user can sue infringers, but his right to do this is based on the right of customers’ fraud cause of action.
There are problems, to my mind, with transferring the customers’ rights to the trademark holder, but even if you were to do this, the trademark holder should not be able to sue an infringer unless there is clear fraud of the customer. For example, Rolex could not sue Rolex knock-off companies, because people who buy fake Rolexes for $10 are not being defrauded. They know they are buying a cheap knock-off. But trademark law–both statutory and common law–does give trademark holders the right to sue infringers, regardless of whether there is really fraud to the consumer.
This is my main problem with current trademark law–that in transferring the customer-fraud-based right to trademark holders, the fraud basis is lost over time, as the trademark right is conceived of as a right of the trademark holder. Then it gets broadened and extended, as all IP law does, just like money is continually debased and rights are continually diluted–for example, now trademark law has the horrendous “anti-dilution” cause of action, which does not even require “consumer confusion,” which at least standard trademark infringement claims do.
From earlier comments in the same email thread:
Identity theft is usually a form of fraud. But the concept of fraud, like that of IP (as well as “labor” and “creation” etc.) is bandied about imprecisely. To my mind, “fraud” is a type of crime not if it’s merely “being dishonest,” but if it’s one way to gain unconsented-to use of another’s property. Just as sex with a child is effectively rape, because the child has no capacity to consent–no effective consent is given–so the transfer of possession and title to a good based on false representations made by the recipient is one where no effective consent is given. In other words, it’s a way of stealing property; it’s “theft by trick.” If you give me your pig, for my bucket of (good) apples, but my apples are all rotten or fake, then title to the pig does not pass to me, and I know it. My right to have and use your pig is conditioned on my not tricking you about the quality of the apples made in payment. So if you give me bad payment, you know you have my pig without my effective consent. And what is theft or trespass but the use of others’ property without consent?
But what is important to realize here, and in the case of fraud, is that it is the party actually being defrauded who is the victim. If you try to base trademark, or reputation rights, on fraud, it fails. In the case of trademark, the company using the mark is held to be infringed. If it were really based on a fraud claim, then the buyers of fake Louis Vuitton purses are not defrauded (they know they are buying a fake $10 purse), so there would be no trademark infringement; yet there is.
To address some of Professor Reisman’s particular points:
“Is identity theft, about which so many people are concerned, some form of mirage or is it a real phenomenon”
Identity theft describes a real phenomenon, one in which fraud is almost always involved. For example, I lie to a bank and persuade them I am Reisman, and they hand over Reisman’s gold to me. I am in possession of gold I do not own and have no right to control. I have defrauded, and stolen from, at least Reisman or the bank. I see no reason to invent “IP” to describe this.
“If it is a real phenomenon and identities are actually being stolenâ€”as many thousands of victims of identity theft are prepared to swear, and as the banks and credit card companies of these victims also swearâ€”then does it not follow that identities are a form of property? For nothing can be stolen that is not first owned by someone.”
I do not think it implies identity is a form of property. It only implies that you only have a right to use others’ property if they consent to it.
“If identities are a form of property, are they not intellectual property, since they consist entirely of words and symbols, not the physical persons of the people to whom the identities refer?”
I think it is not “intellectual property,” since the property at issue is always real property. The question is who is controlling it. If someone uses it or takes or controls it without the consent of its owner, it’s a form of theft or trespass.
“If individuals do have a property right in their own identities, do they not also have a property right in the words and symbols that uniquely identify their products and services? And, by extension, do not voluntary associations of individuals, such as business partnerships and private corporations have a property right in the words and symbols that uniquely identify them and their products and services? Thus, for example, does not General Motors have a property right in its name and logo and in the names and logos of its various individual products and services? In other words, are not brand names and trademarks legitimate forms of intellectual property?”
If I claim to sell a Mont Blanc pen, but it’s a knockoff, then the buyer is defrauded, unless he knows what is is buying is a fake. The company “Mont Blanc” is not defrauded in either case, as far as I can see.
“Are trademarks and brand names not essential for the operation of free competition, in which better producers benefit from their record of past good work and poorer producers suffer from their record of past poor work?”
It is perhaps essential that people be able to identify themselves, and communicate, but this does not mean there are property rights in identifications or ways of communication (languages or words). I see no reason to believe that absent IP there would be no records or reputations, or no ways to prevent or penalize fraud.
And let’s face it: who publishes public domain works now, under false names? Who claims to be the new author of the Nichomachean Ethics? Any serious businessman wants to establish his own name, not pirate others’.
“I want to say that I recognize that we live in an age of intellectual disintegration, in which philosophers, lawyers, and judges have proved themselves capable of corrupting practically any concept. As a result, it should not be surprising that there are corruptions of the concept of intellectual property and its application. One that comes readily to mind is Ralph Lauren’s ability, according to John Stossel, to appropriate the word “Polo,” to the point that even organizations of actual polo players cannot use the word without being held guilty of violating an alleged intellectual property right of Lauren’s. The truth, of course, if Stossel is right, is that Lauren’s appropriation of the word “Polo” is a violation of their intellectual property rights.”
In my view, this is the inevitable and predictable result of entrusting the state with the production and adminstration of law.
“I’ve deliberately avoided any discussion of patents and copyrights here because my purpose has been simply to establish the legitimacy of the concept of intellectual property as such.”
As far as I can see, there is no legitimacy to this concept. To the extent it’s legitimate, it’s just the application of principles of fraud and property. To the extent it goes beyond these things (e.g., giving the right to sue to the trademark user instead of to the customer) it’s not legitimate.