Two Bad Arguments Against IP

by Stephan Kinsella on December 9, 2014

I’ve noted before the dearth of good arguments for intellectual property (There are No Good Arguments for Intellectual Property). In a recent Facebook post, I mentioned two weak/confused arguments used against IP arguments and claims. I summarize these, and some others, here:

1. Restrictions on use of sold goods is illegitimate

The first one is that copyright by contract would be illegitimate because if you sell something the buyer “completely owns” it. I.e., IP people often argue that copyright is legitimate because the publisher “could” make the buyer “sign a contract” not to copy or learn from or use or remember the book, and that would (could?) end up creating something like a copyright regime. They are completely wrong about this for a number of reasons (such contracts could not bind third parties, they are totally impracticable, etc.). But one argument against this (ridiculous) contract argument is that the buyer of the book “owns the whole book” and therefore the contract is “null and void” (or some such layman language that sounds like it came out of an income tax protestor nut’s reading of Black’s Law Dictionary). However, I think this argument is flawed. THere is nothing illegitimate about co-ownership or contractual arrangements. If I loan you my book or my car for particular uses, you do now own the entire book or car and some uses could be considered some type of trespass, property violation, or contract breach. It’s just that such contracts (a) are ridiculously uncommercial [would not be popular] and (b) would not create IP anyway, since IP is an in rem [property] right good against the world and contract is in personam–between the parties–and you can’t get in rem property rights from contract rights.

2. Hypocrisy of “Copyrighting”

The second one is usually a response given to the charge that people who “copyright” their works yet who oppose copyright are hypocrites. There are many problems with latter argument. First, you don’t copyright things; it’s automatic; the holder of the copyright cannot be a hypocrite if he is not intentionally doing anything. Second, even if he were a hypocrite, that does not mean IP is justified. It’s really just a stupid argument. However, some IP opponents will say something like “well the reason I copyrighted it was to prevent someone else from taking my work and getting a copyright on it and stopping me from being able to publish my own work.” This is simply not the way copyright law works.

There is a grain of truth in this comment when it comes to patent and trademark, but not copyright. For patents, it is possible for A to invent X and keep it as a trade secret, and then for B to later invent X independently and then get a patent and sue A; that was always the risk of using trade secret instead of patent (that was in fact the intent of the patent system–to encourage people to disclose information that would otherwise be kept secret); yet this risk is lower now after the Obama America Invents Act, which provides a more general and robust prior user right. In any case, that has to do with patent not copyright.

And in the field of trademark if you do not enforce your trademark there is a chance it could become generic, as in Kleenex and Xerox becoming generic terms–but all this means is you would lose your trademark rights — your legal right to stop others–not your right to use the mark. In any case, that is about trademark not copyright. In the case of copyright, it is the author who obtains a copyright (again: automatically): and even if the first author could somehow make his work “public domain” [he can’t] by “failing to copyright it” [he can’t; as it’s automatic], that still would not permit a second person to “copyright” the work since the second person would not be its author.

So, there: I admit it: two slightly confused arguments often used by the anti-IP side.

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I thought of some others:

3. Switzerland and Italy had Thriving Pharmaceutical Industries Without Patents

Jacob H. Huebert, “The Fight against Intellectual Property“
Boldrin and Levine’s Against Intellectual Monopoly
Kinsella, Intellectual Property Discussion with Mark Skousen
——, The Purpose of Law: Justice and Property Rights vs. IP Rights and Optimizing Innovation
——, Wenzel on patents in developing countries

I and others have argued that there are many examples of innovation and creativity without IP law. As for the purportedly “strongest case” for IP, patent protection for pharmaceuticals, we have pointed out that there were times when some countries did not have patents on drugs but were leaders. Writes Huebert, for example, relying on Boldrin and Levine:

What about pharmaceuticals? Some people argue that we need pharmaceutical patents because drugs require expensive R&D to develop, but then can be cheaply reverse engineered. So, the thinking goes, if we don’t give drug makers patent protection, they won’t bother to produce drugs in the first place.

Numerous facts undermine this argument. Boldrin and Levine have found that the pharmaceutical industry historically grew “faster in those countries where patents were fewer and weaker.”[29] Italy, for one, provided no patent protection for pharmaceuticals before 1978, but had a thriving pharmaceutical industry. Between 1961 and 1980, it accounted for about nine percent of all new active chemical compounds for drugs. After patents arrived, Italy saw no significant increase in the number of new drugs discovered there — contrary, one supposes, to the IP advocates’ predictions.[30]

One issue I have with this argument is that the patent proponent could simply retort that Italy and Switzerland only had thriving pharma industries because most other countries did have patents so they could apply for patents in this countries and sell the drugs there at monopoly prices. I am not sure if this is quite right, but I think it could be a weakness in this critique of the IP argument.