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Demented Cato “Doctor” Wants to Strengthen Patent Law

This Term’s alignment of rights in trademarks and copyright with traditional rights in real property is a welcome baby step (indeed, two steps) forward for the Court, which in recent years has refused to put other intellectual property rights on par with real property. One can only hope that the Court will soon explicitly tie the intellectual property rights to the law of real property. One also hopes that while doing so, the Court will take a third step in the right direction by again treating patent rights on par with real property.

—Gregory Dolin, M.D., “Intellectual Property in OT 2022: Two Baby Steps in the Right Direction,” Cato Supreme Court Review 2022–2023 (hat tip Jeff Tucker)

Well, Taco is at it again. This is sad. This joker, or the editor of that review, seem oblivious to the fact that one of their former top scholars, Tom Palmer, was at the forefront of the battle against IP (before he softened his stance since many of Taco donors are Big Pharma, that is).1 No wonder they disinvited me from an IP panel discussion (Disinvited From Cato). (And I guess it’s further confirmation I was right back in 1999, when Cato approached me about heading up their Supreme Court Law Review, to immediately say “not interested, thanks.”)

Dolin also refers to copyright infringement as “stealing,”2 which is sloppy and inaccurate, and typical of the emotivist and dishonest way IP proponents argue—by simply labeling copying as stealing, theft, piracy, “ripping off,” and other inaccurate terms. Even the Supreme Court has observed that IP infringement is not “theft.”3

E.g., in Dowling vs United States, the Court held that copies could not be regarded as stolen goods under the law:

Instead, “interference with copyright does not easily equate with theft, conversion, or fraud. The Copyright Act even employs a separate term of art to define one who misappropriates a copyright: ‘[…] an infringer of the copyright.’”

But Dolin and his socialistic comrades who favor abolition of private property rights in real resources in the name of the evil, murderous utilitarian bullshit of patent and other forms of IP law4 like to denigrate copying and free market emulation and competition and freedom of speech as “stealing.”

For criticism of this insane and evil view, that IP rights should be expanded and treated the same as normal property rights, see Stephan Kinsella, “Against Intellectual Property After Twenty Years: Looking Back and Looking Forward,” in Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023), Part IV.I, reprinted here:

I. The Structural Unity of Real and Intellectual Property

Another argument made in support of IP is that it is, legally, structurally similar to normal property rights in scarce resources, such as property rights in realty (land or immovables) or personalty (corporeal movables).[1] This is an odd argument. It is true that the state, via legislation, is able to set up positive rights that, in modern legal systems, are treated similarly to property rights in scarce resources (land and personalty). But so what? In antebellum America, under chattel slavery, slaves—innocent human beings—were legally ownable and thus subject to the various legal incidents of property, such as sale, mortgages, and so on. The fact that the state, by artificial legislation, can make inventions and artistic creations the subject of contracts, sales, and so on does not show that the law is just. This is just a facile argument.[2]

First, patent and copyright were not originally called property rights. They were referred to accurately as state-granted privileges or monopolies.[3] Referring to patent and copyright as “property rights” was a later innovation, engaged in for propaganda purposes. This was observed by Fritz Machlup and Edith Penrose in a seminal study in 1950:

There are many writers who habitually call all sorts of rights by the name of property. This may be a harmless waste of words, or it may have a purpose. It happens that those who started using the word property in connection with inventions had a very definite purpose in mind: they wanted to substitute a word with a respectable connotation, “property,” for a word that had an unpleasant ring, “privilege.”[4]

And as Machlup wrote in a later study commissioned by the US Congress:

While some economists before 1873 were anxious to deny that patents conferred “monopolies”—and, indeed, had talked of “property in inventions” chiefly in order to avoid using the unpopular word “monopoly”—most of this squeamishness has disappeared. But most writers want to make it understood that these are not “odious” monopolies but rather “social monopolies”, “general welfare monopolies”, or “socially earned” monopolies. Most writers also point out with great emphasis that the monopoly grant is limited and conditional.[5]

Professor Michael Davis also explores the strategy of those who insist on erroneously classifying patents as property rights. He calls this tactic “the trump of property,” which is

a strategy of defining patents according to property law concepts far removed from debates over the public interest in the issuance of patents …. [T]he foregoing description of patent law as a form of competition regulation, let alone as a form of national industrial policy, is obviously not the conventional one. Organized patent interests (the patent bar, patent proprietors, and their sponsors) do not espouse that view, but instead habitually offer a more cramped description of patent law. One might call that description the trump of property—a strategy to secure the claim that proprietors can exclusively own patents, and to eliminate any argument that the public has a continuing interest in issued patents. That description promotes patents as just another kind of property, but firmly rejects any suggestion that patent law represents either a form of competition regulation or a national industrial policy. With a firm foundation in free market theories, the strong claim that patents are just another form of property implicitly rejects the idea that patent law serves any regulatory function ….[6]

Davis also notes, of the attempt to defenders of patents to deny that they are monopolies:

This “debate” seemingly has only one point: to sanitize the patent monopoly so that it more closely resembles simple property. A monopoly, of course, virtually compels the public interest. Thus, the trump of property depends on asserting not only that a patent is simple property, but also that it does not constitute an economic phenomenon, like a monopoly, in which the public has a particular interest.[7]

It is clear that, despite the assertions of defenders of IP, these rights are not like normal property rights in scarce resources. First, unlike property rights in scarce resources like personalty (movables) and real estate or land (immovables), IP rights in inventions (patents) and creative works (copyright) expire after a finite term—about 17 or so years for patents, and life of the author plus 70 years for copyright (say, about 120 years for a 40 year old author who lives to age 90). Second, the “borders” or boundaries defined by copyright law in “works” and by patent law for “inventions” is inherently murky, vague, arbitrary, and non-objective.

Scholars have noted other differences between IP and normal property rights. Writes Professor Tom Bell:

Copyrights and patents differ from tangible property in fundamental ways. Economically speaking, copyrights and patents are not rivalrous in consumption; whereas all the world can sing the same beautiful song, for instance, only one person can swallow a cool gulp of iced tea. Legally speaking, copyrights and patents exist only thanks to the express terms of the U.S. Constitution and various statutory enactments. In contrast, we enjoy tangible property thanks to common law, customary practices, and nature itself. Even birds recognize property rights in nests. They do not, however, copyright their songs.

Those represent but some of the reasons I have argued that we should call copyright an intellectual privilege, reserving property for things that deserve the label. Another, related reason: Calling copyright property risks eroding that valuable service mark.[8]

Regarding Epstein’s contentions about the “structural unity” between IP and real property rights, Professor Peter Menell concludes that:

the Property Rights Movement is too limited and grounded in absolutist ideology to support the needs of a dynamic, resource-sensitive intellectual property system. Professor Epstein’s simplistic equation of real and intellectual property generates more heat than light. It is not particularly helpful to think of real and intellectual property as structurally unified. The differences matter significantly and resorting to rhetorical metaphors distracts attention from critical issues. As Judge (later Justice) Cardozo cautioned in 1926, “[m]etaphors in law are to be narrowly watched, for starting as devices to liberate thought, they end often by enslaving it.”[9]

There are even further dissimilarities between IP rights and normal property rights. For example, as Professors Dorfman and Jacob write:

In these pages we seek to integrate two claims. First, we argue that, taken to their logical conclusions, the considerations that support a strict form of protection for tangible property rights do not call for a similar form of protection when applied to the case of copyright. More dramatically, these considerations demand, on pain of glaring inconsistency, a substantially weaker protection for copyright. In pursuing this claim, we show that the form of protecting property rights (including rights in tangibles) is, to an important extent, a feature of certain normal, though contingent, facts about the human world. Second, the normative question concerning the selection of a desirable protection for creative works is most naturally pursued from a tort law perspective, in part because the normative structure of copyright law simply is that of tort law.[10]

Thus, as Wendy Gordon writes,

The “property” portion of the “intellectual property” label has caused practical as well as conceptual difficulties. Too many courts have assumed that all things called “property” should be treated similarly, ignoring the important physical, institutional, and statutory differences that distinguish intellectual “property” from the tangible kind.[11]

Incidentally, I should note that, to my knowledge, none of the above-quoted scholars is an IP or patent abolitionist, except perhaps for Davis re patents. But they are honest scholars who recognize IP as being an unnatural legal regime distinct from natural, common law property rights.

In sum, IP rights, especially patent and copyright, are not like property rights in scarce resources. And even if they were, this would not make them just, any more than the ability to make human slaves property justifies this institution.

[1] See, e.g., Richard A. Epstein, The Structural Unity of Real and Intellectual Property (The Progress and Freedom Foundation, 2006; archived version at https://perma.cc/B8JP-4MWQ); idem, “The Disintegration of Intellectual Property? A Classical Liberal Response to a Premature Obituary,” Stanford L. Rev. 62, no. 2 (2010; https://perma.cc/79X2-9CS8): 455–523; Wendy J. Gordon, “An Inquiry into the Merits of Copyright: The Challenges of Consistency, Consent, and Encouragement Theory,” Stan. L. Rev. 41 (1989; https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3581843), Part I; Adam Mossoff, “Commercializing Property Rights in Inventions: Lessons for Modern Patent Theory from Classic Patent Doctrine,” in Geoffrey A. Manne & Joshua D. Wright, eds., Competition Policy and Patent Law Under Uncertainty: Regulating Innovation (Cambridge University Press, 2011; https://perma.cc/SD7Q-F7U9); idem, “The Trespass Fallacy in Patent Law Florida Law Review,” Florida L. Rev. 65, no. 6 (2013; https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2126595): 1687–1711; Roger E. Meiners & Robert J. Staaf, “Patents, Copyrights, and Trademarks: Property or Monopoly,” Harv. J. L. & Pub. Pol’y 13, no. 3 (Summer 1990): 911–48, pp. 915, 923, 940, et pass. Mackaay unpersuasively argues that something resembling patent and copyright can emerge through private legal arrangement like trade secret and contractual structures, a “simulated property right,” which the legislator can then “complement” by “by adding the possibility of systematically ensuring exclusivity against third parties.” Mackaay, “Economic Incentives in Markets for Information and Innovation,” p. 904; see also p. 899–901 et pass. Or, as summarized by Dale Nance, Mackaay sees IP rights

as representing a compromise that appears relatively warranted because they do not have the kind of features associated with the worst kinds of governmental meddling in the economy, and because their functional equivalents could, to a considerable extent but perhaps at greater cost, be achieved by carefully protected trade secrets combined with contractually imposed restrictions on copying by buyers or licensees of the information in question. In other words, he sees patents and copyrights as little more troublesome than state-provided form contracts.

Dale A. Nance, “Foreword: Owning Ideas,” Harv. J. L. & Pub. Pol’y 13, no. 3 (Summer 1990): 757–74, p. 770. Easterbrook makes a similar, and similarly untenable, claim, when he writes: “in the end intellectual property may be understood as the result of voluntary undertakings, which the government simply enforces.” Frank H. Easterbrook, “Intellectual Property Is Still Property,” Harv. J. L. & Pub. Pol’y 13, no. 1 (Winter 1990; https://chicagounbound.uchicago.edu/journal_articles/309/): 108–118, p. 114.

And many other proponents of IP argue for parallels between IP rights and normal property rights. See, e.g., “Conversation with Schulman about Logorights and Media-Carried Property” (ch. 17).

Yet elsewhere, Epstein concedes there are some significant differences between IP and real property. As he writes, “There are in fact no ‘natural’ boundaries here [in patent and copyright law], similar to the metes and bounds of land.” Richard A. Epstein, “Why Libertarians Shouldn’t Be (Too) Skeptical about Intellectual Property,” Progress & Freedom Foundation, Progress on Point, Paper No. 13.4 (February 2006; https://perma.cc/6F5S-7KNS), p. 8. So much for the “structural unity.”

[2] See my posts “Yet more disanalogies between copyright and real property,” C4SIF Blog (Feb. 4, 2013); “Mossoff: Patent Law Really Is as Straightforward as Real Estate Law,” C4SIF Blog (Aug. 17, 2012); “Classifying Patent and Copyright Law as ‘Property’: So What?”, Mises Economics Blog (Oct. 4, 2011); and “Richard Epstein on ‘The Structural Unity of Real and Intellectual Property,’” Mises Economics Blog (Oct. 4, 2006). Anyone who thinks there can be a straightforward analogy between normal property rights and property rights in intangibles should consult Peter Drahos, A Philosophy of Intellectual Property (Ashgate, 1996; https://press-files.anu.edu.au/downloads/press/n1902/html/cover.xhtml), pp. 16–19 et pass., and Alexander Peukert, A Critique of the Ontology of Intellectual Property Law, Gill Mertens, trans. (Cambridge University Press, 2021), p. 101 et pass.

[3] See Kinsella, “Intellectual Properganda,” Mises Economics Blog (Dec. 6, 2010).

[4] Fritz Machlup & Edith Penrose, “The Patent Controversy in the Nineteenth Century,” J. Econ. History 10, no. 1 (May 1950): 1–29, p. 16 (footnotes omitted; emphasis added). They go on (ibid.; footnotes omitted):

This was a very deliberate choice on the part of politicians working for the adoption of a patent law in the French Constitutional Assembly. De Bouffler, reporting the bill to the Assembly, knew that “the spirit of the time was so much for liberty and equality, and against privileges and monopolies of any sort” that there was no hope of saving the institution of patent privileges except under an acceptable theory. Thus, according to Rentzsch, De Bouffler and his friends in deliberate insincerity “construed the artificial theory of the property rights of the inventor” as a part of the rights of man. De Bouffler obviously knew “what’s in a name.” As monopoly privileges, the patents for inventions would be rejected by the Assembly or, if accepted, would be disdained by the people; as natural property rights, they would be accepted and respected.

[5] Fritz Machlup, U.S. Senate Subcommittee On Patents, Trademarks & Copyrights, An Economic Review of the Patent System (85th Cong., 2nd Session, 1958, Study No. 15; https://mises.org/library/economic-review-patent-system), p. 26 (footnotes omitted). As explained in Machlup & Penrose, “The Patent Controversy in the Nineteenth Century,” and as summarized in Machlup, An Economic Review of the Patent System, free market economists began to object to the patent system in the mid-1800s, leading some countries to repeal or delay adopting patent laws. The primary criticism was that protectionist patent grants are incompatible with free trade. However, the “Long Depression” starting in 1873 turned public opinion against free trade, leading the anti-patent movement to collapse and for modern patent systems to eventually become dominant world-wide. See also, on this, Meiners & Staaf, “Patents, Copyrights, and Trademarks: Property or Monopoly,” p. 911–12.

[6] Michael H. Davis, “Patent Politics,” S. Carolina L. Rev. 56, no. 2 (Winter 2004; https://scholarcommons.sc.edu/sclr/vol56/iss2/6): 337–86, pp. 338–39 & 373–74 (footnote omitted); discussed in Kinsella, “Patent Lawyers Who Don’t Toe the Line Should Be Punished!C4SIF Blog (April 12, 2012). Amusingly, the left-leaning Davis, somewhat perplexed, writes “Many libertarians, practically wedded to the free market system, surprisingly oppose patent rights,” citing my AIP. Ibid., p. 374, n.142.

[7] Ibid., p. 374, n.141. See also Kinsella, “Are Patents and Copyrights ‘Monopolies’?”, C4SIF Blog (Aug. 13, 2013). As Hayek wrote:

Perhaps it is not a waste of your time if I illustrate what I have in mind by quoting a rather well-known decision in which an American judge argued that “as to the suggestion that competitors were excluded from the use of the patent we answer that such exclusion may be said to have been the very essence of the right conferred by the patent” and adds “as it is the privilege of any owner of property to use it or not to use it without any question of motive.” It is this last statement which seems to me to be significant for the way in which a mechanical extension of the property concept by lawyers has done so much to create undesirable and harmful privilege.

F.A. Hayek, “‘Free’ Enterprise and Competitive Order,” in Individualism and Economic Order (Chicago: University of Chicago Press, 1948; https://mises.org/library/individualism-and-economic-order), p. 114 (emphasis added; citation omitted). See also idem, The Fatal Conceit (Chicago: University of Chicago Press, 1988), pp. 36–37; and Cole, “Patents and Copyrights: Do the Benefits Exceed the Costs?”, at 82–83.

[8] Tom Bell, “Copyright Erodes Property℠,” Agoraphilia (July 14, 2011; https://perma.cc/L25V-A8X8). See also idem, “Copyright as Intellectual Property Privilege,” Syracuse L. Rev. 58 (2007; https://perma.cc/7ZLM-CDWA): 523­–46. Bell also writes elsewhere: “to call copyright ‘property’ risks vesting copyright holders with more powers than they deserve. To call it ‘privilege’ offers a rhetorical counterbalance, reminding copyright holders of what they owe to the public and recalling lawmakers to their duties.” Bell, Intellectual Privilege, p. 98 (footnote omitted).

[9] Peter S. Menell, “The Property Rights Movement’s Embrace of Intellectual Property: True Love or Doomed Relationship?”, UC Berkeley Public Law Research Paper No. 965083 (Feb. 26, 2007; https://perma.cc/F6X9-5L9D), quoting Berkey v. Third Ave. Ry. Co., 155 N.E. 58, 61 (N.Y. 1926; https://casetext.com/case/berkey-v-third-avenue-railway-co). See also idem, “Intellectual Property and the Property Rights Movement,” Regulation 30, no. 3 (Fall 2007; https://perma.cc/F6X9-5L9D): 36–42, at 42 (“Suggesting that ‘intellectual property’ must be treated as part of a monolithic “property” edifice masks fundamental differences and distracts attention from critical issues”); and Christina Mulligan & Brian Patrick Quinn, “Who are You Calling a Pirate?: Shaping Public Discourse in the Intellectual Property Debates,” Brandeis University Department of English Eighth Annual Graduate Conference (2010; https://perma.cc/7SCS-8P3J), pp. 7–8 (regarding overuse of the “piracy” metaphor for copyright infringement).

On the perils of misuse of metaphors, see Kinsella, “On the Danger of Metaphors in Scientific Discourse,” StephanKinsella.com (June 12, 2011) and idem, “Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors,” Mises Economics Blog (Jan. 3, 2008).

[10] Avihay Dorfman & Assaf Jacob, “Copyright as Tort,” Theoretical Inquiries in Law 12, no. 1 (Jan. 2011; https://perma.cc/4HZM-QPHU): 59–97, p. 96–97.

[11] Wendy J. Gordon, “Intellectual Property,” in Oxford Handbook of Legal Studies (Peter Cane & Mark Tushnet ed., 2003; https://perma.cc/59GP-HRD8), § 1.1.3. But see idem, “An Inquiry into the Merits of Copyright,” at 1353, 1354, 1378 (“The noncontractual restraints imposed by copyright are of the same nature as those imposed by other areas of the law …. [T]he commonalities in structure predominate over the differences. … [I]ntellectual and tangible property serve similar economic roles. … [T]he tangible and intangible property structures are quite similar …. [C]opyright is functionally as well as structurally consistent with tangible property.”). Perhaps the apparent difference in Gordon’s views is due to some evolution of views, as they were published fourteen years apart. See also Adam Mossoff, “Patents as Constitutional Private Property: The Historical Protection of Patents Under the Takings Clause,” Boston U. L. Rev. 87 (2007; https://perma.cc/G7JW-NZNE): 689–724, at pp. 698–99 (mentioning some scholars who, accepting the “claim that patents and copyrights were special, limited monopoly grants in the early American Republic … today condemn recent expansions in intellectual property rights, which they refer to as ‘propertizing’ intellectual property. They also criticize the use of ‘property rhetoric’ in intellectual property doctrines today, which they consider both a novel practice and a contributing factor in the ‘propertization’ of intellectual property doctrines”; footnotes omitted); and Mulligan & Quinn, “Who are You Calling a Pirate?,” p. 1 (arguing that the “analogy between physical property and intellectual property is troubled for a number of reasons”). See also Lawrence Lessig, Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity (New York: Penguin Press, 2004   ; https://perma.cc/J8ZM-FT46), pp, 117–18 (the desire to treat IP rights the same as other property rights has “no reasonable connection to our actual legal tradition. … While ‘creative property’ is certainly ‘property’ in a nerdy and precise sense that lawyers are trained to understand, it has never been the case, nor should it be, that ‘creative property owners’ have been ‘accorded the same rights and protection resident in all other property owners.’ Indeed, if creative property owners were given the same rights as all other property owners, that would effect a radical, and radically undesirable, change in our tradition.”).

  1. Sadly, David Henderson appears to have softened his own stance on IP too. Jeff Tucker winning economist David Henderson over to the anti-IP side. []
  2. “Whether that’s true or not, it is certainly true that the painting (like Warhol’s soup cans) ‘is immediately recognizable as a “Warhol.”‘ … But as a matter of copyright law, the retort is ‘so what?’ For example, the movie No Country for Old Men may be ‘instantly recognizable’ as a ‘Coen Brothers,’ but it does not follow that the movie’s adaptation of the original No Country for Old Men novel is, ipso facto, ‘fair use.’ If that were so, as the Court majority correctly observed, it would give famous, recognizable artists license to steal from lesser-known ones.” []
  3. See Stop calling patent and copyright “property”; stop calling copying “theft” and “piracy”. []
  4. See, e.g., Patent vs. Copyright: Which is Worse?”; “Legal Scholars: Thumbs Down on Patent and Copyright”; “The Overwhelming Empirical Case Against Patent and Copyright”; “Costs of the Patent System Revisited”; patents kill (search).  []
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