Libertarian and IP Answer Man: Artificial Intelligence and IP

I received a couple questions from someone about IP and AI.

Question 1:

we could imagine an AI system without any censorship which can quote anything without any restrictions and provide access to any information that is available, anyone could create a website with any pirate content they want and it uses modern technologies allowing to provide this service without any way blocking it. How long IP could exist if there was a tool that completely ignores human made laws and lets information live freely?

Kinsella:

I’m not quite sure what you are asking. I think copyright is incompatible with AI. You can’t have both. That’s the problem with copyright. It’s already affecting AI. See, re Sarah Silverman’s suit against OpenAI, “AI Suffers Setback As Judge Trims Case“; “The Times Sues OpenAI and Microsoft Over A.I. Use of Copyrighted Work” (“Millions of articles from The New York Times were used to train chatbots that now compete with it, the lawsuit said”); Artists release silent album in protest against AI using their work; Hundreds of actors and Hollywood insiders sign open letter urging government not to loosen copyright laws for AI. See this tweet thread with Kinsella explaining that copyright gimps AI; tweet about “The EU’s AI Act invalidates the theory of Non-Expressive Use. It’s a major international precedent set by policymakers to consider training as falling under Copyright.”; tweet about “The historic NYT v. @OpenAI lawsuit”; tweet re copyrightable AI art; tweet “Potential copyright infringement & why generative AI may be in for a rough ride”. [See also Whereupon Grok admits it (and AI) is severely gimped by copyright law; twitter (“Meta has pirated millions of books to train its AI. Either this stops now or publishing is finished.”)]

Response:

Obviously OpenAI is affected by the government regulations, I am talking about black market version of it, that doesn’t care about made up laws and acts strictly within voluntary cooperation. The question is: if there was a distributed system (kind of like bitcoin is) that couldn’t be blocked by the government and allowed using AI without any restrictions, how in your opinion would it change the mindset of the people regarding copyright?

Kinsella:

Hard to say. Probably not much. They are too confused about IP and copyright to start to understand it just because of some obvious examples. Instead they would (a) minimize the example and focus on how the unregulated blackmarket AI is also being used for bad things (it might give racist answers etc., or “for crime,” like Bitcoin or The Silk Road) and (b) they would say, “well this just means copyright law is being abused here and all we need to do is find the right ‘balance.'” No one can ever think in principled terms.

After all think of how copyright obviously hobbles Youtube, but no one says we should abolish copyright because of this. They just moan about “abuse” and say the system needs to be tweaked or improved or fixed to achieve the right “balance.” It gets tedious to hear this nonsense over and over.

So I expect copyright to continue to hobble AI (patents might too; see how nChain/Craig Wright tried to use both copyright and patents, maybe trademark too, I can’t recall, as threats against the bitcoin ecosystem).¹ This will mean it will have reduced functionality and it will be more expensive as the AI companies are extorted into paying ransom in the form of “license fees” to book publishers, newspapers, and others with content on the Internet. It’s going to hold back human progress, as IP always does. No offense, Heritage Foundation, Cato, Independent Institute, Federalist Society, and others.²

Question 2:

Intellectual property is one of the most fascinating and, at the same time, controversial concepts created by the state to regulate interactions between people. The term itself is essentially an oxymoron because ideas, knowledge, or creative expressions cannot be “owned” in the same sense as physical objects. You cannot restrict the spread of a thought once it enters someone else’s mind. Yet the state has invented rules that allow this to happen through coercion, restrictions, and penalties.

True property is based on the principle of self-ownership: you own your body and, therefore, the fruits of your labor if they are created without violating the rights of others. But can it truly be considered a violation to “copy” an idea that someone has heard or seen? If I create a copy of your book or invent a similar machine, does that really harm your property? After all, the original remains with you, and you have not lost anything. This contradicts the very nature of property, which aims to avoid conflict over scarce resources.

The system of intellectual “property” benefits only those who wish to use coercion for profit: corporations, states, and bureaucrats. Authors, inventors, or artists receive only an illusion of protection, which quickly shatters against the reality of lawsuits, patent trolls, and bureaucratic obstacles. In contrast, true freedom of creativity and innovation comes from open systems where ideas freely circulate and enrich society.

Everyone who creates something in this world has the right to decide how and with whom to share their work. If your ideas are truly valuable, you will find those willing to support you voluntarily. But imposing a monopoly on thought is an attack on the freedom of others, on their right to use their own minds, to create, and to share their ideas.

Thus, the issue of intellectual property is ultimately a question of freedom versus coercion. A free society does not need state patents or copyrights. It needs a space for collaboration where people create, copy, improve, and freely exchange ideas without fear of bureaucracy or legal sanctions.

Kinsella:

This is not bad, and it’s aiming at the right answer. There are few things I would tweak.

First, a pedantic point. You write: “the issue of intellectual property is ultimately a question of freedom versus coercion”. We libertarians oppose aggression; libertarians sometimes use “coercion” as a synonym for aggression, just like we sometimes (sloppily) say that we oppose “violence.” But not all coercion is aggression, just like not all force or violence is aggression. See my posts The Problem with “Coercion” and The State is not the government; we don’t own property; scarcity doesn’t mean rare; coercion is not aggression.

Second, you write: “True property is based on the principle of self-ownership: you own your body and, therefore, the fruits of your labor if they are created without violating the rights of others.”

Here, you speak of “true property.” As one legal scholar explains,

In the United States, the word property is frequently used to denote indiscriminately either the objects of rights … or the rights that persons have with respect to things. Thus, lands, automobiles, and jewels are said to be property; and rights, such as ownership, servitudes, and leases, are likewise said to be property. This latent confusion between rights and their objects has its roots in texts of Roman law and is also encountered in other legal systems of the western world. Accurate analysis should reserve the use of the word property for the designation of rights that persons have with respect to things. (( See Kinsella, Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023) [LFFS], ch. 2, App. I. ))

So the question is not what “is property” but what human actors have property rights to. As Rothbard explains, all (human) rights just are property rights; and all property rights are rights in scarce resources.³ And to be just—according to libertarianism and the private law—these property rights must assigned in accordance with (1) original appropriation (occupation; Lockean homesteading) or (2) contractual title transfer from a previous owner.⁴

I would also slightly disagree with your wording: “you own your body and, therefore, the fruits of your labor if they are created without violating the rights of others”. We do not own labor, or the “fruits of” our labor. We own previously-owned scarce resources acquired either by original appropriation or by contractual title transfer from the previous owner. Neither one of these actions “creates” the “thing” owned, nor do they require the assumption that an actor owns of the “fruits of his labor”. When an actor appropriates or occupies an unowned resource, he does not create it; it already existed; he merely appropriates it. Yes, yes, this effort involves the use of labor (and intellect, knowledge, and so on), but the labor is merely a type of action (as opposed to leisure); labor is not owned, and neither is “action” or “leisure.”⁵

It is true that laboring—rearranging an already-owned resource—is a source of wealth but not of property rights.⁶

In light of all this, I would also say that the problem with IP is not that ideas “are not property.” Even scarce resources are not “property”; as noted above, humans have property rights in scarce resources (determined in accordance with original appropriation and contractual transfer). The thing that I own is not “property”; it is something in which I have a property (ownership) right.

The problem with IP is not that ideas are “not property” or that IP is “not property”; the problem with IP law and the IP rights it creates, is that that IP rights violate existing property rights—since IP gives ownership rights to IP holders, over resources already owned by others in accordance with principles of original appropriation and contractual transfer. IP rights and IP law are unjust. This is the fundamental problem with IP rights.⁷

As I pointed out in “Intellectual Property versus Intellectual Property Rights“:

One mistake made by many opponents of IP is that they believe the problem with IP is that it is “not property,” which is one reason they are reluctant to adopt the loaded term “intellectual property.” But this is because they still hew to the common view that things we have property rights in “are property.” If they believe that IP law is illegitimate, this means that “intellectual property” is not actually “property”; that there is no such thing as “intellectual property”; or as some of them say, “intellectual property does not exist.” As this chapter will make clear, the problem with IP is not that it does not exist, but that IP rights and IP law are unjust. Inventions and creative works exist; patents and copyrights, and patent and copyright law, exist. The opponents of IP here remind me a bit of the natural law types who resist calling a bad law “law” but instead say things like, an unjust law is no law at all.

(See also my similar comments in “Munger on Property Rights in Words and Information.”)

Update: See also Trump fires director of U.S. Copyright Office, sources say. Evidence of growing obvious “tension” between copyright and AI, and a possible positive movement?

The Trump administration has fired the head of the U.S. Copyright Office, two sources familiar with the situation confirmed to CBS News Saturday.

The firing of Register of Copyrights Shira Perlmutter came after Perlmutter and her office earlier this week issued part three of a lengthy report about artificial intelligence and expressed some concerns and questions about the usage of copyrighted materials by AI technology.

“It is an open question, however, how much data an AI developer needs, and the marginal effect of more data on a model’s capabilities,” the report read. “Not everyone agrees that further increases in data and test performance will necessarily lead to continued real world improvements in utility.”

… Morelle speculated that there was “surely no coincidence he acted less than a day after she refused to rubber-stamp Elon Musk’s efforts to mine troves of copyrighted works to train AI models,” in reference to the report released by the Copyright Office this week.

Last month, Musk took to his social media platform X to seemingly express support for the abolition of intellectual property laws. Musk also owns AI startup xAI, with which in February he submitted a failed bid to purchase OpenAI, the company that operates ChatGPT.

Mr. Trump has been a major proponent of AI. Immediately after taking office, he announced a joint venture involving OpenAI, Softbank and Oracle that will invest up to $500 billion in private sector money to build artificial intelligence infrastructure.

Update: Recent article about “Fair Training” exceptions to copyright law for AI training:

Andrew W. Torrance & Bill Tomlinson, “Training is Everything: Artificial Intelligence, Copyright, and ‘Fair Training,’” 128 Dick. L. Rev. 233 (2023).

Abstract: In this Essay, we analyze the arguments in favor of, and against, viewing the use of copyrighted works in training sets for AI as fair use. We call this form of fair use “fair training.” We identify both strong and spurious arguments on both sides of this debate. In addition, we attempt to take a broader perspective, weighing the societal costs (e.g., replacement of certain forms of human employment) and benefits (e.g., the possibility of novel AI-based approaches to global issues such as environmental disruption) of allowing AI to make easy use of copyrighted works as training sets to facilitate the development, improvement, adoption, and diffusion of AI. Finally, we suggest that the debate over AI and copyrighted works may be a tempest in a teapot when placed in the wider context of massive societal challenges such as poverty, inequality, climate change, and loss of biodiversity, to which AI may be part of the solution. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4700945

This piece seems to be fairly useless, since the authors are not radicals and want to achieve a “balance” between anti-IP views and pro-technology considerations. Take a stand make some actual predictions, guys.

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Intellectual Property Issues and Generative Artificial Intelligence in the Courts

1. Announcing the Open Crypto Alliance to Protect Bitcoin, Blockchain and Crypto; various tweets by . [↩]
2. Adam Mossoff, “The Patent System: America’s Innovation Engine,” Heritage Foundation Report (Jan. 23, 2025); see also Kinsella, “Independent Institute on The ‘Benefits’ of Intellectual Property Protection,” C4SIF Blog (Feb. 15, 2016). [↩]
3. LFFS, ch. 4, text at n.2. [↩]
4. See LFFS, ch. 4, 5, 9, et pass.; Kinsella, “Aggression and Property Rights Plank in the Libertarian Party Platform.” [↩]
5. See my posts Cordato and Kirzner on Intellectual Property; L ch. 11, text at n.33. [↩]
6. See LFFS, ch. 14, Part III.B; ch. 15, Part IV.C; Kinsella, “Locke, Smith, Marx; the Labor Theory of Property and the Labor Theory of Value; and Rothbard, Gordon, and Intellectual Property,” StephanKinsella.com (June 23, 2010); idem, “KOL 037 | Locke’s Big Mistake: How the Labor Theory of Property Ruined Political Theory,” Kinsella on Liberty Podcast (March 28, 2013).  [↩]
7. Kinsella, “Intellectual Property Rights as Negative Servitudes” (June 23, 2011). [↩]