The Purpose of Law: Justice and Property Rights vs. IP Rights and Optimizing Innovation

[From my Webnote series]

Related

• The Overwhelming Empirical Case Against Patent and Copyright
• “Legal Scholars: Thumbs Down on Patent and Copyright”
• Intellectual Property’s Great Fallacy;
• Mark Lemley: The Very Basis Of Our Patent System… Is A Myth
• IP Law and “Market Failure”
• Richard Epstein’s Takings Political Theory versus Epstein’s Intellectual Property Views
• Richard Epstein’s Takings Theory of the State
• Email to Richard Epstein: Tension Between Takings Framework and IP Views
• “Intellectual Property Advocates Hate Competition”
• The Universal Principles of Liberty; The Fundamental Principles of Justice
• On Property Rights in Superabundant Bananas and Property Rights as Normative Support for Possession
• Libertarian and Lockean Creationism: Creation As a Source of Wealth, not Property Rights; Hayek’s “Fund of Experience”; the Distinction Between Scarce Means and Knowledge as Guides to Action
• The Problem with Intellectual Property

From various posts at C4SIF.org and StephanKinsella.com:

The Problem with Intellectual Property:****

I tire of people repeating over and over again that we need IP because without it there would be no innovation, etc. I have pointed out to them over and over that not only is this false,¹ but that it misconceives the purpose of law itself. It imagines that there are market failures and imperfections,² such as “holdout problems” and “free riders,”³ and “too much competition,⁴ and that the state is therefore justified in intervening–in engaging in what are in effect takings—in attempt to grow the size of the pie. Of course this never works because (a) there are no market failures, (b) even if there are, they are dwarfed by political failure, i.e. the solution is worse than the problem. But it also assumes that if the state could intervene and make things “better” in some vague sense, that this is justified. But this misconceives the purpose of law: it is is to do justice—by recognizing, identifying, defining, respecting, and protecting property rights.⁵ IP law violates property rights;⁶ it is the opposite of justice. It is a perversion of law and justice.

Here are some passages from various posts at C4SIF.org and StephanKinsella.com touching on this:

The Problem with Intellectual Property:

The purpose of property rights is to support actors in the pursuit of their goals by enabling them to employ resources, including their own bodies, free of physical conflict and interference from other actors. Property rights are inherently practical. For this reason legal systems and their corresponding property rights from time immemorial have always exhibited certain core features in the private law, to one degree or another: self-ownership, original appropriation, contractual transfer, and transfers for rectification.

… The goal of law is justice, not maximizing utility.⁷ This is done by identifying and protecting property rights. This is because justice is just giving someone his due—and what he is due depends on what his rights are.

Stephan Kinsella, “Preface,” in Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023):

The issue of what property rights we have, or should have, what laws are just and proper, has long confronted mankind, and continues to be the subject of debate today. This book seeks to address these issues, with an approach that keeps in mind the nature and reality of human life—that we are purposeful human actors living in a world of scarcity and facing the possibility of interpersonal conflict—and the purpose of law and property norms: to enable us to live together, in society, peacefully and cooperatively. The goal is to vindicate the private law as developed in the decentralized systems of the Roman and common law, with an emphasis on consistency, principle, and the inviolable rights of the individual. In short, to argue for a private law system informed by libertarian principles.

Stephan Kinsella, “How We Come To Own Ourselves,” in Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023):

… the “first use” rule is merely the result of the application of the more general principle of objective link to the case of objects that may be homesteaded from an unowned state. Recall that the purpose of property rights is to permit conflicts over scarce (rivalrous, conflictable) resources to be avoided.⁸ To fulfill this purpose, property titles to particular resources are assigned to particular owners. The assignment must not, however, be random, arbitrary, or biased, if it is to actually be a property norm and possibly help conflict to be avoided. What this means is that title has to be assigned to one of the competing claimants based on “the existence of an objective, intersubjectively ascertainable link between owner and the” resource claimed.⁹

Thus, it is the concept of objective link between claimants and a claimed resource that determines property ownership. First use is merely what constitutes the objective link in the case of previously unowned resources. In this case, the only objective link to the thing is that between the first user—the appropriator—and the thing. Any other supposed link is not objective, and is merely based on verbal decree, or on some type of formulation that violates the prior-later distinction. But the prior-later distinction is crucial if property rights are to actually establish rights and make conflict avoidable. Moreover, ownership claims cannot be based on mere verbal decree, as this also would not help to reduce conflict, since any number of people could simply decree their ownership of the thing.¹⁰

So for homesteaded things—previously unowned resources—the objective link is first use. It has to be, by the nature of the situation.

…  But for human bodies, matters are somewhat different.

On the Obligation to Negotiate, Compromise, and Arbitrate:

… when we are considering property rights and laws, and the administration of justice, again we must be informed by the very purpose of property rights: to reduce conflict in order to make peace, trade, and cooperation possible.

Libertarian Answer Man: Do Corporations have “Privileges”?:

I suppose if you have blinkers on you can say some state action lowers some costs, but of course, this is at expense of other costs that inevitably come with the existence of the state; nothing is for free. And anyway the purpose of law is not to run around looking for market failures to “fix” or transactions costs to lower; it is to do justice by recognizing, identifying, and protecting just property rights.¹¹

“KOL337 | Join the Wasabikas Ep. 15.0: You Don’t Own Bitcoin—Property Rights, Praxeology and the Foundations of Private Law, with Max Hillebrand” (May 23, 2021)

So they don’t bother to innovate in, say, trying to improve the product because it would be illegal to sell that product because it’s patented, so they don’t bother to innovate.  And likewise, the person that gets the patent on their innovated product slows down on their innovating because they don’t need to innovate anymore to keep customers because they have a monopoly for about 17 years where they’re free from competition.  So they don’t innovate as much, and their competitors don’t bother to innovate because it wouldn’t do them any good.  So patents actually impede innovation, not that the purpose of law is to encourage innovation in the first place.

00:13:48

The purpose of law is to set these rules down, to assign ownership to scarce resources so that we can live in peace with each other and cooperatively and we can trade.  So the purpose of law was never to encourage innovation because people that tinker with the law to achieve their pet social goals, they always make exceptions to the basic law.  And they say, well, one purpose of the law is to make sure we have enough – make sure we have a spaceship landing on the moon.

00:14:15

So let’s tax people, take their property from them, and use it to fund NASA, or I want to make sure people don’t starve, so I’m going to have a welfare system and I need to take people’s property from them to fund that, or we need basic education for free for the public, so we’re going to take people’s property and pay for education.  So if you come up with a pet project, you can always use that as an excuse to steal people’s property, but the purpose of law is to protect property, not to invade it in the service of some artificial goal that you happen to have.

“KOL341 | ESEADE Lecture: Should We Release Patents on Vaccines? An Overview of Libertarian Property Rights and the Case Against IP” (June 5, 2021)

00:36:14

JUAN IGNACIO IBAÑEZ: So the purpose of the law – so your position requires the purpose of the law to be the avoidance of conflict.

00:36:21

STEPHAN KINSELLA: Correct.

00:36:21

JUAN IGNACIO IBAÑEZ: But if I said that the – what if I believe – what would you tell me if I believe that the purpose of the law is not just to avoid conflict but also to promote innovation.  You said that the difference between designing automobiles and pizza is a matter of degree, so when innovation is so much more important in our goals as a society than avoidance of conflict, what will you tell me to convince me that the law should not protect “intellectual property?”

00:36:57

STEPHAN KINSELLA: Yes.  This is why I said that the argument is different whether I’m addressing a libertarian audience or a general audience because libertarians should understand that the purpose of law is not to promote innovation.  In fact, the purpose of law – there are many values we have in society that we personally have as well.  And you could arbitrarily pick any one of these values as what the law should do, but that’s not what we libertarians believe in.

00:37:22

In fact, the non-aggression principle is key to our philosophy because we understand that the only way to violate rights is to use force against other people.  This is an implicit recognition that the entire purpose of law is to help us avoid conflict.  The reason I use the word conflict – the word scarcity is ambiguous because it sometimes means lack of abundance.  And sometimes in economics it has a technical meaning, which means basically rivalrousness, which I use the term which I made up called conflictable because that really gets to the essence of what we mean, but rivalry captures it pretty well.  This is, in fact, one trick that statists use is they say things like, well, we believe that liberty is an important value, but unlike you libertarians, it’s not the only value.

…

01:07:42

As I said, if you studied the book by Boldrin and Levine, just read that one chapter seven or – it’s either seven or nine on pharmaceuticals.  You’ll see that Switzerland and Italy had thriving pharmaceutical industries when they had no patent protection for pharmaceuticals.  And again, no one will say that no one will invest in innovation.  All you can argue is there will be not enough innovation.  But then you get into this argument that the goal of law and the purpose of government is to intervene in the free market to make sure we have the optimal amount of innovation.

…

“KOL388 | Cantus Firmus with Cody Cook: Against Intellectual Property” (July 8, 2022):

… And so would we lose some of those advances or would that slow down if IP was not protected?

42:51 Stephan Kinsella: So let me give you a few responses. Once more fundamental response is that the way of framing this is in the favor of the IP people because once they get you saying, well, does this encourage innovation or not, they’ve got you already accepting the premise, which is hidden, which is that the purpose of government and law is to incentivize innovation or something or to maximize it or optimize it or something.

When did that become the purpose of law? The purpose of law is to identify owners of scarce resources which are the subject of conflict by establishing property rules and enforcing them so that people can have—they can live their lives free of violent conflict from other people. That’s the fundamental purpose. That’s what justice—the purpose of law is justice. Justice—what does it mean? According to Justinian, the emperor from Rome, justice means giving someone his due. Now, what his due is depends on what his property rights are. His property rights are the time-tested private law rules of you own your body, you own resources you acquire, and you know that kind of stuff.

So the purpose of law is to do that. It’s not to come in and tweak the rules to optimize some random factor. I mean, what if—what if we said, well, the goal of law is to optimize religious observance, or I mean, it’s any—any number of arbitrary values other than liberty and justice and property rights? You could pick innovation is not one of them. And there’s no stopping point to this because so you—you could argue that you have this much innovation with the patent system, without the patent system, and then you have say twice as much with a patent system. Well, there’s still some innovation left on the table because even charging a monopoly price for 17 years is—it does—is not going to give you enough incentive to recoup your costs for certain very, very, very expensive R&D projects. So maybe we should double the patent term, or maybe we should impose capital punishment, or maybe we should have a government taxpayer-funded prize system where the government awards an additional bonus to people who come up with unique things. If our goal is to maximize innovation, we could basically have a 99% tax rate and just pour it all into subsidizing innovators. It just makes no sense. And even if it did increase innovation on net, which I don’t think it does, but even if it did, it doesn’t mean that it’s worth it because it has to come at the cost of something else because it comes at the cost of basically an implicit tax on everyone else because when you have a monopoly price being charged, then it’s like a tax because people have less money left over in their pockets to spend on other things. Consumers have less money in their pockets to spend on consumption or investment, so there’s less money left over to engage in other activities which could have led to other consumer benefits, whether it’s production, new business ventures, or even other types of innovation, right?

“KOL458 | Patent and Copyright versus Innovation, Competition, and Property Rights (APEE Guatemala 2025)” (April 8, 2025):

Kinsella: And … to put it simply, the purpose of law is to do justice. And the way you do justice is you recognize property rights and you enforce them. The purpose of law is not to say “hmm, what kind of thing is underproduced and that we can stimulate with an innovation?”

“KOL470 | Intellectual Property & Rights: Ayn Rand Fan Club 92 with Scott Schiff” (August 18, 2025):

William (22:13):

I’d like to ask you a question about the effect of the division of labor on the need for patents and copyrights. When we were just hunter-gatherers, there was no need for patents or copyrights because there was no technology that’s going to make them money. People weren’t publishing books and things like that. But when civilization reaches the point where you need storytellers and inventors, and they need to be able to make money and survive in society off their labor, isn’t patents and copyrights a form of protecting the division of labor and the need for that?

Stephan:

Well, that’s complicated. First of all, the way I look at it in general is, I hate to bring up praxeology and Mises, but it’s a simple way of looking at what human action is. I don’t think this is incompatible with Objectivism. In every action in human life, human beings aim at a certain end. They’re trying to change the universe. They’re trying to change the future for the way they see things coming, right? They’re uneasy about what they think is coming, and they have a goal in mind and try to achieve it. That’s what all human action is.

To do that, they have to have knowledge and scarce resources at their disposal. The knowledge is the ideas, and that’s crucially important. That’s an ingredient you have to have for successful action. You also have to have availability of means, and to have availability of means in a society of other people where there’s possible conflict, you want to have secure possession of those means so people don’t take it from you. So you can have long-term plans and things like that.

Property rights emerge to socially protect those scarce means of action.¹² But the knowledge is the second ingredient that informs what you do.¹³ I would say, even in the caveman days or the days you’re talking about, technological knowledge is equally important. You have to know how to catch a fish. You have to know how to do things.

If we need IP now, I don’t see why we wouldn’t need it before. In fact, back in Sybaris, the Greek city-state, in the year 500 BC, about 2500 years ago, there were some crude early forms of copyright and patent. There was a cooking culinary competition, and everyone would try to cook their best dish. Whoever won, who got the king’s favor or whatever, would have a monopoly to be the only one who could make that dish for a year.

So, you had this idea around for a long time. But there are two problems with the way you worded it. Number one, it presupposes that the purpose of rights and property rights is like we have to have this central planning mentality and look around for market failures and things that the law should incentivize or encourage—like, we need to make sure we have enough division of labor or something like that.

But that’s just not the purpose of law, justice, and rights. The purpose of law is to protect people’s rights, to do justice, right? And to do that, we have to know what their rights are. Once their rights are established, then they can operate knowing what they are. It’s up to them to figure out how to make a profit in a world that secures those rights.

The other assumption is that you need the government to grant you some kind of limited protection from competition to sell something or make a profit at it. I mean, you can sell a book without having the right to stop people from selling copies of the book. There’s nothing stopping you from selling your book.

William:

Yeah, I was just going to say, I mean, the take that incentives don’t matter versus the rights. Going back to Rand, it’s like the moral is the practical, and you can see that in all these areas that capitalism increases the rate of technological progress, standard of living. So, you’re telling us here in this one case that without adopting it, it may stifle creativity or the arts.

Stephan (26:55):

So, I would say this. I don’t think it does stifle creativity, and I don’t think it’s necessary, but I’m simply saying that our primary focus has to be on the principled approach and on rights. You don’t reverse-engineer the rights to get the incentives that you want. Normally, they go hand in hand. If you can say, “Well, the rights system that Kinsella proposes has this breakdown because there’s no good incentives,” that’s fine to point out and look at closely to see if there’s a disconnect because there shouldn’t be a disconnect. The practical and the moral should be the same thing.

I think the assumption is wrong, and in fact, all the empirical studies show that every argument given that you need these rights to stimulate creativity and that without these rights you have an underproduction of these things—a so-called market failure—there’s just no evidence of that.¹⁴ The common-sense case, I understand, like, “Why would I spend a billion dollars to make a drug that someone could just make a knockoff of it the next day?” I can understand that knee-jerk argument, but if you look into it more closely, the argument just fades away.

In any case, the point is, you have to first identify what our rights are, and then you have to analyze how society’s going to work based on that. I’m not saying that I don’t care what happens or that the consequences are irrelevant or incentives don’t matter. I do think incentives matter, and I think they flow from a rational, objective system of law that protects property rights. I just think it’s enough to do that, and within that system, people can find ways to make a profit even though they face competition.

Basically, I don’t have a problem with competition, which is ultimately what people who support patent and copyright have a problem with.¹⁵

I think people have this idea that up until around the 2000s, maybe when the internet started, technology started, piracy started, and encryption and digital information started, we were in the analog age. In the analog age, you had a natural ability to make a profit because it was difficult for people to compete with you because everything people made was a real service or a tangible product,¹⁶ a material product, which required a factory, employees, capital, and labor. When you invest in that and take a risk, you hope to make a profit, and you make an unnatural profit for a while. Because remember, profit is an unnatural thing because when you make a profit on the market, you send a price signal to the rest of the world saying, “This guy’s making a lot of money. He’s doing it by pleasing the consumers.” Over time, you attract competition, and it becomes harder to make that profit. But for a while, you have a head start, and your profit goes down to the rate of interest over time. But at first, you have this natural profit in the beginning because you’re the first one. Then, over time, that gets eroded, and you have to keep improving your product.

That’s the natural way the world worked in the analog age when there was a friction or difficulty of people right away competing with you. They couldn’t—if I sold a Harry Potter book one day or a new phone or a new drug, people couldn’t make a duplicate of it the very next day because; when books were analog, you had to have a printing press. You had to decide which books to copy if you wanted to pirate or bootleg books. You don’t want to copy every book that’s out there because you might be wasting your money. So, you might wait a year or two to see, “Oh, Harry Potter is the bestseller.” Now I’m going to start making bootleg copies. But in the digital age, you can do it right away, or I can make a drug right away, is the argument, which is not true. It’s not the way pharmaceutical companies work.

But anyway, that’s the idea: it’s too easy to compete in the digital age. Because it’s too easy to compete, the natural analog world’s competition process breaks down. Now it’s too hard to make a profit. It’s too hard to make this unnatural profit. It goes down to zero much more quickly, and therefore, the whole incentive structure breaks down. So, we should put these patent and copyright laws in place to slow down the diffusion of ideas¹⁷ because these new ideas are a problem. I think this is insane, but that’s kind of what they come out on. They’re literally afraid of competition because competition makes it—if competition comes too free and easy, which it does in the digital age with certain goods like digital goods—then no one’s going to invest in the first place. That’s kind of the argument.

“KOL483 | The Economics and Ethics of Intellectual Property, Loyola University—New Orleans” (February 25, 2026):

Methodological and Ethical Problems with Utilitarian Case

[around 25:41]

Now, there’s in addition to these empirical problems with the utilitarian case for IP, there’s other problems. There’s a methodological problem, and that is the Austrian view that recognizes that values are subjective and they can’t be compared interpersonally or cardinally. You can’t sum up values. You could never have an economist come up with a number saying this is the value of the patent system to the economy because you can’t compare these things anyway.

So they could never prove their case. Despite David Friedman a utilitarian economist who claims that von Neumann has proved that you can compare values interpersonally and cardinally which is I think is ridiculous. Bob Murphy has already debunked that.

And there’s ethical problems too. Utilitarianism is a horribly monstrous ethical idea. Just to take a quick example, if we came up with a technology that would allow you to take an eye from a sighted person and put it into the head of a blind person and give them vision, then the logic of utilitarianism would say, well, that’s permissible because yeah, the sighted person is going to suffer, but he still gets to see. But the blind person goes from zero to good vision.

So that’s a net plus for the human race, right? So that would justify monstrous acts like literally holding someone down and removing their eye.

And the other problem is when you hear this argument that people say, well, if you don’t have patent law, how are people going to have the incentive to make a new drug or something like that? They’re asking a loaded question because they’re presupposing that the purpose of law is to run around hunting for market failures and having wise legislators calibrate the system and come in and nudge it and make us better off by fixing these little market failures.

But this is not the purpose of law. The purpose of law is as Ulpian said at the end of the Roman Empire to do justice to render under each man his due. Right? It’s the constant and perpetual wish to render everyone his due to live honestly to hurt no one and to give everyone his due.

Now to know what someone’s due is you need to know what their property rights are. So that’s why you need property rights. So the whole purpose of law is to do justice by protecting and defining property rights. Not to maximize innovation or politeness or whatever or landing on the moon, whatever your artificial governmental goal is. That’s not the purpose of law.

“Andrew Torrance: Patents and the Regress of Useful Arts” (October 25, 2011):

Of course this is the problem with the entire utilitarian, law and economics, wealth-maximization mentality. It just assumes that the purpose of law is to be tweaked to maximize certain values, or to “incentivize” behavior. It is really a statist, central planning type mentality. It even trips up the analysis of anarchist libertarian David Friedman. For example, in his Law’s Order, ch. 11, he writes:

Property rights serve two related functions: They provide both a way of deciding who gets to use what when and an incentive for creating things.

In the case of intellectual property, the first function is not merely unnecessary but perverse. We cannot both drive the same car to different places, which is an argument for property rights in cars. But we can both use the same idea to build different machines, or simultaneously read different copies of the same book, which is an argument against property rights in ideas or writings.

Having one more person choose to read a book does not increase the cost of writing it; that must be paid in full in order for there to be any readers at all. Hence when we include in the price of a book a royalty payment to the author, we are, from the standpoint of efficiency, overcharging. If the price of an eleven dollar book represents a ten dollar production cost plus a dollar in royalties to the author, an additional copy produces a net benefit as long as the purchaser values it at more than ten dollars. But if he values it at more than ten and less than eleven, he will not buy it, which is an inefficient outcome. The same is true for the potential user of an idea who values it at more than zero but less than the license fee set by the patentholder. On the dimension of how many people use an idea or a writing private property gives an inefficiently low result, commons an efficiently high one.

There remains the second function of property. It is hard to read a book if nobody has written it, and authors may choose not to write books if they cannot collect royalties on them. Similarly for inventions. So the protection of intellectual property does provide some benefit. But the case for treating ideas as property is, economically speaking, weaker than the case for propertizing many other things, which may help explain why intellectual property is a relatively recent institution.

Friedman recognizes the need for property rights as a response to scarcity in his first “function,” but assumes that the “incentive” effect of property rights is an independent justification for property rights. For normal property, like scarce resources, assigning property rights in the scarce resources, so that peaceful, productive, conflict-free use may be made of these resources, also happens to give owners “incentives” to use the property efficiently, and to transform the property into more valuable arrangements, i.e. to “create things”–actually, to create wealth, not things (see my post Locke on IP; Mises, Rothbard, and Rand on Creation, Production, and “Rearranging”). But this does not mean that property rights in non-scarce things can be justified simply to try to incentivize “creating things.” But thinking of property as having “two functions” leads to the bizarre conclusion by an anarchist that legal protection in ideas might be justified–that is, the right of one person who did not do anything to produce or homestead someone else’s property, to veto that other person’s uses of his property. As I explain elsewhere, such IP rights may be viewed as negative servitudes, a type of property right in the IP holder, in someone else’s property. But negative servitudes are justified only if granted contractually by the owner of the servient (burdened) estate. Legally giving such a right to the IP holder without the owner’s consent is a form of theft, or redistribution of property. (See also my post David Friedman on Copyright, and Hoppe’s criticism of the similar “Coasean” type reasoning in the Chicago Diversions section of this article.)

“Conversation with a Student about Australian Copyright Reform, Piracy, and Innovation and Creation in a Copyright-Free World” (April 11, 2015):

Just one follow up question: If you can, could you give an idea of how the “creative industries” might operate in a world without copyright and intellectual property? I.e. how would things like films and television, which require significant capital investment, be funded and ultimately constitute a profitable enterprise outside the current paradigm where copyright owners profit from selling copyrighted material/from royalties? Would the “creative industries”, as we know them today, even exist?

To me that seems to be the sticking point for many people — they might admit the principled objections to copyright and IP, but can’t get their head around how cultural content would be made without copyright. I’m not sure I fully grasp it myself.

Cheers,

***

Me:

It is a sticking point for a couple of reasons. People implicitly think of law as a way to arrange incentives to obvious problems. So people say that in a free market we’ll have an underproduction of creative goods–so IP law is a way to “adjust” incentives to fix this. There is no reason to think this is a problem, and there is no reason to think that IP law addresses this non-problem–but the real problem is that this is now how to think about the purpose of law. Law’s purpose is to do justice–to respect property rights so that conflict can be avoided and resources can be used peacefully, cooperatively, productively. That’s it. It’s not about incentivizing the right amount of innovation.

So I am hesitant to even answer such questions since they seem to presuppose the wrong normative assumptions. Answering them concedes too much. Further, we cannot know exactly how the market will or would address certain situations absent state intervention. I can’t predict what the market will do. If a commie under communism asks a free market advocate how many brands of toothpaste there would be if the state monopoly is eased, no one can answer this–does this mean that the state monopoly on making toothpaste should continue, just because liberals can’t predict exactly what a free market would result in? No.

That said–I and others have tried to explain and posit some answers to some of these questions–see some of the posts below. Others are sprinkled around at TechDirt. The problem is that if I answer one question–“how would novelists make money?”–then as soon as I answer it, the IP proponent just goes on to the next question in his unending bad of demands: “Okay, maybe novelists could make money taht way–but what about poets???” So the questions are never-ending. It’s like they want a state-granted assurance for any possible question they have. They seem to imagine that the state can provide some kind of panacea for their uncertainties and doubts. It’s all ridiculous.

Bottom line, to be honest: your failed business model is not my problem. 

***

“Libertarians and Patents: Kinsella vs Mossoff (Dennis Crouch, 2012)” (April 16, 2022) and “Mossoff: Patent Law Really Is as Straightforward as Real Estate Law” (August 17, 2012):

“I’m now wondering what are the “factors” (as you call them) that go into the making of a new drug molecule, and how useful to me is the drug that I have made out of those “factors”. Unless I am dying of the disease in question, no use at all. But I still don’t see how, absent a system of patents, there are ever going to be any drugs created, to save any lives at all. I asked that before, and got no answer. Can you answer now?”

Well, I am reluctant to answer such questions because they are worded as if it’s obvious that unless I can show you how, we have to have a patent system. That is, you are smuggling in a utilitarian/consequentialist mentality, which I believe is not so obvious. In fact that is now how we decide what laws are just: we don’t just sit around thinking of end goals we think “should be met” In society (like: there ought to be ‘enough drugs’ created) and then just rubber stamp any artificial legal scheme dictated by a bunch of politiicans that they claim might help you achieve this predetermined “goal.” The only goal of the law is: justice; which means: giving someone his due; which means: protecting his property rights from invasion by others. That is the sole goal of law.

…

“So, how do you incentivize people to create something that can be easily copied?”

The purpose of law is not to “incentivize” people. The very idea of law has been distorted by the modern unprincipled utilitarian ethos, as your comment shows. You could ask this about any business: why would I build a grocery store if someone can just compete with me?? Why would I make the first computer if someone can just compete with me? Etc. Thsi is life. This is the market. You figure out a way to make a profit by selling a product or service someone wants.

” How do incentivize people to create ideas/content/innovations? It is one thing to throw darts at the current system – it is another thing altogether to create a VIABLE system to replace it.”

The viable system exists, underneath the state regulations: it is the free market. In such a system peopel have wealth and engage in innovation for any number of reasons. You are engaging in central planning.

“Maybe you need a hypothetical to loosen your tongue. I’m a film producer. I want spend $200M to make the next blockbuster film. However, all the countries in the world all simultaneously removed all the laws on intellectual property – mostly based upon your writings. I have come to you to ask you how can I make money from this $200M investment. Explain to me, under this new system, how this can be accomplished.”

the goal of law is not to make sure you can make your $200M blockbuster. But thre is no rason to think it would not. link to c4sif.org and link to c4sif.org

“Zeidman, Why Libertarians Should Support a Strong Patent System” (February 1, 2026):

“Patents offer protection for inventors from competitors.” Correct. This is not a property right.

“Without patents, inventors have no incentive to disclose how they created their inventions.” The purpose of law is not to give inventors incentives to disclose information but to secure justice by protecting property rights. And this statement is false anyway; for most inventions, disclosure is inevitable; and for others, the inventor often keeps it as a trade secret instead of patenting it. As Judge Easterbrook writes,

“The idea that a patent represents an exchange of protection for disclosure makes no sense, except perhaps with respect to process patents. The product itself, not the patent papers, usually discloses things. Inventors want and need patents only when disclosure is inevitable in the absence of protection.” Frank H. Easterbrook, “Intellectual Property Is Still Property,” Harv. J.L. & Pub. Pol’y 13, no. 1 (Winter 1990): 108–118, pp. 109–110. https://c4sif.org/2011/07/mark-lemley-the-very-basis-of-our-patent-system-is-a-myth/

https://c4sif.org/2010/12/the-purpose-of-patent-law/

“Independent Institute on the “Benefits” of Intellectual Property Protection” (February 15, 2016):

In any case, what do these weird “arguments” for IP have to do with liberty, human freedom, private property rights, and the rule of law? So what if a certain government policy might “promote innovation”? Since when was that the purpose of law, justice, and property rights? Utilitarian libertarians just launch into discussions about empirical benefits of various state policies, as if that is relevant to justice. These libertarians have lost their mooring, and their principles.

The Independent Institute should be ashamed for repeatedly promoting the evil, statist idea of intellectual property—especially in the name of liberty and free markets.

“Intellectual Property Discussion with Mark Skousen” (February 3, 2024):

Fundamentally, the purpose of law is not to “increase innovation”. It’s to do justice by protecting property rights and then allowing people to find their own ways to prosper on the free market. …

Another crucial point here is that it is quite obvious, and widely recognized, that the patent system as well as copyright derogate from the free market for the purpose of stimulating innovation; so the burden of proof is on those who advocate this fix to “market failure”. (See, e.g., Desrochers, “Excludability, Creativity and the Case Against the Patent System”: “One of the few topics over which free-market proponents often radically disagree is the relevance of the patent system. According to some, without patent protection an inventor has no incentive to invest time and money into something that can be easily copied by its competitors without incurring significant R&D costs. Patents therefore correct this market failure by providing a temporary monopoly to the inventor. Even though monopolies typically involve a misallocation of society’s resources, any welfare losses due to the restrictions in disseminating an invention are outweighed by the incentive to invention they provide.”)

Against Intellectual Property After Twenty Years: Looking Back and Looking Forward:

The purpose of property rights is to permit conflict-free use of resources, the scarce means of action that humans employ to causally interfere with the course of events in an attempt to achieve their ends. But this applies only to conflictable resources. Human action also implies the possession of knowledge by the actor—knowledge of what ends are possible and knowledge of what scarce means might be employed to causally achieve the desired end. Thus all successful human action requires two separate components: the availability of scarce means or resources and knowledge to guide one’s action.^[58]

***

• “Why ‘Intellectual Property’ is not Genuine Property,” Adam Smith Forum, Moscow (November 15, 2011)
• “Intellectual Property Advocates Hate Competition” (July 19, 2011)
• “Never-ending questions about “how would creators make money in an IP-free world”?” (April 15, 2025)
• “KOL479 | Co-Ownership Revisited: Property Rights, Exclusion, Contracts, and Edge Cases, with Nick Sinard” (December 10, 2025)
• “KOL440 | The Rational Egoist (Michael Liebowitz): Debating the Moral Status of Intellectual Property: Part IIb” (August 29, 2024)
• “KOL438 | The Rational Egoist (Michael Liebowitz): Debating the Moral Status of Intellectual Property: Part I” (August 16, 2024)

1. The Overwhelming Empirical Case Against Patent and Copyright; “Legal Scholars: Thumbs Down on Patent and Copyright”;  Intellectual Property’s Great Fallacy; Mark Lemley: The Very Basis Of Our Patent System… Is A Myth. [↩]
2. IP Law and “Market Failure”. [↩]
3. Richard Epstein’s Takings Political Theory versus Epstein’s Intellectual Property Views; Richard Epstein’s Takings Theory of the State; Email to Richard Epstein: Tension Between Takings Framework and IP Views.  [↩]
4. “Intellectual Property Advocates Hate Competition”. [↩]
5. As Justinian himself said, “Justice is the constant and perpetual wish to render every one his due.… The maxims of law are these: to live honestly, to hurt no one, to give every one his due.” Thomas, ed. (1975, Book 1, Title 1). See also The Universal Principles of Liberty; The Fundamental Principles of Justice; The Fundamental Principles of Justice. [↩]
6.  Intellectual Property Rights as Negative Servitudes. [↩]
7. “Justice is the constant and perpetual wish to render every one his due.… The maxims of law are these: to live honestly, to hurt no one, to give every one his due.” Thomas, ed. (1975, Book 1, Title 1).  [↩]
8. On the term “conflictable,” see Kinsella, “On Conflictability and Conflictable Resources,” StephanKinsella.com (Jan. 31, 2022); also “Against Intellectual Property After Twenty Years: Looking Back and Looking Forward” (ch. 15), at n.29; “What Libertarianism Is” (ch. 2), Appendix I. [↩]
9. Hoppe, A Theory of Socialism and Capitalism, p. 23. [↩]
10. Hoppe elaborates on these themes in chaps. 1, 2, and 7 of A Theory of Socialism and Capitalism. [↩]
11. KOL483 | The Economics and Ethics of Intellectual Property, Loyola University—New Orleans; The Universal Principles of Liberty; On Property Rights in Superabundant Bananas and Property Rights as Normative Support for Possession.; KOL484 | Praxeology, Property Rights & Bitcoin: Bitcoin Infinity Show #192, with Knut Svanholm; KOL458 | Patent and Copyright versus Innovation, Competition, and Property Rights (APEE Guatemala 2025). [↩]
12.  On Property Rights in Superabundant Bananas and Property Rights as Normative Support for Possession. [↩]
13. Libertarian and Lockean Creationism: Creation As a Source of Wealth, not Property Rights; Hayek’s “Fund of Experience”; the Distinction Between Scarce Means and Knowledge as Guides to Action. [↩]
14.  The Overwhelming Empirical Case Against Patent and Copyright; “Legal Scholars: Thumbs Down on Patent and Copyright”; Intellectual Property’s Great Fallacy; Mark Lemley: The Very Basis Of Our Patent System… Is A Myth; IP Law and “Market Failure”.  [↩]
15. “Intellectual Property Advocates Hate Competition”.  [↩]
16.  Hardy Bouillon, A Note on Intellectual Property and Externalities. [↩]
17.  Shughart’s Defense of IP; Independent Institute on the “Benefits” of Intellectual Property Protection. [↩]