Common Misconceptions about Plagiarism and Patents: A Call for an Independent Inventor Defense

by Stephan Kinsella on December 10, 2010

From Mises Blog, Nov. 2009:

Common Misconceptions about Plagiarism and Patents: A Call for an Independent Inventor Defense

November 21, 2009 by Stephan Kinsella

Defenders of patents commonly say they are against innovators’ ideas being “stolen” or “plagiarized.” This implies that patents simply permit an innovator to sue those who copy his idea. This position betrays either disingenuity or ignorance about patent law. Let me explain.

Under copyright law, someone who independently creates an original work similar to another author’s original work is not liable for copyright infringement, since the independent creation is not a reproduction of the other author’s work. Thus, for example, a copyright defendant can try to show he never had access to the other’s work, as a defense. The reason for this is that the fundamental copyright is, well, a right to copy one’s original creative work. By the nature of creative works that are subject to copyright, it is very unlikely someone would independently create the same novel, say, or painting, as another author. (And if copyright only protected literal copying, it would be much less a problem; but unfortunately it protects a bundle of rights including also the right to make “derivative works“.) But, in the rare case where author 2 independently creates a work very similar to that of author 1, it is not an infringement of author 1?s copyright, since author 2 did not copy anything.

Patent law is different. Very different. Most defenders of IP do not seem to be aware of this difference–one reason they should not be opining in favor of legal regimes they know little about. When patent defenders say that patent abolitionists are in favor of plagiarism and idea theft, they imply that patent law is like copyright law–that it simply prevents people from copying others’ ideas.

Not so. To prove copyright infringement you have to show an actual copying of the work. But to prove patent infringement, the patentee need only prove that the accused infringer makes, uses, sells, or offers to sell, or imports the patented invention–that is, a device or method that is described in at least one of the “claims” of the patent. It doesn’t matter if the infringer invented it independently. It doesn’t even matter if the infringer invented it before the patentee. Got that? Someone who previously invented the same thing and is using the idea in secret can actually be liable for infringing the patent granted to the second inventor. If a later person independently invents the same idea that was previously patented by another, this is also no defense. Prior use or independent invention are not a defense.

Obviously, it should be. [continue reading…]

{ 0 comments }

Spiers: Why no Intellectual Property Rights–China and Business

by Stephan Kinsella on December 10, 2010

Mises blog post. See archived comments below.

This is a good post by John Wiley Spiers about why he thinks intellectual property rights (IPR) are not needed for business to succeed.

Why No IPR

At 22 in 1977 I de-trained at Lo Wu to walk, as required, from Hong Kong territory into Red China to alight a Communist train for business in Canton. From day into night, from Hong Kong to Maoist China. How could cousins, on each side of the border, end up as those with no resources (Hong Kong side) wealthier than their colonial masters, but the communist side with limitless resources, were dirt poor? It took a while to find out, but it was merely ideas, and the most advance explication of the ideas was the Austrian school. Thirty years later I was in Auburn for the week long “university,” hearing what any Cantonese businessman would tell you was just so. It is not lawlessness that explains Chinese uninterest in “intellectual property rights,” it is common sense.

We all know in natural law property rights form when labor is mixed with material, whether land or tools, each according to his abilities. Private property may yield an artichoke or a lawnmower for sale. But a product is the result of ideas mixed with ideas: my own predilections, customers’ ideas and designers’ input. Material, whether land or tools, are limited to one person at a time, given physical limitations. Ideas, like candle light, can be used at once by all within sight, and are endlessly replicable at no cost to the source. In a neat trick, IPR mocks natural law, but is grounded in positive law. Free candle light defies monopoly, hence the pretense of “rights” must be backed up with violence.

How does a free market work? A premise is small businesses are innovators and large businesses are conservators (following Drucker); small introduces innovation, subsequent iterations routinize and commoditize, and eventually conservators (big biz) “steal” the idea, apply the economies of scale (manufacturing, logistics, finance) to the item, and make material goods and services available to the widest possible demographics. Innovators bring out (relatively) few, poor, expensive, and slow… but desirable by enough people to launch a going concern… conservators apply economies’ of scale and make the innovators’ product more better cheaper faster. The free market at once introduces what is needed and then conservator gets the price down to where everyone has access to material goods and services, a symbiotic relationship between the innovator and conservator. See the cell phone, 1980-2010.

In the measure a market is deregulated, the relative freedom produces the benefit. Recall Jimmy Carter deregulating telephony, beer, transportation and normalizing trade with China.

This process generates division of labor, a real source of well being (following Dr. North, contra arch-anarchist Prince Kropotkin.)

In practice those who thrive in small business have not the slightest interest in IPR. If someone “knocks off” my design, necessarily they are using 2nd rate factories, selling to 2nd rate customers… literally none of my business. My first rate customers are not interested in 2nd rate product. I find 2nd rate customers not worth serving. IPR solves a problem that does not exist, in relation to shoddy knock-offs.

Along these lines, when a conservator makes an excellent knock-off of my idea, and lowers the price through superior economies of scale, here again someone is using their factories, capital, etc, to reach customers I never could. Where is the theft? Where is the violation of my rights? This is the flip side of Rothbard’s argument regarding who has the right to control my use of my photocopy machine? What right do I have to complain of Big, Inc using their resources to reach customers I could not?

Marketing is the key to business, not control. In essence, my relationship, is built on the degree to which I listen (oboedire) or obey, my customers. That is marketing, that is what makes or breaks me. My customers judge me and then tell me how I might best serve them. I redesign accordingly, if I want a raise.

Something left out of IPR discussion is we innovators are constantly dropping items in favor of more profitable new items. If I cannot increase sales by improving an item further, or someone has made my product irrelevant with a superior alternative, then I am on to something new, again in deference to customer feedback. It is all about the customer.

Now, say my product gets to the point, after years of profitable iterations on my part, a conservator decides to “steal” my idea. This is not done lightly. The conservator has done the multimillion dollar MIT-expert statistics phd market study necessary to warrant knocking off my product. If it pencils out, Big, Inc knocks me off, lowering the cost, and making my product available to everyone. But Big, Inc runs a risk. Having carefully proved the obvious, that is I have a viable mass market item, I can simply do an IPO, raise the money to be the conservator, and become my conservator’s competitor. See Apple IPO 1980, vs IBM (and everyone else).

After introduction, but before IPO (or not, the vast majority of innovators have not the slightest interest in becoming bigger than a few million per year in sales, life is too short, family is too important to spend it at the office) it is not uncommon for my peers around the world to see my product in the factory overseas. For example a German may desire to try out my USA-proven item in the German market. By prior agreement with the factory, the German will be charged a slight premium, which is paid to me by the factory, deposited locally in my account. I have bank accounts in Canada and Hong Kong for this purpose. In this way, I am compensated for my designs selling worldwide. It is not intellectual property rights, it’s just business. Rockefeller did it with the railroads, I do it with my USA based critical suppliers as well to assure they do not serve my competitors without me being pleased.

IPR poses a false dilemma and solves solves a problem that does not exist. Business challenges, in practice, are addressed in contract, not intellectual property rights. IPR inhibits justice in the distribution of goods and services. It keeps the pie small, leaves ameliorants of wants and needs unavailable or nonexistent. The world would be better off without IPR, but the entrepreneur has an advantage in the marketplace knowing IPR is spurious. Business objectives come faster and easier ignoring IPR.

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Posted in intellectual property by John Wiley Spiers

Archived comments:

{ 44 comments… read them below or add one }

mrlazare December 13, 2010 at 8:37 pm

I’m sorry, I literally could not get past the first few paragraphs because of the mediocre (at best) English. Any chance at a cleanup job?

Aaron December 14, 2010 at 4:39 am

The following seemed counter intuitive to me,

“If someone “knocks off” my design, necessarily they are using 2nd rate factories, selling to 2nd rate customers… literally none of my business. My first rate customers are not interested in 2nd rate product. I find 2nd rate customers not worth serving. IPR solves a problem that does not exist, in relation to shoddy knock-offs.”

If I take the example of Burberry, a high priced fashion label with a very distinctive tartan design icon. It was as easily replicable as it was distinctive and cheap knock-offs became commonplace, particularly amongs consumers that Burberry’s high priced products did not serve. The tartan design became associated in its home market in Britain with the underclass, football hooligans and welfare queens. This reputational loss damaged sales to those first rate customers who had been paying high prices for up-market Burberry products.

guard December 14, 2010 at 5:34 am

Interesting.
This is a good example of one evil fostering another. Presumably neither the utility nor the beauty of a product is affected by the design icon. This leaves only the marketability of elitist pretensions, which is all the intellectual property law provides for here. The snob is able to feel superior because of a design icon he and no one else, can get. It’s clear this was the case with Burberry because once it became available to everyone, it lost its value as an elitist symbol.

This dovetails well with advertising. The moral purpose of advertising is to inform the public of the availability of a product and its suitability for some particular use.
As currently practiced, the purpose of advertising is to manipulate the public through deception. One deception for example is that I need “exclusive product x” in order to be happy, superior, etc.

IPR may support an entire web of immoral activity such as this.

Silas Barta December 14, 2010 at 3:52 pm: But those who oppose IP in fashion and fashion trademarks tout it as a _good thing_ that the absence of IP forces people to go through the new-fashion treadmill a lot more quickly, spending a lot more money to signal the same level of wealth.

Which, incidentally, is just what you accused advertisers of imposing upon people. So it looks like you have it reversed — it’s the absence of IP, if anything, that forces people into the kind of wasteful consumption you hate.

REPLY

Wildberry December 14, 2010 at 2:10 pm

With all due respect, if this is a good argument against IP, I would hate to see a bad one.

Stephan Kinsella December 14, 2010 at 2:23 pm

the burden is on those who say we need a criminal state to enact positivist artificial law that creates huge zombie bureaucracies to grant ad hoc monopoly privileges to favored supplicants in the name of free enterprise, innovation, private property, and competititon.

Silas Barta December 14, 2010 at 2:42 pm

Then why do you support the statist private property system?

Stephan Kinsella December 14, 2010 at 3:12 pm

I don’t, Silas. I’m a principled anarchist, rather than a sellout, scientistic, amateur, engineer-gadfly confused utilitarian, like… some.

Silas Barta December 14, 2010 at 3:49 pm: Just trying to impress upon you how your comments appear to me…

REPLY

Beefcake the Mighty December 14, 2010 at 3:23 pm

Hey Silas, if I steal some factors of production and use them to create something, instantiate an idea, whatever you want to call it, am I then justified in preventing someone else from copying my idea?

Wildberry December 15, 2010 at 12:56 pm

Beefcake,

Far be it for me to interfer in the conversation between you and Silas, but I thought I might take a stab at this just to keep the conversation going. In return, I have a question for you. Fair?

If you steal some factors of production, and us them to create something that would be copyrightable (and you understand “ideas” are not sufficient to meet this burden), then you would be justified in preventing someone from copying your copyrighted property, within the meannig of current copyright laws.

If you call that copyrightable property “ideas” you are misstating the definition of what is copyrightable.

The fact that you stole something, whether they be factors of production used to produce something legal, or something illegal, you woud have incurred liability from the rightful owners of those factors. Your liability to them would have nothing whatsoever to do wtih the copyrighted material.

OK, my turn.

If I require your production to serve only an external economy, meaning that your output does not equal your income, would it be fair to call that slavery?

If I couldn’t require you to do this, meaning you could “sesceed” from such an arrangement, would it be fair to call that “voluntary slavery”?

Would a rational human choose slavery over other alternatives?

Beefcake the Mighty December 15, 2010 at 2:49 pm: “Fair?”

Of course.

“If you steal some factors of production, and us them to create something that would be copyrightable (and you understand “ideas” are not sufficient to meet this burden), then you would be justified in preventing someone from copying your
copyrighted property, within the meannig of current copyright laws.”

I don’t know if this is correct or not; perhaps Kinsella can comment. If true, it’s another good argument against such laws. However, my point wasn’t really how the current law operates. Let me rephrase the question to you: what rights, if any, do I retain if I perform actions with illegitemately acquired means?

“If I require your production to serve only an external economy, meaning that your output does not equal your income, would it be fair to call that slavery?”

I’m sorry, I don’t know where you’re going with this.
Wildberry December 15, 2010 at 3:12 pm: Beefcake,

“If true, it’s another good argument against such laws.”

I know you believe this, but I don’t understand the connection you are trying to make.

If I steal a bat, and then find myself in a position to use it to defend myself, is my defense negated because the bat I used was stolen?

“I’m sorry, I don’t know where you’re going with this.”

This is probably true, but I’m just asking. I’m not sure it needs a context. If it does, the the context is within the meaning of “Austrian Economic Theory” which defines (at least according to Mises) “external economies”, “output” and “income”.

In general, is it a reasonable definition?
Beefcake the Mighty December 15, 2010 at 3:53 pm: “If I steal a bat, and then find myself in a position to use it to defend myself, is my defense negated because the bat I used was stolen?”

OK, good point. Let me ask you then: is this really what is happening if I try to use force to prevent someone from copying a creation I make with stolen goods?
Stephan Kinsella December 15, 2010 at 4:12 pm: “OK, good point. Let me ask you then: is this really what is happening if I try to use force to prevent someone from copying a creation I make with stolen goods?”

I deal with this in detail in AIP in the section about Cooter and the oil information.

Let’s take a simple example. Let’s suppose Galt, a famous actor, is gay, but no one knows it. And he wants it kept private. Now, Balph sneaks into Galt’s house and steals his computer, and later he discovers all the gay porn on Galt’s computer. So he sends it to Wikileaks and soon everyone knows Galt is gay. Soon the movie parts for hetero leading man that he was getting dries up. He loses tens of millions as his price plummets.

Now, Balph committed a crime–trespass against private property–and the damages should include this. But take the movie producer who, knowing that Galt is now a known gay, decides not to cast him as a manly hetero guy. Without this “illegally obtained” evidence, he would have hired Galt. But now he doesn’t. He bases his actions on information he has, that is the result of a crime.

Does he have a right to act on this information, or not? If you say yes, then basically Silas’s case explodes, because this is what it amounts to.
Wildberry December 15, 2010 at 5:56 pm: Beefcake,

“is this really what is happening if I try to use force to prevent someone from copying a creation I make with stolen goods?”

Well, I’m not sure what you mean by “copying a creation”. In order to use force against someone (i.e. enforcement), they have to violate your rights, presumably you are asking about property rights.

To have property rights violated, you have to have them first. If I have them, for example by way of copyright law, then that law gives the holder of the property the right to enforce against infringement.

This is similar to real property laws. In fact, copyright laws enjoy the advantage of the “fixation” requirement, because then the copyrighted material can be treated just like tangible property, and can depend on the body of laws in property and contracts.

However, not all property is equally susceptible to copying. (i.e. can be easily/cheaply replicated). For example, land cannot be copied, and therefore copyrights are not relevant, so it is not surprising that replication rights are not protected under the law.

Other things are easily copied, but are also not protected under the law. This seems to be widely misunderstood in many discussions here, but ideas themselves are never protected by copyright law. You cannot protect the “idea” you have for a book. Even if you copy the ideas in my book and write your book around them, unless it was so similar that copying was the only reasonable explanation for your book, copyright does not protect them, and you are free to copy them.

Even if it is copyrighted material, you still have certain “fair uses” that are not protected. You can lift a whole chapter from my book, copy them, distribute them to your class, and that would probably be a fair use.

So, yes, I think it makes little difference if the computer you used to write a book, for example, was stolen. You have to deal with that under computer theft. The copyright is a completely different issue.
Beefcake the Mighty December 15, 2010 at 6:21 pm: “Does he have a right to act on this information, or not? If you say yes, then basically Silas’s case explodes, because this is what it amounts to.”

Right, which is why I suspect Silas won’t respond. If he says I can prevent someone from copying a pattern I make with stolen goods, then he’s saying aggression should be rewarded. However, if he says I cannot, then he is effectively acknowledging that before a creator can legitimately use force against “unauthorized” copiers, HIS (the creator’s) own acquisition and use of factors must be first established as legitimate. In other words, he must first put forth a theory of property rights, something he has gone to great lengths to avoid throughout.
Wildberry December 15, 2010 at 8:24 pm: Beefcake and Stephan,

I have asked politely, and I’ve played along. You criticized Silas for not responding to your questions, so I’m just asking again, as I’ve now asked you both this same question.

“If I require your production to serve only an external economy, meaning that your output does not equal your income, would it be fair to call that “slavery”?

“If I couldn’t require you to do this, meaning you could “secede” from such an arrangement, would it be fair to call that “voluntary slavery”?

“Would a rational human choose slavery over other alternatives?”

Regards,
Beefcake the Mighty December 15, 2010 at 8:40 pm: Wildberry,

“If I require your production to serve only an external economy, meaning that your output does not equal your income, would it be fair to call that “slavery”?

I’m sorry, I still don’t understand what you mean here. What is an “external” economy? What do you mean by “requiring” my production to “serve” it?
Stephan Kinsella December 15, 2010 at 9:41 pm: I’m with Beefcake–I don’t understnad Wildberry’s questions about “external” economy.
Wildberry December 15, 2010 at 10:58 pm: Beefcake and Stephan,

Allow me to explain.

In one of my screeds, I had earlier(as have others) referred to Mises, HA p. 658, where he said this:

“It is beyond the scope of catallactics to enter into an examination of the arguments brought forward for and against the institution of copyrights and patents. It has merely to stress the point that this is a problem of delimitation of property rights and that with the abolition of patents and copyrights authors and inventors would for the most part be producers of external economies.”

I said this, here:
http://blog.mises.org/14914/intellectual-properganda/comment-page-1/#comment-744664

I agree that an act of homesteading, as conceptualized by Rothbard, would establish “better title” than anyone else. However, I have also demonstrated that title can be established by contract, and 100% coverage of all parties is equivalent to a law. It does not require royal decree. If homesteading is not present, property rights can still exist, and the issue remains one of “better title”.

Therefore, the ultimate challenge is to argue why IP should be subjected to a different property ethics than any other property. I think this is impossible, and in fact to do so by any means would be to create an ethics which endorses production for external markets. Without appeal to morality or utility, I have simply stated that production for external markets is in fact, slavery.

Therefore, as ironic as this may sound, IP opponents find themselves in the curious position of advocating slavery.”

Then Stephan said this here:
http://blog.mises.org/14914/intellectual-properganda/comment-page-1/#comment-744696

“Well, that’s better than pedophilia, I guess. (See Absurd Arguments for IP.)”

So I’m simply asking what you call a property ethics that requires that a roducer transfer his output to an external market?

Output equals income is fundamental to the concept of economic calculation, right?
Beefcake the Mighty December 16, 2010 at 11:22 am: Wildberry:

OK, so you’re referring to externalities and using Mises’ somewhat antiquated terminology. Fine.

“Without appeal to morality or utility, I have simply stated that production for external markets is in fact, slavery.”

As far as I can tell, in the current context what you mean by this is that producers of goods which require substantial intellectual input create benefits that are widely reaped and that the producer cannot be compensated for unless there are institutions like IP law. Furthermore you find something morally objectionable about this state of affairs (otherwise why use loaded terms like “slavery”?). Apologies if I’ve misunderstood, but my response is, so what? Many actions have positive spill-over effects, it doesn’t follow that the recipeients of such spill-over have violated any property right of the spiller.

“Output equals income is fundamental to the concept of economic calculation, right?”

Not really, no.
Wildberry December 16, 2010 at 1:28 pm: Beefcake,
Thanks for the reply. Perhaps we can get back on track.

“OK, so you’re referring to externalities and using Mises’ somewhat antiquated terminology. Fine.”

Antiquated or not, (I find them surprisingly useful and quite relevant to the contemporary world) I am making a simple point about the relationship between property rights, and economic calculation.

“As far as I can tell, in the current context what you mean by this is that producers of goods which require substantial intellectual input create benefits that are widely reaped and that the producer cannot be compensated for unless there are institutions like IP law.”

Not at all. You are referring to a secondary effect which Mises also discusses. I am referring to a direct analysis of human action, and the rational process that precedes an act. This involves an economic calculation that weighs the subjective value of a potential transaction which is, in the final analysis, a cost/benefit analysis.

It is relevant to understand what factors are taken into account during that calculation, especially with regard to external markets (and costs).

If I own a factory and the air pollution I create is not attribute back to me, then that cost is externalized, and I treat it as such in my economic calculation of cost/benefit of running a factory. This is bad (i.e. contrary to free market operations), because it does not attribute to me the real costs of running that factory. This makes my profits greater at someone else’s expense.

It also works in the other direction. If I own a factory and all of the costs are internalized (meaning there is no externality I can attribute them to), and my output is not attributable to me (that is, it is attributed to an externality, i.e. external market; someone benefits other than me), then I am producing for an external market. My output does not equal my income. This fact must be integrated into my economic calculation of cost/benefit.

Mises is simply saying that these are economic factors, and affects the economic calculations, and as such have economic effects. This is reflected in the praxeology of examining human action, and the catallactics of examining economic exchange.

In this analysis, he makes a direct reference to how this affects the IP problem. That is a very interesting section as it relates to this discussion of IP, property rights, and the catallactics in looking at the impact with and without IP laws which assign property rights to protected works.

“Furthermore you find something morally objectionable about this state of affairs (otherwise why use loaded terms like “slavery”?).

If you are calling it a cheap trick, I agree, I am guilty.

I was reading a section of Touchstone discussing negative and positive rights. She refers to external markets by another term; “unilateral transfer”. When a producer puts his “output” into the market, without “income” coming back, (like a charitable donation), he is making a unilateral transfer.

She made the comment that it is a practical definition of slavery. I borrowed the argument, and applied it to the Mises terminology of producing for external markets. I used the term for its shock value.

It worked, I guess, because Kinsella jumped in right away and attempted to ridicule me without even reading anything that led up to that statement, by adding me to a list of absurd IP arguments. Oh well, live and learn.

“Many actions have positive spill-over effects, it doesn’t follow that the recipeients of such spill-over have violated any property right of the spiller.”

I agree. It is possible that an output, for which I am compensated in the market in a normal way, also has external benefits to those who do not compensate me. That is part of the cost/benefit analysis. Maybe you can think of this as “leakage”, in the sense that if everyone paid somebody for the benefits they received, there would be 100% accounting for everything.

But in reality, if I write a great book that changes the world for the better somehow, I don’t own a piece of this general improvement, even though there is clearly a benefit and it can be somehow attributed to my book.

To be clear, I am not saying that IP laws should seek to capture any and all “leakage”. I am just saying that if I had no market mechanism to be compensated for my output, (i.e. despite the fact that I wrote a book that changed the world, anyone could freely copy it from the first copy sold, thus externalizing the income coming back to me, the author) it would have an effect on the economic calculations of all concerned.

The way we have traditionally handled this problem is by declaring a property right in that book. Once that step is taken, it is handled in the market consistently with how other property is handled, i.e. torts, property law and contracts.

“Not really, no.”

I am a baker, I produce bread. That is my output. Eating the bread is my income. If I eat it all, there is not profit. If I make more than I eat, I may sell it. If I sell it, to who should the income of my output be attributed?

If I contemplate a business plan whereby I will be able to produce 100 loaves of bread, but there is no way that I can enforce my property rights in that output (just go with me here), how would I conclude that baking bread is going to improve my satisfaction beyond what I can eat?

This is the fundamental purpose of property rights. This is why they exist. If they existed for the wrong reason, even, they would still be necessary for a free market in bread to operate. Mises also makes this point clear in his section on property.

If I went ahead and produced bread anyway, for whatever reason, it would be for the service of an external market, it would be a unilateral transfer, it would be charity.

If I was forced to make bread for an external market, I would be, for all practical purposes, a slave to an external market.

If I developed an ethics which declared that bakers must be willing to bake bread for external markets, I would be advocating slavery.

That word has strong emotional content. Why? Nobody in their right mind would agree to be a slave.

Does this reasoning seem absurd to you?
Beefcake the Mighty December 16, 2010 at 2:02 pm: Wildberry,

Sure, a particular allocation of property rights will affect the market for things delimited by those rights, and thus any profit-and-loss calculations to evaluate actions with those things. I didn’t think that was really the issue here?

“If I was forced to make bread for an external market, I would be, for all practical purposes, a slave to an external market.

If I developed an ethics which declared that bakers must be willing to bake bread for external markets, I would be advocating slavery.”

I’m sorry, but this is hyperbole and pretty sloppy. Who’s talking about “forcing” anyone to do anything? How is that relevant? At any rate, why don’t you simply say, “if the baker is forced to make bread, he is a slave?” That would be an accurate statement (if still irrelevant). Why do you want to keep introducing externalities? I suspect it’s because you ultimately want to appeal to a utilitarian defense of IP but you’re aware of the problems there. Hence the introduction of market “inefficiencies” that can be “corrected” with suitable legislation, etc.

Bottom line is this: let’s say the system of ethics under consideration says that a producer has no right to reap all of the benefits that his product brings to the world. There’s only one question that has to be answered: is that system legitimate, or not? If it is, then these questions about external economies are of no relevance.
Wildberry December 16, 2010 at 3:32 pm: Beefcake,
Thank you.

“I didn’t think that was really the issue here?”

The IP debate has been characterized by a discussion of whether or not property rights in IP is justifiable, based on the Rothbardian/Kensillian notion of homesteading as the only legitimate means for establishing legitimate ownership.

Second, there has been a general distinction made regarding the scarcity of ideas, and how the properties of replication affect scarcity. This argument presumes notions concerning the relationship of ideas and IP law which does not exits. Ideas are specifically excluded from protection.

So, the means of establishing property rights and the issue of how IP differs from other property is relevant. If it is relevant, it should also be relevant economically. That is what we have been talking about; how the delineation of property rights impacts the economic calculation, relative to allocating cost/income to internal/external markets.

“I’m sorry, but this is hyperbole and pretty sloppy.”

Perhaps, but I’m just trying to explore this with you. Bear with me a minute.

“Who’s talking about “forcing” anyone to do anything? How is that relevant?”

I am not suggesting that anyone is actually going to force anyone to do anything. I’m just trying to illustrate the point that if I tried to force you, you would recognize it as coercion of a particular kind.

The real issue I am raising is what would be the impact on your own calculations if I tried? If you could choose, you would not choose this course of action, one that leads to coercive production.

“At any rate, why don’t you simply say, “if the baker is forced to make bread, he is a slave?”

OK, that works for me.

“Why do you want to keep introducing externalities? I suspect it’s because you ultimately want to appeal to a utilitarian defense of IP but you’re aware of the problems there.”

You got me. I am testing whether the objection is supportable, in the way I am making it. It is easy to say, “I am making a utilitarian argument”, and pigeonhole me in the “absurd” category.

However, I am asking, what is absurd about an argument that shows that, given the choice, a person would not use his means of production to produce for an external market. That is the result of a failure (refusal, rejection) of recognizing property rights in IP. This is precisely what Mises said as well. His argument makes sense to me.

I am open to understanding where I’m wrong, but I don’t see it. That is why I value this discussion, and for your interest I am grateful.

“Hence the introduction of market “inefficiencies” that can be “corrected” with suitable legislation, etc.”

Please observe that I am saying the exact opposite. Denying property rights in what by any other measure would be treated as property, intervenes in the free operation of the market by creating an externality for the producer; one which doesn’t exist in any other domain of property. This is reflected by the position for say copyrighted material, by the nature of IP (involving somehow an argument that “ideas” are involved), it cannot be property.

I am asking you (or anyone) to make an argument showing me, based on the point of departure I am offering, why not?

I am not departing from a position which assumes Rothbard’s ethics of property. I am not saying that “society requires it”. I am approaching the problem by looking at ALL property based on Roth bard’s ethics of property, and finding that it doesn’t even apply to real property, (meaning land). It is not a workable ethics for how property rights are established. Furthermore, how they are established is not nearly as important as establishing them such that the free market can operate.

“a producer has no right to reap all of the benefits that his product brings to the world.”

As I said before, I agree with this statement. Even if I didn’t, I have no idea how a system of ethics could possibly account for all benefits to everyone. That is unrealistic and unnecessary.

In law, there is a concept of “proximate causation”, which I discussed somewhere on this blog. It is the traditional way that the law deals with this problem. It is assumed that any act has causal links that stretch infinitely into the past and future. The question that is asked is, what specific acts were proximate (near and closely related to) to injury? Something like this is what I’m talking about.

To continue the baker analogy, if I sell bread, the children may be better nourished, learn better, and live longer. It would be ridiculous for me to claim a percentage of every person’s income that ate my bread. It is enough to establish that I have property rights in the bread up until the moment that I receive payment. From then on, the benefits accrue to the person who paid.

But this analogy cannot be extended to IP without further analysis. The ease and cost of replication becomes a factor in how the property rights are designed and how they operate. Land cannot be replicated. Cars can, but it is very expensive. Books are cheap to copy, especially today. Ideas are free. An ethics of property rights must comprehend this factors.

The question I am asking is this: why should the fundamental nature of property be adjusted according to the ease by which property can be copied? It seems to me that the attributes of property (definition, enforcement) must be adjusted where such replication costs are an issue. Copyrights and patents are such a case. Land is not. All of these categories are still property by all meanings of the concept.

Tucker and Kinsella used the “magic bagel” analogy to make their case about scarcity and property for things that can be easily copied. This is wrong.

“is that system legitimate, or not?”

Yes, that is the question, but I am asking it backwards. I am asking, what is the justification for excluding certain tangible goods from the category of property, given that such exclusion creates external markets, which undermines the normal functioning of a free market?

This has nothing to do with what the “cure” is, legislation or otherwise. I have looked at this problem from a variety of angles, and no matter where I start, I keep ending up at the same conclusion; there is no rational basis for making an exception to IP relative to property rights.
Stephan Kinsella December 17, 2010 at 10:59 am: BTW the gay producer hypo–similar to one I gave before here:

http://blog.mises.org/12565/ip-means-you-must-buy-that-iphone/

According to IP advocates, Apple owned the lost iPhone and also its IP–the designs, the trade secrets, the very information that a new iPhone was coming out. If you take IP seriously, then the Gizmodo employees had no right to the “knowledge” they gleaned from the iPhone prototype (we can safely assume here that they were aware it was Apple’s property and that they were dissecting and using this device without Apple’s consent–a form of trespass). Gizmodo had no “title” to these ideas. And, as Rothbard argues in the case of the mousetrap, we masses who have heard about this incident have no title to these ideas either–after all, we got the ideas from Gizmodo, but it’s a well known legal maxim, as Rothbard relies on, that you cannot receive greater title than the person you receive the thing from. Thus we have no title to these ideas either. That means we have no right to use this information. If I was going to buy an iPhone 3GS next week, I muststill go through with it. If I don’t, I am committing trespass against Apple by using their property (the information about the existence of the new iPhone prototype) without Apple’s consent. No, Apple is entitled to that sale. As Jeff Tucker remarked to me, in discussing this, I’d be committing “insider refraining from buying” if I acted on information I don’t own….

…But no worries that I’ll buy the new iPhone and feel bad about my purchase–even doing this would be using the information, and I have no right to do this. So I must be glad about my new purchase. To fail to do so violates Apple’s proprietary rights in patterns and information.
Wildberry December 17, 2010 at 4:28 pm: Stephan,

For an IP guy, you sure raise a lot of IP questions that don’t seem to wash. I’ll defer to your expertise, but I don’t get it.

Isn’t this where the phone was left in a restaurant and it got in the hands of Gizmod (they actually paid $5,000 for “abandoned” property, right?) and they released information and Apple took action against them?

This would be a trade secret action, right? The issue would turn on improper means. I’m sure Gizmod argued proper means, and it seems they would have a good case. They published information. From that point anyone who acquired the information would have done so by proper means. Also, since you can’t put the genie back in the bottle, the damage resulting from publication would be on Gizmod, if they lost their case.

I can see no implications for the general public. It would be hard to imagine how such a finding by a judge would not be an abuse of discretion. There would have to be a court order against “all potential iPhone consumers now and forever” It would be impossible to issue a court order against parties that were not afforded due process, right? This did not happen, did it?

Plus, the order would have to be based on a legal finding against the parties so ordered. It would have to be a finding that supported a legal conclusion that “a class” of consumers violated trade secret laws. That didn’t happen, right?

In any case, let’s say he did. How could that possibly be enforced? Apple may be able to give some circumstantial evidence to show abruptly falling sales, but that evidence would go to damages against Gizmod, not individual consumers. Such an order, if it existed, would be meaningless in actuality. Unenforceable court orders are rarely (ever?) issued.

So, did the judge order any consumers to do as you suggest? Could he? Would he? I fail to see how this argues against trade secret laws. They don’t and didn’t operate as you suggested, so what is the value of using this example to show how the logic of IP works?

The article does imply that the Feds overstepped their constitutional search and seizure powers, but there is the problem with the supremacy of federal laws v. state shield laws.

Finally, you argue in your cited article that this is an issue of contract, when is in fact not. Of course you know that third parties not in privity are not bound by a contact between principals. Therefore “title” cannot pass to them under any circumstances. How could it?

How can parties not privy to a contract be swept up into terms of a contract? Only if the contract terms become law. Laws, in practical terms, are duties which automatically apply to all “qualified” actors uniformly and inclusively. The operate within a “jurisdiction”. (I know you know all this, but for clarity sake…)

While it is true that IP laws grant property rights in intangible goods (what you imprecisely call “ideas”), they are only enforceable as to the tangible goods into which they are “affixed”. The fair use doctrine permits certain uses, and prohibits certain others, especially copying and commercial publication or use.

So for a practical matter, if someone acquired a trade secret through proper means, including reverse engineering, there is no protection for the trade secret rights holder. If it was a patent, it cannot be acquired in this way, as it is an absolute, limited monopoly. So a judge would probably issue an injunction against any further commercial use.

Parties without malicious intent would probably just have to surrender something, or desist from further commercial use of the patented work on the theory that they don’t own it.

How would they? Homesteading theory? So what’s the problem, again?
You lost me.
Stephan Kinsella December 17, 2010 at 6:56 pm: Wildberry:

For an IP guy, you sure raise a lot of IP questions that don’t seem to wash. I’ll defer to your expertise, but I don’t get it.

I don’t konw what you mean by ‘wash.” Be clear. This squishy type of talk is typical of IP advocates. I am NOT and never have argued by authority. But I do know what the law IS. In terms of IP policy I have no more authority than anyone else, and have never claimed to. In fact what I despise is IP attorneys promoting IP and acting as if htey have a special inside knowledge about why it should exist; they are completely dishonest of course, and full of it. They know NOTHING more than any ordinary person, and in fact are biased to favor it. If anything one’s pro-IP views should be discounted the more he knows about IP. That said, to advocate IP you better know what the hell you are advocating, which most IP advocates do not.

Isn’t this where the phone was left in a restaurant and it got in the hands of Gizmod (they actually paid $5,000 for “abandoned” property, right?) and they released information and Apple took action against them?

This would be a trade secret action, right? The issue would turn on improper means. I’m sure Gizmod argued proper means, and it seems they would have a good case. They published information. From that point anyone who acquired the information would have done so by proper means.

Wrong. The first person may have. NOt those down the chain. Anyway libertarianism is about justice and property rights, not about making sure people acquire information by “proper means” (whatever that means).

Also, since you can’t put the genie back in the bottle, the damage resulting from publication would be on Gizmod, if they lost their case.

Same, then, with patents: if third parties have the information, they can use it.

If the information was released by the inventor (say, by selling a product in which inventive designs are obvious) then it’s his “fault.” If an employee reveals it, it’s his fault, as in the trade secret case. In both situations the third parties are out of it and should not be enjoined or liable.

I can see no implications for the general public. It would be hard to imagine how such a finding by a judge would not be an abuse of discretion.

Then you are completley ignorant of the implications of the very law you seem to be trying to defend. This is an outrage. Know what you are talking about, or stay out of it until you have learned. Have a bit of humility. Why would you weigh in on a serious political topic in an opinionated way when you admit you are utterly newbish and ignorant? O! this movement of ours!

There would have to be a court order against “all potential iPhone consumers now and forever” It would be impossible to issue a court order against parties that were not afforded due process, right? This did not happen, did it?

HELLOoo! THIS IS WHAT PATENT LAW DOES!!! Do you not get my point??
Wildberry December 21, 2010 at 4:50 pm: Stephan,

Sorry it took me a couple of days to respond.

“I don’t konw what you mean by ‘wash.” Be clear.”

Sometimes your descriptions of how the law operates and my understanding don’t match up; i.e they don’t “wash”.

“This squishy type of talk is typical of IP advocates”

Although perhaps imprecise, in a layperson’s sort of way, it seems inconsistent to claim experience and knowledge on the one hand, and to deny any presumption of logic within existing law, on the other. As an attorney, I’m sure it gets tiresome to constantly address the uninformed use of legal terms and concepts, but this is a site involved in the enterprise of education. That is an opportunity, perhaps, for someone as knowledgeable as you to educate the rest of us. Perhaps that is your intention, after all?

Also, it would be more in keeping with the spirit of my postings if you would consider me not so much as an adversary “IP proponent”, but rather as a person advocating a position for the purpose of discussion. I give you and others ample opportunity to contrast your “precise” reasoning for my “squishy talk”. Why not take advantage of that opportunity?

Instead, I somehow get the feeling that you are shouting at me, and others. Any way to ask you to take a slightly more friendly tone?

“That said, to advocate IP you better know what the hell you are advocating, which most IP advocates do not.”

That said, it seems reasonable that we begin our various debates concerning the merits of IP law by first establishing a common, accurate understanding of what it IS, and how it is SUPPOSED to operate as designed. If that understanding is misrepresented by obfuscation, intentional or otherwise, it casts some doubt on the validity of arguments on one side or the other; that is, arguments for or against IP sharpen their knives merely for a straw man.

I get the impression that your zeal against IP might be causing you to take liberty with the explanation of how the law actually operates which in turn is read and comprehended by mostly laypeople who likely have never read the law. They depend upon your explanation, somewhat, as to what the law actually says and does. After all, you are the expert, and people rightfully grant you a certain amount of trust that you will be fair.

That would be, it seems to me, the intellectually honest way to begin a criticism of IP. However, it seems on occasion, if not a consistent mark of your style, that you cast your “opponent” in the most negative light first, by creating impressions of what the law does that are at the least biased and at worse a misrepresentation of the facts, in order to make your “client” look more reasonable; understandable in the courtroom context, but hardly useful in an academic one. It is reason, not advocacy that matters most here, IMHO.

One of the most blatant examples of what I’m talking about is all the effort you and Tucker have put out to create the impression that “Ideas are free, so why should IP create property rights in ideas?” You know quite well that ideas are specifically excluded from copyrights and patents, and very tightly limited in trade secrets, which completely legitimizes the conduct of reverse engineering. To represent otherwise is misleading at best and deceptive misrepresentation at worst.

“Wrong. The first person may have. NOt those down the chain.”

To be precise, you are right. The actual issues are ones of accidental disclosure, notice and continued disclosure. “Improper purpose”, as a term of art, is reserved for conduct that would be illegal or otherwise professionally unethical, and is defined in the Trade Secret section of the California Civil Code under §3426.1.(a) I’m sure Texas has a similar statute, given that the source of the language is the Restatement, and it reads as follows:

“(a) “Improper means” includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means. Reverse engineering or independent derivation alone shall not be considered improper means.”

Since it is a term of art, I guessed you would recognize its use, even if improper and squishy. When responding to you in the future, I will be more legally precise, promise.

Anyway, no doubt the guy who “lost” the phone probably lost some other things too. I presume you mean that the first finder of the phone may not have had notice, but then again he sold it for $5,000. Next, Gizmod paid it, so it would be hard for them to deny notice. Then people read it in the publication. What happens to them under current law? I think the answer is NOTHING, just as would be the case in the absence of IP laws.

“Anyway libertarianism is about justice and property rights, not about making sure people acquire information by “proper means” (whatever that means).”

Oddly, a point that you seem to purposefully overlook, or at least refuse to acknowledge, is that I have never argued against justice or property rights. What could you possibly mean by this comment other than 1) I must think libertarianism is about “proper means” of acquiring information (whatever that means), or 2) I am not qualified to be a libertarian, because I don’t support property rights or justice. Does that seem fair and just representation of what I’ve contributed to these discussions, if you even consider that a contribution of any kind.

“Same, then, with patents: if third parties have the information, they can use it.”

You saw the chance so you took it. Of course I wasn’t commenting on the legitimacy of property rights in IP, I was saying that the existing law has something already worked out to assign liability for injury, presumably to Apple. Findings of liability here, under no result from these facts, would likely reach readers of Gizmod, correct? Yet you implied they would. Wouldn’t they be free to use what they learned to make purchasing decisions under current IP laws, just as they would under a no-IP legal system?

“If the information was released by the inventor (say, by selling a product in which inventive designs are obvious) then it’s his “fault.” If an employee reveals it, it’s his fault, as in the trade secret case. In both situations the third parties are out of it and should not be enjoined or liable.”

Are you saying that the person who found it and Gizmod (not inventor or employees) are excused from any liability? What about notice and continued disclosure? We agree about the readers, they are out if it under all circumstances.

“Then you are completley ignorant of the implications of the very law you seem to be trying to defend. This is an outrage. Know what you are talking about, or stay out of it until you have learned. Have a bit of humility. Why would you weigh in on a serious political topic in an opinionated way when you admit you are utterly newbish and ignorant? O! this movement of ours!”

Well, thank you for pointing it out with such knowledge, clarity, and humility!

Of course there are implications of the existence of trade secret laws IN GENERAL. If they didn’t exist, there would have been no court case. We wouldn’t need to have this discussion. But this conclusion is not fairly advocated from a position of reporting that an outcome was produced from existing law that DID NOT ACTUALLY HAPPEN.

“HELLOoo! THIS IS WHAT PATENT LAW DOES!!! Do you not get my point??”

Is your point that such a lawsuit never should have happened in the first place? Is it that the public would be better served if it didn’t? That sounds like a utilitarian argument that favors the non-inventors over the inventors. Is that your point, inventors require no protection at all, have not rights under any circumstances? If they can’t figure out a way to protect their economic interests in the absence of IP law, too bad? Then yes, I think I get your point.

My point is to ask this question: Is it possible, under any circumstances, giving the existing law a fair reading, that a fair and just result can be obtained? It seems to me that the answer is generally yes. However in some instances, the answer may actually be no. It would be useful to identify those cases.

You make it very difficult to separate the “we have IP because we have the State” argument from those which identify specific outcomes of current law that are specifically unfair or unjust. That is what I’m interested in understanding. That is why I push back; to learn.

Regards, and Merry Christmas.
Stephan Kinsella December 21, 2010 at 11:34 pm: Wildberry:

That said, it seems reasonable that we begin our various debates concerning the merits of IP law by first establishing a common, accurate understanding of what it IS, and how it is SUPPOSED to operate as designed.

I think those who advocate IP or oppose its abolition have the burden of knowing what they are talking about and of having an argument for it.

I get the impression that your zeal against IP might be causing you to take liberty with the explanation of how the law actually operates which in turn is read and comprehended by mostly laypeople who likely have never read the law.

I became anti-IP because I was pro-IP and a libertarian and an IP attorney. Why would I misstate the law? I tried to find a way to justify IP law. To do that I had to know what it was, and try out the various attempts to justify it.

That would be, it seems to me, the intellectually honest way to begin a criticism of IP. However, it seems on occasion, if not a consistent mark of your style, that you cast your “opponent” in the most negative light first, by creating impressions of what the law does that are at the least biased and at worse a misrepresentation of the facts, in order to make your “client” look more reasonable; understandable in the courtroom context, but hardly useful in an academic one. It is reason, not advocacy that matters most here, IMHO.

Libertarians who are unclear about how IP operates should for this reason alone be skeptical of it. It’s a new right invented by state legislation, and no one really understands it; justifications for it are all over the map. Questions are fine but the proper stance for a laymen who do not undersatnd the law and who are confused about whether or if it is jsutified is a questioning humble stance.

One of the most blatant examples of what I’m talking about is all the effort you and Tucker have put out to create the impression that “Ideas are free, so why should IP create property rights in ideas?” You know quite well that ideas are specifically excluded from copyrights and patents,

Nonsense.

What could you possibly mean by this comment other than 1) I must think libertarianism is about “proper means” of acquiring information (whatever that means),

I have no idea what you mean since you are leaving it up to implication.

Wildberry December 15, 2010 at 5:28 pm

Stephan,
“Now, Balph sneaks into Galt’s house and steals his computer, and later he discovers all the gay porn on Galt’s computer.”

As I’m sure you know, counselor, at this point Balph has liability to Galt as to the computer, and as to the use of the information on that computer. It doesn’t really matter whether it is porn or Galt’s bank accounts. If the scenario ended here, civil remedy would be limited to damages calculated on the basis of simple property law and torts, in addition to any criminal charges, which may be brought against Balph by the state.

“So he sends it to Wikileaks and soon everyone knows Galt is gay.”

As you also know, this act brings defamation laws into play. Given the nature of Wikileaks, this would probably be sufficient to establish malicious intent as to Balph, entitling Galt, a public figure, to punitive damages. This also falls under tort law.

If Wikileaks publishes it knowing that it was defamatory, they are implicated as well. So far, this has nothing to do with IP laws. If you are thinking of moral rights in IP law, that only applies to visual arts, which are not in play in your scenario.

“Soon the movie parts for hetero leading man that he was getting dries up. He loses tens of millions as his price plummets.”

This would figure into past and projected damages. As you know, damage to reputation is a bigger factor when your reputation has a large role in your employment opportunities. For example, a banker who has his honesty and trustworthiness slandered suffers greater damages than say, a garbage collector, where it is a lesser factor in future employment opportunities.

“Without this “illegally obtained” evidence, he would have hired Galt. But now he doesn’t. He bases his actions on information he has, that is the result of a crime.”

One cannot “un-possess” information once obtained. The best that can happen is that its use can be constrained by way of applicable laws, for example discrimination laws. In this case, if the producer can be shown by Galt to be discriminating on the basis of sexual preferences, he would have a civil rights action. Also, especially in today’s social climate of diversity and political correctness, the producer would likely suffer other impacts (boycotts, etc) for his discriminatory practices.

Therefore, the producer would find himself constrained for taking overt action against Galt based on the information that he was gay, both legally and economically.

What, pray tell, does any of this have to do with IP?

Stephan Kinsella December 15, 2010 at 5:41 pm: “As you also know, this act brings defamation laws into play. Given the nature of Wikileaks, this would probably be sufficient to establish malicious intent as to Balph, entitling Galt, a public figure, to punitive damages. This also falls under tort law.”

This is irrelevant; the revealed information could be anything useful–like the fact there is oil under your property, as in the Cooter example I give in AIP. Further, truthfully revealing someone is gay is not defamation, since truth is a defense.

“If Wikileaks publishes it knowing that it was defamatory, they are implicated as well.”

it’s not defamatory, as it’s true.

So far, this has nothing to do with IP laws. If you are thinking of moral rights in IP law, that only applies to visual arts, which are not in play in your scenario.

““Soon the movie parts for hetero leading man that he was getting dries up. He loses tens of millions as his price plummets.”

“This would figure into past and projected damages. As you know, damage to reputation is a bigger factor when your reputation has a large role in your employment opportunities. For example, a banker who has his honesty and trustworthiness slandered suffers greater damages than say, a garbage collector, where it is a lesser factor in future employment opportunities.”

Yes. So this affects how much Balph owes Galt. Balph. The trespasser.

“One cannot “un-possess” information once obtained.”

BINGO. This is why if I have information I can use it.

” The best that can happen is that its use can be constrained by way of applicable laws, for example discrimination laws. In this case, if the producer can be shown by Galt to be discriminating on the basis of sexual preferences, he would have a civil rights action. Also, especially in today’s social climate of diversity and political correctness, the producer would likely suffer other impacts (boycotts, etc) for his discriminatory practices.”

Red herring. Take the oil example I gave in AIP. Now that the neighbors know there is oil they refuse to sell their property to the victim of trespass, since they know there is oil underground now. By the logic of IP they could be compelled to sell at the lower price they *would* have sold for absent the “stolen” information, and the producer can be compelled to pretend he doesn’t konw Galt is gay and hire him as he originally would have. thisi s what patent law does.
Wildberry December 15, 2010 at 7:00 pm: Stephan,

“This is irrelevant; the revealed information could be anything useful”

OK, but it was your scenario. What is relevant includes what the “information” is, how it was obtained, and what use it is put to by the person who has it.

For example, if your scenario was an insider trading fact pattern, it would follow a securities law theory. If it was a trade secret fact pattern, it would follow trade secret legal theory. Facts matter, otherwise we would need only one law: “Thou shall not steal”, for example.

“Further, truthfully revealing someone is gay is not defamation, since truth is a defense.”

Of course you are right. I wasn’t attempting to try your hypothetical case. I also didn’t use other possible theories of prosecution. I was just simplifying. Sorry.

***“If you are thinking of moral rights in IP law, that only applies to visual arts, which are not in play in your scenario.”
***““Soon the movie parts for hetero leading man that he was getting dries up. He loses tens of millions as his price plummets.”

I think you are confusing the point, (not that you are confused) but it’s not really important. The IP moral rights here would go to attribution to Galt for his roles in movies, whose rights are probably held by the studio or producer, etc. They are not a factor in your scenario. Your scenario goes to Galt’s damaged reputation and damages to his livelihood. IP moral rights are not relevant.

“Yes. So this affects how much Balph owes Galt. Balph. The trespasser.:

Yes.

“BINGO. This is why if I have information I can use it.”

Sorry. Possession of information does not equal right to use it. If you don’t have the right to possess information because it belongs to someone else, such use is a misappropriation. Insider trader laws are one of the most commonly understood examples of this.

“Red herring. Take the oil example I gave in AIP.”

With all due respect, I think you are conflating causalities and therefore your conclusions are wrong.

Cooter trespasses as to Jed. He has liability for damages to Jed. Let’s leave the issues of how those would be calculated and whether they might exceed Cooter’s ability to pay aside. However, the damages associated with trespass would be nominal. They mainly go to prove illegal access. He also improperly acquired something of value to Jed; information about the oil. His acquisition of that information was unlawful. Therefore his use of that information is illegal, and goes to damages as to Jed, not the neighbors.

Had Cooter acquired this same information through legitimate means, i.e. he hired his own geologist, nothing in this scenario would be illegal. Jed would be screwed and would have to pay a fair price. One could argue that Jed could not expect to keep this a secret forever; there is an argument for “inevitable discovery”, to borrow the term.

I can’t think of any basis by which Jed could copyright this information, can you ? Trade secret? I don’t think so. Patent? Certainly not. The analogy is lost on me.

The case for the neighbors would turn on the issue of whether they obtained their information by improper means. Reading it in the newspaper was certainly not improper, and so they are free to act on this information until such time as they sell, or refuse to sell to Jed. Until they sell, they are the masters of the price. No court would direct them as to the value of their property in the absence of an imminent domain action, which is not relevant here.

“By the logic of IP they could be compelled to sell at the lower price they *would* have sold for absent the “stolen” information”

This sounds like a remedy in contracts; putting someone in the position they would have been, in the absence of breach. I don’t think that applies here. The neighbors were not in contract, were they? Since there was no privity with Jed, there would be no remedy for breach.

“the producer can be compelled to pretend he doesn’t know Galt is gay and hire him as he originally would have.”

The produce cannot be compelled to know or not know something. It is not about knowing. It is about using what you know. Had the producer found out through proper means, he would have been in the same boat. His ability to act on that knowledge would be limited by discrimination and employment laws, as well as public opinion.

“thisi s what patent law does.”

Galt, the producer, nor Jed patented anything. I’m confused.

Wildberry December 22, 2010 at 3:49 pm

Stephan,

Thank you for this thoughtful and helpful post.

“I think those who advocate IP or oppose its abolition have the burden of knowing what they are talking about and of having an argument for it.”

I couldn’t agree more. I would add that there ought to be, within a context of this discussion thread at least, the freedom to explore that understanding. This might be accomplished by asking questions requiring an advocate to defend their positions, or making statements and inviting others to challenge them on some reasonable grounds. Both are conceivably legitimate forms of inquiry.

Fundamental to this process of inquiry and relative to IP laws, it seems reasonable to start out with a fair reading and understanding of what the law says and how it operates. Without that foundation of common understanding, advocacy for or against its legitimacy is rendered less meaningful. I think it would be helpful to clarify the distinction between arguing about what the law says, and arguing that it should stay, go, or be modified. I think this is important, and so I will do my part to make sure this distinction is clear.

“I became anti-IP because I was pro-IP and a libertarian and an IP attorney. Why would I misstate the law? I tried to find a way to justify IP law. To do that I had to know what it was, and try out the various attempts to justify it.”

I hope you can accept my statement that this is precisely the process I am engaged in. To confess some personal information about myself, I am interested in libertarian thought that examines the intersection and interactions of economic policy and laws. I am not entirely a lay person in this regard, as I have some experience in the study of general law. I am not a practicing attorney however, so I only mean to suggest that I hope that one dimension of our conversation might include legal arguments, as well as ethical and libertarian ones.

I am only taking the advocate position because there seems to be less enthusiasm for arguing that side of the debate, with some notable exceptions. I am taking on the client named “proponent”, while you represent “opponent”. Perhaps I will tell what I actually believe at the end of the debate, but at the outset it is not relevant.

It would be helpful if we could include in our debate legal concepts like “unjust enrichment” or “foreseeable reliance” as a rational for “equitable estoppel” without having to explain to each other what that means. That would enrich the debate, in my opinion. If we are going to debate the law, it seems only reasonable to be able to depend on existing legal concepts as one useful tool of analysis. Do you think that is possible, even if you considered my knowledge to be incomplete or inaccurate? I would hope so, and that your reaction would one of offering a correction to my misuse rather than to reject any use at all.

This legal concept is of particular interest to me, for example, because it intersects with Mises’s treatment of “external markets” in an economic context, and Touchstone’s use of “unilateral transfer” in an ethical context.

“Libertarians who are unclear about how IP operates should for this reason alone be skeptical of it.”

I agree; however skepticism cuts both ways. If I hold certain beliefs about liberty and property which we might agree are consistent with libertarian thought, it seems proper for me to be skeptical of both the wisdom of a law, and the wisdom of criticisms of it. I suppose it is ultimately a matter of style, but my style is more akin to a scientific method of inquiry. Assertions are theories, upon which evidence and reasoning are applied and evaluated as either supportive or non-supportive of the theory. Any system of human knowledge is enriched and expanded by exposing it to this process of inquiry and justification. IP is no exception.

Unlike you, I am not pursuing a career as an IP lawyer. I am finding, however, that it is an effective vehicle for examining the principles of libertarian thought, Austrian economics, and my understanding of the law. By engaging in this discussion, I am learning. If I am learning, I can suppose that those reading or otherwise participating in these discussions might be as well; so much the better.

“It’s a new right invented by state legislation, and no one really understands it; justifications for it are all over the map.”

I agree, except for the “new” part. For me, the fact that IP law is dealing with these weird fact patterns of software, derivative works, etc. is a phenomena of rapidly advancing technology. I have never taken the position that in every case, the legal system has always gotten it right.

On the other hand, if there is any ethical foundation for IP laws, it should be related in some consistent way to an expression of ethics that reaches far back into human history. The citations by Touchstone having to do with rights of attribution in ancient societies related to songs and stories would be such an example.

Ethics, in their nature, are as old as human society. Contemporary law cannot long survive if they place themselves in direct contradiction to reasonable, acceptable ethical principles. IP law is merely a modern expression, with distinctions relevant to contemporary fact patterns. There should be, if the ethical rule is likely to be legitimate, some sense of continuity with ancient systems for peacefully resolving human conflict among cooperating humans. One might even describe one’s sense of continuity with an accepted ethic, “common sense”. This is why, in my opinion, common sense is a legitimate indicator of where the “nonsense” might be hiding. It is the obligation of rational inquiry to prove it.

“Questions are fine but the proper stance for a laymen who do not undersatnd the law and who are confused about whether or if it is jsutified is a questioning humble stance.”

Fair enough. Again, this cuts both ways. If you are willing to engage in these discussions with laypersons, then you also have to be willing to deal with a certain amount of imprecision in the use of the language and in the understanding of subtle legal distinctions. If you are not willing to engage on that basis, then you have the right to withdraw. It does not seem reasonable to expect everyone who is interested in weighing in on this topic to have a perfect grasp of the subject, if there is actually such a thing.

“Nonsense.”

OK, here is my problem. You are asserting that ideas are non-scarce, their use and copying do not diminish or conflict with the original and therefore a law that establishes property rights in ideas is unjustifiable, because it interferes unjustly with the property rights of the copier, who owns those tangible goods which are themselves the means of copying. Because IP law, copyright for example, establishes property rights in ideas, this law is unjustifiable because it aggressively violates the legitimate rights of property ownership. This ownership is only legitimately established by the act of homesteading scarce resources, or by their legitimate transfer. I hope this is a fair representation of your position.

So, in order to evaluate your position, I go to the laws of copyright and find that §102 defines what is protectable are “original works of authorship”, and §102(b) says “In no case does copyright protection for an original work of authorship extend to any IDEA, PROCEDURE, PROCESS, SYSTEM, METHOD OF OPERATION, CONCEPT, PRINCIPLE, OR DISCOVERY…”

How is it that I should reconcile your position and what the law actually says and does?

It appears that copyright law makes an important distinction between “ideas” and “original works of authorship”. One cannot simply ignore that distinction in order to argue that IP laws should be abolished, on the basis that they are doing something which they clearly attempt to avoid.

Therefore I would suggest that as the proponent of an anti-IP position, you have the burden to show where and how this inconsistency between what you advocate relative to a law, and what that law actually says and attempts to accomplish, can be resolved. I am asking with utmost humility. Really.

Once accomplished, it seems that we would be in a better position to debate the law on the merits, but not before.

“I have no idea what you mean since you are leaving it up to implication”

That is true. In the future I’ll just depend on you saying what you mean, and if I don’t understand, I’ll ask you about it.

Thank you for your interest and patience. I do appreciate it.

Stephan Kinsella December 22, 2010 at 6:05 pm: Wildberry–good replies; I am just too backed up to reply in detail now. Maybe later; or maybe Surda or someone else can. Otherwise I can only refer you to my numerous pieces on this.
Peter Surda December 22, 2010 at 6:49 pm: Sorry, horribly backlogged. Maybe over the holidays.
Wildberry December 22, 2010 at 7:36 pm: No problem.

Merry Chistmas to you both.

Beefcake the Mighty December 14, 2010 at 5:38 pm

Still waiting, Silas.

Silas Barta December 14, 2010 at 5:58 pm

For what? A better way to complete the sentence “Silas Barta is the intellectual equivalent of …”?

Beefcake the Mighty December 14, 2010 at 8:30 pm: No Silas, an answer to my question, which I’ll conveniently and considerately repost for you here:

If I steal some factors of production and use them to create something, instantiate an idea, whatever you want to call it, am I then justified in preventing someone else from copying my idea?

Wildberry December 14, 2010 at 3:20 pm

Stephan,

“…those who say we need a criminal state to enact positivist artificial law that creates huge zombie bureaucracies to grant ad hoc monopoly privileges to favored supplicants in the name of free enterprise, innovation, private property, and competititon”

And who might “those” be? Certainly not me. I have no intention of defending such a position, even if I could sort it out.

Stephan Kinsella December 14, 2010 at 3:46 pm

good, then I’ve flushed you out as being anti-IP. good to hear.

Wildberry December 14, 2010 at 4:59 pm: Ha! Please don’t put words in my mouth.

I’m the guy that produces screed, remember? It’s already crowded in here without you stuffing them in from the outside!

REPLY

Graham December 14, 2010 at 6:52 pm

>>What right do I have to complain of Big, Inc using their resources to reach customers I could not?

I assume the argument from the innovator’s point of view would be that Big Inc, by taking the idea and applying its inherent position of advantage to reach customers they could not, completely diminishes the chance for the innovator to ever develop their business to a point where they COULD reach those customers.

>>If I cannot increase sales by improving an item further, or someone has made my product irrelevant with a superior alternative, then I am on to something new, again in deference to customer feedback.

Part of the problem is that without IP laws the incentive to move on “to something new” is greatly reduced. An innovator who pours their sweat and blood into a project, only to find it hijacked by interests that maintain a pre-existing advantage due simply to their capital, may “move on” once, maybe even twice, but after a while, when they watch others grow rich off their work, why bother? May as well go to work for the company that steals the ideas.

>>Having carefully proved the obvious, that is I have a viable mass market item, I can simply do an IPO, raise the money to be the conservator, and become my conservator’s competitor.

It is MUCH more difficult for a start up operation to secure financing, when it lacks the proven synergies and economies of scale of an existing ‘conservator’, than it is for the ‘conservator’ to simply take the idea and convince investors to fund it. By the time the start up operation reached a level where it was able to produce the product on the scale that the ‘conservator’ is able to, the ‘conservator’ has already used its inherent position to secure market share and profit.

A start up is a much riskier investment, not just because of the product, but because of what is involved to build the business to make it available. The ‘conservator’ already has these in place.

As an investor, where would you be more likely to put your money?

In an individual who comes to you with only himself as the mode of production, an unproven track record regarding management, but a great idea and long term promises?

Or a multinational company with the infrastructure already in place, with the same idea, and the ability to make it happen almost immediately?

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Denver Post sues Drudge Report, extending copyright crusade

by Stephan Kinsella on December 10, 2010

From the Colorado Independent. Note that they are asking not only for $150k damages but that Drudge surrender his domain name–this is legalized extortion.

Denver Post sues Drudge Report, extending copyright crusade

Denver Post management has taken aim over the past year at the internet, apparently sweeping the web routinely for Denver Post content and threatening litigation if it finds unlicensed material floating free of the Denver Post brand. It sent a letter to popular blogsite ColoradoPols this past summer sounding Orwellian warnings against quoting even the smallest amount of material from the paper. The Post has now sued the national conservative politics Drudge Report for running a Denver Post photo. The Las Vegas company suing on behalf of the Post is asking for $150,000 and for Matt Drudge to surrender his popular website domain names drudgereport.com anddrudgereportarchives.com.

Righthaven LLC filed the suit on Wednesday, according to the Las Vegas Sun, which also suggests Righthaven is making good business of newspaper struggles in the digital age. Since March, Righthaven has filed more than 181 copyright lawsuits against website operators and bloggers.

Brazil’s Largest Newspaper Sues Parody Blog For Making Fun Of It

by Stephan Kinsella on December 10, 2010

From Mike Masnick on Techdirt:

Brazil’s Largest Newspaper Sues Parody Blog For Making Fun Of It

from the thin-skin dept

Marcos alerts us to a story coming out of Brazil, where the country’s largest newspaper publisher, Folha de S. Paulo is apparently suing a parody blog that was set up to mock the publisher. The parody blog is called Falha de S. Paulo. Obviously, the names are similar, but it’s a parody and it’s apparently somewhat clever in Portuguese. “Folha” is apparently somewhat akin to “Journal” in English, while “Falha” means “failure.” See? Clever. Apparently the Folha folks didn’t think so. They got a court order demanding the site be shut down and then filed suit, demanding monetary damages. The claim, of course, is trademark infringement. Not being too familiar with Brazilian law, I don’t know if there are parody exceptions, though obviously I think there should be. However, the claim is that it probably doesn’t much matter either way, as many expect Folha to win simply due to its political clout. That would be unfortunate if true. Either way, it’s a pretty sad statement when the largest newspaper in a country can’t handle a little parody.

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A “Patent Stimulus” to End the Recession?

by Stephan Kinsella on December 10, 2010

From the Mises blog. Archived comments below.

It’s bad enough to have mainstream economists tell us we need to “stimulate” the economy by printing money, to get us out of the recession. Now we have some calling for the printing of patents to do the same, by patent attorney Gene Quinn, about whom I’ve blogged before.¹ You remember Quinn–he’s the guy who ridiculously argued that we need a state-granted monopoly system … so that Albert Einstein could have had a job in the Swiss patent office.²

In Patent Stimulus to Solve Great Depression II, Quinn writes:

If we really want to get out of this economic downturn we need a Patent Stimulus Plan. Yes, that is a PSP, not of the Sony variety though, a PSP of the get us the heck out of this miserable recession/depression variety.

… The nice thing about this Patent Stimulus Plan is that it will cost only a small fraction of the amount of money we have already wasted on failed economic stimulus. What we need to do is have President Obama issue an Executive Order directing the Patent Office to start allowing patents. A 42% allowance rate during the first quarter of 2009 is wholly unacceptable. … So while you are at it President Obama, order the Patent Office to issue a patent UNLESS there is a reason to deny it.

The sheer ignorance and stupidity of this argument is breathtaking. [continue reading…]

{ 6 comments }

Absurd Arguments for IP

by Stephan Kinsella on December 10, 2010

[From my Webnote series]

From Mises blog. Archived comments below.

I’ve noted before “There are No Good Arguments for Intellectual Property,” and I’ve begun to collect some of the sillier arguments I’ve heard for IP. Here are a few:

“Thank goodness the Swiss did have a Patent Office. That is where Albert Einstein worked and during his time as a patent examiner came up with his theory of relativity.” —Patent attorney Gene Quinn
“It is true that other means exist for creative people to profit from their effort. In the case of copyright, authors can charge fees for reading their works to paying audiences. Charles Dickens did this, but his heavy schedule of public performances in the United States, where his works were not protected by copyright, arguably contributed to his untimely death.” —Willliam Shughart¹
If you are not for IP, you must be in favor of pedophilia. —Sasha Radeta
If you oppose IP, you are advocating slavery. —Wildberry
“Patents are the heart and core of property rights.” —Ayn Rand
Song piracy and file-sharing are the cause of stage collapses at concerts. (Insurers blame stage collapse on copyright piracy)
Postwar Japan prospered because it had a patent system; countries with the most IP are the most prosperous; America’s prosperity and growth since its inception is due to its patent and copyright systems (typical correlation is causation fallacy)
IP contributes $5 trillion to the economy (because industries that IP is inflicted on generate $5T).
Because you “can” treat IP as a form of property, it’s okay to do so (no offense, chattel slaves)
a confused anarcho-socialist argument that “intellectual ownership” is needed, even though property rights are generally bad, to reward “the individual who laboured to discover,” but not “the owner of the idea itself, being an abstract piece of property”. Hunh? (The Worst Argument for IP Ever?)
Copyleft advocates are like homophobic, anti-gay marriage bigots (some commentor at Techdirt)
“To make a distinction between things which are ownable or not ownable with the difference being whether they’re constructed out of molecules or pixels is to create a new kind of apartheid, in which some kinds of property are just niggers.” —J. Neil Schulman
If IP isn’t legitimate, then it’s okay to steal other people’s babies.
Without IP you can’t have money: “Cool, so money can’t exist right? Since banks don’t have copyright for the cash they print, anyone can print any form of cash, thus destroying the economy…. cool story bro” —”sunny vegas” on Youtube comments
“Kinsella claims the right to torture.” —@CaminaDrummer4

Of course they do, nobody has been able to use them.

They are proof Kinsella is a fraud when he claims only rivalrous property is property.

I own those inventions, you can’t get them without torturing me.

Kinsella claims the right to torture.

— Camina Drummer (@CaminaDrummer4) May 30, 2026

I’m in possession of 4 patentable claims. You would have to torture me to get them. The patents long expired but nobody has replicated these inventions in industry. Thus likely nobody will.

You claim I am stealing from you and that I cannot keep this property from you. https://t.co/BVBKzp2Uly

— Camina Drummer (@CaminaDrummer4) May 29, 2026

Update: See Intellectual Nonsense: Fallacious Arguments for IP (Libertopia 2012).

Archived comments:

{ 56 comments }

El Tonno September 19, 2011 at 11:25 am

Andrew Orlowski: “If you oppose IP, you want to curtail creators’ human rights.” (paraphrasing from here: http://www.theregister.co.uk/2011/09/19/pirates_berlin_protest_vote/ )

Dean Wilson September 19, 2011 at 1:02 pm

The point about Einstein seems to combine two fallacies, the second is that scientific hypotheses are so unique and rare that they could only come from the inventor who made them famous. Instead, they’re a dime a dozen and have to be rigorously tested. Not to diminish the discovery of relativity, but if not Einstein, someone else would have come up with it–just as someone else refined relativity into useful forms. Austrians, of all people, are well aware of the nearly simultaneous discovery of marginal utility.

And that’s assuming relativity is correct.

J. Murray September 19, 2011 at 1:09 pm

That’s because someone else did come up with relativity before Einstein.

James Maxwell wrote a paper on spacial reletivity 27 years before Einstein.

Hendrik Lorentz was an early pioneer in much of what Einstein is given credit for, 15 years prior to Einstein’s work.

Olinto De Pretto was the first to write e=mc^2, 5 years before Einstein’s work.

This is just the surface.

However, if Einstein didn’t violate the intellectual property “rights” of these and many more men, relativity would likely be stuck in some dark part of history as opposed to a well known concept.

Albert Einstein was the Steve Jobs of the turn of the century. He didn’t develop much of anything he’s famous for, but without him, we’d likely not know it even exists. And if we had a strong IP and Copyright law at the turn of the century, much of this and future research would have ceased to exist or delayed by decades or more.

El Tonno September 19, 2011 at 3:32 pm

>James Maxwell wrote a paper on special relativity 27 years before Einstein.

I don’t think so.

But otherwise yes – Einstein took an inductive leap of faith by looking at the by then well known Lorentz transformations in a new way. As written in Reflections on Relativity

Thus, Einstein’s contribution was to recognize that “the bearing of the Lorentz transformation transcended its connection with Maxwell’s equations and was concerned with the nature of space and time in general”. Instead of basing special relativity on an assumption of the absolutely validity of Maxwell’s equations, Einstein based it on the particular characteristic exhibited by those equations, namely Lorentz invariance [i.e. Maxwell’s equations must be valid for any moving coordinate system which can be transformed into each other using Lorentz transformations], that he intuited was the more fundamental principle, one that could serve as an organizing principle analogous to the conservation of energy in thermodynamics, and one that could encompass all physical laws, even if they turned out to be completely dissimilar to Maxwell’s equations. Remarkably, this has turned out to be the case. Lorentz invariance is a key aspect of the modern theory of quantum electrodynamics, which replaced Maxwell’s equations.

J. Murray September 19, 2011 at 5:13 pm

I stand corrected.

Still, if IP was involved, Maxwell could have sued Einstein and Lorentz for infringing on his “concept” of the nature of space and time.

JFF September 20, 2011 at 10:47 am: Speaking of Maxwell, Einstein’s synthesis was severely limited due to Heaviside’s truncation of Maxwell’s original work from quaternions to vectors. Supposedly, if Einstein used Maxwell’s Equations in their original forms, things would have worked out much differently.

coturnix September 20, 2011 at 4:59 am

Relativity is correct as far as humankind have tested it. It might approximate something even more general, but we don’t know it yet.

Stephan Kinsella September 20, 2011 at 10:12 am: People here interested in that issue ought to check out Bethell’s article Relativity and the Priesthood of Science http://www.lewrockwell.com/orig6/bethell4.1.1.html

Tim September 19, 2011 at 1:05 pm

If god didn’t patent the universe, someone else might have entirely stolen his ideas and we wouldn’t have had such great inventions as hunger, disease and death.

Wildberry September 19, 2011 at 1:08 pm

Kinsella:

Not that you are bothered by facts or acuracy, but this is the actual quote from your link.

Therefore, the ultimate challenge is to argue why IP should be subjected to a different property ethics than any other property. I think this is impossible, and in fact to do so by any means would be to create an ethics which endorses production for external markets. Without appeal to morality or utility, I have simply stated that production for external markets is in fact, slavery.

Therefore, as ironic as this may sound, IP opponents find themselves in the curious position of advocating slavery.

Andras September 19, 2011 at 1:20 pm

He is shameless, and this is under the name of Mises.
Kinsella should put himself on the top of his Libertarian Controversies list.
I bet it with triple the registration into his course.

Matthew Swaringen September 19, 2011 at 1:49 pm: You’re just jealous you weren’t put on the list for making your own absurd pro-IP arguments.
Peter Surda September 19, 2011 at 2:34 pm: Andras,

He is shameless, and this is under the name of Mises.

Says the faux scientist.
Andras September 19, 2011 at 2:55 pm: I have written “I bet it would triple the registration into his course”.
Somehow it changed.

Matthew Swaringen September 19, 2011 at 1:48 pm

“Therefore, the ultimate challenge is to argue why IP should be subjected to a different property ethics than any other property.”
This is question begging first of all, and if it is property it’s protection is inherently contradictory to other forms of property, as has been reiterated multiple times in various different ways.

Wildberry September 19, 2011 at 2:28 pm

Mathew,

Your use of the word “inherently” says it all.

You didn’t seem to catch the central thrust of the quoted passage, which is odd considering it was a challenge to your smuggled assumpton that the two, IP and all other property, cannot coexist.

Consider this: If, as Mises writes “property is a human device”, then ALL property is a function of positive law in a real sense; that is it can only exist if there is an enforcable “rule” establishing rights of ownership relative to an economy and a system of enforcement of those rights.

Given that, what is the distinction between “real” property and the “fake” property called IP?

Despite all the hand-waving about scarcity and such, the answer is whatever distinctions we chose to make. It is a question of means employed to achieve desirable ends, fundamental of which is the continued and improving cooperation within a division of labor society.

In this regard, if you think you can resolve the controversy by claiming it is “inherently contradictory to other forms of property”, then you don’t understand your own argument.

I mean that in a good way.

J. Murray September 19, 2011 at 2:34 pm

Put “intellectual” in a basket, show it to me in such a way I can’t confuse it with a song, film, piece of paper with words on it, or a DVD with grooves cut into it with a laser, and then we’ll continue this conversation as to whether intellectual can be property.

Andras September 19, 2011 at 3:00 pm

As long as you don’t consume the particular property you can ask similar questions about all property and its ownership.

J. Murray September 19, 2011 at 5:14 pm: You sure could, but apart from this “intellectual” everyone talks about but can’t show, I can show you a piece of land that is mine, or a calculator, or a DVD, or a bar of gold, so on, so forth.
Andras September 19, 2011 at 7:29 pm: @J.Murray,
Definitely, your land, calculator or DVD is yours as long as nobody puts a claim on it. Or you claim their property unjustly. Your ownership feeling is natural but the conflict resolution with another person’s similar feelings about the same property is absolutely subjective. Thus, property, after settled, is a human device.
Similarly, independently whether IP is acknowledged as property or not, new IP is just entering the economy from an external status. (I do not mean the strawmen IP but the real ones) The resolution of their entry then must be subjective as any other newly internalized property. One extreme of this resolution is by social engineer Kinsella with his focus on instant gratification but ignoring the unintended (?) consequences.
Since there are not much physical property left uninternalized this is not so obvious any more with physical property.
Moreover, even with settled property, with every type of property, whenever conflict arises the arbitration will always be subjective. Whatever anarchists will tell you, as long as humans are not automatons there always be different rationalizations for this arbitration and all will have different levels of arbitrariness in them. So all of them are subjective. However, if humans were like ants and bees, their arbitration would be done by their chemistry. That would be the manifestation of real natural property rights if you could still call that a “right” and their “property” in that “society”.
Thus, again, property is a human device!
Wildberry September 20, 2011 at 12:10 pm: Andras,

That is a unique explanation. Well done!
Peter Surda September 23, 2011 at 1:25 am: Andras,

Similarly, independently whether IP is acknowledged as property or not, new IP is just entering the economy from an external status.

If this was true, it would be possible to show an example of IP entering the economy without using physical objects. I have challenged IP proponents for a long time to provide an example of this.

Wildberry September 19, 2011 at 5:20 pm

J. Murray:

Even though I get you are not really asking, but think you have found some kind of homerun zinger that is supposed to leave me with my jaw at my knees, let me respond to you just for fun.

IP is a category of rights attributed to a type of thing. We have real property, personal property, future interests in property, community property, quasi-community property, etc. etc. etc.

We use such categories to facilitate communication and cooperation as we go about our daily activities. Despite your implication, it has meaning that any third grader can understand. “See, this is YOUR story. That’s HIS painting.” Are you smarter than a third grader?

The question is, what is the possible reason we woud invent something like IP? As Danny Sanchez pointed out today in his two excellent articles, it is social utility.

Now you tell me something; what is social utility? Whatever it is, that is the reason we have property, any kind of property, at all. After all, property is a human device, see?

J. Murray September 19, 2011 at 5:25 pm: I am asking. Put this thing called “intellectual” into a basket and show me how I can steal it from you in a way that you cannot utilize it and I’ll admit it’s property. I don’t want to hear about made up concepts like some form of objective “utility”, that belongs purely in the subjective camp. Objective utility is in the same category as dragons and leprechauns. When discussing property, it’s all objective, all the time.

Old Mexican September 19, 2011 at 5:09 pm

Re: Wildberry,

Consider this: If, as Mises writes “property is a human device”, then ALL property is a function of positive law in a real sense;

Non sequitur.

that is it can only exist if there is an enforcable “rule” establishing rights of ownership relative to an economy and a system of enforcement of those rights.

Break into my house and my two friends, Smith and Wesson, will show you how property can be enforced without the need for no stinkin’ laws.

Given that, what is the distinction between “real” property and the “fake” property called IP?

Oh, now you’re begging the question. “Since property is what law says, then IP is what law says! Great!”

Wildberry September 19, 2011 at 5:22 pm

Just how Old are you, Mexican?

Old Mexican September 19, 2011 at 5:35 pm: Re: Wildberry,

Just how Old are you, Mexican?

Old enough to know better than to make such question-begging arguments, Wildberry. There is NO direct link between this: “property is a human device,” and this: “then ALL property is a function of positive law in a real sense;”

That is a non sequitur. Certainly all concepts are man-made, but that does not mean concepts REQUIRE positive laws to be. Do you need an enforceable law to tell you what is a chair?
Wildberry September 20, 2011 at 12:07 pm: OM,
See my resonse to Mattew and see if you still think it is non sequitur. If you think these statements are not linked, then I would like to see your argument of how they are separate, if you have one.

Property is a member of the class “concept”. So you are correct, both concepts and property are a human device. Not all concepts are embodied in positive law, but certainly many are.

Wildberry September 20, 2011 at 12:02 pm

@Matthew Swaringen September 19, 2011 at 5:32 pm

“Consider this: If, as Mises writes “property is a human device”, then ALL property is a function of positive law in a real sense; that is it can only exist if there is an enforceable “rule” establishing rights of ownership relative to an economy and a system of enforcement of those rights.”

To say that property is a human device doesn’t necessitate the conclusion that it is a function of positive law, it could merely mean that property doesn’t exist without purposeful human action.

I suppose that would depend upon what you meant about “purposeful human action”.

The difference between these is that positive law is founded upon legislation or agreement while natural law is theoretically founded as the direct consequence of purposeful action, which would mean there is no other way to have society without it.

First, “legislative agreement” is a form of “purposeful human action.” Second, positive law can embody, say, historical, evolutionary common law. Third, when you define “natural law” being the “direct consequence of purposeful action”, you seem to be saying that natural law (whatever that actually is) and positive law may be (and are to the extent that “natural law” exists) equivalent, (which in many cases they are, if I grant what I believe to be your meaning.) Fourth, there is no other way to have society with rules that foster cooperation over conflict. In at least one interpretation, that is the function of positive law.

Positive law can be changed at a whim whenever humans decide to create a body of law that is different, it can be completely arbitrary if one desires.

While it is true that a legislative act entails the right of government to enforce and the obligation of citizens to obey under threat of enforcement penalty, it is also true that no law can forever stand without general public support. Also, the problem that you raise calls into question the theory of social governance you choose to assume. For example, if you assume monarchy or military dictatorship, perhaps there is a theory of positive law based on “whim”. If you assume something more towards self-government, “whim” does not really describe the process.
Also, what you would call “natural law” is already incorporated largely in legislative laws; the state criminal codes, for example. The fact that some legislatively produced codes are wrong is precisely the problem that we are discussing, but it does not de facto change the assertion I made, that all human and property rights, in the sense that they are an integral part of our system of self-governance, are the subject matter of positive law, and that such rights would not and could not exist without it or something similar.

If I agreed with your point that positive law was the basis of property, I would agree with your point that there is no inherent contradiction between physical and intellectual property, because property can be arbitrarily defined.

Yes, that is my point, except you smuggle in the assumption of “arbitrarily defined”, as if positive law is enacted with no incidence or means of opposition, or it never get revised or repealed once enacted, or exist as the result of what I describe as “legislative bias” (think of mercantilism applied generally. The fact that bad laws can be enacted is not contested, certainly not by me. Nonetheless, that only returns us to the question of how we can distinguish between good and bad laws, or whether such a distinction even exists, as is held apparently by Ancaps, and Kinsella in particular, who holds that any “State” action is “dripping with evil” and must be destroyed entirely.

However, then I would still say on utilitarian grounds that most of current IP law is both untenable and undesirable, and because it requires positive enforcement and infringements of the rights of 3rd parties (forcing ISPs, proxy services, etc to give up information about their customers, for example) the onus is on those advocating IP law to prove why it is a good idea.

Yes, I am familiar with this line of reasoning, which I hold to be erroneous. I agree that much of the positive law, including court decisions in support of the forms of expansion and protectionism that has been characterized in most of the revisions that have been enacted since the original Acts. However, there is a legitimate principle at the core of the debate.

If you peal everything about IP back to its core, you are left with the problem of external economies that Mises identified and discussed. Therefore, if I followed your theories of natural law, I would have to argue that IP is a natural law in the same ways that any other natural law, and is derived from self-ownership and as private property, where “property” as a human device designed in the service of cooperation and a division of labor society operating in a free market. In this regard it is not unlike any other property in this regard.

The lack of natural scarcity in the consumer goods is the nature of the subject matter of IP, and is the specific attribute that IP law is designed to address, and that Mises discussed. It is unique in this regard, its infinite servicabilty, and therefore not like land or chattel or intangible contractual property interest. Once you reach that philosophical point, from then on you are talking about positive law; the rules that we “choose” to enforce through our system of self-government, whatever you define that to be.

I would like to know exactly how it is altogether different in function from laws that created the supposed natural monopolies that I think most of us know did not work, contrary to the expectations of state officials at the time these monopolies were put in place.

First IP is in fact a monopoly, as is all private property; the right to exclusive use.
Second, I am not sure what you are thinking of here. I can think of monopolies granted by municipalities that exist today (i.e. Comcast cable) that in my view don’t work. There have been many examples of government granted monopolies, which generally have severe consequences for what would otherwise be a freely operating market. So if you are referring to a market monopoly, say where only one company can compete to deliver cable to your home or pick up your garbage, I tend to agree with you. Mises explains the difference between a market monopoly, however, and the kind of monopoly in which private property of all kinds is an example. In that sense of the word, monopolies are all around us and they work fine within a free-market context.

However, there is no denying that IP positive law creates monopolies that would not otherwise exist, except within the context of individual enforcement theories. Monopolies are inherently harmful, I agree, and so must be limited. All rights are likewise limited. Even the most absolutist interpretation of personal property acknowledges that some actions taken with one’s own property are forbidden to the extent that those acts infringe on the liberties of others. It is the task of positive law to make and codify those subtle distinctions. The philosophy and economics of law is always grappling with this dilemma.

I just don’t see how you are making the case easier for yourself going into positive law like this. You also seem to want to make the moralistic arguments, but you want the arbitrary rules, and you can’t convincingly have them both.

Danny Sanchez wrote a couple of articles posted yesterday, and I recently read William Patry on copyrights, and I am persuaded by the link between what Danny attributes to Mises in terms of utilitarianism, and the utilitarian argument in that sense that Mises makes for IP, and Patry describes in more detail.

In my view, IP positive law is a means to ends that have been historically determined by our society to be desirable; learning within the context of internal, (not external) economies. We may debate, as we should, as to whether contemporary enactment is consistent with that and other principles of free-market operation. But this does not touch the fundamental issue that property is a human device, and positive law is the means by which we create and enforces all property rights, and that there is considerable free choice concerning what form those laws take, and that they can change over time as our sophistication and understanding of our desired ends evolves, hopefully in a beneficial direction.
Despite Kinsella’s opposition to Patry on ideological grounds, there is substantial agreement between their views concerning the extent to which the principle of IP (which Kinsella denies exists) and the current implementation in positive law has become the means which directs to towards ends that many see as excessive and anti-competitive.

That is my view as well, but I do not hold for abolishment of the fundamental principles of IP; limited monopoly rights in exchange for disclosure and fair use. How limited, and what uses, are the important utilitarian issues under debate, in my opinion.

Stephan Kinsella September 20, 2011 at 12:51 pm: there is no denying that IP positive law creates monopolies that would not otherwise exist, except within the context of individual enforcement theories. Monopolies are inherently harmful, I agree, and so must be limited. All rights are likewise limited.

So… you admit IP is a monopoly, and monopoly is bad, and you conclude we ought to try to limit, instead of eliminate them? And then you say rights are limited to–? like monopolies/ So… individual rights are bad? They are inherently harmful, and we ought to try to limit property rights? I can see why you think this, given that your IP does invade property rights. The only way to justify this is to say property rights are to be limited, and setting up these monopolies is a good way to do it. How bizarre your thinking is!

Despite Kinsella’s opposition to Patry on ideological grounds

Ideology! principle! Heaven forfend!
Wildberry September 20, 2011 at 2:46 pm: Even I am not going to bother trying to unpack this pile of horse puckey. This is not even worthy of a straw man; it is more like tossing a bunch of hay in the air and saying “See???”.

As far as ideologies and principles go, I suppose it matters just a bit what, specifically they are, unless they are yours, of course! In that case, you are so obviously correct that it goes without saying, and anyone who sees it differently must be, let’s see, now did you put it again…”stupid or dishonest”.

Yea, that’s the ticket…
Old Mexican September 20, 2011 at 3:51 pm: Re: Wildberry,

See my resonse to Mattew and see if you still think it is non sequitur. If you think these statements are not linked, then I would like to see your argument of how they are separate, if you have one.

By all means – see below:

Property is a member of the class “concept”.

No. The CONCEPT of property is in the class “concept.” Property itself is very much a concrete thing – again, try and test if otherwise by breaking into my house so my two good friends, Smith and Wesson, give you a quick education.

So you are correct, both concepts and property are a human device. Not all concepts are embodied in positive law, but certainly many are.

So what? I can certainly write a law around the concept of “chair” to leave to posterity in no uncertain terms exactly what a “chair” is. That does not mean a) I invented the chair for all to behold and b) that by law, you cannot rest your buttocks anywhere else. Same with property and property rights: both do not exist by virtue of laws, but by virtue of our ability to defend our property. I do not need a law to have my two very good friends – Smith and Wesson – stop you from entering into my house and taking my LCD TV, or do I?
Wildberry September 20, 2011 at 5:33 pm: @Old Mexican September 20, 2011 at 3:51 pm
“Property is a member of the class “concept”.

No. The CONCEPT of property is in the class “concept.” Property itself is very much a concrete thing – again, try and test if otherwise by breaking into my house so my two good friends, Smith and Wesson, give you a quick education.

That S&W comment was cute the first few times you lifted it from Neil Schulman , but try to think of something else for variety sake.
As to your “point”, yes property is a concept to describe a certain class of things. This is meant to be helpful in some way, or are you just creating another opportunity to use your S&W line? This is not what I would expect from a Mexican that was actually old enough to know better.
“So you are correct, both concepts and property are a human device. Not all concepts are embodied in positive law, but certainly many are.”

So what?

Exactly.

I can certainly write a law around the concept of “chair” to leave to posterity in no uncertain terms exactly what a “chair” is. That does not mean a) I invented the chair for all to behold and b) that by law, you cannot rest your buttocks anywhere else. Same with property and property rights: both do not exist by virtue of laws, but by virtue of our ability to defend our property. I do not need a law to have my two very good friends – Smith and Wesson – stop you from entering into my house and taking my LCD TV, or do I?

Again with the Smith and Wesson? You are like canned laughter.

Look, you can’t be taken seriously and I am not your foil for your imagined stand-up routine. If you want to believe that all you need to get along is your own self and your trusty six-shooter, then perhaps you envision somewhere like Afghanistan or Libya to be your happy place. The rest of us would like to have some rules that we can have some assurance that other people, especially strangers, are generally going to follow, and that there is an alternative to OK corral to settle every socially relevant dispute.

By the way, the average gun-slinger typically doesn’t live very long, so I assume you are either full of it about your friends, or you are very young, which explains a lot.
Matthew Swaringen September 22, 2011 at 6:38 pm: First, “legislative agreement” is a form of “purposeful human action.”

No doubt, but being purposeful doesn’t make the action valid. There is an implication of the need to use force against people any time legislation is passed. Either you are preventing A from doing X, forcing A to do X, or taking money from A to pay for something.

If you are utilitarian then you need a cost/benefit test to pass to prove the point, or you need a fundamentally undeniable logical proposition, which I think you are trying to say Mises actually put in his writing, but from what I’ve seen this is simply not the case.

What we see from Mises is rather mixed on this matter, is far from a logical proof, and yes, I think it’s entirely valid to say Mises is wrong in large part because he couldn’t have known what something like the internet would do. He may have been a genius, but even geniuses have their limitations, this is in fact why we don’t believe in government interventionism even if we think the right people are doing it.

Fourth, there is no other way to have society with rules that foster cooperation over conflict.

Than legislation? I certainly disagree if that’s what you meant here… But when you say “no other way” I would say that self-ownership and property rights meet the test, however, that’s part of the reason I think they are “natural” and not positive (meaning they arise without any legislation or use of force, that it in fact will require force to violate them and doesn’t foster cooperation).

that such rights would not and could not exist without it or something similar.

Something similar being what? In my opinion, something not at all similar would be the use of social norms, contracts, ostracism, and having a purely voluntary society that rejects the initiation of force, but I think this is also the best way to ensure rights are respected, because positive law requires taking people’s rights away to enforce other laws (taxation, imprisonment, etc.)

If you assume something more towards self-government, “whim” does not really describe the process.

Self-government is a variable term, define it as you see it please, because I haven’t seen your definition elsewhere.

To me “self-government” would mean voluntarism, ie: I govern my own actions, but I think you mean something more like democracy and I’m not sure why that’s valid, I think Spooner made a very good argument on this in No Treason.

you smuggle in the assumption

Which isn’t an assumption at all, it’s based on the knowledge that well connected political classes develop, which is something even every minarchist admits, via the whole necessity to maintain “eternal vigilance” against expanding government. Too bad that hasn’t worked… The empirical evidence is strongly against repeal of laws that help out a special interest except where there is a huge body of people who have a bigger reason to be against that policy, and while I think we will get there with IP we are still a bit away from that.

The problem is that enormous damage can be done waiting for repeal.

If you peal everything about IP back to its core, you are left with the problem of external economies that Mises identified and discussed.

I have seen his discussion and found it a bit lacking, but if you can go back to specifics on his logic I’m certainly willing to say specifically where I disagree with certain statements of his on this matter, and you can explain why you think those are logically necessary. That said, I don’t think I’ve seen that Mises ever agreed with the idea that copyright is like property, just that it’s necessary.

“external economies” is a reason that statists call for all kinds of other kinds of intervention such as cap & trade, etc. Similar to Hayek’s call for a welfare system I kind of think Mises made a mistake here. Why is it ok to question Hayek on some things but not Mises?

The lack of natural scarcity in the consumer goods is the nature of the subject matter of IP, and is the specific attribute that IP law is designed to address

Address by attempting to force scarcity? I am not seeing how that is ever a good idea. Even a system of government payouts makes a heck of a lot more sense to me than IP.

Matthew Swaringen September 19, 2011 at 5:32 pm

Consider this: If, as Mises writes “property is a human device”, then ALL property is a function of positive law in a real sense; that is it can only exist if there is an enforcable “rule” establishing rights of ownership relative to an economy and a system of enforcement of those rights.

To say that property is a human device doesn’t necessitate the conclusion that it is a function of positive law, it could merely mean that property doesn’t exist without purposeful human action.

The difference between these is that positive law is founded upon legislation or agreement while natural law is theoretically founded as the direct consequence of purposeful action, which would mean there is no other way to have society without it.

Positive law can be changed at a whim whenever humans decide to create a body of law that is different, it can be completely arbitrary if one desires.

If I agreed with your point that positive law was the basis of property, I would agree with your point that there is no inherent contradiction between physical and intellectual property, because property can be arbitrarily defined.

However, then I would still say on utilitarian grounds that most of current IP law is both untenable and undesirable, and because it requires positive enforcement and infringements of the rights of 3rd parties (forcing ISPs, proxy services, etc to give up information about their customers, for example) the onus is on those advocating IP law to prove why it is a good idea.

I would like to know exactly how it is altogether different in function from laws that created the supposed natural monopolies that I think most of us know did not work, contrary to the expectations of state officials at the time these monopolies were put in place.

I just don’t see how you are making the case easier for yourself going into positive law like this. You also seem to want to make the moralistic arguments, but you want the arbitrary rules, and you can’t convincingly have them both.

Old Mexican September 20, 2011 at 6:52 pm: Re: Wildberry,

That S&W comment was cute the first few times you lifted it from Neil Schulman , but try to think of something else for variety sake.

I don’t know the guy.

As to your “point”, yes property is a concept to describe a certain class of things. This is meant to be helpful in some way, or are you just creating another opportunity to use your S&W line?

And again, the concept of property is one thing. Property is a very concrete thing for human beings. One does not eat concepts, WB.

Again with the Smith and Wesson? You are like canned laughter.

Oh, my God – I so sorry I brought it up, WB. Now, will you kindly address the problem with your “positive law” canard?

By the way, the average gun-slinger typically doesn’t live very long, so I assume you are either full of it about your friends, or you are very young, which explains a lot.

I appreciate very much you calling me “young.” Makes my day, kid.

Peter Surda September 19, 2011 at 2:33 pm

Wildberry,

Therefore, the ultimate challenge is to argue why IP should be subjected to a different property ethics than any other property.

I see that there is a need to repeat myself again: it is logically impossible for IP to be subjected to a different property ethics than other property, since IP is another property belonging to someone else. IP is a redistribution of other property. If you support other property, you need to reject IP.

I know elementary logic presents an insurmountable obstacle for you. But at least I can clearly point out your error to others before they get confused by you spouting voluminous dadaistic pamphlets.

Stephan Kinsella September 19, 2011 at 3:45 pm

I paraphrased you, I didn’t quote you. and I linked back to the original quote so people can see your wisdom in its full glory. How is that “inaccurate”? I didn’t pretned to quote you. I would have used “quote marks” had I wanted to do that.

Wildberry September 19, 2011 at 5:10 pm

Kinsella,

Yes, you “paraphrased” the meaning right out of my words, without ever attempting to actually address the actual point I was making about external economies.

Forcing someone to produce for external economies is literally slavery. Since people generally won’t volunteer to be slaves, they will choose to do something else with their time. Therefore creators of intellectual products will produce something else, something that pays. You can’t have it both ways: external economies and production.

But that’s OK. Most people who care to look know by now what you are up to.

Here is Sasha’s quote in context:

“- Do you support the alleged “right” to stalk and film children for online broadcasts based on the notion that you don’t violate their physical integrity while exercising your physical control of your tools?
This question is important because it demonstrates the key issue of the scope of property rights: do the[y] go beyond the right to physically alter the object, or to “change momentum” as some excentrics tried to imply.”

Somehow your “paraphrase” seems to miss the point, but what else is new? He is challenging your notion of the “unlimited” scope of property rights, but that would be hard to discern from your “paraphrase”.

Gee, that’s two for two. Is there a pattern here?

Old Mexican September 20, 2011 at 12:51 am

Re: Wildberry,

Yes, you [Kinsella] “paraphrased” the meaning right out of my words, without ever attempting to actually address the actual point I was making about external economies.

That’s likely because your argument is specious. You simply made up that concept to prop up your pro-IP argument.

Forcing someone to produce for external economies is literally slavery. Since people generally won’t volunteer to be slaves, they will choose to do something else with their time.

You’re begging the question, WB.

Stephan Kinsella September 20, 2011 at 10:08 am

IP proponents routinely engage in question-begging. Either they are stupid, or dishonest.

Wildberry September 20, 2011 at 12:19 pm

@Old Mexican September 20, 2011 at 12:51 am

Yes, I made it up, which is what particular offense to you?

Here is another guy that made it up before me: http://mises.org/resources.aspx?Id=07d1b2f6-fb91-4c45-acf5-63ed940ce86a.

Try to offer a meaningful criticism, if you have one.

Old Mexican September 20, 2011 at 3:41 pm: Re: Wildberry,

Try to offer a meaningful criticism, if you have one.

You’ve got to be kidding me. I pointed out the fact that you totally made up the concept of “external markets” and you proceed to give me a link to Mises’ description of property rights? You’re one to talk about “meaningful criticism”!
Wildberry September 20, 2011 at 4:46 pm: Sorry, wrong link.

Try this: http://mises.org/resources.aspx?Id=eac7e8e0-67c4-49a4-a880-e7ddc5b7498e

Starting here:

The External Economies of Intellectual Creation

Matthew Swaringen September 20, 2011 at 5:36 pm

The problems with Sasha’s argument are
1) The biggest flaw is that he implies that not seeing filming children as a property rights violation is the same as supporting it. Many of us would be disgusted with these sorts of people and ostracize them, which is totally within our rights even if we don’t think what they are doing is violating property rights.

2) Except in a few cases, the “stalking” would be done on someone else’s property, and more than likely they would not be ok with someone stalking children or filming them. I suppose you can talk about “filming” without stalking by inviting children, and not violating their rights because the cameras are hidden or something, and I agree this is extremely distasteful. So in no way is it right for Sasha or you or anyone to say anyone supports these things by virtue of not seeing them as property rights violations.

3) The view is arbitrary, as is the norm with IP advocates. How is taking a nude image different than drawing a child nude? Or drawing different than imaging? And yet do you think someone who merely thinks about a nude child is guilty of a property rights violation? Where is the logical point of delineation? Is it if the drawing is too accurate? If the resolution of the camera is greater than 320×240?

Wildberry September 20, 2011 at 6:32 pm: @Matthew Swaringen September 20, 2011 at 5:36 pm

The problem with your analysis is you miss his point. He is just raising the issue that all rights to the use of one’s own property are circumscribed by the rights of others.

All of your hair-splitting analysis here is non-responsive to this point. Whereas we may disagree as to where the lines should be drawn to delineate the boundaries between competing rights, the fact that we develop such lines is not really controversial, except to those who refuse to acknowledge an obvious truth because the wrong person said it.

Andrew from Russia September 20, 2011 at 3:54 am

@Wildberry:

Forcing someone to produce for external economies is literally slavery. Since people generally won’t volunteer to be slaves, they will choose to do something else with their time. Therefore creators of intellectual products will produce something else, something that pays. You can’t have it both ways: external economies and production.

Wasn’t that strawman dealt with a month ago or do they respawn?

Peter Surda September 20, 2011 at 5:08 am

Andrew,

Wasn’t that strawman dealt with a month ago or do they respawn?

A zombie strawman, that’s a good one .

Wildberry September 20, 2011 at 12:28 pm

Kinsella brought it up but then fails to address it. That’s ok, anyone who is paying the slightest bit of attention here can see what is happening.

As far as I know, Andrew, no one including you has made any attempt, much less a serious one, to lead us all through the reasoning that shows that Mises was wrong because he was writing before the internet, hadn’t evolved as far a Rothbard, or whatever.

Did I miss something? Perhaps you can link us all to your monumental rebuttal?

Andrew from Russia September 20, 2011 at 3:05 pm

As far as I know, Andrew, no one including you has made any attempt, much less a serious one, to lead us all through the reasoning that shows that Mises was wrong because he was writing before the internet, hadn’t evolved as far a Rothbard, or whatever.
Did I miss something? Perhaps you can link us all to your monumental rebuttal?

Technology has nothing to do with this dogmatic reading/misreading of Human Action, and the non-issue of “external economies” has been painstakingly addressed here. In fact, back then I saw two problems with it: (a) the assumption that author’s sales to copiers can only happen at consumer-good prices, and (b) preoccupation with externalities as if the scope of internalization doesn’t count whenever externalities are present.
Rather than suffering the diseconomy of arguing with write-only pro-IPers, I believe we can simply make a Graphviz flowchart of a typical IP debate, with entry points like “you wouldn’t steal a car, would you?” leading into an endless loop of trite retorts: “taking the fruits of one’s labor”, “why would anyone spend a billion”, “no incentives = sovok*”, “ever-cheaper copying necessitates copyright”, “so you are forcing the author to give his work away for free”, and of course, the classic: “theft is theft, no matter how you rationalize it”. No memory variables, no exit conditions – just random jumps from one haphazard defense to another.

*sovok (совок) is a Russian informal word for decadent Sovietism, invoked copiously by IP propaganda on the Eastern front.

Wildberry September 20, 2011 at 5:12 pm

@Andrew from Russia September 20, 2011 at 3:05 pm

Considering your “painstaking” address resulted in a similar detailed response here http://blog.mises.org/18048/millions-and-millions-of-patents-oh-the-humanity/#comment-797776 there seems to be some question about the finality of your conclusion this is a “non-issue”.

This is especially evident from the fact that your two point summary of the “problems you saw” looking back to that exchange are both fallacious.

a) the price the author sells at is not at issue with externalities. It is not a matter of what price is possible and/or whether a “wholesaler” might be involved, although it is hard for me to imagine why a wholesaler (publisher?) would pay for something it cannot own, but perhaps there is a business model there that could operate under precisely assumed conditions. In any case, that is not my issue. Rather, it is whether the benefit of production “for the most part” accrues to the producer or some unrelated third party.

b) This makes b) an equally invalid rebuttal, because it is not a consideration of WHO this third party is, only that if the benefit accrues to ANYONE other than the producer, FOR THE MOST PART, then it is MOSTLY production for external economies. Such production has consequences for the rational calculations of the future producer as to whether it is PROFITABLE to produce. That in turn has consequences for production and supply aimed at demand. That is the Mises argument.

So to your so-called problem, it in fact matters what the proportion of internalization to externalization results from the introduction of products to the market. If the proportion, IN THE JUDGMENT OF THE PRODUCER is to the benefit of the producer, he is likely to produce. If it is not, he will reallocate his resources, which is the rational thing to do.

Of course there are those producers who do not care or do not intend to profit from their creations. Mises deals with this under the term “creative genius”. I think he cleverly does that to clear the decks of subjective discussions of “real” motivation of producers. He limits his argument to those who only produce for an economic purpose, like the producers of technical manuals. They are not in the class of “creative genius” and so will be subject to the presence of externalities in his calculation of means and ends.

There is always some amount of externalities and they can’t be entirely eliminated. But if production is PRIMARILY for the benefit of some non-producer, production will decrease in the absence of coercion to produce, i.e. slavery. If you disagree with that premise, then you are in your own domain of economic theory, and apparently intend to compete directly with Mises for the correct and coherent economic theory. Naturally, you have not such intent or capability. You are a blogger on a site called Mises.org, but don’t let that bother you. Mises is old, wrote before the advent of the internet, and can therefore be casually ignored when convenient by mental giants such as yourself.

So as to both of your “problems” as I tried to point out to you in my response, you miss the point. If you miss the point, your “rebuttal” is aimed at the wrong target.

In general this is what I find ironic about the anti-IP side of this debate; you are so convinced that the issue is elementary, you don’t even realize that you haven’t addressed the issue being raised, and declare victory without ever joining the fight. You make a big show of sharpening your knives against a dead adversary, or one that you construct with the weaknesses you wish to conquer. It is not a heroic act, nor particularly useful.

Andrew from Russia September 21, 2011 at 1:49 am

@Wildberry:

So to your so-called problem, it in fact matters what the proportion of internalization to externalization results from the introduction of products to the market. If the proportion, IN THE JUDGMENT OF THE PRODUCER is to the benefit of the producer, he is likely to produce. If it is not, he will reallocate his resources, which is the rational thing to do.

Nice try but it was illustrated that the proportion between the two does not matter because one does not generally eat away from the other. If any author/inventor/producer is, for some inexplicable reason, worried about externalities rather than his own pocket, then so be it – I admit that such whimsical types can, indeed, be motivated by IP. Perhaps it’s OK if we declare “maximizing creative output” as our “policy goal” and then go about “incentivizing” every producer. But that means Austrians out, Chicagoites in.

But if production is PRIMARILY for the benefit of some non-producer, production will decrease in the absence of coercion to produce, i.e. slavery.

It either pays, or it doesn’t. There’s no need to be concerned with interpersonal comparison of the degree of benefit.

Wildberry September 21, 2011 at 10:34 am: @Andrew from Russia September 21, 2011 at 1:49 am

it was illustrated that the proportion between the two does not matter because one does not generally eat away from the other.

Declaring victory, without actually trying to argue this point? What is your reasoning behind this bald assertion? Obviously Mises disagrees, so perhaps you could have the courtesey to explain to all us simple folk why he is wrong.

The policy goal is to link production with internal economies. That is the policy that leads to innovation and increasing supply; economics 101.

If an economic good has some price value, then the rule of private property requires that the benefit of that good acrue to the owner. You propose something else.

Note that Mises does not limit his explanation of external economies to IP, but only uses it for illustration as an “extreme example”. So you are in a peculiar position of arguing against the principle of private property. Like I said, socialism is a hard habit to shake.

It either pays, or it doesn’t. There’s no need to be concerned with interpersonal comparison of the degree of benefit.

Yes, but you fail to indicate whether it matters to whom it pays. As to the “interpersonal comparison”, this is nonsense. I am not engaging in such a comparison. Just follow the money in your “model” and see if it leads back to the producer/owner. If not he is producing for an external economy. This is not rocket science.
Wildberry September 21, 2011 at 10:43 am: One more thing:

First you said this:

b) preoccupation with externalities as if the scope of internalization doesn’t count whenever externalities are present.

Then this:

Nice try but it was illustrated that the proportion between the two does not matter because one does not generally eat away from the other.

Perhaps you can explain how these are not contradictory?
Andrew from Russia September 21, 2011 at 11:31 am: it was illustrated that the proportion between the two does not matter because one does not generally eat away from the other.
Declaring victory, without actually trying to argue this point? What is your reasoning behind this bald assertion?

I illustrated my point with an example of two producers in the thread I already linked to.

First you said this:
b) preoccupation with externalities as if the scope of internalization doesn’t count whenever externalities are present.

Then this:
Nice try but it was illustrated that the proportion between the two does not matter because one does not generally eat away from the other.

Perhaps you can explain how these are not contradictory?

The degree of externalities tells nothing about the degree of internal benefits. Didn’t I put it clear enough? The corollary is that an externality-prevention strategy (e.g. IP) is not necessarily an income-maximization strategy. And it must be repeated that, absent IP, internalization is always possible because there’s no information without media, and media is always privately owned.

JFF September 20, 2011 at 10:57 am

I see, a thoroughly beaten dead horse becomes a strawman zombie. Fascinating.

He also wrote, “To paraphrase the late economist, John Robinson, patents and copyrights slow down the diffusion of new ideas for a reason, to insure there will be more new ideas to diffuse.” [↩]

{ 12 comments }

Patent Lawyers Who Don’t Toe the Line Should Be Punished!

by Stephan Kinsella on December 10, 2010

See this post .

{ 1 comment }

Is It So Crazy For A Patent Attorney To Think Patents Harm Innovation?

by Stephan Kinsella on December 10, 2010

From StephanKinsella.com, Oct. 2009:

Good post by Mike Masnick on Techdirt: Is It So Crazy For A Patent Attorney To Think Patents Harm Innovation?

from the not-at-all dept

I know a fair number of patent lawyers and copyright lawyers who are quite skeptical of what’s become of patent and copyright law — and who readily admit that the law has gone way beyond what is reasonable or what the law was designed to do (i.e., “promote the progress…”). And yet there are some in the patent or copyright legal business who somehow seem to think that it’s traitorous for a patent or copyright lawyer to ever dare question the idea that patents and copyrights work. I had a patent lawyer argue with me the other day that of course patents encourage innovation, because the Constitution says they do. This sort of logical blunder blows my mind. How can otherwise intelligent people assign such backwards logic to things? Do these same people also believe that when Congress passes any law, it automatically achieves its goals?

I have a good friend, who has recently made it through law school. Since he spent over a decade as a computer scientist, the law firm he went to work for made sure he did a rotation in the patent group (but of course). He was telling him how sick the experience made him feel. He said the stuff he was working on was disgusting. Helping companies patent blatantly obvious ideas, and using those patents to sue other companies who were innovating. Even worse, he said that many of the partners in the group seemed gleeful at how they were abusing the system, solely because of the amount of money such projects bring in. None of them bothered to consider that the overall impact of what they were doing wasn’t “promoting the progress” but was harmful to society as a whole.

So, I can understand how lawyers can be on both sides of the equation (though, it says something to me about how they view the world). And, yet, there are still some IP attorneys who seem to think that it’s somehow ridiculous that a patent attorney could ever find patents a net negative on society (leaving aside the many, many recent studies done by lawyers who have shown exactly that). Stephen Kinsella, a patent attorney who is against patents has responded to one such claim by a patent attorney, explaining why of course a patent attorney can disagree with the patent system, and still do his job. He notes plenty of patent attorneys who have become skeptical of the patent system. [continue reading…]

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Gene Patent Absurdity

by Stephan Kinsella on December 10, 2010

Previously posted on The Libertarian Standard:

Gene Patent Absurdity

by Stephan Kinsella on April 13, 2010 @ 11:42 pm · 0 comments

in IP Law,Science,Technology

Those without any sound principles about rights and economics are totally confounded by the issue of gene patents. The author of “The absurdity of patenting genes,” in The Guardian, for example, first observes, “Patents are a sensible idea, because people are more likely to invest in innovation …”. But on the other hand, “patents also act as a barrier to innovation, and gene patents bring these disadvantages into stark relief.” So, patents are sensible, because they stimulate innovation … yet they also hamper innovation. Mmm-hmm.

Libertarians, however, having a better understanding of the nature of property rights, are increasingly recognizing that all patents are unjust (see my The Case Against IP: A Concise Guide). And something about gene patents–having the state grant monopolies on the way our genes are configured–is especially galling. Thank goodness this is being fought by the heroic David Koepsell, who is producing the anti-gene patent documentary Who Owns You? (see also Koepsell – Quinn “Debate” on Gene Patents; David Koepsell: Another Austrian-Influenced IP Opponent). And it’s also good that a federal trial court recently ruled against gene patents, in Association for Molecular Pathology and ACLU v. USPTO and Myriad (see Federal Court Invalidates Breast Cancer Gene Patent, Ronald Baily, Reason‘s Hit & Run; Court: Essentially All Gene Patents Are Invalid, Patently-O). [continue reading…]

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Obama Transition Team Member on “Optimizing” the Patent System

by Stephan Kinsella on December 10, 2010

[Previously posted on the Mises Blog, Nov. 2008]

As noted here here, one of Obama’s transition “team members is Reed Hundt, who was Bill Clinton’s FCC Chair from 1993 through 1997. Hundt is slated to work on the agency review team in charge of international trade and economics agencies.” In a 2006 Forbes op-ed, Hundt had various suggestions for patent reform. They are not all terrible, but they continue to miss the point by struggling to find some way to make the system work better. Part of his proposal is to reduce the number of patents granted, increase fees, and increase funding of the USPTO. Writes Hundt: “First, we should slash the number of patents granted each year by 90%. In 2004 the U.S. Patent &Trademark Office issued 165,000 patents. Sixteen thousand is more like an optimal number.” He proposes a $500k fee companies can pay for a “fast-track” one-year patent application review.

Typical bureaucratic hubris to think he knows the “optimal” number of patents–though technically he is right that 16,000 is “more like” an optimal number than is 165,000, since the optimal number is zero. This is not dissimilar to another recent proposal to improve patent quality and reduce the number of patents granted by radically increasing filing fees from the $1000 level to about $50,000. As Manuel Lora noted to me, this is like the Laffer Curve of Patents (see Rothbard’s evisceration of the Laffer Curve). Such high fees would of course reduce the number of patents, but would also tend to benefit large corporations.

These guys ought to give up trying to fine-tune an inherently unjust system and just admit it ought to be scrapped. Hundt writes, “We have a horribly expensive system, with huge backlogs and a daunting litigation risk. No wonder the Chinese don’t want to adopt it. Let’s get rid of it and start from scratch.” Well, he’s half-right.A few more responses to selected comments by Hundt:

Second, we need to spend more money on the system. The budget of the U.S. Patent & Trademark Office is $1.5 billion. That ought to be tripled to $4.5 billion . . .

Who do you mean, “we,” kemosabe? Not if it requires taxpayer funding.

We don’t want grossly overworked professionals trying to figure out whether specific algorithms used to refresh the pixels on a computer monitor screen ought to be patented.

No, we want bright young Clintonite master bureaucrats!

Fourth, all patent case awards should be forward looking and linked to lost sales. In other words, plaintiffs who win patent-infringement challenges should be able to enjoin only future competition.

I thought he was onto something with his first sentence, but then he shys away from radical reform by not urging the abolution of all patent injunctions.

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Copyright Lawyers Sued by Copyright Infringers

by Stephan Kinsella on December 9, 2010

Andy Chalk | 1 Dec 2010 5:16 pm

Filed under: andy chalk, copyright infringement, dunlap grubb and weaver, file sharing, lawsuit, lawyers, us copyright group

The U.S. Copyright Group and the law firm of Dunlap, Grubb and Weaver, who recently demanded sanctions against a lawyer who offered cheap assistance to people accused of copyright infringement, are now facing a class-action lawsuit filed by those very same people.

IP: Divided Congress May Create Perfect Storm for Patent Reform

by Stephan Kinsella on December 9, 2010

See the following post from Inside Counsel. The typical mainstream patent bar view. It’s complete nonsense, of course. The comment notes that the Patent Reform Act of 2010

provided guidance on patent damages, raised the bar for finding willful infringement, discouraged forum shopping and eliminated false marking suits where the plaintiff could not show competitive damage. All in all, the 2010 Act was seen as pro business and a good first step towards much needed systemic change.

All trivial, as I noted in “Reducing the Cost of IP Law” and “Radical Patent Reform Is Not on the Way.”

IP: Divided Congress May Create Perfect Storm for Patent Reform

Both democrats and republicans have a history of ignoring patent reform when they control Congress, but the current divide could lead to action.

By Mark C. Scarsi

The promise of Patent Reform reminds me a bit of Lucy’s perennial football prank on Charlie Brown in the Peanuts comic strip. Every year Congress tees up a reform package designed to cure the ills of the Patent System, patent practitioners and business owners get excited about the first real reform of the patent system in decades and then, like Lucy, Congress yanks the ball away by closing its legislative session without taking action.

This past year was no different. In March, the Senate introduced the Patent Reform Act of 2010. The Act included a number of measures to provide clarity in the patent system and to curb patent litigation abuses. For example, the 2010 Act provided guidance on patent damages, raised the bar for finding willful infringement, discouraged forum shopping and eliminated false marking suits where the plaintiff could not show competitive damage. All in all, the 2010 Act was seen as pro business and a good first step towards much needed systemic change.

Read more>>

[Mises cross-post]

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Quote of the Week: Martin Beckett

by Stephan Kinsella on December 8, 2010

“We must not let these global corporations destroy this rich chain of creativity, which has taken centuries to achieve, by circumventing the intent of national laws in a feeding frenzy of greed. We need to achieve a balanced and fair system where all can benefit from the fruits of our artistic works, and artists are protected from these manifestly unfair contracts.

“This publication is intended to bring this matter to the forefront of public attention and provides all the evidence that these practices are both widespread and wrong and demands immediate action. We must not allow corporate greed to destroy what has taken centuries for our culture to develop.“

–Martin Beckett, photographer, “Whose Rights?“

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Patent Trolling in Action: Big Patent Firm Sues Nine Tech Firms

by Stephan Kinsella on December 8, 2010

Good example of patent trolling at work. Not that there is anything particularly wrong with patent trolls: this is a natural result of having a patent system.¹

Update: see als0 Peter Zura’s post on the 271 Patent Blog, *** Intellectual Ventures Launches Massive Litigation Across 3 Industries ***.

Big Patent Firm Sues Nine Tech Firms

Intellectual Ventures LLC, which has spent a decade buying and filing for patents, named nine big technology companies as defendants in its first-ever infringement suits.

The closely held firm was co-founded by former Microsoft Corp. chief technology officer Nathan Myhrvold, who had avoided litigation for years but never ruled it out.

Nathan Myhrvold, CEO of Intellectual Ventures.

Intellectual Venture’s lawsuits focus on patents in the fields of computer security and semiconductor technology. One suit names Symantec Corp., McAfee Inc., Trend Micro Inc. and Check Point Software Technologies Ltd.

Another targets Elpida Memory Inc. and Hynix Semiconductor Inc. A third names Altera Corp., Lattice Semiconductor Corp. and Microsemi Corp., which recently acquired Actel Corp.

The lawsuits, all filed in federal court in Delaware, seek unspecified damages. None of the defendants could immediately be reached for comment.

Read more: http://online.wsj.com/article/SB10001424052748703493504576007444122372926.html#ixzz17YP8WbEV

See my Patent Trolls and Empirical Thinking; Patent Law, State Courts, and Free Speech: The Case of Troll Tracker. [↩]

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