In this interesting interview on KERA Think, with the author of a new book on Dungeons and Dragons, the author observes that in the early years of D&D, the publisher was aggressive in suing fans who published modified versions of the D&D rules (presumably using either copyright or trademark law as the weapon of choice), but that in the early 1990s, under new ownership, following the lead of the open software movement, D&D made the rules “open source” and permitted fans to publish variations, which ended up making the game flourish and spread, and helped sustain and keep it alive (approx. 27:30-29:40). Yet another example of how the open approach (and lack of IP enforcement) is better even for the creator.

Of Dice And Men

August 21, 2013

The following passage on patents, by Lionel Robbins, was called to my attention by Jeff Tucker. This is from Robbins’s 1939 book The Economic Basis of Class Conflict and Other Essays in Political Economy, Part I, “The Interests of Groups and the Interest of Society,” chapter III, “The ‘Inevitability’ of Monopoly,” Section (4), “The Causes of ‘Spontaneous’ Monopoly.” Bold added:

(4) THE CAUSES OF “SPONTANEOUS” MONOPOLY

It is now time to dig rather deeper. So far our analysis has been confined to asking whether, in the absence of direct authoritarian restriction of competition, the sphere of monopoly is ubiquitous; and it has appeared that this is certainly not the case. In surveying the various types of production, we have found areas of competition and areas of monopoly; but there can be little doubt that on any quantitative test, such as proportion of world population employed or value of output produced, the competitive area would be considerably the larger. We have, however, found much monopoly which, directly at any rate, has not been deliberately imposed by state action, and if we are properly to appreciate its significance and to assess propositions concerning its inevitability, it is necessary to enquire further concerning its origin. We must enquire concerning the causes of monopoly.

Now the desire for monopoly is more or less general. Monopoly means higher gains, less effort, more security than competition. There are few men who do not covet such a position or who, if they see a chance of achieving it, deliberately refrain from making the attempt. “People of the same trade”, said Adam Smith, “seldom meet together, even for merriment and diversion but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”¹  The representatives of the modern trade associations may say that they have changed all that. But the reasons they adduce are slender; and their actions belie their claims.

But it is one thing to want monopoly. It is quite another thing to be able to achieve it. If producers are able to induce governments deliberately to prohibit competition, well and good. But if this fortunate event does not occur, it is only under certain conditions that the attempt to secure monopoly is likely to be successful. The world is a wide place. The gains of monopoly are tempting to outsiders. Fortunately for the rest of humanity, there is usually a plentiful supply of would-be interlopers and blacklegs. Combinations which are not enforced by the sanction of the state are in danger of breaking down. To understand the continuance of monopoly, therefore, we have to enquire what are the conditions which conduce to its survival. We have to ask to what extent these conditions can be regarded as natural, to what extent they are the indirect result of policy.

(i) We may start with conditions which are obviously “natural”. If the supplies of any natural resource are concentrated in one place, or in a small number of places, it is easy for them to gravitate into the hands of one control or of a very limited number; and there is a strong incentive to action which will bring this about. We have seen already that this is the case in certain extractive industries. One can easily conceive of worlds in which the physical constitution of the planet would give rise to widespread monopoly of this type. But in our own, while such conditions are important in certain narrow lines, in modern times, they have not been responsible for any but a small fraction of the area of “spontaneous” monopoly.

(ii) Somewhat similar, and probably quantitatively much more important, is the influence of costs of transport. We have seen that position in space may, in certain circumstances, be regarded as constituting a unique source of supply. Even where exact position is not of great importance, in areas where demand is small, single units of supply — local shops or brickworks for example — may have positions of monopolistic power. It is important to observe that the extent of this power will depend essentially upon costs of transport from other areas. The middle ages must have been honeycombed with this kind of monopoly; and the deliberate restriction of transport development on the roads in our own time must be regarded as a factor tending to sustain it where it still persists. The lower the cost of transport, the less the danger of local monopoly. [continue reading…]

1.  Wealth of Nations (Cannan’s Edition), vol. i, p. 158.  [Note: the next two sentences rarely accompany a quotation of the first: Smith goes on to say: “It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary”. —SK]  [↩]

From my Mises blog post from 2009, with some updates:

Update: Dennis Crouch, “The Carrot and Stick Approach to Innovation,” Patently-O (Jan. 16, 2024): “The ruling in Gilead Tenofovir Cases opens the door to lawsuits punishing companies for not innovating fast enough – a sharp contrast to the patent system’s traditional approach to encouraging innovation through potential monopoly-like profits. This flips the normal “carrot”/”stick” innovation incentive model on its head. Patents traditionally encourage innovation by rewarding it through time-limited exclusive rights enabling high prices that “fuel … genius,” as President Lincoln put it.”

From Penner on Intellectual Property, Monopolies, and Property: Penner readily acknowledges that IP rights are not property rights but monopoly grants: “not one of them [early twentieth-century authorities quoted previously] embraces the idiotic fiction that intellectual property constitutes property in ideas (patents) or expressions (copyright). They see it for what it is, a certain class of rights to monopolies.” (p.77) He also expresses a view on the issue of whether IP rights are ownership in ideas or not, something even IP advocates cannot agree on, such is their confusion on the foundations of this issue.

Update: “… the patent system confers a legally protected monopoly on inventors to stimulate invention.” Areeda, Kaplow, Edlin, and Hemphill, Antitrust Analysis: Problems, Text, and Cases, 7th ed. (2013), ¶118.

Update: In the recent Oil States case (April 24, 2018), the Supreme Court recognized that patents are “public franchises,” and states that, “like the PTO’s initial review, the Board’s inter partes review protects ‘the public’s paramount interest in seeing that patent monopolies are kept within their legitimate scope.'” And:

Patents began as little more than feudal favors. … The crown both issued and revoked them. … And they often permitted the lucky recipient the exclusive right to do very ordinary things, like operate a toll bridge or run a tavern. Ibid. But by the 18th century, inventors were busy in Britain and invention patents came to be seen in a different light. They came to be viewed not as endowing accidental and anticompetitive monopolies on the fortunate few but as a procompetitive means to secure to individuals the fruits of their labor and ingenuity; encourage others to emulate them; and promote public access to new technologies that would not otherwise exist. … The Constitution itself reflects this new thinking, authorizing the issuance of patents precisely because of their contribution to the “Progress of Science and useful Arts.” Art. I, §8, cl. 8. “In essence, there was a change in perception—from viewing a patent as a contract between the crown and the patentee to viewing it as a ‘social contract’ between the patentee and society.” Waltersheid, The Early Evolution of the United States Patent Law: Antecedents…. And as invention patents came to be seen so differently, it is no surprise courts came to treat them more solicitously.

Of course, patent proponents are very upset by this. Objectivist law professor Adam Mossoff bemoans this decision, writing

the Court rules that the U.S. follows the original practice by English Kings and Queens who bestowed royal privileges on their subjects as “patent” grants, applying to U.S. patent owners the historical dictum that “what the government giveth, the government can taketh away.”

I, for one, agree: there is nothing wrong with the government taking away a patent it has granted (I pointed this out in Objectivist worried ObamaCare may weaken patent rights; see also Price Controls, Antitrust, and Patents). As Justice Thomas says, writing for the majority, all inter partes review involves is “reconsideration of the Government’s decision to grant a public franchise.”

So of course we have patent shill Gene Quinn lamenting the decision and then dragging out a group of industry and IP commentators, most of whom are upset by this decision. Some even cling to the hope that inter partes review may yet be found unconstitutional on Takings and Due Process grounds, based on Thomas’s statement that

our decision should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause.

However, it is hard to see how abolition of patent law, narrowing of patent protection judicially or by legislation, etc., would really be a “taking” given the thrust of the Court’s reasoning—which is why Mossoff worries—hopefully rightly—that the decision ultimately means “what the government giveth, the government can taketh away.” Abolishing or limiting existing patent rights is no more of a taking than eliminating welfare or social security would be.

See also: Adam B. Jaffe & Josh Lerner, Innovation and Its Discontents: “A patent thereby creates a kind of monopoly for its owner, although the breadth and hence significance of this monopoly depends on the breadth or extent of the patent grant.”

See also Michael Davis, Patent Politics, at n.141:

(Archived comments below)

Are Patents “Monopolies”? (archive):

JULY 13, 2009 by STEPHAN KINSELLA

On occasion you get some defender of patents who is upset when we use the m-word to describe these artificial state-granted monopoly rights. For example here one Dale Halling, a patent attorney (surprise!) posts about “The Myth that Patents are a Monopoly” and writes, ” People who suggest a patent is a monopoly are not being intellectually honest and perpetuating a myth to advance a political agenda.”

Well, let’s see. First, see my post Epstein and Patents, noting that the pro-patent Epstein writes:

Patented goods are subject to a lawful monopoly created by the state in order to induce their creation. No one thinks that new pharmaceutical drugs will be invented by private firms that cannot receive a rate of return sufficient to recover [various costs]. … The legal monopoly granted by the patent is the only mechanism that allows the producer to recover those fixed costs….

Is the pro-patent Epstein being dishonest?

And see my comments (1, 2) on The Three Stages of Invention post, excerpted below:First, as to whether patents are monopoly grants–hell, even the feds admit this: “Section 154 and related provisions [e.g. Sec. 271] obviously are intended to grant a patentee a monopoly only over the United States market….” U.S. Supreme Court, Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518 (1972). See also: King Instr. v. Perego, by the Court of Appeals for the Federal Circuit (“Congress made the policy choice that the “carrot” of an exclusive market for the patented goods would encourage patentees to commercialize the protected inventions so that the public would enjoy the benefits of the new technology during the patent term in exchange for granting a limited patent monopoly. In other words, the public expected benefits during “‘the embarrassment of an exclusive patent as Jefferson put it.’” Graham v. John Deere Co., 383 U.S. 1, 10-11 (1966). See in particular, “Thomas Jefferson to Isaac McPherson 13 Aug. 1813“: “accordingly it is a fact, as far as I am informed, that England was, until we copied her, the only country on earth which ever by a general law, gave a legal right to the exclusive use of an idea. in some other countries, it is sometimes done, in a great case, and by a special & personal4 act. but generally speaking, other nations have thought that these monopolies produce more embarrasment than advantage to society. and it may be observed that the nations which refuse monopolies of invention, are as fruitful as England in new and useful devices.”)

[Jefferson also referred to patent and copyright as monopolies in his proposal for an amendment in the Bill of Rights:

Art. 9. Monopolies may be allowed to persons for their own productions in literature and their own inventions in the arts for a term not exceeding — years but for no longer term and no other purpose.

See Kinsella, “Thomas Jefferson’s Proposal to Limit the Length of Patent and Copyright in the Bill of Rights,” C4SIF Blog (Dec. 1, 2011)]

See also Engel Ind. v. Lockformer Co. (“We hold that the disputed royalties provisions do not inappropriately extend the patent monopoly to unpatented parts of the patented system”); Carborundum Co. v. Molten Metal Eq. Co. (“A patentee, in demanding and receiving full compensation for the wrongful use of his invention in devices made and sold by a manufacturer adopts the sales as though made by himself, and therefore, necessarily licenses the use of the devices, and frees them from the monopoly of the patent.”)

And: Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947):

The Florida statute is aimed directly at the promotion of intellectual creation by substantially restricting the public’s ability to exploit ideas that the patent system mandates shall be free for all to use. Like the interpretation of Illinois unfair competition law in Sears and Compco, the Florida statute represents a break with the tradition of peaceful coexistence between state market regulation and federal patent policy. The Florida law substantially restricts the public’s ability to exploit an unpatented design in general circulation, raising the specter of state-created monopolies in a host of useful shapes and processes for which patent protection has been denied or is otherwise unobtainable. It thus enters a field of regulation which the patent laws have reserved to Congress. The patent statute’s careful balance between public right and private monopoly to promote certain creative activity is a “scheme of federal regulation . . . so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it.”

Brenner v. Manson, 383 U.S. 519 (1966):

Whatever weight is attached to the value of encouraging disclosure and of inhibiting secrecy, we believe a more compelling consideration is that a process patent in the chemical field, which has not been developed and pointed to the degree of specific utility, creates a monopoly of knowledge which should be granted only if clearly commanded by the statute. Until the process claim has been reduced to production of a product shown to be useful, the metes and bounds of that monopoly are not capable of precise delineation. It may engross a vast, unknown, and perhaps unknowable area. Such a patent may confer power to block off whole areas of scientific development, without compensating benefit to the public. The basic quid pro quo contemplated by the Constitution and the Congress for granting a patent monopoly is the benefit derived by the public from an invention with substantial utility. Unless and until a process is refined and developed to this point — where specific benefit exists in currently available form – there is insufficient justification for permitting an applicant to engross what may prove to be a broad field.

Diamond v. Chakrabarty, S.Ct. (1980), Brennan’s dissent:

I agree with the Court that the question before us is a narrow one. Neither the future of scientific research, nor even the ability of respondent Chakrabarty to reap some monopoly profits from his pioneering work, is at stake. Patents on the processes by which he has produced and employed the new living organism are not contested. The only question we need decide is whether Congress, exercising its authority under Art. I, 8, of the Constitution, intended that he be able to secure a monopoly on the living organism itself, no matter how produced or how used.

Now you can argue that patent holders do not necessarily have “monopoly power” (see The Importance of Patents for Economic Development – 1999, by Prof. William Hennessey), but as Rothbard et al. have pointed out, the government’s concept of monopoly is flawed; the only issue that matters is whether there is a legal monopoly granted. See, e.g., Hoppe, A Theory of Socialism and Capitalism, ch. 9, pp. 185-86:

The monopoly problem as a special problem of markets requiring state action to be resolved does not exist. In fact, only when the state enters the scene does a real, nonillusory problem of monopoly and monopoly prices emerge. The state is the only enterprise whose prices and business practices can be conceptually distinguished from all other prices and practices, and whose prices and practices can be called “too high” or “exploitative” in a completely objective, nonarbitrary way. These are prices and practices which consumers are not voluntarily willing to pay and accept, but which instead are forced upon them through threats of violence.

See also Rothbard, Man, Economy, and State (with Power and Market): “The only viable definition of monopoly is a grant of privilege from the government.”

Now it is, indeed, clear that a patent is a monopoly grant to someone that permits them to charge above-market prices; this is exactly the goal of the patent law: to provide this monopoly profit to inventors so as to incentivize them to innovate and file for patents. And it is why, for example, Blackberry paid over $600 million to NTP in a recent patent suit; and it is why consumers will have to pay more for Blackberry services than they otherwise would, etc. Did NTP have “monopoly power” as defined by the government’s antitrust scheme? I don’t know. Probably not. But did they extort RIM/Blackberry by use of the government-granted patent monopoly? Of course.

See also Arnold Plant, The Economic Theory Concerning Patents for Inventions, sections 16, 19, 20, 24:

The patent system may, on the one hand, be expected to affect the making of inventions in two ways. The first is to divert inventive activity into those fields in which the monopoly grant will be expected to prove most remunerative. It may, secondly, affect the total amount of inventive activity.

… the utilitarians assumed that the patent system was responsible for the greater part of inventing activity. The question which they one and all failed to ask themselves, however, is what these people would otherwise be doing if the patent system were not diverting their attention by the offer of monopolistic profits to the task of inventing. By what system of economic calculus were they enabled to conclude so definitely that the gain of any inventions that they might make would not be offset by the loss of other output? By no stretch of the imagination can the inventing class be assumed to be otherwise unemployable. Other product which is foregone when scarce factors are diverted in this way completely escaped their attention.

… at the beginning of this century Professor J. B. Clark was still writing: “If the patented article is something which society without a patent system would not have secured at all – the inventor’s monopoly hurts nobody… His gains consist in something which no one loses, even while he enjoys them.”? No inkling here that the patent inducement to invent diverts scarce human effort from other production, and that the subsequent exploitation of patents again interferes with the disposition of scarce factors which would obtain under competitive conditions.

… It seems unquestionable not only that a very considerable volume of inventive activity must definitely be induced by price conditions, but also that that activity is diverted by price movements from other types of endeavour as well as from other fields of invention. Entrepreneurs faced with new difficulties or with new opportunities will divert not only their own attention, but that of every technician who can be spared, from the business of routine production to that of urgent innovation. They will not rely exclusively upon those types of professional inventors whose autonomous output pours out in a stream of unvarying size, and some of whom may be prepared, in return for the inducements which the entrepreneurs can offer, to transfer their spontaneous activity to their service. It cannot be assumed that all who are capable of innovation spend their whole lives in inventing. Many of them are also able administrators and production controllers; some in the past have been clergymen and barbers, and in our own time there is a steady flow of technicians from the research laboratories of pure science into those of industrial invention and out again. … The patent system … enables those who “have the monopoly of the right to use a patented invention to raise the price of using it … and in that way to derive a larger profit from the invention than they could otherwise obtain. The effect must surely be to induce a considerable volume of activity to be diverted from other spheres to the attempt to make inventions of a patentable type. [emphasis added]

See also Rothbard, Man, Economy, and State, ch. 10, sec. 7:

It is by no means self-evident that patents encourage an increased absolute quantity of research expenditures. But certainly patents distort the type of research expenditure being conducted. . . . Research expenditures are therefore overstimulated in the early stages before anyone has a patent, and they are unduly restricted in the period after the patent is received. In addition, some inventions are considered patentable, while others are not. The patent system then has the further effect of artificially stimulating research expenditures in the patentableareas, while artificially restricting research in the nonpatentable areas.

Update: See “Ideas Need Protection: Abolishing Intellectual-property Patents Would Hurt Innovation: A Middle Ground Is Needed,” by William F. Shughart II, a senior fellow with the Independent Institute, The Baltimore Sun (Dec. 21, 2009):

Granting a temporary monopoly to the rare breakthrough is necessary, therefore, to provide its inventor with an opportunity to earn a return on the investment that led to the new idea – and to encourage additional such investments. Such protection is especially important in the pharmaceutical industry, where, in its absence, new drugs could be duplicated by competitors, and the incentive to invest would disappear, stifling the discovery process.

To paraphrase the late economist Joan Robinson, patents and copyrights slow down the diffusion of new ideas for a reason: to ensure there will be more new ideas to diffuse.

Update: It is interesting to note that one of the first patent statutes was England’s Statute of Monopolies of 1623.

Update: New York Law School professor Beth Noveck, quoted in an article on improving the U.S. patent system, admits: “A patent is a pretty significant monopoly, so we want to make sure we are giving it to the right people.”

Update: See my post IP Rights as Monopolistic Grants to Overcome the Public Goods Problem.

Update: As I note in Canada’s Founders Debated Justification for Patents, Canadian Sen. Jean-Charles Chapais, the agriculture minister, in introducing legislation for a Canadian patent law in 1869, readily admitted the monopoly nature of patents:

It must be remembered that a patent is a kind of monopoly, though he did not mean to say that the word monopoly should be taken in its fullest sense, but nevertheless it is a monopoly, because it gives to a man the right of manufacturing or vending alone, an article useful to the public; certainly there was great reason for granting this monopoly.

Update: In Thomas Jefferson’s Letter to James Madison, August 28, 1789 (On the liberty to write, speak, and publish and its limits), he proposes to James Madison, then in the process of drafting the Bill of Rights, that the following be incorporated into the Bill of Rights:

Art. 9. Monopolies may be allowed to persons for their own productions in literature and their own inventions in the arts for a term not exceeding — years but for no longer term and no other purpose.

This was written just shortly before the Constitution itself was to be ratified. It appears to be aimed at adding a limit on how many years Congress could grant patent and copyright monopolies for. The copyright and patent clause in the then-pending Constitution had no outside limit on how long the patent and copyright monopoly grants could be, providing: “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Jefferson apparently wanted the “limited time” to be capped at some maximum number of years (probably 14 or 21 years or so). If he had got his way, (a) it would be clearer to everyone that patent and copyright are monopolies, and (b) Big Media and Mickey Mouse would not have been able to extend the copyright term to its current 100+ years.

See also Alex Tabarrok, Launching the Innovation Renaissance (which I discuss here):

Innovators need time to recoup their sunk costs, but why should every useful, non-obvious and novel idea be granted a 20-year patent? Maximizing innovation requires treating different industries differently. The idea for one-click shopping does not have the same sunk costs of research and development as a new pharmaceutical, and the former does not need and should not be given the same monopoly rights as the latter. [Tabarrok, Alex (2011-11-21). Launching The Innovation Renaissance: A New Path to Bring Smart Ideas to Market Fast (Kindle Locations 241-243). TED Books. Kindle Edition.]

Update: “A patent is an obvious monopoly; the patentee has exclusive rights and, where patented processes are involved, conditions are necessarily monopolistic. This influence has many ramifications. Not merely does it directly protect the manufacturer of patented articles; it also permits the creation of a whole network of tying contracts, forced joint supply, resale price maintenance and other trade practices, not particularly conspicuous in themselves but cumulatively highly conducive to the consolidation of monopolistic conditions. Indeed it is so important an influence that it is no exaggeration to say that special lines of expertise exist, not to forward the progress of invention but merely to devise variations in productive processes permitting the continuation of this form of monopoly power.” ~ Lionel Robbins (1939)

Also see Edmund W. Kitch, “Patents: Monopolies or Property Rights?,” Rsch. in L. & Econ. 8 (1986): 31–50; Frank H. Easterbrook, “Intellectual Property Is Still Property,” Harv. J.L. & Pub. Pol’y 13, no. 1 (Winter 1990): 108–118, p. 112 (“[A] right to exclude in intellectual property is no different in principle from the right to exclude in physical property.”)

“If the government objects to monopoly prices for new inventions, it should stop granting patents.”
–Ludwig von Mises, Human Action (Mises Quote on Patents and Monopolies)

Mises: “Patents and copyrights are results of the legal evolution of the last centuries. Their place in the traditional body of property rights is still controversial. People look askance at them and deem them irregular. They are considered privileges, a vestige of the rudimentary period of their evolution when legal protection was accorded to authors and investors only by virtue of an exceptional privilege granted by the authorities. They are suspect, as they are lucrative only if they make it possible to sell at monopoly prices.” (Mises on Intellectual Property)

See also:

• Are Patents “Monopolies”?
• Lionel Robbins on the Patent Monopoly

Are Patents “Monopolies”? (archived comments):

What can one say…?

Copyright Lawyers vs Patent Lawyers Smackdown: And The Winner Is…

from the when’s-the-rematch? dept

Michael Rozeff has a provocative post on LRC about property rights in the content of email. Here’s the post:

Contents of Private E-Mails Are Private Property

Suppose that I own a safe and it is empty. Someone breaks into it and finds nothing. They have trespassed at a minimum. Maybe more, maybe breaking and entering, maybe attempted burglary.

Suppose now that I invent a new soft drink and I keep the formula in this safe. No one can chemically analyze the soft drink and replicate the formula. Someone breaks into the safe and steals the formula. Is the crime worse? I say it is. The harm to me is greater. One cannot assume that the formula, as an idea, is not a scarce good or a free good. It is my private property. It can be copied without disturbing the original, but that is not relevant in this case because I’ve placed a boundary around it. We shouldn’t go off on a confusing tangent about it using a concept of intellectual property because of the copying factor.

A private e-mail, like a letter, could physically be intercepted, accessed and copied without taking anything physical away from the sender or owner. Are the contents then not property, and is copying them therefore not a theft? I say it is theft. The “good” that is an e-mail and a letter is not purely physical. The subjective utility of it depends on its personal, private and psychological content as a communication. The thief who accesses it has, in general, undermined this utility. He has harmed the sender.

I see this case as being the same as the thief who steals the soft drink formula. There is a trespass followed by a theft.

NOTE: A comment by Nick Badalamenti with a second from Robert Wenzel has induced me to alter this post although not in the direction they suggested. All remaining errors are solely mine.

This post provides a good opportunity to explore some issues related to libertarian property theory. I repeat the post and provide some comments inline:

Suppose that I own a safe and it is empty. Someone breaks into it and finds nothing. They have trespassed at a minimum. Maybe more, maybe breaking and entering, maybe attempted burglary.

Suppose now that I invent a new soft drink and I keep the formula in this safe. No one can chemically analyze the soft drink and replicate the formula.

It’s odd to simply assert that it’s impossible to analyze the soft drink and replicate the formula. It’s just a soft drink, after all. But let this pass.

Someone breaks into the safe and steals the formula. Is the crime worse? I say it is. The harm to me is greater. One cannot assume that the formula, as an idea, is not a scarce good or a free good. It is my private property. It can be copied without disturbing the original, but that is not relevant in this case because I’ve placed a boundary around it. We shouldn’t go off on a confusing tangent about it using a concept of intellectual property because of the copying factor.

Rozeff is correct that the harm is worse. But this issue goes to the damages (restitution) appropriate in response to an act of trespass. If I steal from you a hunk of marble worth $100 then I owe you something on the order of $100; if I steal from you a hunk of marble you bought from some sculptor for $100,000, then I owe you more money. The things stolen were different. But objects x and y being different does not mean that the “difference” is an ownable thing. [continue reading…]

On the Freakonomics blog, Kaul Raustiala and Chris Sprigman (the latter mentioned here previously) discuss the phenomenon copyright suppression of some older works because of a combination of the orphan works problem and long copyright terms. This has been discussed here before at How long copyright terms make art disappear. The post is repixeled below.

Good for them for recognizing and publicizing this harm, but it is truly maddening to see one repeated unprincipled argument after another by pragmatists and utilitarians and economists. They simply seem unable to think in principled terms. They see the damage done by copyright law, and even highlight it, but never oppose it root and branch. They never want to abolish it. At most, it must be “reformed.” Bah.

Copyright law is poison, one of the worst travesties foisted on society by the fascist state; see:

• “Masnick on the Horrible PROTECT IP Act: The Coming IPolice State” (June 2, 2011)
• “Copyright and the End of Internet Freedom” (May 10, 2011)
• “Death by Copyright-IP Fascist Police State Acronym” (Jan. 30, 2012)
• “SOPA is the Symptom, Copyright is the Disease: The SOPA Wakeup Call to Abolish Copyright,”The Libertarian Standard (Jan. 24, 2012)
• “Where does IP Rank Among the Worst State Laws?” (Jan. 20, 2012)
• “Should Copyright Be Allowed to Override Speech Rights?” (Dec. 20, 2011)
• “Copyright is Unconstitutional” (Nov. 27, 2011)
• “Patent vs. Copyright: Which is Worse?” (Nov. 5, 2011)

For some real reform, abolish patent and copyright, or at least do something significant: see “How to Improve Patent, Copyright, and Trademark Law” (Feb. 1, 2011).

Here’s the post.

Does Copyright Make Books Disappear?

• Libertarian and Lockean Creationism: Creation As a Source of Wealth, not Property Rights; Hayek’s “Fund of Experience”

Some of Hayek’s views on patent and copyright have already been collected in previous blogposts (see below). Steve Horwitz just called to Jeff Tucker’s attention another provocative comment of Hayek’s on this topic, in his Constitution of Liberty. This is from chapter 3 (which is reprinted here) (emphasis added):

3. The rapid economic advance that we have come to expect seems in large measure to be the result of this inequality and to be impossible without it. Progress at such a fast rate cannot proceed on a uniform front but must take place in echelon fashion, with some far ahead of the rest. The reason for this is concealed by our habit of regarding economic progress chiefly as an accumulation of ever greater quantities of goods and equipment. But the rise of our standard of life is due at least as much to an increase in knowledge which enables us not merely to consume more of the same things but to use different things, and often things we did not even know before. And though the growth of income depends in part on the accumulation of capital, more probably depends on our learning to use our resources more effectively and for new purposes.

The growth of knowledge is of such special importance because, while the material resources will always remain scarce and will have to be reserved for limited purposes, the users of new knowledge (where we do not make them artificially scarce by patents of monopoly) are unrestricted. Knowledge, once achieved, becomes gratuitously available for the benefit of all. It is through this free gift of the knowledge acquired by the experiments of some members of society that general progress is made possible, that the achievements of those who have gone before facilitate the advance of those who follow.

Here Hayek correctly identifies a key aspect of human progress and production: the reproduction and spread of knowledge which, unlike material resources, is nonscarce and can be duplicated and copied without limit or exhaustion.

See also further quotes from that chapter (emphasis added):

Jeff Tucker wrote on this today too:

Hayek: Spread of Non-Scarce Knowledge is the Key to Progress

Jeffrey Tucker · August 2, 2013

For years I’ve looked for a passage from the Austrian tradition that clearly explains the nature of knowledge as a non-scarce good and its high value in pushing social and economic progress. Stephan Kinsella and I have found enough material to provide hints and suggestions, small examples and first thoughts, but never anything that really made the point super clear.

In all my speaking and writing for the past three years, I’ve gone to great lengths to spell out the difference between the physical world of scarcity and the world of ideas in which non-scarcity prevails, and suggested that this is a major reason for the great migration to the digital world. I’ve longed for a passage from some Austrian thinker who seemed fully to grasp the idea — not just in hints and suggestions but worked out and precise.

Well, last night, Steven Horwitz came across a passage from F.A. Hayek that is just gold. It is from the Constitution of Liberty (Chicago, 1960, 1978, p. 43). He puts it as plainly as one can possibly hope given that he was writing before the digital age.

The growth of knowledge is of such special importance because, while the material resources will always remain scarce and will have to be reserved for limited purposes, the uses of new knowledge (where we do not make them artificially scarce by patents of monopoly) are unrestricted. Knowledge, once achieved, becomes gratuitously available for the benefit of all. It is through this free gift of the knowledge acquired by the experiments of some members of society that general progress is made possible, that the achievements of those who have gone before facilitate the advance of those who follow.

Hayek goes on. He uses the fantastic phrase “fund of experience” — an analogy to capital theory in the physical world — as a way of explaining how the whole world and the whole of history can benefit from the success of one single firm or one innovator. “The free gift of the knowledge that has cost those in the lead much to achieve enables those who follow to reach the same level at a much smaller cost.”¹

This free gift is what I’ve called the socialistic side of capitalism. Every private producer, in order to market its wares, must necessarily give away that most precious thing, the evidence of its own success. That evidence, that knowledge, becomes part of the commons. That thereby inspires competitors to emulate the success. The profitable producer must, in turn, stay on the path of change and progress and never rest, generate ever newer and better knowledge.

So we see here how Hayek anticipated the great trend of our time, the steady and inexorable move of more and more of life from the realm of scarce to non-scarce: words, images, movies, physical objects with 3d printing, and now even money. This is all about the scalability, malleability, indestructibility, and immortality of ideas as non-scarce good. It is gratuitously available for the benefit of all — and this of course is what the markets “desires” in effect: the inclusion of the whole of the world’s population and resources in the great process of improving our lives in this world in which scarcity will always and forever be a feature — a feature to deal with realistically (and humanely) and also to overcome insofar as we are able.

See also:

• Tucker & Kinsella, “Goods, Scarce and Nonscarce,” and many quotations/citations therein
• Kinsella, Intellectual Freedom and Learning Versus Patent and Copyright
• Kinsella, Knowledge is Power
• Jeff Tucker, “Misesian vs. Marxian vs. IP Views of Innovation“; Tucker, “Hayek on Patents and Copyrights“; Joe Salerno, Hayek Contra Copyright Laws
• Ludwig von Mises, Human Action 3rd rev. ed. Chicago: Henry Regnery (1966), chap. 23, section 6, pp. 661–62; see also pp. 128, 364; Kinsella, “Mises on Intellectual Property“
• Rothbard, Man, Economy, and State and Power and Market, Scholars Edition, pp. liv, 745-54, 1133-38, 1181-86
• “The Law of the Sea of Ignorance: F. A. Hayek, Fritz Machlup, and other Neoliberals Confront the Intellectual Property Problem,” by Quinn Slobodian

1. Update: Re the “fund of experience” notion: see also the Supreme Court case Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948), discussing scientific discoveries which add to the “storehouse of knowledge of all men“; also discussed in Elizabeth I. Winston, “The Technological Edge.” See also “Against Intellectual Property After Twenty Years: Looking Back and Looking Forward“: “For elaboration, see Kinsella, “Hayek’s Views on Intellectual Property,” C4SIF Blog (Aug. 2, 2013) and “Intellectual Property and the Structure of Human Action,” discussing Hayek’s comments about how the accumulation of a “fund of experience” helps aid human progress and the creation of wealth. See also Kinsella, “Tucker, ‘Knowledge Is as Valuable as Physical Capital,’” C4SIF Blog (March 27, 2017).” [↩]

Objectivist Yaron Brook on the Leonard Peikoff podcast answers a question about how long the duration of copyright should be. Well, I should say, he attempts to answer the question. No, he doesn’t even quite do that. He just “punts”; says he doesn’t know and that this is the domain of legal philosophy. He says it’s like any other property rights; if someone creates something, it’s “theirs”; but because it’s digital, it “has a certain lifespan.” But what that lifespan is is just a “technical question.” Then he recommends the work of Adam Mossoff, who is the “best thinker on these issues of intellectual property rights.” As I have noted before, the Objectivists have no coherent argument for IP.¹

Objectivists insanely claim that IP is the most important type of law. Ayn Rand actually said that “patents are the heart and core of property rights“;   Objectivist IP attorney Murray Franck said: “intellectual property is after all the only absolute possession in the world.” Ayn Rand said that “Intellectual property is the most important field of law.”² So you would think they would, you know, have a theory of how long IP rights are supposed to last. They are the most important property rights of all! Objectivists say that patent and copyright are “just like” other property rights (except: they are more important), but, unlike other property rights, they cannot (for some unfathomable reason) last forever; and they cannot just have a zero term; so it has to be somewhere in between. How principled! What should this term be? Well, …. well …  legal experts can figure this out! (Except: they can’t: Legal Scholars: Thumbs Down on Patent and Copyright; The Overwhelming Empirical Case Against Patent and Copyright.) And hint: something that has a limited term is not a natural right, as Tom Bell and others have argued: it’s a temporary state-granted monopoly privilege.³

The idea of an optimal copyright term is pure nonsense. There is nothing natural or objective about the number of years the criminal state decides to grant its monopoly privileges for. What’s the right term? A million years? Forever? Fourteen? Twenty-eight? Life-plus-fifty? Life-plus-seventy? Who knows?⁴ That Objectivists would refer to IP rights as the “most important” type of property, and have no coherent theory of how long they should last, is pathetic.

1. See Locke’s Big Mistake: How the Labor Theory of Property Ruined Political Theory: Transcript; Yet more disanalogies between copyright and real property; Mossoff: “Convincing the Intellectual Property Skeptic”; Mossoff: Patent Law Really Is as Straightforward as Real Estate Law; Classifying Patent and Copyright Law as “Property”: So What?; Objectivists: “All Property is Intellectual Property”; Locke on IP; Mises, Rothbard, and Rand on Creation, Production, and ‘Rearranging’; Locke, Smith, Marx and the Labor Theory of Value; Hume on Intellectual Property and the Problematic “Labor” Metaphor”. [↩]
2. See Inventors are Like Unto …. GODS…..; Ideas Are Free: The Case Against Intellectual Property; Rand on IP, Owning “Values”, and “Rearrangement Rights”. [↩]
3. See Locke on IP; Mises, Rothbard, and Rand on Creation, Production, and “Rearranging”, where I note that Tom Bell and Ronan Deazley have shown that neither the Founders nor Locke thought that IP was a natural right–that is, they only favored IP as a policy tool. [↩]
4. See  Tom Bell on copyright reform; the Hayekian knowledge problem and copyright terms; Optimal Patent and Copyright Term Length; Where did the patent term come from?; Masnick, Copyright Length And The Life Of Mickey Mouse.  [↩]

Update: KOL235 | Intellectual Property: A First Principles Debate (Federalist Society POLICYbrief)

and James Stern: Is Intellectual Property Actually Property? [Federalist Society No. 86 LECTURE]

***

Economists and legal scholars have long been skeptical of IP,¹ and libertarians in recent decades have become even more skeptical; most nowadays are in favor of abolishing IP altogether.² So it is passing strange that the Federalist Society, allegedly a group of conservative and libertarian lawyers, is completely dominated by pro-IP discourse. You would never know that anyone opposes IP in principles. Its events, teleforums, articles, never bring up the anti-IP position. It’s always a pro-IP guy (often a federal “judge”) against some “reformer”. The reformer wants to fix the system, but not abolish it. After all, it’s in the Constitution, and that’s sacrosanct! (Nevermind that the Constitution was an illegal coup d’etat,³ which centralized the state, authorized taxation, conscription, eminent domain, slavery, and war, the central bank, inflation, fiat money, the business cycle, and apparently minimum wage laws, regulation of narcotics and firearms and immigration, and the like.)

For recent examples of Federalist Society IP discussions which never include the anti-IP side, but, at most, some “reformist” viewpoints:

• The Myriad Decision and Patented Innovation in the Biotech Industry;
• Unanimous Court Decides  Bowman v. Monsanto  Patent Rights;
• What’s Next for Copyright Enforcement? Rogue Sites and Other Challenges;
• The State of the Patent System: A Discussion with Chief Judge Rader;
• Federalist Society Panel: Undermining or Preserving Property Rights? The New Administrative Patents;
• Copyright and Commercialization after Kirtsaeng v. John Wiley & Sons;
• Is the Patent System Working or Broken? A Discussion with Judges Posner and Michel (for an analysis of Judge Michel’s reasoning, see A “Patent Stimulus” to End the Recession?);
• Federalist Society Asks: What’s the Right Amount of Censorship?
• Federalist Society’s Intellectual Property Practice Group National Lawyers Convention Panel Online;
• The Supreme Court and Patentable Subject Matter: Can Prometheus be Bound?;
• Kirtsaeng v. John Wiley and Sons – Post-Argument SCOTUScast;
• Patent Rights: A Spark or Hindrance for the Economy?.

These talks often include pro-IP advocate Objectivist law professor Adam Mossoff, federal judges, pro-IP Richard Epstein (whose arguments for IP are glaringly weak, compared to the corpus of his work), or “reformers” who think the copyright term should perhaps be reduced by a few years or the fair use defense expanded or “clarified.” The talk is almost always unprincipled and utilitarian. Or else it is just a positive discussion of the existing law, regardless of its legitimacy or morality. Why no principled libertarian, propertarian, or economist opponents or deep skeptics of IP, such as, off the top of my head: Wendy McElroy, Tom Palmer, Timothy Sandefur, me, David Levine and Michele Boldrin, Mike Masnick, David Koepsell, Tom Bell, Jacob Huebert, Terence Kealey, Roderick Long, Sheldon Richman, Jeff Tucker, Karl Fogel, Nina Paley, and other scholarly and libertarian luminaries? (Many of these thinkers’ works are linked at my C4sIF.org resources page.)

The Federalist Society’s conservative and libertarian bibliography is also lacking in this respect; as I noted previously:

The Intellectual Property section was last updated recently (December 2010, repixeled below) but  it unfortunately seems to have a decidedly pro-IP, utilitarian, and mainstream bias. The material listed is dominated by law and economic analysis (Posner); positivist legal analysis by fairly mainstream scholars; and  technical legal analysis (Chisum) of interest mainly to patent practitioners, not to libertarians and conservatives.

As far as I can tell the material listed contains little explicitly libertarian analysis, other than pieces by utilitarian libertarian law professor Richard Epstein and Objectivist law professor Adam Mossoff—both of whom are pro-IP. The bibliography is missing a wealth of important anti-IP work by libertarians and economists, including many economic and empirical studies that conservatives and libertarians interested in the IP issue should be familiar with. It even omits classic studies by Plant and Machlup (see below). [See Anti-IP Material Needed in the IP Section of the Federalist Society’s “Conservative & Libertarian Legal Scholarship: Annotated Bibliography”.]

To be sure, on occasional local Federalist Society chapters host anti-IP speakers. I’ve done this a couple of times, in Houston and other chapters like Ohio (Federalist Society IP Debate (Ohio State)), but the national group is completely dominated by pro-IP and utilitarian thinking.

The latest example of the Federalist Society’s pro-IP bias is the publication of libertarian lawyer Russell Hasan’s pro-IP article Winning the Copyright War: Copyright’s Merger Doctrine and Natural Rights Theory as Solutions to the Problem of Reconciling Copyright and Free Speech, in its journal Engage (Volume 14, Issue 1 February 2013). This article simply tries to reconcile free speech rights with copyright; it makes no positive much less principled much less libertarian case for patent or copyright. In this, it is similar to arguments by Mossoff and Epstein that try to defend IP on the grounds that it “can” be integrated into a conventional property rights legal framework.⁴ Well—so what? So what if human beings can be considered property and bought and sold and mortgaged? So what if conventional legal principles “can” be twisted to include various positive legal rights like taxes, welfare benefits, chattel slavery, and IP? What kind of defense or justification is this supposed to be? So what if there is a way to twist and contort constitutional free speech doctrine to make it more compatible with the aims of patent and copyright? After all, free speech is not a primary or fundamental right in the first place; all rights are property rights, and the only just rights are the rights to control certain scarce resources in accordance with the Lockean homesteading rule combined with a few ancillary rules such as contract and tort.⁵ And it is clear that IP is an infringement of such natural property rights, amounting to a taking, an expropriation, which amounts to a negative servitude.⁶

Further, as I have previously argued, copyrights and free speech/property rights are utterly incompatible, and for this reason, copyright is clearly unconstitutional (see my podcast KOL067 | Patent and Copyright are Unconstitutional! and notes and links in my post Copyright is Unconstitutional).

The tide is turning against IP. It is increasingly seen, especially by principled libertarians and propertarians, as a clear and dangerous infringement of liberty and life.⁷

As a side note, even Cato seems to have a similar problem, which is even more striking as it was the home of Tom Palmer, one of the early pioneers of the principled case against IP.  (See Does Cato’s New Objectivist CEO John Allison Presage Retrogression on IP?) “Reformers” like Jerry Brito⁸ don’t cut it.

Update: For libertarians who think IP/copyright is “compatible” with free speech/1st Amendment: More Copyright Censorship: ‘Straight Pride’ Group Uses DMCA To Take Down Their Own Responses To Reporter; Why Yes, Copyright Can Be Used To Censor, And ‘Fair Use Creep’ Is Also Called ‘Free Speech’.

Update: from Facebook:

Stephan Kinsella

32 mins ·

The Federalist Society pretends to be a group for conservatives and libertarians but it is invariably horrible on IP, always taking the pro-IP side. In debates, it’s always about how to “reform” or “improve” the IP (patent/copyright) systems, never whether these systems are just or even constitutional. They routinely feature pro-IP lawyers, judges, and law professors–never a real libertarian who opposes IP law. See e.g. the pro-IP slant of the IP section of their bibliography: http://old.fed-soc.org/…/conservative-libertarian-legal-sch…

E.g. they often feature Adam Mossoff, an Objectivist, not even a conservative or libertarian, of the “Center for the Protection of Intellectual Property”.http://cpip.gmu.edu/about/people/adam-mossoff/ Note: Not for the *study* of IP–but for its *protection*. Hmm, wonder if they have an agenda? yep. Wonder if it is compatible with libertarianism at all? Nope.

Case in point: the latest podcast, which features Mark F. Schultz–who is with the CPIP — and law professor Gregory Dolin, a “doctor” and “lawyer” who has written a paper for the CPIP, and lawyer Robert Sterne, who is also pro-IP (surprise, surprise).

I find it pathetic that the Federalist Society poses as a free market/conservative organization while pushing only the statist message in IP. In this talk, it is really disgusting to hear the commentators whining about a very minor change in the law from Obama’s America Invents Act (which I dissected already at http://www.stephankinsella.com/…/kol164-obamas-patent-refo…/). They literally whine and complain that a patent owner has to defend his patent from challengers in some adminstrative proceeding. They even accuse people who threaten to bring such a proceeding as “extortionists.” for example one of them gives the case of a patent troll who sued Apple for patent infringement and won a $300M judgement, and some “reverse troll” (my language) asked for 10% or $30M or they would challenge the patent’s validity in the administrative proceeding–one of the lawyers calls this “extortion”!! That’s rich.

The Federalist Society is pathetic and worthless. It has nothing to do with liberty.

Administrative “Death Squads” for Patents? Assessing the New Administrative Procedures for…

Property rights in patented inventions are being struck down at an unprecedented rate in a new administrative forum. This new post-grant review procedure (PGR),…

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I sent this email to 3 of the participants:

1.  Legal Scholars: Thumbs Down on Patent and Copyright; The Overwhelming Empirical Case Against Patent and Copyright. [↩]
2.  The Death Throes of Pro-IP Libertarianism; The Four Historical Phases of IP Abolitionism; The Origins of Libertarian IP Abolitionism. [↩]
3. See also Black Armbands for “Constitution Day”; Thumbs Down on the Fourth of July; Happy We-Should-Restore-The-Monarchy-And-Rejoin-Britain Day!. [↩]
4. See Classifying Patent and Copyright Law as “Property”: So What?; Mossoff: Patent Law Really Is as Straightforward as Real Estate Law. [↩]
5. See my What Libertarianism Is; also Rothbard, “Human Rights” As Property Rights. [↩]
6.  Intellectual Property Rights as Negative Servitudes. [↩]
7. See Where does IP Rank Among the Worst State Laws?  [↩]
8. Brito: What’s Wrong With a Copyright Alert System?; Republicans More Radical than Libertarian Copyright Moderates. [↩]

From the MacIver Institute, a Wisconsin free market group:

Intellectual Property Cannot Be Property

July 16, 2013

by Joseph Diedrich
Special Guest Perspective for the MacIver Institute

What is property?

More specifically, at its essential theoretical core, beyond the artifice of legal fiat, what is property?

Somewhat broadly, property is anything that satisfies each of the following requirements: property is scarce; property possesses objective (intersubjectively ascertainable) borders; and property has a determinable temporal genesis.

The theory of intellectual property (IP) posits that two distinct genera of proprietary resources exist–tangible and ideal–and that, while formally differentiable, they are fully compatible within a logically constructed theory of property. In essence, both tangible and ideal resources are property.

For the sake of argument, assume the truth and tenability of the IP theory–that ideal resources are, in fact, property. Assume that every idea, pattern, design, and conception meets all three of the aforementioned necessary requirements to be classified as such. Ultimately, assume that the theory of intellectual property is legitimate and fits harmoniously within a broader theory of property rights.

What, then, are the logical implications of such an assumption?

To begin, all property can be owned–i.e., fully and exclusively controlled. As economist Ludwig von Mises writes, “Ownership means full control of the services that can be derived from a good.” The process by which an individual acquires exclusive control over a proprietary resource can be either legitimate (peaceful and just) or illegitimate (aggressive and unjust). Legitimate means of acquiring ownership involve voluntary title transfer by contract, including by sale, rent, or gift. In contradistinction, theft is the prime example of illegitimate ownership acquisition.

Thus, if indeed property, ideal resources can be sold, rented (licensed), given away, or stolen, contingencies all of which are incorporated into IP law. Patent and copyright holders regularly sell, license, and give away (often by virtue of conscious ambivalence toward IP law) their patents and copyrights; moreover, they can seek legal resource if another party steals their patent or copyright. [continue reading…]

A couple decades ago, Bill Gates seemed to have some appreciation of the damage wrought by patent law:

If people had understood how patents would be granted when most of today’s ideas were invented, and had taken out patents, the industry would be at a complete standstill today. I feel certain that some large company will patent some obvious thing related to interface, object orientation, algorithm, application extension or other crucial technique. If we assume this company has no need of any of our patents then [they] have a 17-year right to take as much of our profits as they want. The solution to this is patent exchanges with large companies and patenting as much as we can. Amazingly we havn’t done any patent exchanges tha I am aware of. Amazingly we havn’t found a way to use our licensing position to avoid having our own customers cause patent problems for us. I know these aren’t simply problems but they deserve more effort by both Legal and other groups. For example we need to do a patent exchange with HP as part of our new relationship. In many application categories straightforward thinking ahead allows you to come up with patentable ideas. A recent paper from the League for Programming Freedom (available from the Legal department) explains some problems with the way patents are applied to software. [See Bill Gates’ 1991 Comments on Patents; emphasis added.]

Yet over the years Microsoft relied on the other major form of intellectual property—copyright—to dominate aspects of the software industry, and then to use the monopoly profits to accumulate thousands of patents. These two forms of IP are then used together to squelch competition. (See Controls breed controls, Monopolies breed monopolies; Microsoft Copyrights —> Patent Dominance; Price Controls, Antitrust, and Patents; The Schizo Feds: Patent Monopolies and the FTC.)

Now that Gates has used state-granted IP monopolies to acquire billions of dollars that he can then use to be a bigshot philanthropist, he is all for patents (as my friend Rob Wicks says, Gates is “America’s wealthiest welfare queen”). For example, in a recent Microsoft Summit, he had this to say about patents:

On the greatness of patent law

“Thank god for commercial software,” Gates told an audience member who asked about the disconnect between Microsoft’s historically proprietary nature and all the charitable work Gates now does.

Intellecual property in developed countries pays salaries and lets software companies, pharmaceutical companies and others actually be able to invest in the innovation that helps improve our world, he explained. Then, when organizations like the Gates Foundation are doing work in undeveloped countries, pharmaceutical, IT and agri-business companies can afford to give away their work for free. (A skeptic might say that’s like robbing from the not-so-rich to give to the poor.)

“Anybody who thinks getting rid of [patent law] would be better … I can tell you, that’s crazy,” Gates said. “My view is it’s working very well.”

How the heck does Gates know it’s “working” well? Does he know the costs and the benefits of this system? No. (See The Overwhelming Empirical Case Against Patent and Copyright.) This sounds like welfare-socialists who say that medicare or social security “work well”. Yes, if you ignore the victims forced to pay for it, maybe.

And now he is involved with a company spun off from uber patent troll Intellectual Ventures (see Patent Trolling in Action: Big Patent Firm Sues Nine Tech Firms), as noted in Bill Gates’ nuclear company explores molten salt reactors, thorium:

“We’re thinking about it and trying to work on it and we have a few proprietary ideas that we’re cooking up,” Gilleland said in relation to MSRs. He did provide details of the “proprietary” ideas, noting that, “We like to work on an idea for a while before we run out and tell about it – so we have some ideas which we’re trying to ferret out how good they are.”

Director of innovation Latkowski declined to say whether or not TerraPower has filed any MSR patents. In addition to running innovation and related partnerships, Latkowski also “oversees the development, maintenance and protection of TerraPower’s intellectual property portfolio” according to his company bio. TerraPower is a spin out of Intellectual Ventures, an innovation and venture capital firm that makes a business out of patents and is known as a keen collector and protector of intellectual property. It is headed by Nathan Myhrvold, a former Microsoft chief strategist and technology officer who serves as TerraPower’s vice chairman.

***

Patently speaking. TerraPower vice chairman Nathan Myhrvold is CEO of Intellectual Ventures, a company whose business is intellectual property. TerraPower is an Intellectual Ventures spin out.

Imagine some other company comes up with a good way to make affordable, cheap, clean, safe thorium or other nuclear energy systems. They could well be sued into the ground by TerraPower by virtue of its patents, setting human progress and welfare back decades.

It’s no surprise Gates is in favor of the statist institution of IP; here he is gushing over the great things state violence gives us:

You write about the violence in traditional societies. It made me think of Steven Pinker’s The Better Angels of Our Nature, which shows how and why the world has become a less violent place over the centuries. One factor is the growth of centralized governments that have a monopoly on punishing people. You’ve seen examples where police come in to an area for the first time. As soon as they make it clear that the first guy to take revenge will go to prison, the levels of violence drop very quickly. [From Gates’s blog: A Discussion with Jared Diamond.]

This is all a shame, given that Gates elsewhere seems to have some glimmer of understanding of the importance of capitalist property rights:

The incredible economic transition in China over the last three-plus decades occurred because the leadership embraced capitalistic economics, including private property, markets, and investing in infrastructure and education.

This points to the most obvious theory about growth, which is that it is strongly correlated with embracing capitalistic economics—independent of the political system. When a country focuses on getting infrastructure built and education improved, and it uses market pricing to determine how resources should be allocated, then it moves towards growth. This test has a lot more clarity than the one proposed by the authors, and seems to me fits the facts of what has happened over time far better.

From the great Rick Falkvinge. For related see Intellectual Poverty, Are Patents “Monopolies”? and Intellectual Properganda.

Language Matters: Framing The Copyright Monopoly So We Can Keep Our Liberties

• Rick Falkvinge
• July 14, 2013

George Orwell was scaringly right in many ways, but one of his most overlooked points is one of the most important. The language we use defines our reality and what problems we perceive, communicate, and solve. From theft of intellectual property to sharing culture and knowledge, it’s a war of words.

“1984″ by George Orwell is a book that seems to increasingly define our society, mixed in with a dash of Aldous Huxley’s Brave New World. One central theme to 1984 is the concept of Newspeak – but the language Newspeak never takes center stage in the book, it is just pervasive throughout the storyline.

The concept of Newspeak was simple. By taking away the expressions for free thinking and challenging authority from the language, the people in power would remove other people’s ability to conceptualize those thoughts, and thus ensure obedience.

In one passage in the book, translators of Oldspeak into Newspeak say they have a trouble with translating the Declaration of Independence into Newspeak – there is simply no way to express what it says in Newspeak. Orwell comments on this in an appendix: as long as the language has words for rebellion, freedom of thought, and dissent, then society will eventually throw off any tyrant.

This matters, because the words we use define the society we live in. That definition of society, in turn, decides what problems need to be solved and how. We are nerds and geeks; we tend to not bother with subtleties and nuances of communication, except to be technically precise in what we express. But all words have values to them. Some are negative, some are positive. Some have double meanings. Some evoke feelings of happiness, others of discomfort. Being aware of this as you discuss net liberty and culture today is paramount to the discussion – the side that wins the definitions, wins the long-term war.

It is not a coincidence that the deceptive term “Intellectual Property” has been relentlessly used by the copyright industry. They are trying to get others to use it. They are trying to make it define the copyright monopoly; to make people think of their monopoly in terms of property. Property is a positive word, and it follow-up-defines any violation of those monopolies as stealing (as violation of property rights is stealing). Don’t ever fall for using this term. Not once, not ever.

The way to spread your own framing of the world is not necessarily to correct others in their use of language – that would only seem rude. Rather, we use our own language consistently, persistently, and tenaciously. We use our language that defines the world of the net generation the way we see it, and in a way that doesn’t give influence to the copyright industry.

Every time you repeat a term of the adversary’s worldview, you help them take away your rights. Every time you use one of the terms that define our worldview, you help the net generation retain their civil liberties. People will copy your terms subconsciously. Be happy when they do, but don’t point it out. Again, that would be rude.

Here’s a sample of words to be conscious of:

Copyright industry – use this consistently instead of record industry and/or film industry. It highlights how the middlemen incumbents are monopolistic parasites that aren’t necessary for the cultural ecosystem, having industrialized lobbying for their monopolies and cashing in on them, and the term sticks very well.

Sharing knowledge and culture – use this instead of “file-sharing”. The “file-sharing” term tends to be too technical, and doesn’t appropriately convey the usefulness of the act. Also, “sharing knowledge and culture” is fundamentally positive to anybody who hears it – plus, it is technically correct. People who share knowledge and culture should never be punished, they should be rewarded.

Copyright monopoly – don’t ever use “copyright” alone. When you do, you will reinforce that it is a right of some kind, like the right to freedom of speech. In reality, it is a monopoly. While a somewhat clumsy term, it is necessary at this stage to communicate that the copyright monopoly is just that, a monopoly. Use language to tie the concept together with its nature to people who haven’t seen it as such yet.

Patent monopoly – Same thing there.

Industrial Protectionism – don’t ever use the IP term that reads out as some kind of “property”. That’s self-defeating. If you cannot escape using the IP term (which you should, as it lumps completely unrelated laws together) then take care to read it out as “Industrial Protectionism”. It’s what it is, and the value of the word protectionism is sharply negative.

Manufacturing copies – try avoiding “downloading” copies of something. That implies “taking”, and leads down the wrong line of thought. What people are doing aremanufacturing copies using their own raw materials, and it highlights how the copyright monopoly is trying to restrain a legitimate activity. Say “when people are manufacturing their own copies of knowledge and culture”, if you can’t highlight the process of “sharing knowledge and culture”.

Digital Restriction Mechanisms – DRM. No comment necessary. Read it out as Digital Restriction Mechanisms. (Some have used “Management” for M. That is a positive word that dilutes the negative “Restriction”; I prefer Digital Restriction Mechanisms.)

There are many more examples, but these are a starter. Remember that the side that wins the language wins the definition, and take time to judge the subtleties of how language defines and shapes the problem we discuss.

About The Author

Rick Falkvinge is a regular columnist on TorrentFreak, sharing his thoughts every other week. He is the founder of the Swedish and first Pirate Party, a whisky aficionado, and a low-altitude motorcycle pilot. His blog at falkvinge.net focuses on information policy.

Thought-provoking piece by Jeff Tucker:

Evangelization vs. Copyright

by Jeffrey Tucker

Brandon Vogt really liked the new papal encyclical but noted that the Vatican only made it available in HTML. So he worked to convert it to PDF, epub, Mobi, and more, and then he gave away these formats on his website.

Perhaps he was inspired by the message: “The transmission of the faith not only brings light to men and women in every place; it travels through time, passing from one generation to another. Because faith is born of an encounter which takes place in history and lights up our journey through time, it must be passed on in every age.”

Whoops. Both the Vatican and the USCCB wrote to demand a takedown. Clearly, Vogt was “stealing from the Pope” (really? I don’t think making other formats available causes the text to be mystically removed from the Vatican website). Also, he was accused of “violating the civil law.” Perhaps, but the Church does not need to take recourse to civil law — a law that restricts information flow by assigning legal right of ownership to the expression of ideas. The Church can easily publish into the commons, as millions of others do today as a way of avoiding restrictive state laws.

Multinational copyright enforcement is a legal invention of the late 19th century. It serves to block the light of truth. This is a great example of that. Thousands, maybe millions, who would be able to obtain the encyclical on their ereaders will now not be able to — at least not until it is published by the state-protected monopoly agent. That’s just a very strange way to go about distributing light and truth.

When faced with the question of whether to impose and enforce copyright over core Catholic texts, one might ask the question that was popular among the teen set a few years ago: What Would Jesus Do?