As noted in Safeway Bakery Bans Photos to Keep Its Cakes From Being Mocked Online and Ways to Play it Safe.

In this Yahoo article, we are told woes of Dan Brown, an American producer of the patented “Bionic Wrench,” who is upset that a competing product, “Max Axess,” is too similar … and is made in China. Brown had been selling his wrench with Sears, but then Sears started also selling the Max Axess wrench as part of its Craftsman line.

While I was at Libertopia last month (see Intellectual Nonsense: Fallacious Arguments for IP (Libertopia 2012)) I was interviewed a few times. One of them was by Silver for the People/Future Money Trends: see Stephan Kinsella – Copyright Laws Cost the U.S. $ Billions in Economic Growth. Video is below; audio file is streaming below as well and may be downloaded here (30MB).

Update: a transcript is appended below.

[podcast]http://www.stephankinsella.com/wp-content/uploads/media/kinsella-future-money-trends-interview-copyright-2012.mp3[/podcast]

Transcript:

From the comments section to Wendy McElroy’s Daily Anarchist article The Basics of Copyright:

Scott:

Sorry I didn’t get to meet you at Libertopia; my best wishes to you regarding those issues.

Regarding your comments about NDAs: I agree with you here: “What I find less practical is contractual copyrights for general publications.” But to me this is not an argument for copyright, but rather a further argument against it: many people argue that copyright is just the outcome–or could be the outcome–of some private contractual schemes. But it is not and cannot.

You also write:

Just as the original farmer appropriates land from the un-owned physical commons to create a productive farm, and therefore owns the farm and the produce grown upon it, the artist or writer appropriates un-owned language and concepts from the commons of our cultural heritage to create a *work* of art or literature. That work is the property of its creator.

I have read Kinsella’s work and his position denies that property originates in a person’s labor. When I objected he accused me of supporting a “labor theory of value,” which is nonsense. What I support is a labor theory of _property_, first described by Locke, and which is the basis for most libertarians’ concept of property rights.

Most libertarians are confused by Locke’s own confused argument and his overly metaphorical way of arguing for rights. His labor theory of property, as you accurately describe it, did, IMO, give rise to the labor theory of value, and also to what I refer to as property “creationism”. Labor is just an action, however. It is not some substance that we own. We no more own labor than we own actions. ations are just what you do with things you own, including your body. I discuss this in various posts, namely: Hume on Intellectual Property and the Problematic “Labor” Metaphor. (And in others: Locke on IP; Mises, Rothbard, and Rand on Creation, Production, and ‘Rearranging’; Locke, Smith, Marx and the Labor Theory of Value; see also Rand on IP, Owning “Values”, and “Rearrangement Rights”;  and Thoughts on Intellectual Property, Scarcity, Labor-ownership, Metaphors, and Lockean Homesteading.)

Locke is wrong that you own your labor, and he is wrong in arguing that the reason why you own things you homestead is that you have mixed with the unowned thing, something that you do own (labor). Rand is wrong to rely on this to argue that we own “values” that we “create.” Values are not things. Value is subjective, a relationship between an actor and some end of action, whether the end be a scarce resource or some outcome desired by the actor. As Mises explains, value and preference are demonstrated in action; and as Rand herself echoes, values are things you act to gain and or keep. That is, when you act, you always seek some end, and thereby you demonstrate that you do value the end you aim at more than others, which are opportunity costs of the action.

The confusion lies in thinking that creation is one of 3 sources of ownership. It is not. Rand hersefl recognized that we do not metaphysical create things; we only rearrange them. Mises, Rothbard say the same thing. When we labor on an already-owned scarce resource that is a raw material or factor of production, we rearrange it to result in a more-valuable object. In this way we create wealth or value, that is, we and/or others value the rearranged thing more than it was valued before. But no new property rights are thereby created. To produce requires ownership of the factors; production is the rearrangement or transformation of already-owned things. It results in wealth, or increases the value of the things owned, but does not result in new ownership.

The mistake stems from this sloppy, overly metaphorical way of thinking that Locke used in his argument. He double-counted by saying we own labor; it’s sufficient to say you own your body. Ownerhsip of your body is sufficient to let you do what you want with it–to act as you please, to labor as you please. You don’t own your labor, however, and you don’t own your action. You own only scarce resources, such as previously-unowned things you homestead, or your body.

Not that Locke himself, and the founders, did not believe that his homesteading idea applied to IP. He did not think it meant you had a natural right to own ideas that you create, even if you expended “labor” to “create” these ideas. (Despite strained arguments to the contrary by people like Adam Mossoff, Merges, and Eric Claeys.) SEe the links above on this.

When you act (yes, labor, fine) on a previously unowned resource you establish a better claim to the property than anyone else since you have an earlier claim than they do (see on this Hoppe and de Jasay, even Hume). Not because you “own” the labor you mixed with it. Not that anyone who argues they should be able to take the object from you is himself making an ownership claim, that is, he wants to take it and have title to it. But having title to it means he wants to be protected from anyone who comes later and tries to take it from him. He would object to this, which means he is recognizing that as between two possible claimants for a given contestable resource, the latecomer loses. But if you work backwards wtih this assumption, this means the first homesteader has a better claim than anyone in the world, since everyone else would be a latecomer. The only person who has a better claim would be someone the original owner contractually assigns title to.

It is a fact that nonscarce things like patterns of information can NOT be owned. This is not a normative argument: it is a fact. It is literally impossible to own a novel, a poem, a painting, a design for a motor. All disputes are always, necessarily, over who gets to control (own) a particular scarce (rivalrous, contestable) resource. If Bieser sues me for making copies of his drawing, what he wants is for physical force (from the state courts) to be used against my body or my owned objects, to either take these things (such as money in the case of damages) or to coerce me not to use my body or owned objects in certain ways (e.g., if he gets an injunction from the court ordering me not to print certain patterns on my own paper with my own ink). To enforce rights in “IP” always necessarily requires undermining already-existing property rights in already-existing things. Legally speaking, IP rights are negative servitudes (negative easements) (see my post Intellectual Property Rights as Negative Servitudes): it grants to the IP holder a veto right over how others use their own bodies or other owned scarce resources. I.e., the IP holder is made a co-owner with others, in their own property. It is a trasnfer of proeprty rights. A negative servitude or easement is perfectly legitimate if it is voluntarily granted by the original property owner; this is often done among neighbors in the form of restrictive covenants, say, where you agree not to paint your house outlandish colors unless your neighbors agree; they have a veto right. BUt it is not legitimate if the state just grants this veto right to people, when the burdened estate owner has not agreed to it.

Bieser goes on:

Just as the original farmer appropriates land from the un-owned physical commons to create a productive farm, and therefore owns the farm and the produce grown upon it, the artist or writer appropriates un-owned language and concepts from the commons of our cultural heritage to create a *work* of art or literature. That work is the property of its creator.

This argument is flawed in so many ways. First, it analogizes a work of art to land, while ignoring the difference between them: the land is a scarce resource, a pattern of information is not. Only scarce things are ownable things. Second, this argument would not justify modern copyright, and certainly not patent; patent affects even people who independently invent something. Copyright also covers more than just literal reproduction; it prevents people from making derivative works. If I write a new Han Solo novel I am also making a new pattern, but this is itself prohibited by copyright. and all this is based on the ridiculous idea that the only actions people are entitled ot perform are actions that are not similar to actions others have performed in the past. It is truly a breathtakingly stupid idea.

When published, it is true the work is no longer “scarce” in the same sense a physical object is said to be scarce. But neither is it superabundant in the same sense that the air and the oceans are. It is limited in time, as it did not exist before some person first labored to generate it.

Equivocation. The physical object that carries the pattern–say, a physical book–is a scarce object, but the pattern in it is not. And the pattern is not scarce just because it required labor to generate it. Information, once made public, is nonrivalrous, no matter how much effort is required to produce it. Every economist recognizes this. No one can seriously deny this.

Kinsella has remarked that it is a strange notion of property that has a time-limit on it, but it’s not strange at all. For while the farmer obtained his land from the natural world, the artist appropriated his raw materials from a social commons that had been created from the prior labor of those who came before him. Therefore, a moral debt is owed to that commons

A moral debt? What a ridiculous “defense” of state-granted monopoly privileges. There is NO MORAL DEBT AT ALL that comes from learning and taking advantage of knowledge accumulated over the centuries by previous men! And if there were, this is an argument against IP not for it; it shows that everyone is using ideas from others for free, and has no right to lock up theirs with IP.

, which the artist repays by releasing his work to the commons after enough time for him have enjoyed the fruits of his labor. (What that length of time should be is a detail to be arrived at by the same social processes that determine the details of other laws.)

This argument is so transparently ridiculous that comment on it is hardly needed. BUt it is clear that no libertarian can take this seriously.

I’m a big fan of David Friedman, and his father, Milton, both of whom helped put me on the anarcho-libertarian path in the 1980s and 1990s (see How I Became A Libertarian). Even though I recoil from Milton’s minarchist deviations, and I disagree with David’s positivism and empiricism. Milton acknowledged the distorting effects of patents, as I’m sure David would, but David cannot seem to bring himself to oppose IP on principled grounds (see David Friedman on Copyright).

[update: David Friedman on Intellectual Property]

In a recent post, MMORG as the Future of Fiction?, David Friedman writes:

Nowadays, a lot of the intellectual property protected by copyright law is in digital form. This raises an obvious problem for enforcing copyright, since digital files are easy to copy and easy to distribute.

One possible solution is technological protection, distributing the content in some form that lets the user use it but not copy it. That solution has a problem, sometimes referred to as the analog hole.

Notice that we only need a “solution” if there is a real “problem,” and the only problem Friedman identifies is “enforcing copyright.” But since copyright is unlibertarian, just like tax or conscription or drug laws are, it’s not a “problem” when the state is unable to enforce it; in fact it’s a good thing. Friedman comes up with bizarre “solutions” to this non-problem, like people writing novels that are distributed and dynamic:

Years ago, thinking about this issue, I tried to dream up a version of a movie that would not be fully revealed, perhaps one where the viewer could see it from different points of view each time he viewed it. It eventually occurred to me that something of that sort already existed, and I was spending a good deal of time watching it. World of Warcraft, as I pointed out in my previous post, is a story as well as a game. Because it is a story that is told by having the viewer participate in it as a character, walking through a mostly predetermined plot, it is not fully revealed in one use. What I want is the experience for myself, not a recording of someone else having it.

So here we have a proposed distortion of culture, literature, and intellectual creation all in the name of enforcing artificial anti-copy-rights. IP law leads to all kind of distortion in other areas of social life: it skews technical and scientific research (Milton Friedman on the Distorting Effect of Patents;  The Forgotten Costs of the Patent System); it distorts other areas of commerce and culture (The Effects of Patent and Copyright on Hollywood Movies; Destructive Creation). Now David Friedman is proposing that the field of literature be contorted, twisted, and distorted to solve a “problem”—people can learn from, copy from, emulate, and compete with information others make public, as if this is a “problem”—by making novels dynamic and POV-oriented.

How about we just give up on the ridiculous, statist, 20th century idea of property-in-ideas, instead, and let people be free to do whatever the hell they want? Let a thousand flowers bloom, and all that?

Nice piece at Laissez-Faire Today by IHS’s Isaac Morehouse on his move from a pro-IP to anti-IP position: My IP Journey (October 31, 2012).

Updated version: How I Changed My Mind on Intellectual Property (also published in Keith Knight, The Voluntaryist Handbook).

See also KOL216 | Morehouse Interview: Why Intellectual Property Sucks.

It never ends. SOPA was defeated but Hollywood and the music industry won’t give up. See Mike Masnick’s Techdirt post Looking Beyond TPP: US & EU Planning More Bad IP Rules In ‘US-EU Free Trade Agreement’:

Just a reminder: when you think you get past an attempt by certain legacy industries to shove through bad laws with questionable international trade agreements, there’s always at least one (and probably more) such agreements lurking. So, from ACTA we went straight into TPP… and following TPP, it looks like the US and the EU are already discussing a new US-EU Free Trade Agreement to be worked out soon. A “working group” to get the process started put out a report about what the agreement would include… and, of course, there will be a section on “intellectual property.” The USTR has made it clear over the past few years that it thinks free trade agreements are the perfect vehicle for intellectual property maximalism. This makes little sense, since intellectual property is the exact opposite of “free trade.” It’s whole purpose is to be a trade barrier and a monopoly. But…

Both the EU and the United States are committed to a high level of intellectual property protection, including enforcement, and cooperate extensively through the Transatlantic IPR Working Group. Both sides agree that it would not be feasible in negotiations to seek to reconcile across the board differences in the IPR obligations that each typically includes in its comprehensive trade agreements. Before the launch of any negotiations, both sides would further consult on possible approaches to deal with IPR matters in a mutually satisfactory manner.

So, at the very least, there would be some limits on what such an agreement would get into, given existing “differences,” but they still seem to want to include something about “dealing with IPR matters,” which can only mean ratcheting things up. It’s still early, but you can bet that the legacy industry lobbyists are already well aware of this and involved in the process — so it needs to be on everyone else’s radar as well.

Oh, and both Obama and Romney have indicated they support such an agreement, so it’s not like either one is better than the other going into next year.

See also

• “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,”
• “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?”
• “Masnick on the Horrible PROTECT IP Act: The Coming IPolice State” (June 2, 2011)
• “Copyright and the End of Internet Freedom” (May 10, 2011)

From Mike Masnick at Techdirt (from 2007):

New Study Shows Patents And Innovation Are Not Related

from the no-clear-connection dept

There’s an annoying trend among many to assume that patents are a proxy for innovation. In fact, this leads to the false assertion that more patents or more patent applications somehow means more innovation. However, as we’ve obviously seen, the reverse can often be true. We’ve shown plenty of examples where patents have been used to hold back innovation rather than encourage it. It’s nice to see that there’s some more data supporting this as well. John Bennett atAgainst Monopoly points us to a new paper from Booz Allen Hamilton, looking at 1000 companies that do serious research and development, where they found no link between patents and innovation. Patents, they note, show no statistical relationship to profits. They point out that few patents actually have any real impact on innovation, and often the most innovative things have no patents at all. Another interesting finding in the study is that big companies aren’t very good at leveraging their scale to innovate. This is an issue that comes up often when we discuss patents. People make the claim that small companies can’t out-innovate large companies because those large companies have all the money. However, the study suggests that’s not true at all. Larger companies can be woefully bureaucratic, slow, inefficient and risk averse. That leaves plenty of opportunity for smaller companies to out innovate the larger ones despite the appearance of a disadvantage in money and scale.

See also Pierre Desrochers, On the Abuse of Patents as Economic Indicators, Quarterly Journal of Austrian Economics (Winter 1998).

Update: KOL235 | Intellectual Property: A First Principles Debate (Federalist Society POLICYbrief) and James Stern: Is Intellectual Property Actually Property? [Federalist Society No. 86 LECTURE]

The Federalist Society has long offered a generally excellent Conservative & Libertarian Legal Scholarship: Annotated Bibliography. Years ago I remember it being in paper form, and now it is online, and appears to be updated fairly often. [Update: see also Conservative & Libertarian Pre-Law Reading List.]

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). The bibliography should be supplemented with key anti-IP and other important references to provide a more balanced and useful research tool. The need for making libertarians and conservatives aware of the missing material is pressing, given:

• the increased importance of IP in the last fifteen years, since the dawn of the Internet;
• the concomitant increase in interest in IP among libertarians and others;
• the increasing use of copyright to stifle Internet freedom and civil liberties and to ratchet up the police state;¹
• and the growing tide of opposition to IP among economists,² legal scholars,³ and libertarian thinkers.⁴

The C4SIF Resources page contains a wealth of material that could be used to improve the bibliography, such as the following (and more):

• Kinsella, “The Case Against IP: A Concise Guide“
• Kinsella, Against Intellectual Property
• Boldrin & Levine, Against Intellectual Monopoly
• Jacob H. Huebert, “The Fight against Intellectual Property,” in Libertarianism Today
• Fritz Machlup, U.S. Senate Subcommittee On Patents, Trademarks & Copyrights, An Economic Review of the Patent System, 85th Cong., 2nd Session, 1958, Study No. 15 (text excerpt) [“Report to the US congress from 1958, which also extensively narrates the history of the patent movement and of earlier economic research on this subject. Machlup, a renowned American economist of Austrian origin, is the first author of a large treatise on knowledge economics and other treatises which belong to the teaching repertoire of economics departments in universities. His report cites a wealth of historical and economic evidence to refute most of the reasoning used by lawyers to legitimate the patent system.”]
• Fritz Machlup & Edith Penrose, “The Patent Controversy in the Nineteenth Century,” Journal of Economic History 10 (1950), p. 1
• Arnold Plant, “The Economic Theory Concerning Patents for Inventions,” Economica, New Series, 1, no. 1 (Feb., 1934)
• Benjamin Tucker (see Wendy McElroy, Copyright and Patent in Benjamin Tucker’s periodical Liberty)
• Tom W. Bell, Intellectual Privilege: Copyright, Common Law, and the Common Good (draft)
• ———, The Great Debate on Intellectual Property, in Cato Policy Report (January/February 2002)
• Hayek on IP (see Tucker, Misesian vs. Marxian vs. IP Views of Innovation; Tucker, Hayek on Patents and Copyrights; 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; see also Kinsella, Mises on Intellectual Property
• Murray N. Rothbard, Knowledge, True and False
• ———, Man, Economy, and State and Power and Market, Scholars Edition, pp. liv, 745-54, 1133-38, 1181-86
• Tom Palmer, “Intellectual Property: A Non-Posnerian Law and Economics Approach”
• ———, “Are Patents and Copyrights Morally Justified? The Philosophy of Property Rights and Ideal Objects”
• Julio Cole, “Patents and Copyrights: Do the Benefits Exceed the Costs?”
• Roderick Long, Owning Ideas Means Owning People
• ———, The Libertarian Case Against Intellectual Property Rights
• Francois Leveque & Yann Meniere, The Economics of Patents and Copyrights
• Timothy Sandefur, “A Critique of Ayn Rand’s Theory of Intellectual Property Rights,” Journal of Ayn Rand Studies 9:1 (Fall 2007), pp. 139-61
• Mark Lemley: The Very Basis Of Our Patent System… Is A Myth;
• Andrew Torrance (see Open Science Summit 2011: IP and the New Mercantilism: Panel: “The Future (the End?) of ‘Intellectual Property’”; Andrew Torrance: Patents and the Regress of Useful Arts)
• Chris Sprigman (see The Knockoff Economy: How Copying Benefits Everyone, Reason.tv; Christopher Sprigman on creativity without copyright)

I did suggest some of my IP writing to the editor of the bibliography a few years ago, before it was most recently updated, but my advice was obviously not heeded, so it’s possible this is an uphill battle. Those more closely connected to the Federalist Society should urge them to consider this. [continue reading…]

1. See my posts Where does IP Rank Among the Worst State Laws?; Death by Copyright-IP Fascist Police State Acronym; SOPA is the Symptom, Copyright is the Disease: The SOPA Wakeup Call to Abolish Copyright; Masnick on the Horrible PROTECT IP Act: The Coming IPolice State; Copyright and the End of Internet Freedom. [↩]
2. See my post The Overwhelming Empirical CaseAgainst Patent and Copyright. [↩]
3. See my post Legal Scholars: Thumbs Down on Patent and Copyright. [↩]
4. See my article “The Death Throes of Pro-IP Libertarianism,” Mises Daily (July 28, 2010) and my posts The Four Historical Phases of IP Abolitionism and The Origins of Libertarian IP Abolitionism. [↩]

One of my posts from LewRockwell.com in 2003:

Teach me more!

Posted by Stephan Kinsella on June 17, 2003 11:14 PM

Excellent Forbes post by Jon Matonis, “Generic Viagra Industry Is Pro-Choice In Payments,” in which he points out that “payment intervention” is being used to stamp out online pharmaceuticals, giving rise to increasing interest in alternative systems like bitcoin to evade control by the state-corporatist duopoly:

Payment intervention is defined as the use of the payment mechanism to detect or prevent certain transactions that are deemed to be politically incorrect or against a particular jurisdiction’s law. The latest target is online pharmaceuticals and their affiliates providing medications such as generic or unlicensed Viagra, Nexium, or Lipitor, all of which are illegal for Americans to have mailed into the United States.

In the recent paper “Priceless: The Role of Payments in Abuse-advertised Goods” presented at the 19th annual ACM Computer and Communications Security Conference in Raleigh, North Carolina, five academic researchers outline the methodology behind the aggressive practice known as payment intervention and arrogantly conclude that it is in society’s interest.

This is the ugly face of monetary repression. It is shameful! Using the payments system as a repressive tool for or against certain behavior is like using Catholic Church attendance as a way to target illegal immigrants. In a free society, private payments should be covered by merchant-customer privilege just as attorney-client privilege covers confidential legal communication. Like the telephone network used to execute a transaction, the payments network is a neutral actor. Pro-choice means placing the decision of payment type in the hands of the money owner. Grandma wants her affordable generic Lipitor.

Leaving aside for the moment the twisted economics of privileged drug manufacturers collaborating with generic manufacturers, the immorality of the patent system, and the case against intellectual property, supranational authority was bestowed upon the IACC (International AntiCounterfeiting Coalition) in 2010 through a series of agreements made between brand holders, payment providers, and the White House’s Intellectual Property Enforcement Coordinator. The agreements streamlined targeted actions against ‘rogue’ websites and merchant accounts used to monetize counterfeit goods and services.

From Courthouse News Service:

William Faulkner v. Woody Allen

 

By ROBERT KAHN

In a copyright complaint that tests the limits of “fair use,” Faulkner Literary Rights sued Sony Pictures for a nine-word (mis)quote of William Faulkner in the Woody Allen movie, “Midnight in Paris.

In the 2011 film written and directed by (nonparty) Woody Allen, the hero, Gil Pender, played by Owen Wilson, somehow ends up in Paris in the 1920s, and meets artistic giants such as Hemingway, Picasso and F. Scott Fitzgerald.

The complaint states: “In describing his experiences, Pender speaks the following lines (the ‘Infringing Quote’): ‘The past is not dead! Actually, it’s not even past. You know who said that? Faulkner. And he was right. And I met him, too. I ran into him at a dinner party.'”

The complaint continues: “The Infringing Quote is taken from a passage in the William Faulkner book ‘Requiem for a Nun’ (‘the Book’), where it reads: ‘The past is never dead. It’s not even past.’ (‘the Original Quote’).”

Faulkner Literary Rights then points out that Faulkner copyrighted the book in 1951, and that it owns “all right, title and interest in the name, image and likeness of William Faulkner.”

It claims the infringing misquote, and use of Faulkner’s name, are “likely to cause confusion, to cause mistake, and/or to deceive the Infringing Film’s viewers” about the perceived affiliation, connection, sponsorship, origin or approval of the Faulkner association and Sony.

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