A comment by a friend about a future world of smart machines and robots made me think of one way to illustrate the manifest injustice and absurdity of patents. Whenever patent and copyright are discussed, a few typical arguments routinely emerge:

• how would pharmaceutical companies make money without? After all, it takes hundreds of millions of dollars to do the research and testing, and if some competitor could just knock them off, no one would make the drugs in the first place. (Nevermind Boldrin & Levine’s complete evisceration of the empirical assumptions here in ch. 9 of Against Intellectual Monopoly.)
• And without copyright, you could never have blockbuster movies. (As if the purpose of this state monopoly is to make sure society produces Avatar; and forgetting that people go to movie theaters and pay for the privilege.)
• Patents are essential to protect the little guy. (Forget the fact that patents protect larger companies from competition from smaller players, leading to barriers to entry and oligopolies. See Patent Cross-Licensing Creates Barriers to Entry; Intellectual Property Advocates Hate Competition; also Kevin Carson, Criminalizing Competition.)

My point here is that the “strongest” case for patents is alleged to be the pharmaceutical industry. Now imagine a not-too-distant future world where 3D printers of all types are becoming more prevalent. It is easy to imagine machines designed to fabricate pharmaceuticals. If a new life-saving drug hits the market and costs thousands of dollars per year (due to the combination of the patent monopoly, the FDA system, medical licensure of doctors, government regulation of prescription drugs, and other state interventions), some consumers may prefer to “make their own” generic version, using reverse-engineered “recipes” floating around the web programmed into their own, or a friend’s, 3D drug printer. Just as the hacker community quickly cracks new iOS releases on the iPhone, say, it is not hard to imagine the drug-hacker community reverse engineering the composition and manufacturing method of pharmaceuticals–especially in this near future world with increasingly sophisticated and cheap analyzing and related equipment.

Now, these home-made generic pharmaceuticals might not be as good as the official ones. They might even be more dangerous. But to save thousands of dollars a year, many people might turn to this.

In such a world, what would Big Pharma and the state that it is in bed with do? Today, it’s easy for the state to pursue generic drug companies: they are visible and easy to target and find. And though attacking them indirectly harms the consumer, it’s not seen as a direct attack on the consumer–just as the poor and middle classes sometimes support taxes on corporations even though this ends up filtering down to them in terms of higher prices.

But in a world of home-brew drug printers, what would the state and its Big Pharma cronies do? Would Patent SWAT teams break down the front doors of homes of suspected “patent smugglers,” as is done now in the drug war? (And as illustrated in fiction, with respect to the use of patents to shut down crops infected by patented “seeds”–see, e.g., The Evil of Patenting Food and Seeds; season 4, episode 5, of the TNT program “Leverage”; Geoffrey Allan Plauché’s review of “The Calorie Man” by Paolo Bacigalupi.) There may be some of this, but in the end it would be hard to prevent such widespread “homebrew” drug fabrication. This would, of course, drive down the prices of the patented, “official” products.

Another tack the state might take would be to go after the use of information, as it does now in the case of copyright. Owning a 3D drug printer would not be per se illegal since it has so-called “non-infringing” uses. The only thing that would make certain uses of it illegal would be loading a given recipe into it that enables it to fabricate a version of some patented pharmaceutical. How would a consumer obtain these recipes? Probably on the Internet, by email, the Pirate Bay, and so on. So what the state would have to make illegal would be knowledge itself, a recipe for how to do something. It would be illegal to find out how to make a given drug. We are already seeing the beginning of the IP War on 3D Printing; it would no doubt escalate as home fabricators were used to manufacture high-priced drugs. So we can see that in the future, the only way to protect the patent for the allegedly most important case for patents, would be to have the state police and censor knowledge and information. And,

That, of course, is what the state does now, it’s just that it’s not as easy for consumers to see this yet. In the future, hopefully, with increasingly advanced technology, it will be harder and harder for the state to maintain its cover.

[mises]

From Jeff Tucker at the Mises blog:

In-N-Out Sues Grab-N-Go

August 23, 2011 by Jeffrey Tucker

The battle over the burger takes the low road as In-N-Out sues Grab-N-Go for copyright infringement.

A system where companies learn from examples of success and emulate in the service of the consumer? We can’t have that!

A recent fascinating KERA Think podcast interview with Johnnie Hughes, The Evolution of Ideas, discusses his book On the Origin of Tepees: The Evolution of Ideas (and Ourselves). He has some great ideas about … ideas and their origin, function, and evolution. The interview is great, and the books sounds interesting–I intend to buy it. In the interview he discusses four types of creatures. He gives an example of the relative success, and effect of natural selection on, animals trying to cross a busy road:

• Darwinian creatures: such as a jellyfish. Their behavior is pre-programmed;
• Creatures that operate by instinct but it can learn;
• “Popperian” creatures (like chickens) that have little model of the world and can crudely plan;
• “Dennettian” creatures (after philosopher Daniel C. Dennett, who has a model of intelligence), who can communicate rationally, swap information, trade ideas, learn, etc. The other three types inherit genes; we can inherit, trade, ideas and information.

This interested me because of my focus, in studying intellectual property law and its intersection with ideas and the role of ideas in human action and the economy, e.g. in my recent talk Intellectual Property and Economic Development. It also called to mind some of Hans Hoppe’s recent thoughts on the role of human intelligence in helping humanity evolve to the point of intelligence sufficient to escape the Malthusian trap (discussed in Advanced Graduate Seminar, Tuesday, July 26, 2011).

Speaking of tepees, he mentions that one advantages of these lightweight, collapsible tents is that they could easily be carried–initially by dogs, before Europeans brought horses over–hence the origin of the expression “dog days.” Hunh. Not sure he has the origin of that expression right, but interesting hypothesis.

NSK Interview on Patents, by Taylor Conant — this link above is defunct; here is the original, from WayBackMachine:

APRIL 6, 2007

“Big Dig #3” – Patent Law

The following was an assignment, “Big Dig #3,” for a business journalism class. I researched the patent process and interviewed a patent attorney from Houston, Texas, Stephan Kinsella (his personal website is available here).

—

On November 28, 2006, the Supreme Court heard oral arguments in the KSR v. Teleflex patent case, a trial which could produce the most important ruling for patent law in forty years.

The case involves a dispute between KSR, a company which manufactures gas pedals that use an electronic signal rather than a mechanical cable to signal the engine, and Teleflex, a company which claims KSR has infringed a patent it was issued in 2001 for a similar technology. The dispute revolves around whether or not KSR’s system was an “obvious” integration of known technologies or not.

“The implications of this case to the patent system are huge. It could impact millions of U.S. patents currently in force and over 700,000 patent applications currently being examined by the PTO,” according to an interview conducted by PRNewswire.com of Robert Greene Sterne, a member of the counsel for KSR.

Patents, like trade secrets, trademarks and copyright, seek to protect “intellectual property,” or “IP.” Of the general IP category, only patents and trade secrets protect inventions.

According to Stephan Kinsella, a patent attorney from Houston, Texas, there are four criteria the United States Patent and Trademark Office (or PTO), use when judging whether or not an invention is patentable—statutory subject matter, utility, novelty and non-obviousness.

“Basically you can patent machines and processes that produce a useful result, so that’s the first one, and utility means it just has to do something useful,” says Kinsella.

So, based on the first two criteria, drugs are in (potentially make you healthier), while nuclear bombs and perpetual motion machines are out (nukes can only do harm or disutility, while perpetual motion machines are impossible according to the laws of thermodynamics).

“Novelty means it has to be new, and that’s usually pretty easy to overcome,” Kinsella continues. “But then you have to ask yourself if it’s an obvious difference or a non-obvious difference, and in most other parts of the world this is called the ‘inventive step.’”

So, by way of example, Kinsella says patenting the use of an LCD panel with a computer would not be a possibility because it is already obvious that you would use a display device with a computer, even though and LCD is new in comparison to a standard CRT monitor.

As the Supreme Court case shows, and as Mr. Kinsella emphasizes, obviousness – or lack thereof – is the central issue of patent law being debated these days. And the spread of the Internet and electronic goods will serve only to further complicate the patent system in that regard.

“About five years ago, Amazon got an injunction against Barnes and Noble to stop their one-click—they had a patent on clicking once on the basket to buy something as opposed to clicking twice,” says Kinsella, recounting a key moment in the growth of e-commerce. “It’s ridiculous, utterly ridiculous… Barnes and Noble is lagging behind now and I don’t know if that’s why, but it’s possible.”

According to Kinsella, there may even be a kind of populist revolt against the concept of IP by consumers who are increasingly frustrated by restrictions on the way they use their electronic media and information technologies.

“I believe there is a growing hostility towards IP in general, at least among Gen-X and the tech people,” Kinsella says, citing the examples of the RIAA, Disney and the recent Blackberry patent suit in which the company was forced to pay hundreds of millions of dollars to another company which claimed Blackberry had violated one of its patents. “There is an increasing fear a lot of small companies are in of patent infringement when they’re just trying to do business.”

That’s a concern worth taking seriously—after all, the patent system is predicated on the belief that the limited-monopolies granted by it incentivize creativity and create a net benefit for the economy. But if the arbitrariness of the patent system leads to exponentially-increasing costs, the economic usefulness of the system might need to be reexamined.

“If you really take seriously the idea that anyone who comes up with an idea has some property right in it, it either has to be definite or infinite. If it’s infinite, the human race probably would’ve died out a long time ago, because no one would be able to use the wheel, or fire or build a house without getting permission,” says Kinsella. “Therefore, the only way to make them work is to define their duration, but then you run into the problem of arbitrariness—twenty years for a patent, seventy-five years for a copyright, ten year renewable terms for trademarks.”

Until the time comes for Mr. Kinsella’s ideal system which only respects trade secrets and trademarks, he and others concerned with the patent system will just have to cheer on the right outcome in court cases such as KBR v. Teleflex. Depending on the way the ruling goes, that case could result in a striking down of current notions regarding “secondary conditions of non-obviousness,” which Kinsella views as currently helping to promote the arbitrariness of the patent system which is responsible for situations like the Amazon one-click patent.

According to the industry blog PatentlyO.com, Justice Scalia has already hinted that a conclusion in the case has been reached, saying, “I know how that one comes out, but I’m not going to tell you.”

Stephan Kinsella has his fingers crossed.

POSTED BY THE OWNER AT 2:43 PM 

From Mises.org. Archived comments below.

In his paper Infringement Nation: Copyright Reform and the Law/Norm Gap, law professor John Tehranian explains how the normal activities (see pp. 543-48) of a typical Internet user–he takes an “average American, …take an ordinary day in the life of a hypothetical law professor named John”–someone who does not even engage in P2P file sharing–could result in up to $4.5 billion in potential liability annually, for copyright infringement. The acts include:

• having his  email program “automatically reproduce the text to which he is responding in any email he drafts. Each unauthorized reproduction of someone else’s copyrighted text—their email—represents a separate act of brazen infringement, as does each instance of email forwarding….” (twenty emails in an hour: $3 million in statutory damages);
• distributing in his Constitutional Law class copies of three just-published Internet articles presenting analyses of a Supreme Court decision handed down only hours ago;
• absentmindedly doodling a sketch of the Guggenheim museum on a notepad during a boring faculty meeting, i.e. making an unauthorized derivative work;
• reading a 1931 e.e. cumming poem to his Law and Literature class, an unauthorized public performance;
• emailing to his family five pictures his friend took of a local football game–his friend owns the copyright;
• having a Captain Caveman tattoo and revealing it while swimming at the local university pool: violating Hanna-Barbera’s copyright by the reproduction and public display;
• singing Happy Birthday to a friend at a restaurant and recording it on his smartphone videocamera, an unauthorized public performance and reproduction of a copyright-protected work–as is the painting on the wall of the restaurant that is captured in the video footage; and
• reading on his email a magazine that itself has clips of interesting items from other publications, a contributory infringement leading to up to $7.5 million of liability.

As Tehranian concludes:

By the end of the day, John has infringed the copyrights of twenty emails, three legal articles, an architectural rendering, a poem, five photographs, an animated character, a musical composition, a painting, and fifty notes and drawings. All told, he has committed at least eighty-three acts of infringement and faces liability in the amount of $12.45 million (to say nothing of potential criminal charges). There is nothing particularly extraordinary about John’s activities. Yet if copyright holders were inclined to enforce their rights to the maximum extent allowed by law, barring last minute salvation from the notoriously ambiguous fair use defense, he would be liable for a mind-boggling $4.544 billion in potential damages each year. And, surprisingly, he has not even committed a single act of infringement through P2P file-sharing. Such an outcome flies in the face of our basic sense of justice. Indeed, one must either irrationally conclude that John is a criminal infringer—a veritable grand larcenist—or blithely surmise that copyright law must not mean what it appears to say. Something is clearly amiss. Moreover, the troublesome gap between copyright law and norms has grown only wider in recent years.

And this is just civil, monetary damages; Tehranian did not even include potential criminal liability (but here he cites 17 U.S.C. § 504(c)(2), 506; 18 U.S.C. § 2319, “providing for criminal penalties against certain copyright infringers.”)

[mises]

Update: AI image generator hit by $1.8 trillion lawsuit from Getty Images.

Also: https://twitter.com/NSKinsella/status/1648460189996285953: with “AI” services like ChatGPT, art models, and so on reading data online (much of it subject to copyright) and then generating outputs based on this, potentially a copyright infringement, e.g. as a derivative work, and the human directing it, as well as the owners/operators of the site/service, potentially being also liable, e.g. by secondary or vicarious liability,¹ the $4.5B liability per typical Internet user (15 year ago: in 2007) could be multiplied by 10 or even 1 billion times or more, leading to potential liability on the part of the provider of the AI service and/or the customers who use it, in the quadrillions or quintillions or dollars, or even more. See Sindhu Sundar, “Billionaire Barry Diller says the media should ‘absolutely’ sue AI makers over ingesting text from articles,” Business Insider (Apr 12, 2023); also Generative AI Has an Intellectual Property Problem; Who owns copyright in AI-generated works?; Generative AI should pay human artists for training; Critics of Generative AI Are Worrying About the Wrong IP Issues; Generative AI Is Getting Sued. Here’s Why You Should Pay Attention; Zach Naqvi, “Artificial Intelligence, Copyright, and Copyright Infringement,” Marquette Intellectual Property Law Review 24, no. 1 (Winter 2020): 15–51; Ron Dreben, “Generative Artificial Intelligence and Copyright Current Issues“; Katarzyna Szczudlik, “Can Artificial Intelligence be the author?”

Archived comments:

Ohhh Henry August 22, 2011 at 8:30 pm

Great article. Any law is garbage if it can’t be easily understood by the victims and perpetrators, or fairly and transparently enforced by the authorities. And by “garbage” I mean uncivil, treacherous and evil.

But what else can government do, if they are to make an decent living from running a protection racket? There’s not much money to be made in codifying and enforcing simple, obvious rules of property and conduct. Those rules are so simple and fair that nearly everyone spontaneously obeys them, nearly all the time. The real money is to be made in creating an elaborate set of complicated, hidden, legal traps for the public, then subtly or unsubtly nudging them into the traps. Then they pounce on them, seize their property, put them in a cage, and shake down the rest of society for a lot of money in order to pay for the imprisonment and rehabilitation of the “criminals”.

Nathan August 22, 2011 at 9:43 pm

I saw a posting on another message board about how all the home design shows on HGTV blur out the paintings in people’s houses, because showing a painting on the air would be copyright infringement. But if we take the law literally, such blurring is insufficient (although it might reduce damages). The copy is made when the painting is videotaped. A sufficiently litigious artist could probably sue for this and win. Another absurdity of copyright law.

Jonathan Bartlett August 22, 2011 at 11:10 pm

Doesn’t “fair use” cover these activities?

Stephan Kinsella August 22, 2011 at 11:55 pm

As Tehranian says: “For the purposes of this Gedankenexperiment, we assume the worst case scenario of full enforcement of rights by copyright holders and an uncharitable, though perfectly plausible, reading of existing case law and the fair use doctrine. Fair use is, after all, notoriously fickle and the defense offers little ex ante refuge to users of copyrighted works.”

I would also say I think many people — those who use the Internet more than average, say — engage in far more acts of infringement than Tehranian lays out–probably leading to 10 times or more the liability he estimates — $50 billion a year per person, or more, for active Internet users. It’s truly insane.

Wildberry August 24, 2011 at 11:21 am

You speak as if this folly of a mind experiment was actually taking place. One has to wonder, Mr. Kinsella, why doesn’t it?

Could it be for the same reasons that every jostle on the bus does not result in charges of battery?

Big Brother August 23, 2011 at 2:18 am

If the folks defining “fair use” have the same mentality as those going after children who sell lemonade, then I wonder what the chances are?

Big Brother August 23, 2011 at 2:12 am

239,893,600 Internet users (as of June, 2010). 239,893,600 x “$50 billion a year per person” = …. Hmm. Deficit problem solved!

nate-m August 23, 2011 at 6:00 am

That’s not as fanciable as you may first thing. One of the commonly referenced figures in used to politically support the USA Federal Government’s war against liberty world-wide is the made up losses our ‘culture’ sustains due copyright piracy abroad.

That is that these people claim that if we were able to go out to places like China or India and go after copyright violators then we could eliminate, if not reverse, our ‘trade deficit’.

Here is a example:
http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=1583&context=ilj

Intellectual property piracy had pushed the United States and China to the verge of major trade wars three times between 1990 and 1997. While U.S. investment in China had grown since the 1980s, its trade deficit with China had also continually expanded.
Relying heavily on the export of intellectual property products to offset its trade deficits in the world market, the United States had ample reason to see that its intellectual property products served a similar function in the Chinese market.

So not only is IP sacred and people have a ‘right’ to ‘profit from their intellect’ we have people that think the very economy of the USA rests on exporting our anti-freedom policies to other countries.

Big Brother August 23, 2011 at 7:01 am

Holy S**t, Batman! What’s the political equivalent of Murphy’s Law? The one that says, if you can think of an evil thing that a human could do, someday someone will try it (if they haven’t already).
When I heard that a lot of farmers were pouring milk down the drain because the cows or the grass had been irradiated by Chernobyl fallout, I thought, “Someone somewhere will think ‘what a waste’ and try and sell it to unsuspecting 3rd-world consumers. Shore enough, a few months later, radioactive powdered milk showed up on supermarket shelves in Africa.

Brian Macker August 23, 2011 at 6:47 am

“having his email program “automatically reproduce the text to which he is responding in any email he drafts. Each unauthorized reproduction of someone else’s copyrighted text—their email—represents a separate act of brazen infringement, as does each instance of email forwarding….” (twenty emails in an hour: $3 million in statutory damages);”

That’s idiotic for a layman let alone a lawyer to claim.

Stephan Kinsella August 23, 2011 at 7:24 am

First, he explicitly notes it’s a worst case scenario:

For the purposes of this Gedankenexperiment, we assume the worst case scenario of full enforcement of rights by copyright holders and an uncharitable, though perfectly plausible, reading of existing case law and the fair use doctrine. Fair use is, after all, notoriously fickle and the defense offers little ex ante refuge to users of copyrighted works.

And he provides backup for his $3m email liability claim:

In the morning, John checks his email, and, in so doing, begins to tally up the liability. Following common practice, he has set his mail browser to automatically reproduce the text to which he is responding in any email he drafts. Each unauthorized reproduction of someone else’s copyrighted text—their email—represents a separate act of brazen infringement, as does each instance of email forwarding.31 Within an hour, the twenty reply and forward emails sent by John have exposed him to $3 million in statutory damages.32

31 17 U.S.C §§ 102(a)(1), 106(1), 501(a). Although one could attempt to distinguish the existing case law on the matter, courts have deemed fair use rights to a previously unpublished work, such as a piece of correspondence, to be exceedingly limited. See, e.g., Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 555 (1985) (noting the strong presumption against fair use of unpublished works); New Era Publ’ns Int’l. v. Henry Holt & Co., 873 F.2d 576, 583–84 (2d Cir. 1989) (noting that “a small, but more than negligible, body of unpublished material cannot pass the fair use test” and that under ordinary circumstances “the copying of ‘more than minimal amounts’ of unpublished expressive material calls for an injunction barring the unauthorized use” (quoting Salinger v. Random House, Inc., 811 F.2d 90 (2d Cir. 1987))).

One could also argue that John had an implied license. However, such a defense is problematic. As the Copyright Act notes, “[o]wnership of a copyright . . . is distinct from ownership of any material object in which the work is embodied. Transfer of ownership of any material object . . . does not of itself convey any rights in the copyrighted work embodied in the object.” 17 U.S.C. § 202. For example, in an infringement case involving letters penned by J.D. Salinger, the Second Circuit deemed Salinger the owner of the copyrights thereto, even though he no longer owned the letters themselves (he had mailed them). The court then rejected a fair use defense and enjoined the publication of the letters. Salinger, 811 F.2d at 94–95. § 202 and its application, as illustrated in Salinger, call into question the viability of an implied consent defense in the email example.

Under existing secondary liability principles, the maker of this email software also faces potential liability for contributory and vicarious infringement. See, e.g., Gershwin Publ’g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971) (imposing contributory liability when defendant has knowledge of an infringement and materially contributes to it and vicarious liability when a defendant has the right and ability to control the activities of an infringer and gains a direct financial benefit from these activities). Courts have read these doctrines with increasing liberality in recent years. See Mark Bartholomew & John Tehranian, The Secret Life of Legal Doctrine: The Divergent Evolution of Secondary Liability in Trademark and Copyright Law, 21 BERKELEY TECH. L. J. 1363, 1369–70 (2006).

32 This figure assumes the availability and the assessment of maximum statutory damages in the amount of $150,000 for each of the twenty distinct acts of infringement. 17 U.S.C. § 504(c)(2) (2006).

HL August 23, 2011 at 1:06 pm

Indeed. Let us not forget that absurd laws can and often do lead to absurd results. For example, will RIM, the maker of my beloved Blackberry devices, survive the monster cashflow hit it took on account of an IP troll a few years back? Who knows.

As Tim Wu demonstrates in his book The Master Switch, the law is a tool for those seeking control and cash. IP has evolved into a splendid device for the big and profitable users of it. Everyone else hobbles along in the darkness, never sure when a goblin will pop out from the shadows with an IP complaint.

Brian Macker August 25, 2011 at 5:19 pm

The sender of an email (like the poster of this comment) has given the written text away for free, and made no copyright claim. It’s ludicrous to claim anyone would be likely of being prosecuted for this. It certainly work as an argument invalidate Rothbardian style copyrights. We are still left with the fact that copyrights are grounded in physical property rights, and rights to freely associate and trade via contracts. As Rothbard has pointed out.

Stephan Kinsella August 25, 2011 at 10:19 pm

The sender of an email (like the poster of this comment) has given the written text away for free

Bad legal advice. You do realize that when you write a letter and send it to someone, you retain copyright, right? The recipient can’t publish the letter in a book, say, without your permission, even though you sent it to him. Why is email different? You are just making a layman’s assertion.

, and made no copyright claim.

Since the 1980s you don’t need to make a copyright “claim” or notice or registration to have a copyrihgt. It’s automatic. So it’s irrelevant whether the author “makes a claim”. He HAS a copyright, whether he “makes a claim” or not.

It’s ludicrous to claim anyone would be likely of being prosecuted for this.

Prosecuted? He talked about civil liability.

Brian Macker August 27, 2011 at 6:56 am

“Bad legal advice. You do realize that when you write a letter and send it to someone, you retain copyright, right? The recipient can’t publish the letter in a book, say, without your permission, even though you sent it to him. Why is email different? You are just making a layman’s assertion.”

I just copied your “copyrighted” material. Sue me, lol.

Oztrian August 23, 2011 at 10:58 am

Shoot the messenger.

Plus ca change.

Gordon C Harrison August 24, 2011 at 9:58 am

A point often made in attacking copyright is that it is a ‘privileged monopoly’. This is an argument founded on an inability to understand the scope of copyright. Copyright is not a privileged monopoly, it is a moral human right granted to every person on the planet. All human beings are creative and copyright allows everyone to benefit from the fruits of their creativity. Copyright is an *individual* human right enshrined in article 27 of the UN Human Rights act of 1948.

I say to anyone reading this, respect the creativity of your fellow human beings, it is right that you should do so, be moral, respect their exclusive right to make a living from their creativity, be creative yourself, enrich our culture and enjoy the benefits of copyright granted to you.

Vanmind August 24, 2011 at 3:00 pm

1. Nothing that must be formally codified (i.e. “granted”) could possibly be a right
2. The UN is an institution of organized crime

I have a Fine Arts degree, and I’d be willing to bet that I respect human creativity more than you. Copyright fraud diminishes humanity’s creative output.

Stop speaking as a wishful businessman and start acting like an artist.

Brian Macker August 25, 2011 at 5:14 pm

“Nothing that must be formally codified (i.e. “granted”) could possibly be a right”

A claim which if true invalidates property rights for anything that isn’t nailed down or can’t be constantly watched, or carried with you.

1. Liability for copyright infringement by AI. [↩]

From Mike Masnick at Techdirt:

Chorus Of Mainstream Press Saying The Patent System Is Broken Gets Louder

from the why-isn’t-Congress-doing-anything? dept

We’ve been noticing that the mainstream press has really been speaking up about the broken patent system lately. It was mostly kicked off by the excellent This American Life story about just how broken our patent system is, and that seems to have thrown open the floodgates. So, suddenly an issue that was generally discussed mainly by entrepreneurs and geeks was suddenly showing up all over the place. Last week we noticed stories in both the NY Times and the Economist calling out the dreadful problems of the patent system.

And now we’ve got two more mainstream publications going further down that road. First up, is The Guardian, which focuses mainly on software patents in explaining how the system is really broken and wondering why the government isn’t fixing anything:

Patents were supposed to protect innovation. Now they risk throttling it. Such acquisitions may drag technology companies ever further from their original core competences. Academic research by the Berkman Center for Internet and Society has found that software patents have provided no net benefit to the software industry, let alone to society as a whole. Tragically, because so many corporations which formerly opposed software patents have now joined the system, an effective solution will be harder to find. Once again consumers are pitted against the corporations. Where are the regulators when they are needed?

A much bigger deal, however, is that the Washington Post has a story by Pulitzer-prize winning business and economics columnist Steven Pearlstein, explaining how the patent system is completely brokenand the patent reform going through Congress right now won’t fix the real problems (he’s actually a bit generous in thinking it will fix some of the problems). The piece is a giant condemnation of a broken patent system:

Silly me. I thought the purpose of patents was to spur innovation by giving people who invent something the exclusive use of their innovation for a limited time.

There’s still some of that. But out in Silicon Valley, patents have become the competitive weapon of choice, used by high-tech giants to bludgeon rivals and crush upstarts.

It turns out that the more patents you have, the more likely it is that you can extort exorbitant royalties from people who might have easily come up with the same idea or the same feature that you did but never thought to patent it. And the more patents you have, the more your competitor wants so he can retaliate with a patent suit of his own, claiming that it was you who stole the ideas from him.

In other words, it’s an arms race to buy as many patents as possible, bidding up the price of patents without anyone gaining a permanent competitive advantage. Like all such races, this one involves a huge waste of time, talent and capital, not only in the race to buy patents but in trying to win a patent on every half-baked notion that anyone thinks up.

Instead of spurring innovation and entrepreneurship, patents are being used by companies, venture capitalists and their cynical lawyers to stifle and discourage them.

Pearlstein is someone that folks in DC actually read, which means that our elected officials are hopefully reading this. Will it make some in Congress finally wake up and realize that the patent system is really, really broken, and the patent reform bill they’re discussing does little to address the real problems? It would be nice, but it seems unlikely.

More patent threats to the Android smart-phone platform, from Inside Counsel:

Mobile-device patent disputes heat up

Upcoming cases could throw a wrench in Google and HP’s plans

August 22, 2011 By Ashley Post

As the lucrative smartphone market continues to grow, technology companies are paying close attention to upcoming cases concerning mobile-device patents.Today, the International Trade Commission (ITC) will hear a case in which Microsoft Corp. alleges that Motorola Inc.’s smartphones, which operate on Google Inc.’s Android operating system, infringe Microsoft patents. A decision in favor of Microsoft could block imports of Motorola phones running Android.

The ITC’s ruling is particularly important to Google, which last week agreed to pay $12.5 billion for Motorola. The acquisition will allow Google to obtain a group of patents that will help deter litigation against its Android system.

Read more>>

More tech-company “competition”. From the WSJ:

Founder of Priceline Spoiling for a Fight Over Tech Patents

I was a guest last night on FreeTalkLive (Sunday, Aug. 21, 2011), discussing intellectual property with Sunday hosts Mark Edge and Stephanie. We talked for about an hour and a half, from 7pm-830pm EDT and had a good, wide-ranging discussion. A few callers called in near the end. This was the FTL debut on XM satellite radio’s “Extreme Talk”, XM 165. The show is now available on the podcast feed here (local MP3).

I’ll be a guest tonight (Sunday, Aug. 21, 2011), discussing intellectual “property,” on FreeTalkLive, which is also now on XM satellite radio’s “Extreme Talk”, XM 165. (Probably in the 7pm-8pm EDT slot.) I think Mark Edge and Stephanie will host; Ian Freeman is currently in a government cage for violating a malum prohibitum “law”.

From Mike Masnick at Techdirt:

Clear & Concise Explanation Of The Problem With Patents

from the more-voices dept

More and more people are adding their voices to the growing consensus around the massive harm that the patent system is doing to innovation within the tech industry. PC World’s Katherine Noyes has a great article that lays out a clear argument for why the patent system is making things worse for consumers. Here’s just a snippet, though the whole thing is worth reading:

5. Innovation Is Being Squelched

Software innovation depends heavily on the exchange and iterative development of new ideas, but such exchange is precisely what software patents are designed to prevent. Numerous patents have been granted that are excessively broad, too, making it virtually impossible to develop original software without fear of infringing.

6. Small Companies Are Being Shut Out

For all of the above reasons, you could be the most brilliant and creative software developer ever, but if you don’t have pockets deep enough to pay hefty licensing fees and start a patent war chest of your own the way Google is being forced to do, you are simply out of luck. End of story.

7. Consumers Pay the Price

Small businesses suffer as a result, but ultimately the even bigger loser–as always–is the consumer. Under this system, control of ideas is falling into the hands of the companies that are big, fat and unable to innovate, simply because they have the money and no other easy way to earn more. That, in turn, means the little guys–the innovative ones–can’t bring to market the next big thing that could change consumers’ lives, at least not without a heavily inflated price.

It’s nice to see that more and more people are making it clear that this isn’t just some “fringe” opinion, but such feelings are extremely common among folks throughout the tech industry — supposedly the people patents are supposed to protect most. When those people hate and/or fear the patent system, clearly something’s wrong. So why is Congress’ only move to make the system worse?

Related

• The Death Throes of Pro-IP Libertarianism
• Brian Doherty, “Intellectual Property: Dying Among Libertarians?,” Reason Online (8.2.2010)
• KOL037 | Locke’s Big Mistake: How the Labor Theory of Property Ruined Political Theory
• Rand on IP, Owning “Values”, and ‘Rearrangement Rights’
• Locke on IP; Mises, Rothbard, and Rand on Creation, Production, and ‘Rearranging’

https://t.co/oLrR1m8xPk
Time for a new one: For libertarians only

— Stephan Kinsella (@NSKinsella) June 19, 2026

I posted this on the Mises blog in 2006:

On a patent practitioner email list I posted the following:

It seems to me that many small/medium companies live in fear of a big patent lawsuit. Even if they had their own IP, I suspect many companies would gladly give up forever their right to sue for patent infringement, in exchange for some kind of immunity from patent liability–at least, if they could eliminate the threat of an injunction, so that the worst penalty they might face is some kind of mandatory royalty. Surely IBM et al. would not take this deal, but I bet a lot of other companies would. What do you think?

Second, in view of this, does this mean there is some kind of market for a service that would let a bunch of companies get together and “pool” their IP and have some kind of agreement (a) never to sue each other; (b) to have access to this pool of patents to countersue any company that sues any of the members.

This post drew some interest so I am doing a simple webpoll. I think the results might be interesting. (DIGG it here.)

Patent Rights

Would you give up your right to sue others for patent infringement in exchange for immunity from all patent lawsuits? Yes No   Current Results

In Seen and Unseen Costs of Patents, Jeff Tucker notes, “Intel’s CEO spoke for many when he said he would be glad to cut patents to a tenth of its current rate provided that others did the same.”

Update: I did another poll in Feb. 2016 on Twitter:

Update: From SohoForum:

Let’s do an unofficial pre-debate poll before our 11/15 debate ft. @NSKinsella @RichardAEpstein: should patent and copyright laws be abolished?

— The Soho Forum (@TheSohoForum) November 10, 2021

Update: See the Rational Patent Exchange’s (RPX) Defensive Patent Aggregation Service (2). Also: EFF’s Daniel Nazer, Hacking the Patent System: A Guide to Alternative Patent Licensing for Innovators.

Update: The Patent Bay Non-Assertion Patent Pledge

Update: From RPX (Rational Patent Exchange?):

• We are not a patent troll

  RPX resembles a patent troll in one way only: we buy potentially problematic patents in the open market. The similarity ends there. Unlike a troll, we do not opportunistically license our patents. Every member of the RPX client network receives a license to all of, or a portion of, the patents we own immediately upon joining, based on their membership agreement. And we never offensively assert or litigate the patents we own.

  RPX provides a purely defensive service. Our goal is to acquire and clear potentially problematic patents from the market so that they cannot be asserted against our clients.

See also:

• Do Business Without Intellectual Property (Liberty.me, 2014)
• Defensive Patent Publishing
• Jefferson on Anonymous Defensive Patent Publishing

Also: Unified Patents.

Also: Blockstream’s Defensive Patent Strategy: Patent Pledge; The Defensive Patent License; Blockstream Announces Defensive Patent Strategy; Blockstream: Modified Innovator’s Patent Agreement; EFF: Blockstream Commits to Patent Nonaggression.

I’ve blogged a lot lately about all the various patent battles in the smartphone and other spaces, leading to wasted money on litigation, patent acquisition, licensing, and so on–billions and billions of dollars.¹ We have Google spending $12.5 billion on Motorola Mobility in part to obtain 17,000+ patents,² to defend itself from patent threats by competitors like Apple and Microsoft. Patents are being “weaponized,” forcing even non-aggressive companies like Google to acquire patent shields.

This is good for Google–though a waste of its precious capital; think how many jobs and innovative research could those billions could have gone towards–but not everyone has the money or clout to acquire such patent arsenals for defensive purposes. Thus, the larger corporations are protected from competition from smaller players, leading to barriers to entry and oligopolies.³

I’ve often wondered if there could be a way for some kind of “open access” patent pool to be formed for smaller companies and little guys–something solely defensive. I discussed something along these lines in my 2007 Mises blog post Open Source Patents, which mentioned the Open Invention Network (OIN) (Wiki entry), a type of patent pooling arrangement which seeks to defend the Linux System from patents. It does this by first purchasing patents, and then offering them to anyone, on a royalty-free basis, so long as the licensee “agrees not to assert its patents against Linux.” If the pool grows big enough–and it’s funded by “a diverse group of companies including IBM, Novel, Philips, Red Hat, Sony and NEC”–then many companies fearing liability from one of the patents owned by OIN may enter into this arrangement for defensive purposes. OIN does “not anticipate[] that there will be any royalty streams.” Its purpose is simply to force companies not to sue “programmers, independent software vendors, distributors and businesses” who use Linux.⁴

1. Google buying more patents to defend itself; Microsoft Copyrights –> Patent Dominance; Patent Cross-Licensing Creates Barriers to Entry. [↩]
2. Google pays $22 million per patent to defend itself. [↩]
3. Patent Cross-Licensing Creates Barriers to Entry; Intellectual Property Advocates Hate Competition; also Kevin Carson, Criminalizing Competition. [↩]
4. For more on patent pooling, see In the Pool, by patent shill Gary Odom, aka “PatentHawk”. [↩]