Intellectual property

Intellectual property (IP) is a broad concept that covers several types of legally recognized rights arising from some type of intellectual creativity, or that are otherwise related to ideas. IP rights are rights to intangible things—to ideas, as expressed (copyrights), or as embodied in a practical implementation (patents).

Intellectual property laws grant monopolies to originators of ideas, giving them a legal right to initiate force (through the state) against anyone making use of the idea without the permission of the originator of that idea.

Modern libertarians, such as Stephan Kinsella and Jeffrey Tucker, consider the term to be self-contradictory, because ideas and patterns are not scarce or rivalrous, so logically cannot be owned.

Types of intellectual property

In today’s legal systems, IP typically includes at least copyrights, trademarks, patents, and trade secrets.

Copyright consists of legal rights over literary, musical, dramatic, or artistic works, such as novels, music, and so on. A concept central to modern IP law is that of the "idea-expression dichotomy"; that a copyright holder has rights not over the ideas per se, but rather in his expression of those ideas. For example, a historian may write a book about the history of the Austrian school, based on a number of historical facts. Another author may use the same facts, but write his own book in his own, different words. There would be no copyright violation. The concept of the idea-expression dichotomy has been criticised by some anti-IP writers. Although it depends on the medium, such copyright typically lasts for the life of the author plus a number of years- often as much as 70.

Patents are monopoly rights over the use and distribution of inventions. Unlike copyright, which is automatically granted (although some jurisdictions give additional legal rights to registered works), patents must be applied for and approved of.

In a similar vein of thought, a commonly held belief is in a right to one's reputation, and that speech can be restricted if it is libel or slander.^{[citation needed]}

History

Patents emerged as a form of protection for mercantiles. Copyrights are rooted in control and censorship of ideas.

Effects of IP

IP rights, at least for patents and copyrights, may be considered rights in ideal objects. The ownership of an idea, or ideal object, effectively gives the IP owners a property right in every physical embodiment of that work or invention. Consider a copyrighted book. If A writes a novel, he has a copyright in this "work." If he sells a physical copy of the novel to B, in book form, then B owns only that one physical copy of the novel; B does not own the "novel" itself, and is not entitled to make a copy of the novel, even using his own paper and ink. Thus, even if B owns the material property of paper and printing press, he cannot use his own property to create another copy of A’s book. Only A has the right to copy the book (hence, "copyright").

Likewise, A’s ownership of a patent gives him the right to prevent a third party from using or practicing the patented invention, even if the third party only uses his own property. In this way, A’s ownership of ideal rights gives him some degree of control—ownership—over the tangible property of innumerable others. Patent and copyright invariably transfer partial ownership of tangible property from its natural owner to innovators, inventors, and artists.

Views

Intellectual property is a regularly debated subject among libertarians. Most of the debate about IP concerns patent and copyright.

• Stephan Kinsella and Jeffrey Tucker are two of the most prominent strong opponents of all forms of intellectual property.
• Murray Rothbard was opposed to patents, but he believed that a weak form of copyrights could be enforced through contracts.
• Ludwig von Mises and F. A. Hayek were largely opposed to intellectual property.
• Ayn Rand was an enthusiastic supporter of intellectual property.

Arguments in favor of IP

Natural rights arguments

Some libertarians advocated IP on moral or natural-rights grounds. According to this view, creations of the mind are entitled to protection just as tangible property is. Both are the product of one’s labor and one’s mind. Just as one has a right to the crops one plants, so one has a right to the ideas one generates and the art one produces.

This theory depends on the notion that one owns one’s body and labor, and therefore, its fruits, including intellectual "creations." An individual creates a sonnet, a song, a sculpture, by employing his own labor and body. He is thus entitled to "own" these creations, because they result from other things he "owns."

Ayn Rand argues that, since ideas must originate from the mental effort of an individual (or group of individuals), that originator holds the exclusive property rights to the product(s) of his labor. While one cannot copyright theoretical knowledge - discoveries of facts or truths of reality not previously known - he can claim the right to an invention, the practical application of that knowledge. Since the object that is patented might not have existed without the inventor, and the object copyrighted would not have existed without the creator, the ideas behind such created objects are the property of their originators.

Utilitarian arguments

The utilitarian argument presupposes that we should choose laws and policies that maximize "wealth" or "utility." With respect to copyright and patent, the idea is that more artistic and inventive "innovation" corresponds with, or leads to, more wealth. Public goods and free-rider effects reduce the amount of such wealth below its optimal level, i.e., lower than the level we would achieve if there were adequate IP laws on the books. Thus, wealth is optimized, or at least increased, by granting copyright and patent monopolies that encourage authors and inventors to innovate and create.

Copyright by contract

According to Murray Rothbard, only activities which are not consonant with the free market would be outlawed by the market. In terms of copyright, when a person writes a work and imprints "copyright" on it, he sells it on condition that the buyer not reproduce the work for sale. By buying the copyrighted work, the buyer implicitly agrees to this condition and is contractually obligated to uphold it. Patents that go beyond this restriction of the copyright contract to prevent people who independently arrive at the same invention from using and selling that invention are punishing an act that is not implicit theft, and hence would not be outlawed by the free market; thus, patents become a state grant of exclusive monopoly privilege, incompatible with the free market.

Arguments against intellectual property

Ethical

Stephan Kinsella's seminal article, Against Intellectual Property outlines the modern libertarian case against all forms of intellectual property. Kinsella's paper focuses on the unethical nature of intellectual property rights. They are always in opposition to real material property rights. They are a straightforward government grant of monopoly to a favored producer.

Utilitarian

Utilitarians hold that the "end" of encouraging more innovation and creativity justifies the seemingly immoral "means" of restricting the freedom of individuals to use their physical property as they see fit.

Kinsella points out three fundamental problems with justifying any right or law on strictly utilitarian grounds:

1. First, let us suppose that wealth or utility could be maximized by adopting certain legal rules; the "size of the pie" is increased. Even then, this does not show that these rules are justified. For example, one could argue that net utility is enhanced by redistributing half of the wealth of society’s richest one percent to its poorest ten percent. But even if stealing some of A’s property and giving it to B increases B’s welfare "more" than it diminishes A’s (if such a comparison could, somehow, be made), this does not establish that the theft of A’s property is justified. Wealth maximization is not the goal of law; rather, the goal is justice—giving each man his due. Even if overall wealth is increased due to IP laws, it does not follow that this allegedly desirable result justifies the unethical violation of some individuals’ rights to use their own property as they see fit.
2. In addition to ethical problems, utilitarianism is not coherent. It necessarily involves making illegitimate interpersonal utility comparisons, as when the "costs" of IP laws are subtracted from the "benefits" to determine whether such laws are a net benefit. But not all values have a market price; in fact, none of them do. Mises showed that even for goods that have a market price, the price does not serve as a measure of the good’s value.
3. Finally, even if the other problems are set aside, it is not at all clear that IP laws lead to any change—either an increase or a decrease—in overall wealth. It is debatable whether copyrights and patents really are necessary to encourage the production of creative works and inventions, or that the incremental gains in innovation outweigh the immense costs of an IP system. Econometric studies do not conclusively show net gains in wealth. Perhaps there would even be more innovation if there were no patent laws; maybe more money for research and development (R&D) would be available if it were not being spent on patents and lawsuits. It is possible that companies would have an even greater incentive to innovate if they could not rely on a near twenty-year monopoly.

Since advocates of intellectual property generally appeal to utilitarianism (that 'nothing will be created' if creators are not granted a monopoly over their creation), Michele Boldrin and David Levine have examined, in their book Against Intellectual Monopoly, the empirical evidence for this claim. They find that, rather than stimulating creativity and innovation, intellectual property laws - especially patent laws - usually inhibit creativity and innovation.

Links

• Intellectual Property Page resources compiled by Michele Boldrin and David K. Levine

• Writings
  • "The Fallacy of Intellectual Property" by Daniel Krawisz, August 2009
  • "The Fight against Intellectual Property" by Jacob H. Huebert, 2010

• Other media
  • "Ideas Are Free: The Case Against Intellectual Property" lecture by Stephan Kinsella, June 2010 (transcribed as Mises Daily here)

• Intellectual property at Wikipedia