Intellectual Property Is Neither Intellectual, Nor Property: Discuss

Well over a decade ago I tried to explain why things like copyright and patents (and especially trademarks) should not be considered "intellectual property," and that focusing on the use of "property" helped to distort nearly every policy debate about those tools. This was especially true among the crowd who consider themselves "free market supporters" or, worse, "against government regulations and handouts." It seemed odd to me that many people in that camp strongly supported both copyright and patents, mainly by pretending they were regular property, while ignoring that both copyrights and patents are literally centralized government regulations that involve handing a monopoly right to a private entity to prevent competition. But supporters seemed to be able to whitewash that, so long as they could insist that these things were "property", contorting themselves into believing that these government handouts were somehow a part of the free market.

For years I got strong pushback from people when I argued that copyright and patents were not property — and a few years ago, I modified my position only slightly. I pointed out that the copyright or the patent itself can be considered property (that is, the "right" that is given out by the government), but not the underlying expression or invention that those rights protect. Indeed, these days I think so much of the confusion about the question of "property", when it comes to copyright and patents, is that so many people (myself included at times) conflate the rights given by the government with the underlying expression or invention that those rights protect. In other words, the government-granted monopoly over a sound recording does have many aspects that are property-like. But the underlying song does not have many property-like aspects.

Either way, it’s great to see the Niskanen Center, a DC-think tank that continually does good work on a variety of subjects, has decided to try to re-climb that mountain to explain to "free market" and "property rights" supporters why "intellectual property is not property." If you’ve been reading Techdirt for any length of time, most of the arguments won’t surprise you. However, it is a very thoughtful and detailed paper that is worth reading.

Imagine two farms sitting side by side in an otherwise virgin wilderness, each of them homesteaded by a husband-and-wife couple (let’s call them Fred and Wilma and Barney and Betty) — two parcels of newly created private property appropriated from the commons by productive labor. One day, as Fred and Wilma are both working outside, they both notice Betty walking through the orchard of apple trees that Barney and she had planted some years back and which are now just ready to bear fruit for the first time. As Betty picks some of the first ripening apples to use in baking a pie, she sings an enchantingly lovely ballad that she and Barney had made up together back when they were courting. For the rest of the day Wilma can’t stop thinking about that beautiful song, while Fred can’t stop thinking about those trees full of delicious apples. That night Wilma sings the song to her baby daughter as a lullaby. Fred, meanwhile, sneaks over onto Barney and Betty’s property, picks a sack full of apples, tiptoes back to his property and proceeds to eat the lot of them, feeding the cores to his pigs before heading back inside.

Do you think that Fred and Wilma both did something wrong? Are they both thieves? Did both of them violate Barney and Betty’s rights? After all, Fred stole their apples, and Wilma “stole” their song — that is, she sang it to someone else without asking for permission. If you’re having trouble seeing Fred and Wilma’s actions as morally equivalent, it’s because of a fundamental difference between the two types of “property” they took from Barney and Betty.

That fundamental difference is that Barney and Betty’s song, like all ideal objects, is a nonrivalrous good. In other words, one person’s use or consumption of it in no way diminishes the ability of others to use or consume it. As expressed with characteristic eloquence by Thomas Jefferson (who perhaps not coincidentally viewed patents and copyrights with skepticism), the “peculiar character [of an idea] is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.”

By contrast, physical objects like apples are rivalrous: Once Fred and his pigs had finished devouring the ones Fred stole, they were gone and nobody else could consume them. Even when physical objects aren’t physically consumed by their owners — think paintings or plots of land — there is still unavoidable rivalry in using, enjoying, and disposing of them. The owner exercises that control over the owned object, and therefore nobody else does.

This is why it’s clear that Fred inflicted harm on his neighbors, since he took the fruit that they grew and now they don’t have it anymore. But Barney and Betty still have their song; the fact that Wilma sang it did nothing to prevent them from singing it anytime they want to. So, if Wilma did harm to Barney and Betty, what exactly is it?

The whole paper is really worth reading, and digs in on how and why people create, the nature of externalities in the creative process, and what actual data shows on the incentives of copyright and patents in driving innovation and creativity. The paper also digs deep on how excessive monopoly rights vastly hinder follow-on creativity and innovation (which is how most innovation and creativity come about in the first place).

In the case of copyright, excessive internalization is an impediment to the process of borrowing that is essential for the growth of creative works. While each artist may contribute new ideas to the cultural landscape, their contributions are based on the previous body of work. We all begin as consumers of ideas — and then some of us go on to create new ones. Take the case of Star Wars. The Jedi, Darth Vader, and the Death Star were all new in 1977, but George Lucas relied heavily on older ideas to make them possible. It is common knowledge that Lucas borrowed from Joseph Campbell’s Hero With a Thousand Faces when crafting the hero’s journey of Luke Skywalker. But the borrowing didn’t stop there. The famous opening crawl is virtually identical to those at the beginning of episodes of Flash Gordon Conquers the Universe. Telling the story from the perspective of two lowly characters, the droids R2-D2 and C-3P0, was inspired by Kurosawa’s The Hidden Fortress — something Lucas freely admits.

But while Lucas’s borrowing was permissible under copyright law, other borrowing is not, as current law gives rights holders control over broadly defined “derivative works.” A number of Star Wars fan films have been shuttered or severely limited in their scope (mostly by prohibiting commercialization) due to threats of litigation by Disney. The genre of fan fiction is a legal gray area, with many tests to determine whether it constitutes fair use, including commercialization and how “transformative” the work is. While the vast majority of these works will never amount to much, their existence is more tolerated than established as a clear-cut case of fair use. A more aggressively enforced copyright regime would almost certainly be the end of most fan fiction.

Thankfully, the paper also takes on the "fruits of our labor" view of both copyright and patents and why that doesn’t make much sense either.

The idea that people should be able to enjoy the fruits of their labor has clear intuitive appeal, but its invocation as a justification for stopping other people from making use of your ideas without your permission suffers a fatal difficulty: The argument proves far too much. Indeed, the problem goes beyond the widely understood “negative space” of intellectual creations that stand outside of patent and copyright protection: scientific discoveries, fashion, comedy, etc. Given that every new business venture starts with an idea, why shouldn’t every first entrant in a new industry be able to claim a monopoly? Or, for that matter, why not every first entry in a geographic market? If someone has the bright idea that their hometown needs a Thai restaurant and succeeds in making a go of it, why shouldn’t she be able to prevent competitors from coming in to poach her good idea — at least for a couple of decades? On the other hand, given that every new idea is in some way adapted from earlier ideas, why shouldn’t those first entrants in new industries and new markets be seen as “thieves” and “pirates” who are infringing on earlier ideas? Once you really start working through the implications, the whole argument collapses in a hopeless muddle.

The problem is this: The claim that enjoying the fruits of one’s intellectual labor entitles you to stop competitors has no inherent limiting principle, and thus the claim can be extended headlong into absurdity — as indeed it frequently has been. Of course, one can impose limits on the claim, but those limits have to be based on other principles — in particular, some sense of relative costs and benefits. But now we’re doing policy analysis and the case-specific comparison of costs and benefits, at which point the grandiose-sounding claim that patent and copyright law combat injustice shrivels and fades.

The paper then suggests some reforms for both copyright and patent law that seem quite reasonable. On copyright, they suggest reducing terms, requiring registration, limiting infringement to commercial exploitation, expanding fair use, narrowing derivative works, and ending anti-circumvention (a la DMCA 1201). These are all good suggestions, though the "commercial exploitation" one is one that sounds good but is often hard to implement, because what is and what is not "commercial exploitation" can be somewhat gray and fuzzy at times. But the intent here is sound.

On patents, the paper suggestions are to eliminate both software and business method patents, greatly tighten eligibility requirements, and no infringement in cases of independent invention. To me, as I’ve argued, the independent invention point is the most important. Indeed, I’ve argued that we should go further than just saying that independent invention is a defense against infringement. Instead, we should note that independent invention is a sign of obviousness, meaning not only that the second invention isn’t infringing, but that the initial patent itself should likely be invalid, as patents are only supposed to be granted if the idea is not obvious to those skilled in the art.

All in all, this is a great and thorough paper, especially for those who really want to insist that copyrights and patents should be treated like traditional property, and position themselves as supporters of "free markets." I fully expect — as I’ve experienced in the past — that those people will not engage seriously with these arguments and will rage and scream about them, but it’s still important to make these points.

Permalink | Comments | Email This Story

via Techdirt
Intellectual Property Is Neither Intellectual, Nor Property: Discuss