intellectual property

We all know that there are many different kinds of businesses, business owners, employees, etc. (in short, we are all unique beautiful snow flakes with our own way of doing things). Some businesses do a great job at competing with the status quo. Others are really good at making new things but have difficulty marketing (just think of the last time you came across a company run by engineers; their product was probably outstanding, but they probably couldn't sell it). Others are really good at competing using politics--we can all agree that's coercion and it's bad. An example of a company that is really good at doing something that's already been done would be the big personal goods companies (Johnson & Johnson et al). Companies that are really good at innovating are often the smaller companies that don't have the production and marketing in place to compete with the bigger companies (Apple is a common example; Sega back when they existed).

Cutting out the political aspect of IP would surely be a benefit to everyone. However removing an incentive to do good cannot help but have some bad impacts. It might well be that its good impacts exceed the bad impacts; if that is the case with patent/copyright, please tell me how and why. I'm not here to argue like a moron or to sound clever, I'm here to learn. If you're about to right a book on this stuff, I promise I won't jump in and write a book on your thoughts first; honest.

So let's start by assuming away re-patenting (and the FDA as a barrier to entry). You've got a cure for cancer, it works by x and y affecting z. You've got a patent (and you can't repatent the same thing with a slight modification later). That patent could last for 20 years, it could last for 5. A week and a half would obviously be too short and 100 years would obviously be too long. I think that offering some kind of protection of a "reasonable" length of time (let's say 15 years, for kicks) offers a good deal of incentive for a pharmeceutical company (or with no FDA, brilliant entrepreneurs) to create new products. It creates a means for ineffecient producers but very effecient creators to make a profit. After the patent runs out the general production goes to competition and XYZ pharmeceuticals reduces production of their cancer drug due to competition, but can focus on new cures, treatments etc. knowing it will be able to make money with new products.

By getting rid of IP protection Microsoft could easily use its size to undercut Apple out of the marketplace. Had this been done 10 years ago you might not have an iPod to listen to.

I don't think it can be argued that the patent, in this case hasn't been good. What I want to read arguments about is why (if) a lack of patents would be better. I have yet to see any solid arguments addressing the issue of utility. As for the length of patent protection, I think that would be better left to an research paper than this forum, so I'm going to mostly just leave it alone.

Cheers,

Rick

To defend intellectual property is to proclaim ownership of the mind by someone other other than the person of whom that mind is a component. You fully own an idea so long as you keep it in your head, and once it leaves your head it is no longer your exclusive property, because it then enters the minds of others - to where your ownership may not extend.

Instead of IP as it exists today, I like the Tannehills' idea of invention insurance as described in The Market for Liberty.

Person A invents something, makes a detailed representation of his invention, and takes it to an invention insurer. He pays them to put their seal of approval on it.

He then goes to a manufacturer, shows them the title of insurance (proving that his invention is valuable), and makes a deal with them that in exchange for his sharing the invention with them, they will produce his idea exclusively and pay him royalties for x number of years. The deal can also lock in distributors as well. If the invention is worth anything, they will gladly be bound to honor his exclusive "patent" for the term of the contract.

He is guaranteed a profit for that term (if his invention is worth anything), and at the end of it, the market opens up to competition.

What this does NOT do is protect him from people reverse-engineering his product and starting their own manufacturing deals. But again, if the thing was any good, he still makes a profit.

If the manufacturer breaches the agreement, the insurer pays the inventor a compensatory sum and takes the manufacturer to arbitration to recoup their losses.

Alright, then just for the fun of it, let's proclaim ownership of the mind by someone other than the person of whom that mind is a component... Do we get a net benefit or a net loss by legally defending IP in our legal system in a way somewhat similar to property?

First, I reject your collectivist concept of "we". I don't know of any "we", and I don't care that much about the welfare of fictional creatures. Only individuals exist, and in any hypothetical discussion only individuals should be considered.

Second, "we" will suffer a net loss from protectionism, which is all IP really is. It is nothing more than monopoly privilege granted to the person or firm who pays the mob first (or best).

Third, if your ethics allows for ownership to extend into the minds of other people... well, the logical conclusions of that premise are abhorrent.

MacFall:

To defend intellectual property is to proclaim ownership of the mind by someone other other than the person of whom that mind is a component. You fully own an idea so long as you keep it in your head, and once it leaves your head it is no longer your exclusive property, because it then enters the minds of others - to where your ownership may not extend.

No.  First, "intellectual property" encompasses at the very least patents, copyrights, trademarks, and trade secrets.  They're all very different, and none of them proclaim "ownership" of somebody else's mind.  Patents don't protect ideas (let alone claim ownership of a mind); they protect novel and useful methods, processes, compositions of matter, etc. that have been explained in a concrete way.  Copyright doesn't protect ideas; it protects the expression of ideas in certain ways.  Trademark don't protect ideas; they protect the sales of businesses, and the expectations of customers that they're buying from who they think they're buying from.  Trade secrets can protect pretty much anything from being unlawfully shared, including ideas (but not minds), so long as you can keep it secret from people using lawful means.  Your rhetoric may be pretty, but it doesn't really make sense.

He then goes to a manufacturer, shows them the title of insurance (proving that his invention is valuable)

A title of insurance can't prove that an invention is valuable.  The invention will be valuable to the manufacturer if it can make a profit off of it, and that depends on a lot of factors.

What this does NOT do is protect him from people reverse-engineering his product and starting their own manufacturing deals. But again, if the thing was any good, he still makes a profit.

A manufacturer wouldn't pay for an invention as though it were patented.  It would pay for the invention as though it were going to be reverse-engineered and sold by other manufacturers in short order.  In other words, you're not accomplishing anything by introducing this contract and invention insurance.

I agree with you that there is no "we". I use the term as an abstract concept of "society" or "civilization". I also agree that IP is not a natural phenomenon, but a political phenomenon. Recognizing IP is akin to recognizing murder to be a crime. I as an individual might be able to benefit by murdering someone, but the marketplace ("we") agree that allowing murder would be bad. Likewise we might agree that allowing IP is good (or we might get rid of it if we find it to be bad).

Granted, IP is a form of protectionism, it is not the classic Mercantilist protectionism that we know and have proven is damaging. It doesn't build a wall around everything during any given time, it creates a barrier to entry into a market over the short term. The shorter the term, the better for competition, but the less that an innovator can be rewarded (excepting of course those innovators like Henry Ford who innovate the production rather than the product).

I agree that IP protection is an affront to an aspect of freedom (as is a law against murder), but I am merely examining it from a theoretical standpoint. I think you may be right that IP is damaging, but I don't know why, that is what I have been asking you (and everyone else).

WHY DOES IP REDUCE UTILITY?

Thanks,
Rick

I think the "Idea Insurance" concept is more like an appraisal (and perhaps brokerage) service. I doesn't really insure anything. The only way to "insure" an idea without having IP law would be Mafia protection rackets.

I suppose it could be argued that IP extends ownership into the minds of others, but no more than property rights can be extended into the hands of others ("Hey, you're holding my shovel, I want it back").

Certainly when an idea enters a person's mind, it becomes a part of them, but if that idea is a patented idea, there is nothing they can legally do with it. The patent does not enslave them, it merely limits their options to what they had available before that invention, with the added option of buying from the patent holder. To say that this is some terrible atrocious act is basically saying "It is horrible that I can buy Windows from Microsoft!" Perhaps you would like to buy from someone else, but had Microsoft never made Windows because there was no profit, you would be stuck with Linux

~Rick

MacFall:

To defend intellectual property is to proclaim ownership of the mind by someone other other than the person of whom that mind is a component. You fully own an idea so long as you keep it in your head, and once it leaves your head it is no longer your exclusive property, because it then enters the minds of others - to where your ownership may not extend.

That was beautiful, elegant, accurate, and, I think, the crux of the issue. It's almost an axiom - it's a corollary of the definition of property.

RickWeber:

but had Microsoft never made Windows because there was no profit, you would be stuck with Linux

Is that something like "had Henry Ford never made the Model T, you would be stuck with a DB-9..."? :)

RickWeber:

WHY DOES IP REDUCE UTILITY?

Again, patents and copyrights reduce utility, because just like any other government granted monopoly, it reduces competition resulting in higher prices and/or lower quality goods and less innovation.

Now, over the long run the market may eventually catch up to where it would have been.  But why would we want to take a thousand years to figure out something that we might be able to figure out in just a few years instead? 

Also, the protectionist laws may damage the economy so much that we never attain as high of technological heights as we could because there is never going to be as much capital to do so with the restrictions that are imposed with patents and copyrights.  The market ends up paying way more than it normally would.

Callisthenes:

Patents don't protect ideas (let alone claim ownership of a mind); they protect novel and useful methods, processes, compositions of matter, etc. that have been explained in a concrete way.

And they do that by making it illegal for anyone who has an idea deemed similar enough to the original to make their own product. That is, they effect a state of legitimized control (ownership) by the original inventor over any content of others' minds which pertain to that idea.

And it's not even necessarily the first person to come up with it - it's the first person who has the idea and simultaneously has the capital and/or political pull to jump through a bunch of arbitrarily established legal hoops to get the right to exclusivity.

In a more practical sense, patents illegalize competition over the production of that invention. They guarantee profit to the favored party (who is by no means neccessarily the best qualified party) in exchange for jumping through legal hoops, whereas in the absence of patents people compete on the basis of excellence in providing that product or service. They are a legal barrier to entry into the market which encourages those things which you liberals hate oh so much - MONOPOLIES.

Copyright and trademark laws are legitimate because they defend original producers against fraud, and because they deal only with the ownership of material, scarce resources and not with the immaterial realm of ideas.

Your rhetoric may be pretty, but it doesn't really make sense.

It results in more incentive for efficiency in production and innovation in development. Which makes perfect sense unless you just hate low prices and quality products.

A title of insurance can't prove that an invention is valuable. The invention will be valuable to the manufacturer if it can make a profit off of it, and that depends on a lot of factors.

The inventor could just go to the manufacturer himself and make a presentation. The role of the insurer is partially to warrant to the manufacturer that the idea is worth the price for which the inventor is asking (which they would help determine), without which promise the manufacturer would have less incentive to accept the deal. But their primary role is to help protect the inventor against the manufacturer reneging on their part of the deal.

A manufacturer wouldn't pay for an invention as though it were patented.  It would pay for the invention as though it were going to be reverse-engineered and sold by other manufacturers in short order.

Only if they're idiots. If they are competent, they will build in safeguards against reverse-engineering, and they will agree to the exclusivity contract for a period of time reflecting their confidence in those safeguards. As usual, you imagine that businesses in a free market would act like government bureaucracies.

In other words, you're not accomplishing anything by introducing this contract and invention insurance.

What this idea would accomplish is the replacement of state protectionism with voluntary contracts. But I know how much you loathe the idea of solving problems through peaceful means, so I don't expect you to support it.

Copyright and trademark laws are legitimate because they defend original producers against fraud, and because they deal only with the ownership of material, scarce resources and not with the immaterial realm of ideas.

See, this is why I said your rhetoric was pretty but meaningless.  IP includes copyright and trademark, and now you're saying they're legitimate?  Compare that to what you wrote in the message I replied to.

As for patents, you can't get a patent on something that has already been made public by someone else.  You do have to jump through legal hoops to get a patent, but your original filing date is what matters, not how long it takes you to get through the hoops.  They don't guarantee profit to anyone -- the patent holder's invention has to be deemed valuable by customers, or no one's going to buy it.  While monopolies are often bad, I'd rather have a time-limited monopoly in a certain invention than not have that invention at all, or have the invention delayed significantly.

The role of the insurer is partially to warrant to the manufacturer that the idea is worth the price for which the inventor is asking (which they would help determine), without which promise the manufacturer would have less incentive to accept the deal.

So is the insurer going to compensate the manufacturer if the invention doesn't turn out to be valuable?  If not, then the insurer's word is meaningless, and manufacturers aren't going to care what they say.  They'll just do their own analysis of the value of the product.  And how is the insurer supposed to make money in this deal?

Only if they're idiots. If they are competent, they will build in safeguards against reverse-engineering, and they will agree to the exclusivity contract for a period of time reflecting their confidence in those safeguards. As usual, you imagine that businesses in a free market would act like government bureaucracies.

No, I assume they'd act like business do, which is to deal with reality, not some idealised world that you invent so that your theories seem to work out.  Preventing people from reverse engineering products is not an easy thing to do in many fields.  If it were, you'd see a hell of a lot more companies relying on trade secrets to protect their products instead of relying on patents.  If they're using patents, and if they're acting rationally, then they've decided that they're not going to be able to keep their invention secret for that long.

What this idea would accomplish is the replacement of state protectionism with voluntary contracts. But I know how much you loathe the idea of solving problems through peaceful means, so I don't expect you to support it.

No, it wouldn't.  Invention insurance doesn't add anything to it.  It will always come down to how long the inventor/manufacturer can keep others from reverse engineering the product.  Now, there could be a different type of invention insurance where insurers compensated inventors/manufacturers if others reverse-engineer products within a certain amount of time.  But all this would do is "average" the amount of time that it takes to reverse engineer inventions and spread the costs across the industry.

Paul:

Is that something like "had Henry Ford never made the Model T, you would be stuck with a DB-9..."? :)

No, it's saying that if Henry Ford never made the Model T you would not have the Model T; you would have the DB-9 until something else came along. Surely someone would eventually create the assembly line, but it would be delayed--not unlike the progress that is currently pushed off because of the private investment that is prevented from happening because of taxes.

Spideynw:

Again, patents and copyrights reduce utility, because just like any other government granted monopoly, it reduces competition resulting in higher prices and/or lower quality goods and less innovation.

But unlike a typical government granted monopoly a patent is for a limited period of time. If it were not I would agree with you whole-heartedly.

In regards to the whole 'idea insurance' concept I think someone needs to point out (if only for the sake of other discussions, namely health-insurance) what exactly insurance is. Insurance is a protection against an unforeseen event by spreading risk across a pool of at risk parties. i.e. I could possibly get cancer, diabetes, or go blind at somepoint in the future. To protect myself against these risks I purchase Critical Illness Insurance and pay $X per year until either a specified event occurs (I get cancer) or I die or I decide not to pay my premiums any more. If the event occurs, I am paid. If the event doesn't occur, my premium money will go to someone else to whom the event did occur. An idea can not be insured, because if it is worth copying, then someone will copy it.

The only way to protect an idea from being copied is with IP law. The 'idea insurance' scheme you describe is really 'idea appraisal' and does nothing to protect ideas. Investing time into reverse engineering protection would likely make products less efficient and would also slow production and innovation. IP laws create incentive for creating new proucts (albeit at the price of temporarily reducing incentive for improving those products), cut out the need to waste productive capability on reverse engineering protection and can do so in a systematic fashion (i.e. not arbitrary, not done on the spot by the whim of a legislator) in keeping with Rule of Law.

I'm not sure how far Rule of Law can go within an Anarchist's moral code, and suspect that when we get right down to it there's nothing left to do but agree to disagree. IP does not fit in with Anarchy, but it does fit in with my more moderate view that government can be used as a tool that creates greater net utility. It seems to me that IP protection increases net utility and so behind a 'veil of ignorance' (which perhaps you don't like, but I see as a useful, or at least intersting tool) it would seem to be desirable to impliment IP protection.

But that's just me. Thanks for the stimulating thoughts, I'll be moving on now unless someone will address how IP could reduce utility without simply labelling it protectionism without taking into account how it is different from traditional protectionism.

Cheers,
Rick

RickWeber:

By getting rid of IP protection Microsoft could easily use its size to undercut Apple out of the marketplace. Had this been done 10 years ago you might not have an iPod to listen to.

If customers chose Microsoft's products over Apple's products, Apple has lost fair and square. The customers have put Apple out of business. Everyone is better off.

But you can't see the forest for the trees. If not for patents we would not be limited to two companies, we would have dozens. Patents obviously reduce competition, they don't create it!

RickWeber:

Paul:

Is that something like "had Henry Ford never made the Model T, you would be stuck with a DB-9..."? :)

No, it's saying that if Henry Ford never made the Model T you would not have the Model T; you would have the DB-9 until something else came along. Surely someone would eventually create the assembly line, but it would be delayed--not unlike the progress that is currently pushed off because of the private investment that is prevented from happening because of taxes.