There are many good reasons to completely repeal patents and copyright laws: they are too complex to be understood or obeyed by anybody except a highly trained Intellectual Property (IP) attorney, they are often used for predatory purposes, they impede innovation since a patented invention cannot be improved by a third party.
Additionally, because one firm holds a monopoly on the patented product, competition diminishes bringing with it the high prices and low quality of all monopoly services. Intellectual property is also very expensive to enforce since it requires surveillance and enforcement on millions of consumers.
Nevertheless, some continue to support IP rights under the following mantras:
Authors of IP should be paid for their work
IP supports investment and innovation in R&D departments
An industry with no IP would lose productivity
This article attempts to answer those and other objections.
The Fashion Industry
If we removed IP law from the fashion industry, what would be the effect on this industry, which thrives on creativity and new design. Would innovation and creativity cease? Would companies like WalMart copy fashions the second they were created and undercut the brilliant producers behind the scenes? Would the market stagnate?
The answer is "No" for a very simple reason. The fashion industry is not covered under the blanket protection that IP law provides so many other industries. The creativity and variety that are the hallmark of this industry are the results of natural market evolution, without any IP protection. WalMart already does copy the designs straight from the runway.
The elimination of IP law would have a dramatic effect on advertising revenue. While it could be argued that many companies would continue to receive such funding, some will not. In the event that every television show, every song and every book were made public domain, then there would be two options for funding the distribution.
First, there are the traditional channels. This would use your viewing time to pay for the service of hosting and delivering the content. The authors of such content would not necessarily be paid from these funds, but it may be sufficient to run a bunch of servers producing on demand content.
Second, fee for use hosting and peer based sharing could serve as the distribution mechanism. It would be hard to deliver a service that interrupted the show every fifteen minutes to advertise when the same content could be gotten elsewhere without the annoyance. This may cripple or even destroy many firms which fund their operations from advertising revenue.
The Electronic Accreditation Technique
Under this paradigm, all media would be stamped with a unique signiture that maps back to the authoring group or individual author. Tools could be cheaply created that allow you to donate directly to any producers you like. Like DRM, this stamp would be unique and tamper proof. Unlike DRM, it would not encrypt the media in any way.
This would require very simple integration with media playing software and can be set up to donate 5/10/25 cents to anything you rate highly enough... at your choosing.
Accreditation can be used alongside copyright or as a replacement. This type of producer compensation is made possible by current technology and may provide a suitable producer targetted replacement for the business friendly copyright laws.
Books & Newspapers
Imagine you run a major book publisher. You publish a book, but then --whoops-- somebody clear across the country (or across the world) starts printing the same work. Because you don't have exclusive control over your content, you cannot pay your authors.
Major newspapers, on the other hand, produce new content on a daily (or weekly) basis, print millions of copies, and have them on their customers' doorsteps before anybody else has a chance to copy their work. Because of this, they don't need a government-enforced monopoly on their content.
In centuries past, authors used to have their books published one chapter at a time in major periodicals. Readers had to purchase multiple issues to read the entire book.
In a world without copyright laws, authors would probably follow a similar protocol. Then, after the last chapter has been published, other printers could copy the author's work and distribute it far and wide.
Authors have two main interests: to be paid for their work, and to have their work widely read and enjoyed so as to make a name for themselves. Those two interests sometimes run contrary to each other. However, the system discribed above, works for everybody. Authors can get paid by the newspapers. The newspapers make a profit by selling multiple, successive issues. Printing companies can "free ride" by printing the book without paying royalties. Authors are promoted by having their works published by multiple firms. Consumers get the best deal of all: they can read a few chapters in the newspaper, then purchase the entire book at a competitive price.
Movie makers receive most of their revenues from motion-picture theatres, not DVD sales. Motion-picture theatres, unlike DVDs, are at low risk of piracy. Therefore, movie piracy is not nearly as harmful to the movie industry as they would have you to believe.
Broadcasters are funded by advertising revenues, not by selling content. Hence, broadcasting would continue as usual without IP laws.
Musicians could still get paid, even without copyright. They would still be able to sell concert tickets, even if they did not make a thin dime from CDs and MP3 downloads. In fact, file-sharing might actually make them more famous! They could then cash in on their new-found fame in other ways (increased ticket sales, T-shirts and promotional items, product endorsements, movie deals...)
Of course, people would still buy CDs, even with unrestricted file sharing networks in place. If you hear a CD being played in a store, and you like it, what are you going to do:
Spend a few dollars, get a dozen good songs in your possession, or
Spend the next four hours on the Web trying to find those songs performed by some obscure local artists.
The answer is obvious.
When Thomas Edison (or, more accurately, Edison's company) invented the light bulb, he was three steps ahead of anybody who would try to manufacture light bulbs of their own. He had the technical know-how, he had the necessary equipment to manufacture light bulbs, and his name was known in every household. Because of these three major advantages, he did not need a legal monopoly on light bulbs to get a return on his investment. He must, however, remain three steps ahead of the competition.
Let's invent a a parallel universe, however, where Edison invents the light bulb, and then does not bother in any way to improve it or reduce the cost of manufacturing it. After several years, a rival inventor reverse-engineers the light bulb and build his own on his garage. He then discovers a way to manufacture the light bulb for cheaper than Edison's. He would quickly capture Edison's market share. In the absence of patents, Edison's laziness is punished and his rival's ingenuity is rewarded.
This happened with the invention of the steam engine. James Watt made important improvements and secured a patent for them, but then blocked many further improvements, which could be applied only when his patent expired.
"During the period of Watt's patents the United Kingdom added about 750 horsepower of steam engines per year. In the thirty years following Watt's patents, additional horsepower was added at a rate of more than 4,000 per year. Moreover, the fuel efficiency of steam engines changed little during the period of Watt's patent; while between 1810 and 1835 it is estimated to have increased by a factor of five." (*)
Even without copyright laws, programmers would continue to produce software. They might engineer the software to work only with permission from the software firm, requiring the consumer to pay for it.
A second profitable business model is to allow consumers to use to the software for free, courtesy of advertisers. Google follows this model.
A third option, and probably most preferable from the consumer's perspective, is the open-source freeware/shareware model, or software written by volunteers/hobbyists and made freely available without difficult licensing restrictions. Users may copy, edit, modify, sell, or pretty much do anything with the software. (For-profit entrepreneurs are able to take a piece of shareware, add useful features, and sell copies with tech support.)
Brands & Trademarks
Let's take it a step further. Why do we need to have registered trademarks? The conventional answer is that it helps consumers recognize a familiar product and distinguish it from other manufacturers' products. Without corporations having legal monopolies on their respective trademarks, though, consumers would still be able to distinguish one producer's products from another's.
Imagine that you are an entrepreneur who makes O-shaped cereal similar to General Mills' Cheerios. Without legal trademarks, it would be perfectly legitimate to call your product Cheerios.
Even though you would have the right to call your product Cheerios, grocery stores may refuse to carry your product. They might object to the name and request you to call it something else. In the absence of intellectual property laws, general consensus would determine which words refer to a specific firm and which words refer to a generic product.
NOTE: Most authors address registered trademarks independently of copyrights and patents. While a patent has the potential to stifle innovation, no such danger exists with trademarks. Many authors treat trademarks as a unique identifier to establish a level of trust with the consumer. It would be fraudulent to impersonate a company to try to trick customers into trusting them. Immitation is okay... impersonation is not. The cereal above would be fine if it was labeled "SomeCompany Toasty-O's", but would be lying to imply that they are indeed General Mills.
There you have it. Without patents and copyright, we would still have books, music, software, and world-changing inventions. We could still watch movies, and authors would still get paid for their work. There would by less mind-numbing regulation, and more competition in the market. Plus, you wouldn't need to feel guilty for downloading audio files from your next-door neighbor.
James Watt: Monopolist