Some random news items:
- In the UK budget of March 2012, the Chancellor, George Osborne, made passing reference to the taxation of patents.
- There are calls for science journals, protected by paywalls, to be opened to the public for “free”.
- Blackberry, the makers of those ubiquitous handheld devices, settled a case concerning a patent fight in 2006.
- Singapore has reportedly stated its intention to become an IP “hub”.
- A Dyson vacuum cleaner is a product issued by that firm, not a generic name. There remain occasional stories about how Dyson seeks to enforce its brand.
- Many of us have heard of so-called patent “trolls”.
- Recently, the US has tried to pass legislation – SOPA – ostensibly with the goal of protecting intellectual property, but internet users have claimed it represents a dangerous clampdown on free speech.
- We read regularly of how Disney tries to shoot down attempts to use pictures of Mickey Mouse without permission.
- Max Mara, the fashion conglomerate, is – according to a law firm I chatted to the other day – fierce in protecting its trademark and will “sue until the ends of the earth to protect it”.
- Karen Millen, founder of the eponymous Karen Millen fashion chain, prompted her old firm in March this year to issue a stern warning that she cannot resume trading under her own name having sold her trademark in the business several years ago.
As all these examples demonstrate, intellectual property is a big issue for commerce, the media and society in general. Libertarians, as we know, place great importance on the institution of private property. Private property is inseparable from liberty in general – freedom and “self ownership” are, on this view, one and the same. The assumption that property rights are not as important as “human rights” is a distinction that libertarians do not accept, contrasting them with “liberals” in the US use of that word.
Property is important for the benefits it makes possible: an extended market order, competition, privacy, a widely dispersed form of control over the means of production, and so on. Some of the arguments for property focus on the consequences of it. And some defences focus on a more normative approach, as in the natural rights tradition that argues that property is a logical consequence of the idea that humans own their lives and need to be able to own the things that enable them to survive and flourish in accordance with their nature as rational animals. Property is also a mark of dignity – it gives us the chance to be acknowledged for the things we create.
What are the main forms of IP?
Firstly, there are patents, which are designed to protect inventions, products or processes if they are new; have a “non-obvious” inventive step and are capable of industrial application. In Europe, business methods and computer software and scientific discoveries cannot be patented. In the US, business methods can be, within limits, protected by patents. In major industrialised countries, patents last for 20 years.
Copyright: This applies to literary (including computer software, musical, dramatic and artistic works; films, broadcasts and sound recordings. They do not generally protect underlying ideas. Infringement of copyright can be a criminal offence. There is a “fair use” doctrine in copyright (such as being able to quote a passage from a book) that IP critics have likened to an easement of physical property, as when a state imposes a road on a private piece of land via eminent domain. Patents last for the lifetime of the creator and 50 years thereafter in the UK (this is 70 in the US).
Trademarks: Names, logos, signs, colours, smells and shapes. These need, in the words of Withers, the law firm, to be “distinctive not descriptive”; and not deceptive or illegal.
Designs (registered or unregistered)
Confidential information and “know-how”: Withers defined this as “information of a confidential nature or disclosed in circumstances giving rise to a duty of confidence”.
Okay, having said we favour property, but then described what IP actually means, you can see that the issue of intellectual property is a controversial one for libertarians. On the “pro-IP” side, if one regards property as essential for fostering creativity, then there appears a strong case for encouraging people who develop creative works to be able to derive an exclusive economic benefit from the sale of them for a period of time, if not indefinitely. (By exclusive I don’t mean of course that other parties won’t benefit, such as owners of bookshops, distributors, paper printers, ink manufacturers, etc).
This argument also draws on ideas of dignity and fairness: a novelist who has worked on a novel is entitled to try and insist, if they have thus contracted, on the exclusive right to sell their work for money for a certain period. Even once a novel or some other work has been published, it does not immediately fall into the “public domain” (a key concept) where people can copy it at will. This is because many people will still not have encountered this work after the first batch of books have been published and it seems unjust to deny the creator the chance to sell later editions for money, at least until a period of time has elapsed.
If I were to list a few notable defenders of IP – not all of them strict libertarians – I would in particular cite a recent book, Justifying Intellectual Property, by US-based academic Robert Merges. He makes an interesting argument, tying together ideas from three immensely different political philosophers, plus some “mid-level” principles (such as proportionality) to make the case for IP. Another is Adam Mossoff, a scholar and lawyer in the US. Slightly further back, Robert Nozick, in Anarchy, State and Utopia, made a brief but largely friendly reference to IP. One of the strongest defences of IP made by a radical libertarian was that of Lysander Spooner, an anarcho-capitalist who wrote a long treatise on the subject. And Ayn Rand herself, in her collection of essays, “Capitalism, the Unknown Ideal”, argued in favour of patents and copyright. Another free marketeer who has worked as a private legal arbitrator in this field and is a follower of Rand’s ideas, Bryan Niblett, is in favour of IP. Jan Lester, a UK libertarian, has argued in favour of IP, making what I think is an interesting case. Here is a quote from an article he produced a year or so ago:
“Some memetic innovations may be independently discovered or created (most patented ideas: someone else would usually have come up with the idea eventually) and some are not (most copyrighted works: no one would have written the same novels if Charles Dickens [1812-1870] had not done so). This distinction matters because any IP that extends beyond likely independent discovery or creation is thereby likely to *proactively impose a negative *externality. Conversely, that others are not worse off than if some IP had never been created appears to indicate that IP does not proactively impose in any inherent way. If it were somehow naturally impossible to use an idea without its creator’s permission, then people would be unlikely to complain that they were proactively imposed on by this—as they would see that they were not. Thus one defense of IP is that it is *libertarian to allow it, and unlibertarian to disallow it, up until any likely independent production would emerge, if it ever would. It will be shared with any who could demonstrate that they probably would have eventually become independent creators of it. When all claims run out, it becomes *common property.”
Admittedly, there is no scarcity with the use of good ideas unless we allow restrictions by using such things as secrecy, purchaser contracts, technological devices, or IP. But there is a scarcity of good ideas themselves. And all the restrictions tackle that scarcity, without worsening anyone’s situation, by rewarding the creation of good ideas. 5) Physical property internalizes externalities and strongly tends thereby to be optimally *economic and libertarian. The same seems true of IP. To expect an inventor of an idea to have sufficient incentive merely by being first to market is significantly like expecting the creator of a physical product to sell what he can before people discover where his factory or farm is and can then simply take what they want from it without his *consent. And even where it is still profitable, it will often be insufficiently profitable to stimulate the economic amount of production. 6) If every relevant product is sold subject to the contract that no user can copy it without permission then that stops copying, using the ideas, by all customers. But what if a non-customer can see, or find out, how something works or what it looks like? We can have no such contract with the observer. With many innovations this might undermine all or most of the economic incentive to produce it. And, as before, even where it is still profitable it might not be optimally economic. To expect the creator of an idea to protect his idea by contract is like expecting the homesteader of some land to protect his land by contract. 7) Technological devices that restrict using other’s ideas add expense. If they could somehow be made perfect for all products, then we would simply be back to a situation analogous with the natural impossibility of using other’s ideas—but with all the added expense. If such anti-copying devices are in principle fine without limit, then why not simply allow the cheaper option of having IP in the first place? 8) It is not clear that starting a new market practice should not be protected in this way if protection is claimed, subject to likely independent invention. Counter-intuitive though this may be, this would appear to internalize externalities and thus tend to be libertarian and efficient. 9) Any IP ownership needs to be claimed; and it cannot clash with any existing contracts, such as what and how house colors are allowed on, say, some privately run estate. It is not likely that many people would want to claim what is trivial. But such things are, after all, only trivial. In any case, we still have the limit of likely independent invention.
In short, IP is an extension of property into the memetic realm for relevantly and sufficiently similar economic reasons, rather than perfect analogies, as to why it is libertarian and economic in the physical realm. It must have appeared strange when people first attempted to fence off land and claim exclusive rights of use. They had not, after all, even created the land. But those who claim IP did at least create it, albeit in the framework of a pre-existing culture. To reject IP is to call for universal intellectual common property. It is proactively imposed *communism in the realm of ideas. Admittedly, however, this could not be anywhere near as disastrous as physical communism. Of course this libertarian defense of IP could well be mistaken, but it appears to give cogent answers to the current criticisms of IP. It ought, at least, to clarify and develop the debate to attempt to refute it.
So what are the criticisms and who makes them?
To begin with, critics question as to whether an invention or specific creative work, like a play or piece of music notation, should be “owned”.. For example, up until 1981 in the US, software (according to one study on the subject) was not covered by IP, so why should it be protected now? Physical property such as land is what economists call an excludible good – only one person can stand on a patch of land at one time, say, whereas an infinite number of people can read a passage of a book without denying the owner of it use of this work. Physical goods are, in this sense, scarce, and we have property to ensure peaceful control of these things, but in the real of ideas, there is no such scarcity. Also, IP represents, on this argument, an attack on freedom by creating a monopoly over something that is a non-rivalrous good (and being good free marketeers, libertarians believe monopolies are bad).
Let me go into this in a bit more detail. If I own a computer, and a supplier of software bans me from using it in certain ways lest I violate IP, then I am being told how to use my own physical property. In short, IP limits freedom and rights of the individual, at least on this argument. Also, like any state enforced right, there are issues of rent-seeking (not to mention the phenomenon of the IP “troll”). Rent-seeking encourages inventors to spend more time finagling the legal system than inventing and innovating. (Sometimes the example of how James Watt, a steam engine pioneer, tried to block other inventions is cited by opponents of patents).
More practically, IP is hard sometimes to enforce, and the costs of enforcement can sometimes impose a significant dead weight on an economy. It is also, some say, getting even harder to enforce in the age of downloading and the internet. And enforcement in countries such as China, which has become notorious for its violations of IP, is hard (although there are signs that as China is becoming more of a home-grown innovator, that it will push harder on IP enforcement). Even if IP has some merits, those merits, it is said, are declining in today’s world.
And some anti-IP folk deny that IP even is necessary for invention and creation, arguing that many ideas and works will be developed anyway. Also, does it make sense, as in the US, to try and patent something as broad as a “business method” – it could increase the monopoly power of Big Business. (Such critics of IP point to alternative ways of encouraging innovation such as prize competitions, government subsidies to inventors, private patronage, the open source movement in software, and so on. However, this begs the question of whether a world without patents and copyright might, perversely, strengthen the hands of big, established business. One effect, for example, might be for certain authors to charge astronomical prices on their first editions since that might be their only shot at making money before copiers moved in.)
Libertarian critics of IP
So who argues against IP from within the libertarian/classical liberal camp? Well, one notable critic is Tom Palmer, of the CATO Institute, who in 1990 wrote an essay, “Are Patents and Copyrights Morally Justified?” Stephan Kinsella, of the US-based Mises Institute, has argued vehemently against it, arguing that there is no evidence IP has boosted innovation and may have even harmed it. More recently, Tim Sandefur, whom I have mentioned earlier, wrote another essay I recommend on his own blog, in which he challenges Rand’s “natural rights” defence of IP:
“But if Rand is saying that patents and copyrights ought to be regarded as natural rights, she has to make a case for it, and that case must profoundly address the most significant characteristic of intellectual property: its non-exclusivity. That is, intellectual property can be used simultaneously by more than one person at a time, and once obtained, it can never be taken away from a person. In Jefferson’s phrase, a person who lights his candle from mine illuminates himself without darkening me.
Rand fails to address this matter at all, except in one interesting passage. In that passage, she argues that intellectual property rights must be limited in time, lest they clog the flow of progress: “it would become a cumulative lien on the productivity of unborn generations, which would ultimately paralyze them,” she says, for intellectual property rights to extend to perpetuity. Rand at 131. Yet this argument counts against her proposition that intellectual property is a natural right. For one thing, I know of no other natural property right which becomes unjust merely by the passage of time, and with no intervening unjust act occurring. And if intellectual property is a natural right, then it would seem that a time limit would be an injustice, just as it would be unjust for the government to simply declare that all land titles shall expire in exactly 50 years.”
“Just as time limits are incompatible with a natural right copyright, so any doctrine of “fair use” would seem to be incompatible with a natural right copyright, as well. Government has no legitimate authority to force me to provide a public easement over my land—so, too, if intellectual property rights are a natural right, then the government has no right to declare a public “fair use” quasi-easement over my intellectual property rights. Yet Rand herself employed the fair use doctrine on a regular basis: she quoted and published passages from Nietzsche, Victor Hugo, and other writers she admired, without, so far as I am aware, any compunctions: and rightly so, because Nietzsche and his descendants (had he any) would have no legitimate right to stop Rand from quoting him—not because “fair use” is a legitimate easement over a natural intellectual property right, but because intellectual property is not a natural right.”
Responses to critics
However, the idea of Palmer and Sandefur that non-physical things cannot be owned because they are not scarce, and hence cannot be monopolised, has been challenged by the writer, Mark Friedman, who is the author of a recent book on the ideas of Robert Nozick. Here are some quotes:
“Moreover, under rights-based libertarian principles the owner of a particular resource might legitimately gain a position that will limit the freedom of all other individuals over “an entire range of actions unlimited by place or time” (the same indictment Palmer lodged against IP). Suppose that some particular rare mineral is required in the production of certain high-tech electrical devices. For the time being there are many sources for this input.
“However, a particularly clever entrepreneur calculates that within a few years all sources of this mineral but one will be exhausted, and that it will take many years, if ever, for new deposits to be identified and developed. This wheeler-dealer acquires the one sustainable mine and waits for the others to shut down. When this occurs, she will enjoy a veto right over the production of all the gizmos that require this rare metal, just as if she had a patent over these devices, except that this monopoly may be of a potentially infinite duration.
So, in other words, why are classical liberals seemingly okay about these quite onerous forms of “monopoly” over natural resources, but aflame over the ownership of an invention with a 20-year patent that is running out and might be efficiently and rapidly licensed off anyway?
Another prominent critic of IP is Larry Lessig – who is more a conventional US-style “liberal” than libertarian. A libertarian duo who have written a book arguing that innovation and creation can occur without IP, and in fact sometimes is hurt by IP, are Michele Boldrin and David Levine, with their book, Against Intellectual Monopoly. I recommend it highly for how it shows how many inventions and creations happened without IP. (Not all of their examples seem to work in my view, however. They give an example of how a book by the US 9-11 Commission sold well without IP, but that book was originally funded by the taxpayer!)
So what is the answer?
First of all, on purely practical grounds, there are some rather non-intellectual issues to bear in mind. In the age of rapidly advancing scientific advance, with such phenomena as “open source” systems and sharing of knowledge (Wikipedia, etc), IP as has been conventionally known is likely to become harder to enforce in practice. Even Robert Merges, who defends IP, argues that some IP is not always worth the expense to firms and individuals to defend it, and this factor limits its scope and depth. We have already mentioned China; the abuse of IP by such countries creates trade tensions – some of which will be exploited by politicians and vested interest groups of one kind or another. So in practical terms, even if you think IP is right or at least a necessary evil, it might be hard to enforce it, or all the time.
Also, let’s not forget that there are a variety of different forms of IP, not all of which are even typically protected by statutes or as difficult to think about as others are. Take confidential information: this can be enforced under Common Law contract. If I hire Fred as a computer scientist and Fred agrees to my confidentiality agreement, then I have grounds to sue if he takes company ideas and sells them on. On a related point, in some professional services areas, such as the wealth management sector that I report about, bankers typically have to sign “no-dealing” terms in their contracts, and go on “gardening leave” for several months when changing jobs, to prevent them from taking a whole client list from their old employer. It should be pointed out that these contracts can be hard to enforce in practice, given the reputational risk associated with costly litigation.
On the issue of patents and copyrights, my view is that for all I can see why Sandefur and others regard them as not being “natural rights” on a narrow, consistency sort of argument, I also don’t think they quite make the case for total abolition yet. On balance, I tend to feel easier about reducing the protections and scope of patents than I am about copyright. The patent system seems, in some jurisdictions, to be in a bit of a mess and seems to be full of abuses.
What about the argument that IP is bad as it is a monopoly, as already mentioned above? First, I think the point made by Mark Friedman when discussing the Palmer and Sandefur argument is astute. The monopoly only exists, in my view, if something is clearly taken into exclusive use that was once held in common by everyone, as in the case of software before 1981 in the US. Where IP is extended into an existing field, that does, it seems to me, to be an unacceptable move. IP must only apply to what is clearly and unambiguously new. IP, remember, is meant to recognise the effort that a person and persons have devoted to breaking new ground with all the risk of failure they might have faced. (This takes us back to the moral aspect of this issue).
If we have patents, they must be short and narrow
Long patents can be self-defeating. As Boldrin and Levine say in their book about James Watt, not only did he use legal force to stop people copying his idea – much to Boldrin and Levine’s wrath – but Watt also could not add things to steam engine as, by glorious irony, they were protected by patents too. But in that case, self interest should surely have led Watt to swap one patent licence for another, perhaps through a “patent” broker. Under a short duration patent regime, a Watt would have to get on with developing his ideas or lose the edge.
Defenders of patents might add that if a person, frustrated that an invention has already been patented by a curmudgeonly creator, can significantly modify the curmudgeon’s idea to such a degree that he has developed something significantly new, and patent that, therby avoiding the roadblock put down by the curmudgeon.
This newness adds to the stock of human ingenuity, rather than just recycle existing cleverness. Also, the very fact of having an IP system means that instead of keeping ideas secret, as firms might otherwise be tempted to do, the IP filers have to write down their inventions or creations and register them. So James Watt would be forced to describe his engine, rather than keep the idea under the bed, so to speak.
A key quality of property is that it should be defined and known. We don’t say that a trespasser has no way of knowing of the trespass as an excuse for trespass, and in a world of the internet, it is not – much – of an excuse to say that an inventor had unwittingly invented something that had already been under patent.
Another point relates to originality and the “non-obviousness” of an act of invention. Rather than invent the same gadgets over an over and fight over who got there first, surely, if we want to advance in technology and other ways, it makes more sense for people to come up with new ideas rather than just copy older ones. Switching to copyright disputes, we live in the age of “mashups” in music (mixing and the like) – but surely we want more original stuff? So any examination of IP must pay attention to whether the “property” concerned is really original and adds something fresh. This is not an easy question to answer.
What of the argument that IP squeezes free speech and use of one’s own property? First of all, what is important in my view here is that free speech means the freedom to speak your own mind, not simply the freedom to copy the mind of someone else, although obviously we need to absorb the ideas of others in the creative process. This is tricky: many of our thoughts are not original – they come from our “environment” but what is distinctive about each individual is that each of us has something a bit different – or original, in other words – to say. This leads to the complex issue of “public domain” – over a period of time, ideas move into it, and can be used by anyone. But if we say that as soon as a person has published a book that it instantly falls into the public domain and can be copied, is this not moving too fast? I think it is.
A difficult issue is the length of IP. As Sandefur said, IP is not, apart from trade marks, perpetual. You cannot inherit IP from a parent in the way that you can with a piece of land. I suppose what IP defenders might say is that you cannot bequeath the IP, but you can bequeath the wealth it generated when you were alive. But sometimes the lifespan of IP appears to be almost arbitrary.
One final thought. A lot of the fiercest critics of IP are, funnily enough, very strong advocates of physical property rights. Yet might it be said that the difference between the two is not always as sharp as they claim? Both physical and non-physical property plays to the idea that Man is a rational creature who needs to survive and thrive by using his mind to manipulate the stuff of nature, and bring ideas on how to do so, including marking out his “territory” and “mapping” it. Clarity in defining property, as demonstrated by Hernando de Soto in his book, The Mystery of Capital, is a key ingredient in achieving economic success and growth. In that sense, all property, whether it is farming a patch of soil or inventing a new computer hard drive, is intellectual because it requires us to use our minds as well as our hands.
All of which is to say that IP is a complex subject with no obvious right or wrong answer at the outset by simply referring to basic concepts.
But in my review of the arguments and literature I am not convinced, at least not in the face of existing debate, that there is a case for free market liberals to abolish it totally. Nor am I convinced that the pace of innovation and creativity in our society would be significantly faster or more beneficial if no IP existed at all, although it is very hard to prove counterfactuals conclusively. Given the immense pace of change already under way, it seems hard to believe that IP is really such a problem that its opponents claim, although there are signs that rent-seeking and abuse of the system by “trolls” can be vexatious and should be dealt with more efficiently than it is as present.
The expansion of some forms of IP into areas previously free of it should, in my view, be resisted as monopolistic in potential intent, if not effect. IP must relate to stuff that is new at the time the patent/copyright is granted. Protection of previously unprotected areas of creation/innovation is unjust. Some of this smacks of corporate welfare. Some of the examples provided by Levine and Boldrin are shocking.
If we have to retain it, let’s make the IP award and licensing system as clear and efficient as possible. Ignorance of property rights is no a defence for a trespasser on physical land and this should be the same with IP. There is already a large and growing secondary market in IP – largely below the radar of most people. Matching up those with ideas so they can sell them to those who want to make commercial use of them sounds like successful capitalism to me. And it appears to be extremely competitive. It is one of the reasons why I am more relaxed about IP than many libertarians seem to be. It seems the very opposite of a monopoly; more like a stock exchange, in fact.
There could be an “abandonment” doctrine for IP. If an IP right is not used for a certain period of time (X number of years) and there is no provable intent by the IP holder to use it for commercial purposes, the IP should be deemed “abandoned” and fall into the public domain particularly if challenged by an independent creator/innovator who can prove independent invention/creation.
Firms/persons must accept that in the rapidly changing world of today, some forms of IP are too costly to defend, and should learn to live without it and lots of costly lawyers. (This is happening anyway). Entrepreneurs should examine different revenue models; they should not assume that they can always rely on IP. The success of open source software, for instance, is proof that new models can work successfully. It is also useful in dealing in countries where respect for such rules is poor.
Giving away free samples can help build a “fan base” and have often been the start of a successful business. Waivers can often foster goodwill and expand a market base. Never mind whether IP is a good idea or not: it’s just smart business practice. This is something that music and video businesses have been reluctant to accept but once they do so, the results can be surprisingly positive. All too often, IP can be the resort of frightened, hidebound companies, not real innovators.
Trademarks do not need significant reform at all, in my view. They perform a valuable customer protection role by encouraging the building of brand reputation by ensuring quality of service and product in a customer’s eye. Consider the brand value of, say, Rolls Royce, Rolex, Samsonite or BMW. Remove trademarks, and a lot of valuable reputational capital is lost.
The advances in technology do suggest that alternative models of earning revenue from creations and inventions may prove more attractive than conventional IP and so the system may adapt out of all recognition to the present one. One thing we can be sure of is that things are sure to change significantly in the decades ahead, IP or no.
Do not overlook the moral issue at stake. An inventor/creator should be honoured for his or her work and even the most ardent opponents of IP “monopoly” should do well to remember that coming up with creative works, for example, is often hard and entails opportunity costs. And we all benefit if it is possible for people to earn a full time living, and specialise, in producing and making such “intellectual goods”. Such producers bring new things to the world, so let’s be careful in throwing boo-words around like “monopoly”.
Dale Halling: The Decline and Fall of the American Entrepreneur. He is very pro-IP and has a blog, www.hallingblog.com. He argues that some of the claims about the pernicious nature of IP are wildly exaggerated to an almost “criminal” degree, as in this post:
He also challenges the claim that only about 2% of patents every pay off, referring to an academic study giving the level at nearer 50 per cent: http://hallingblog.com/wall-street-journal-proves-its-patent-ignorance/
Another interesting article defending the US patent system here: http://gametimeip.com/2012/01/26/myopic-patent-cynicism/
- Alex Tabarrok: Launching the Innovation Renaissance: A New Path To Bring Smart Ideas To Market Fast. He says patents should last for shorter periods or be scrapped entirely.
- Lawrence Lessig: Free Culture: The Nature and Future of Creativity.
- Against Intellectual Monopoly by Michele Boldrin and David Levine.
A very fierce attack on IP, that they call a “monopoly”. Some of their arguments have been criticised for inaccuracy, such as their treatment of James Watt, the Scottish steam engineering pioneer. For example, here is this essay: http://econfaculty.gmu.edu/pboettke/workshop/Fall2009/Selgin2.pdf Boldrin and Levine acknowledged their errors, but claimed their central case was unchanged, a fact that led George Selgin to acidly remark that he doubted their central case.
I have my own, Amazon.com review of the book, here: http://www.amazon.com/review/R34DF3EMI5PKFV/ref=cm_cr_pr_perm?ie=UTF8&ASIN=0521127262&nodeID=&tag=&linkCode=
- Stephan Kinsella, Against Intellectual Property. Kinsella is one of the foremost “Austro-Libertarian” attackers on IP. Unlike some other fellow libertarians, he is against all forms of IP, as far as I can see.
- Rethinking the development of patents : an intellectual history, 1550-1800 by Adam Mossoff.
- Justifying Intellectual Property. Robert P Merges.
- The Public Domain: Enclosing the Commons of the Mind. James Boyle.
- Capitalism: The Unknown Ideal. Ayn Rand, Alan Greenspan et al.
- Infringement Nation: Copyright 2.0 and You. John Tehranian.
- How to Fix Copyright. William Patry.
- Lysander Spooner, The Law of Intellectual Property;
- or An Essay on the Right of Authors and Inventors to a Perpetual Property in their Ideas.
Alex Tabarrok, a US-based economist, has discussed the vexed issue of the independent invention, here: http://marginalrevolution.com/marginalrevolution/2012/02/defending-independent-invention.html
Some quotes from Tabarrok:
If independent invention were uncommon this type of case wouldn’t be important but independent invention is very common. Classic cases include Newton and Leibniz with the calculus, Alexander Graham Bell, Elisha Gray and Johann Philipp Reis with the telephone, Ohain, Campini, and Whittle with the jet engine and so on. And if independent invention is common with great discoveries and inventions then it is surely much more common with ordinary innovations.
Independent invention should be a defense in a patent infringement lawsuit. An independent invention defense would allow Kelly to exclude imitators but would prevent Kelly from excluding an independent inventor such as Pat.
Inventors should not have to pay to use their own ideas! An independent invention defense is not only just, it also has good economic properties. An independent invention would create more competition. On the one hand, this does reduce the “pot of gold” incentive to create new ideas, the winner of a patent race might have to sell as a duopolist rather than a monopolist. In this case, however, there are several reasons why we wouldn’t expect the number of ideas to fall and innovation could even rise.
First, firms today are often surprised to find that they are being sued for patent infringement. An independent-inventor defense would give inventors greater security in their ideas, thus increasing the incentive to invest. In this age of cumulative innovation often what innovators want most is the security that they can build on what they have produced already. Lawsuits and associated transaction costs would also be reduced.
Second, the type of inventions that are most likely to be independently invented are those with high value relative to their cost. Thus, an independent-invention defense would automatically tend to offer smaller rewards to low-cost innovations and larger awards to more costly innovations, this is exactly the optimal rule discussed in my paper Patent Theory versus Patent Law (pdf) but unlike the system described in that paper it does not require anyone to examine an inventor’s costs.