A CHALLENGE TO PUNDITS:

For those of you still insistent upon the position that intellectual property does foster innovation,

Some disclaimers...

trademark

TM

Are Intellectual Property Laws a Good Thing?

we challenge you to name even a single case of a new industry emerging as a result of the protection of existing patent laws.
For more information on why copyright and patent laws should be reconsidered, please visit or consult: Center for the Study of Innovative Freedom (c4sif.org) Against Intellectual Monopoly (A highly recommended book available for free in PDF at levine.sscnet.ucla.edu/general/ intellectual/againstfinal.htm) The Ludwig von Mises Institute (mises.org) Againstmonopoly.org

Although copyrights and patents hold no place in a world of true property rights, trademark is a separate issue. Consumers should be able to know what products they are buying and from whom they are buying them. If a company is selling a watered-down version of Coca-Cola and claiming that the product is genuine, then that company should still be held liable for fraud. Trademark has played a role in keeping fraudulent activity at a minimum. However, any effort toward legal reform of copyright and patent law will need to consider how to limit the use of trademark to prevent its use as a substitute for copyrights and patents. Rights to privacy should always be protected. In the case of the ink pen that was replicated at the snap of a finger, if the information regarding its design had been taken in an instance of trespass to personal property, then of course, the replicator should be held liable for trespass but not for theft. Once that information is out there, its anybodys to do with as they please (e.g. Wikileaks) and cannot be restituted as physical property can. So, when a student is guilty of plagiarism, she is not guilty of theft, but only of breaking contract with either the school or the teacher.

What?! Are you out of your mind?! you might be thinking right now. Of course intellectual property protection is a good thing! It makes sure people have the incentive to profit from innovation, doesnt it? Shouldnt we have control over our own property?
These are perfectly valid responses, but you may want to consider the case that copyright and patent laws do not encourage further innovation and industry growth. Rather, we are willing to argue that IP laws have exactly the opposite effect. Not only does IP stagnate progress, but it actually infringes upon real (or scarce) property rights.

Intellectual Property Infringes Upon Actual, Scarce Property

Let us say that I have a sleek ink pen that I designed myself and intend to profit from. Now let us assume that simply by snapping your fingers, you now have an exact replica of that pen. If you have done nothing to harm or reduce my own physical property, then should you be held liable for damages?

Intellectual Property Stagnates Innovation, Knowledge, & Growth

The history of economic development is the story of imitation and incremental improvements upon those imitations. Eli Whitney did not invent the cotton gin he was one in a long line of innovators who improved upon ideas that came before him. Despite their own modest contribution to the development of the airplane, in 1906, the Wright brothers managed to obtain a patent covering virtually anything resembling an airplane. While refusing to devote any effort to selling their own airplane, they did invest an enormous amount of effort in legal actions to prevent others from selling airplanes. Fortunately for the history of aviation, the Wright brothers had little legal clout in France, where airplane development began in earnest about 1907. By the time the United States entered WWI, French planes were used instead of American ones.

What Happens in the Absence of Intellectual Property?

When there is no government-granted monopoly in place over the production or expression of something, then the producer is now forced to stay competitive by making improvements upon the original object. If I put a book on the market for $25 and it is not protected by copyright, someone else might publish the same book for $12. Instead of sitting back and filing suit, I now must either produce a higher quality book than my competitor or make it less expensive.

In effect, this is precisely what happens when others reproduce (to a potentially infinite extent) the original ideas of any individual or group. The patent or copyright thus keeps others from doing what they wish with their own physical property (raw materials, machinery, etc.) If you believe that you should be held liable for damages, then you must believe that people also own the value of their property. However, if I buy an ounce of gold at a value of $1400 today and then a week later, if the market supply of gold has significantly increased (or has been replicated), should I still be entitled to $1400 when I decide to sell the gold?

During the period of James Watts patents on the steam-powered engine, the UK added about 750 horsepower of steam engines per year. In the thirty years after Watts patents had expired, 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 Watts patent; however, between 1810 and 1835 (after the patents expiration) it is estimated to have increased by a factor of five.

The fashion industry is an example of an industry functioning without much IP protection. Enormous innovation occurs every three to six months, with a few top designers racing to set the standards that will be adopted by the wealthy first and widely imitated by the mass producers of clothing for everyone else shortly after. As one example among many in the industry, the Spanish clothing company Zara and its many imitators show that the original innovator keeps innovating and keeps getting richer while everyone benefits. Free software licenses allow most open-source software to be written by large and loosely organized teams of programmers, each contributing small pieces of code and all benefiting from shared information and ideas. Similar open-source success stories are in the American automobile industry, the Swiss and German chemical industries, the oxygen steelmaking industries, the Italian textile and fashion industries, the Swiss watch industry, the Czech and Venetian glass industries, and so on and so forth.