From my comment on this thread:

Re the issue of the prices charged for things like apples etc.--see my post Imagining the Fate of Copyright in a Future World.

Imagine 1000 years from now, if we still have these ridiculous IP laws .... Say you need some music--to play in your department store's elevators, to go with a scene in a movie, etc.--you can choose between an almost infinite supply of older, public domain work, or pay for a new tune that is still under copyright. That will force new works' price to be almost zero.

One concern I have is that the IP socialists would at that point come up with a new IP right--basically a renewal of copyright held by someone who "rediscovers" older work forgotten in the almost infinite pile of public domain work. Imagine living in a world where Michael Jackson's work, or the music of the 70s, had been basically forgotten and lost, a needle in a haystack, surpassed by all the music over the ensuing centuries ... then some DJ starts playing it, people rediscover it anew.. shouldn't he get credit for this? After all, it takes a lot of work to loook thru all the old stuff and find "what to recommend" (a lot of IP law is based on the Marxian labor theory of value, the idea that you should be rewarded if you labor on something, as in the old "sweat of the brow" copyright law doctrine). Shouldn't the discoverer be rewarded for this? After all, if he's not, you consumers would never have heard of Michael Jackson, would not have the pleasure of knowing what (free) tracks to play at your party. What's the harm of awarding the DJ a monopoly? After all, you would never have found that needle in an infinite haystack, so no one is worse off, and everyone is better off. Copyright can never die; it only gets reincarnated. O brave new world! That has such laws in't!

Well, not exactly, but this delightful anecdote by Taki has a quasi-Galambosian ring to it (Galambos, you may recall, was the hyper-IP libertarian fringe personality from "California").

When the Marx Brothers announced in 1946 that their upcoming film was called A Night in Casablanca, Warner Bros threatened to sue for breach of copyright. Warner had produced the great hit "Casablanca" four years earlier, and insisted the funny men were trying to cash in on it. But Groucho was no slouch. He had his lawyer threaten Warner Brothers with breach of copyright for using the word brothers. The Marx boys won, as they were brothers before the Warners had formed the company. A Night in Casablanca turned out also to be a great hit.

On the Mises blog, I noticed one of the frequent commentators on IP-related blog threads, one Bala, used to defend the IP position but of late had been taking an anti-IP position. We discussed this privately and I asked him to give me a short write-up about his thought process as he changed his mind on this issue. I find such "conversion" stories interesting, and have seen it in others as well--myself, Jeff Tucker, etc. He sent it to me; I append it below.

Pro-IP to Anti-IP: The Transformation of an Objectivist

by S Balasubramanian

[The author resides in Chennai, India, and has a B Tech (Aerospace Engineering)--Indian Institute of Technology (IIT) Madras ('94), PGDM (equivalent of an MBA)--Indian Institute of Management (IIM) Ahmedabad ('98). He is a businessman, running a test prep company that trains students for competitive examinations for admissions to institutions of higher education, especially for those aspiring to get into the top B-Schools in India. He also recently started a pre-school which he hopes to build into a full-fledged school.]

It was in August of 2009 that I stumbled, or rather fumbled, my way into mises.org. I was guided to LvMI by none other than the Ayn Rand Institute, which referred LvMI as the place to go to if I wanted to get any understanding at all of economics, especially capitalism. As a long-time fan of Ayn Rand, having read a lot of her fiction as well as non-fiction and actually applying the basic principles of Objectivism in my daily life, I decided to take the tip seriously.

Pretty much to my shock, almost the first thing I came across was a little Rand-bashing and, worse, a denunciation of an idea Rand had explained as being the cornerstone of property rights - that of Intellectual Property.

The ideas I came in with

My ideas on intellectual property were formed almost completely based on Rand's arguments justifying the idea. It all begins with the fundamental premises that:

1. Ideas are legitimate property;
2. Ideas owe their existence to the person who originated or "created them" and hence morally "belong" to the creator.
   1. It is important for a reader to understand that Objectivists use the term "morally" differently. Morality, to an Objectivist, is a code of values that guides man's actions in the face of choices. It is rationally derived starting with recognition of the Objective reality that we are a part of. It is not a set of edicts or diktats from a higher authority.
   2. Those who copy ideas deprive the creators of the value that should rightfully accrue to them and are hence guilty of stealing (the emphasis is on "rightfully" as it flows from point 2 above).
   3. It is the fundamental responsibility of government to protect individual rights, property rights being the most important of man's rights.
   4. A system of patent & copyrights is a way by which creators register their claim to creating ideas, a means by which they inform all interested parties as to whose property an idea is
   5. Infringement of patents and copyrights is a violation of property rights and government enforcement of patent & copyright laws is legitimate protection of property rights.

Questions that troubled me

In the course of some heated discussions, a few interesting questions came up for which I had to reach deep inside to find the answers

1. How do you reconcile the facts that recognising and enforcing IP essentially gives some people a right to the physical property of others?
2. How can ideas and patterns be property?
3. How do you propose to enforce IP except through the State machinery? Considering that the State has never demonstrated any tendency other than for evil, how is this consistent with the advancement of Liberty?

What made me realise the error in my (and the "orthodox" Objectivist) position on IP

To cut a long thing short, the moment I realised that there is a conflict between rights to intellectual property and rights to physical property, I also realised that something is wrong about the whole thing. Such a contradiction usually means that something is wrong with the premises of the person facing the contradiction - me.

Restricting a person from giving physical shape to an idea he has in his mind is clearly a violation of his Liberty and Property Rights. However, this is precisely what implementation of IP means. IP proponents typically tent to retort saying that what I am calling "violation of Liberty and Property Rights" is actually implementation of the property rights of the owner of the idea/pattern that is the subject of the IP.

If it is true that in the name of protecting Intellectual Property Rights, one is actually violating the Liberty of some individuals, in effect one is also saying that the holders of Intellectual Property have an undefined lien on the Liberty of the individuals of the other part. Translated, this gives some individuals the right to enslave others by virtue of being holders of Intellectual Property rights. This made the notion all the more bizarre to me. It was in direct contradiction of the most basic principles of Objectivism that no man may claim the right to initiate force against another.

This led me to realise that there is a fundamental problem in the way different people were defining the concept "property". At least, the way Objectivists seem to be defining "property", they are setting themselves up for a conflict between the right to physical property and the right to Liberty on one side and the right to Intellectual Property on the other.

The answer, to me, was to obtain clarity on the relationship between the Right to Liberty and the Right to Property. The question I was trying to answer was "Which of the 2 rights is more fundamental to human nature?". If Liberty is more fundamental to human nature, it would be futile to define Property independent of Liberty because such a definition is bound to lead to a contradiction.

Liberty or Property - Which is more fundamental?

To me, the answer was obvious - Liberty. The Right to Liberty is a logical corollary of the Right to Life and is in fact a restatement of the latter focusing on a specific part of it. The Right to Liberty, as per Objectivism, is nothing more than the freedom to act as per the judgement of one's rational mind. Action being essential to life and in fact being an integral and inviolable part of the definition of the concept "Life" (a sequence of self-generated self-sustaining actions), violation of the Right to Liberty is a violation of the Right to Life itself.

Once again taking from Rand herself, value is that which you act to gain or keep. Thus, gaining or keeping value is impossible unless one is free to act. Thus, it is futile to place "property", which is nothing more than the value one acts to gain or keep with the aim of sustaining one's life, above that which is a prerequisite to the process of gaining or keeping value, i.e., action. Translating this into a simple inequality,

Right to Life > Right to Liberty > Right to Property

Therefore, the choice was clear - to define the concept "property" in terms of the more fundamental concept "liberty". The outcome is bound to be a non-contradictory system of Property Rights where it is possible for Liberty and Property Rights to coexist.

Defining the concept "Property"

(The most fundamental premise I used in this discussion is that initiating force against another is a violation of his Right to Liberty. As per my limited understanding of Objectivism, this is how Ayn Rand defined Liberty.)

Objects exist in 3 states - existent, possession and property. An apple exists. When I hold the apple in my hands, it is in my possession. When my possession is morally justified, i.e., when the apple "ought" to be in my possession, it is deemed my "property".

Clearly, not every "possession" is "property". That raises the question how and when a "possession" becomes "property". The answer to the question is to be found by a study of the morality of the actions that went into gaining and keeping "possession". If you obtain possession the "right" way, it is morally yours, i.e., you are better off with it than without. On the other hand, if you did something "wrong" in the process of gaining possession, it is not morally yours, i.e., you are better off without it than with it. Objectivists in particular should have no difficulty evaluating issues from a moral perspective and to talk of issues like "right" and "wrong" because they ought to be used to deriving these logically from reality, which they consider absolute.

From an Objectivist perspective, there is only 1 "wrong" that a man can commit in the process of gaining possession of an existent - that is to initiate force against other men in the process. Thus, possessions to gain which man has to necessarily initiate force against others will not get moral sanction. Such possessions cannot be considered property.

Equally fundamental to the concept "property" is the right to exclude others from total or partial enjoyment of the value that the property holds. Exclusion of others requires specific actions from the person in possession of an object. The nature of the actions one needs to undertake in order to exclude others from one's possessions also influences the moral status of the possession in question. If excluding others requires retaliatory force only, such exclusion would be a morally sound action. If, on the other hand, exclusion itself involves initiation of force, it would naturally be immoral and the author cannot exclude and be right at the same time. Such possessions that create contradictions by their very nature cannot and should not be deemed property.

Applying this idea to the 2 broad categories of property - physical and intellectual, physical possessions clearly justify the use of the term "property" to denote their ownership. The taking possession of or the exclusion of others from physical objects does not necessarily involve initiation of force. On the other hand, the taking away of a physical good without the consent of the legitimate owner always involves the initiation of force. Thus, the statement "no man shall take away the physical property of another man without his consent" is equivalent to saying that "one man may not initiate force against another". In this sense, it is no different from the basic Objectivist principle of non-initiation of force.

Ideas and patterns, on the other hand, presented a problem when I tried to treat them as "property". While there is no denying the value of ideas in human advancement, exclusion of other individuals from an idea or pattern necessarily involves the initiation of force. For instance, how else is A to prevent B from incorporating A's idea in his B's product other than to force himself upon B's property and coerce B to prevent him from doing so, thus violating B's Liberty? In effect, recognising ideas and patterns as property is tantamount to saying that A has a moral right to initiate force against B simply because he has coined an idea. Thus, as an Objectivist, classifying ideas and patterns as "property" takes me into dangerous territory where I am ready to label the initiation of force as legitimate.

Even worse than the above is to codify IP into law and giving the State and its machinery additional legitimacy engage in rampant violation of Liberty. As an Objectivist, I hate the State as much as anyone else can. To see the State as an ally just because it is the only agency capable of enforcing Intellectual Property Rights is downright immoral. I realised that once there, there was no turning back. I become as evil as the very collectivists and statists that I am trying to condemn and fight against.

I am now left with a very moral choice - do I or do I not recognise ideas and patterns as "property". If I should remain true to my Objectivist roots (which I value for good reason), my only option is to apologise to Rand for disagreeing with her strongly and telling her that she was wrong on this one and that I am not ready to apply the label "property" to ideas and patterns.

(While in the above analysis, I might appear to be going in circles around essentially 1 idea, the non-initiation of force, given that that principle is the most important Objectivist social principle, the one that defines how an individual ought to deal with the society he lives in, I do not think I am guilty of circular reasoning. Rather, I am making my axioms clear and validating all my conclusions against my axioms.)

Conclusions

An Objectivist cannot and should not support the notion of Intellectual Property because it violates fundamental Objectivist principles. Rejecting the validity of "Intellectual Property" does not mean that one is rejecting Objectivism. Anyone who claims otherwise needs to be reminded of Ayn Rand's warnings against package deals. He who wishes to say "Rand said otherwise" needs to be reminded of Rand's other very important point - that no human may consider himself or any other human being to be infallible, not even Ayn Rand herself.

[Mises crosspost; SK crosspost]

Jeff Tucker's Bonfire of the Missalettes is fighting the IP forces inside the Catholic Church!

Someone recently told me "I just ran across a few of your interviews and writings. I was particularly impressed with the point that IP creates scarcity where none existed before. Despite its obviousness, it is characteristic of IP that had not occurred to me before."

So I thought I would elaborate a bit on this. The "artificial scarcity" insight is indeed a good one, but it is not mine. From pp. 33-34 of Against Intellectual Property:

Ideas are not naturally scarce. However, by recognizing a right in an ideal object, one creates scarcity where none existed before. As Arnold Plant explains:

It is a peculiarity of property rights in patents (and copyrights) that they do not arise out of the scarcity of the objects which become appropriated. They are not a consequence of scarcity. They are the deliberate creation of statute law, and, whereas in general the institution of private property makes for the preservation of scarce goods, tending . . . to lead us "to make the most of them," property rights in patents and copyrights make possible the creation of a scarcity of the products appropriated which could not otherwise be maintained.[64]

Bouckaert also argues that natural scarcity is what gives rise to the need for property rules, and that IP laws create an artificial, unjustifiable scarcity. As he notes:

Natural scarcity is that which follows from the relationship between man and nature. Scarcity is natural when it is possible to conceive of it before any human, institutional, contractual arrangement. Artificial scarcity, on the other hand, is the outcome of such arrangements. Artificial scarcity can hardly serve as a justification for the legal framework that causes that scarcity. Such an argument would be completely circular. On the contrary, artificial scarcity itself needs a justification.[65]

Thus, Bouckaert maintains that "only naturally scarce entities over which physical control is possible are candidates for" protection by real property rights.[66] For ideal objects, the only protection possible is that achievable through personal rights, i.e., contract (more on this below).

[64] Arnold Plant, "The Economic Theory Concerning Patents for Inventions," p. 36. Also Mises, Human Action, p. 364: "Such recipes are, as a rule, free goods as their ability to produce definite effects is unlimited. They can become economic goods only if they are monopolized and their use is restricted. Any price paid for the services rendered by a recipe is always a monopoly price. It is immaterial whether the restriction of a recipe's use is made possible by institutional conditions such as patents and copyright laws or by the fact that a formula is kept secret and other people fail to guess it." [For more on Mises's view of IP, see Mises on Intellectual Property.]

[65] Boudewijn Bouckaert, What Is Property? (text version) in "Symposium: Intellectual Property," Harvard Journal of Law & Public Policy 13, no. 3 (Summer 1990), p. 793; see also pp. 797-99.

[66] Bouckaert, "What is Property?" pp. 799, 803.

Bouckaert's paper, What Is Property? (text version), is, by the way, superb and highly recommended.

Update: Jeff Tucker's article and recent speech had me thinking about something that ties into this post well. People want to impose artificial scarcity on non-scarce things because they think scarcity is good. But they have it backwards. If anything, we should want material things to be non-scarce.

In Tucker's talk, he was pointing out the difference between scarce resources and non-scarce, infinitely reproducible ones. Yes, they are different, but I think we also need to combat another fallacious view: people seem to implicitly think it's bad that ideas are infinitely reproducible. This is a "problem" we need to combat by making them artificially scarce. But it's a good thing. i.e., at least ideas are non-scarce; but unfortunately, material things are scarce. But it would be good if material things were more abundant. So imagine that some benevolent genius invents a matter-copying device that lets you just point it at some distant object, and instantly duplicate it for free for you. So I see a coat you are wearing, click a button, and now I have an identical copy. I see you having a nice steak, and duplicate it. Etc. This would make us all infinitely wealthy. It would be great. Of course people would fear the "unemploymetn" it would cause--hey, I want to be unemployed and rich! And the rich would hate it because they would now not be special. They couldn't lord their Rolls Royces and diamonds over the poor; the poor would have all that (it would be similar to how audiophiles were irked by the advent of the CD so tried to find granite turntables etc. to pretend they were still better). So imagine a rich guy suing a guy who "copied" his car.... imagine farmers suing people who copied their crops to keep from starving... how absurd! And what damages would they ask for? Not monetary damages--the defendant could just print up wealth to pay him off! So the only remedy he could want would be to punish or impoversih the defendant... for satisfation, to once again feel superior. How sick. As my friend Rob Wicks noted, you could imagine a short story based on this in which judge orders a famine as a remedy to crop-copying.

Rebellion in the Red: Manifesto (google translation) notes Spanish legislation allowing the suspension of Internet service to users "to safeguard the rights of intellectual property" has caused a huge backlash. Journalists, bloggers, users, professionals and Internet developers have put forth a statement "In defense of fundamental rights on the Internet", which includes:

1. Copyright can not be above the fundamental rights of citizens, including the right to privacy, security, the presumption of innocence, to effective judicial protection and freedom of expression.

People are beginning to recognize the growing conflict between individual rights and "intellectual property"--and, if forced to choose, are choosing real, individual rights over IP. Hopefully it won't stop here.

(HT to Keith Krauland for the link)

[Mises cross-post; SK cross-post]

On the latest This Week in Tech, guest panelist and sci-fi author Jerry Pournelle has an interesting anecdote about his involvement with a copyright squabble between Fox and Universal in the 1970s concerning Star Wars and Battlestar Galactica. As noted on Wikipedia:

Battlestar Galactica was finally produced in the wake of the success of the 1977 film Star Wars. In fact, 20th Century Fox sued Universal Studios (the studio behind Battlestar Galactica) for copyright infringement, claiming that it had stolen 34 distinct ideas from Star Wars. Universal promptly countersued, claiming Star Wars had stolen ideas from the 1972 film Silent Running (notably the robot "drones") and the Buck Rogers serials of the 1940s.

Pournelle says [go to about 1:15:45 of the TWiT episode] that after Universal was sued by Fox, he was paid $20,000 by Universal to help show that BG was not too similar to Star Wars. Pournelle says that to write a brief showing there was no plagiarism. He says,

I looked at it, and said, why, that's easy. If you ask me which is the better movie, then no question, Star Wars is the better one. But if you ask me which is the most original, there ain't an original frame in either one of 'em! They're both derivative from fiction that was published centuries ago--for instance the male-pair bonding between Han Solo and Luke Skywalker was echoed in Battlestar Galactica--I said, yeah, and they both got it from Homer, didn't they?

(See also Battlestar Galactica Dubbed "Too Expensive" and "Star Wars Ripoff"; The Top Five Most Ridiculous Legal Disputes Involving Lucasfilm, the latter of which lists the #1 most ridculous lawsuit as follows: "Star Wars blatantly rips off Universal's Silent Running. Universal's Battlestar Galactica overtly steals from Star Wars. No one acknowledges that every sci-fi movie is a variant of other sci-fi movies. Lawsuits are filed.")

[Mises blog cross-post; SK cross-post]

As I mentioned in Radical Patent Reform Is Not on the Way, in in In re Bilski, the Court of Appeals for the Federal Circuit (CAFC) modified previous holdings regarding the patentability of software or business-method patents in upholding the rejection of patent claims involving a method of hedging risks in commodities trading. The case was appealed to the Supreme Court and oral arguments were heard earlier this month. This entire area of patent law is very arcane, but the main issues and the oral arguments are explained very well by the heroic IP-abuse reporter Joe Mullin in Bilski v. Kappos Oral Arguments: Supreme Skepticism Toward Method Patents.

Take a look at Mullins' discussion of the oral arguments--it's fascinating seeing the Justices grapple with the absurdity of patent law. A few choice excerpts below.

I suspect the Court will choke back a bit on software and business method patents--but not too much, as I argued in Radical Patent Reform Is Not on the Way. One reason is that although the law is, as the Justices seem to be realizing, completely unjust and absurd, it is the law. Or, as Bilski's lawyer said, "That's our system ... We do grant exclusive rights in exchange for disclosure." Yes, we do. And when you implement such an abomination, that's what you get: absurd, unjust results, such as granting monopolies on "fundamental ways of conducting business or organizing human behavior" (and yes, patents are monopolies, despite the shrill denials by patent shills and other pro-monopolists).

Excerpts from oral arguments:

Across the board, the justices indicated a deep skepticism toward the invention described in the patent application at issue, which was rejected by the U.S. Patent and Trademark Office and describes a method for trading commodities. Some of the justices went even further expressing both a fair amount of disdain for the idea of granting broad "method" patents and a concern that ruling in favor of the petitioners would lead to patent grants on fundamental ways of conducting business or organizing human behavior. ...

Based on the justices' attitude during the arguments, it not only seems extremely unlikely that Bernard Bilski will ever get the patent at issue, it also seems clear that the court is poised to establish a new, and most likely stricter, test of what is patent eligible.

One after another, the justices prodded Bilski's lawyer, Michael Jakes of Finnegan Henderson, Farabow, Garrett & Dunner, in search of some idea about where to draw the line. The thrust of the questions: Does absolutely everything fall within the domain of the U.S. patent system?

"So, an estate plan?" asked Justice Ruth Bader Ginsburg. "A tax avoidance method? How to resist a corporate takeover? All of these are patentable?"

"They are eligible for patenting under section 101," replied Jakes, referring to the section of the 1952 patent statute that governs what is patent-eligible subject matter.

... "Your argument is that anything that helps business succeed is patentable," Breyer said. Would the framers of the Constitution, he asked, really have wanted everyone with a new idea to run to Washington to get a patent, in the process enabling them to "stop the wheels of progress" unless competitors got permission?

"Why not patent a method of speed dating?" Justice Sonia Sotomayor asked.

There are a few, limited areas, Jakes said, where patent protection isn't available; he pointed to the fine arts as one example. Otherwise, he argued, patents encourage people to innovate, and it is via the patent system that they disclose their new creations to the public.

... Justice Sotomayor took issue with Jakes's suggestion that patents are always a manifestation of innovation.

"A patent limits the free flow of information," she said. "It requires licensing. You can't argue your position is enhancing the free flow of information."

Jakes replied: "It does, because of the disclosure requirement."

"Even though the public can't use [the patented invention]," noted Scalia.

"That's our system," said Jakes. "We do grant exclusive rights in exchange for disclosure."

Time and again, Jakes refused to draw a line that ruled anything off-limits to the patent regime. His position left the justices questioning whether he was advocating the "ownership" of basic human activities.

"Let's take training horses," said Justice Antonin Scalia. "Don't you think that some people, horse whisperers or others, had some ... insights into the best way to train horses? Why didn't anybody patent those things?"

"I think our economy was based on industrial processes," responded Jakes.

"It was based on horses, for Pete's sake!" said Scalia. "I would really have thought somebody would have patented that."

... Chief Justice Roberts pushed back on an inconsistency in Stewart's briefing of the case. On the one hand, he said, the government claims Bilski's method just describes a way of doing business, and therefore isn't patentable but then posits that a computer with an "interactive website" doing the same thing might be. "That's like saying if you use a typewriter to type out the process, then it's patentable," said Roberts.

If the website scheme was part of a computer program, Stewart said, "the computer would be at the heart of the innovation."

"No, no," said Roberts. "That's just saying instead of looking in the Yellow Pages, you look on a computer."

[Mises blog cross-post; SK.com cross-post]

I was invited to be a guest on The Peter Mac Show last night and ended up staying on for both hours. It was a pretty in-depth interview. The host asked impressively intelligent questions for someone who had just started coming around to the anti-IP position (after reading my Intellectual Property and Libertarianism just the day before (!)). The MP3 files are here: hour 1 ; hour 2.

Defenders of patents commonly say they are against innovators' ideas being "stolen" or "plagiarized." This implies that patents simply permit an innovator to sue those who copy his idea. This position betrays either disingenuity or ignorance about patent law. Let me explain.

Under copyright law, someone who independently creates an original work similar to another author's original work is not liable for copyright infringement, since the independent creation is not a reproduction of the other author's work. Thus, for example, a copyright defendant can try to show he never had access to the other's work, as a defense. The reason for this is that the fundamental copyright is, well, a right to copy one's original creative work. By the nature of creative works that are subject to copyright, it is very unlikely someone would independently create the same novel, say, or painting, as another author. (And if copyright only protected literal copying, it would be much less a problem; but unfortunately it protects a bundle of rights including also the right to make "derivative works".) But, in the rare case where author 2 independently creates a work very similar to that of author 1, it is not an infringement of author 1's copyright, since author 2 did not copy anything.

Patent law is different. Very different. Most defenders of IP do not seem to be aware of this difference--one reason they should not be opining in favor of legal regimes they know little about. When patent defenders say that patent abolitionists are in favor of plagiarism and idea theft, they imply that patent law is like copyright law--that it simply prevents people from copying others' ideas.

Not so. To prove copyright infringement you have to show an actual copying of the work. But to prove patent infringement, the patentee need only prove that the accused infringer makes, uses, sells, or offers to sell, or imports the patented invention--that is, a device or method that is described in at least one of the "claims" of the patent. It doesn't matter if the infringer invented it independently. It doesn't even matter if the infringer invented it before the patentee. Got that? Someone who previously invented the same thing and is using the idea in secret can actually be liable for infringing the patent granted to the second inventor. If a later person independently invents the same idea that was previously patented by another, this is also no defense. Prior use or independent invention are not a defense.

Obviously, it should be. The Intellectual Property and Communications Omnibus Reform Act of 1999 did add a limited first inventor (prior user) defense for prior commercial users of "business methods"--see 35 U.S.C. § 273--but not a general one. Justice obviously requires that, at the very least, a general independent inventor defense be added to the patent system. To blunt its sharp, unjust edges. In particular, a defense should be provided for those who are prior users of, or who independently invent, an invention patented by someone else. This would greatly reduce the cost of the patent system since one difficulty faced by companies is that they do not know what patents they might infringe. If someone learns of an invention from another's patent, at least they are aware of the risk and can possibly approach the patentee for a license. But quite often a company independently comes up with various designs and processes while developing a product, which designs and processes had been previously patented by someone else. If the goal of patent law is to reward invention, it should be sufficient to permit patentees to sue people who actually learned of the idea from the patent just as copyright infringement exists when someone reproduced another's work but not when it is independently created. A broad prior user right defense should be established, as well as an independent inventor defense that even a later inventor could use. (Pending patent reform legislation originally proposed to broaden the existing prior user defense by eliminating the business method patent limitation so that users of all types of inventions would have been able to use the defense, but this was removed from later versions of the bill. The Council on Foreign Relations study, "Reforming the U.S. Patent System: Getting the Incentives Right," recommends a prior-user right be adopted; James Bessen & Michael J. Meurer, Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk (Princeton University Press, 2008), recommend an independent inventor defense--see the Introduction.)

Even pro-IP libertarians usually reluctantly agree that independent invention should be a defense, once you dispel their ignorance about the system they for some reason support (well, the reason is not that hard to see--it's lingering state-indoctrination, or some form of statism such as minarchism, or some unprincipled, incoherent grounds like utilitarianism). This is one of the aspects of arguing IP policy that infuriates me. Whenever you point one of these things out to a libertarian defender of IP, he will usually say, "well, I don't support that." So you say, "well, what do you support?" The answer is basically, "Hey, I'm not a patent lawyer; that's just a detail." I.e., they are in favor of some ideal patent system; not the current, statist one (though they oppose abolishing it or weaking it!), but a "libertarian" one (as if one could imagine a patent system concocted by decentralized courts without legislative power! [on this see my Legislation and the Discovery of Law in a Free Society]). In other words, they don't know what in the heck they are even talking about. They can't describe the system they favor, and are not willing to abandon a statist system they admit is unjust.

And they seem blithely unaware that removing the obvious, "problematic" features of patent law would largely gut it, resulting in an emaciated, weak patent system--a change that would be attacked by mainstream IP advocates as "harming innovation," in the same way that these libertarian patenteers criticize us patent abolitionists. Libertarian IP advocates are schizophrenic. They shy away from the obvious injustices of patent law, and would favor reforms that most normal IP proponents would recoil in horror from; while they try to maintain the facade that they support IP because they support innovation and inventors' "rights", even though they cannot tell you what their ideal libertarian patent system even looks like.

Don't believe me that providing an (obviously just) "independent inventor" defense would gut the patent system? I've been practicing patent law since 1993. I have lost count of the number of times I've been called upon by a client to analyze a patent that has come to the client's attention, that concerns it. What typically happens is this. Company A is producing or developing a product. They hear a rumour from a customer "Hey, I think that Company B has a patent on something similar to this." Or, they get a letter from Company B saying, "Hi, we attach a copy of our latest patent for your interest! If you want to discuss licensing, give us a call! declaratory judgment action against us, please! We wouldn't want to give you cause to sue us first, robbing us of the chance to choose the venue! Love, Company B". So Company A calls me, says, "can you take a look at this patent? Are we in trouble? Are we infringing? Is the patent valid? If so, can we change our design to get around it? We'll be happy to pay your $30k fee for an analysis and opinion." Such a productive use of precious capital!

Now, what I want to emphasize here is that: in all the umpteen times I've done this over the last 15 or so years, I have never, ever, even once, seen a case where the client's engineers copied the patented invention. In every case that I can recall, the company designed its product on its own--using available technology, to meet the market demands--and then only later were made aware of some patent buried among millions in the bowels of the patent office. Then they panic, worrying that they might be shut down by an injunction by a competitor, or sued into the ground (for examples see my Radical Patent Reform Is Not on the Way).

No doubt in some cases there is copying. An entrepreneur espies a popular product, and makes a similar one; lo and behold, it turns out there were some patents, and so he is sued. Still unjust--what is wrong with emulation, competition, and learning?!--but still, sure, in some cases, there is copying. But there can be no doubt that millions and millions of dollars are lost on attorneys' fees alone, not to mention the cost of changing designs to avoid infringement, or foregoing development in a field crowded with patents or rife with uncertainty, in cases where the victim was not copying or even learning anything from the company that just happens to hold a red-ribbon adorned manilla certificate issued by a technocratic bureaucracy of the criminal central state. Add an independent inventor defense, and a lot of the work done by lawyers like me would dry up--meaning a more efficient economy, lower priced goods, more competition and innovation, more innovative freedom, more breathing room.

This is a type of reform that most libertarian patent advocates, in my experience, begrudgingly agree to. And it would gut the patent system. The caterwauling of the patent bar, deprived of half their federal law-sponsored teats, would reach a deafening crescendo. Large companies that rely on the inchoate threat of patent lawsuits to squelch competition and keep small innovators down, would increase their bribes to DC, fearful of barriers to entry falling.

So why not come all the way with us, my fellow libertarians? You see the injustices of the patent system, and usually agree with our concrete criticisms of them. You are not sure of what a good patent system would even look like. The current one is undeniably a mess. And it's just an arbitrary fake-law scheme enacted by an obviously incompetent, evil, illegitimate, and criminal state. Why in the world would a libertarian support this? Besides, by advocating such reforms you are going to be lumped in with us "enemies of innovation" by the vested IP interests. So if you are doing the time, you might as well do the crime.

Update: See Mike Masnick's excellent posts, Calling For An Independent Invention Defense In Patents and If Patents Are Supposed To Support The Independent Inventor, Why Isn't There An Independent Invention Defense?, the latter of which mentions a great post by Joe Mullin, Patent defendants aren't copycats. So who's the real inventor here?

[Mises blog cross-post; SK cross-post]