The recent Board of Patent Appeals and Interferences (BPAI) decision, Ex parte Rodriguez (discussed here), is a good example of the completely arbitrary, artificial nature of patent law. This is what counts as the meat and bones of natural "justice" in the IP world. This opinion discusses the relationship between the Patent Act's Sec. 112, 6th and 1st paragraphs, and clarifies why and under what conditions a functional claim limitation that is not a means-plus-function recitation may be invalid under Sec. 112, 1st para. for lack of enablement. Blah blah blah.

How anyone can think this is possibly compatible with libertarian principle is beyond me. No offense, Randians.

[SK cross-post]

"A Note on Intellectual Property and Externalities," by Hardy Bouillon, Mises Daily (Oct. 27, 2009), originally published in Property, Freedom and Society: Essays in Honor of Hans-Hermann Hoppe (2009).

[SK cross-post]

Who Owns You? Corporations Patenting Your Genes

A debate between IP opponent David Koepsell and patent attorney Gene Quinn about gene patents. As noted in IP Debate? (see also Gene Quinn the Patent Watchdog and Is It So Crazy For A Patent Attorney To Think Patents Harm Innovation?), Quinn previously said he wanted to debate an IP opponent, before transparently banning me from his site after I called his bluff; then David Koepsell offered to debate Quinn--it was supposed to be held yesterday at Cardozo law school, but then Quinn backed out, and finally agreed to the online thing you see above. Good thing for him he was not there face to face to present his embarrassingly weak "arguments."

[SK cross-post]

In Thin Liberalism and the Folly of Burning Bridges, Timothy Lee makes (at least implicitly) several interrelated claims. First, that libertarians tend to oppose net neutrality. Second, that "free software intellectuals like Richard Stallman and Eben Moglen" are anti-IP. Third, that this is compatible with libertarianism. Fourth, that Moglen and Stallman, despite some unfortunate rhetorical excesses, hold views that are not really inimical to the free market. Fifth, that some libertarians, who (properly?) oppose net neutrality, wrongly accuse the anti-IP/free software types as being unlibertarian. Finally, that the reason these libertarians get it wrong is that they have succumbed to thinness.

It seems to me that most of these claims are at least partly incorrect, or confused. Let's take them one at a time.

1. Libertarians tend to oppose net neutrality. (I'm inferring this position from Lee's post.) Libertarians seem to me to be confused about this area, but the principled ones I am familiar with of course oppose net neutrality. I oppose it. On the other hand, the various forms of state support received by the telecom and other Internet infrastructure corporations should of course be abolished, which might alleviate most of the concerns of (left?) libertarians sympathetic to the aims of the net neutrality crowd. But libertarian position is clearly to oppose any state interference with the market to impose "net neutrality." Service providers should be able to charge whatever they want, in whatever manner or tiers they wish, if the market supports it; at the same time, any state favors, monopolies, protectionist regulations, etc., should of course also be abolished.
2. Free software intellectuals like Richard Stallman and Eben Moglen are anti-IP. (I'm inferring this position from Lee's post.) Not really. The problem, from the libertarian perspective is not that Moglen and Stallman are anti-IP; it's that they are not anti-IP enough. If I am not mistaken, Moglen, for example, is not completely opposed to copyright and patent. (See my Eben Moglen and Leftist Opposition to Intellectual Property.)
3. The ideas of open source/free software/anti-IP are compatible with libertarianism. Yes, this is true, as I have argued extensively. But this is a strange argument coming from Lee, who himself is not opposed to IP in any principled way (and neither are the leftist free software types, as noted above). For example, as I noted in $30 Billion Taxfunded Innovation Contracts: The "Progressive-Libertarian" Solution, Lee has written: "I can't agree with Baker that all copyright and patent monopolies are illegitimate. Copyright and patent protections have existed since the beginning of the republic, and if properly calibrated they can (as the founders put it) promote the progress of science and the useful arts. Like any government intervention in the economy, they need to be carefully constrained. But if they are so limited, they can be a positive force in the American economy." Unlike the views espoused by confused, quasi-economically illiterate leftists and utilitarian, minarchist libertarians, the proper, principled, libertarian position is that patent and copyright are completely and utterly unlibertarian and unjustified.
4. Moglen and Stallman, despite some unfortunate rhetorical excesses, hold views that are not really inimical to the free market. I tend to agree with Lee that various comments about "a bottom-up, participatory structure to society and culture, rather than a top-down, closed, proprietary structure" and "the democratizing power of digital technology and the Internet," etc., are not anti-libertarian. However, as noted in Eben Moglen and Leftist Opposition to Intellectual Property, Moglen holds clearly unlibertarian views, such as his view that free bandwidth is everyone's "birthright" (as socialist Finland believes, too-it recently enacted legislation making broadband access a legal right); and his opposition to regulating the EM spectrum as a property right (and his confused view that it already is, despite the state's nationalization of the EM spectrum).
5. Some libertarians, who (properly?) oppose net neutrality, wrongly accuse the anti-IP/free software types as being unlibertarian. This appears to be correct. Some libertarians are pro-IP and thus, mistakenly believing the free software socialists to be opposed to IP, confusingly criticize them on these grounds. In this respect, the confusion on both sides is similar to confusion about IP held by leftists and traditional libertarians: both the left and traditional pro-IP libertarians accept the false assumption that intellectual property is a legitimate type of property right. Libertarians who accept this premise thus favor IP, because they are pro-property; and leftists oppose IP because they are hostile to private property rights and mistakenly believe IP is a type of private property right.
6. The reason these libertarians get it wrong is that they have succumbed to thinness. So here we have Lee, who is pro-IP, criticizing libertarians for being pro-IP. Leaving this bizarre critique aside, is Lee right that "thinness" is what makes some libertarians too pro-IP? Lee maintains that "A libertarian whose conception of liberty is confined to limited government is going to be left rudderless when confronted with a pro-liberty movement whose concerns are orthogonal to the size of government." I think this is just confused. Thickness is actually problematic since it just muddies the waters, conflating issues pertaining to the permissibility of interpersonal violence with other interpersonal norms and institutions. The thickness theorizers add nothing of substance to our understanding of libertarian principle; instead, they pointlessly link the libertarian opposition to aggression to non-rigorous, malleable leftist gremlins like "hierarchy" and "bossism" and "pushing people around." I am, in some sense, a "thin" libertarian yet oppose IP root and branch, on principled, pro-property, pro-rights, pro-individualist, non-leftist grounds. Thinness is not the cause of confusion about IP. Rather, it is the lack of principle. It is the lack of principle and the adoption of flawed, bankrupt utilitarian ideas which leads libertarians to try to be "moderate", to support some IP, but not too much; and to be minarchist--that is, statist--rather than anarchist.

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

See Nokia: Apple iPhone Violates Our Patents: A few choice excerpts:

In a statement, "Nokia said Apple has refused to pay for use of intellectual property developed by Nokia that lets handsets connect to third-generation, or 3G, wireless networks, as well as to wireless local area networks. "Apple is attempting to get a free ride on the back of Nokia's innovation," Ilkka Rahnasto, Nokia vice-president for legal and intellectual property, said in the statement.

This implies apple copied their patented inventions. but copying need not be shown for infringement, and you can bet they will not rely on this in pressing their case. They are trying to have it both ways: to darkly hint Apple copied them, while being happy to persecute Apple for non-copying acts that still infringe their patents.

The Finnish handset giant said Oct. 22 it has filed suit against Apple ... in U.S. District Court in Delaware, accusing its California-based rival of infringing patents for core technology that allows the iPhone to make calls and connect to the mobile Internet. Although Nokia ... has sued rivals such as Qualcomm ... over patents in the past, the latest lawsuit came as a surprise and represents an escalation of increasingly contentious competition with Apple.

So ... the filing of the lawsuit is how they are engaging in "increasingly contentious competition." How much more clear could it be that these patents are nothing but anti-competitive devices used for protectionism?! It's obvious to everyone.

The loss of smartphone share is doubly frustrating to Nokia because it sold phones with computer-like features years before Apple. During the last two years Nokia has launched a series of handsets with iPhone-like touchscreen interfaces, but none has generated quite the same buzz as Apple's devices....

So they are losing out in competition, so using legal weapons instead.

Apple, like all mobile-phone makers, relies on such standards to make its devices compatible with carrier networks. Nokia says it has contributed its intellectual property to global standards bodies, but demands to be compensated for the use of its patents in commercial products. "Apple is expected to follow this principle," Nokia's Rahnasto said in the company's statement.

So, Nokia contributed to a standard with the very goal of making a standard that everyone would start using. Apple starts using it--bam, they sue them. Nokia is leveraging the monopoly the state granted them. Horrible.

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

[From Mises blog, Dec. 7, 2007]

I received an impressive inquiry from a high school senior: "I am contacting you to ask if I can interview you for my senior project paper, which is a persuasive paper about why copyrights are invalid and impractical. I will have between 5-10 questions regarding intellectual property for you to answer." I said sure; and she sent on her questions, which were:

1. What would you say is the most powerful argument against copyrights and patents? 2. What would you respond with to someone who argues that resources do not have to be finite or scarce in order to be allocated as property? 3. How would you respond to Lysander Spooner's argument that property is wealth that is owned, and wealth includes ideas since they can be manifested into tangible wealth? 4. What about the argument that people own their minds, so they own the mental products? 5. Some anti-IP people believe in a right to first sell. Would you say that the original creators should have a right to sell the creation first? Why or why not? 6. What would you respond to someone who claims that if there were copies all around, the original inventor wouldn't get as much profit as he should have?

My replies are below.

Question 1. What would you say is the most powerful argument against copyrights and patents?

As I elaborate in In Defense of Napster and Against the Second Homesteading Rule and Against Intellectual Property (both available here), humans need to use scarce or "rivalrous" resources -- for example, tangible things like land or food or clothing -- to survive. The nature of these things is that only one person can use or control the resource. Thus, there is a possibility of conflict over the use of these things. For people to live peacefully and productively in the world, we need to be able to find ways to use scarce resources without fighting over them. This means that each scarce good--each thing that might be the subject of conflict--is assigned one unique owner, someone with the exclusive right to control that resource. The rules for determining who is the owner have to be objective, fair, and just, in order to be generally accepted and serve the function of reducing conflict. It is for this reason that ownership is thus assigned to the person with the best claim to the thing in question--the most objective "link" to it. This is the libertarian-Lockean idea of "first use"--whoever first possesses or uses a thing--that is, establishes objective property "borders" with respect to the resource--is the owner. Any other rule is non-objective or arbitrary. For example, if the first user did not have the best claim to the resource, then whatever rule you use to assign property rights, property is not secure because some latecomer could just take it from the current owner. So any property assignment rule at all presupposes the first-user idea--the idea that an earlier user, ceteris paribus, has a better claim than any other user. Which implies the first user -- the homesteader -- has the best claim of all. Any other rule in effect violates the notion that latecomers have an inferior claim to earlier users. For example, a thief who steals property is in effect a latecomer. And mere verbal decree is not sufficient either, for one or two reasons: first, because (with respect to unowned resources), it's not an objective use of the thing; it does not establish any visible link; and any number of people could make such a claim, in contradistinction to first possession, which can only be done by one person, and which is objective and visible; and second, because (with respect to already owned resources) this amounts to theft, or a latecomer ethic.

Now, given this understanding, we can see that any just and peaceful and prosperous society requires the assignment of ownership rights in scarce resources in accordance with the libertarian homesteading or "first use" principle. Now ideas -- creative works protected by copyright or inventive designs or recipes or processes of patent law -- are not scarce resources. Any number of people can have a copy of a song; or can use the same method or design, with their own bodies and property. To assign rights in such things--called "ideal objects"--means setting up enforceable claims in these intangible things--but force is a tangible, real thing that can only be applied to other real (scarce) things. In other words, because ideas are scarce, assigning rights in ideas necessarily is accomplished by assigning ownership rights in scarce resources. So, for example, the holder of a copyright to a novel has a partial ownership right over the bodies and tangible property of everyone else in the jurisdiction, because he can stop them from using their bodies or property in a certain way. The owner of the patent for a mousetrap can stop you from using your own body and wood and metal to make a mousetrap having a similar design to his patented design. But as we have seen above, recognizing such rights contradicts the only just and objective property assignment rule, since it overrides the ownership rights already established in already-owned things. I homestead property, and own it; then someone else acquires some rights to control my property merely by a decree of the state, in effect, merely by their thinking of a way to use their own property, which is not "first use" of the resources they now claim ownership of.

So, in short, the problem with patent and copyright is that it amounts to theft of rights to scarce resources.

Question 2. What would you respond with to someone who argues that resources do not have to be finite or scarce in order to be allocated as property?

Assigning rights to non-scarce things necessarily infringes on rights to scarce things, since IP rights are enforced with force, real force, in the real world, against real things. For example, the copyright holder can force the "infringer" to pay money to him; or can get an injunction forcing him to stop using his body and (scarce) property in a certain way. Assigning rights to non-scarce things acts much like inflation of the money supply does: the more you do it, the more you dilute and reduce the value of real property (money). Question 3. How would you respond to Lysander Spooner's argument that property is wealth that is owned, and wealth includes ideas since they can be manifested into tangible wealth?

Wealth is too nebulous a term to be used here and is unnecessary. It appears to mean value; but as Hoppe and Rothbard show, value is not ownable or owned. The owner of property has no property right in the object's value, since its value lies in how others' appraise it. (Hoppe argues this in his TSC, as I note in my Against IP article, at text at note 79.) See also Rothbard's explanation for why there are no rights to one's reputation--because a reputation is what others believe about you, and you don't own their minds or opinions. (I think this is in Ethics of Liberty.)

Question 4. What about the argument that people own their minds, so they own the mental products?

This line of reasoning is based on the confusing notion that creation is an independent source of property rights. This error is similar to the confused idea that we own things we mix our labor with because we "own" our labor. We own -- have the right to control -- various scarce resources, such as our bodies and other scarce resources we homestead or acquire from previous homesteaders. We do not own "labor"; labor is just an action, an activity of the body. To be sure, when one first uses unowned property, and thereby homesteads it, he is engaging in a type of "labor"; but we do not need to rely on the confusing metaphor that we "own" our labor. By working to emborder or possess an unowned resource, one thereby establishes a visible link with the property, thus establishing a better claim than any latecomer, i.e. ownership. This chain of reasoning does not imply or rest on the idea that we "own" our labor.

As for creation, it is often maintained that one can acquire ownership of things by either finding (homesteading), contract (acquiring it from a previous owner), or by creating the thing. But this is confused: creation is not an independent source of ownership. In fact, a bit of reflection shows that it is neither necessary nor sufficient. If you own a resource and re-shape it into some new, more useful, more valuable configuration (say, you "create" a mousetrap using your wood and metal; or you "create" a statue by carving up your hunk of marble), then you own the resulting "creation" simply because you were already the owner of the material that constitutes it. So it is not necessary to think of creation as a "source" of ownership rights. Likewise, if you carve a statue into someone else's property, then you do not own the resulting statue; rather, the owner of the marble is entitled to have his marble back, and perhaps damages for trespass. So creation is not sufficient for ownership either.

In fact, the only legitimate ways of acquiring title to a given scarce resource is to either homestead it from its unowned state, or to contractually acquire it from someone who already owns it and who can trace his title back to an original act of homesteading. This fully exhausts all ways of coming to own scarce things. This is because matter cannot be created by man, but only rearranged.

Now let me note one other thing. Rothbard explains in Ethics of Liberty why there is not really an independent right to free speech; there are only property rights. There is no "right" to free speech that gives you the right to speak on others' property--you must have the consent of the owner. And if you own property, you can do whatever you want on it, including speak--not because you have a "right to free speech" but because you can do whatever you want with your own property so long as you do not invade others' property rights.

So back to your question: we do not own the mental products of our mind for several reasons. First, owning one's body, just as owning property gives you in effect a (derivative) right to speak on it, allows you to use it to do useful things, such as come up with ideas, or even sell your services, or labor. There is no need to engage in the confusing fiction or metaphor that you "own" your labor, or you "own" the "products" of your mind. Second, "products of the mind" is far too vague of a concept. It is so broad that if property rights were granted in them, they would swamp and override all real rights in real things. And finally, if the products of your mind are scarce, you presumably own them because they result from reworking material you already owned (if not, as in the stolen marble example, you do not own it at all, but someone else does). And if they are not scarce, they are not the subject of property, since granting property in them is impossible, and can only be accomplished by eroding property rights in others' things. Question 5. Some anti-IP people believe in a right to first sell. Would you say that the original creators should have a right to sell the creation first? Why or why not?

I believe you may be referring to the doctrine of common law copyright. As a practical matter, if you have an idea or manuscript, you can use this to leverage payment to reveal it. But if you are foolish enough to let the information become public, it is too late to do this. As Benjamin Tucker noted: "You want your invention to yourself? Then keep it to yourself." (see on this Wendy McElroy, Copyright and Patent in Liberty).

Question 6. What would you respond to someone who claims that if there were copies all around, the original inventor wouldn't get as much profit as he should have?

Austrian economics teaches us that values are subjective, and that the only way to determine an objective price is on the market. See on this Rothbard's Utility and Welfare Economics, e.g. The only way to know how much profit someone "should" make is to see what people are willing to pay them for. Part of the market is the need to incur costs of exclusion. If you don't put a lock on your business, people will steal it. If drive in movie theaters didn't incur the cost of putting little speakers for each car, then people would free ride by watching it from outside. To decide whether a given endeavor is worthwhile, one must take all costs into account, including costs of exclusion. The more creative find ways to exclude that have a low enough cost and that exclude a sufficient number of free riders so that the business can be profitable. For those entrepreneurial plans that have too high a cost, they should not be engaged in. So we see people finding ways to profit from their ideas, given the free rider problem--so rock bands give away their music for free (it plays on the radio, e.g.) so they develop fans who will pay to see them play live in concert (but even here, there are costs of exclusion--the ticket selling and enforcement mechanism, say). Or television shows are broadcast for free and paid for by advertisting. And so on.

[Mises blog post; SK cross-post]

Let me highlight a few excerpts from Google digital library plan opposed by Angela Merkel: German chancellor opposes the internet firm's attempt to put every book ever written online:

German chancellor Angela Merkel yesterday waded into the row over Google's plans to build a massive digital library.

The move was a remarkable intervention from a leading world politician in a growing dispute about the threat posed by the internet, and Google in particular, to publishing companies, authors and also newspapers.

In her weekly video podcast, before the opening of the Frankfurt Book Fair this week, Merkel appealed for more international co-operation on copyright protection and said her government opposed Google's drive to create online libraries full of scanned books.

"The German government has a clear position: copyrights have to be protected on the internet," Merkel said, adding that there were "considerable dangers" for copyright protection online.

Isn't this astonishing? I thought "the goal" of copyright was to promote the spread and growth of human creativity. Now it appears "the goal" is to protect copyright itself. This reminds of government school advocates who say they "believe in public school"; who oppose any attempt to reform or privatize public school because it might threaten public schooling--when the goal of public schools is supposed to be education. Google's "plan would make millions of out-of-print books available online and thus would not cannibalise existing sales, as those books were not readily available to buyers. Google argues that it is increasing access to works that would otherwise never see the light of the day." But the state fears the unregulated behavior of free people. Who knows what people might do with this information? If you let people freely connect and communicate in a digital world, the state's copyright and other regulations might not even reach them! And we can't have that!

So these atavistic brutes want to kept information locked up in musty paper because of a fear that some people might learn things without dropping a nickel in the Galambosian box. If they don't understand it, if they can't control it--Hulk smash! Doesn't this recall the heartless zeal of drug warriors who are willing to deny suffering people medical marijuana because the only way to effectively outlaw recreational marijuana use is to allow no exceptions. And we have to prevent recreational marijuana use... don't we? We have to protect copyright, don't we? We have to have government education, don't we? I mean, who can imagine the horrors of a dystopian world where people were free to use marijana; where they had hundreds of millions of books available any time, at their fingertips; where states are not able to brainwash and propagandize students in their little loyalty-factories.

[LRC cross-post; SK cross-post]

In my post An Open Letter to Leftist Opponents of Intellectual Property: On IP and the Support of the State, I noted that both conservative and libertarian IP advocates, and leftist IP opponents, all accept the idea that IP is a type of property right. The leftists oppose IP for this reason--because they are opposed to private property rights; and the libertarians favor IP because they are proponets of property rights. I noted Richard Stallman and Eben Moglen as examples of the former.

I just listened to Moglen's speech below (google video link). He's smart and has some good insights and criticisms here and there. But, although some hail the speech as "absolutely brilliant," Moglen seems has no coherent underlying or principled theory other than vague anti-corporatism and an inconsistent belief in "free speech" combined with the idea that in today's age, this means free software, almost free hardware, and free, unlimited bandwidth--he says this is everyone's "birthright" (as socialist Finland believes, too--it recently enacted legislation making broadband access a legal right). I didn't jot down all the problems I noted when I listened to it, but, for example, he opposes regulating the EM spectrum as a property right--he seems to think it has been treated as private property since the federal government nationalized it decades ago, and he seems not to realize that despite technological advances there is of course still scarcity and thus the need for property rights; he seems to be in favor of copyright, and even some form of patent (if I did not misunderstand his comments); he speaks of upholding the Jeffersonian goals of the Constitution's IP clauses, which is both naive and positivistic; he tosses off confused comments about how the nature of economics has changed. He is rightly extremely cynical about the corruption and incompetence of Congress, even though he does not seem to oppose the state on principle or even its IP law and its positivistic Constitution, and even though he seems to want to trust the same state to provide everyone with unlimited, free bandwidth as their "birthright", and to use the power of the state to outlaw the charging of price for bandwidth services (in this he seems to go beyond even the net neutrality advocates goals).

If only the leftist opponents of IP would shore up their views with a more realistic view of politics and the nature of the state and a better appreciation for the indispensability of private property rights and Austrian economics.

(google video link)

[Mises cross-post; SK cross-post]

As noted in this alert by the law firm Fulbright & Jaworski, the U.S. Patent and Trademark Office (PTO) has announced that it is rescinding controversial rules promulgated in 2007 that have been ensnarled in litigation since then. The rules sought to limit the number of patent claims per patent application, and the number of continuing applications that could be filed. As I noted in Radical Patent Reform Is Not on the Way, these changes are not radical, as the patent privileges lobby paints them. But the very fact that they were so vociferously opposed by the organized patent bar, such as the AIPLA, indicates that these changes would probably have been in the right direction. Basically, anything the AIPLA is against, the libertarian should be for.

Following the rule that each President is worse than the last and eventually makes you nostalgic for his predecessor, here we have a case where the Obama administration is fighting one of the few halting, tentative efforts of the Bush administration to actually improve matters. As a PTO press release stated, the current PTO Director "has signed a new Final Rule rescinding highly controversial regulations, proposed by the previous administration, that patent applicants felt unduly restricted their capacity to protect intellectual property." As Fulbright's alert notes, "The exact scope of the PTO's procedural rulemaking authority, a highly contested issue in this dispute, remains unresolved. The rescission of these rules may prove to be a tactical decision in a quest for greater PTO rulemaking authority. Despite the PTO's emphasis that these rules were proposed by the previous administration, the current administration, via Secretary of Commerce Gary Locke, is actively lobbying for substantive rulemaking authority at the PTO."

[LRC post; SK post]

Interesting post on Wired, Oct. 7, 1806: Do You Copy? Carbon Paper Patented, about Englishman Ralph Wedgwood, who received "the first patent for carbon paper." But this case only shows that simultaneous invention is common, and that inventions usually come one way or the other. As the report notes, Wedgwood's "work seems to duplicate that of Italian inventor Pellegrino Turri":

Turri in Italy had by 1808 completed an early typewriting machine he had been working on for several years. It, too, was for use by the blind and relied on some form of carbon-impregnated paper. So, his work was more or less simultaneous with Wedgwood's.

Also,

Scottish engineer James Watt, of steam-engine fame, had invented a tissue-copying process for business correspondence in 1779. But it required special inks and fluids and was a wet process for the user, so it didn't catch on.

[SK post]