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As if we needed a demonstration of the injustice of patents, RIM finally settled the patent-infringement suit against it by agreeing to surrender $612.5 million to NTP. BlackBerry will continue. But make no mistake about it: this is legal extortion.
NTP is a patent-holding company. It doesn't make things. Instead, it monopolizes ideas and sues others for infringing on its state-granted privileges. Here's how the Wall Street Journal describes the background of the case:
NTP was co-founded in 1992 by former patent examiner Don Stout and the late inventor Thomas Campana, who worked on ways to send emails wirelessly. In 2001, NTP sued RIM saying it held patents covering the"push" aspect of wireless email.
RIM wasn't accused of breaking into NTP's office and stealing something. It was accused simply of implementing an idea that Campana had"worked on" and had registered with the state.
This is (intellectual) property and protection of property rights? Balderdash! It is a license to extort. As the Washington Post reports:"Intellectual property attorney Donald R. Steinberg said the size of the settlement might spur more lawsuits from patent-holding companies, but that in most cases, a settlement is often desirable because it limits risk on all sides." What risk does the suit-filing patent-holder take? That his extortion might not succeed? This is"entrepreneurship in the Corporate State.
What great products aren't we seeing because of this corrupt system?
Patents are a key form of state-privilege by which people get rich at the expense of others. The patent system would have no place in a real free market. It is said that patents are needed to encourage innovation, but now the truth is clear for all to see. Patents suppress innovation. The notion of intellectual property rights has no justification. It fails both the natural-rights and"utilitarian" test. As Thomas Jefferson recognized long ago, ideas, lacking finitude, are not the kind of"things" to which the principles of property can be applied:
He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property.
Dr. Higgs writes: "First, to the extent that the idea itself has value, the thief steals it because he took something of value that had been created by another without the creator's permission. Is that not a definition of stealing? But for the creator's efforts, the idea would not have existed in the first place."
I am so often in agreement w/ the sound and profound Dr. Higgs that I had to think twice when reading this.
The error in this line of reasoning, in my humble opinion, is in the implicit view that there is a property right to value. I would not say that IP has no value, and "therefore" there are no rights in it; I would say that even though IP has value, there are no rights in it, because there can be no property right in value.
Property rights serve to assign owners to users of things that can only have one user; the purpose is to permit conflict to be avoided. In other words, property rights are bound up with scarce resources, in the sense of resources for which one person's use excludes another's. (I think this is roughly what some economists call rivalrous.)
Stepp writes, "I'm not sure I understand your argument, so correct me if I have misunderstood it."
Yes, it appears you have either midunderstood the sense of my comment or flown right past it into other things. I assumed that you would know what the classic imputation problem had to do with, and that by invoking it, I could get right to the point in my previous comment, but evidently I made a poor assumption.
In any event, this commentary has become, it seems, simply a back and forth between Stepp and Higgs. Recognizing that the world at large has no interest in it, I suggest we both look for other things to do.
William J. Stepp -
3/6/2006
I am wondering if anyone knows of a statistical database, particularly an easily accessible one, that contains statistics of rent or wealth transfers in "IP" cases, either by country (e.g., the U.S.) or by region (e.g., the E.U.)?
Thanks.
William J. Stepp -
3/5/2006
I'm not sure I understand your argument, so correct me if I have misunderstood it. Labor services and capital goods derive their value from the consumers' good they are used to produce. The present value of capital goods, but not labor services, is the discounted sum of their future rents. This is also the case for patents; they derive their value from the stream of rents they command, which can of course be zero, as is the case with an obsolete patent or capital good.
There are patent trolls building patent portfolio firms, such as ex-Microsoft CTO Nathan Myhrvold. A huge shelf of patents will soon be auctioned on Ebay. Etc.
The difference between patents and other types of capital is that the value of the former exists because of the "IP"-sanctioning legal regime, which is a necessary condition for their existence.
(The same is true for the value of slaves under slavery.)
A libertarian legal system would abolish "IP," so the value of patents--but not patented inventions-would plummet to zero. The value of some inventions would no doubt be marked down (to the free market level!), as competitors launched their own inventions that they previously could not.
Copyrighted works would also sell for whatever their free market value was. The copyright-mollycoddled stocks of the big media, music, and book publishing firms would take a hit (to their free market levels).
Or maybe not--maybe some of them would reinvent themselves to take advantage of the new legal system, gain a first mover advantage in whatever form they regrouped, etc.
The rents obtained by owners of "IP"-protected goods would be dissapated, the overall market would be more competitive, and the return to owners and productive factors
would still be determined by changing patterns of final demand, which would be greatly reconfigured in a libertarian legal system (for example, Napster would never have been shut down--it has since resurfaced with a different service).
Overall, the market would be bigger and more robust, inventors and creators (authors, musicians, etc.) would be free to create in ways they could not under the "IP" system.
There would be more innovation, contrary to the Law and Economics Establishment.
That patent perp in Virginia who ripped off RIMM wouldn't like it, but he's got lots of ill-gotten loot to last him longer than it took Anna Nicole Smith to blow through her late hubby's 6 Million.
William J. Stepp -
3/5/2006
The author of the idea does not own its value, which is determined by the market. He he has no control over this. This is why libertarians (Henry Hazlitt excepted) don't believe in libel and slander. No one owns his reputation just as an idea entrepreneur doesn't own the idea(s) he thinks up.
Let me clarify this comment. Someone who dreams up an idea does not own its value, which is determined by the market, and then usually only in a different form. This is true for whatever form his idea is embodied in, whether a patentable invention or a copyrightable work.
He only owns whatever copies he has legal title to. This title doesn't give him the right to prevent others using their own copies of something he created to make copies or derivative works.
The ownership of ideas is irrelevant. What matters is the ownership of their instantiated form; these can be owned by anyone, as well as works derived from them.
Robert Higgs -
3/5/2006
Your argument seems to me to be rather like solving the classic imputation problem by asserting, say, that labor services have no value because, absent cooperating input services (of capital, raw materials, power, etc.), the labor services could produce nothing. We understand why such an argument is incorrect, and why all the cooperating resource services contribute to producing the ultimate output.
Similarly, even though cooperating resource services are generally required in order to "do something" with an idea, one might equally turn the assertion around and claim that, absent the new idea, all those other resource services would avail nothing, because they would have no "plan" to follow, so to speak, as to how they are to be applied in producing a valuable good or service.
It's quite clear that the new idea AND the cooperating resources services have value. Why else would people pay royalties for the use of patented knowledge? If their other resources alone would turn the trick, they'd simply proceed to equal effect without using the knowledge for which they are paying.
William J. Stepp -
3/5/2006
First, to the extent that the idea itself has value, the thief steals it because he took something of value that had been created by another without the creator's permission. Is that not a definition of stealing? But for the creator's efforts, the idea would not have existed in the first place.
This is the Mark Twain line of ideas as property. (See his autobiography, chap. 57.)
Ideas by themselves don't have value; what has value is working knowledge, which is generally different from the idea that led to it. (Boldrin & Levine are very good on this point.) Ideas have to be converted into something to be valuable; my idea for a new business is worth nothing if no one (me or someone else) ever capitalizes on it by actually forming the business and then making a profit, which can be sustained.
Moreover, you can't actually own an idea in the sense that your "ownership" of it can preclude someone else's "owning" it, the way your ownership of a tennis racket prevents me from owning it.
To the extent that an idea has value, even if the value is derived from the idea, there has to be a lot more working than merely the idea for the value to be realized.
The idea of software is a nice idea; but it takes a developer or team of developers and some capital (if only computers, desks, chairs, etc.) to make it a reality.
The author of the idea does not own its value, which is determined by the market. He he has no control over this. This is why libertarians (Henry Hazlitt excepted) don't believe in libel and slander. No one owns his reputation just as an idea entrepreneur doesn't own the idea(s) he thinks up.
Reverse engineering someone else's invention is not theft; it's using one's own property to make a copy or imitation, and perhaps even to improve upon it. This is how innovation often works.
The greatest boon to creativity and innovation would be to abolish the copyright capo, the patent perp, and the license raj. We have to get over this idea that "intellectual property" is property. It's actually rent-seeking and theft.
I am not going to "steal" your idea of idea theft because I disagree with it.
Robert Higgs -
3/5/2006
Sheldon writes: "When I steal your apple, I now have it and you don't. When I "steal" (use of this term begs the question) your idea, I have a copy, but you still do also. How did I "steal" it? Not by breaking into your home; not by tapping your phone; but rather by observing its embodiment in an object that I either purchased or saw while engaging in non-rights-violating conduct. This resulted in my having a copy of the idea "in my head." I don't see the validity of calling that "stealing.""
I don't believe that this response covers the whole ground.
First, to the extent that the idea itself has value, the thief steals it because he took something of value that had been created by another without the creator's permission. Is that not a definition of stealing? But for the creator's efforts, the idea would not have existed in the first place.
Second, as one might have noted, I deviated from Sheldon's stipulation in the preceding observation by saying that the idea was taken without the creator's permission, whereas Sheldon stipulated no rights-violating conduct. Such clearcut theft, however, is not only conceivable but evidently common, if I am correctly informed with regard to the prevalence of so-called industrial spying. The case of reverse engineering a product sold onto the market or discovering its composition by chemical analysis raises less clearcut moral issues, yet it still seems to me that such actions entail one man's taking from another what would not have existed but for the other's efforts, to the gain of the taker and the loss of the creator.
Do we really suppose that this kind of conduct, whatever our judgments about its morality, entails no adverse incentives for creativity? I understand, of course, that creators may take all sorts of actions to mitigate the likelihood and the damages of such idea theft, but such costly efforts only manifest the unfortunate consequences of idea theft. We'd all be better off if we didn't have to lock our doors.
Andrew D. Todd -
3/5/2006
The reality is that governments pick up most of the tab for health care, and they regulate it extensively besides. For example, by now, there are computerized systems to keep track of which physicians are prescribing what to whom. The pharmacist has to feed the prescription into the system, and alarm bells go off if the prescriptions go over certain limits. They are especially sensitive about things like pain-killers. However, over time, a lot of the "Total Information Awareness" notions will percolate in. For example: automatic cross-referencing of malpractice cases from court dockets with prescription information. The inspectors will turn up at a physician's office because a) his prescription history fits a profile of physicians who have been sued, and b) he doesn't seem to be under any kind of discipline or control, ie. not working for a hospital or HMO. Likewise, they will probably correlate prescriptions with drug advertisements in national magazines, and woe to the physician whose prescribing habits turn out to track advertising expenditure.
The practical effect of this is that pharmaceutical manufacturers are de-facto government contractors, on much the same basis as defense contractors. Of course, European (and Canadian) health care is even more socialized than that in the United States. Europe tends to take a more conservative line about medical intervention, saying, in effect: "let the Americans go first, and use themselves as guinea pigs. It will be time enough for us to adopt new techniques if they actually prove to work on a large scale." This is reflected in drug expenditure. The European health care authorities drive a hard bargain, using governmental control of the national patent system as an ultimate club, and if it is pointed out that their price will not allow research, they express their indifference. So what it comes down to is that, one way or another, the United States government is going to have to pay the costs of new drug development, either directly or indirectly. No one else is willing to pay for the kinds of radical medical intervention into which new drug development fits.
There is an interesting book, William A. Knaus, _Inside Russian Medicine_ (1980). The author is an American physician with extensive experience in the Soviet medical system, and was able to develop a systematic comparison. At one point he describes taking some visiting Soviet physicians on a tour of his typical American Intensive Care Unit. The Russians looked around, took in how old and sick some of the patients were, and politely accused Knaus of "frankensteinism."
Given that the pharmaceutical companies are government contractors, it matters very little under which budget line they are paid. They can always be given "development contracts" for things like drug testing. So patents are ultimately irrelevant. Much the same thing applies to defense contractors, of course. The reality is that Uncle Sam is willing to pay for things which no one else is willing to pay for, because they cannot be turned into consumer products in the foreseeable future, and that necessarily defines the scope of research and development.
There are two keys to understanding CR. One is the rent-seeking angle, for example, a lttle patent perp trying to "get some" at Research in Motion's expense. Another example is playing out in a British court now, where two authors are trying to "get some" at Random House's expense, claiming that Dan Brown, author of The Da Vinci Code, "stole" "the architecture" of a book they wrote in the 1980s (also published by Random House), which became the basis for his book.
Question: if Da Vinci Code had been a commercial failure and sold a few thousand copies before being pulped, with no follow on movie deal, would this lawsuit have been brought (whistling in wind)? Wouldn't the "theft" have also happened in that case?
CR didn't evolve within the institution of the common law; it was always about monopoly and rent-seeking. The original CR machine was the Stationer's Company, an English printer that was given a plumb monopoly grant to print the King's documents in sxchange for towing the "party line" and not printing derogatory statements about His Royal Highness. When some years later the Stationer's realized that they couldn't retain their monopoly under the lobbying pressure of rival printers, they struck a deal with a few of them and brought authors into this unholy mix by agreeing to pay them royalties in exchange for having a monopoly to print their works. The authors liked this because the upstart pirate printers could now be sued for infringing their CRs.
As an aside, I read somewhere that, while CR was enforced in England for a few decades, it was not in Scotland. This led to greater growth and innovation in the Scottish printing industry, whereas English printers hid behind their CR monopoly and were insulated from competition to this extent.
I don't know if there's a parallel between this and the Scottish free banking thesis, but there might be.
Scotland, where free banking prevailed for decades, had financially stronger and more innovative banks, which were less subject to failure than their British counterparts. The latter operated in a more heavily regulated banking industry until the mid-nineteenth century.
A visit to Mr. Google uncovers dozens of articles on the history of CR, including full chapters with relevant material from The Cambridge History of English Literature. There's also a very good chapter (don't know if it's online) on CR in The Oxford Companion to English Literature.
The second key is a theory of property rights. A utilitarian defense of CR begs the question of a theory of property rights, which should encompass property in ideal objects in which ideas are embodied.
Rereading Rothbard's "Justice and Property Rights," I am still scratching my head how he could get from that to his mythical copyright stamp, which I gather he thought could be applied to inventions as well as creative expression in books, etc.
The bottom line is that you can't get from Locke's homesteading of nature (or whatever starting point you use), liberty, and nonaggression to "intellectual property," including CR.
Hayek made the point in MT&tTC (I think it was there) that periods of monetary upheaval are when the biggest advances in monetary theory are made.
We could probably make a parallel case that now is a time when similarly big advances might be made in the theory of "IP," given the CR and patent grab engineered by the government in league with rent-seeking New Class parasites the last decade or so. It's up to libertarians to advance the whole case for justice in property rights, including how it applies in the case of "IP."
That's why Boldrin and Levine's book is so important. It's a real advance on the first, utilitarian front, both on historical and theoretical grounds. But we must point out that neither they nor the authors of the recent working paper, "The Piracy Paradox," have gone far enough in drawing out a theory that justifies liberty and defends all of our rights.
Sheldon Richman -
3/5/2006
Oops. Chapter 9.
William J. Stepp -
3/5/2006
Sheldon is right; you can't steal an idea. You can only steal physical property.
If you don't want anyone to "steal" your idea, you always have the options of either not publishing it, or inventing a technology so that you can publish it in an encrypted form that cannot be copied.
Your copy"right" prevents me using my property (a justly acquired copy of your book) in a way I might want, by making copies of it.
The difference between libertarians and Boldrin and Levine is that we think we have a theory of property that can justify this; evidently they don't.
Sheldon Richman -
3/5/2006
When I steal your apple, I now have it and you don't. When I "steal" (use of this term begs the question) your idea, I have a copy, but you still do also. How did I "steal" it? Not by breaking into your home; not by tapping your phone; but rather by observing its embodiment in an object that I either purchased or saw while engaging in non-rights-violating conduct. This resulted in my having a copy of the idea "in my head." I don't see the validity of calling that "stealing."
Craig J. Bolton -
3/5/2006
O.K., let me try.
I think that the problem here arises from the historical evolution of law. The law of property arose and evolved somewhat separately from the law of contract, albeit most economists would today tell you that such a distinction makes no economic sense. For instance, many valuable "properties" like most financial assets [bank accounts, bonds, stocks, etc.]are "nontangible" and are generally reducible to a contract for someone else to do something upon demand.
There is even a thriving market for interests in term life insurance policies held by insureds who have been diagnosed with a fatal disease -albeit there is no currently "tangible" thing being exchanged and may never be if the original policy holder survives longer than the assignee cares to pay premiums. Same way with most option contracts.
That a man like Bohm-Bawerk, who was primarily known as an economist and who had not inconsiderable experience in financial dealings, should rest an argument on an historical division in the law is most strange.
As for the broader issue here, the question is not whether property [a legally recognized valuable right in a scarce thing] must be tangible, because it clearly need not be, but whether "property rights" in a particular thing are "properly" recognized.
For instance, in a famous case of about 30 years ago here in central Arizona, a major national home builder put in a subdivision within smelling distance of a stock yard. The new residents objected to the odor when the wind was blowing in the wrong direction, and filed a lawsuit. The Court could have thrown out the lawsuit on the grounds that there was no property rights in pleasant or ill smelling air, but it did not do so. Instead it recognized that such a right was valuable to certain people [witness their willingness to file a lawsuit over it] and determined that the holder of the right was the stockyard [since it existed first]. It thus allowed for a situation where the stockyard and the homeowners association could bargain over and had incentive to bargain over reduction of the smell without the all or nothing "solution" of destruction of the stockyard or abandonment of the subdivision. You can't have bargaining and adjustment of the other guy's actions if there are no "property rights" to bargain over and exchange.
Same sort of issues in the present instance. We all agree [at least I think that we all agree] that a higher rate of invention and of production of quality literary products is a good thing in the abstract. The issue is whether incentives should be given to such increased production by creating a right in the replication of new products, and, if so, what limits should exist on these sorts of rights. An answer to that issue is not derived from applying terms with inappropriate negative connotations, such as "monopoly," or trying to distinguish between "natural property rights" and "artificial property rights" [since all property rights can be shown to be "artificial" and contextual], or even by pointing out that frivilous law suits exist regarding a particular sort of properly right when that sort of property right is recognized. [If you don't think that there are frivilous and costly lawsuits over property rights that have been around for hundreds of years, like ownership and use of land, you haven't been near a courthouse in 50 years.]
Robert Higgs -
3/5/2006
You advise, "If you haven't read Tom Palmer, Stephan Kinsella, and Roderick Long on this, may I suggest their refreshingly bracing revisionist writings on 'IP'?"
Having read them and others along similar lines, and having found their arguments interesting but less than completely persuasive, the questions I raised previously remained in my mind, as they remain still.
No one has convinced me that I cannot steal a man's ideas as well as I can steal his car or his TV. And having stolen his ideas, I may be able to get rich to boot, while depriving him of the opportunity he otherwise would have had to get rich himself. Why is it unjust for someone to steal the apples from the tree I nurtured but not unjust for someone to steal the valuable ideas that I alone brought to fruition?
William J. Stepp -
3/5/2006
I'll defer to Boldrin & Levine on the European patent regime and will pass these along. I agree that they could strengthen their discussion with more concrete information about what innovations were made, the products they led to, and and where they were sold.
As for no one's having an incentive to put his name on my book and sell it, I fail to see why.
Because repuation matters in business. Do you seriously think people are going to patronize a sleazy publisher very long, one who has a reputation for posing as the author of someone else's book(s)?
Can you name an example of someone who has actually done this, other than (I think) the Clifford Irving case? Why didn't this happen when Dickens and other authors were having their works published by pirates? I know of no pirates who did this, although I'm open to learning otherwise.
What advantage would Joe Blow derive from slapping "Joe Blow" on _A Christmas Carol_, when everyone knew Dickens was the author? Who has the better brand name recognition--Joe Blow or Dickens?
If a buyer was confronted with two copies of the book, c.p., would he buy the one with Joe Blow on the cover or the one with Dickens?
(Which would have more resale value?)
People don't buy my book because my name is on the cover; they buy it, one hopes, for its contents, which reviewers can inform them about or they can sample for themselves prior to their purchase.
Authors have reputations and they matter a lot for sales, as any literary agent will tell you. I guarantee you that lots of people who bought _Blink_ and _Freakonomics_
didn't read it, but bought it because Gladwell and Levitt were must have authors. Gladwell has an amazing "installed base" of buyers (but not necessarily readers) who will go to see him at B&N, Borders, etc. at the drop of a hat. (I've seen them at a couple events.)
He has sold 3 million copies of his two books. Lots of them are collecting dust unread.
The same will happen for his next book.
In your case, is another scholar going to cite Joe Blow, _(name of your next book)_, in a research paper or book he writes? Doesn't he risk his own reputation by doing this? Isn't he going to get some pointed questions from you or people who know the truth, who presumably are 99.9% of the people who matter? Is he going to retain his job? Get tenure, if he's up for it?
Remember a "scholar" named Michael Bellesiles and his (ex-)job/reputation?
... Scientists and artists mix their labor with "nature" no less than the yokel who scratches the prairie with a plow and throws a few handfuls of buckwheat on it. Objections that another man might have independently come up with the same thing are plausible in some cases in some respects, but I'll wager that the odds of someone's independent efforts yielding a book identical to mine are exactly zero, and the odds of someone's even approximating it are nearly nil.
Scientists and artists mix their labor with justly owned property every day. Sometimes it's "nature" (going into the backyard and digging up earthworms [scientist], or maybe a piece of wood taken from a tree [artist]. Probably more often its a capital good bought from a store, such as an art store or an industrial or laboratory supplier.
As for someone else independently writing your book, the odds of it happening are nil (but not exactly zero). But this calculus is beside the point.
If someone secures a justly-owned copy of your book, he has a right to do anything he wants with it, save for using it to commit a crime, such as bashing someone over the head. His copy of a book you wrote is his property, not yours, catelleous copyright to the contrary. The range of legal activities includes making and selling copies (with or without royalties to you) in competition with the publisher(s) you contract with.
If you haven't read Tom Palmer, Stephan Kinsella, and Roderick Long on this, may I suggest their refreshingly bracing revisionist writings on "IP"?
Robert Higgs -
3/5/2006
I hold no brief for either the existing patent system or for the pharmaceutical industry. I am alive to the many objections that may be and have been raised against both. My questions are sincere, and I have entertained them without satisfaction for a long time, despite all that I have read about the matter.
I looked at the Boldrin and Levine book online, and I read its chapter on the pharmaceutical industry. I do not believe that these authors present anything that completely disposes of the questions I raised earlier or of the matter of patents in general. In fact, I found their presentation to be tendentious. Their discussion of Italy's pharmaceutical industry before and after drug patents in Italy does not present enough information about what kinds of products were being produced and what kinds of innovations were being made during the two epochs and where the products were being sold. Moreover, some of their discussions, especially that of Germany, seem to disregard willfully the import of the Germans' (and others) being able to patent their products in England and the United States, even if not in Germany (or another country) itself. The United States has long been the world's great market for such products, so the issue is hardly idle.
As for no one's having an incentive to put his name on my book and sell it, I fail to see why. People don't buy my book because my name is on the cover; they buy it, one hopes, for its contents, which reviewers can inform them about or they can sample for themselves prior to their purchase.
Finally, on a more general matter, I always see in these discussions what has long struck me as a physicalist fetish with regard to legitimate property rights. No doubt this goes back to Locke and his "mixing labor with land" notion of homesteading property out of nature. But I see absolutely no reason to give privilege to what can be held in the hands or stamped on with the feet. Scientists and artists mix their labor with "nature" no less than the yokel who scratches the prairie with a plow and throws a few handfuls of buckwheat on it. Objections that another man might have independently come up with the same thing are plausible in some cases in some respects, but I'll wager that the odds of someone's independent efforts yielding a book identical to mine are exactly zero, and the odds of someone's even approximating it are nearly nil.
William J. Stepp -
3/5/2006
Boldrin & Levine don't have the references they cite in their book up at their homepages (last I looked), but if anyone wants it, e-mail me at wstepp@nyc.rr.com and I'll forward it.
William J. Stepp -
3/5/2006
OUP or whoever your publisher is wouldn't be happy, but then capitalists don't like competition, do they?
I refer here to the case in which your name is on the cover of a "pirated" copy of your book and published by a competitor of the publisher you have contracted with.
Markets are not zero-sum games, contrary to an implication of "IP" apologists. "Pirated" copies of your book don't necessarily "steal" market share from your primary publisher.
William J. Stepp -
3/5/2006
I forgot to point out that no one would publish your book under his name, at least not anyone concerned about his reputation and the problem of being called a plagiarist.
If a drunken no name published your book and slapped his name on the front cover, presumably the jig would be up in about a nanosecond and no one would be fooled.
OUP or whoever your publisher is wouldn't be happy, but then capitalists don't like competition, do they?
William J. Stepp -
3/5/2006
The pharmaceutical industry is always Exhibit A in the case for patents, given the R&D investment and long lag between discovery/innovation and time to market.
Boldrin and Levine confront this myth head on in chap. 9, "The Pharmaceutical Industry." They show why innovation and investment can proceed without "IP" and why "IP" actually impedes drug innovation.
Without summarizing their case, they point out that proprietary drug firms in Europe more than held their own on the world market despite weak or nonexistent patent regimes.
For example, Italy had no drug patents until 1978, and had a more innovative pharmaceutical industry during that time than it does now.
And contrary to Paul Romer, who seems to think that the MC of producing a generic drug = 0, generic drug firms spend a considerable portion of their revenues on R&D. Some spend as much as 5% annually.
He seems to think you can just go into your kitchen and whip up a batch of a generic drug. It's not quite that easy.
B&L also point out that part of the apology for patent protection by the drug industry is the high cost of bringing pharmaceuticals to market, which includes legal and advertizing expenses. The drug industry has sponsored several studies making this point, but they are suspect, as they point out. Even if their inventions should be patented (and I claim they should not be), why should their marketing and legal costs (much of which are caused by the FDA) be patent-mollycoddled? The Constitution says something about inducment for inventors, not marketing gurus and legal geeks. It also says nothing about outside shareholders "gettin' some," as the copyright-protected Rolling Stones would say.
The pharma industry is not the only one with high "fixed" costs and large initial investments. Steel firms and airlines certainly fit this model, but they don't have patent protection, at least not for this reason.
Regarding the book you spent half your life writing, if a publisher you had not contracted with (not OUP obviously) published "pirated" copies of your book and didn't pay you royalties, Dickens-style, you should actually be shouting from the rafters and giving them high fives.
(Of course, if they saw fit to pay you, you'd be even happier.) The reason is they are spreading the good word and enlarging the market for your book--and for your reputation. And maybe even paving the way for you to make more money, by speaking engagements and other ventures. Think of it as free PR. If they are really good, and sold, say, a million copies of your book, would you complain? If you could make $40k per gig, as Mr. Gladwell is, would you turn it down?
B&L have an excellent discussion of this in their history of the book trade. U.S. book publishers sold pirated editions of European authors' works for a fraction of the cost in the Old Country. Some actually paid royalties to the authors. This helped spread literacy in America, which in turn enlarged the reputations of European writers and the market for their books.
And contrary to historical legend, Charles Dickens didn't get ripped off by American publishers, whatever that might actually mean. In fact three of them paid him royalties, although he complained to his friend and biographer John Forster that only one did. He wrote to Ticknor & Fields that, "In America the occupation of my life for thirty years is, unless it bears your imprint, utterly worthless and profitless to me." Harper & Brothers and T. P. Peterson and Brothers took exception to this prevarication and pointed out that they had paid him for years. (B&L were unaware of this when I pointed it out and said they might want to note it for the record. I don't know if it will make it into the rewrite they are doing now.)
The publishers that didn't pay him were well within their rights by the legal standards of the day, and certainly by libertarian legal theory circa 2006.
Now excuse me while I go into the kitchen and whip up some generics. Back in five.
Sheldon Richman -
3/5/2006
Chapter 4 of Against Intellectual Monopoly (www.dklevine.com/general/intellectual/against.htm) discusses the worldwide pharamceutical industry historically in light of differing patent regimes, including no patents at all. The case of Italy is illuminating.
Robert Higgs -
3/5/2006
I don't know anything about the BlackBerry, but I do know something about pharmaceuticals. In recent years, the average FDA-approved new drug has cost more than $800 million by the time it reaches the market, and nearly 15 years have been spent by its developers in research, development, clinical testing, and FDA-approval-related delays.
Now, what all this time, effort, and money produce is, literally, a chemical formula--something you can write down on one sheet of paper. Moreover, once the product is placed on the market, a chemical analysis can reveal its composition easily and cheaply. So, anybody who wants to begin making and selling it has little standing in the way.
It has always seemed odd to me that someone or some group of investors who sacrificed so much of their own property in order to produce, at great risk, such a (sometimes life-saving) formula has no special right to the end result of all that toil and trouble. You may say, nobody has a natural right to a formula. I am not convinced. The formula was not just sitting out there "in nature."
In any event, sans patents, I have grave doubts that anybody would be willing to sink a billion dollars and fifteen years into developing such products.
Can it be that justice requires us to forgo the creation of such products?
I know, futher, that if I spent half a lifetime writing a book and then, when it finally reached the market with great potential payoff for my efforts, others simply copied the thing and sold it under their names, I would be mightily tempted to suspect that an injustice had been done to me. Am I wrong?
William J. Stepp -
3/4/2006
Another suggestion I made in an e-mail to Boldrin and Levine is to start a blog. MB said they might do this, so stay tuned to their home pages.
William J. Stepp -
3/4/2006
Although patents interfere with using ideas, they are aimed proximately at inventions, contrary to David Friedman, who says that
"[p]atents are not on objects but on ideas" (_Law's Order_, 131). A patentee tries to patent an invention, not an idea, or its expression, which is what copywrong is about.
A patent prevents an inventor from using his own property, just as a copy"right" prevents a copier (or author, or other intellectual creator) from using his own property by copying or making marks on it, etc.
Michele Boldrin (who I met with Wednesday between his visits to Columbia and NYU) and David K. Levine point this out in their forthcoming book, but don't have a theory of justice in property rights to support this. In response to my query about this point, MB said that they think that property is an arbitrary convention. He also said that most economists support "IP" because of lucrative consulting contracts and other self-interested reasons.
Their book is going to be the blockbuster of the year IMO, and has the potential to kindle the most important debate at the intersection of law, economics, and public policy in a long time. I suggested they go with a non-academic publisher, such as William Morrow, which did _Freakonomics_, and try to get Steven Levitt to write a forward. Instead they are considering Solow, who is sympathetic to their position. (But who would have greater best-seller drawing power?) And yes, I do think they have a potential best-seller, with a proper marketing job, op-eds, talk shows, etc. This is a hot area and is only going to get much hotter.
Andrew Todd makes some very good points in his post. Rambus is mentioned in Kopin Tan's column in "Barron's" today. He points out that their litigation expenses are over $30 M annually. In fact, they are almost half its SGA expenses and have been for years, and nearly as much as the firm's R&D.
The investors' section of its website has a link devoted just to litigation. What a bunch of parasites.
When _Against Intellectual Monopoly_ (or _Against Intellectual Property_, as Boldrin would rather call it, with a nod to the left and Proudhon) is published, it ought to get into the hands of every IO economist, "IP" lawyer, and judge in the land, including the Supremes.
Then this most underappreciated of assaults on liberty, property, and prosperity would receive its long due commupeance; the Rambus's of the world would have to "get a real job"; and the Research in Motion's could innovate in peace and earn all the fruits of their investment.
Sheldon Richman -
3/4/2006
In support of Andrew's comment, this is from BusinessWeek re the BlackBerry dispute:
"Not all of [inventor Thomas] Campana's associates support his legal battle. [Murali]Narayanan ended up testifying on behalf of RIM. 'I was surprised [Campana] got the patents,' he said. 'As a computer guy, putting e-mail and paging together seemed obvious to me.'"
Andrew D. Todd -
3/4/2006
In the first place, I take it that Craig J. Bolton is the lawyer and sometime economist from Phoenix, Arizona, correct? Doing a Google search, I was not able to find any indication of his standing in the engineering or software development community. His website does not suggest any expertise in technology-related aspects of law.
The weight of experience among engineers is that virtually all economically significant patents are spurious, in the sense that the patentee was not in fact the original inventor, or that the patented matter was immediately obvious to one skilled in the art. This especially applies to "combination patents." One of my favorites is the patent for teasing a cat with a laser pointer (in lieu of a piece of string). Further, it has been found with monotonous regularity that the patentee engaged in what amounts to insider trading with a standards committee (the Forgent and Rambus patents). Another technique is to make a patent so deliberately overbroad, and so indefinite in its language, that it could mean practically anything. It can be claimed after the fact that the patentee really meant the matter which his victim is alleged to have infringed. The cumulative weight of experience, furthermore, is that the management of the patent office knowing colludes in the issuance of spurious patents, and does so as a profitmaking business. The patent office collects fees from applicants, and has a vested interest in keeping the applicants happy. There's a name for judges who do that kind of thing. The patent office is in fact a Racketeer Influenced Corrupt Organization.
My experience confirms this. I have been peripherally involved with three or four patent matters, of varying degrees of seriousness. My initial encounter was when someone else patented matter which I had published in a scholarly journal some years previously. It never came to anything, as the patentee's proposed commercial use of the system I had published was quite unrealistic, and he never reached the level of trying to shake anyone down for royalties. This sensitized me, and whenever I heard of similar cases, I asked myself whether I knew anything which might help the defendant, and if so, I sent it on, pro bono. I have a good memory for things I read a long time ago, and I have repeatedly been able to locate documentary evidence of prior art, thirty and forty years old, pertaining to patents granted within the last five or ten years (*). The patent office proceeded in ignorance of 1960's best-sellers, for example, Alvin Toffler's _Future Shock_. Greg Ahronian has made some comments about the general mental capacity of patent examiners (or rather the lack thereof).
(*) One old engineer commented, sardonically, about one case, that (quoting from memory) "the matter was old hat when the patentee was still deciding on solid food." I would prefer to refer to the other end of the digestive tract, myself, but let that pass.
Thus, in discussing patents, we have no need to progress to the issues of law and policy. The supporters of patents literally do not have a leg to stand on. They are trying to misappropriate things invented by other persons, which were previously in the public domain. The situation is rather as if someone had tried to file a "homestead" claim on land in a public park which had been donated to the city by a public-spirited millionaire a hundred years earlier.
Sheldon Richman -
3/4/2006
Clearly, my condemnation of patent-holding companies is that what they hold and bar others from using are ideas. My argument would not apply to tangible property. The monopoly, moreover, is a state grant, not the result of voluntary exchange. It would be impossible without the state. So there is no aid and comfort for antitrusters.
I see nothing silly in Bohn-Bawerk's argument. Please explain.
Craig J. Bolton -
3/4/2006
I agree with Shelton's basic premise [or is it his conclusion?] in this blog entry [as I do with most other of his premises and conclusions] but I think that at least part of the argument he presents is defective.
Namely, the following makes no sense: " NTP is a patent-holding company. It doesn't make things. Instead, it monopolizes ideas and sues others for infringing on its state-granted privileges."
The problem with that argument is, of course, that it has been used to attack every property rights system that has ever been proposed or ever existed. If you're going to have ownership of something, as opposed to mere usufruct rights, then some people are going to exercised their ownership rights in ways that other people think are "not productive."
Most property rights most places are enforced by what is loosely referred to as a "government." Unfortunate, perhaps, but that's the way things are.
Similarly, the "monopolization" argument. Property right imply [rest upon?] the right to exclude others from use of what you own. That isn't "monopolization." To start using terms in this way is to invite the conceptual confusions on which antitrust law is built.
None of that, of course, goes to the basic arguments for or against "intellectual property rights," in fact, those arguments are an unnecessary and unproducive distraction from the actual reasons for or against such "rights."
IMHO the real arguments come down hard against copyrights [but, perhaps not against a "right of identification"]and they also come down, albeit somewhat less categorically hard, against patents -at least expansive and long term patents. The Bohm-Bawerk categorical arguments [that require that there be a tangible thing to have property] are, however "simply silly."
