In response to my Reducing the Cost of IP Law, my friend and ex-colleague (and mentor) Steve Mendelsohn, a patent lawyer in Philadelphia, wrote me the following. N.B.: Steve is not a libertarian but is honest and smart, unlike patent shills (he's also an excellent patent attorney, if you need one). Here's an edited version of his comments, posted with his permission (for comments from another honest patent lawyer, see here):

I agree with much of what you say and don't necessarily disagree with most of the rest. For example, I agree with you that we don't know whether the patent system is doing what it says it's doing as far as adding more than it's subtracting. (You might know the answer to that question, but I agree that "we" don't know.) I do believe that the system can be significantly improved without getting rid of it completely. Again, it is possible that the world would be better off without a patent system, but I'd rather see it improved first. (I think that our federal government needs a lot of improvement, too, but that doesn't mean that no government is better. I can't help but look at Somalia as an example of a country with no centralized government. But perhaps you've got a better example to point to.) (For now, I'd better stick to patents per se and not use them as a metaphor for government in general.) To me, the biggest problem with the current U.S. patent system is the granting of patents for inventions that are not novel and non-obvious due to the incompetence of the U.S. patent office. Just last week I was advising a client that I didn't think that their invention was patentable. I had to qualify my advice by explaining that that did not mean that I didn't think we could get a patent for the invention, just that I thought we shouldn't be able to get a patent for the invention. I can't tell you, but I suspect you've experienced this yourself many times, how many patent applications I've prosecuted over the years where I get the U.S. patent issued only to have the European, Japanese, or Korean patent office subsequently find better prior art and apply that art with a more-accurate understanding and appreciation about what it takes for there to be a patentable improvement over that art. The result is either an issued foreign patent with claims of much-reduced scope or an abandoned foreign patent application. Either way, there remains an issued, presumptively valid U.S. patent of unknown value. The presumption of validity is legitimate only if the U.S. patent office is doing a good job. Since the U.S. patent office is not doing a good job, I agree with you that the presumption of validity should be eliminated.

For years I have been wondering what the EPO, JPO, and KIPO are doing right that the USPTO is not and why can't the USPTO look and see what the EPO, JPO, and KIPO are doing to figure it out and then adopt it. It reminds me of the time that Bush's first crony appointment to head the PTO came to our PIPLA meeting and told us "We've got the best patent office in the world." In reality, we wouldn't even get the bronze metal. Our typical American chauvinism prevents us from looking elsewhere for improvement.

I am one of those many patent lawyers who would hate to have to provide search results and explain how my clients' inventions were patentable over those search results. Nevertheless, perhaps the default (an invention is assumed to be patentable until the patent office proves otherwise) needs to be reversed.

Until the PTO gets its act together, one way to challenge some of these bad patents is through the ex parte reexamination procedure. It's certainly not perfect and not free, but I'd bet it's a lot cheaper than litigation as a way to defeat bad patents on a case by case basis. I'm only now in the midst of working on my first ex parte reexam for a client who is trying to knock out a competitor's bad patent. The particular claim at issue is incredibly ridiculous. The client managed to knock out claims (in a first reexam) directed to a particular type of device having [an Oscillator Type A], a particular configuration for oscillators that has been around for about 60 years. The remaining claim is directed to devices that do exactly the same thing using [an Oscillator Type B], another particular configuration for oscillators that has been around for about 80 years! Because the main reference didn't happen to discuss [an Oscillator Type A], the Examiner allowed those claims, presumably without any knowledge or appreciation for the interchangeability of those different types of oscillators. It's too early to tell whether we will prevail.

Steve Mendelsohn Mendelsohn, Drucker, & Associates, P.C.

[Mises; SK]

No, not me. Michael F. Martin, a patent attorney with Drinker Biddle. The March 2010 issue of Liberty (which also features a letters exchange regarding my December 2009 Liberty article, Intellectual Property and Libertarianism) features the following guest reflection by Mr. Martin:

Sane and sound "The hallmark of sanity is to remain firmly tethered to reality," said the federal judge to the parties of a patent infringement litigation between a large Canadian computer company and a small, patent holding company (a.k.a. "patent troll") after a jury had found the computer company liable for infringement. The computer company in question? Research In Motion, makers of the Blackberry. The case finally settled for $612.5 million.

That was March 2006. In May 2006 there followed the Supreme Court's announcement of its decision in the case of eBay v. MercExchange. In eBay, the Supreme Court overturned the Federal Circuit rule that permanent injunctions should issue against patent infringers "absent exceptional circumstances." Many large companies in the software industry, which tend to be defendants, have hoped that eBay would put an end to "patent trolls" and their own patent infringement liability. Indeed, since eBay only a handful of injunctions have issued to patent owners who do not practice their invention. "But," wrote the Supreme Court in eBay, "traditional equitable principles do not permit such broad classifications." And thus, just over three years later, on Dec. 22, 2009, the Federal Circuit upheld an injunction and award of $290 million in damages for patent infringement this time to a small Canadian startup, i4i Inc. The defendant was Microsoft Corporation, maker of Microsoft Word, which had incorporated into its software an XML editor patented by the startup.

The difference between the cases? Unlike the "patent trolls" in the earlier cases against RIM and eBay, one of the inventors behind the i4i patents, Michael Vulpe, was also an entrepreneur, who had started a business to commercialize the patented concepts.

Although Vulpe's apparent victory should be an occasion for rejoicing by libertarians (most of them, anyway) and other believers in strong property rights, one wonders what reality is faced by inventors without the desire or skill to become entrepreneurs.

Some might say the law has, at least for the moment, achieved a delicate balance between the exclusivity needed to encourage investment in new technology and the access needed to spread that new technology around. Others might say that a better way to determine what "reality" is most "sane" is to rely on private negotiations based on the principle of strong property rights. The eBay decision discouraged negotiation; the recent decision may lead to more negotiation and less litigation. Michael F. Martin

Martin writes as if oblivious of the fact that libertarians are increasingly opposed to IP rights (see my Have You Changed Your Mind About Intellectual Property?; Against Intellectual Property; and other material here); as when he writes, "Vulpe's apparent victory should be an occasion for rejoicing by libertarians (most of them, anyway) and other believers in strong property rights..." Vas...? We should rejoice that i4i was able to use the state-granted patent monopoly to impose millions of dollars of cost on Microsoft? Why? This presupposes that IP rights are legitimate "property rights." (Not to excuplate Microsoft from charges of hypocrisy: see my post Microsoft Wants Galactic Patent. The recent case mentioned by Martin is i4i v. Microsoft.)

Let me go through Martin's post in a bit more detail. First, his post implies that patent trolls are problematic (a patent troll was behind the $612.5 million Blackberry settlement), while actual inventors who have "commercialized" their own patent are good guys (Vulpe, the i4i inventor in the Microsoft case) and are justified in using their state monopoly grants to (legally) extort money from others. But patent trolls are not the problem at all (see my posts Patent Trolls and Empirical Thinking; Facebook Threatened by a Non-Patent Troll). The patent system does not require the patent owner to practice the patented invention or even to make an actual working model (see my "Reducing the Cost of IP Law", where I recommend imposing working and reduction-to-practice requirements on patentees, which would reduce patent trolling; I don't see Martin recommending this). Martin implies it's good--and libertarian, supposedly--that "the recent decision may lead to more negotiation and less litigation". What is libertarian about this? If the legal system grants clear, strong rights to a patentee to allow him to (legally) extort money from his victims, of course that may lead to "more negotiation" and "less litigation." Why is this good? If the legal system makes it crystal clear that the victim will lose in court, thus reducing the need for wasted time in litigation, this is not good, if the victim's losing is unjust.

In fact, this is exactly what happened in the Blackberry (RIM) case that Martin holds out as an example of injustice. In that case (see my post Woops, sorry, Blackberry!; also The Age of Technocide: RIM Pays Out Again Over Patents), RIM coughed up $612.5 million because of the possibility an injunction issuing--even though the patents in question were being re-examined at the US Patent Office. But even though it appeared likely they might be declared invalid a few months later, the courts were then operating under pre-eBay caselaw which made an injunction easy to get. In other words, the court in the RIM case was about to issue and order shutting down the Blackberry itself, even though the underlying patents' validity was in question and being re-examined at the PTO. This would have ruined RIM. So it caved, paying a huge ransom to save the company. If there had not been a threat of injunction, RIM would certainly have just fought the case--instead of paying almost a billion dollars!--and maybe the patents would have been declared invalid, and they would have walked away $612.5 million richer. That's why eBay was a good decision--for libertarians, at least, since it made injunctions less automatic, harder to get (see Woops, sorry, Blackberry!; I also discuss the eBay case in Radical Patent Reform Is Not on the Way). And that's why in Reducing the Cost of IP Law I recommended the abolition of patent injunctions. Martin acts as if he opposes the Blackberry settlement, blaming it on patent trolls (but without advocating a working or reduction to practice requirement, which would limit trolling), while favoring the granting of injunctions which was the real cause of the outrageous injustice done to RIM. (For a discussion of the pro-patent approach of patent attorneys, see "The Silent Bar" section of Reducing the Cost of IP Law.)

I see here a libertarian patent lawyer who is taking it for granted that patents are legitimate property rights--presumably because he believes the law should grant a monopoly license to provide "the exclusivity needed to encourage investment in new technology." Patents are not legitimate property rights. They are mercantalist, monopolistic abominations. Libertarians, including libertarian patent attorneys, should oppose the patent system.

[Mises; SK]

My article "Intellectual Property and Libertarianism" was published in the December, 2009 issue of Liberty; the March 2010 issue features the following exchange in the "Letters" section.

Philosophizing IP

Thanks to Stephan Kinsella for questioning the justice of intellectual property ("Intellectual Property and Libertarianism," December 2009). Like many libertarians, he posits property rights as the foundation of libertarian political theory, and suggests that because it is a derivative concept, we stop calling the nonaggression principle an "axiom." So far so good. But Anthony de Jasay suggests that the concept of "property" itself should in turn be considered derivative, from the still more fundamental principle of liberty of contract. De Jasay also defines "rights" and "liberties" more carefully and usefully than most libertarians, who use these loaded words all too loosely Kinsella included. (See de Jasay's "Choice, Contract, Consent," or "Before Resorting to Politics," reprinted in "Against Politics.")

Kinsella's attempt to show that no well-formulated property rights can apply to pure information seems dubious. Yes, information can escape physical confines and reproduce in ways that physical objects can't, but so what? Perhaps the real question is not whether IP should be classified ontologically with other forms of "property," but whether voluntary agreements can be reached (without the help of legislatures) that would make revelation, or publication, or mishandling of information a tort. Clearly some can; what of contracts to protect trade secrets, and other nondisclosure agreements?

Never mind that the concept of "self-ownership" has philosophical problems that Kinsella does need to take more seriously. I've been suspicious of "property rights reductionism" ever since I noticed that it led Rothbard to believe in his own IP rights as an author of copyrighted writings, even as he disparaged the IP rights of professional inventors. At least Kinsella avoids this inconsistency (if that's what it is).

Kinsella is right to seek the philosophical foundations of the IP question; let's hope he keeps digging.

Lew Randall Freeland, WA

What Would Edison Do?

It was a pleasure reading Stephan Kinsella's piece "Intellectual Property and Libertarianism." I'm in agreement with its content as regards the nature and source of property rights. What I find impossible to accept is the view that there is no good utilitarian argument in support of legislated patent and copyright law. Would Thomas Edison and his financial backers have invested so much time, effort, and money just for the pleasure of exercising intellectual creativity? I certainly wouldn't, and I suspect I'm not alone. Having said this, in a free society, would it be a legitimate government function to establish rights where none "naturally" exist, even if the consequence of such legislation would foster an improvement in the quality of human existence? By establishing such rights, or should I say "privileges," wouldn't the freedom of action of others be curtailed? Formulated this way I opt for principle over utility, as the slippery slope comes to mind.

Howard Shafran Shelter Island, NY

The Property of the Mind

Before finally getting around to the topic of his article on intellectual property, Stephan Kinsella trumpets the proposition that each person "owns" his own body; he "inhabits" it; he is its "occupant" and Kinsella uses those very words. He dismisses as "silly wordplay" the objection that each person just is himself or his body. But who is perpetrating wordplay? Who is tainting sound political philosophy with dubious metaphysics?

Kinsella echoes the old mind-body dichotomy, the notion of the self as "the ghost in the machine" (Gilbert Ryle's derogatory description of Descartes' dualism). On the contrary, each person's mind and consciousness are functions, remarkable functions, of his body and specifically his brain. Does Kinsella really mean that the self is distinct from the body? Does the one survive dissolution of the other? (Does the self exist even before its body is born?) Does Kinsella believe in ghosts or angels? What evidence, beyond very dubious evidence, can he cite? If Kinsella does not really mean what he says, he should use more exact words.

The self-ownership slogan finds some resonance in libertarian circles. But libertarians should go beyond displaying their authenticity to each other; they should try to persuade nonlibertarians. They should avoid irrelevant metaphysics. They should put their best foot forward, not their worst. I do not mean that they should dilute their libertarianism; rather, they should present it attractively.

Perhaps Kinsella could find some (feeble) excuse for his metaphysics, but he would still be putting a worst foot forward.

Leland Yeager Auburn, AL

Copy Shop

Stephan Kinsella's argument against IP is seriously flawed. For instance, he states that copyright is "received automatically, whether you want it or not, and is hard to get rid of." Copyright, that is, the right to make copies of your work, is inherent in the creation of the work. It is not "received" by law. You can waive your copyright easily by simply making copies and distributing them without the required copyright notice. Copyright law recognizes, defines, and controls to some extent your rights to control the copying and dissemination of your work.

He also states that "We libertarians already realize that . . . the right to a reputation protected by defamation law" is illegitimate. This libertarian does not realize such illegitimacy. The libertarian principle is that no person has the right to initiate aggression against another. Spreading lies or untruths to destroy the reputation of another person is clearly within the definition of aggression.

Kinsella makes a number of references to "homesteaders," mainly, I believe, to emphasize the difference between property that you can hold in your hand, i.e., the soil from your farmland, and the more ephemeral IP which is snatched out of thin air and dissipates in the wind, i.e., the sound of a melody. However, this comparison overlooks the intellectual content of real estate (property) improvement. A farmer who homesteads a parcel of land must decide what crop will be successful on that land. A pineapple ranch in North Dakota will not succeed. Once the crop is chosen, the farmer must implement a plan for the planting and harvesting of the crop. In the case of, say, music, running a melody over in your head or tinkering on a piano is just the beginning of the creative process. It must be transcribed and carefully inspected to make sure that each note is properly chosen and placed. Then you can make your copies, register the copyright and begin selling copies of your work. With a little luck, someone may make a successful recording.

Patents are similar. You come up with the idea, develop it into a saleable product, manufacture copies and sell them. When a buyer buys a copy of your work, either invention or literary work, what does he buy? Under the law, he buys that one copy of your invention. Defining what is embodied in that one copy can get messy because the human mind is messy, but the buyer does not buy anything other than that one copy. He cannot make copies and distribute them.

So what can you do with your copy of the work or invention? You can write a critique of the song or story, quoting reasonably from the work itself to illustrate your points of argument. You can read the story or sing the song to your friends for their enjoyment. You can take your copy of an invention and modify it to suit your needs. You can strip it of unnecessary decoration that does not make it work better. You can take it apart to see how it works, or to repair it or to improve the design so much that you feel justified in applying for a patent on your improvement. You can sell it to someone else. You cannot, however, begin manufacturing the item and selling it. That is true whether the item is a widget, a book, a sheet of music, or a recording.

David Kirkpatrick Klamath Falls, OR

Body of Work

Although Stephan Kinsella's article on intellectual property moves smoothly enough from premises to conclusions, those conclusions are (to me at least) so counterintuitive that the argument acts as a reductio ad absurdum, undercutting his premises rather than proving his conclusions.

Let us say that a given work exists only in the memory of the author's computer. At this time the work could not be more obviously the author's; in a keystroke he can change it in any way, or abolish it forever. Overnight a hacker invades the machine, copies the work, and reproduces it. This is theft, is it not? If so, then the author retains ownership of the work even after it has left his hard drive. Why, then, would his ownership suddenly be reduced to naught at the instant that he sends it off to a prospective publisher? Reportedly, a British firm offered to publish "Lolita" if Nabokov would consent to the removal of four sentences. Nabokov refused, and the book was not released in Britain until a year later, by a different publisher. Surely this was right.

Kinsella takes it as axiomatic that one's property rights begins with one's own body. I think that many authors would consider their ownership of their works as more intimate, and more obvious, than their ownership of their bodies.

Jamie McEwan Lakeville, CT

Kinsella responds: Mr. Randall asks whether trade secret and nondisclosure agreements could be used to construct a form of IP. I do not believe they can, because such agreements cannot bind third parties. Only by assuming that knowledge is a form of property can you bind third parties, but this assumes there is IP. I address this in further detail in the "Contract vs. Reserved Rights" section of "Against Intellectual Property," available at StephanKinsella.com. As for philosophical problems with the notion of "self-ownership" self-ownership just means that you have the right to decide who touches or uses your body, not some other person. What could be more libertarian, or less controversial or problematic?

Mr. Shafran is no doubt right that Edison or other patentees may have benefitted from the patent monopolies granted to them by the state. But the utilitarian case requires a benefit to the economy as a whole, not merely to particular beneficiaries of wealth redistribution. Studies almost universally conclude that there is no such gain that patents actually restrict innovation. See the post at tinyurl.com/pat-innov for more information on these studies.

Professor Yeager misunderstands my comments. I am, like him, nonreligious. Viewing the mind as distinct from (though not unrelated to or independent of) the brain, and the self as distinct from the body, does not imply a soul or ghosts or angels. It does not imply that there can be a self without the body, or a mind without the brain. It merely implies a distinction. One may think of the mind as an epiphenomenon of the brain, but it is not the brain itself. Likewise I can run and remember with my body but running and remembering are not the same as my body. The "silly wordplay" I referred to is the use of the trite observation that we "are" our bodies (in some real sense) to object to the idea of self-ownership. But atheism is not contrary to self-ownership. Self-ownership is the libertarian idea that you have the say-so over who uses your body that others need your permission. Self-ownership is the rejection of slavery and aggression. It is perfectly compatible with the idea that there is no soul; that you die when your body dies. In any event, Yeager's atheism does not prove there are intellectual property rights, or that we are not self-owners.

Mr. Kirkpatrick upbraids me for stating that copyright is received automatically. He asserts that copyright may be waived "by simply making copies and distributing them without the required copyright notice." Wrong. Copyright notice is not required at all, nor is copyright registration. See Sections 102 and 401 of the Copyright Act, or the "Copyright Basics" brochure at copyright.gov. Copyright notice has not been needed since 1989, when the law was amended per the Berne Convention.

As for reputation rights, Murray Rothbard explained in "The Ethics of Liberty" why there can be no reputation rights: your reputation is merely what third parties believe about you. You do not own their brains or what they think about you; they are entitled to change their minds about you. Kirkpatrick writes, "If I grow a potato in my back yard, it is my potato. If I write a song in my kitchen, it is my song. They are both my property." By such reasoning one could argue that you own your wife, your parents, and your country (note the possessive pronoun!); if you discover that the earth is round then "it is my discovery" and you could own that fact. The mistake here is in failing to realize that not every "thing" that one can conceptually identify is an ownable type of thing. Scarce resources are capable of being owned because of the possibility of conflict over use of such things. Other things, such as "songs," information, and patterns are not ownable things at all. In acting, humans select scarce means to achieve desired ends. Their choice of ends, and means, is guided by information. To successfully act, the scarce resources employed as means need to be owned, because by their nature as scarce resources only one person may use them; but the actor need not "own" the information that guides his choice of means, since he can use this information even if thousands of other people also use this information to guide their own actions.

Mr. McEwan is correct that the hacker is a thief, since he is using the author's property (his computer) without his permission. But this does not mean that the information he gains access to is property. If the author revealed some private fact say, that he had a glass eye and the hacker discovered this and revealed it to the world, the author would have no right to demand that everyone forget this fact or not act on it. Likewise if the information was a novel, musical composition, recipe for a nice soup, or schematic for an improved mousetrap.

[Mises; SK] [Mises; AM]

The Supreme Court decided Citizens United v. Federal Election Commission this week link here. It declares that corporations and other groups have the same rights as live humans. The left considers this a great defeat which will lead to a flood of corporate money in elections to the detriment of the average voter while the right only sees a justified extension of corporations and other groups freedom to speak and spend money to affect political races.

Professor Juan Cole in his blog, Informed Comment, asks a sensible question: Does this decision really change the amount of corporate money in political campaigns? The cynic might note that both parties seem to be captive of one interest group or another. Another blogger noted that TV time for political ads is already fully spoken for.

There is some irony, however, when one notes that both Chief Justice Roberts and Associate Justice Alito carefully claimed to be judicial conservatives and would stick with precedent. In fact, they are turning out to be radicals of the right. Stay tuned to learn the new surprises they have for us.

From the comments to Reducing the Cost of IP Law (see also my post The Non-Aggression Principle as a Limit on Action, Not on Property Rights):

Russ:

"...You are (in effect) assuming that only scarce (and hence physical) entities can be "property" in order to "prove" that ideas and patterns cannot be "property"."

I agree, Stephan. In Randian terms, you are smuggling in as an assumption that which is to be proved; that only scarce goods can qualify as property. In your own terms, you're begging the question, every bit as much as you accuse others of doing.

Kerem: "How is, "IP is not valid because it infringes on the property rights of others" is an independent argument when it depends on the never proven but often assumed assertion that only scarce things can be property?"

It does not assume that ONLY scarce things are property, but it assumes that scarce things ARE property--don't we all agree on this? The one that is up for debate is property in anything else. My contention is that assigning rights in non-scarce things necessarily undermines rights in scarce things. Since we all agree with rights in scarce things, we should oppose the type of rights-inflation that undermines this.

Surda:

any theory of property restricts the way some people may act.

Let's be precise here. It is the nature of scarcity that restricts how people may act. Consider Guido Hülsmann's comments in his 1997 article Knowledge, Judgment, and the Use of Property, p. 28:

There can be no doubt that the effect of the increased scarcity of tin will rapidly spread throughout the whole economic system and influence not only all the uses of tin but also those of its substitutes, etc. This process is, however, not best characterized by a coordinative function of prices.

The fundamental fact of scarcity implies that not every demand for tin can be satisfied. Some people have tin whereas others do not. An increased scarcity of tin implies that some market participants who otherwise could have benefited from tin are now of necessity prevented from using it. If a quantity of tin is sold, then the seller cannot sell it again, regardless of the exchange rate. There is simply no more of this tin left. Whether the seller takes notice of this or not is immaterial. He cannot sell what is no longer in his possession. Moreover, tin does not become scarcer and then this fact can come to be known to someone and lead to adaptations. Rather it is the other way around. The very fact that demand increases means that someone already knows of a more value-productive employment of tin.

(I discuss this also at note 9 and accompanying text of my Knowledge, Calculation, Conflict, and Law.)

Now, the fact of scarcity is part of the world. It is this which limits how we can act. The fact is that if there is a scarce resource, A and B cannot both use it at the same time. If they can, there is no scarcity, and no conflict. Conflict can only arise when there is scarcity, and conflict can only be conflict over the use of scarce resources. People say there is conflict over religion, etc., say--nonsense. Religion is the reason why A wants to kill or control B's body, perhaps, but the conflict is over B's body--a scarce resource.

The only question is whether the use of scarce resources will be conflict-free or not. If there are no property rules then the use of scarce resources is precarious and people will waste time in violent struggle rather than in productive use of resources.

To avoid such conflict and permit peaceful, productive use of scarce resources, property rules can assign ownership to identifiable individuals. As I have explained in What Libertarianism Is, all political and legal systems assign property rights--someone is assigned the legal right to control each particular scarce resource. The libertarian approach is unique in that the assignment is based on a consistent desire to avoid conflict, and so we follow a Lockean type of property assignment rule--the first user of a resource has a better claim, ceteris paribus, than later claimants. Now this is not a complete argument for the libertarian case, and in a libertarian forum where we all agree with this one need not argue for it--but you can see that the very nature and purpose of any property system is to permit the conflict-free use of scarce resources, and that the libertarian approach is the one most consistent with this purpose and nature.

So: it is not a theory of property that restricts how people may act. It is the omnipresent, undeniable fact of scarcity. A theory of property permits peaceful use of resources, by prohibiting violent struggle over them, which is not productive. The only question is whether the property rules are just or not. If they are all assigned to Donald Trump or the State, then this would technically allow conflict to be avoided but at the cost of injustice. The libertarian thus favors a just rule: assigning property rights in a given scarce resource to the first appropriator thereof.

This is not a restriction on action. It permits the resource to be used peacefully, and justly.

Now even the advocates of IP, such as Silas, are too happy to admit that they don't really favor property rights in mere abstract "ideas". No, they readily admit it's only in physical instantiations of the idea. That is, they admit that what they want in their IP theories is to grant to A property rights in all the physical media (say) owned by B1, B2, ... Bn. So the real dispute is always about scarce resources. If B owns a piece of plastic (a blank DVD) then the IP advocate wants A to have some property rights in B's disk. He wants A to have a veto over B's use of B's own disk.

Now, there are many non-libertarian property rights theories--theories that undercut or are contrary to the libertarian-Lockean first-use-first-own rule. This is just one of them. It is not "circular" to point this out. It is not "circular" to be a libertarian, any more than it's "circular" to be a socialist, communist, theocrat, or IP advocate. They all advocate property assignment rules that differ from the libertarian's Lockean homesteading rule.

The attempt to analogize this to the gun shooting or murder prohibition example fails. If A is prohibited from murdering B, this is just a way of restating one application of the libertarian conception of rights: it is saying that B owns his body, and that A's actions of shooting bullets into it violate's B's rights in that scarce resource. To say A is limited in what he may do is to recognize property rights in scarce resources.

In other words, the libertarian idea is that we do not live by permission. We live by right. We may do anything we wish in life, perform any action, unless it is an unconsented-to use of another's property. In other words, unjustified interpersonal violence--conflict--is prohibited for the sake of establishing a regime where peaceful, productive use of scarce resources may occur. I can use my gun for anything one can think of: the possibilities are open ended--anything except narrow cases where it would be an act of aggression against others. But it is not as if there are 1,136 permissible things I can do with the gun, each one a "right," and 17 things I cannot do with the gun. Rather, it's as if there is an ocean of liberty--open-ended, infinite, with small islands of things that I may not do. The IP advocate has to view us as living by permission: you have those 1,136 things you may do with your gun, and only those things. It is a finite list, fixed at some moment in time. If B thinks of way number 1,137 to use a gun, then he owns this way-to-use-guns. That is to say, he owns all guns in the universe, to the extent they are used for method 1,137. And, they say, this does not harm owner A, since he never had that right in the first place. It doesn't take away his right to use his gun for method 1,137; he only had homesteaded the first, known, 1,136 ways to use it. In fact, the IP fascist says, A is now better off, since he can learn from 1,137, and get permission for a small fee from B to use his gun in a new way. Everyone wins!

Except this is the totalitarian way of looking at things. We do not live by permission. Rothbard has explained that there is no right to free speech; it's just one implication of property rights. In my Against Intellectual Property (p. 53), this is precisely why I pointed out that

We do not have to have a "right to copy" as part of a bundle of rights to have a right to impose a known pattern or form on an object we own. Rather, we have a right to do anything at all with and on our own property, provided only that we do not invade others' property borders. We must not lose sight of this crucial libertarian point. If I own a 100-acres of land, I can prance around naked on it, not because the land is imbued with some "right-to-prance-naked," but because I own the land and it does not (necessarily) violate the property rights of others for me to use my property in this fashion.

I am restricted in my use of my gun to murder B only because of property rights in scarce resources. Unless you can point to such an act of aggression (trespass), I can use my gun as a means for any action whatsoever. I don't have to find an enumerated right #1,132 in my bag-of-rights, in my "permissions", to do it. I can do any action, so long as it is not a use of another person's property.

And this is precisely why this is not analogous to the IP case. Pointing out the above as an implication or explication of how libertarian property rights is not circular. It does not assume there are only property rights in scarce resources; rather, it unwinds a theory about allocating property rights in scarce resources. The nature of such a system is what implies that assigning rights in "ideal objects" is really simply a different way of assigning rights in scarce resources--an assignment rule that differs from the libertarian-Lockean one; this is exactly why in my 2000 LRC article on IP explicitly opposed "the Second Homesteading Rule."

The IP advocate's argument is dishonest. He says, well, my IP rule limits your property rights, but so do all property rights. So what's the big deal? The big deal is that the only limits we recognize are that you may not violate others' property rights! Murder or normal theft or trespass is obviously an instance of this. But using my own property peacefully is not! The IP advocate needs to show that my use of my own DVD somehow interferes with his own property in his own scarce resources. Obviously, it cannot. So, it fall back on IP itself: it says, well, it doesn't violate B's physical property, but it does violate his intellectual property. Hellooooo--THIS is the circularity. The circular reasoning is done by the IP advocates, NOT by the libertarian who is simply a consistent opponent of aggression.

Published: January 22, 2010 10:58 AM

[SK]

Scientific American has a gloss in this month's issue on the decline of U.S. broadband access over the first decade of the 21st century (no link provided because access is limited to paying subscribers):

At the turn of the millennium, the U.S. had some of the best broadband access in the world. It reached more homes, and at a lower price, than most every other industrial country. Ten years later the U.S. is a solid C-minus student, ranking slightly below average on nearly every metric.

Just how the U.S. lost its edge and how it plans to get it back are the issues before the Federal Communications Commission as it prepares to launch the most significant overhaul of network policy since the birth of the Web. As part of last year's stimulus package, Congress provided $7.2 billion to expand broadband access to every American. It also required the FCC to outline a plan for how to make that happen. The outcome of the FCC's deliberations, due February 17, could determine not just control over the broadband infrastructure but also the nature of the Internet itself.

The reason for this decline can be traced the the FCC's decision (under the stewardship of Bush administration appointees) to exempt the telecoms and cable companies from the open access provision of the 1996 Telecommunications Act, which forced the local telephone monopolies to grant access on reasonable terms to any and all long-distance telephone service providers. The result of this act was a dramatic reduction in long-distance phone costs, and a corresponding decline in profits for the telecoms.

The exemption the FCC put in place for broadband services has had the direct effect of putting the U.S. in a distinctly inferior position on broadband access across a variety of metrics, most notably download speeds and cost of service. But Verizon and Comcast love it. With the FCC now under new management, it looks as though it is poised to rescind the previous rules and bring open access back to internet services.

I was interviewed yesterday by Mark Edge, as part of his "Edgington Post Interview Series," for his Free Talk Live radio show, about my Mises Daily article, "Reducing the Cost of IP Law." The interview is lasts about 35 minutes, and starts at 2:02:36 in the Jan. 20, 2010 show (MP3). Edge conducted an excellent interview--very informed and interesting. And, like many others, he's come around to the anti-IP position.

[Mises; SK]

Canada has permanent-residency on the 301 Watch Lists prepared by the Office of the United States Trade Representatives. A disgrace earned by the state of our domestic copyright law. As Michael Geist revealed this week, the EU has an equally dismal view of Canada. Ongoing efforts to negotiate a trade agreement between Canada and the EU came with a scolding. Here are some of our sins:

1) We provide a copyright term of life plus fifty years, instead of life plus seventy.

2) We insist that ISPs are not liable for the conduct of their users.

3) Our law is antiquated (last major revision was in 1997, as compared to the DMCA of 1998).

4) We have not acceded to WIPO Internet Treaties (which obscures the mundane detail that Canada is compliant with international obligations.)

5) Our current law is precise on one disturbing point: copyright is a set of limited rights. So said our Supreme Court (four times).

6) Instead of listening to our trading partners (current and potential) with respect to changing Canadian law, our Federal Government chose to engage with Canadians. In summer 2009 Ministers James Moore (Heritage) and Tony Clement (Industry) embarked upon a national consultation. 8,000 letters later we are still waiting to see what shape the next law will take, but in the meantime Canadian media industries are holding their own.

PricewaterhouseCoopers recently published their 2009-2013 projections of global media and entertainment industries. In their comparison of consumer spending on media and entertainment in North America, PWC writes:

Canada will be the fastest-growing country, with projected 2.2 percent compound annual increase compared with 1.2 percent compound annual growth for the United States.

Notably, in the category of recorded music (the realm of active copyright lobbyists) both countries show a declining compounded annual growth rate. But Canada's decline is projected to -1% whereas its American counterpart shows -4.7%. Similar comparisons to U.K (-3.9%), France (-7.4%), and Germany (-1.9%) all place the Canadian music scene as more stable. This, despite the state of our copyright law.

Jammie Thomas downloaded 24 songs from Kazaa and was sentenced to a fine of US$2,000,000. Joel Tenenbaum downloaded 30 songs and was fined $675,000. These amounts sound improbable, but could have a justification à la Becker: If the fine is high enough, then it should deter everyone from this activity. In fact, if the fine is infinity, then their would be no crime at all. That only works if there is no risk of error in the determination of guilt, in which case, the fine need to be reduced to account for type I errors. The level of a fine then reflects the gravity of an action and the likelihood of errors.

How do the above fines compare to other crimes? Gapers Block uses the Illinois Criminal code to find that file-sharing is worse than arson, child abduction and second-degree murder, among others. This just shows how ill-conceived laws are sometimes, and copyright and patent law unfortunately provides too many examples.