Friday, September 12, 2003

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The merits of intellectual property rights

Eugene Volokh has a great post on why intellectual property is not so different from tangible property. One key point:

The theory of intellectual property is... that giving people the right to exclude others from new works or inventions will give people an incentive to invest effort in creating and inventing. We would have less legal freedom of action -- you'll be more limited in what you can do in your own office or garage -- but we'd have more wealth, because there'll be a lot more works and inventions, albeit ones that it may cost you money to use.

What Eugene failed to mention is what makes the conferral of intellectual property rights so difficult: the credible commitment problem.

Before a concept comes into existence, the incentive created by intellectual property rights is very strong. After a concept is invented, critics are correct in saying that society would be better off if those rights were revoked. Hence the need for a credible commitment, in the form of legal protections, to assure innovators that their intellectual efforts will yield tangible rewards.

Dynamically, society is better off protecting such rights, because that helps to ensure a constant stream of innovation. However, in times of crisis, when the future is heavily discounted, it's very tempting to revoke this commitment.

UPDATE: Larry Solum responds to Volokh, and Volokh returns the favor.

posted by Dan on 09.12.03 at 03:56 PM


By Allah, I do love this topic. Yall miss the point. Intellectual property is just fine, but it is not the role of the state to protect it. For a brief sliver of time, record companies could make a transcription of performance that most were unable to "rip" at reasonable cost. They became accustomed to the profits. Now those transciptions are easily duplicated. Remember the old cartoon about the boy looking in the knothole at the ball park? But this is just the tip of this very juicy topic. Fundamentally, the state is here to preserve order. For the rest, let the market decide. Sorry if you thought that just because you were an artist or an intellectual you would automatically get rich, courtesy of "the Law"

posted by: cottus on 09.12.03 at 03:56 PM [permalink]

uhm, cottus? decrying record company business models and (lack of) adaptation, with which i heartily agree have been not-so-great still does not excuse one from breaking the law.

and even if IP were not law, morally it makes sense. i fail to see why the creator of a good, whether it be intangible or easily transferred with the advent of items technological, does not deserve protection. the law protects order by protecting valuable goods. it protects the shopkeeper. it should protect the creator. (N.B. your ballgame analogy is flawed, for the product, that is, the viewership of the game, is markedly better in paid seats. not so with pirated music and software.)

succinctly, wait until you have a good idea. i'm curious if your tune (pun intended) will change.

/so types the photographer who wants his images protected, so types the friend of recording artists.

posted by: patrick on 09.12.03 at 03:56 PM [permalink]

I agree with much of what you say in principle, but in my field (computer science) most of the really fundamental advances were done by academics or other people who did not subsequently patent their inventions. In this field, most great innovators are/were driven by their intellectual need to solve problems, not by the promise of lucre.

On the other hand, most patented computer science inventions with which I'm familiar tend to come in two flavors: first, trivial tweaks on existing fundamental concepts; and second, "land grab" patents taken out when a technology is young and you can patent an idea that's "in the air", just because you get your lawyers to the patent office earlier. The former kind don't advance computer science --- they're the sort of thing that, if you ever paid J. Random Hacker to figure out the solution to your particular problem, (s)he would probably figure out exactly the same solution. The latter kind don't advance computer science either --- they're the sort of thing that many people invent nearly in parallel (like Newton and Liebniz inventing calculus) and society is not served by giving any one of them exclusive rights to their invention.

Imagine if Slashdot had patented the blog; and that, prior to writing any blogging software, the developers of Movable Type had to get permission, and then pay royalties, if the Slashdot guys felt like granting a license. Do you think that Slashdot would have been developed earlier because of that possibility? Do you doubt that someone else would have come up with the blog without them?

And, actually, I think that the "IP arising from social incentives" model is not necessarily the best one for describing how creative works arise. It's only one of several competing models. Another one that I like is Eben Moglen's analogy from Anarchism Triumphant:

The dwarf's basic problem is that "incentives" is merely a metaphor, and as a metaphor to describe human creative activity it's pretty crummy. I have said this before,[10] but the better metaphor arose on the day Michael Faraday first noticed what happened when he wrapped a coil of wire around a magnet and spun the magnet. Current flows in such a wire, but we don't ask what the incentive is for the electrons to leave home. We say that the current results from an emergent property of the system, which we call induction. The question we ask is "what's the resistance of the wire?" So Moglen's Metaphorical Corollary to Faraday's Law says that if you wrap the Internet around every person on the planet and spin the planet, software flows in the network.

In other words, people can't help being creative; in some fields, and at certain times, rather than creating incentives, IP protection simply provides resistance to that natural creativity. I won't say that this model holds all of the time --- certain kinds of IP take enormous capital to develop, and won't get developed without some sort of social incentive --- but I do think it's sometimes more accurate than the "incentives" model.

posted by: Armature on 09.12.03 at 03:56 PM [permalink]

Unlike tangible property, the boundaries of IP can be vague and ill-defined. This is especially true on the modern fringes of IP, where we encounter such concepts as "fair use", "derivative uses", "business-method patents". When boundaries are vague, transaction costs are high and there is full-employment for lawyers. This is no great inconvenience to a big movie studio, but a huge drag in other contexts. Quite often these transaction costs exceed the real value of the IP itself. Carnegie Mellon had a pilot project to digitize their library, and found that fewer than half of the copyright holders could even be located or contacted, much less persuaded to give permission.

While I will concede that the record industry has a problem, I am not willing to make the sacrifices in freedom and constraints on innovation that may be necessary to preserve their current business model.

posted by: Hunter McDaniel on 09.12.03 at 03:56 PM [permalink]

and even if IP were not law, morally it makes sense. i fail to see why the creator of a good, whether it be intangible or easily transferred with the advent of items technological, does not deserve protection. the law protects order by protecting valuable goods. it protects the shopkeeper. it should protect the creator.

Sorry to burst your bubble, but neither the shopkeeper nor the "creator" is protected for their own sake. Property protections, intellectual or otherwise, exist because society benefits from those protections. Or, at least, that is the position of the U.S. Constitution. In situations when society can benefit more from less restrictive IP protections, then society is justified in doing so.

For example, as a photographer, your work borrows from the visual vocabulary of millions of images that other people have produced, and that you have seen. If you believe "creators" have a natural right to IP protection for unlimited times, then you owe royalties to all those people every time you snap a picture. Sensibly, our legal system recognizes that such a rigid IP protection regime would result in the production of fewer photographs, and therefore IP protections are much more limited. But there's nothing magical about our current protection regime; in fact, there's plenty of evidence to suggest that our current scheme is much too restrictive.

BTW don't make naive analogies to physical property. It's absurd to believe that matter and information, which have such thoroughly different properties, should be governed by the same laws.

posted by: Armature on 09.12.03 at 03:56 PM [permalink]

And this says nothing at all about the problem some like me have -- music exists (i.e. has been recorded) that I wish to buy (at a reasonable, but negotiable price) that I may not because the IP holder refuses (because they cannot make a big enough profit) to re-issue the music or put it in a form usable to me. Thus they "squat" on that which enriches them not but impoverishes me.

posted by: JorgXMcKie on 09.12.03 at 03:56 PM [permalink]

I can fully appreciate the societal value that patents confer. What interest me is how economists or lawmakers determine the appropriate duration of a patent? It seems pretty arbitrary to me.

posted by: todd on 09.12.03 at 03:56 PM [permalink]

A lot of stupid things are said about IP as statement of fact, being the result of conclusion drawn from poorly established principles. It's not surprising that different conclusions are drawn when the starting assumptions vary so significantly. I would like to weigh into the argument with these thoughts...

1. New creations provide benefits.
I would say we could take this as a given even though contrary example might be noted.

2. Benefits to society as a whole are fundamental to proscribing laws related to IP.
Proscribe in the sense that the fewer laws required the better. Again, it is presumed as a given that increasing societal benefits is a good thing.

3. Economic incentives will encourage creation.
This is where the argument is and I believe significant features about this point are often missed. Such as...

A. All creators (artists, programmers, corporations, etc.) require or are entitled to the same protection.
Why is this true? I don't believe it is.

An individual may not have the marketing presence or initial capital to take advantage of a new creation and I would argue that they certainly could use some protection from predators. Does a corporation with significant marketing strength (not necessarily monopoly presence) require the same protection in order to insure the 2nd principle? In cases where protection is in order, what are the limits? I think many examples could be given where these limits have become far too extreme and significantly curtails societal benefits.

B. Creation happens only for economic gain.
Stating it in this way suggests the answer. No, creation happens because people are fundamentally creative. Starving artists are the rule, not the exception. Whether they should be starving is not the point... will they create regardless... Yes, but perhaps following different paths from those that have their work subsidized.

Should creators benefit from their work? Of course they should. But should they exercise total control over the manufacture, use and distribution of their creations (and for what period of time?)

As a programmer I have a personal take on this argument. I think it is my responsibility to provide value so that others will reward me for my creations. I think it is my responsibility (because the capability exists) to limit the unauthorized copying of my works. But if my work is nothing more than data that can be easily copied (rather than a service or code that can not) I believe it negatively impacts on society for me to agressively pursue those that are benefiting from my work where I am not.

What if I wasn't a programmer? Let's say I was a writer of books. That might fall into my 'just data' category in the preceding paragraph. You have 'fair use' saying some portion of the work can be copied, but it's unclear to me what that percentage is. It's also unclear to me that the making of many books actually is a societal benefit. Perhaps society would benefit more if only those without economic incentives were writing books? I don't presume so, but has the question been adaquately examined?

C. Should the creator lose, give or assign rights to a marketing or distribution organization? While technically an artist may own the rights to a creation and deserve protection (a given assumption) is the assignee entitle to the same protection? Once an artist decides to go beyond self publishing, do they, or should they, give up some rights? Doesn't society benefit more from having competative sources?

Anyway, that's my 2 cents.

posted by: ken anthony on 09.12.03 at 03:56 PM [permalink]


Walt Disney determines the appropriate duration of copyrights. They just bribe Congress whenever their copyright on Mickey Mouse is about to expire.

With patents, I think you have to pay to keep it, and I think they last something like 17 years, which is reasonable.

The problem with copyrights now is that the original goal was to have things enter the public domain eventually. You give a temporary monopoly to spur innovation, and then it is eventually made public. The logic was that people don't typically create something looking more than a few years at most in the future. That's when things like songs make most of their revenues anyway. It was a win-win situation. Now it's not.

The current system is corrupt and doesn't deserve any respect.

posted by: kalb on 09.12.03 at 03:56 PM [permalink]

I accept that IP protection adds to the welfare of society. the question I think is really how much protection should there be.

To me the length of copyrights has been extended well past the point where it was a generation ago, but I do not think that anyone could argue that we have been rewarded with some pent-up out burst of creativity. The truth is that the 28=28 term of copyrights that prevailed untill the 1970's impounded the useful economic life of most materials. The extentions since then have only served to harass.

Furthermore, the extention of copyright to "derivative" works has been counterproductive. Most art is derivative. Shakespeare derived Hamlet from Kyd's "Spanish Tragedy." Allowing copyright holders to prevent derivative works, without narrowly defining the scope of derivation, hurts creativity.

The patent system also suffers from flaws. Many of which are administrative in origin. The patent office recently issued a patent on drinking limeade. , a patent on putting mustard on ham sandwiches cannot be far behind.

posted by: Robert Schwartz on 09.12.03 at 03:56 PM [permalink]

It's arguable that IP, particularily, copyright,actually stifles innovation in the medium and long term.

At one level the absurd extension of corporate copyright terms to vanishing future means that Mickey and Pooh and a host of lesser creations will never legally enter the public domain. Which means the better Mickey Mouse will never be built.

At a business level, the RIAA is frozen in the headlights of technological change. Instead of embracing that change as anything other than an opportunity to get consumers to repurchase their entire album collection, the record companies are hiding behind an unenforceable notion of copyright.

While they are certainly legally entitled to sue .0000001% of the file sharers in America, the transaction costs of such a strategy will overwhelm the pittance they are likely to collect. The minimal deterrent effect - there are 4,000,000 file sharers on Kazaa as I write - will be far outbalanced by the dismal Public Relations disaster of suing your own customers.

Instead of baring the barn door as the cow trots off to the next county the music biz should be embracing the prodound marketing potential of the internet. Over at my blog I have one suggestion...there are hundreds and not one of them has been tried by a music business mired in the mythology of copyright, piracy and litigation.

That war, at least in the music business, is over. New, innovative and profitable opportunities await; but none of them rely upon the draconian DMCA.

posted by: Jay Currie on 09.12.03 at 03:56 PM [permalink]

I notice that Volokh didn't defend extending copyright protection to works for 95 years after the death of the creator.

After a quick scan of his conceptual defense, I didn't see anything that I couldn't live with. The trouble is that empirical practice has gone way, way past what makes conceptual sense. Sure, material incentives for creators are nice, both for creators and society as a whole. But establishing incentives for creators does not mean providing for said creator's heirs unto the third generation.

For a little historical perspective, 95 years spans Japanese history from before Commodore Perry to after Hiroshima; Russia from Nicholas II to Vladimir Putin. It is time enough to carry Germany from Bismarck almost all the way to Willy Brandt.

If Jefferson had copyrighted the Declaration of Independence under present US law, his heirs would have controlled the rights until Ulysses S. Grant was president. If Lincoln had copyrighted the Gettysburg address under present US law, his heirs would have controlled the rights until after the launch of sputnik. (The copyrighted works of Grover Cleveland will enter the public domain this year, Teddy Roosevelt's in 2014, but cousin Franklin's will have to wait until 2040. By which time your author will be 72.)

No French form of government since the Revolution in 1789 has lasted the full term of current US copyright coverage. Not one.

Copyright is now intended to last longer than the entire present history of computer science. Powered flight has only just lasted longer than copyright, as has radio broadcasting. Nothing copyrighted that has ever appeared on American television can possibly enter the public domain before 2022. If frozen foods could be copyrighted in the United States, they would not enter the public domain for another 16 years; penicillin for another 20; ballpoint pens for another 30; frisbees, velcro and contact lenses for another 40.

Ecrasez l'infame!

posted by: Doug on 09.12.03 at 03:56 PM [permalink]

Lots of good points. I entirely agree that the lengthy of copyright protection for movies, etc., is way too long. That doesn't mean I'd want to abolish copyright prorection completely, but certainly shorten it.

However, the arguments that economic incentives play no role in innovation is just absurd. I'm intrigued that a lot of the comments have centered around artistic innovations, i.e., music, literature, film. My concern has more to do material innovations, such as new products and processes.

The simple fact is, much of this type of innovative activity can no longer take place with out tremendous investments in plant and personnel. Without intellectual property rights, the incentive for engaging is innovative activities with large fixed costs is drastically reduced.

posted by: Dan on 09.12.03 at 03:56 PM [permalink]


The kinds of things you're discussing, though, fall under patent law and thus enter public domain after 17 years. I think the vast majority of people are OK with that; the only debate there really is the granting of "silly" patents.

posted by: Kevin Brennan on 09.12.03 at 03:56 PM [permalink]

The problem you note, granting IP rights, then revoking them is not a new concept. In economics it is the time inconsistency problem.

The other thing that is not covered by Prof. Volokh is that the current system of protecting IP is not the only one. Some new research on this by Michele Boldrin and David Levine is pretty interesting.

posted by: Steve on 09.12.03 at 03:56 PM [permalink]

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