{"id":17229,"date":"2011-05-26T09:39:30","date_gmt":"2011-05-26T16:39:30","guid":{"rendered":"http:\/\/oooorgle.com\/BeyondTheCorral\/?p=17229"},"modified":"2015-05-25T22:10:35","modified_gmt":"2015-05-26T05:10:35","slug":"how-intellectual-property-hampers-the-free-market","status":"publish","type":"post","link":"https:\/\/oooorgle.com\/BeyondTheCorral\/how-intellectual-property-hampers-the-free-market\/","title":{"rendered":"How Intellectual Property Hampers The Free Market"},"content":{"rendered":"

TheFreemanOnline.org<\/a> | It\u2019s important to understand the origins of these concepts. As law professor Eric E. Johnson notes, \u201cThe monopolies now understood as copyrights and patents were originally created by royal decree, bestowed as a form of favoritism and control. As the power of the monarchy dwindled, these chartered monopolies were reformed, and essentially by default, they wound up in the hands of authors and inventors.\u201d<\/p>\n

Patents were exclusive monopolies to sell various goods and services for a limited time. The word patent, historian Patricia Seed explains, comes from the Latin patente, signifying open letters. Patents were \u201copen letters\u201d granted by the monarch authorizing someone to do something\u2014to be, say, the only person to sell a certain good in a certain area, to homestead land in the New World on behalf of the crown, and so on.<\/p>\n

It\u2019s interesting that many defenders of IP\u2014such as patent lawyers and even some libertarians\u2014get indignant if you call patents or copyright a monopoly. \u201cIt\u2019s not a monopoly; it\u2019s a property right,\u201d they say. \u201cIf it\u2019s a monopoly then your use of your car is a monopoly.\u201d But patents are State grants of monopoly privilege. One of the first patent statutes was England\u2019s Statute of Monopolies of 1624, a good example of truth in labeling.<\/p>\n

Granting patents was a way for the State to raise money without having to impose a tax. Dispensing them also helped secure the loyalty of favorites. The patentee in return received protection from competition. This was great for the State and the patentee but not for competition or the consumer.<\/p>\n

In today\u2019s system we\u2019ve democratized and institutionalized intellectual property. Now anyone can apply. You don\u2019t have to go to the king or be his buddy. You can just go to the patent office. But the same thing happens. Some companies apply for patents just to keep the wolves at bay. After all, if you don\u2019t have patents someone might sue you or reinvent and patent the same ideas you are using. If you have a patent arsenal, others are afraid to sue you. So companies spend millions of dollars to obtain patents for defensive purposes.<\/p>\n

Large companies rattle their sabers or sue each other, then make a deal, say, to cross-license their patents to each other. That\u2019s fine for them because they have protection from each other\u2019s competition. But what does it do to smaller companies? They don\u2019t have big patent arsenals or a credible countersuit threat. So patents amount to a barrier to entry, the modern version of mercantilist protectionism.<\/p>\n

What about copyright? The roots literally lie in censorship. It was easy for State and church to control thought by controlling the scribes, but then the printing press came along, and the authorities worried that they couldn\u2019t control official thought as easily. So Queen Mary created the Stationer\u2019s Company in 1557, with the exclusive franchise over book publishing, to control the press and what information the people could access. When the charter of the Stationer\u2019s Company expired, the publishers lobbied for an extension, but in the Statute of Anne (1710) Parliament gave copyright to authors instead. Authors liked this because it freed their works from State control. Nowadays they use copyright much as the State originally did: to censor and ban books. (More below.)<\/p>\n

IP, American Style<\/strong><\/p>\n

The American system of IP began with the U.S. Constitution. Article 1, Section 8, Clause 8 authorizes (but doesn\u2019t require) Congress \u201cTo promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.\u201d<\/p>\n

Despite modern IP proponents\u2019 claims to the contrary, the American founders did not view intellectual property as a natural right but only as a policy tool to encourage innovation. Yet they were nervous about monopoly privilege, which is why patents and copyrights were authorized only for a limited time. Even John Locke, whose thought influenced the Founding Fathers, did not view copyright and patent as natural rights. Nor did he maintain that property homesteading applied to ideas. It applied only to scarce physical resources.<\/p>\n

Granted, some state constitutions had little versions of copyright before the American Constitution. (See Tom W. Bell, Intellectual Privilege: Copyright, Common Law, and the Common Good, part 1, chapter 3, section B.1.) On occasion, the language of natural rights was used to defend it, but this was just cover for the monopolies they granted to special interests. Natural rights do not expire after 15 years. Natural rights are not extended to Americans only. Natural rights wouldn\u2019t exclude many types of innovation and intellectual creativity and cover only a few arbitrary types.<\/p>\n

And what is the result of this system? In the case of patents we have a modern statute administered by a huge federal bureaucracy that grants monopolies on the production and trade of various things, which means holders may ask the federal courts to order the use of force to stop competitors. But the competitors have not done anything that justifies force. They merely have used information to guide their actions with respect to their own property. Is that compatible with private property and the free market?<\/p>\n

Examples of Censorship<\/strong> Read Entire Article<\/a><\/p>\n

By N. Stephan Kinsella<\/p>\n


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