Update: KOL207 | Patent, Copyright, and Trademark Are Not About Plagiarism, Theft, Fraud, or Contract; Kinsella, “If you oppose IP you support plagiarism; copying others is fraud or contract breach,” in “Hello! You’ve Been Referred Here Because You’re Wrong About Intellectual Property” (C4SIF)
From the Mises Blog; archived comments below.
Common Misconceptions about Plagiarism and Patents: A Call for an Independent Inventor Defense
Defenders of patents commonly say they are against innovators’ ideas being “stolen” or “plagiarized.” This implies that patents simply permit an innovator to sue those who copy his idea. This position betrays either disingenuity or ignorance about patent law. Let me explain.
Under copyright law, someone who independently creates an original work similar to another author’s original work is not liable for copyright infringement, since the independent creation is not a reproduction of the other author’s work. Thus, for example, a copyright defendant can try to show he never had access to the other’s work, as a defense. The reason for this is that the fundamental copyright is, well, a right to copy one’s original creative work. By the nature of creative works that are subject to copyright, it is very unlikely someone would independently create the same novel, say, or painting, as another author. (And if copyright only protected literal copying, it would be much less a problem; but unfortunately it protects a bundle of rights including also the right to make “derivative works“.) But, in the rare case where author 2 independently creates a work very similar to that of author 1, it is not an infringement of author 1’s copyright, since author 2 did not copy anything.
Patent law is different. Very different. Most defenders of IP do not seem to be aware of this difference–one reason they should not be opining in favor of legal regimes they know little about. When patent defenders say that patent abolitionists are in favor of plagiarism and idea theft, they imply that patent law is like copyright law–that it simply prevents people from copying others’ ideas.
Not so. To prove copyright infringement you have to show an actual copying of the work. But to prove patent infringement, the patentee need only prove that the accused infringer makes, uses, sells, or offers to sell, or imports the patented invention–that is, a device or method that is described in at least one of the “claims” of the patent. It doesn’t matter if the infringer invented it independently. It doesn’t even matter if the infringer invented it before the patentee. Got that? Someone who previously invented the same thing and is using the idea in secret can actually be liable for infringing the patent granted to the second inventor. If a later person independently invents the same idea that was previously patented by another, this is also no defense. Prior use or independent invention are not a defense.
Obviously, it should be. The Intellectual Property and Communications Omnibus Reform Act of 1999 did add a limited first inventor (prior user) defense for prior commercial users of “business methods“–see 35 U.S.C. § 273–but not a general one. Justice obviously requires that, at the very least, a general independent inventor defense be added to the patent system. To blunt its sharp, unjust edges. In particular, a defense should be provided for those who are prior users of, or who independently invent, an invention patented by someone else. This would greatly reduce the cost of the patent system since one difficulty faced by companies is that they do not know what patents they might infringe. If someone learns of an invention from another’s patent, at least they are aware of the risk and can possibly approach the patentee for a license. But quite often a company independently comes up with various designs and processes while developing a product, which designs and processes had been previously patented by someone else. If the goal of patent law is to reward invention, it should be sufficient to permit patentees to sue people who actually learned of the idea from the patent—just as copyright infringement exists when someone reproduced another’s work but not when it is independently created. A broad prior user right defense should be established, as well as an independent inventor defense that even a later inventor could use. (Pending patent reform legislation originally proposed to broaden the existing prior user defense by eliminating the business method patent limitation so that users of all types of inventions would have been able to use the defense, but this was removed from later versions of the bill. The Council on Foreign Relations study, “Reforming the U.S. Patent System: Getting the Incentives Right,” recommends a prior-user right be adopted; James Bessen & Michael J. Meurer, Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk (Princeton University Press, 2008), recommend an independent inventor defense–see the Introduction.)
Even pro-IP libertarians usually reluctantly agree that independent invention should be a defense, once you dispel their ignorance about the system they for some reason support (well, the reason is not that hard to see–it’s lingering state-indoctrination, or some form of statism such as minarchism, or some unprincipled, incoherent grounds like utilitarianism). This is one of the aspects of arguing IP policy that infuriates me. Whenever you point one of these things out to a libertarian defender of IP, he will usually say, “well, I don’t support that.” So you say, “well, what do you support?” The answer is basically, “Hey, I’m not a patent lawyer; that’s just a detail.” I.e., they are in favor of some ideal patent system; not the current, statist one (though they oppose abolishing it or weaking it!), but a “libertarian” one (as if one could imagine a patent system concocted by decentralized courts without legislative power! [on this see my Legislation and the Discovery of Law in a Free Society]). In other words, they don’t know what in the heck they are even talking about. They can’t describe the system they favor, and are not willing to abandon a statist system they admit is unjust.
And they seem blithely unaware that removing the obvious, “problematic” features of patent law would largely gut it, resulting in an emaciated, weak patent system–a change that would be attacked by mainstream IP advocates as “harming innovation,” in the same way that these libertarian patenteers criticize us patent abolitionists. Libertarian IP advocates are schizophrenic. They shy away from the obvious injustices of patent law, and would favor reforms that most normal IP proponents would recoil in horror from; while they try to maintain the facade that they support IP because they support innovation and inventors’ “rights”, even though they cannot tell you what their ideal libertarian patent system even looks like.
Don’t believe me that providing an (obviously just) “independent inventor” defense would gut the patent system? I’ve been practicing patent law since 1993. I have lost count of the number of times I’ve been called upon by a client to analyze a patent that has come to the client’s attention, that concerns it. What typically happens is this. Company A is producing or developing a product. They hear a rumour from a customer “Hey, I think that Company B has a patent on something similar to this.” Or, they get a letter from Company B saying, “Hi, we attach a copy of our latest patent for your interest! If you want to discuss licensing, give us a call! <smiley face! we’re all friends! it’s all good! Don’t file a declaratory judgment action against us, please! We wouldn’t want to give you cause to sue us first, robbing us of the chance to choose the venue! <double-smiley-face> Love, Company B”. So Company A calls me, says, “can you take a look at this patent? Are we in trouble? Are we infringing? Is the patent valid? If so, can we change our design to get around it? We’ll be happy to pay your $30k fee for an analysis and opinion.” Such a productive use of precious capital!
Now, what I want to emphasize here is that: in all the umpteen times I’ve done this over the last 15 or so years, I have never, ever, even once, seen a case where the client’s engineers copied the patented invention. In every case that I can recall, the company designed its product on its own–using available technology, to meet the market demands–and then only later were made aware of some patent buried among millions in the bowels of the patent office. Then they panic, worrying that they might be shut down by an injunction by a competitor, or sued into the ground (for examples see my Radical Patent Reform Is Not on the Way).
No doubt in some cases there is copying. An entrepreneur espies a popular product, and makes a similar one; lo and behold, it turns out there were some patents, and so he is sued. Still unjust–what is wrong with emulation, competition, and learning?!–but still, sure, in some cases, there is copying. But there can be no doubt that millions and millions of dollars are lost on attorneys’ fees alone, not to mention the cost of changing designs to avoid infringement, or foregoing development in a field crowded with patents or rife with uncertainty, in cases where the victim was not copying or even learning anything from the company that just happens to hold a red-ribbon adorned manilla certificate issued by a technocratic bureaucracy of the criminal central state. Add an independent inventor defense, and a lot of the work done by lawyers like me would dry up–meaning a more efficient economy, lower priced goods, more competition and innovation, more innovative freedom, more breathing room.
This is a type of reform that most libertarian patent advocates, in my experience, begrudgingly agree to. And it would gut the patent system. The caterwauling of the patent bar, deprived of half their federal law-sponsored teats, would reach a deafening crescendo. Large companies that rely on the inchoate threat of patent lawsuits to squelch competition and keep small innovators down, would increase their bribes to DC, fearful of barriers to entry falling.
So why not come all the way with us, my fellow libertarians? You see the injustices of the patent system, and usually agree with our concrete criticisms of them. You are not sure of what a good patent system would even look like. The current one is undeniably a mess. And it’s just an arbitrary fake-law scheme enacted by an obviously incompetent, evil, illegitimate, and criminal state. Why in the world would a libertarian support this? Besides, by advocating such reforms you are going to be lumped in with us “enemies of innovation” by the vested IP interests. So if you are doing the time, you might as well do the crime.
Update: See Mike Masnick’s excellent posts, Calling For An Independent Invention Defense In Patents and If Patents Are Supposed To Support The Independent Inventor, Why Isn’t There An Independent Invention Defense?, the latter of which mentions a great post by Joe Mullin, Patent defendants aren’t copycats. So who’s the real inventor here?
Update 2: Since writing this post, the America Invents Act (AIA) was enacted, which amended patent law to provide a broader “prior user right” than before, which goes some way to providing a type of independent invention defense, but not far enough (see my posts The American Invents Act and Patent Reform: The Good, the Meh, and the Ugly and Prior User Rights and Patent Reform; also Tabarrok: Defending Independent Invention).
[Mises blog cross-post; AgainstMonopoly cross-post]
Archived comments: Part 1; Part 2:
November 21, 2009 at 9:15 am-
What happened to your constant lumping of copyright and patent under the umbrella, IP, to discredit it all as the same thing? You’ve been doing that for quite some time. Like the way Marxists like to lump all the rich, then to use obviously ill gotten gain to those who have earned their riches.
Copy rights are about property rights not IP as I’ve pointed out numerous times in great detail. Copy rights are perfectly legit.
November 21, 2009 at 9:40 am-
I agree it’s amazing that I haven’t found anyone who likes what copyright/patent do.
Yet as soon as I mention abolishing them, they go all apoplectic and accuse me of bringing “politics” into the discussion.
Thank you for addressing the differences between copyright and patent. Most people, myself included, make mistakes in confusing the two.
November 21, 2009 at 11:42 am-
The differences in the legalities seems to me to be hair splitting.
Ultimately, both are positive rights that move against Natural Law. It’s not possible to posses knowledge exclusively, and at the same time to share it.
It is like saying one has exclusive rights to use the air you are currently breathing, the water you are currently pumping through your veins. You have rights to those things now, but once you exhale or spit, then what? How can you lay claim of ownership after they are no longer in your possession? Why would you want to?
Then, following the claim, how can you possibly enforce a right like that? You can’t!
As for the knowledge itself, what good is it if it can’t be used?
November 21, 2009 at 2:14 pm-
Deefburger, Mr. Kinsella’s point is that the common attack that B is ripping A off when he implements an invention he apparently learned of from A falls apart when you find that B invented it on his own, without ever seeing A’s invention, perhaps even before A invented it. The realm of possible inventions that meet a goal is much smaller than that of possible ways to write a novel that a particular author finds satisfying. Just look at how many times the eye has indepdently evolved, with very similar designs, even though the design wasn’t shared genetically (apologies to any Intelligent Designers reading this).
November 21, 2009 at 2:37 pm-
“Under copyright law, someone who independently creates an original work similar to another author’s original work is not liable for copyright infringement, since the independent creation is not a reproduction…”
if i used a character named “harry potter” and the gangs of new york as a book title..about a gang fighting hero..not infringment i guess.
if i wrote a book called chester potter and the wing of bat harem about a teenage wizard-boy and his magical adventures, that wouldnt be infringment either?
- November 21, 2009 at 3:59 pm
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Scott, your last example might depend on whether you had read or heard of the Harry Potter series. If you read Mr. Kinsella’s article, you’ll see that it’s not the content per se for copyright, but how it came into existence. “What colour are your bits?” is a good article covering this subtle issue.
- November 21, 2009 at 5:07 pm
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I see the point. It’s just that Patent and Copyright both are fatally flawed concepts. The flaw is that the knowledge, no matter how it was obtained, cannot be returned. Possession is now mutual and will remain so. I’m sure no species ever stopped evolving just because another did it first. All things have evolved because at least one other had “done it first”.
But that’s not even the issue. It’s the use of force, to “remove” knowledge, that is the issue. This act is un-natural. You can split hairs about the nature of the un-natural act of law all you want, and never justify it wholly because the concept is already un-natural. In order to argue the differences between the two types of law, one must accept the existence of these types of positive rights to be acceptable. I do not. Arguing in favour of one piece of a flawed concept over another piece of a flawed concept is like polishing a clod of dirt.
- November 21, 2009 at 6:08 pm
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Deefburger, I think there is value in splitting the case against IP into multiple aspects, and discussing each separately. Discussions which cover too much ground can be hard for participants to keep up with. In this case, the argument shows that even on their own terms, many who argue in favor of IP are really arguing in favor of a fantasy, and are opposed to the reality of the matter. It’s pretty silly to have two people opposing each other, where one is arguing against the actual situation at present, and the other is opposing that by arguing in favor of a fantasy.
November 21, 2009 at 8:50 pm
November 21, 2009 at 10:09 pm-
It’s only 18 years, usually much much less and you can do whatever you want. The legal system can even shorten it further but abolishing it? Come on!
This is a small compromise for a social engineer to satisfy both sides.
By the way, prior invention is positively, and rightly acknowledged in pharmaceutical cases. 
November 22, 2009 at 3:45 am-
“It’s only 18 years, usually much much less and you can do whatever you want. The legal system can even shorten it further but abolishing it? Come on!”
I’m sorry sir, but “I mean, come on” is only a valid argument when you’re trying to end a gang war.
http://www.southparkstudios.com/clips/104359/
- November 22, 2009 at 12:56 pm
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@Ivan Ivanov
I have repeatedly listed my concerns about Kinsella’s position.
Namely, that the rules of all type of homesteading, internalization of the external, are arbitrary. Who cries for the second comer, the first looser during homesteading of any physical property. Or even the first comer who was strong armed by a mighty competitor. History of the American coal-, oil-, steel-, railroad industry is littered with controversial or even disgusting cases. But who uses them as an argument to abolish private property? No-one but the socialists.
I have repeatedly stated that the grace period, you can even call it monopoly, offered by the patent laws is an acceptable compromise which satisfy the interest of the inventor and the copiers. In an ideal case this time frame coincides perfectly with the internalization of the idea from the unique to the infinite to satisfy the scarcity argument.
In my opinion the only room for change left is setting the time frame, the reason I used the “18 years or much much less argument”. This is a job for social engineers not for philosophers.
I hope this diatribe will satisfy you better.
On the side, I am a medicinal chemist. In my trade, the composition of matter patents “catalog themselves”, they are self explanatory. There are only two universal reference systems out, Beilstein and Chemical Abstract or their online versions. Everybody in the industry subscribes to them. Competition is run by long term and well established rules. As a result, multi-billion dollar worth of information is packed in an approximately 500 Dalton size molecule. The structure of which, by the way, and all the necessary information to steal and market it, can be figured out from 2 mg of it in hours by modern spectroscopic methods. Abolishing the patent system due to a blanket grudge over the IP laws would do a tremendous damage to the pharmaceutical industry. This is alone for many a valid reason to go against IP. But then again luddites were socialists as well.
I don’t know the IT or other patents. I don’t even try to pretend to understand them. I agree, patenting double click for eventuality is ridiculous. But it is a great idea. Of course, if it was original and not some retroactive hack. It’s time frame might be the problem then. Anyway, I leave it to the social engineers.
Hey minions, bring it on!! 
November 22, 2009 at 1:31 pm-
> Namely, that the rules of all type of homesteading,
> internalization of the external, are arbitrary.
Even if one assumed this is correct, in IP you have another layer of arbitrariness. As I was explaining to ktibuk in comments to another post, from objective point of view IP infringement revolves around two completely separate objects. The connection between them exists only in people’s heads, and with sufficient subjective interpretation, they appear similar enough. I don’t think the first level of arbitrariness justifies the second one, because then one could claim a monopoly over anything based solely on the fact that to him, it appears to be connected to something he has homesteaded. - November 22, 2009 at 2:52 pm
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@Peter,
If a process has one arbitrary step the whole process is arbitrary. Your separation of arbitrariness is totally subjective. Separation of the initial act out of the process will not make it less subjective. Let the time frame of a patent expire and the case will be moot. Modify the time frame if you are so unsatisfied. And observe the results. Decrease it gradually to zero and investigate if any unwanted consequence pops up. There are approaches much less risky. But jumping into it without any experience in inventing any new ideas might be slightly dangerous. Atlas might go on strike!I agree there are debatable cases, even in pharmaceutical patents but they are not assigned only to IP. They are not unique. All type of property rights have these issues. Courts are full of them. However, that does not lead to blanket questioning of property rights. (Sorry, I’m wrong, communists do.)
November 23, 2009 at 1:23 am-
In the absence of IP, what types of businesses would go out of business, if any? What will Mr. Kinsella do for a living? Should we pass around the hat just in case?
- November 23, 2009 at 2:03 am
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> Your separation of arbitrariness is totally subjective.
Let me explain why it isn’t. In the first layer, we can measure the property boundaries and just argue about what number is relevant. The measurement is objective, the second part is subjective and can in theory scale from zero to infinity. Zero is also a valid interpretation actually (only the actual amount you homestead, and nothing surrounding), and evidently an objective one.In the second layer, there is no way to measure anything, it just “appears” similar. Zero is not acceptable (as you declare yourself).
Also, as many times said by various people smarter than me, the actual net benefit has yet to be proven.
- November 23, 2009 at 9:28 am
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@Peter,
Your approach is rather scientistic or even positivist. How could you assign a percentage, a ratio to something that cannot be measured with cardinal numbers.
When I say homesteading is arbitrary I mean its rules depends on customs. What makes a virgin land yours? Fencing it? Ridiculous! Use? What kind of use? The real deciding factor is whether you can prevent others from the same, a monopoly.
I guess these issues are not really a problem any longer as less and less land, or even any type of physical property is up for grab, especially with a growing Levithan State.
The only realm remains where you still have chance for homesteading the ideas. Not so long if that depends on Kinsella. 
November 23, 2009 at 10:03 am-
IP laws are said to protect the creator or inventor, but another consideration is that the creator/inventor also draws heavily on the previous work of others. IP laws create a thicket of regulations that block off much existing knowledge, technology or culture from the entrepreneur, inventor or artist–stifling the freedom ability to create new work.
People who cannot draw freely on available knowledge have little incentive to refine or improve upon that knowledge, or find new applications for it.
IP law prevents you from doing things with your own property simply because other people have done similar things with their own property. They force you to not make use of knowledge that you have or could discover.
How can fobidding people to learn information and apply to their own property possibly be in line with basic property rights? How could this use of force to restrain people from innovation possibly promote innovation?
November 23, 2009 at 10:30 am-
@Andras: “…multi-billion dollar worth of information is packed in an approximately 500 Dalton size molecule. The structure of which, by the way, and all the necessary information to steal and market it, can be figured out from 2 mg of it in hours by modern spectroscopic methods. Abolishing the patent system due to a blanket grudge over the IP laws would do a tremendous damage to the pharmaceutical industry.”
I realize this is a utilitarian argument, but one must at some point at least wonder how much good would be done to humanity as a whole, were that information readily available to any chemist who wishes to build upon it. Imagine the additional resources that would be brought to bear by those looking to cash in on a multi-billion dollar industry, to create new, effective drugs. How many sick people would benefit from the expanded research?
Of course, we all know that one of the primary reasons the pharmaceutical industry enjoys its multi-billion dollar status is due to the exclusivity of the patent system. Were that to dissolve, the profits enjoyed by the pharmaceutical monopolists would undoubtedly be reduced, but there’s no reason to believe they would evaporate. Many companies still make a profit selling plain old aspirin, a formula which has been known by many chemists for many years.
I also don’t mean to suggest that those who currently have access to that knowledge should be forced to disseminate it, or even to make it available to others. They are still free to employ whatever non-coercive measures they wish to keep it a secret. A patent merely shifts the costs of secrecy onto the taxpayer.
November 23, 2009 at 12:06 pm-
This is the first anti-IP article I have read that differentiated between copyright and patents. Indeed, the article I responded to more than implied that copyright and IP were in fact the same. And, of course, they are. Not all IP is copyrighted, but all copyrighted material are IP. As a composition instructor, I know for a fact that disregard for IP leads directly to plagiarism. How do I know? Almost all my Chinese students from China plagiarize. Why? They do not understand that copyright infringement is wrong. Why? There is no such thing as IP in China. That is why books and movies are bootlegged all the time in China. It would be like someone from a culture where no property rights were recognized at all. Such a person would end up in jail for theft before long, and not have the foggiest idea why he’s there. The plagiarist is in the same boat, and for the same reason.
I am glad to see you differentiating between copyright and patents, though. Of course, that does com plicate your anti-IP position. All in all, though, some of the examples you give of the problems in patent law suggest that we need legal reform. You still have to convince me that we need to throw the baby out with the bath water rather than just change the water.
For example, why couldn’t someone, if they were able to prove they invented the product independently, actually share in the patent?
- November 23, 2009 at 2:05 pm
- November 23, 2009 at 11:30 pm
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@Ron,
You are making the same argument as the marxists when they say “just imagine how many we can feed the food we could confiscate from the rich”.
I can only hope that you do not want to travel the same road. - November 24, 2009 at 9:20 am
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@Andras:
> Your approach is rather scientistic or even
> positivist. How could you assign a percentage, a
> ratio to something that cannot be measured with
> cardinal numbers.
I believe we misunderstood each other. Hopefully the next text will contribute to clarification.> When I say homesteading is arbitrary I mean its
> rules depends on customs. What makes a virgin
> land yours? Fencing it? Ridiculous! Use? What
> kind of use? The real deciding factor is whether
> you can prevent others from the same, a
> monopoly.
The issue you describe only affect the method of homesteading, but not the scope. Regardless of the decisive factor in the above example, none of it implies the ability to homestead something that is outside of close proximity. Say, on the other side of the planet than the property. Some might say that, for example, homesteading land gives you an extra 10 meters above and below (e.g. Block in Privatization of Roads and Highways). This number is indeed abritrary and subjective. But Block also argues that increasing this number ad infinitum gives one ownership of other planets and stars and is ridiculous.On the other hand, there is no such limit in IP. IP streches ad infinitum over the whole universe (which is ridiculous), as well as introduces the subjective concept “similarity” (which is sometimes also ridiculous). Even in the most “generous” systems of (classical) property, you can’t find an example of one claiming homesteading of a house on the other side of the planet purely on the grounds that it appears similar to him to something he already has.
So, even if we assumed that one can homestead immaterial goods, it requires separate steps to assume that this implies homesteading of:
– immaterial goods that are “manifested” far away
– immaterial goods that appear similarWith a sufficient twist of a mind, anything can appear similar to anything. So how do you specify the “optimal” demarcation line? According to published research, human and a chimpanzee share at least 96% of DNA. The overlap among humans themselves is even larger. Yet I don’t see anybody claiming they own someone else born later merely due to their DNA being similar. But take just one paragraph from a book (say 0.1%) and you have a potential copyright infringement.
> The only realm remains where you still have
> chance for homesteading the ideas.
Again, even assuming this is correct, why should that mean it stretches ad infinitum and to things that are merely similar?(this is a reply to a differrent one):
> You are making the same argument as the
> marxists when they say “just imagine how many
> we can feed the food we could confiscate from
> the rich”.
And you are making the same argument as mercantilists when they say “imagine how many in we can feed the food if we could prevent free trade and encourage protectionism”. - November 24, 2009 at 1:35 pm
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When you do not have property rights, you have to expect people to steal (since it is not “illegal” and, more importantly, stealing ceases to even be a concept without property rights). The same is true of ideas. That is where plagiarism comes in, and why it is relevant. The connection between the two is so incredibly obvious to me, that it boggles my mind that it’s not clear to you. And I say that with all sincerity.
Now, as for the example I gave, if course it’s illegal. Does that prevent me from proposing that change as a way to improve and, therefore, protect IP? Of course not. To object that my proposed reform isn’t valid because to do it under current law, which I propose to change with my reform, is ridiculous.
As for D, the answer is: too bad. To argue otherwise is to argue that the people who bought the house right before I wanted to buy the house now have to share the house with me, because I wanted it too. After all, I looked at the house, had a real estate broker, put in a bid (albeit, too late), etc. In science, the one who gets published first gets the credit for the discovery. I suppose you might find that ridiculous too, but one has to have some criteria for giving credit for work done.
Perhaps I care about this so much because I do create intellectual products from my intellectual work.
- November 24, 2009 at 4:46 pm
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@Peter,
You wrote: “IP streches ad infinitum over the whole universe (which is ridiculous), as well as introduces the subjective concept “similarity” “.
For my answer I admit that I am not an expert on IP in general. I know however the patent laws of my trade.
What you state above is just not true there. You cannot claim everything (ad infinitum) based on similarity.
To have a pharmaceutical patent granted you need to have a novel invention wich is practical and advantegous.
Novel: new, no prior art (example)
Practical: you have to show a way how to do it by example, prototype.
Advantegous: it has to be better then the previous solution of the same problem.
All three are limiting factors. And they are taken seriously. You cannot get a composition of matter by claiming anything made of atoms. You have to show and prove that you have made it which is quite capital intensive. The further you go with the similarity argument (scope) the less solid is your case as the difference (limitations) will grow and anybody else can claim those on the bases of these differences as an application.
And do not forget this is not forever but only for 18 years. Then all your invention becomes public property.
I think this is much less arbitrary than any type of homesteading apart from the time frame. Change that if you are so unsatisfied! 
November 24, 2009 at 6:46 pm-
@Andras:
Peter wrote:
“IP stretches ad infinitum over the whole universe (which is ridiculous), as well as introduces the subjective concept “similarity” “.You tried to answer:
“What you state above is just not true there. You cannot claim everything (ad infinitum) based on similarity.”
Please read the statement of Peter again and again. Until you understand it. You seem to have trouble really understanding it and instead you use straw-man arguments.
This statement itself of Peter remains true. Your “answer” is in every way misguided.
You say it yourself here by mentioning pharmaceutical patents: They stretch if understood as property rights at least for a time period over the whole universe. And they are based on the concept of similarity. If you do not understood that subjective concept, please read adequate literature about it.
You did not in any way disprove the argument that patents introduce “ip rights” to similar objects, methods and so on.
And you did not in any way show that claims based on patents do not stretch infinite (space-wise) through the universe.
- November 24, 2009 at 9:05 pm
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@Anti Patents,
If you were following our discussion with Peter you could see a reference to referencing. That takes care of your similarity ambiguity: In a composition of matter patent you list your scope as chemical structures and the combinations of thereof. These are unambigous, they could be translated into mathemathical formulas to check if they are identical with anything known. That is the definition of novelty here and they are checked on an individual basis. Every and each compounds in a patent granted is new, literally.
I guess your other infinity, that of in space is your real concern after all. You are right, the patent is universal, no space limitations. That is the nature of ideas and you just have to live with that. It is balanced by the time limitation which again, preferably coincides with the time that it takes for the idea to go from the unique to infinite (reaching “no scarcity whatsoever”). Then it is free for all. You do not have this unconditional time limitation with non-IP and it clearly did not bother you. This is another arbitrariness in homesteading, one of the many. - November 25, 2009 at 5:41 am
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@anti patents:
Thank you, I was worried I am not articulating myself well, but you showed that there are people that comprehend my arguments.@Andras:
You still are still evading and not facing the claims.IP (in either copyright and patents) stretch infinitely over the whole universe. What is the reasoning behind that?
You need to admit that two molecules on two locations, even if they have the same composition, are two distinct objects and the only relationship is the interpretation that happens in human mind. Of course, from the point of biochemistry, there might not be a difference between them. Just like from the point of view of architecture, two houses on the opposing side of the planet might not be different. From the perspective of that particular sience or art, the differences are irrelevant. But that is an insufficient argument for homesteading and requires a separate step.
- November 25, 2009 at 10:36 am
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The whole discussion started with Kinsella mocking some ridiculous IP issue. He is right there are a lot. But they are not unique. The physical rrealm of properties are full of them, too. They are not an argument to abolish property rights though. Not so with Kinsella.
Noone is doubting that IP is different. That is why we discuss these. You prefer to limit your world to the physical as the high priest preaches. I understand the scarcity argument but when it comes to ideas you evade. Yes they spread fast but they still need time from the non-existent to the unique and then to the infinite. How do you address these time issues? 
November 25, 2009 at 10:38 am-
Troy Camplin wrote:
**********
When you do not have property rights, you have to expect people to steal (since it is not “illegal” and, more importantly, stealing ceases to even be a concept without property rights). The same is true of ideas.
**********You are making the assumption that “ideas” are a form of property. One cannot “steal” something which cannot be owned. It is therefore crucial to clarify the definition of “idea” before one can decide whether or not it can be classified as property.
Let’s look at some common definitions and work from there. Idea:
1. any conception existing in the mind as a result of mental understanding, awareness, or activity.
2. a thought, conception, or notion.
3. an impression.
4. an opinion, view, or belief.
5. a plan of action; an intention.Given the above definitions, how can one claim ownership of an idea? Let’s say that person A forms an idea. That idea is a conception that has formed in the mind of person A. The moment that idea is communicated to person B, the idea is then a conception in person B’s mind. If you declare that the idea is the property of person A, then you are also declaring that a conception in the mind of person B belongs to person A.
But person B owns his own mind. Person A does not own it. To claim ownership over certain workings of person B’s mind is to claim partial ownership over person B’s mind. You have therefore assigned the material property rights of person B’s mind to two different individuals.
If you don’t see the problems with this, maybe an example will help. Let’s say I bought and just finished reading a Harry Potter book.
1. Can I photocopy the book and give it to someone else?
2. Can I hand-write the entire book and give it to someone else?
4. Can I recite the book on audiotape and give it to someone else?
5. Can I translate the book into Italian and give it to someone else?
6. Can I translate the book into Ancient Hebrew and give it to someone else?
7. Can I translate the book into a made-up language and give it to someone else?
8. Can I copy the first 4 chapters and give them to someone else?
9. Can I copy one chapter and give it to someone else?
10. Can I copy a single passage and give it to someone else?
11. Can I copy a single paragraph and give it to someone else?
12. Can I copy an individual sentence and give it to someone else?
13. Can I compile every second word into a book and give it to someone else?
14. Can I copy the remaining words into a second book and give it to someone else?
15. Can I create 5 small books each containing every fifth word and give them to someone else?
16. Can I create 76944 separate books, each only one word long, and each being a consecutive word from the original Harry Potter book, and give them to someone else?
17. Can I create an extensive, paragraph-by-paragraph, summary of the book and give it to someone else?
18. Can I create a passage-by-passage summary of the book and give it to someone else?
19. Can I create a chapter-by-chapter summary of the book and give it to someone else?
20. Can I create an eight-page summary of the book and give it to someone else? 21. Four-page summary? 22. Two-page? 23. One-page? 24. Half-page? 25. Two-sentence? 26. One-sentence? 27. Four-word? 28. Two-word? 29. One-word?
30. Can I tell a friend what happens in the book during lunch?
31. Can I paint a picture of Harry Potter based on the descriptions of him in the book?
32. Can I paint an abstract picture of Harry Potter loosely based on descriptions of him in the book?
33. Can I draw a stick-figure of Harry Potter?
34. Can I create a piece of music capturing the emotional feel of the book?
35. Am I even allowed to ever communicate the words, “Harry Potter”?If you take idea-ownership its logical extreme, the answer to all these questions is no. I need J.K. Rowling’s express permission before “stealing” her ideas and expressing them to someone else in any way shape or form. She owns the idea, whoever’s mind it should be in. Therefore all actions I partake in which require use of this idea can only be performed with her permission. If the story inspires me to write my own book, develop a new invention, write a new piece of music, develop a new dance routine or write an new piece of program code then doesn’t J.K. Rowling have partial ownership over all these new things I developed? I used her idea without permission to develop something. She has partial ownership of my mind. I am not allowed to use my mind in any way which uses her idea.
Maybe you draw the line somewhere. But where? How do you decide where that line is? To what extent does an individual own an idea? What actions can they prevent others from performing? Does J.K. Rowling only have a partial-partial ownership of my mind rather than a partial ownership of my mind?
This goes even further. Is it justified to say that J.K. Rowling owns the idea of the Harry Potter books in the first place? We don’t know what ideas she “stole” to inspire her to write her novels. It’s also very clear that she must of based her novels on previous ideas. She certainly didn’t invent the idea of wizards, magic, goblins, wands, flying-brooms, etc. And she didn’t write the book in a made-up language using made-up symbols and a made-up system of grammar. It’s clear that J.K. Rowling has used a plethora of previous ideas in the creation of her novels.
Every idea is simply an extension of previous ideas. By assigning ownership of ideas to individuals, you are placing a road-block on the natural evolution of ideas. This clearly must result in the deterioration of the rate at which new ideas will be generated. If the ideas of “wizards”, “magic” and “flying brooms” had previous owners assigned to them, then the Harry Potter books may never have been written.
Troy Camplin, it seems impossible to justify classifying “ideas” as a form of property. To do so is to promote partial slavery. The holder of a copyright can prevent me from thinking and doing anything related to their idea. Not only do they have a partial ownership of me, but also a partial ownership of all my physical property, seeing as I cannot use it in anyway that infringes on “their” idea. It should be clear that “Intellectual Property” rights and “Physical Property” rights (which includes self-ownership) cannot possibly coexist. The contradiction between the two is so incredibly obvious to me, that it boggles my mind that it’s not clear to you. And I say that with all sincerity.
- November 25, 2009 at 11:37 am
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@Jay Lakner:
Very well put, I couldn’t have done it better myself.I’ll just give another example, by summarising a book.
—————
This book is a story of a bright boy. He had trouble getting along with his family, but one day was selected for special (yet so far almost unmanifested) skills and sent to an elite school. The school allows him to hone his skills. He excells in combat disciplines and demonstrates great leadership abilities. Meanwhile, the world is being threatened by a powerful enemy. The enemy was temporarily beaten some time ago, but is planning a comeback. It is said that the special skills that the boy posesses are the only way to defeat the enemy. In the end, he defeats the enemy, but finds out that he had been skillfully maneauvered into the confrontation by his own mentor.
————-So, I assume the majority of the readers think I was talking about Harry Potter. However, that’s not the book I described. I was talking about Ender’s Game.
Or was I? How do you establish that?
- November 25, 2009 at 12:12 pm
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Andras wrote:
**********
I have repeatedly stated that the grace period, you can even call it monopoly, offered by the patent laws is an acceptable compromise which satisfy the interest of the inventor and the copiers. In an ideal case this time frame coincides perfectly with the internalization of the idea from the unique to the infinite to satisfy the scarcity argument.
**********Andras, your entire argument rests on this point. The key to debunking this argument rests upon considering both the ‘unseen’ effects as well as the ‘seen’ effects. The following link is a good start. Have a look.
http://blog.mises.org/archives/009334.asp.
@Peter Surda
Thanks Peter. And yes that’s a great example.
- November 25, 2009 at 1:11 pm
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@Jay Lakner,
I have read the bible and I am still a heretic.
I even have comments unanswered in that link.
Boldrin’s pharmaceutical statements are simply not true, you can reserch them yourself. I can recommend Chemical Abstracts.
I agree you should seen the unseen, too. It is an interesting comment from someone who has no background in drug discovery but still feels confident to blanket and abolish the IP of that field. I have suggested a solution, decrease gradually the life of the pharmaceutical patent. And see what happens.
People like these half baked AIDS solutions because they are perfect to bash big pharma even if they are not true.
Shortly, all anti-infective drugs develop resistance. Without proper infrastructure this problem hits so fast that you loose even those who are cared for under the best conditions, your home patients. Are you willing to sacrifice that, too, or just others precious resources. - November 25, 2009 at 3:27 pm
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@Andras,
I said that link was a start.
Obviously I’m going to have to do this myself.I’ll start with a break-down of your view:
1. The state enacts patent laws.
2. Drug companies decide to invest additional funds in research because of the promise of being able to charge monopoly prices.
3. Greater funding results in a greater chance that new discoveries will result.
4. Therefore the patent laws increase the technological advancement of society.So far so good right? Society has gained the knowledge of a new beneficial technology.
But what is ‘unseen’? Point 5 is very important…5. ‘Technological advancement’ is an ongoing process occurring at all levels in every competitive industry.
6. The additional funds that went into drugs research have been denied from going to other industries.
7. As a result, a large number of small improvements, innovations and discoveries have failed to occur in other industries.
8. It is impossible to measure the gained drug technologies against the numerous technologies that otherwise would have come into existence.
9. It is therefore impossible to measure the net effect of technological advancement on society.I could just stop here and I think your point is refuted. But I think going further really demonstrates some interesting things.
10. Company A has a patent on a drug.
11. Company A therefore has a monopoly on that drug.
12. Company A therefore charges monopoly prices for that drug to maximise their profits.
13. Company A will therefore restrict its production.
14. Less of the drug is being produced than otherwise would have in a competitive market.
15. Large numbers of people miss out on a drug they otherwise would have had.Maybe you’re going to argue here that the drug would not exist at all in the absence of patent laws. Such a claim is obviously impossible to prove. But, as I continue, let’s assume that the drug would be undiscovered without the research efforts of Company A.
16. The funds that went into discovering the drug instead went to other industries.
17. These other industries most likely do not contain monopolies.
18. Without monopolies, businesses are competing with one another for consumers.
19. This competition results in consumers receiving the maximum amount for their purchasing power.
20. This competition also results in constant innovation in those industries to provide better products at lower prices.
21. Technological advancement in those industries therefore increases at a greater rate.So the choice here really is:
Do you want funds for research and innovation to go towards a monopolised industry? Or,
Do you want funds for research and innovation to go towards a highly competitive industry?
Which of the two choices will result in greater technological advancement?I should point out that I consider the competitive market to be very much like a laboratory. Businesses are constantly trying out new products, services, business models, etc, etc, etc to see how consumers react. Funds injected into a competitve market is, in my view, funding innovation and therefore technological advancement.
But, of course, there’s more…
22. Patent laws have administration and enforcement costs.
23. These costs are extra taxes on society.
24. If consumers have less money, they have less savings.
25. Less savings means less capital.
26. Less capital means less money for business to borrow and spend on, for example, research.
27. Less money spent on research means a lower rate of technological advancement.Think I’m at the end yet? Not quite…
28. Patent laws require businesses to consult lawyers.
29. X number of extra lawyers are employed.
30. That’s X number of people engaged in unproductive jobs.
31. That’s X number of people not engaged in productive jobs.
32. As a result, society misses out on extra goods and services they otherwise would have had.I actually could keep going, but I think you get the point.
Overall, the important point to keep in mind is that laboratory research is not the only means by which technological advancements occur. The market system itself is one of constant technological advancement as businesses need to continually innovate to stay competitive.Based on my reasoning, I’d have to conclude that the net benefit of patent laws on society is negative. But I cannot prove that claim any more than you can prove your claim that the net benefit on society is positive.
But, what I can point out, is that the implementation of patent laws gives definite negative effects:
Monopoly prices
Taxes
Less productive jobs (patent lawyers)
Coercion from governmentWhereas, there are no definite negative effects due to the absence of patent laws.
Given two choices where the net benefit of each is unmeasurable, it is clearly the most logical to choose the one with no definite negative effects.
- November 25, 2009 at 3:53 pm
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@Jay Lakner,
You persuaded me, I’ll go herd sheep!
But wait! You can make a very similar list and conclusion for non-IP. People got fooled into it and see what they got. Have you asked what the inventors, the generators of ideas think about your proposal?
Or just ignore them as their opinion does not fit yours.
Actually, I see huge negative effects already. Like all socialist scheme it lacks the ability to calculate thus to cooperate (as Mises pointed out). There will not be professional inventors, but lone wolves, outside of economies, called externalities. I see this as a negative as cooperation should beat parasitism but I was wrong before. - November 25, 2009 at 4:57 pm
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@Andras,
You have completely evaded the point I’ve made. Clearly you’ve realised that the “net benefit to society” argument simply doesn’t hold up.
What is ‘standard troll procedure’ in these circumstances? I’m guessing it’s something like: Make a sarcastic and pointless comment, bring up an irrelevent point and then try to change the argument. Let’s see how well you did…
**********
You persuaded me, I’ll go herd sheep!
But wait! You can make a very similar list and conclusion for non-IP. People got fooled into it and see what they got.
**********Please go ahead and make that list for non-IP, I’m sure it makes sense.
This response leads me to suspect that you simply didn’t understand my post. (The fact that you called it a “list” suggests a general lack of comprehension)**********
Have you asked what the inventors, the generators of ideas think about your proposal?
Or just ignore them as their opinion does not fit yours.
**********Oh it’s suddenly a matter of opinion now? Before it was, “Patents give a net benefit to society”. Now it’s “oh we can’t put the poor inventors out in the cold”.
Is it just me or are your arguments getting weaker and weaker as the discussion continues?
Should I consult the central bankers and ask them what they think about my idea of abolishing central banking?**********
Actually, I see huge negative effects already. Like all socialist scheme it lacks the ability to calculate thus to cooperate (as Mises pointed out). There will not be professional inventors, but lone wolves, outside of economies, called externalities. I see this as a negative as cooperation should beat parasitism but I was wrong before.
**********And, surprise surprise, you’ve suddenly tried to change the argument to one of economic calculation.
You got 3/3 in the “How to be a forum troll” handbook. Congratulations. You have won a place on my “List of known Mises trolls”, which I keep on the desk next to me.
Goodbye Andras.
- November 25, 2009 at 7:54 pm
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@Jay Lakner,
–”Clearly you’ve realised that the “net benefit to society” argument simply doesn’t hold up.”–I have never used the utilitarian “net benefit argument” though I have argued that what anti-IP simply is just social engineering and as such should go for the best compromise.
–”Please go ahead and make that list for non-IP, I’m sure it makes sense. This response leads me to suspect that you simply didn’t understand my post. (The fact that you called it a “list” suggests a general lack of comprehension)”
–I agree with your argumentation. I did even before your list as I went through the same. But I see huge holes in it, e.g., it should not be linear as there are alternative solutions and life is too short to wait for solutions for life threatening diseases. However, ducktailing slogens won’t cut it. Read Marx and you will find similar arguments for bringing heaven to the proletariat ending with the same conclusion you made for non-IP.
When you eliminate all opposing arguments, facts and experience, by definition you end up with your original thesis. But that does not make it true.–”oh we can’t put the poor inventors out in the cold”
–I don’t think inventors will need help. I certainly do not. I can do the lobotomy work and on the side I can satisfy my curiosity and invent even in if on a much smaller scale. I surely will survive but will you? I was rather concerned about you.
–”And, surprise surprise, you’ve suddenly tried to change the argument to one of economic calculation.”
–Strange, it always ends here. On both sides. If you read my discussion with Peter that I was focusing on the scarcity argument. As you have changed subject and flooded me with contradictions I was forced to go to the next one as the original was evaded.
Jay, it seems we talk a different language and not just because English is my third. I am sure you observed that, too. I was surprised that Mises.org has little opposing voices left inspite of the fact that even Kinsella is complaining about the world not understanding his genius. I see now that the main tactic is chasing away opposing views. I wanted to educate you on my field and its IP implications but clearly you are not interested. You rather prefer conforming Kinsella/Boldrin/Tucker, even when Mises was definitely against their argumentation.
On the other hand, you seem to be well versed in the anti-IP dogma. If you live around LA we might meet and go beyond slogens and soundbites. I am truly interested in argueing someone who knows what he is against to find answers to my questions.
Let me know. 
November 25, 2009 at 9:49 pm-
to andras:
i think your argument boils down to: large-ticket, intermittent drug breakthroughs (feasible under ip law) are more important [in some broad social sense, and notwithstanding regulatory cost burden] than more the frequent, incremental, small-ticket innovations, which would dominate without ip legislation.is that right?
- November 26, 2009 at 4:22 am
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Andras wrote the following in earlier posts:
“This is a small compromise for a social engineer to satisfy both sides.”
“I have repeatedly stated that the grace period, you can even call it monopoly, offered by the patent laws is an acceptable compromise which satisfy the interest of the inventor and the copiers. In an ideal case this time frame coincides perfectly with the internalization of the idea from the unique to the infinite to satisfy the scarcity argument.
In my opinion the only room for change left is setting the time frame, the reason I used the “18 years or much much less argument”. This is a job for social engineers not for philosophers.”“Abolishing the patent system due to a blanket grudge over the IP laws would do a tremendous damage to the pharmaceutical industry. This is alone for many a valid reason to go against IP.”
“they still need time from the non-existent to the unique and then to the infinite.”
And then later tries to say:
“I have never used the utilitarian “net benefit argument”…”
I wish Andras would show a little intellectual honesty here. “Acceptable compromise” and “satisfy both parties” are clearly “net benefit” arguments.
The rest of his last post is clearly an attempt to bait me into further argument. Standard Troll procedure. I do appreciate the skill that trolls have of inciting emotional reactions. The following lines are classic:
– “Flooded me with contradictions”
– “I see now that the main tactic is chasing away opposing views”
– “clearly you are not interested”
I may not like trolls, but I can’t help but admire their skills..
@Newson, what you have written was my interpretation of Andras’ position. Actually it took me a while to work out what he was going on about because his posts are vague in general. Once I figured out that his position was simply a “net benefit” argument, I knew the refutation would come from considering the “unseen”.
- November 26, 2009 at 12:42 pm
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@Jay Lakner
…And then later tries to say:
“I have never used the utilitarian “net benefit argument”…”
You conveniently left out the end of the sentence:
…though I have argued that what anti-IP simply is just social engineering and as such should go for the best compromise.
I absolutely agree with Mises on this who places this problem outside of the scope of praxeology.
Jake, I am a free marketeer, the reason I am here. However, I have questions on IP. I am looking for the answers. You never gave me the answers, instead offered me your creed, your profession of faith. I am not interested of that. As you called me a troll I could have called you a minion, too:
as you have religious zeal, adoration of the high priests, vicious attack on the opposition and ignoring all opposing views.
You lost another opportunity to expand your world. - November 26, 2009 at 2:01 pm
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@Newson,
That is one consequence but I would not dare to use this here as an argument.
I have more fundamental issues with anti-IP.
The scarcity argument for example. Anti-IP says by definition that ideas are not scarce. But patents are not about ideas in general but about best solutions to known problems. One dimension of scarcity that distinguishes this from the rest is being the best. The other dimension is its spreading. There is a point, where these come to existence. The outsiders call it an aha moment but this will not describe it better than explaining colors to blinds as the outsiders connect the aha moments to comprehending the already known. Anyway, you have a conception of a new solution or just the first solution to an existing problem.
Think big here, cure of cancer, AIDS, Alzheimer’s etc. Again, before that there was nothing and after that there is only one who has it. At this moment it is external of and to all economies. The question is how to internalize it. That is the reason homesteading is invoked for comparisons. Currently we have a system. It has problems but it works, at least for pharmaceuticals. I don’t care for the others now.
Without this system, I believe, this invention would not even be possible though. Enter here the calculation argument: a very high degree of planning and execution is needed for cooperation between the fields of sciences connected, among others with economics. It would be great if you had at least a basic knowledge how it works.
At this point, all anti-IP suggests is to market it. But the inventor is not a marketer, not a salesmen, nothing further from that. Even if he is he looses his time to improve it further and the advantage of cooperation is also lost.
Going further on the scarcity argument. Under no IP, now on, your main objective is to hide it, if you want to market it, as its value gets lost with spreading. You have to hide it from those who understand the best, your colleagues who now become potential competitors instead of collaborators since they can go rouge, any of them, any time. A nightmare scenario. But I think you will never get to this stage as collaboration explodes much earlier. If you arrive to non-IP from an IP world, this system depletes all previous solutions than collapses. I am sure something will build up even under no-IP but that would take a very long time and the results can hardly be separated from the cannibalized IP world, at least for decades.
The third problem I have with anti-IP is the tactic used at Mises.org. If it were Kinsella.org I would not care. Total and blanket hatred for anything connected to the state as you would expect from an anarchist. But god’sake, we are trampled everywhere. Kinsella cherry picked IP and fooled a lot into it. Almost all of his nightmare examples can be used for physical properties as well which is a rather dangerous demagoguery.
One of his other method is to blur the line between owning ideas instead of internalizing ideas. If it were made clear, the time argument would not be so uncomprehendable. And this is what all IP laws about. Help the transition from non-existent through unique to infinite. But that point it is all just social engineering not some high flying philosophical problem.
Again, and all this here at Mises.org when Mises’ opinion was clearly totally different but ignored as a rookie’s. - November 27, 2009 at 5:25 am
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@Andras:
> The scarcity argument for example. Anti-IP says by
> definition that ideas are not scarce.
Actually, I agree that the “non-scarcity” argument is weak (even more so as an axiom). I stopped using that. Still, there are tons of other things you haven’t addressed.> Without this system, I believe, this invention would
> not even be possible though.
Allow me please to provide an alternative view. You come to this conclusion because it corresponds to the way you (or the industry you work in) is presently conducting business. It reminds me of a lecture that is somewhere on this website (I believe by Yuri Maltsev). He used to work as an economist in the Soviet Union. He recalled explaining the free market for workers to the communist beaueu. And they said: that can’t possibly work, we can’t imagine people moving to a different city in order to get job.This is both a psychological issue and a simple result of the complexity of the world. The ability to come up with an unexpected way to reach your goal is a trait frequently found in engineers and businessmen. I would even say businessmen are better at it.
As I said in other comment, IP encourages approaches that are more capital-intensive. Does that mean that the goods thusly produced would be impossible to produce otherwise? Of course not. It could also mean that a substitute product may have been produced by a competitor that was driven out of business due to IP. It could also mean that the product would be produced later, and other goods (e.g. less effective product) sooner. It could also mean that the product might have been developed at a lower cost. We can’t know that in advance. But to jump to the conclusion that it would be impossible is the economists’ equivalent of a conspiracy theory (connecting the facts into a conclusion that is unrefutable but unlikely).
Projecting results as a linear progression of the current trend makes only sense in limited amount of areas and/or short time periods. The more complex the issue is, the less likely a linear progression is to match the development. Solving problems is not a binary function. It is not even onedimensional. Same goes for satisfying customers’ needs.
- November 27, 2009 at 1:42 pm
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@Peter,
Thanks for your reply. It shows real strength to admit a weakness in your argument. I truly appreciate that.
I am coming from a communist country, I understand what you are talking about concerning the polit bureau. I have a tremendous faith in free market, I left late enough to have total understanding how socialism works and early enough before I became indoctrinated, the reason I could connect so easily with Ayn Rand.
I follow the IP discussion to find a way to reconcile my discomfort about the state monopoly and rights. I think I have found the solution and that is not Kinsella’s. Sorry, I am not an anarchist, I saw that in practice as well. But that would be a subject of another discussion.It seems your final argument is based on faith, somehow, we do not know how it will work out. I am sure it will. Just it takes time. What is the cost of, not just reach that stage but also disassemble what we have now.
Let me give you one example: at my previous project I was working on how to cure C. difficile infections. http://en.wikipedia.org/wiki/Clostridium_difficile
The current treatment is not too effective. 10-20% of patients just keep showing symptoms (fulminating bowels). So the final solution is to remove their colon (a non-IP solution from the alternative, the surgery field). Desperation is so prevalent that even fecal transplantation is used. Literally you it shit, shit of your healthy relative. Just read the website I gave you.
We had a compound that has a great potential to cure the disease just by taking it for a month or so, according to test results. It is a result of a great collaboration between biochemistry, structural biology, medicinal chemistry, microbiology, pharmacology, toxicology and the clinicians. The first three heavily rely on IP. Without IP we would not even have a chance to understand the underlying principles. Beyond others it also allows allocation of resources, human resources as well to their right positions (under the current system). And there is the non-IP solution to eat shit. Right now, that is the “somehow”. I am sure that can develop to something better when resources allocated differently. It is just time. But explain that to the patients.
Maybe IP is not so bad after all. Especially, when its life span is limited.I understand the property right argument as well. It always argues with full rights, forgetting rents, limited ownership etc. What if chemicals are sold with the limitation that you can only use them for what is allowed by IP. Would that be a conspiracy theory as it must involve the whole industry? Or a trade association which removes the black sheep. The result is the same as now but shifted the issue to the physical world.
Best, Andras 
November 27, 2009 at 3:14 pm-
“Andras”:
“I follow the IP discussion to find a way to reconcile my discomfort about the state monopoly and rights. I think I have found the solution and that is not Kinsella’s.”
Oh? Do tell!
But the solution that is “not-Kinsella’s” simply means “some state solution” since I oppose the state grant of privilege. You are wording it in a way that tries to avoid making clear that you are positively favoring state grant of monopoly privileges. It doesn’t matter what your “solution” is so long as it is some variation of this; it is not justified, for the reason that aggression and crime cannot be argumentatively justified.
” Sorry, I am not an anarchist, I saw that in practice as well. But that would be a subject of another discussion.”
yes; again, here you want to say you are “not an anarchist” as if it’s just one of many views for which the proponent needs to carry a burden of proof. It’s not. It’s simply the anti-aggression point of view. We don’t need to justify being against aggression any more than we need to justify being nice to people (no offense, Objectivists who need to prove that it’s okay to be benevolent).
- November 27, 2009 at 4:30 pm
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Hi Stephan,
There is the ideal world and there is the real one. Mises started to teach us how to connect the two.
Your ideal world is built on ideal people. You can not select them to populate your world. Their value system is absolutely different from yours. What qualify as aggression then is totally subjective even if you think, maybe absolutely rightfully to you and the gang, that it is objective. You might even have a chance to win your way through but, ultimately does it worth the cost? Everyone has different threshold. Yours seem to be higher, you want to be right even ideologically. Your choice.I think you have dismissed my idea of testing the patent system by seeing the effects of decreasing the monopoly time because you felt that by doing so you acknowledge their right to regulate and ultimately their existence. We like it or not, they are the souvereign. Even if the law of the land says differently.
Anyway, I say decrease the state as much as possible. You say unless its zero I’ll never satisfied. My system unites yours divides. You fit into mine even if I will never fit into yours. It seems a huge difference but the funny thing is we are closer to each other than to 99% of the population. At least we understand each others value system. At least I understand yours and even respect it. I wish you luck to reach your objectives. I truly hope you win.
Andras - November 28, 2009 at 4:14 am
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Dear Andras,
I was actually also born in a communist country and also consider Ayn Rand’s writings a powerful message. At the same time, I disagree with a lot of her arguments and philosophy.
In my country, the planning beaureau decided that heavy industry is the way to go and concentrated their efforts in that direction for decades. The positive results were that it created a lot of employment and an improvement of the living standards for large parts of the population. The negative results where the lack of consumer goods and devastated environment. Once communism fell apart, it turned out the products were not competitive on the market and large parts of the heavy industry went bankrupt. That created mass unemployment and associated drop of living standards for those affected. These people have trouble finding alternative jobs (due to non-marketable skills) and long for the communism to come back.
So, according to your logic, we should conclude that the favouring of the heavy industry wasn’t so bad after all, because there were some benefits and the industry would have never existed without it.
This assumes that the costs are lower than the benefits. But how do you calculate that?
- November 28, 2009 at 9:56 am
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Peter,
I have observed the same. However, I don’t see IP as a state subsidy more than enforcement of other properties.
Honestly I don’t even know how to calculate in non-IP as I stated my doubts above. I think that system has to become so secretive that the lack of even a minimal level of trust makes all co-operations impossible. Inventors do not strike me as altruists.
To solve a complex problem you have to rank ideas, thoughts and their bearers somehow well before they materialize. Right now it works but after removing the temporary ownership I doubt it will. Show me how! (But don’t use the world somehow.)
Scarcity and calculations were my two main concerns. Aren’t they fundamental to keep IP as property? Is there something that over rides these to justify the abolishment of the patent system? Especially when it does not even have to be state run, it can be like a private title system.Anybody can address these?
- November 28, 2009 at 11:59 am
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I can’t believe how often pro-IP people try to appeal to economic calculation as a justification of IP. Economic calculation is actually an argument against IP, not for it.
The ability to calculate is really the ability to minimise the ‘unknown’. The more unknowns there are, the greater the risk you are taking with each decision and therefore the more difficult calculation is.
What has this got to do with IP? Well, you can’t possibly “calculate” how much capital is required for a new technology. Therefore you are taking a risk whenever you invest in research. It is very easy to show that IP increases business risk rather than decrease it.
Consider the following:
1. Businesses A and B invest capital into developing a new technology.
2. Business A develops the new technology first.
3. Business B is now excluded from using that technology.
4. The capital invested by business B is now wasted even if business B would have developed that technology independently.
5. In the absence of IP laws, the capital would not have been wasted since business B would still have been able to utilise the fruits of their research.
6. The risk of wasting capital on technological research has therefore been increased by the existence of IP laws.
7. Hence IP laws make economic calculation more difficult.This should be no surprise to anyone.
IP is contradictory to property rights.
The better the property rights of the individuals in a society are enforced, the more accurate economic calculation in that society is.
Therefore, the implementation of IP laws must decrease the accuracy of economic calculation. - November 28, 2009 at 1:00 pm
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Welcome back Jay,
I have two problems with your response:
1) In your reasoning, point 3 does not follow point 2. So the rest of your reasoning is also false.
The solution of Business A is not necessarily the same as that of Business B. They market their different solutions and the market will decide.
In the pharmaceutical industry, the first stage of research is target validation which includes assessment of known solutions and approaches. As there is only two reference systems it is relatively easy to check the viability and chances of your approaches. As I describe above, there is no similarity ambiguity, at least not in the composition of matter patents. Of course, there are chances for future overlaps but these are filtered out at a very early stage, at the 5-10% investment level. At this stage it is early enough to change directions so you do not loose your investment. You can see this in the introduction of statins. At least five arrived at the same time to the market. IP protection is also ensured at a very early stage before large investments. So the technology was not monopolized, only the singular solutions were.
By the way, are you also concerned about those poor shmucks who arrived late for homesteadings or just strongarmed out of their rightful properties? History of the coal, oil, steel and railroad industry is littered with these cases. Are they reason to abolish private property in those fields? Where is the difference?2) You saw the calculations only as a macroeconomic problem. You did not address the organizational problem. And that is the real one. How do you do the actual research, heavily theoretical without the ability to rank the information and the people who handle them and if you trust them without the risk of them going rouge and starting their own business. Any of them, any time?
You may know, please tell me.
I saw only one solution, the Russian’s “science cities”, intellectual labor camps, similar to the “Manhattan Project”. However, I see some shortcomings with this approach, as well. I would prefer IP any time to those. 
November 28, 2009 at 7:55 pm-
to andras:
without ip, the need for commercial secrecy to capture monopoly rents increases. and the larger the enterprise, i imagine, the harder to monitor and enforce confidentiality. firm size will be a trade-off between scale and secrecy. a new equilibrium will be reached. it’s hard to imagine big pharma flourishing in that situation, but i don’t see that as the end of the world.but also imagine that the enforcement and regulatory burden imposed by ip legislation is now lifted. the savings are going to go to alternative uses. maybe charities will deal with non-commercial research like rare diseases or those peculiar to the third world, as i think happens today but to a lesser extent.
science gulags are best left to communists. incidentally, ip protection was a feature of the ussr
http://www.marxists.org/history/ussr/government/1928/sufds/ch15.htmas far as calculation goes, every tiny commercial innovation faces uncertainty, on the cost side, and to an far greater degree on the revenue side. that’s the art of the entrepreneur. science entrepreneurs aren’t a special case.
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November 29, 2009 at 4:26 am-
Can someone point out to Andras that, in my line of logic, it is implied that both A an B were researching the same technological breakthrough.
He has therefore not refuted my claims and my proof stands.It is no surprise that the drug industry has set up an efficient system around the existing patent legislation to minimise the loss of investment. But there still is loss of investment. Time, wages, capital, etc are still consumed and irretrievably lost when business A discovers the very technology that business B was close to discovering.
In the absence of patent laws, there is no loss of investment because business B is not excluded from utilising the fruits of their research.
November 29, 2009 at 12:34 pm-
Can someone teach Jay the basics of pharmaceutical research? Can someone teach what he is against? You can not patent “technologies”! You can only patent applications. You can buy these patents or their licenses. And you can wait till the patent expires. Furthermore, not only your competitor’s but your research is also backed by patents. They will need your licenses as well (if you were so close). Nothing is lost due to IP. What potentially lost is due to mismanagement and that is not unique to IP driven businesses. Moreover, under no-IP schemes lots of resources has to be allocated to ensure secrecy. You literally have to build a gulag for it. And your product is also burdened by extra features to accommodate the new situation.
Jay and Newson you are stuck in the macroeconomic level of calculations, a common mistake of desk economists. Try to imagine the micro level where two or more researcher has to collaborate and have to find their way to allocate their time and resources in the absence of property right allocation because the first physical property is the end product. Without understanding and solving these there is no macro level.
When I mean calculation problem I refer to these.
Guys, you don’t understand the IP system, you don’t know the pharmaceutical industry but you have the arrogance to blanket obliterate IP.
Right now, the only industry in the US that leads the world is biotech and material sciences. They both heavily rely on IP. Pull the rug from under and you can replace the with the other leading US industries, security and military.
And Newson, big pharma does not do much research. They are only marketing houses. Biotech is doing the lifesciences.
And my recollection from the communists is that they were not really for properties, any type of properties. No website will change that. 
November 29, 2009 at 8:30 pm-
to andras:
the micro environment is a function of the macro settings. companies adapt to meet the regulatory framework. peter klein’s done a lot of work in this area on company size being a function of regulatory burden.the military industry is parasitic. anything that shrinks the power of the state is a direct threat to its health. so i don’t think we can be dogmatic about what industry would predominate, free of ip monopoly.
i raised the existence of ip legislation in the ussr, because those against ip legislation are often accused of being some sort of marxists.
- November 30, 2009 at 3:13 am
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Andras wrote:
**********
Nothing is lost due to IP.
**********I find it interesting that Andras can even attempt to make this claim. Consider the following:
Business A is a drug research company.
Business B is an individual who has set up a laboratory in his back shed.
A and B are both independently researching the same problem.
The undiscovered drug X solves this problem.
A discovers drug X first and patents it.
One week later, B discovers drug X.
Due to the patent on drug X, B is forbidden from using it without paying the monopoly price stipulated by A.
B’s investment is therefore lost.Even if the loss of investment is relatively small, it is still a loss of investment. Hence my arguments in the above posts are still unrefuted.
Andras also wrote:
**********
You can buy these patents or their licenses. And you can wait till the patent expires. Furthermore, not only your competitor’s but your research is also backed by patents. They will need your licenses as well (if you were so close).
**********With patents, researchers have to work out how much to invest by factoring in the price of existing licenses.
Without patents, working out how much to invest is far easier because their are no existing licenses and hence no additional costs of using their own resources.
Hence calculation is hampered by patents.
I would have thought it was obvious that the less factors of production, the easier calulation becomes.Andras also wrote:
**********
Moreover, under no-IP schemes lots of resources has to be allocated to ensure secrecy.
**********The premise that patent legislation decreases the need for secrecy is completely unfounded. Throughout the research phase, the promise of monopoly to the first discoverer would increase the need for secrecy, not decrease it. Is Andras really trying to argue that cutting edge drug research is not currently shrouded in a cloud of secrecy?
It would only be during the testing phase that one could possibly argue that secrecy needs to increase. It is impossible to make a general determination of the overall costs/savings (it will be different from case to case). Therefore, one cannot use the argument of ‘decreased secrecy costs’ to justify patent laws.Andras may have a lot of specific knowledge about the current drug patent system. However this seems to be limiting his ability to view the ‘unseen’ effects of that system. I liken it to someone who has great knowledge of the current minimum wage laws but is unable to see their true effects because they can only recognise the ‘seen’ effects and are unable to recognise the ‘unseen’ effects.
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