KOL184 | Intellectual Property is the Root of All Evil (PorcFest 2015)

[Music]

we would like to welcome our favorite self-hating patent lawyer so welcome

stefa hello good to be here my first pork fest it’s

wonderful um I think patent law patent attorneys

is a strange profession because I have a feeling if you’re a cancer doctor an oncologist you probably don’t get asked

how can you be paid to fight to eradicate something that would end your career you know they just don’t get

those questions uh defense attorneys who are representing criminals accused of

drug crimes don’t get asked you’re against the drug war how can you take money to try to help people in a system

that you wouldn’t even be paid to it wouldn’t even exist without the drug war so patent law it’s kind of a strange

thing to uh to be a Libertarian and a patent attorney I passed the patent

board in 1994 and I think in 1995 I published my first anti-ip article so

they kind of coincided um learning a little bit about a topic makes you um see its flaws if

they have them the title of my talk I chose an an intentionally hyperbolic and

uh uh uh title which is intellectual property the root of all evil uh this is a little bit exaggerated

but I want to buttress that claim a little bit it’s based upon the title of Frank chodov

1950 54 book income tax the root of all evil which I admit gives IP a good run

for its money and probably in some ways is really worse um probably my real title should

have been John lock the most evil man in all of

history just joking we all know it’s Emanuel

Kant so what I want to do is explain why IP by which I mean intellectual property

law which is a false name given to it by its proponents for patent and copyright and some other subsidiary uh legal rules

the state propounds and for Upon Us patent and copyright primary but also

trademark trade secret boat hole designs database rights in some countries moral rights and an increasing array of rights

which I may get into if I don’t see eyes glazing over too much it’s not too often you go to a campground in New Hampshire

on a Friday night and speak about anal property so so I already gave you a gold star

you’re commended to be commended so what I want to show is that IP is one of the worst things the state

does it’s a growing problem and in a way it’s the most Insidious and dangerous of

all of the state evils not in every respect but in many respects so let’s talk about we all know what the state

Evils are and until 15 years ago IP was not on this list because most Libertarians didn’t think about it

didn’t recognize it but it’s obvious War the number one the Federal Reserve

Central Banking Fiat money government schools propaganda government education

number three taxation and of course the drug war which of all

those has the least excuse uh imaginable um and I would put

intellectual property up there in the big six okay now I’ve given this not

this talk but I’ve given speeches about IP too many times at this point you can

look me up on YouTube or on my website if you want to get an in-depth talk about IP I’m going to take it for

granted that most people here are not for patenting copyright right is there anyone here who wants to

come up and I can give you a 5 minute lesson no so I will quickly summarize the case first of all the state is

illegitimate second of all legislation is not the right way to make law even if you have a state third of all patent and

copyright are total creatures of legislation just like the Americans of Disabilities Act or like the tax system

it could not exist without legislation and it couldn’t exist without the state so that’s a primape or an initial case

uh against uh patent and copyright law copyright arose in response to the

printing press the government and the church feared people spreading information they wanted to control it

and they did it with guilds and with protoc copyright law which finally resulted in the statute of an in 1709

which is the basis of modern copyright law so copyright law is a state invention whose Roots lie in censorship

and thought control it’s a little surprising when we find Libertarians who think copyright is

a type of property right it’s a little disgusting frankly um patent arose even a little

earlier in the practice of the crown The Sovereign granting favors and Monopoly

Privileges and protection to court cronies and favored Industries a patent

was basically a statement by the king saying only you can sell playing cards in this town okay so it’s not surpr and

and that that finally culminated in the statute of monopolies in England in

1623 the word monopolies was used back then you see the government used to be more honest about it was what it was

doing we used to have a department of War now we have a Department of Defense okay at least they admitted it

was a monopoly if you tell a pro I libertarian now that they’re in favor of monopolies they go

crazy okay but they are in favor of monopolies okay so intellectual property

is now entrenched patented copyright especially what I would like to do is is well let me just explain quickly the

problem with these views I’m going to go into mises a little bit here because mises is one of my intellectual Heroes

along with Rand and rothbart and the others the basic problem with patented

copyright other than the fact that censorship is UN libertarian and protectionism is UN libertarian is that

the libertarian idea is we want to live in Freedom and prosperity and harmony

with each other we live in a world of scarce resources we live in a world where we’re born we have to act we have

to use knowledge to act and we have to use means to act means are scarce things in the world tools Land

Resources these things these scarce means are of such a nature that there can be conflict over them only one

person can use these things at a time and if there’s not a normative system a property system that says who is the

owner of this thing this thing that there could be a dispute over then

there’s going to be fighting and we want have Society we’ll have Warfare and white makes right and we won’t have

Society or civilization so property rights arise to address this problem that we humans face which is scarcity in

the world it’s all around us every action we take involves us every action we take also involves knowledge we’re

intelligent sentient creatures we need to understand the world comprehend it have an idea about the causal laws have

an idea about the future what’s going to happen and when we feel uncertain or we feel um

uneasy about what’s going to happen in the future without our intervention we think hm I can use this means to get

this thing done to make things better that’s what all Human Action is Human Action uses knowledge and it uses scarce

resources property rights are only for scarce resources and as Murray rothbort has pointed out all human rights are

property rights and all property rights are rights to control these scarce resources in the world that’s all they

ever can be a patent or a copyright is not actually a right to an idea that’s

what it attempts to be that’s the justification given by its proponents a patent or copyright is really a

disguised redistribution or theft of property rights in already existing things as a quick example if you use my

song without my permission I can use copyright to sue you and the court will use its physical Force to take some of

your money and give it to me so it’s really about the money okay the same thing with patents if I invent a new

mouse trap and I have someone compete with me because they see that this mouse trap is popular I can sue them and the

court will use physical force and forced by government guns to take some of their money and to issue an ongoing threat

saying and you may not make this mous trap anymore even though it’s with your property uh on pain of government guns

physical injunction so the this is the basic argument against IP it should be obvious at this point to every

libertarian what is not obvious is how bad the problem is okay so I’m going to what I’m going

to do now is go into a few examples I’ll try to cut this as short as possible for Q&A because we’ll probably probably will

be a lot I’m not going to talk let me let me say what I’m not going to talk about I’m not going to tell you how

people would survive in a in a patent or copyright free world the short answer to

that is uh your failed business model is not my problem okay you if I explain why slavery is

wrong a response to my argument is not but who would pick the cotton okay so if

I tell you patented copyright violate property rights don’t ask me but how

would music get made that because why don’t you answer that question go how about you make some music instead of

wasting time asking me this question okay so that’s not what I’m going to get into today but I will be speaking on

this topic in in Papa’s conference in Turkey in September

actually okay the two main problems in quick summary with the reasoning people

use to justify IP especially by Libertarians which is disheartening number one the natural law property

rights argument is based upon John Lock’s idea that we own our labor okay

now that was the argument John Lock used to justify our self- ownership of our bodies and our ownership of things we

acquire in the world or that we acquire by contract he said that you own yourself because God gave it to Adam

Adam gave it to Mankind we own our bodies and ourselves and therefore if

you own your labor if if you own your body you own your labor and then you own things you

mix it with which is homesteading or appropriating unknown things in the world his conclusion is correct that’s

the libertarian conclusion his reasoning is the problem his reasoning is overly metaphorical ambiguous and imprecise I

don’t blame him too much it was a long time ago he was a Pioneer but you do not own labor labor is just an action you

already own your body that’s what gives you the right to do perform actions with your body labor is just a subset of

action it makes no sense to say you own your actions or to own your labor you own your body that gives you the right

to perform actions the second justification given for uh patent and

copyright is sort of a rear guard defense that is in response to criticisms because people started

noticing in the 18th century free market economists started noticing well there’s something really strange that you’re

grafting onto this roughly free market property system in the US and in the west you’re grafting onto it these

Monopoly privileges of patents and these censorship grants of copyright there’s something strange about that uh they

were called monopolies at the time or privileges and so the response was well they’re needed to encourage people to do

things Etc and another response was well they’re they’re actually natural property rights okay but these two

respons is their natural rights based upon Lock’s overly metaphorical labor Theory which by the way a version of

arguably led to the labor theory of value of KL Marx and Adam Smith and David Ricardo which led to Communism the

deaths of hundreds of millions of people in the 20th century but we can ignore that because we need a new iPad

um the utilitarian argument has led to this thinking we have now where we

Libertarians face it all the time you talk to a normal person they don’t think in terms of principles everything is

about utilitarian or empirical constraints oh we need to have an incentive for this the government needs

to have funding for the Arts the government needs to uh protect this infant industry here okay from from

competition from from Japan the steel industry whatever okay uh the government

needs to subsidize the Arts and Sciences with the National Endowment for the Arts the National Academy of the Sciences uh

Etc now this kind of thinking I think what happened was it was a mistake the

the founding fathers had a hunch they thought ah let’s throw this in there we kind of have this weird copyright thing

the statute of monopolies for patents let’s put that in the Constitution and then let’s let Congress

do something with it just to stimulate some kind of industry we’re a new country after all they had a hunch they didn’t have a bunch of empiricist

economists doing studies they had no idea what they were talking about okay so they had a hunch it’s going to

improve innovation in the country they passed it these industries get entrenched by special

interest whatever the equivalent of the pharmaceutical industry was at the time I don’t know the buggy whip industry you know these guys now have an interest in

monopolizing and carzing their field using patents Publishers had an interest in maintaining their Monopoly over

publishing and printing using the copyright system so these systems start to persist and become ingrained in the

country when they’re subjected to criticisms by free market people and pro uh protol Libertarians classical

liberals their response is oh no it’s a natural right it’s a a property right let’s make up a term it’s not patented

copyright it’s not privileges it’s not monopolies it’s an intellectual property right it’s just another type of property

right and this is one reason why I think that intellectual property is one of the most pernicious and dangerous of all the

state uh uh institutions and policies that are dangerous it’s because unlike

the others most Goodwill people especially now in the aftermath of War inflation problems in the 70s most

people recognize even if you’re in favor of Taxation you sort of know it’s theft even if you’re in favor of public

education you know there’s something a little bit wrong with it you know the government’s educating the children we all can point to war is obviously

something that we want to avoid of all these government policies only

intellectual property flies under the banner of something we’re in favor of and decent people are in favor of which is property rights so it’s very

Insidious and this is why it’s so hard to convince people that if you’re opposed to IP that you’re not not some

socialist or leftist who hates Humanity you know in my view actually the reason to oppose IP is because you have a a

profound respect for for property rights and for freedom and social interaction there is no justification for any

Central agency to tell people what books they can publish you know books have been banned in the name of a copyright a

a sequel to JD salingers catcher in the r a judge banned it uh copies of movies

have been banned people have been ordered there some um customers who accidental uh there was a store who

accidentally sold some copies of one of the Harry Potter novels uh a few days early before release and uh the

publisher went to a federal a judge a judge in Canada and the Canadian judge sent an injunction to private citizens

who had bought the book ordering them not to read it or discuss it I could give you a thousand examples

which would blow your mind and these examples come every day I can’t even keep track of it anymore myself and

these are all empirical examples and when you give these examples The Defenders of Ip say well you’re just not

giving a principled case against it you’re just pointing to examples and every one of these examples you point to I’ll tell a defender of Ip well what

about this what about this what about this and every time they’ll say well I’m not in favor of that I’m not favor of that I’m not favor of that they say well

what the hell are you in favor of uh they’ll say well I’m not a specialist I don’t know I’m like well are you in

favor of the current patent system no don’t accuse me of that I said well do you want to abolish it no I’m not a

communist I mean you can’t get anywhere with these people okay now this thinking

has really confused almost all the approaches to it the more principal types the natural right types like the

objectivist they do a version of locks view of Labor that we own our labor they say that man creates values and he owns

values now I think this is total nonsense we don’t create values we

acquire resources and we use our int and our labor and our effort to improve their value to us value is a subjective

phenomenon as me as misus has explained okay so when you increase wealth that

what that means is taking something you already own and you improve it I take wood and steel I make a mouse trrap now

I’m wealthier but I haven’t created a new property right there’s no value that’s free floating out there that I

own we have to get rid of this idea that we own value that value is an intrinsic thing that a it’s some kind of exist in

entity that can be owned remember all rights are enforced by force of either

some private system or the government and it’s always directed against physical objects our bodies or the

things that we actually manipulate and own that’s what physical force is it always comes down to that that’s where

the rubber um hits the road okay so let me give a few examples

here before I how much time do I have okay I’ll assume seven minutes

okay I I can’t even go through all the examples I’ve collected uh has anyone ever seen how uh Louis

Venton purses have the logo on the side yeah you think that’s normal that’s just a distortion of culture because there’s

no copyright in logos for fashion designs so the the uh the producers use

trademark law which is another type of IP right to put on there so they can sue people for counterfeit and then the

Libertarians who defend that say well aren’t you against fraud like so if a

woman puts on makeup and looks 5 years younger she’s defrauding her date I mean if I buy a $20 Rolex fake Rolex am

I defrauded or do you think I might have a clue that it’s not a real Rolex so I’m not defrauded the seller’s not defrauded

who’s defrauded Rolex Rolex had nothing to do with it so they use these fake arguments all the time um

as you guys probably know Aaron Schwarz this is a couple of years old now Aaron Schwarz actually committed suicide

because he was being persecuted by the feds uh for copyright infringement

facing prison time severe prison time uh tra trademark is one of the least of

the the patent and copyright of the two worst I go back and forth which one’s worse I mean you tell me copyright

threatens internet freedom and freedom of speech and it distorts our our our our artistic culture

doesn’t really cost that much in dollar terms it just distorts everything and threatens internet freedom and I happen

to think the internet is one of the most important uh tools we have against a state in all of history so I think that’s pretty important in libertarian

terms the patent system probably imposes costs of let’s say 1 2300 billion do a

year at least on the US economy alone while distorting the economy causing

cartels giving rise to oligopolies reduced Innovation reduced competition so it basically costs us a lot we’re

basically poorer and we have a less Innovative Society now than we otherwise would have without patents we’re all

much poorer we pay higher prices for cell phones there’s a all these patent taxes you don’t even see you know Apple

sues uh Samsung Samsung sues Motorola one sues Google they hire their patent

lawyers like me we make a lot of money off of it we help them defend it they spend tens hundreds of millions of

dollars a year on these patent lawsuits there’s a chart you wouldn’t believe it looks like the human neuron map or

something all these lawsuits going on between these companies they don’t care they sue each other their lawyers spend

the money and then they finally make a deal Motorola and apple make a deal Google buys a Motorola

division what do they do they say okay I’m going to pay you 20 bucks a phone for these 17 patents you pay me 15 bucks

a phone for the for these 38 patents and we’ll we’ll net it out and then we’ll go

away and then of course they just pass the cost on to the customers and they can do that because they basically have

a quas monopoly position because there’s only three or four players that can afford to do this using the patents they’ve

accumulated little guys can’t compete if I were to enter the field and try to compete with a brand new smartphone

design I’d be sued into Oblivion and I wouldn’t be able to get any investors that are going to give me $17 million to

defend patent lawsuits which I probably would lose anyway because patents are valid this is the other problem people

talk about patent reform they say we need to get get rid of the bad patents we need to get rid of software patents

we need to get rid of patent trolls we need to improve the quality of patents we need to improve the patent office’s budget we need to stop the the siphoning

a funds off from the patent office going to the other agency of the government after all the patent office is self-sufficient they’re profitable yeah

they’re actually profitable like the post office well they’re give a monopoly

they’re of course they’re profitable um all these people missed the

boat the problem with the patent system is not the patent trolls it’s not the

software patents it’s not the stupid patent examiners it’s not the inability to search the patent art for software

it’s not the patents done by trolls who don’t have their own products the problem with the patent system is the

good patents the ones that can be used to extort other people and to keep out

competition this is the problem

anyway the uh as a trademark example as I said it’s number three on my list trade secret is

bad too remember the Apple case when the uh five okay remember when uh the Apple

employee left the iPhone 4 on a bar stool in California somewhere a few years ago well there was a raid of the

guy’s apartment that had found it used by Apple with the police in tow under

Trade Secret law right so there here’s a illegal search and seizure of someone’s apartment remember the guy didn’t breach

a contract and he didn’t create any property violations Apple abandoned their property they were negligent there

was no contract so even trade secret is bad in trademark you guys may have heard of uh uh Chick-fil-A right eat more

chicken you know their stupid little symbol that’s misspelled looks like dripping Black Cow blood for some reason

misspelled there’s some innocent guy named Bo grease or something up in he’s

up in New England somewhere he sells eat more K t-shirts spelled

properly he’s been under siege by uh by Chick-fil-A’s trademark lawyers for about 3 years now he may lose his

business because of this nonsense this H this stuff happens all the time

um let me just give a couple of uh empirical numbers that will just blow your mind first of all there’s been a

study done by John Tani and a law professor looking at copyright law the way it works now this is really not an

exaggeration this is the way it works because there’s what’s called statutory damages in the copyright system there’s

75,000 $150,000 minimum penalty per infringing act okay it’s not even it’s not a

measure of what damage was done to the copyright holder all of us probably us more than

the average person just doing regular things even if you’re not using torret and downloading pirated movies just

emailing each other copying clips of websites sending photographs doing normal things everyone does with the

internet technology uh in principle each one of us is potentially liable for up to $4.5

billion of Damages every year just for living in this country in this technical world and of course what does

this do it gives the state the discretion to selectively enforce it against their enemies which is what they

do um so this is one reason why I think that IP is the root of all evil we need

to get rid of the labor notion that lock has propounded which has infected the Randy and idea of the creation of values

that’s not how property Works creation is not a source of property prop is a source of wealth we need to get rid of

empirical and unprincipled thinking we need to recognize that IP is a growing threat as as the digital world gets more

and more important the proponents of Ip say that it’s even more and more important they’re exactly wrong they

have it the other way around as the as the two things that contribute to human success or the scarce means we have in

principle the capital resources we built up the factories the tools and the knowledge the knowledge is can be expand

without limit because we can transmit it to each other that’s what’s so beautiful about it so we have two ingredients of successful Human Action and prosperity

means of action scarce resources and knowledge to have a law that tries to

slow down the spread of knowledge to tries to penalize people for spreading this building the Corpus of human

knowledge is literally insane and malevolent and uh uh the most UN

libertar and evil thing you can almost think of so I will close here and welcome your

[Music] questions okay first I’d like to give

you something all

right that’s my CD thank you when you take my CD or you download my music from

the internet and then give it to someone else you will have benefited by some

degree and in some measure otherwise you wouldn’t be doing it so whether you get

a smile or you get laid is irrelevant to me I don’t

care what I do want to know about is what kind of system or infrastructure or

anything else are you and the other experts like you who believe the way you

do because I don’t I don’t give a rat’s butt about current copyright law that’s not what I’m talking about what are you

and the other people like you going to come up with to hold people accountable

for having used my time and my labor to

benefit I should I play back the entire 35 I mean I just answered the entire

thing I just explained that that’s the kind of question that I reject

um you you benefited from others before

you’ve learned from other people before I compensated them so I guess the answer is I’m not

going to do anything right I I can be an attorney and help people with contracts

right uh you can think of any industry you

want the fashion industry has no IP right now they’re making profits you can knock off someone’s perfume smell right

now they still make like a profit okay books movies paintings music we’re used

to copyrighting these things and people are relying upon these models and by the way it’s 2015 CDS are

gone I sold you the experience not the CD so and the reason I say that is

there’s a difference between you handing me or giving me a physical object with with which there could be a contract we

could have a contract there is one on the album okay that’s not a contract cor that’s a that’s a fine point of law

which which we can talk about that’s a that’s a that’s a that’s that’s a different issue but when I download something from the internet I never

touched or manipulated anything that you own so I you don’t have the right to get in what I do with this information look

the the answer I would give you is what Benjamin Tucker said over a century ago he said if you want to keep your ideas

to yourself keep them to

yourself so my view is there are things that

authors and artists can do but that’s an entrepreneurial problem and people like

me and others are happy to work with you to help you do it but not when it’s directed as a challenge saying basically

what your question is I don’t want to put words in your mouth but I’ve heard this question 1700 times so the way I would summarize it is unless you

guarantee that I’m going to make expent profit on my personal Hobby or passion

then I’m going to be in favor of copyright and patent law and I reject that okay because there’s no

justification from patent copyright law so if there’s an honest separate question about how would artists survive

look one example this is well artists that sing and perform can make money off

concerts now if you give them this answer they’ll say well what if I’m a poet so everything you give them they

will ask for another answer you know if you’re a novelist like uh like JK Rowling you could sell your your you’re

you’re you’re right you could you could offer to consult on the movie version there’s three movie versions coming out

on the second Harry Potter book okay because it’s popular and she can’t stop anyone from making a movie because

there’s no copyright she can say I tell you what I will for $10 million I will I

will review the script and I will put my name on there there’s ways people can make money she could say look at my

million fans out there in the world I have book number three ready I’ll release it as soon as I get 3 million

people agree to give me $2 each off of Indiegogo or something people have to use the new technology that’s

threatening them in their minds to benefit themselves it’s just an entrepreneurial issue anyway let’s move

[Applause]

on so you said that uh intellectual property can only come from a

legislative law do you in fact believe it’s impossible P copyright anyway

trademark did originate in the common law and trade secret too yeah do you believe it’s impossible for these sort

of intellectual property ideas to arise under a system of common law for example if someone writes a book and someone

else sets up their own distribution of it do you believe that it is impossible that a common law system would arise

whereby the writer of the book could sue this distributor for damages yes I think it’s completely impossible for several

reasons and even if it’s not impossible it would you just be illegitimate then the common law would just be unjust as

it is often unjust today because it was after all a quasi State system or a state system it was just decentralized

so it had advantages over legislation as the way of making law but it’s still a government system so you could imagine

some judge is doing something crazy having a crazy decision and just announcing from the court we think

there’s a right to copy you know this kind of right they could say we think there’s an Americans there’s a right to

be free from discrimination if you’re handicapped they could legislate the Ada From the Bench but the way the common

law works is that kind of decision first of all it would be viewed as what’s called dicta over the dicta a saying

that the judge is making that’s outside of what he had to say to resolve the dispute every case in a common law

system is a dispute between two actual people withstanding and they have a real dispute between them and the judge’s job

is to make a decision or the jury between those two people he can’t make a general law applicable to everyone else

and if his decision is crazy other judges will just disregard it if it makes sense and is a workable solution

over time it will accrete to the body of law that’s how the common law develops so I think it’s totally impossible and

the proof of that is that these are these are statutes it took the US first of all the US is based upon a

Constitution which is just legislation we don’t like to think of it as that we think of it as our Bible or something but it’s nothing but legislation which

was part of a a coup coup they taught in this country centralizing the state giving cover to the state constitution

was ratified in 1789 1790 the Congress passed the first

copyright and patent acts so there are legislation that followed directly from another piece of legislation which

followed from the statute of an which is legislation in England and the statute of monopolies in England so it’s it’s

inconceivable to my mind that to imagine this arising um in a decentralized legal

system thank

you Stefan I’m interested in the uh

strategies of the state and the future strategies of the state and I’d like for you to comment if if you’re aware or if

you’re not um there was a bill this uh past year or there were trying to get it

through where that if you violated copyright you could be held under terrorism laws and held accountable

under terrorism laws and I’m just curious if you if you know aware of that and if you can comment about where you

think the state is going to take IP law in the future to ratchet up Allah

Robert higs oh you by ratchet up you Bob higs

you mean higs is ratchet effect right where right state law tends to increase yeah where the the state uses the law

and legislation to increase its powers yeah which is similar to mis’s Observation that state regulations

usually mess things up and require more regulations so controls breed controls as mises would say right uh I don’t know

if I remember that sounds familiar what you’re talking about using copyright combined with a terrorism charge what

you may be thinking of is the 3D printing uh files of uh Cody Cody Wilson

right and the state has basically threatened him with and I didn’t get a chance to get to this in the talk but

this kind of law is an example of why IP is in cities because to my mind it’s like a patent or copyright type law the

federal government is basically using its export import and anti-terrorism

Technology contr control laws to say you’re exporting uh uh basically a

hostile I forgot the term hostile product because it’s information like if you have the recipe for a gun right so

it’s very similar to copyright it’s just in this case instead of a private party having the copyright or the patent it’s

the federal government claiming this copyright or patent they just don’t call it a copyright patent uh so I think the

government tries to use this mentality to expand his control you could think of any D of laws is IP like the drug war is

IP like the government’s telling you what you can do with your property which is what patent and copyright law allow people to do um you know I think there

was a case I read recently about the NSA suing someone under a Federal Criminal statute for using their logo on their uh

on their website which is normally what a trademark claim would be like but it wasn’t called a trademark claim it’s a

Federal Criminal statute so there’s all kinds of Ip like provisions and I think the government’s getting worse and worse

the worst thing is that they’re exporting this to the rest of the world I think Canada just increased their copyright term by 20 years under arm

twisting by the us so that Canada can be part of the TPP negotiations it’s the trans-pacific partnership which is

probably going to pass because Obama Twisted the arms of the Republican sellouts in the in the Congress to pass

the uh the TPA that allow you know the FastTrack Authority so tpp’s coming it’s

going to ratchet up IP protection on the world copyright and patent uh it’s just going to get worse and worse the only

Saving Grace is that the state’s getting more and more desperate and they have to hide these things more and more and with

the rise of encryption technology and the kind of the Bitcoin stuff we talked about this on Ernie Hancock show this

morning a little bit uh it’s going to get easier and easier for people to evade the states control by just going

underground through some kind of dark net or some kind of encryption so my hope is that copyright and even parts of

patent law will be increasingly unenforceable that’s a practical

matter in a world without patents wouldn’t I I

know you dream this a lot but wouldn’t there be a Virginia industry and back of of back engineering firms and wouldn’t a

company like apple have to charge actually more because the life of their product would be less because somebody

else would come out with a copy Yeah by back engineering you mean reverse

engineering which is which you can do which you can do now you just couldn’t sell the product that you reverse engineer I mean part in in this world

you would be able to do that and that would limit the lifespan of the product that apple or other companies which

means Apple would have to innovate more I mean they’d also have to charge more to be able to make up the their

cost initial cost I don’t think that’s true from just my experience with the industry but even if it was that’s

true well you know I’m actually a Libertarian and believe in free market competition so I

I I I don’t see a problem with companies competing with each other and having to compete uh every time a new business

model comes up or a new product if it’s successful what does this do it sends a it sends a signal to the market via the

price system and it signals to people like blood in the water to sharks hey here’s an opportunity to make a profit

you got to remember profit is an unnatural thing the Market’s always tending towards equilibrium right profit

always gets eroded down to the interest rate if you make a profit you can’t count on that forever you can’t sit on

that so when you make a profit you’re going to expect entrance to come compete with you this is the market process this

is why we have progress I see nothing whatsoever wrong with people competing with with with others and not only that

if you understand the way the patent system works it’s completely non-objective and arbitrary and so Apple

made a smartphone so do they own smartphones or they own roughly rectangular ones or ones with a touch

screen or with a touchcreen tooo much of the surface that’s the job of people like me to write these complicated legal Le paragraphs and patents using the

state’s legislative system that no one else understands no one else understands and it’s completely unjust and arbitrary

nothing to do with the real world it’s just an arbitrary line drawing basically by a court or by a bureaucracy of the

government so some competition is allowed and some is not I think all competition should be

allowed hi so my question is how do we begin to

limit the scope of Ip in this country so I understand your arguments and you know I think we live in an age where a lot of

Industries are more open to this you look like companies like Google and Tesla that taken somewhat more of a looser IP stance and I even think with

copyright there’s some straightforward answers which you kind of brushed upon looking at the pat Patron system but

really the big you know adversary here is the pharmaceutical companies you know they have 10y year long regulatory

periods Plus you know5 billion dollars per successful drug including the failed ones you know how do we start to tick

away at that do you think there’s some um some over you know washing system that we can Target do you think we just

you know have to you know hold back the The Walls by looking at the most egregious Defenders like Myriad or do

you think that possibly we can start targeting and peeling back the scope by looking at things like reformulation and

repurposing of uh prior art I I think the internet helps because it’s publicizing on a daily basis these

outrageous uh examples the problem is people don’t have a principal framework to look at it through right so they’ll

see a bad example and they’ll think well that’s part of the balance we have to do a balance this is part of this this the problem with this utilitarian mentality

we have now everything’s a balance yeah we need free competition but we also need to have people have a guarantee to

get profits uh off of their uh you know so it’s it’s so we just have to have a balance and of course it’s up to

Congress or the courts to do the balancing right or the voters which is completely outside of the free market um

I think it’s the the problem is the same public Choice problem that this is

pushed by people with special interests right they concentrated interests most people don’t see the problems they see

all the good things we have all the high-tech so they’re not really fighting this and they’ve been diluted into thinking this is part of the property

rights system of American Western capitalism so all I can think is we can

keep educating people showing them examples and hope that eventually the courageous you know entrepreneurs and

the people that don’t they’re not always as cowed by the state will just evade the state’s regulations using

technology hi hi I’m ambivalent I had a Patent filed out but I never actually

filed it um but I was going to use his example of the pharmaceutical Industries

you know if they spend like a half a billion dollars developing an appeal um you know they going to want to protect

that from some company just copying it C pill so I was wanting to ask you do

you think that anarchy and intellectual property are mutually exclusive I’m not I don’t think they are I think that

there will be a market for intellectual property because you know anybody who invests that much into like one product

they’ll also be willing to pay a pretty penny to dissuade competitors from

entering the market as well so whether it’s you know um their rights

enforcement agency or whatever um I think that there will still be a market for intellectual property so do

you think they’re mutually exclusive okay so uh

so yes I think they exclusive but let let me address that um first of all yes people don’t want

competition but that’s natural people are willing to pay a pretty penny sometimes you know if I have the only

pizza joint in town and someone else is going to open up a competing joint across the street and steal some of my business right this is how people think

about things in terms of using possessives as arguments um then they might bribe their

mayor buddy to deny the permit for the competitor across the street they might want to do that there might be a market

for Hitman in a free market too but that doesn’t justify it okay so that’s the first thing intellectual property is a

term we have to Define precisely if you’re going to have this kind of discussion it’s used at least in three ways number one it’s used to discuss the

just knowledge people have this is a common colloquial way that engineers and and businessmen use they’ll say you know

this process I have is my IP as to an IP lawyer that’s not what it means that’s just knowledge they have their knowledge

that’s fine IP means the legal rights protected by the state in patents and copyrights primarily it also is used

sometimes to refer to a contractual mechanism people could and would and should use to do a little bit of what

you’re pointing at but that’s not IP that’s a contract and this gets into legal Theory but there’s a difference

between a contract right which only binds people to party to the contract and what’s called a property right or an

INR right that’s good against the whole world the fundamental problem with patent and copyright is that they’re INR rights they’re property rights that’s

what they call that good against the world they bind people that weren’t parties to it this is the problem with

Libertarians who just Trot out the contract word or the fraud word to

justify property systems because fraud I mean fraud and contract are not the basis of a property system there are

implications of it now on the pharmaceutical situation first for anyone who’s interest it I would refer

you to the empirical work by B and LaVine is for free online at against monopoly. org their book against

intellectual Monopoly chapter nine deals in detail with all the fallacies implicit in some of your your

assumptions but one of them as Libertarians easy to see is the reason the FD uh the reason the U the

pharmaceutical companies have such high costs is because of the FDA process which the federal government has also

foed on the country wouldn’t a better solution be instead of of saying we know the federal government has increased

cost and reduced our welfare it’s made these companies have a very hard time uh

making profit making a profit because the cost is so high because of the FDA process and by the way the FDA process

also requires companies to publicly reveal their secrets way before the drug

is approved so by the time they’re ready to go into production all their competitors have been studying their information for years so they can go

into production right away so what’s called the first mover Advantage is lost because of the FDA process and so then

the government swoops in as a white knight and says oh we know that you’re really suffering in this horrible costly

system which we caused we’re going to save you by giving you a monopoly on your invention to protect you from competition for another 17 years okay so

I think the better solution would be instead of adding one layer of government controls and cost taxation

system regulations tariffs minimum wage uh environmental laws all these things

that just impose crushing costs on these pharmaceutical companies instead of just throwing them a Lifeline of a patent

which is another government control why don’t they just reduce all the costs and then the government doesn’t have to come

in and save them in the first

place I try to be a principled Anarchist but I I’m also I try to be a practical

businessman and in Industries where uh traditionally people are using

copyrights patents trademarks and or they can use them against you uh what do

you recommend as a practical tool or what positions or actions should we take

given the current environment I’ve heard that question many times I actually I I wrote I wrote a little

monograph for Jeff Tucker liberty.me It’s called do business without AAL property and it’s online for free on my

website I get some practical Solutions there your question is not not really a practical one it’s more of an ethical

moral one it’s this is a lifestyle question if you’re a Libertarian you’re living in an unfree world and if you

want to try to live ethically what should you do I I don’t pretend to be an expert on that I have some opinions of

course I personally in my life I’ve always refused to be on the uh the aggressive side of a patent litigation I

have no problem representing someone to the hilt if they’re if they’re attacked for patents I I would help a client

counters suit or do anything but I would not personally be part of that people

that do that I don’t know if I can blame them that’s a personal morality question I think you shouldn’t do it I think it’s wrong to sue someone for copy

infringement I think it’s wrong to sue someone patent infringement if they’re not aggressing against you that’s my

personal view if you have those kind of personal Scruples you’re going to be hurt a little bit in the market because no everyone else doesn’t right so it’s

going to cost you but then there’s other things you can do to try to amarate that and to respond to one other question

someone had about things you can do do I mean Twitter and what Tesla some of these companies have they’ve tried to

get rid of the burden of patents on them Twitter signed an agreement with all of his employees where they limited their

right to sue people for patents aggressively their employees can block it basically so they’re trying to tie their own hands to show people we’re not

going to be patent aggressors Tesla has quasi open sourced all of its patents so they have more competition so that the

market for electrical Vehicles thrives so they have a chance to survive in a world that might have an electric

vehicle Market and and and I didn’t give them this idea

some patent some libertarian patent I mean they had to think of this themselves as as entrepreneurs perhaps thinking a little bit morally um so

anyway that’s the answer to that a good talk I I agree with you that um simply uh creating something is not sufficient

uh for ownership you know uh for instance you know I’ll uh maybe I’ll create flatulence and that’s not

sufficient you know and maybe I worked hard for it I had to eat a lot of beans and those cost money um but uh my question is uh sort of to

be influenced uh by Evan when I gave my talk uh you gave examples of current current implementations of the

egregiousness of a patent and copyright law but why does that matter you know I think a Libertarian could say you know

yes just because it’s implemented badly doesn’t mean that I agree with its implementation that’s not a sufficient I

agree totally it it it’s theoretically possible for some current law to be just even though its Origins are tainted

right uh the reason I mention it is because it’s helpful to know history and because no one understands the history

properly they think that the founding fathers are some kind of uh benevolent uh you

know legal geniuses who just thought oh we we have to have this but they didn’t

to understand how it arose is important uh there actually one interesting fact I’ve found out which I

didn’t know until recently was when Jefferson was Consulting uh with Madison on the Bill of Rights ratified 91 Jeff

and remember in 1789 the Constitution already had a clause authorizing patenting copyright 1789 the Bill of

Rights was ratified in 1791 two years later during this during this negotiation Jefferson proposed to

Madison that another Clause be added to the Bill of Rights right to the most important thing one of our most

important documents which which said that the government it was going to limit this it said the government has

the right to Grant these patent and copyright monopolies but only for blank years and he wanted the you know the the

the Congressional assembly to put a number in like 14 years or something they didn’t do that if they had done

that then the copyright term wouldn’t have been able to have been expanded from the original 14 years to 28 and

then to 56 and then to 70 and now to life of the offer plus 70 years which is

over a century which is what’s happening now to every work that we create when you send someone an email right now you

know you’re you’re it’s going to be copyrighted for a hundred years um so at I think the history is

important to know anyway I find it interesting yeah um you were talking a

little bit before about how the little guy gets kind of bogged down by the big folks who own all these pets and stuff

like that but what I I have a sar in M I like you to respond to basically if I’m

a small businessman and I’ve got an idea for a product and let’s say I keep that stored on a computer and stored on the CD in my office and the office is locked

up and I’m working to get investors so I can build a factory and build my widgets or whatever they are somebody else

breaks in steals the CD takes it to their own factory makes their stuff and sells it for millions of dollars as far

as I can tell with intellectual property the only restitution I’m entitled to is two bucks for a CD is there any other way that I could

get any more restitution or is that how it’s going to be well I’ve written a little bit on this I mean the problem is

the law is not too developed because the law has gone down the path of the current statutory systems and

legislation uh so we have to sort of imagine what we we think would develop and I’m always trying to be cautious

about being an armchair libertarian predicting exactly what’s going to happen however given common law

precedent that I’m aware of and property Theory and contract theory for example from rothbard and others you know my

view is that would be viewed as a trespass it’s a trespass against an owned resource the office or the

computer so there’s a trespass committed which is a an offense under libertarian Theory right so then the question is

what are the damages that’s a restitution issue and I do believe that the the the consequences that we the

victim of a of a tort like that um matter in determining how much

restitution or rectification should be paid so for example if I borrow your car

for without your permission for an hour’s Joy Ride and I return it completely in good condition or if I

borrow it and I I crash it or explode it I think that the amount of money I would

have to pay you would be different because the consequences of that trespass are greater to you so I think

some kind of system like that would be worked out and there are cases that uh there’s the the cubby versus compy serf

case where there’s called cyber trespass cases just go to my website and search spam and trespass and I’ve got some

ideas on that all right hi Stefan um first I’d like to

thank you uh you brought changed my views on IP through your argument so I thank you for pursuing this and trying

to share this knowledge um it’s related to the last questioner uh I I think a situation that’s increasingly coming up

especially with computers and the internet is if you have someone who’s violated property they’ve taken some data off a computer and then they go and

reshare it whether that’s a personal journal or a song or a naked picture um

do you think that the recipient and any further recipients have any ethical or legal um uh duty to not receive that

data or is it just open simple answer I think there’s an ethical obligation usually unless the information is so

public that it’s ubiquitous now and it doesn’t matter child pornography is another case I mean it’s

abhorent but legally no I think information is not an ownable thing and

and uh there’s no contract with these third fourth removed parties and there’s no property right in information per se

so no I I don’t think so okay all right thank you thank

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