KOL458 | Patent and Copyright versus Innovation, Competition, and Property Rights (APEE 2025)

by Stephan Kinsella on April 8, 2025

Podcast (kinsella-on-liberty): Play in new window | Download (50.1MB)

Kinsella on Liberty Podcast: Episode 458.

The meat of this talk is only about 15 minutes, if you skip the first couple minutes of setup and the Q&A at the end.

As mentioned in Speaking at APEE IP Panel in Guatemala, today (April 6, 2025) I spoke on a panel at the APEE 49th Meeting in Guatemala. The theme of this year’s meeting was “The Economic History of State and Market Institutions,” April 6-8, 2025, Guatemala City, Guatemala (program).

My panel was Panel 50. [1.E.06] “Intellectual Property: Old Problems and New Developments,” Monday, April 7, 2025, 3:50 pm-5:05 pm, Breakout06. Organizer: Monica Rio Nevado de Zelaya, Universidad Francisco Marroquín;
Chair: Ramón Parellada, Universidad Francisco Marroquín. My full panel:

Intellectual Property: A Randian Approach Warren Orbaugh, Universidad Francisco Marroquín
Non-Traditional Trademarks Cristina Umaña, Universidad Francisco Marroquín
Copyright versus Innovation in the Market for Recorded Music Julio Cole,Universidad Francisco Marroquín
Patent and Copyright versus Innovation, Competition, and Property Rights N. Stephan Kinsella, Center for the Study of Innovative Freedom

The immediately preceding panel was also on IP, which I attended:

36. [1.D.06] [General] Intellectual Property and Information Technology
Monday | 2:30 pm-3:45 pm | 06. Cafetal II

Organizer: Lawrence H. White, George Mason University
Chair: Osmel Brito-Bigott, Datanalitica

Technological Innovation and Service Business Models: Impacts on Private Property Institutions Osmel Brito-Bigott, Datanalitica; and Laura Marie Carrasco Vasquez, Pontificia Universidad Catolica Madre y Maestra
Five Arguments for Intellectual Property Adam Moore, University of Washington
Ideas Are Not Property: A Cross-Country Analysis of Institutions and Innovation Lucca Tanzillo Dos Santos, Florida Atlantic University

I recorded my 15 minute presentation on my phone as well as the Q&A which mostly was aimed at me. One gentleman was not happy with my remarks and my Adam Moore, a panelist on the previous panel, and I had pretty opposite views, but many others liked my perspective and expressed this to me. I thoroughly enjoyed attending the APEE meeting, if only for one full day.

My notes are below, as well as the Youtube transcript.

Patent and Copyright versus Innovation, Competition, and Property Rights

Stephan Kinsella

APEE 49th Meeting
“The Economic History of State and Market Institutions”
April 6-8, 2025, Guatemala City, Guatemala
Panel 50. [1.E.06] “Intellectual Property: Old Problems and New Developments”
Monday, April 7, 2025, 3:50 pm–5:05 pm, Breakout06.

Based on my forthcoming book “Copy this Book” and also “The Problem with Intellectual Property,” in Handbook of the Philosophical Foundations of Business Ethics, 2nd ed., Christoph Lütge & Marianne Thejls Ziegler, eds. (Springer, forthcoming 2025; Robert McGee, section ed.), update of “The Case Against Intellectual Property,” in Handbook of the Philosophical Foundations of Business Ethics(Prof. Dr. Christoph Lütge, ed.; Springer, 2013) (chapter 68, in Part 18, “Property Rights: Material and Intellectual,” Robert McGee, section ed.)
OK, let’s see how much damage I can do in 15 minutes.
I’ve been a patent attorney for over thirty years, and have prosecuted hundreds of high tech patents over that time. Intel, GE, UPS, Applied Optoelectronics, etc.
Also about thirty years ago I concluded that all forms of intellectual property, or IP, ought to be abolished.
- I published many articles and even books on pure IP law—patents in the oil and gas industry, a trademark treatise—but at the same time wrote articles and books critical of IP law, including Against Intellectual Property.
I’m here to argue that everyone who favors peace, prosperity, justice, property rights, free markets and innovation—and this should especially include libertarians and free-market economists—should also oppose IP law in all its forms
What is IP: The four classical types of so-called intellectual property, or IP, are patents, copyrights, trademarks, and trade secrets.
- Defamation and others
- [Kinsella defamation: “Initially there was squabbling among the jurists about what was to be included in this new category of IP. Everyone now agrees that IP includes the quarto mentioned above, although the European continental analog of IP, ‘industrial property,’ does not include copyright, as ‘copyright was for art and not trade.’^[1] And some have argued that IP should not include trademark since trademark has to do with marks that identify the source of goods and services rather than ‘creations of the mind’ such as inventions (patent law), original works (copyright), and useful, proprietary, secret knowledge (trade secret).^[2] Others argue that ‘traditional’ IP includes patent, copyright, trademark, but that trade secret and others are ‘non-traditional.’”^[3]
IP law, especially patent and copyright, impedes and distorts innovation, impoverishes the human race, reduces competition, gives rise to monopolies and monopoly prices, censors speech and the press, threatens Internet freedom, and enables bullying by large corporations
All arguments for IP are bad; many are absurd, dishonest, or self-serving
- Most people who argue for IP can’t even explain the difference between patents, copyright, and trademarks
- Of course most patent lawyers are in favor of IP—and they know the difference between the types of IP. Congratulations.
- So are Disney, Hollywood, and Big Pharma. Gee, I wonder why.
  - You ever notice Congressmen who attack Big Pharma for charging monopoly prices talk about price caps or using its bargaining power via Medicare and Medicaid to negotiate for lower prices never mention the obvious elephant in the room: eliminate pharmaceutical patents which are the cause of these high prices
    - The very purpose of the patent system is to enable sellers to charge high prices since they don’t face competition
    - When the patent proponent responds that pharma companies need to charge monopoly prices to recoup the costs imposed on it by the FDA process, no Congressmen says “well why don’t we get rid of the patent system and the FDA so that drug prices are lower and development costs are lower”
  - As for “Absurd Arguments for IP”:
    - Thank goodness the Swiss did have a Patent Office. That is where Albert Einstein worked and during his time as a patent examiner came up with his theory of relativity.” —Patent attorney Gene Quinn
    - “It is true that other means exist for creative people to profit from their effort. In the case of copyright, authors can charge fees for reading their works to paying audiences. Charles Dickens did this, but his heavy schedule of public performances in the United States, where his works were not protected by copyright, arguably contributed to his untimely death.” —Willliam Shughart ¹
    - If you are not for IP, you must be in favor of pedophilia. —Sasha Radeta
    - Song piracy and file-sharing are the cause of stage collapses at concerts. (Insurers blame stage collapse on copyright piracy)
    - If IP isn’t legitimate, then it’s okay to steal other people’s babies.

What is intellectual property: It is an artificial category cobbled together by defenders of monopoly privileges to hide its true nature.
Trade secret started out innocently enough based upon, well, the right to keep secrets. The law added a cause of action to keep the secret from leaking.
Trademark is used to distinguish goods and services and is commonly justified based on the idea that it’s wrong to confuse, or defraud, consumers (customers)
There are problems with both but the idea of keeping confidential information away from competitors and preventing consumer confusion are grounded in fairly intuitive notions
Copyright originated in the church and crown using its monopoly on scribes who copied books by hand to control what could be published
- “Gatekeepers”
- When the printing press threatened this control the Stationer’s Company monopolized this function
  - when its charter expired the Statute of Anne 1710 gave copyright to authors and thus to publishers, the new gatekeepers
  - who held their monopoly until mass self-publishing emerged just recently
- Patents originated in monarchs granting monopolies in the form of letters patent (open letters), protecting the holder from competition, in exchange for favors (loyalty, tax collection)
  - Abuse led to the Statute of Monopolies of 1623 which permitted only patents for inventions
- The US Constitution of 1787, ratified 1788, authorized Congress to enact copyright and patent law to protect the works of authors and inventors
  - Surprise, many of the Founders were … authors and inventors
  - First patent and copyright acts 1790
- Backlash by free market economists in the mid 1800s against these “monopoly privilege” grants led to some countries to repeal or delay adopting patent laws.
  - The primary criticism was that protectionist patent grants are incompatible with free trade.
  - However, the “Long Depression” starting in 1873 turned public opinion against free trade, leading the anti-patent movement to collapse and for modern patent systems to eventually become dominant world-wide.
- In response to the criticism of the “monopoly privilege” grants of patent and copyright, the defenders responded that they were a type of “property right,” like trademark and trade secret—a special class of property, “intellectual property”
  - Which explains why patent and copyright expire after a fixed term

Main arguments for IP: natural rights, utilitarian, and the “Personality theory” of IP attributed to Hegel, which no one seems to understand or really believe
- Note: here in my talk I mentioned that Adam Moore, who was in the audience during this lecture, had mentioned this theory in his talk during the previous IP panel. I reference some of his works in the citations below:
- On the Hegelian personality theory, see Stephan Kinsella, Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023), ch. 14, “Law and Intellectual Property in a Stateless Society,” n.62 and text;
- and, from a forthcoming article:
  - Nance argues that most deontological arguments for IP—which fall into the “moral rights” tradition:
    - … fall into one of two sub-categories. First, they can be based upon the creator’s deserving to own the fruits of her labors. This “labor theory” of property is generally associated with John Locke, whose influence on American thought is undeniable. An alternative theory, less familiar to Anglo-American thought, is that such rights are based upon respecting the creator’s extension or reification of personality by the occupation of tangible or intangible things. The “personality theory” of property is most commonly attributed to the German philosopher Hegel and is better established in continental law.[66]
    - 66. Dale A. Nance, “Foreword: Owning Ideas,” Harv. J. L. & Pub. Pol’y 13, no. 3 (Summer 1990): 757–74, p. 764 (citations omitted). Tom G. Palmer, who points out that Wilhelm von Humboldt also linked property rights to personality, critiques the personality justification for IP in “Are Patents and Copyrights Morally Justified? The Philosophy of Property Rights and Ideal Objects,” Harv. J. L. & Pub. Pol’y 13, no. 3 (Summer 1990; https://perma.cc/J8LY-L4MQ): 817–65, at pp. 819–20 and Part III, esp. pp. 843–49). See also Justin Hughes, “The Philosophy of Intellectual Property,” Georgetown L.J. 77, no. 2 (Dec. 1988; https://perma.cc/U4XX-5DZV): 287–366, p. 290 (“Properly elaborated, the labor and personality theories together exhaust the set of morally acceptable justifications of intellectual property. In short, intellectual property is either labor or personality, or it is theft.”). See also Peter S. Menell, Mark A. Lemley, Robert P. Merges & Shyamkrishna Balganesh, Intellectual Property in the New Technological Age: Volume I: Perspectives, Trade Secrets & Patents (Clause 8 Publishing, 2022), chap. 1, § A, “Philosophical Perspectives.”
    - The European reception to the personality justification for IP is one reason continental IP systems often include “moral rights,” which, at least until recently, had been less common in Anglo-American jurisdictions. See, on the connection between personality rights in the civil (continental) law and moral rights, John Henry Merryman, “The Refrigerator of Bernard Buffet,” Hastings L. J. 27, no. 5 (May 1976; https://repository.uclawsf.edu/hastings_law_journal/vol27/iss5/3/): 1023–49, p. 1025. For a more recent illustration of the application of such principles, see Daniel Grant, “Artist’s lawsuit against school that sought to cover up his murals heads to appeals court,” The Art Newspaper (Feb. 1, 2023; https://perma.cc/9EE3-49SA). See also Palmer, “Are Patents and Copyrights Morally Justified?”, p. 820, n.6 and 841–43.
    - For additional discussion of the personality justification for IP, see Adam D. Moore & Kenneth Einar Himma, “Intellectual Property,” in Edward N. Zalta, ed., Stanford Encyclopedia of Philosophy (Stanford University, 2011; https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1980917; https://plato.stanford.edu/entries/intellectual-property/), §3.1; Justin Hughes, “The Philosophy of Intellectual Property,” Part III; William Fisher, “Theories of Intellectual Property,” in Stephen Munzer, ed., New Essays in the Legal and Political Theory of Property (Cambridge University Press, 2001; https://perma.cc/4YLX-P8JF).

Natural rights of IP is theory based on the confused idea of “libertarian creationism”: that creation is a source of rights
- Caused by confused argument of Locke that the reason a man owns homesteaded property is that he owns his labor
  - This confusion also infects Adam Smith, Ricardo, Marx’s labor theory of value
  - Labor is an action that cannot be owned
- Creation is a source of wealth—if you transform an owned resource into a more valuable arrangement, you are wealthier—but not a source of property rights
Property rights emerge as a response to the problem of scarcity and conflict over scarce resources
To permit unowned resources to first be used, the first user, or occupier, acquires ownership
- Original appropriation, or homesteading
If the owner transfers it by contract to another, now he owns it
These two principles—original appropriation and contractual title transfers—are at the core of western private law—Roman law, European customary law, modern continental civil law, English common law
Creation does not enter into it and is not a source of rights

In fact, IP rights are really nonconsensual negative easements (servitudes) which undercut property rights based on original appropriation and contract
- Explain restrictive covenants
- Consensual negative easements versus nonconsensual negative easements
- Consensual sex versus rape

All successful human action involves two equally important and crucial ingredients: availability of causally efficacious scarce means, and knowledge to guide one’s actions.
- This is why we are richer than the Romans: we have more technical knowledge at our disposal because it accumulates each generation, each day
- Hayek’s “fund of experience”
- Property rights—based on original occupation and contractual title exchange—emerge for the scarce resources that serve as means of action but are not applicable to the knowledge that guides action, which is not scarce and which can be easily and infinitely replicated
  - This is why developing nations can catch up so quickly to developed nations, by emulating and copying their recipes
    - By learning

Contrary to the assertions of modern advocates of IP, neither Locke nor the Founders viewed IP as a natural right
- It was thought of as a temporary exception to competition and the free market designed to address a market failure of underproduction of intellectual goods on the unhampered market
- It was based on the founders’ “hunch” that patent and copyright law would stimulate more innovation and artistic creation and that the value of this additional output would be greater than the costs of the system
- The founders did not have econometrics at their disposal in 1787
  - And as noted many of them were the very inventors and authors that would benefit from patent and copyright law

So isn’t it about time that someone does a study to see if the Founders’ Hunch was right?
Thus we turn to the second major argument for IP: utilitarian
The argument goes: it is easier to compete with producers of goods the primary value of which lies in their configuration or impatterning—a book, with its pattern of words; an innovative plough, which has a certain shape and arrangement
- Since it is easier for competitors to compete, it is harder for the originator to make high enough profits to recoup the cost of developing the design
  - So they just won’t bother and innovation will grind to a halt
  - Authors will stop writing books
- The state patches this market failure by granting the monopoly privileges of patent and copyright to protect inventors and authors from competition for a limited time
  - ~17 years for patents
  - ~100–150 years for copyright
    - Originally 14
  - Congress finally commissioned Mises’s student Fritz Machlup to conduct a comprehensive study of the US patent system (1958):
    - He concluded: “No economist, on the basis of present knowledge, could possibly state with certainty that the patent system, as it now operates, confers a net benefit or a net loss upon society. … If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting one.”
    - George Priest, 1986: “[I]n the current state of knowledge, economists know almost nothing about the effect on social welfare of the patent system or of other systems of intellectual property.”
    - Wesley M. Cohen & Stephen A. Merrill, 2003: “There are theoretical as well as empirical reasons to question whether patent rights advance innovation in a substantial way in most industries. … The literature on the impact of patents on innovation must be considered emergent.”
    - François Lévêque & Yann Ménière, of the Ecole des mines de Paris, 2004: “The abolition or preservation of intellectual property protection is … not just a purely theoretical question. To decide on it from an economic viewpoint, we must be able to assess all the consequences of protection and determine whether the total favorable effects for society outweigh the total negative effects. Unfortunately, this exercise [an economic analysis of the cost and benefits of intellectual property] is no more within our reach today than it was in Machlup’s day [1950s].
    - Boston University Law School Professors (and economists) Michael Meurer and Jim Bessen, 2008: “it seems unlikely that patents today are an effective policy instrument to encourage innovation overall”; instead, “patents place a drag on innovation” and “the patent system fails on its own terms ….”
    - Andrew Torrance, 2009: “little empirical evidence exists to support” the assumption that the patent system spurs innovation
    - Boldrin & Levine, 2013: “The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity”
    - Heidi L. Williams, 2017: “To summarize, evidence from patent law changes has provided little evidence that stronger patent rights encourage research investments….
  - And I believe our co-panelist Dr. Cole has helped to demonstrate in this very panel that the evidence does not support the case for copyright either
    - “Since 1999, although recorded music revenues fell sharply, music output increased and access to music has expanded as the industry restructured around new business models. This challenges the assumption that copyright is a necessary condition for musical innovation.”

IP rights distort and impede innovation and harm humanity.
IP is not a natural right but a monopoly privilege based on the confused labor theory of property, on the idea of Lockean creationism, on the flawed notion of market failure, and on the groundless assumption that IP rights lead to additional innovation and artistic creation—and to additional innovation that is worth the immense costs of the IP system.
Down with patents, down with copyrights, down with my patent law career
Is it so surprising a patent attorney wants to get rid of patents?
What about oncologists who are paid to fight cancer but who still want to get rid of it and put themselves out of a job?
The M.D. Anderson Cancer Center in my city of Houston, one of the top cancer centers in the world, has as its slogan “Making Cancer History.”
So I say, together, let’s make IP History.
- Ironically, if I use that slogan, MD Anderson might sue me for trademark infringement

TRANSCRIPT (from Youtube)

stefan Ginsella is the next thank you you already have a little

Yeah okay

oh you need a chair you need a chair yeah please okay just in case

okay uh um you can you can page if you want i wasn’t planning to have to rely

on that should I talk should I start of course okay uh all right i’m Stefan Canella i’m a patent attorney well kind

of retired patent attorney from Houston um and uh uh this this presentation will

be based on a forthcoming book called copy of this book and uh a chapter I have in a forthcoming book uh called the

problem with intellectual property and the handbook of philosophical foundations of business ethics uh my

editor by Springer and my editor is uh Robert Bob McGee um so let’s see how

much damage I can do in 15 minutes um so I’ve been a patent attorney for over 30

years and have prosecuted hundreds of high-tech patents over that time for Intel

GE Lucent UPS Opto applied opto electronics and a variety of

technologies and also about 30 years ago right when I passed the patent bar I concluded that all forms of intellectual

property law or intellectual property or IP should be abolished um and so during

my career I published many articles and even books on pure IP law for my career

patents in the oil and gas industry trademark treatise um at the same time I

was also publishing um articles and books on critical of IP law as a policy

matter including my book um against intellectual property um and as I said

I’m working on a a new book which will be everything I’ve written combined into one um so I’m here to argue that

everyone who favors peace prosperity justice property rights free markets and

innovation and this should especially include libertarians and free market economists such as people here should

oppose IP law in all of its forms all of it um the four classical types the

so-called classical of IP rights are considered to be patents copyrights

trademarks and trade secrets right um now for my opinion the worst of these

from beginning to end and by the way this should also include defamation rights which are not typically considered to be patent rights u IP

rights but they should be because the arguments for them and their effect is very similar and uh they should be IP

all defamation rights and reputation rights and defamation law should be abolished um the worst from worst to

worst to least bad would be patents are the worst they do the most harm to the human race next would be copyright third

would be defamation law um and fourth would be trademarks and finally trade secrets um now the reason is because IP

law especially patents and copyrights impede and distort innovation impoverishes the human race reduces

competition gives rise to monopolies and monopoly prices censors free speech and freedom of the press threatens freedom

on the internet and enables bullying by large corporations other than that is just great and just compatible with a

free society um in my opinion and I’ve studied this for 30 years all arguments

for IP are bad including the five given by Professor Moore um uh and many are

absurd and dishonest and self-s serving um most people who favor or argue for IP

cannot even explain the difference between patents copyrights and trademarks in fact Dr orbach here today

used the example of patents to protect a book that’s copyright that protects books so I think when you’re advocating

for an intrusive state regulation you should at least know what you should at least know what the law is um now of

course most patent lawyers do know the difference and they’re in favor of IP big surprise uh so are Disney Hollywood

and big pharma they’re in favor of IP so I wonder why um and you ever notice that congressmen who attack big pharma for

charging monopoly prices they talk about price caps or using the bargaining power for Medicare and Medicaid to negotiate

for lower lower prices but they never mention the obvious elephant in the room eliminate pharmaceutical patents which

are the cause of these high prices even Bernie Sanders doesn’t do that in fact the very purpose of the patent system is

to enable sellers to charge high prices monopoly prices since they since the patent allows them not to face

competition and when a patent proponent responds that well the pharma companies need to charge monopoly prices to recoup

the cost imposed on it by the FDA process the congressman doesn’t say well why don’t we get rid of the patent

system and the FDA system so the dug cost is lower and the prices are lower too as far as absurd arguments for IP

I’ll just give you a few samples i’ve encountered them all over the years here’s one from patent attorney Gene Quinn of of patent IP watchdog thank

goodness the Swiss did have a patent office that is where Albert Einstein worked during his time as a patent

examiner to come up with the theory of relativity that’s a really good argument for IP um this is William Sugarert and a

free market economist so-called free market economist writing for the independent institute a so-called free market think tank it is true that other

means exist for creative people to profit from their effort in the case of copyright authors can charge fees for

reading their works to paying audiences charles Dickens did this but his heavy schedule of public performances in the

United States which at the time did not protect copyright of foreign authors arguably contributed to his untimely

death okay so if you don’t have copyright you’re going to kill Charles Charles Dickens um some some some rando

on the internet if you’re not for IP you must be in favor of pedophilia song piracy and file sharing are the cause of

stage collapses at concerts and finally if IP isn’t legitimate it would be it would be okay to steal other people’s

babies this is just stupid arguments for IP all the others are are are all equally bad so what is IP it’s an

artificial category cobbled together by defenders of monopoly privilege to hide its true nature

trade secret started out in the common law innocently enough based upon the right to keep secrets but then the law

added a cause of action to keep the secret from leaking which is the problem with it trademark is used to distinguish

goods as we saw earlier and services and is commonly justified on the idea that it’s wrong to confuse or defraud

customers which is true but trademark law goes beyond that for example it

stops uh the sale of a knockoff uh Chanel purse to a buyer even though the

buyer knows that it’s a knockoff so no one’s defrauded so the basis of trademark law so we should just abolish

trademark law and replace it with fraud law which we already have um so there are many problems with both um the idea

of keep with both of these laws but but I’ll I’ll move on so copyright though

using as a monopoly on scribes who copied books by hand to control what could be published they were like the

original gatekeepers but when the printing press threatened the control the station stationers company was

chartered to monopolize this function and when its charter expired a century or two later the statute of an in

England in 1710 gave copyright to authors and thus to publishers um so

they became the new gatekeepers who held their monopoly until just about 15 years ago when Amazon and the Kindle started

threatening that with the self-publishing model now patents originated in the practice of monarchs

granting monopolies in the form of letters patent or open letters which protect the holder from competition in

exchange for various favors like loyalty to the king or tax collecting for the king an abuse of this practice led to

the statute of monopolies of 1623 not 162034 mr orbach uh which permitted only

patents for inventions and then the US Constitution in 1787 ratified in 1788

authorized Congress to enact copyright and patent law to protect the works of authors and inventors and surprise

surprise most of the founders were authors and inventors and the first copyright and patent acts were enacted a

year later in 1790 and then soon European countries followed now

surprisingly not surprisingly backlash against these were not called IP rights in the beginning backlash against by the

free market economists in the 1800s in the mid 1800s against these monopoly

privilege grants which is what they are um led to some countries to repeal or delay adopting their patent laws like

Italy and the u the Netherlands and um uh Switzerland and the primary criticism

of the free market economists of patent rights was that it was a protectionist patent grant that was incompatible with

free trade which is actually correct however um a period in history

intervened and there’s something which was initially known as the great depression in 17 sorry 1873 now it’s

called the long depression because we had another one later um but the the the long depression of 1873 turned public

opinion against uh free trade and then the anti patent movement collapsed and

then patents became dominant worldwide as we have today so the origin of these two systems is has nothing to do with

private property rights or natural rights they’re totally granted in control of speech in the case of copyright and and and the press and and

and u um any competitive practices uh by the crown but in response to the criticism

during this period the defenders of these monopoly privilege grants uh the industries that had grown uh uh

accustomed to these uh protections uh inventing industries uh book publishing industries they responded with the

response that well these are not artificial grants of monopoly privilege they’re a special type of property right

and the reason that they that they expire early is because they’re special they’re they’re creations of the mind

they’re intellectual property rights and what they did was they teamed them up with patent with copyright I’m sorry

with trademark and trade secret which are already types of rights and they lumped them all together although there’s there’s debate among people even

today in Europe they don’t consider uh trademarks should be industrial property rights and and and there’s been debate

about whether trade secrets should be part of that u so it’s just an artificial category that people came up

with as a purely propaganda term to justify this um this practice of of granting monopoly privileges now there

are I would say there are three main right three main arguments ments for uh for intellectual property there’s a

natural rights argument there’s a utilitarian argument and then there’s this personality theory of attributed to

Hegel which I believe Professor Moore went into a little bit which uh usually

no one trots that one out and most people don’t even understand it or how how it’s supposed to apply the the most common argument is more of a lock in um

um a lock in natural rights argument or the utilitarian argument and the natural rights I can only I only have so much

time to go into this but the natural rights um a theory of IP is based upon a very confused notion it’s the is was

what I call lockian creationism or libertarian creationism it’s the mistaken notion that creation is the

source of rights now this is caused by a confused aspect of Lockach’s argument where Loach assumed that the reason the

first user of an unowned resource was the owner by his action of homesteading

was because God gave him ownership of himself which I guess is his body and therefore gave him ownership of what he

did with his body which is motion or action or labor and therefore he owned his labor which is some kind of

substance floating around out there that you have a property right in and if you mix it with some unowned thing then you own that unowned thing so that entire

step by lock uh as others have argued uh like Hume um is totally unnecessary and

confuses his argument and it’s just wrong you don’t own your labor you don’t own your actions uh labor is not a thing

that you can own it’s an action that you perform with your body which you do own um um anyway this confusion in locks

theory has led to to today the con the confused idea that creation is a source of property rights which is not uh the

source of property rights is um uh occupation of an unowned resource being

the first to claim it or acquiring it by contract from someone else so contract and occupation are the only two sources

of property rights creation is a source of wealth it’s useful but wealth just means you have a something that you own

that’s more useful to you and more valuable to you because you owned the input factors and you rearranged it with your own labor and mental effort to make

it more valuable to you but you had to own it first to do that so you already own the way you shape the metal into a

plow making metal that you own into a plow doesn’t mean that you own the plow because you created it it means you own

it because you own the metal that went into it just like the worker on Henry Ford’s factory line who helps make cars

creates the cars but he doesn’t own them because he didn’t own the the raw materials that went into it so creation has nothing to do with ownership uh at

all that’s the the first mistake um in fact the best way to classify this

and I thought about this for a long time being um an attorney a property rights attorney an intellectual property attorney a libertarian legal theorist

and and an Austrian economist um is to understand that the nature of so all

property rights are necessarily physical control rights protected by the law to control the exclusive use of a scarce

resource that’s what property rights are it’s impossible to have a property right in information or patterns of

information information is stuff that guides human action human action always requires the availability of a scarce

means that’s causally efficacious in getting your your the result that you want and information that guides your

actions scarce resources can have conflict over them which is why property rights emerge to allocate and

rationalize them according to the first two principles of occupation and contract um whereas information is just

a guide to action and cannot be owned and is not owned in fact when the law attempts to give property rights and

information uh which is what patent and copyright do it is really a disguised attempt to transform to transfer to the

holder of the patent or the copyright a control right over other people’s property uh and that is actually what we

call in the law a a negative easement or a negative servitude now there’s nothing wrong with negative easements and

negative servitudes if they’re consensually granted just like there’s nothing wrong with having sex with a woman if she consents but if you take if

you have sex with a woman and she doesn’t consent it’s it’s what we call rape right so when you take when when

the law grants a negative easement over someone’s property by fiat by the means of granting a patent or copyright it’s

granting a non-consensual negative easement or negative servitude to the holder even though the the b the owner

of the burden estate never consented to it essentially that’s the problem with all forms of IP especially patented copyright they’re basically

non-consensual negative easements which which result in a taking of property rights okay um now

um now contrary to the assertions of modern advocates of IP who call it a natural right or a property right and it

was never called a property right in the beginning was always recognized as a temporary expedient uh for utilitarian

purposes even lock didn’t view IP as a as a natural right contrary to the claims of Adam Mosoff and others um um

um basically uh uh patents and copyrights were thought of it was based

upon the founders’s hunch okay their hunch that what that patent and copyright law would stimulate more

innovation and artistic creation and that the value of this additional output

would be greater than the cost of the system that’s the essential argument for IP the founders did not have

econometrics at their disposal in 1787 when they came up with this and in fact as I mentioned many of them were

inventors and authors who served to b who stood to benefit from the system so it’s no surprise that that they did this

but even granting them good intentions they the idea of IP was based upon a hunch okay so isn’t it about time that

we see if their hunch was right someone maybe should do a study to find out whether uh whether patents and

copyrights do produce more innovation and artistic creativity right so the

idea is this it’s basically it’s not put like this by free market defenders because they don’t they don’t want to put their arguments this way but

basically it’s a market failure argument the idea is that in in for normal goods it’s when you produce a good it takes

some effort and some cost to build your factory to hire workers and so it’s not so easy to compete with you know with a

new restaurant chain down the down the corner if you know Burger if if McDonald’s is popular it takes a while for Burger King to become a competitor

so McDonald’s can have monopoly prices for a while but eventually their monopoly price gets eroded by

competition but for certain other industries where the primary value to the consumer of the sold service or good

like a book or an invention lies in the way it’s arranged its arrangement where it’s easier for a competitor to make a

copy and therefore compete with them it’s too easy for there to be competition and therefore there would be

an underproduction of these goods because the incentive to make the goods in the first place would be reduced

because the cost would be harder to recoup right so that’s the argument it’s basically that the free market is flawed

and that if you don’t have this the government step in and fix this market failure u you’re going to have an

underproduction of goods right so that’s the argument and there therefore patents and copyrights do this although no one seems to know what the proper term

supposed to be it was 14 years for copyrights in the beginning now it’s 100 to 150 years old and no one seems to

know what the optimal term is dr moore said that uh you know maybe it should be infinite maybe it should be 17 like it

is now or maybe it should be 7 years like some people say for pharmaceuticals no one really knows although they’re

still they still don’t want to abolish it until they figure it out um now Congress finally went around got

around to trying to figure this out in 1958 they commissioned Fritz Mlab who was actually a student of Mises kind of

an Austrian guy in the US he was commissioned by Congress to do a comprehensive study of the US patent

system to find out whether it really did uh uh incentivize and create innovation

his conclusion of his paper which is on the congressional record no economist on the basis of present knowledge could

possibly state with certainty that the patent system as it now operates confers a net benefit or net loss on society if

we did not have a patent system it would be irresponsible on the basis of our present knowledge or its economic

consequences to recommend instituting one now have we learned anything since then the econom the econometrics uh

profession has been hard at work ever since then and here’s what they keep coming up with george Priest I’m doing

this chronologically and just a sampling of law professors and economists who have studied this george Priest in 1986

in the current state of knowledge economists know almost nothing about the effect of social welfare on social

welfare of the patent system or of other systems on intellect of of intellectual

property cohen and Merrill 2003 there are theoretical as well as empirical reasons to question whether patent

rights advance innovation in a substantial way in most industries the literature on the impact of patents on

innovation must be considered emergent okay this is 2003 when are we going to figure this out i mean maybe until we

figure it out we should abolish these things until people can provide a good reason for it um Francois Levak and Yan

Miner of the AO desmines de Paris my French is horrible uh 2004 the abolition

or well I’m just going to quote their their conclusion um uh an economic

analysis of the cost and benefits of intellectual property is no more within our reach today than it was in Macup’s

day in the 50s that’s 2004 boston University law school

professors and economists uh Michael Moir and Jim Besson in 2008 it seems

unlikely that patents today are an effective policy instrument to encourage innovation overall instead patents place

a drag on innovation and the patent system fails on its own terms 2009

Andrew Torrance little empirical evidence exists to support the assumption that patent system spurs

innovation economists Mcklly Baldrren and David Lavine in their book against intellectual property followed up by a

paper in 2013 wrote there the case against and by the way they started their book out to

prove that IP patents and copyrights stimulated innovation but their empirical research led them to realize

that it just doesn’t uh their conclusion is the case against patents can be summarized briefly there is no empirical

evidence that they serve to increase innovation and productivity and my final quote um Heidi Williams in 2017 to

summarize evidence from patent law changes has provided little evidence that stronger patent rights encourage

research investments and Petra Moser actually uh skeptical of patent law too which I mentioned in my comments to Dr

moore uh and then Dr cole has presented his own paper which is abstract says

since 19 well he’s already done it so he she’s shown that although music revenues fell sharply output is not has not

decreased so I’ll conclude by saying this ip rights distort and impede

innovation and they harm humanity ip is not a natural right it was never thought of as a natural right but it’s a

monopoly privilege based on the confused lock in a labor theory of property or on

the idea of lock in creationism or on the flawed notion of market failure and on the groundless assumption that IP

rights lead to additional innovation and artistic creation and to the additional assumption that this additional

innovation is worth the immense costs of the patent system and the copyright system which run to the uncountable

billions of dollars a year so I would say down with patents down with copyrights down with my patent law

career so one thing one more thing is it so surprising that a patent attorney like me wants to get rid of patents well

what about an an oncologist who who is paid to fight cancer but he still hopes

for a world where we can get rid of cancer and put themselves out of a job in fact I’m from Houston Texas and uh we

have something called the MD And MD Anderson Cancer Center uh it’s one of the best top can top cancer centers in

the world and its slogan is making cancer history so I would say together

let’s make IP history and one more thing ironically if

I use that slogan MD Anderson might sue me for trademark infringement thank you

okay as a threat looking forward i mean do do you think we’re still getting rid

of them in the digital age yeah that’s a good question or or do you think you’re still a threat to some industry and

um in that case so I think luckily copyright as Julio

mentioned copyright is getting easier and easier to evade because the nature of it is that you just copy a file or

distribute it and they could be encrypted and sent over torance and over the internet so copyright has been

largely eviscerated thank God although the penalties are draconian they include prison prison sentences which which is

uh which is outrageous um patents my hope is that um uh 3D printing

technology will eventually mature i mean I’m talking 30 years in the future and you could combine that with encrypted

information and people will be able to print whatever they want in their basement uh or on the on the neighborhood underground thing and that

way evade evade uh IP law so my I don’t see any chance of IP law ever being um

got gotten rid of legislatively because the interests are too strong and everyone is too confused about it um but

hopefully technology will help us work around it now the one thing I do think is it’s becoming clearer and clearer

that this new technology of of artificial intelligence uh which is becoming very useful and everyone’s

seeing the promise in it is being severely distorted and hampered by copyright and probably patent law to to

an extent as well uh is gimped already it’s already Grock is prevented from making certain copies of things or or

giving you summaries of novels because it’s afraid that uh the you know the uh Facebook u meta will get sued for

copyright infringement so that it’s already being gimped but when when we come to a point where society has to choose between having a really good

useful life-saving um humanity benefiting uh technology like AI and

it’s in conflict with with um with copyright maybe maybe AI will win

there’s already um a dispute in in in the UK where there’s an attempt by the AI industry to get copyright law

exceptions increased like their their version of fair use uh and of course the all the uh the idiot authors are are are

fighting against it because they want their monopoly and they don’t care what it does to humanity so um I hope that

the conflicts will highlight that you can’t have both you can’t have IP and human life

thank you Fritz and then you

I find that you dismiss natural

right clearly um I think

undeserved yet you’re willing to make the statement that rape is wrong why is it wrong so I don’t dismiss

natural rights in fact I think that the primary problem finish my question all right go ahead okay

okay i’ll leave it there i think other people want to ask i I never dismissed natural rights i said that IP is not a natural right in fact it’s in conflict

with natural rights the problem with IP is that it violates natural rights to property you also stated that there’s no

evidence uh why do we have for example even though you’re perhaps you’re talking

about trademarks uh you have

uh look at the wealth created by the five six largest companies in the world

trillions of dollars based on what

well the question is following you have like do you think for example you think let’s say companies like Apple or should

have patents no I think the patent system should be abolished of course Apple shouldn’t have patents or copyrights no they should have to

compete in the free market like other companies i mean this is a this is a

free market group i find it a little amazing that I look at the wealth created by you know the five six seven 8

nine 10 largest companies in the world who have created trillions of dollars of

wealth who employ millions of people and then I have excuse me for saying I have

university professors say “No no no no this doesn’t create any wealth.” No no this is a like monopoly involvement i

find that preposterous right well first of all I’d rather speak my mind go ahead i have to speak my mind to make this

point out i’m not a university professor i’m just a patent lawyer uh okay and uh

uh uh uh and the the the purpose of to put it simply the purpose of law is to

do justice and the purpose the way you do justice is you recognize property rights and you enforce them the purpose of law is not to say hm what kind of

thing is underproduced and that we can stimulate with an innovation we believe in spontaneous orders for example we don’t think that law has a purpose

correct but patent and copyright law were not sp spontaneously generated on the free market they were legislative

creation this came from the statute of monopolies and the statute of an so they they’re not natural they’re not they’re

not common law they’re not evolved they’re not spontaneous whatsoever i think that law for example the law is to incentivize good

behavior disincentivize bad behavior all right thank you thank you something that you

just said seems to me to highlight what the main argument is for patent you said the purpose of law is to do justice yes

i think the ordinary person who believes the patterns are just they’re not doing it because they’ve read a lot of lots or

utilities or anything else they see that when they buy corn from a farmer that

the farmer they have to pay the farmer for the work that the farmer did to create the corn right and if it’s a

musician who creates music they feel it’s also just if you do pay the farmer for the corn you pay the musician for

the music and uh and it seems to me like the change in the system you’re talking about is just a different way of still

having justice though right you you kind of implied that they isn’t the musician

still getting paid but the the streaming service is now paying a musician so in

the example you’re saying they seem to be supporting what he’s saying but I’m not so sure your example still is preserving the fundamental justice that

the creator should be rewarded for their creation yes and but there’s there’s a

fact Musicians don’t make a lot of money

from most money he doesn’t want them to make any most of them no most of the

money they make is from live performances that’s the big names but most people are

not Taylor Swift well yeah and so then they don’t get anything the little person doesn’t get little don’t get a

lot of money from copyright either but they should at least get us get us something uh but they don’t they they don’t not even before master most

musicians never made a never made a lot of money from copyright but they should get something well I’m sure because they

get money if you buy a little bit of corn from farmer who just grows a little bit of corn they’re not going to get rich either but they should get

something other income sources okay uh sorry sorry we have to be on

time uh now we have another event i recommend you to go to J room to see the

uh the John scholars okay thank you very much and applause for

them thank you