Podcast (kinsella-on-liberty): Play in new window | Download (164.8MB)
Kinsella on Liberty Podcast: Episode 427.
Yesterday (April 10, 2024) I participated in Strings Attached: Tracing the Global Systems that Bind, 62nd Annual International Affairs Symposium, Lewis & Clark College, Portland Oregon, Debate 5: Pirates and Patents. Debate Topic: Is international intellectual property regulation a necessary protection for innovators or a form of modern imperialism?
My opponent was Pieter Cleppe. My notes are appended below.
We got along well and had a nice dinner after the debate.
(Unofficial iphone Audio (mp3))
Strings Attached: Tracing the Global Systems that Bind.
62nd Annual International Affairs Symposium
Debate 5: Pirates and Patents.
Debate Topic: Is international intellectual property regulation a necessary protection for innovators or a form of modern imperialism?
Lewis & Clark College, Portland Oregon
April 10, 2024
Stephan Kinsella
Debate Topic: Is international intellectual property regulation a necessary protection for innovators or a form of modern imperialism?
- “Patents, copyrights, trademarks, etc, are intangible legal protections that allow creators to monopolize the distribution of their ideas. The international system managing these rights is often praised for promoting and protecting innovation. However, it raises the costs of acquiring new technologies, life-saving medicines, and access to knowledge for developing states. How should international intellectual property standards balance these competing interests?”
Introduction
- I am a practicing patent and intellectual property, or IP, attorney for 30 years and a libertarian for even longer than that.
- At the dawn of my career, after many years of research and thought, I came to the conclusion that all forms of IP law are completely unjust.
- This perspective will inform my remarks today.
- Notice my opponent’s remarks were not systematic and did not carefully define the relevant terms.
- In fact his arguments rested on two false assumptions: that patent and copyright increase innovation, and that IP law is therefore justified.
Imperialism and IP
- What is imperialism? Imperialism: “a policy of extending a country’s power and influence through diplomacy or military force.”
- “Imperialism is when a country extends its power into other territories for economic or political gain.”
- Now, IP law is prevalent in the west: patent, copyright, trademark, and other forms.
- There can be little doubt that the west, especially the United States, has used its influence and power to push or even coerce other countries to adopt US-style IP law, primarily patent and copyright
- This is done sometimes by direct imposition or, more usually, by softer forms of coercion such as investment and free trade agreements or other international treaties
- Direct imposition/coercion:
- for example the US expanded Iraqi patent law by decree in 2004, by order of Paul Bremer, the “Administrator” of the “Coalition Provisional Authority”
- German constitution, or “Basic Law,” 1949, under US domination: Article 96 authorizes the establishment by federal law of the Federal Patent Court
- Example below: under pressures from the west, the Thai government specifically undertook not to implement Article 8 (on compulsory licensing) for HIV/AIDS treatment
- Treaties: The Berne Convention already requires member states to have a minimum copyright term of life of the author plus 50 years; the US has added 20 years to this(life plus 70)
- Treaties such as the Paris Convention and Patent Cooperation Treaty require member states to maintain certain minimum patent protections
- The US uses its dominant position to force other countries or regions to adopt US-style IP policies via “free trade” agreements and others like Bilateral Investment Treaties (BITs)
- 2500 BITs in the world today, many US-sponsored
- International Investment, Political Risk, and Dispute Resolution, chapter 6, Part B.
- The TPP(Trans-Pacific Partnership), an ostensibly free trade agreement, was actually a disguised attempt to force other countries to strengthen their copyright law
- For example, although it was never finally ratified, during negotiations, the US then twisted Canada’s arm to extend its copyright term as a condition of even being considered for TPP
- If you want the benefits of free trade with us, you need to put people in jail for “pirating” our Hollywood cronies’ movies and add 20 years to your copyright term
- Think about it: what does a free trade agreement have to do with local property rights, much less IP rights?
- The US, at the behest of Hollywood and other special interests, keeps pushing other nations to strengthen protection of copyright. For example, the ACTA(Anti-Counterfeiting Trade Agreement), and TPP, which was being pushed by the entertainment industry “to get SOPA-like laws introduced around the globe.” (Stop Online Piracy Act)
- SOPA is just another incarnation or variation of related acts, like the PRO-IP Actof 2008; the corresponding Senate bill, the PROTECT IP Act (PIPA); and others like the Online Protection and Enforcement of Digital Trade Act (OPEN), so the TPP is morphing into the Transatlantic Trade and Investment Partnership
- under pressure from US, Mexico’s IP office endorsed ACTA [Anti-Counterfeiting Trade Agreement] and attempted to persuade the legislature to ratify if, after the EU’s parliament rejected it
- In fact, the Covid-19 Relief Bill Adds Criminal Copyright Streaming Penalties and IP Imperialism
- The COVID-19 Stimulus Bill Would Make Illegal Streaming a Felony
- “Provided further, That of the funds provided under this heading, not less than $17,100,000 is for modernization initiatives, of which $10,000,000 shall remain available until September 30, 2022: Provided further, That not more than $100,000 of the amount appropriated is available for the maintenance of an ‘‘International Copyright Institute’’ in the Copyright Office of the Library of Congress for the purpose of training nationals of developing countries in intellectual property laws and policies…”
- So there can be no serious doubt that the US and the west have succeeded in having almost every country in the world sign on to the major IP treaties, conform their local law to western IP standards, for patent, copyright, and trademark.
- Copyright: Berne Convention (1886) and WIPO Copyright Treaty (1996)
- Patent: Paris Convention (1883); Patent Cooperation Treaty (1970)
- Trademark: Madrid System
- There is also the General Agreement on Tariffs and Trade(GATT) and the 1994 Uruguay Round which covers IP
- And the Agreement on Trade Related Aspects of Intellectual Property Rights(TRIPS)
- The US also uses its power to nudge or coerce others to strengthen or expand IP via bilateral or multilateral trade agreements and bilateral investment treaties
- Even though free trade has nothing to do with the local property rights of the other country, much less their IP laws
- Free trade just means low or zero tariffs so as not to impede trade between nations
- It does not need to specify the internal legal system or internal property rights regime of each party
- 2500 BITs in the world today, many US-sponsored
- Now if the West were somehow encouraging developing nations to adopt stronger property rights and civil liberties, we might not call it imperialism, or we might not mind so much.
- Everyone seems happy with the way the US transformed Germany and Japan’s legal systems after WWII to have free markets and civil liberties.
The Problem with IP
- The only way to fully understand the problem of IP imperialism is to understand its nature and why IP laws are unjust and so harmful to nations that are coerced to adopt them
- In short, patent and copyright laws are completely unjust and should be abolished.
- They harm consumers by reducing their choice, violating their freedom and rights, increasing prices and reducing innovation.
- These laws benefit a few major US/western industries—Hollywood/movies (copyright), the music industry (copyright), the pharmaceutical industry (patents/FDA), Big Agriculture (Monsanto) (patents), book and journal publishing (US and Europe; copyright), and some high tech industries (Microsoft, Apple ; copyright, patents, trademark)—at the expense of US consumers and developing countries who are forced to pay higher prices to enrich these US special interests
- Re Monsanto: See Jeff Tucker, Who Poisoned Our Food?
- Libertarians often rail against taxation, central banking, government-run schools, redistribution, war, and victimless crime laws like drug laws, but patent and copyright are as bad or worse than most of these things.
- Very insidious and harmful
- There is nothing good about IP law
- There is nothing to “balance”
- There are no good arguments for IP
- All IP law should be immediately and completely repealed
- Western countries certainly should not impose IP law on developing countries
History of IP
- Statute of Anne 1710, Statute of Monopolies 1623
- Elaborate
- Culminating with the US Constitution’s copyright clause and the expansion of IP globally, leading to modern IP treaties, such as those already mentioned
The purpose and nature of property rights
- Fundamental and important fact: We live in a world of scarcity
- These scarce resources serve as the means of action: Human actors employ scarce resources to achieve their goals
- By their nature, conflict is possible over these scarce things
- Including human bodies
- The function and purpose of property rights is to assign unique owners to each such scarce, or “conflictable,” resource so that they can be used peacefully, cooperatively, and productively without conflict—without fighting
- Notice here that all successful human action also needs knowledge to guide the actor as to what to do: what scarce means to employ, and so on.
- The knowledge that guides action is not scarce; there can be no conflict over it; so property rights make no sense for information or knowledge, but only for scarce, tangible, material resources
- As the private law has discovered and realized for millennia, the only sensible ways of assigning property rights so as to serve its function of reducing conflict, is to choose Objective and obviously fair as well as workable assignment rules
- These rules must include the ability for someone to first use an unowned resource
- Thus, the primary property assignemnt rule is original appropriation, sometimes called homesteading
- Second, the owner can give or sell it to someone else, by contract
- These are the two primary rules for determining ownership of a resource that is in dispute
- If A and B claim an object, the question is: did you homestead it? Did you acquire it by contract from a previous owner?
- Note: these rules apply to owned resources; that is, resources external to one’s body
- e., property allocation rules of private law also presuppose self-ownership or, more precisely, ownership of one’s body.
- not because one homesteaded one’s body or acquired it contractually
- But because of one’s intimate connection with (or: direct control over) one’s body
- The problem with IP
- IP rights violate these rules
- IP rights are essentially nonconsensual negative easements
- Explain
- As I’ll explain later, these unjust laws are harmful in a number of ways
Arguments for IP
- Two primary arguments for IP: natural law/Lockean, and utilitarian
- No time to deal with an esoteric and difficult to understand third one, the “personality” theory (Hegel)
- Himma: “an individual enjoys an exclusive moral claim to the acts and content of his or her personality, personality being understood to include a variety of character traits, dispositions, preferences, experiences, and knowledge. … the claim of ownership over one’s personality will extend to the products of, so to speak, one’s expenditures of personality through acts that express it.”
- Somewhat similar to the Lockean “creation” idea of self-ownership and labor
- Why the creation argument is flawed
- As noted earlier, property rights come from original appropriation and contractual transfer
- Creation (or labor) is a source of wealth but not property rights
- Locke’s big mistake
- Marxism, workers, etc.
- Connection between the Lockean labor theory of property and the Smith-Marx labor theory of value
- Both see labor as some ownable “substance”
- Why utilitarian arguments are flawed
- The burden of proof is on them and has not been satisfied in over 200 years
- the evidence
- “The Overwhelming Empirical Case AgainstPatent and Copyright”; You Can’t Own Ideas: Essays on Intellectual Property
- In the 1950s Congress commissioned an in-depth study by Fritz Machlup:
- In 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.”
- Boston University Law School Professors (and economists) Michael Meurer and Jim Bessen conclude that on average, the patent system discourages innovation. As they write: “it seems unlikely that patents today are an effective policy instrument to encourage innovation overall”
- Economists Michele Boldrin & David Levine, authors of Against Intellectual Monopoly, in a 2013 paper:
- “there is no empirical evidence that they serve to increase innovation and productivity … there is strong evidence … that patents have many negative consequences.”
- Re copyright: we have more music and books and movies than ever despite widespread “piracy”
- Himma: “an individual enjoys an exclusive moral claim to the acts and content of his or her personality, personality being understood to include a variety of character traits, dispositions, preferences, experiences, and knowledge. … the claim of ownership over one’s personality will extend to the products of, so to speak, one’s expenditures of personality through acts that express it.”
- No time to deal with an esoteric and difficult to understand third one, the “personality” theory (Hegel)
So, why do we have IP and why is there IP imperialism?
- We have IP because of inertia, the Lockean confusion, and widespread utilitarianism
- Also, because the defenders of IP in the latter part of the 1800s succeeded in labeling these state grants of monopoly privilege as “intellectual property”
- As Machlup and Penrose wrote in a seminal study in 1950,
- “There are many writers who habitually call all sorts of rights by the name of property. This may be a harmless waste of words, or it may have a purpose. It happens that those who started using the word property in connection with inventions had a very definite purpose in mind: they wanted to substitute a word with a respectable connotation, ‘property,’ for a word that had an unpleasant ring,
- As Machlup and Penrose wrote in a seminal study in 1950,
- Also, because the defenders of IP in the latter part of the 1800s succeeded in labeling these state grants of monopoly privilege as “intellectual property”
‘privilege.’”
- Main beneficiaries of IP: Hollywood and the music industry (copyright); US Pharmaceutical companies and Agriculture (patent), some tech companies (IBM, Microsoft)
- Notice the software industry has largely voluntarily chosen to avoid IP protection for software, preferring instead open licenses.
- Other companies such as Tesla and Twitter have renounced the use of patents to block competition
- Losers: everyone else in the US: consumers, competitors, competition, innovation
- And almost every other country is a net loser
- Even the US is a net loser, except for certain industries
- Costs of copyright system: speech and the press are limited and chilled, culture is distorted, and internet freedom is threatened
- Consider the case of KimDotcom, who was arrested in a raid by dozens of New Zealand police, orchestrated by the FBI.
- Or Richard O’Dwyer, the British student facing extradition to the US for having the wrong links on his site.
- Aaron Swartz, 26 year old co-author of RSS, was facing decades in federal prison for uploading academic articles to the internet, so committed suicide
- Continual agitation for increasing copyright penalties, getting rid of the DMCA safe harbor, which helped make the internet possible;
- continual attempts to set up international treaties to stop online piracy
- thousands of website takedowns in the name of copyright “piracy”
- The black holes of “orphan works”: hundreds of thousands if not millions of books lost due to the orphan works problem, caused by the inability to print an old book because the rights holders are unknown or can’t be bothered
- Costs of patent system are enormous: distorted and lost innovation, rise of cartels, and huge financial costs:
- In short, the patent system distorts and impedes innovation, making each human generation far poorer than it would be without these impediments to the development and spread of human knowledge
- The primary reason we are richer than the Romans is that we have accumulated more technical knowledge
- Anything that slows this down literally kills people
- The patent system often literally causes death, just as the FDA or Federal Death Administration does
- Many of these costs are unseen
- Frederic Bastiat, The Law; Economic Sophisms; Henry Hazlitt, Economics in One Lesson
- But many are evident
- AIDS medicines are too expensive for many patients, especially poor ones in developing nations, because of the premium price that results from the patent monopoly.
- “Although it seems obvious that the AIDS crisis in Africa is an exceptional public health emergency, it took considerable effort to negotiate the 2001 Doha Declaration on the TRIPs Agreement and Public Health as well as the subsequent agreement on implementing paragraph 6 …. Although this agreement contains provisions for compulsory licenses in exceptional circumstances [i.e., generics could be manufactured without consent of the patent holder], under pressure from the US government and specifically the USTR, the provision has been largely disregarded since 1995. In protecting the interests of its national companies, the USTR has argued that protecting the IPRs of the large pharmaceutical companies that produce many of the AIDS-related drugs used in treatments around the world is imperative. Thus, for instance, despite its severe AIDS problem, at the end of the 1990s when Thailand acceded [sic] to the TRIPs agreement, the Thai government specifically undertook not to implement Article 8 (on compulsory licensing) for HIV/AIDS treatment.”
- https://c4sif.org/2014/12/intellectual-property-rights-a-critical-history-and-us-ip-imperialism/
- And the cost of Covid vaccines is of course enhanced by patents
- The whole system is perverse
- Drugs are developed by private industry in collaboration with government agencies, using basic research funded by taxpayers
- During covid the government subsidized costs of the vaccine
- Then the state grants patent monopolies to companies who develop vaccines using taxpayer funded research
- Government employees even get a cut!
- So the price is inflated, but then the state pays for it yet again so no one pays for the vaccine out of pocket
- And then it’s unaffordable in developing countries except as a sort of charity
- And when the Biden Administration threatens to “bust” the patents or issue compulsory licenses then they are accused of socialism
- See also Boldrin & Levine on Covid-19, Vaccines, the Pharmaceutical Industry, and Patents
- Dean Baker, Getting Ready for the Next Pandemic: Can We Get Patent Monopolies on the Table?(Dec. 20, 2021) (“We are still seeing no real debate as to whether we want to rely on these monopolies as a primary mechanism for financing medical innovation in the future.”); Dawn Niederhauser, CEPR Spotlight: Vaccines, Patents and Copyrights (Dec. 20, 2021) (“CEPR has written extensively on how patent monopolies allow pharmaceutical companies to extract billions from everyday people using drug research that is already publicly funded at a fraction of the cost.”)
- Notice the software industry has largely voluntarily chosen to avoid IP protection for software, preferring instead open licenses.
Patents vs. Free Trade
- Many countries impose price-caps on patented drugs because their socialized medical systems can’t afford to pay inflated prices on drugs, and as punishment the US bans free trade in these drugs, i.e. drug reimportation
- Developing countries would do well to renounce all international IP treaties, like the Paris Convention, Patent Cooperation Treaty, Berne Convention, WIPO, and so on and abolish their patent and copyright law.
- They would be sanctioned and punished by the West, especially the US, demonized as “havens for piracy” and so on
- Just as countries have to be careful not to become drug or money laundering havens
- China is continually insulted by being accused of “stealing American IP”, which is nonsense
To Sum Up
- Western IP laws are unjust and harmful to the human race
- They are harmful even to the US, except for a handful of special interests
- They are especially harmful to developing nations who have to pay inflated prices for products and are forced to adopt western-style IP laws locally which violate the rights of their own citizens and which reduce innovation and prosperity
- It’s bad enough that the US and the west foist American-style IP on their own citizens, for God’s sake don’t impose it on developing nations
- IP law should be abolished, IP treaties should be abandoned, developing nations should withdraw from these treaties
- Developing nations should adopt free markets, freedom, and genuine private property rights, and opt out of the imperialist IP nightmare
***
Pharmaceuticals
- No drug patents in Italy and Switzerland until the 1970s but had a thriving pharmaceutical industry.
- “Boldrin and Levine looked to a poll of the British Medical Journal’s readers on the top medical milestones in history, and found that almost none had anything to do with patents. Penicillin, x-rays, tissue culture, anesthetic, chlorpromazine, public sanitation, germ theory, evidence-based medicine, vaccines, the birth-control pill, computers, oral rehydration theory, DNA structure, monoclonal antibody technology, and the discovery of the health risks of smoking — of these top 15 entries, only two had anything to do with patents.”
- “nothing on the US Centers for Disease Control‘s list of the top ten public-health achievements of the 20th century had any connection to patents. And even a review of the most important pharmaceuticals reveals that many came about without the motive and/or possibility of acquiring a patent, including, for example, aspirin, AZT, cyclosporine, digoxin, ether, fluoride, insulin, isoniazid, medical marijuana, methadone, morphine, oxytocin, penicillin, Phenobarbital, prontosil, quinine, Ritalin, salvarsan, vaccines, and vitamins.”
