StephanKinsella.com

Dale B. Halling|8.4.10 @ 4:11PM|#

David Koepsell has purposely ignored the fact that “isolated” forms of genes do not occur in nature. Nor does nature tell humans how to use those genes. Koepsell has ignored the precedents in this area including patents on vitamin B12, insulin and adrenaline. All of these occur naturally, but not in a purified on isolated form.

Stephan Kinsella’s arguments against intellectual property all hinge on the idea that Locke’s Natural Rights theory of property is incorrect. He replaces Natural Rights with the scarcity theory of property rights. This theory is incorrect historically, logically, and does not have the explanatory power of Natural Rights. Scarcity does not explain how people acquire property morally and legally or how property is distributed. Logically it is incorrect when it states that intellectual property is not subject to scarcity. The creation and dissemination of intellectual property takes real resources, so it is subject to scarcity. For more information see Scarcity – Does it Prove that Intellectual Property is Unjustified? http://hallingblog.com/2009/06/22/scarcity-–-does-it-prove-intellectual-property-is-unjustified/

Kinsella is also wrong about the evidence of the utility of patents. The evidence is overwhelming that patents increase real per capita income. Advances in technology are the only way to increase real per capita income/GDP. Real per capita income did not take off in the world until modern patent systems (private property rights in inventions) were introduced. Japan’s real per capita income does not take off until they copy the US patent system. Countries with weak or non-existent patent systems are the poorest countries in the world, have the fewest inventions, and have limited technology diffusion. Most of the studies suggesting that patents do not encourage technological advance are based on misunderstandings of how the patent system works. All of them ignore the overwhelming evidence outlined above. For more information see Source of Economic Growth http://hallingblog.com/2010/05…..c-growth/.

Ayn Rand stated that “What the patent and copyright laws acknowledge is the paramount role of mental effort in the production of material values: these laws protect the mind’s contribution in its purest form: the origination of an idea.” Kinsella’s theory is more consistent with Marx’s physical labor theory of value and if followed will have the same disastrous results that Marxist have had throughout the world.

Stephan Kinsella|8.4.10 @ 10:44PM|#

Halling apparently hasn’t learned yet that correlation is not causation. The “argument” that postwar Japan succeeded because it adopted a patent system is ludicrous.

David Koepsell|8.5.10 @ 4:44AM|#

Actually, I took direct aim at the “isolation and purification” charade, I didn’t ignore it at all. Ron knows this because he was there. My slides can be found here: http://www.slideshare.net/Open…..o-owns-you and the video will be available soon on fora.tv

David Koepsell|8.5.10 @ 2:01AM|#

Moreover, Halling did not read my slides, nor hear my talk, in which I directly attack the ridiculous logic and flawed precedent and other patent attorneys rely on. Kinsella’s reply to the tired old refrain about patents and innovation is spot-on. Patents are 100 percent profitable for patent attorneys, whereas they are enormously inefficient for the economy as a whole. Only 1% of patents ever become profitable in a system that otherwise slows progress and drags the economy, costing millions of dollars, and with no real evidence of necessity. http://www.inventionstatistics…..ntors.html it isvessentially a tax on innovation that funnels money to lawyers. Read Boldrin and Levine for historical counter-evidence to Halling’s apocrypha.

Dale B. Halling|8.5.10 @ 11:44AM|#

Isolation and purification is not a charade. It is clear evidence that the genes in Myriad do not occur in isolation in nature. Koepsell’s argument is that purified O2 could also have been patented. (I apologize for not having knowledge that David had covered this point). This not an absurd result, as long as there was utility for purified oxygen. Nor is it absurd that electrolysis would have violated the patent on purified oxygen, assuming it was invented within the lifespan patent on purified oxygen. It is common for later inventions to build upon and violate earlier patents. This is the essence of the debate between Joseph Swan and Thomas Edison over who invented the light bulb. See http://hallingblog.com/2009/07…..ght-bulb/. If an inventor is the first one to isolate a useful substance, then they have provided the world with a new, useful, substance. Every invention is a combination of naturally occurring substances – you cannot create something from nothing. Why should it matter if have combined two or more naturally occurring substances or isolated a naturally occurring substance?

Some of the first patents were on glass. Glass is naturally occurring substance created in nature by lightning. The glass created by lightning is not in a useful form for human beings. Naturally occurring forms of the genes are not in a useful form for human beings. A patent on glass itself (to the inventor) does not violate the property rights of anyone, because no one knew how to create (or isolate) glass before the inventor. If a subsequent inventor creates a new way producing glass, he can obtain a patent on this invention. However, practicing his invention would violate the earlier patent on glass. This is how patents work and if they did not work in this manner it would create a winner takes all situation. The Swan-Edison controversy illustrates this. Swan invented an incandescent light bulb, but it was a low resistance light bulb and therefore not practical. Edison subsequently invented a high resistance incandescent light bulb, which made electric lighting practical. Both Swan and Edison obtained patents. If they had non-overlapping rights then Edison would have made all the profit from the light bulb and Swan would have received no financial reward for his efforts. No doubt, Edison would argue that he invented his incandescent light bulb without any knowledge of Swan’s design. Either way Swan contributed to the knowledge of how to create an incandescent light bulb.

David Koepsell|8.5.10 @ 11:51AM|#

Thank you, Dale, for helping to demonstrate the madness of the patent bar. I can think of no stronger argument that the inmates should stop being left to guard the asylum than your defense of patenting O2.

Dale B. Halling|8.5.10 @ 12:01PM|#

Kinsella’s argument that property rights in inventions do not encourage invention is absurd and contrary to every human experience with property rights.

Koepsell’s statement that “Only 1% of patents ever become profitable in a system that otherwise slows progress and drags the economy, costing millions of dollars, and with no real evidence of necessity” is false. Jacob Schmookler is the only economist to systematically study the issue of the number of patents that are profitable and his research showed that the answer is closer to 50%. The lie that only 1% of patent are profitable is based on licensing data. Most companies who obtain patents are not attempting to license there technology. According to Koepsell most people do not make money from their real property rights either. I obtain nothing from having title to the computer on which I am typing. This does not mean that having title to this computer is meaningless. I doubt Koepsell would argue that we should eliminate real or personal property rights. However, few people make money on just having title to real or personal property rights (except leasing companies) and our system of real and personal property rights cost millions of dollars a year to administer.

Strong patent rights are only found in free, capitalist countries. These countries are the most technologically advanced and have the highest per capita incomes. But like the socialist of old, Kinsella and Koepsell argue that this is just coincidence. They point to hypothetical academic studies while ignoring studies based on real world evidence and the obvious evidence in front of their faces.

David Koepsell|8.5.10 @ 12:12PM|#

“99.8% fail. Only 3,000 patents out of 1.5 million patents are commercially viable. “In truth, odds are stacked astronomically against inventors, and no marketing outfit can change them. ‘There are around 1.5 million patents in effect and in force in this country, and of those, maybe 3,000 are commercially viable,’ [Richard Maulsby, director of the Office of Public Affairs for the U.S. Patent & Trademark Office], says. ‘It’s a very small percentage of patents that actually turn into products that make money for people. On top of all that, to get ripped off for tens of thousands of dollars adds insult to injury.” What percent of patents make money? How many patents become products? Percent of patents commercialized. Percent of patents that get approved. (Richard Maulsby, director of public affairs for the U.S. Patent & Trademark Office, quoted in Karen E. Klein, Smart Answers, “Avoiding the Inventor’s Lament,” Business Week, November 10, 2005)”

of course, every patent application succeeds…. for the patent attorney who makes his fees.

Stephan Kinsella|8.5.10 @ 3:47PM|#

Halling, you are such an amateur arguer and dishonest shill. “Kinsella’s argument that property rights in inventions do not encourage invention is absurd and contrary to every human experience with property rights.”

“experience” doesn’t prove anything by itself–you need a theory.

Let us assume, Halling, that IP laws do encourage innovation. Let’s assume there is X innovation sans IP law (where X is of course not zero, contrary to the hyperbolic lies of dishonest IP amateurs), and with IP law, we still have X innovation, and now Y additional innovation.

Even in this case, if the value of Y is $10B and the cost of the IP system is $20B, then it’s still not worth it. Right?

Now, if you are confident it’s worth it, please tell us what X and Y are so we can figure out the difference. Please just venture a guess.

The studies I’ve seen conclude it’s a NET LOSS. The ones that even try. Why do you dismiss these? Why can’t you produce a single case of clear net gain? If so, tell us what it is, in dollar terms?

http://blog.mises.org/10217/ye…..nnovation/

And even the worse for your “argument”: the assumption that X stays the same is obviously false. Yes, patent laws might stimulate some new Y of innovation. But it takes away some of the X too–for example there is undeniably SOME R&D that is discouraged now b/c of patents, for example if you know a competitor has a product line locked up b/c of tons of patents then you don’t even try to compete–so you don’t come up with improvements and related innovations you would have. There is no doubt that this happens; patents skew the amount of reseach done in some areas and pushes it to others. So there can be no doub that X is diminished. By how much? I don’t know. Let’s say it’s diminished by Z.

Thus, before patents, we have:
innovation = X.
After patents, we have innovation = (X-Z) + Y.

Now, forget about the costs of the patent system itself. Lawyers’ salaries, inflated product prices, etc. Let’s just say that’s zero. How do you know Y > Z? It must be for the patent system to create MORE innovation. What is Y? What is Z? Please tell me.

In fact, many of the studies pointed to above conclude that innovation ITSELF is driven down by patents. REGARDLESS of the immense costs of the system.

That means we are SPENDING, say, $20B in patent system costs, and for what–for LESS OVERALL INNOVATION. So it’s a double-hit to the economy.

Dale B. Halling|8.5.10 @ 10:47PM|#

Oh Stephan, your ad hominem attacks are Sooo brilliant I have to wear shades.

As for a theory – my theory is Natural Rights. Perhaps you have heard of it. It’s the basis of the Declaration of Independence, common law, and private property rights. Wherever it has been tried it leads to freedom and prosperity and intellectual property rights. Property rights are moral basis of economics. Property rights ensure that parasites, both government and private, cannot live of the effort of other people. As a result, people have an incentive to invest and work hard. Patents are property rights and they provide the assurance that parasites are not able to steal the labor of inventors. This provides the framework in which it makes sense to invest in new technology.

On the other hand, your theory is based on scarcity as the reason for property rights. This theory ignores the value of the human mind and is perfectly consistent with Marx’s physical labor theory of value. It allows parasites to steal the product of other people’s mind. As a result, it destroys the value created by people, particularly inventors, and destroys the incentive to invest in inventions.

Providing a bunch of pseudo math in which none of the variables are measurable is an excellent way to pretend that you have a rational scientific theory. It has worked great as a propaganda technique for the purveyors of nuclear winter and man made global warming. Mathematical formulas for modeling the real world, where none of the variables are measurable is not science it’s fraud.

David Koepsell|8.6.10 @ 2:17AM|#

Dale, as Stephan and I, and even some of our founders argued, there is no natural law basis for IP, and IP violates naturally- grounded rights. If you want a refresher, here is a start: http://www.wikio.com/video/eth…..ll-3274052

Stephan Kinsella|8.6.10 @ 9:30AM|#

Of course there is no natural right to IP and nobody but modern Randroids and Galambosians and patent lawyer know-nothings would make the audacious claim that artificial PATENT AND COPYRIGHT STATUTES decreed by the legislature–mere positive law designed to achieve utilitarian goals–have a “basis” in natural rights:

See https://stephankinsella.com…..s-liberty/ : even Thomas Jefferson, the first patent examiner, and a reluctant supporter of the patent/copyright clauses, and no slouch on natural rights (no offense, modern know-nothing patent lawyers) knew this. As he wrote, to question the contention that property rules “which emerged to avert social conflict over tangible objects are also appropriate to intangible things”:

If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property.

(As an aside, notice what Jefferson writes immediately before the quoted language above:

It has been pretended by some, (and in England especially,) that inventors have a natural and exclusive right to their inventions, and not merely for their own lives, but inheritable to their heirs. But while it is a moot question whether the origin of any kind of property is derived from nature at all, it would be singular to admit a natural and even an hereditary right to inventors. It is agreed by those who have seriously considered the subject, that no individual has, of natural right, a separate property in an acre of land, for instance. By an universal law, indeed, whatever, whether fixed or movable, belongs to all men equally and in common, is the property for the moment of him who occupies it, but when he relinquishes the occupation, the property goes with it. Stable ownership is the gift of social law, and is given late in the progress of society. It would be curious then, if an idea, the fugitive fermentation of an individual brain, could, of natural right, be claimed in exclusive and stable property. [emphasis added]

Stephan Kinsella|8.6.10 @ 9:31AM|#

As I note in n62 of Against IP https://stephankinsella.com…..againstip,

Jefferson recognized that because ideas are not scarce, patent and copyright are not natural rights, and can be justified only, if at all, on the utilitarian grounds of promoting useful inventions and literary works (and, even then, they must be created by statute, since they are not natural rights). See Palmer, “Intellectual Property: A Non-Posnerian Law and Economics Approach,” p. 278 n. 53. Yet this does not mean that Jefferson supported patents, even on utilitarian grounds. Patent historian Edward C. Walterscheid explains that “throughout his life, [Jefferson] retained a healthy skepticism about the value of the patents system.” “Thomas Jefferson and the Patent Act of 1793,” Essays in History 40 (1998).

Stephan Kinsella|8.6.10 @ 9:18AM|#

Halling:

As for a theory – my theory is Natural Rights. Perhaps you have heard of it. It’s the basis of the Declaration of Independence, common law, and private property rights.

You initial-caps Natural Rights like an amateur/crank.

I was unaware Natural Rights was the “basis” for “the common law.” Where did you get that idea from?

It’s not even “the basis” for “private property rights”. Both these systems emerged naturally without any grounding or backing in a theory of natural law.

Wherever it has been tried it leads to freedom and prosperity and intellectual property rights.

This is so confused. First you talk about natural rights, which is deontological, and then right away switch to empirical data…. And further, do you really think IP has always arisen in lock step with “natural rights”? No, it (in its copyright and patent incarnations, which is the issue under debate) has always been a creature of STATE LEGISLATION, which has nothing to do with “natural law” or “natural rights”).

“Property rights are moral basis of economics.”

Economics is the study of the catallactic (market) implications of human action. I didn’t realize that a discipline or study “has a moral basis.”

” Property rights ensure that parasites, both government and private, cannot live of the effort of other people.”

Property rights provide protection for owned scarce resources, if and to the extend they are respected and enforced. They do this by providing visible property borders that are arrived at by a fair assigning process (that is, rooted in Lockean homesteading).

As a result, people have an incentive to invest and work hard.

jumping again to modern “incentive” arguments. Not all rights are about “incentives,” though there is a natural harmony of course.

Patents are property rights

Mere assertion. Sloppy-thinking amateurs apparently do not even know what question-begging is.

and they provide the assurance that parasites are not able to steal the labor of inventors.

Using information to guide your actions does not “steal” anyone’s “labor.” What do you live in, metaphor land?

On the other hand, your theory is based on scarcity as the reason for property rights. This theory ignores the value of the human mind and is perfectly consistent with Marx’s physical labor theory of value.

You keep showing how confused your thinking is. You are so out of your depth is is comical. You have no idea what you are talking about. You should stick to being a good patent-scrivener minion specializing in interfacing between monopoly-seeking clients and the state-bureaucracy that grants them to suitable supplicants.

It allows parasites to steal the product of other people’s mind.

Wow, two question-begging assertions in one short sentence. Impressive.

As a result, it destroys the value created by people,

There is no property right to “value.” Only to the physical integrity of one’s property and its borders.

particularly inventors, and destroys the incentive to invest in inventions.

Once again switching to utilitarian reasoning when you started out talking about “Natural Rights.” Or should I say, Utilitarian reasoning?

Providing a bunch of pseudo math in which none of the variables are measurable

YOU are the ones claiming that IP law creates net wealth. Implicit in this claim is that the net innovation-based gains of the system exceed the costs. You are urging a law that infringes prima facie on property rights and liberty; you have the burden of proving that your proffered justification is correct. If you cannot measure these thigns–and I agree, you cannot, not really–then this just means you can NEVER satisfy your burden of proof. Thanks for conceding!!

Mathematical formulas for modeling the real world, where none of the variables are measurable is not science it’s fraud.

I quite agree with you that when people like you assert that IP law generates net innovation and net wealth and that it’s essential for innovation blah blah blah, this is pure pseudoscience by a bunch of amateurs, poseurs, and dishonest patent shills.

You are in favor of patents because it pays the bills. I get it. Your reasoning is nothing more than this. the rest of your flimsy non-arguments are nothing but makeweights to justify your own source of income. Everyone knows this. Patent lawyers know this. You just recite a few bullshit bromides that judges and law professors toss off, because that’s “good enough” to satisfy most mainstream statist-minded types who will be listening. You are not serious, and everyone knows it. The game is up.

Dan|8.6.10 @ 2:34AM|#

Halling, I guess that means you don’t have an answer to the question Kinsella asked? Or do you always go back to talking points like a politician when you get over your head.

Interestingly, he said that the IP piece caused “by far the most thorough discussion in the comment field of any of our articles. One person called you a liar for calling Rands IP-argument ‘utilitarian,’ and then proceeded to explain her argument in utilitarian form.”

As I wrote in reply, “I am not surprised the article got a lot of discussion. IP posts routinely get the most comments on the Mises Blog (it’s over 400 comments now for one published 2 days ago: The Death Throes of Pro-IP Libertarianism).