Libertarian Patent Reform

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Liberty has recently been a forum for discussing copyrights; this brief essay on patents is intended to contribute to the intellectual property conversation. First, I will suggest several legal reforms that could narrow patents — in my opinion, a good thing. Second, I will explain why patents should exist, although in a form more limited than the present one.

Much has been made in the media about “patent trolls,” companies that file or collect patents, not with the intention of ever selling a product, but simply with the desire to litigate against others for patent infringement. Their special target is small businesses that lack the legal resources to fight back. They extort money from these businesses by threatening to sue them. Patent trolls should be repulsive to all libertarians. Even libertarians who devoutly believe in patent law should consider this a blatant example of people gaming the legal system to steal money from innocent, productive businesses.

Twenty years enables a virtual monopoly that may encompass the bulk of a person’s working life, and that’s too long.

What can be done about such trolls? I have some recommendations for changes in the patent laws. I am confident that these changes would satisfy a broad swath of libertarians because, while hurting the trolls, they would provide a healthy limitation to the laws themselves, laws that, according to some libertarians, are too powerful and tend to help patent owners at the expense of the public.

1. Shorten the term of patent protection to ten years. A patent currently lasts for 20 years from its grant date. But the purpose of the patent laws, as spelled out in the United States constitution, is to encourage innovation — “to promote the progress of science and useful arts.” An adequate incentive to invention would be ten years. Twenty years enables a virtual monopoly that may encompass the bulk of a person’s working life, and that’s too long. Ten years of protection rewards and encourages invention but allows a patent to pass into the public domain early enough so that the public can freely make use of inventions while they are still technologically relevant. This is the public’s reward for granting the patent to the inventor. In other words, the public and the inventor enter into a bargain wherein the inventor gets a temporary monopoly and the public gets the useful knowledge embodied in the invention after the monopoly ends. If the technology is out of date by the time the patent ends — and after 20 years most tech is outdated — then the public is not getting its end of the bargain.

2. Require “intent to use.” Currently a person may file and own a patent merely for having invented it, and may assign it to whomever he likes. Trademark law contains a concept called “intent to use,” but this doctrine has not migrated to patent law. If a legal requirement were imposed that to file or own a patent a person must possess a legitimate intent to develop the invention commercially and sell it, then patent trolls would cease to exist. This would not hurt penurious inventors, because the only requirement would be a good faith intent to use the patent at some point, and there would be no requirement of actually being commercially successful, nor of having the financial resources to start manufacturing in the near future.

3. Give teeth to the “obviousness” requirement. The two legal requirements for a patent to issue are, in the words of patent law, “novelty” and “non-obviousness.” Novelty means that no one has done it before. This is strictly enforced by the courts. But as to the invention being non-obvious, the test is enforced very loosely. The best example is the Amazon “one click” patent. Amazon filed a patent that was, really, for nothing more than the process of buying something on a website by means of a single click of a button on the site, where that one click does everything necessary to complete the sale. Apparently it was novel, and the patent issued. But, in my opinion, one click is patently obvious (pun intended). Clicking a button to buy something seems so obvious that a monkey could think of it. Yet this patent still exists, although it was somewhat narrowed by later litigation.

One click is not an isolated exception. For another example, Yahoo! has a patent, which Google licenses, a patent for including ads in search engine results. An idiot could have invented that patent. But patent law deems it “non-obvious.” I advocate, in all seriousness, the creation of a “monkey-or-idiot” test: if a monkey could have designed something or an idiot could have invented it, then it is obvious, and no patent may issue for it. The test used by the courts for “obviousness” right now is merely whether prior art anticipated it, which improperly collapses the obviousness test into the novelty test, and in practice creates one hurdle to clear when the laws explicitly require that a patent must clear two hurdles.

4. Make patents non-assignable. Right now, there is a handful of big corporations that dominate an area of technology and collect patents in order to prevent smaller startup companies from competing against them. For example, in the software realm, Microsoft, IBM, Apple, and Amazon collect patents aggressively and use their patents to stifle competition. This is rightly characterized as the rich exploiting the laws to hurt the poor and the middle class, because the big corporations are owned by the rich while the small startups tend to be ambitious hard-working poor or middle-class entrepreneurs.

If a monkey could have designed something or an idiot could have invented it, then it is obvious, and no patent should be issued for it.

The solution to this problem is to make patents non-assignable: only the inventor of a patent can own it. This will diversify patent ownership so that the rich cannot use patents to suppress the middle class. One of the purposes of a patent is to reward the inventor for his creative contribution to society, and this reform would force corporations to pay inventors what they are due.

5. Make independent creation a defense to the charge of infringement. In the realm of copyrights, independent creation is already a defense to infringement. If Singer A writes a song, and Singer B writes the same song by himself and does not copy A, then B cannot be sued for infringement by A, even if A owns the copyright in the song. This makes sense, because intellectual property infringement is basically a claim for theft, and B did not steal or copy A, despite the two songs being identical. I advocate a similar defense of independent creation to patent infringement. If an inventor creates an invention by himself, and does not copy or steal from the patent’s owner, then he will be free to use it. (We can discuss whether, in addition to freedom of use, he should also have the right to file a patent for it, when a patent already exists.) This makes sense, because the inventor should reap the rewards of his work, and nothing that the patent owner has done makes it just or right to block an inventor from using the invention that he himself created.

Some libertarians suggest that “loser pays” should apply in patent litigation. Recent legislation to apply “loser pays” to patent cases, in an effort to curtail patent trolls, massively failed to elicit voter support and died in Congress. And the trillion dollar technology industry, and its lobbyists, will never allow patents to be eliminated. However, by intelligently advocating selective, sensible, wise reforms, we can nudge patent law in a direction that makes it more responsive to the needs of the public.

Of course, some libertarians will be outraged that I am advocating patent reforms instead of the wholesale abolition of patents. To enable a discussion of this topic, allow me to review the three libertarian arguments for patents. I call these the Randian argument, the Rothbardian argument, and the Nozickian argument.

1. The Randian (Ayn Rand-derived) argument is simply this: assume that John Galt designs a motor that can convert static electricity to usable electric power. This motor will solve the world energy crisis and create clean, cheap, limitless electricity. Should Galt own a patent in the motor? The Randian answer is yes, because Galt created it by using his hard work, intelligence, and genius, and a person deserves to own the results of his labor, as a matter of justice: you should be allowed to reap what you have sown. If you oppose patents, just imagine James Taggart, a principal villain of Rand’s Atlas Shrugged, taking Galt’s motor and using it without his consent in order to make money for Taggart, who gives nothing to Galt. To a libertarian, this should feel shocking and ghastly. In fact, it should feel like the parasites exploiting the geniuses, opposition to which is the whole point of Rand’s philosophy.

2. Many libertarians oppose patents, not because of analysis or thought, but because libertarian theorist Murray Rothbard told them to. Many libertarians obey the Rothbardian party line and do what Rothbard says without any critical inquiry. But a little critical thinking shows why, even if we concede Rothbard's basic economic theory, we can still justify patents.

Why did Rothbard oppose them? My reading of Rothbard is that, for him, property exists in order to prioritize scarce resources. He believed that ideas are not scarce, and that therefore ideas cannot be subject to ownership. My analysis is that Rothbard confused the use of ideas and the creation of ideas. Once an idea is created, it cannot be used up or depleted, and anyone can employ it without taking it away from someone else. An idea is not scarce in its use. But the creation of ideas is scarce. If the design for a motor that could create cleaner, cheaper, more plentiful electricity is not scarce, then where is this idea? If not truly scarce, it should be growing on trees and waiting to be plucked and used, like berries on a bush or air to breathe. But Galt’s motor is nowhere to be found. Indeed, the motor must be created by Galt before we can use it. And, until it is created, it is scarce.

Recent legislation to apply “loser pays” to patent cases, in an effort to curtail patent trolls, massively failed to elicit voter support and died in Congress.

The creation of ideas uses scarce resources, such as Galt’s genius, or funding for research laboratories. Therefore, even according to Rothbard’s basic idea that property exists to prioritize scarce resources, patents should issue to inventors, so that money can be paid to the creators of inventions, to prioritize the resources that go into creating inventions.

3. Robert Nozick, Harvard’s most notable libertarian, once posed a thought experiment about what would happen if people were allowed to sell themselves into slavery. He posited that everyone would buy an interest in everyone else, leading to a communal society grounded in contract law.

Nozick's argument, which comes from the second section of chapter 9 in his book Anarchy State and Utopia, is very complicated and difficult to summarize. The gist of it is that a socialist state could arise from a series of contracts if everyone were allowed to sell to others the right to make the seller's important life decisions, such as the decision of which job to work, what drugs to use, what to do with money, etc., because eventually everyone would own a decision-making interest in everyone else, so the community would then have the contractual right to make each individual's decisions. Nozick's prose is dense enough and meanders so much that it is debatable whether he thought this was an argument against the right to make such contracts, or whether he merely found it a thought experiment colorful enough to elaborate. I have no need to answer this question, because my version of Nozick's argument focuses on other contracts that, in general, most libertarians would agree that a person has the right to make.

Let us assume that in a libertarian utopia a person is free to enter into contracts with other consenting adults, without limits. And let us assume that Galt invents a great motor. Then, as a condition to telling anyone else how his motor works or showing his design to others, he requires that everyone else involved with it, such as the investors who fund it and the consumers who buy it, signs a contract. This contract between Galt and third parties would say that the other person consents not to use, buy, make, or sell a motor similar to Galt’s, without Galt’s permission or without paying Galt a licensing fee, in return for the right to do business with Galt. How would this arrangement differ from a patent?

But, also consider: what in libertarian theory would forbid such a contract? If such contracts were allowed, then de facto patents could exist, although they would be based on contract law and not on patent law. So the Nozickian argument proves that a libertarian utopia would collapse, or develop, into a society where de facto patents exist, even if patent law had been abolished.

For all three reasons, Randian, Rothbardian, and Nozickian, it is worth asking: why should (some) libertarians be so passionate in their hatred of patents? I do not ask for your blind agreement on an answer, but merely ask that you consider whether your position on patents is the result of thoughtful reflection or peer pressure from the libertarian movement to conform to the standard form of Rothbardian dogma.




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The Absurdity of Intellectual “Property”

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This is a response to Kyle Scott’s essay, published in Liberty on August 16.

Kyle Scott’s case for copyright is interesting, and he should be commended for making it so clearly and intelligently. For him, as for many other libertarians, what people write is their own property, like any other kind of property, and they have a natural right to keep it. Government is merely the protector, not the source of their right. All this can be deduced from the natural rights theory most importantly exemplified by John Locke’s Second Treatise of Civil Government.

Unfortunately, so concerned is Mr. Scott with his line of deductive reasoning, so clear, so forcible, so all-sufficient, that he never notices what a strange kind of property he’s talking about. Copyright is property that stops and starts whenever the government starts or stops it. A few decades ago, it lasted for 28 years, with renewal for another 28 years, if you mixed your labor with the thing a second time, by filling out a form asking for renewal. Now it continues for 70 years after your death or, in the case of “work for hire” — work performed, for instance, in the employ of the Disney Corporation, which hired you to mix your labor on its account — for a whopping 90 years after the original publication of whatever you wrote or otherwise created.

Copyright is an invention of government, and it has fluctuated at the arbitrary whim of government.

I have no doubt that many other alterations in the lifetime of this weirdly fluctuating property will occur, as congressmen receive yet more campaign funds from yet more wealthy holders of copyright. As things stand today, however, the heirs of a 20-year-old who writes something, anything, today, and survives to the age of 80, can manifest themselves in the year 2144, demanding that you get their permission to republish this something, anything, that was produced so long ago by so callow a youth. And if the heirs are not around, in the sense of being visible, you will have to find them, or show that you tried. Then, miracle of miracles, in the year 2145, the troublesome property will vanish. The copyright will have expired, a mere 70 years after its author’s expiration, and you will be free to publish it a thousand times over, if you want.

Now really, does this look like property? Do farms and houses vanish 70 years after the deaths of their creators, unless some government action resuscitates them?

Historically, copyright is an invention of government, and it has fluctuated at the arbitrary whim of government. Mr. Scott would doubtless argue that this has nothing to do with the basic issue, which is one of individual right, right eventually recognized and protected, however imperfectly, by government. He might carry his reasoning to the obvious, though absurd, extreme of insisting that anything I write and perhaps toss into the street should be guaranteed to me and my heirs forever — that the heirs of Sophocles and King Solomon, no doubt very numerous by now, should be tracked down and reimbursed for every republication of these authors’ works. Oh no, no need for consultation of Athenian or Israelite statutes of inheritance, which knew nothing of copyright. Principle alone will guide us.

But in truth, copyrighted “property” is no property at all. The assumption that it is property is fraught with as many evils as St. Paul attributed to the love of money.

Everyone has a right to own a house, to sell it, or to pass it to his heirs. But the house doesn’t vanish 70 years after his death, or whenever Congress passes another law. Nor, to get closer to the root of the problem, is the house an abstract title to the legal authority to reproduce a house, the ownership of which title can require expert knowledge to identify after a fairly short time. No, there is the house, at 400 S. Main Street, and there are the people inhabiting the house or paying rent on it to a readily identifiable owner. A house is completely different from the reproduction of a house — or, still more abstractly, the right to reproduce it. Your property right in your house is in no way diminished by my building a house that looks exactly like it. Furthermore, you can’t just build a house and move away and abandon it, and expect other people to run and find you and pay you money for the right to live in it — much less the right to build a house in Dubuque or Delphi that’s exactly like that house. No, other people are eventually going to mix their labor with your house — use it, maintain it, claim it for their own. Even in the most rights-conscious communities, if you keep leaving your grandfather’s gold watch on the sidewalk, someone else is going to pick it up, wind it, clean it, and appropriate it, and no jury will convict him for doing so. Nor should it, all cookie-cutter libertarian theory to the contrary.

The vast majority of copyrights are of no value at all, and honoring them constitutes an enormous tax on productive people.

Now, a copyright is not like a house, and it is not like a gold watch. It is nothing so real as those things. In Mr. Scott’s conception, and that of the United States government, it is an absolute right to keep other people from copying something, for the sole reason that you produced it. You could say the same thing about — pardon my taste for low imagery — your garbage, or the stuff you put in your toilet. Copyright, in this conception, is an absolute guarantee that no one can copy your words, even if you abandoned them, even if you sold somebody the paper they were written on and walked away and didn’t bother to leave your address. Even if you gave the paper away. Even if you left it lying in the gutter. Even if it stayed in the gutter, or in the moldering archives of a vanity press, for seventy years after your death.

Now, if I sold you a house by claiming that Frank Lloyd Wright had built it, and he didn’t build it, but I built it myself, you could sue me for fraud — but the Wright estate could not. I had every right to build and sell the house, even if it looked the same as one of Wright’s houses; I just didn’t have the right to claim that he built it and charge you more accordingly. But if I sold you a laundry list, claiming that Wright had written it, and he did write it, and you reproduced it, only without the permission of his estate, the estate should be able to sue you successfully, according to the argument of Mr. Scott and many other libertarians. What’s the difference? It isn’t a difference of natural right, that’s for sure; it’s a difference of political enactments that have become so naturalized in libertarian thought that rationalizations are found for them.

It never occurs to dogmatists of copyright that valuable works could be protected by invoking laws against fraud. More important, it never occurs to them that the vast majority of copyrights are of no value at all, and that honoring them constitutes an enormous tax on productive people. I know scholars who spend much of their lives trying to trace the copyright owners of works that are almost 100 years old, works that are of no value except to the hapless researchers and a handful of readers. They are paying a pointless tax to a ridiculous law, a law that Mr. Scott would presumably make still more ridiculous by extending it to eternity.

It isn’t a difference of natural right; it’s a difference of political enactments that have become so naturalized in libertarian thought that rationalizations are found for them.

If labor has anything to do with the creation of property — which it doesn’t, contrary to Mr. Scott’s faith in Lockean dogmas, according to which I can’t pick up a kitten in the street without asking who mixed his labor with the land that sustained the kitten’s progenitors, all the way back to Noah — there are a great many more researchers and readers who have a more substantial property right to the stuff they research and read than the authors who once excreted it. If you don’t believe that, try mixing your labor with John Locke’s prose.

Mr. Scott is patently an intelligent person, yet his claims for copyright are patently absurd. This is an observation that could be made in respect to many radical libertarian arguments, particularly those whose results turn out to be, rather ironically, highly conservative. By Scott’s logic, high schools shouldn’t just be teaching Shakespeare; they should be supporting an eternal Shakespeare Trust, providing dividends for his millions of heirs, any one of whom could veto republication of his works, as a matter of right.

This prompts the question: under what circumstances are intelligent persons most likely to make absurd statements, without realizing their absurdity? Answer: When they are in love. And so it is: Mr. Scott — again, like too many other libertarians — is in love with an ideology and cannot see the absurdity to which his supposedly radical position leads him: the absurdity of endorsing, on the ground of individual rights, a massive governmental creation and subsidization of crony “property.”




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