A Big Ol' Entry on Patents and Copyrights

20 June 2008

[Back when I had an LJ, I more than once threatenpromised to write this entry. Well, I've done it. The organization is far from ideal, and there are probably various errors of grammar and of spelling. But I think that it's better that I spit this all out, rather than continuing to put the task aside.]

There are two important — and significantly distinct — models of intellectual property:

  1. Under one model, a conceptual entity is itself owned; expression or instantiation of the entity is held to be legally or morally limited by the right of ownership.
  2. Under the other model, the conceptual entity is not itself owned, but some possessor of the entity is permitted to condition transfer, and especially to condition transfer on subsequent transfers being likewise conditioned.
Let me make that more concrete. Under the first model, a party might be held to own the idea of renting a motor vehicle; and, within the jurisdiction, no one would be allowed to use the idea without the permission of the owner. Under the second model, a person might tell you a secret cheese-cake recipe, if you promise not to tell it to anyone else.

An operational distinction between these two models is that if some third party were to independently arrive at the idea of renting motor vehicles, under the first model she cannot profit from her independent invention; but, under the second model, if someone independently arrived at the very same cheese-cake recipe, then he could not be blocked by any other formulator or disseminator.

The two models have quite different foundations. The second model may involve the superficial appearance that a distinct class of property is involved, but the property right is really an expression of other, familiar notions of property: ownership of our minds, freedom of expression, and the right to contract. The first model, on the other hand, implies a distinct class of property. As an expression of pure logic, no truly new class of property can be introduced without thereby reducing other property rights. Prior to someone having a claim against all expression or instantiation of a idea, others could employ their persons or other property exactly in such expression; thus, once such claims are possible, ownership of the means of such expression — person and other property — is itself diminished.

Okay, now, I'm going to apply two familiar words to these two different models: The first model, whereïn the conceptual entity is owned, is the model of the patent. The second model, whereïn transfer of the conceptual entity may be conditioned, is the model of copyright.

Many people mistakenly believe that the fundamental distinction between patents and copyrights is the type of conceptual property to which they are applied. But the fact is that at some points in history, it was legally possible to patent almost any expression or instantiation of an idea. Indeed, the original letters patent conveyed monopoly rights that weren't even intrinsically linked to invention, as when a patent was granted for the selling of wine in England. (The holder had not invented wine, selling, selling wine, selling in England, or even selling wine in England.) Meanwhile, just what can legally be copyrighted has also evolved over time, and there is no logical reason that the abstract notion of a copy-right cannot be applied to any sort of design.

There is also a mistaken notion that the right of copyright in America is a creätion of the State by virtue of Article I §8 of the US Constitution:

The Congress shall have Power […] To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

But take note of the words of the principal author of the Constitution, James Madison, writing in The Federalist, No. 43:

The utility of this power will scarcely be questioned. The copyright of authors has been solemnly adjudged, in Great Britain, to be a right of common law. The right to useful inventions seems with equal reason to belong to the inventors. The public good fully coincides in both cases with the claims of individuals. The States cannot separately make effectual provision for either of the cases, and most of them have anticipated the decision of this point, by laws passed at the instance of Congress.

(Underscore mine.) Note also that the Bill of Rights (of which Madison is again the principal author) refers to and respects a common law[1] — America did not start its common law afresh, but continued with the common law that had been inheritted from Great Britain. Article I §8 does not bring copyrights into existence; rather, it empowers the Federal government to protect them (for a limited time), as opposed to leaving that matter to the constituent states.

Some people think that protecting copyrights at the level of constituent states is virtually inconceivable. However, in recent years we have seen the states protecting a different sort of intellectual property: specifically, screen actors have successfully lobbied constituent states to pass laws preventing their voices and likenesses from being incorporated in video posthumously by CGI (and analogous technology for audio) without permission of their estates or assignees. It is no less conceivable that the protection of copyrights could simply have been left in the hands of these states. Moreover, the Constitution does not forbid them from protecting copyrights past the intervals in which they are protected by the Federal government.

And, before I step away from the issue of Constitutionality, while Article I §8 only empowered the Federal government to protect copyrights for a limited time, Amendment 14 §1 greatly extended the power of the Federal government:

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Should natural law (acknowledged in the Ninth Amendment[2]) or common law be seen to recognize copyrights in perpetuïty, the Federal government would arguably be bound to secure them for an unlimited time.

But, aside from the question of whether copyrights are a mere creätion of the Constitution, what is or is not Constitutional is of secondary importance or less. I am concerned to argue about what makes moral and economic sense, and no one should start with the assumption that the Constitution conforms to such sense, let alone much creätes it. (Certainly I for one find parts of the Constitution regrettable before the Amendments, and parts regrettable after the Amendments.)

The operational distinction between copyrights and patents has certainly obtained. The story behind the movie The Towering Inferno (1974) furnishes my favorite example of how a copyright is not a monopoly right. This movie was a joint production of two studios, Warner Brothers and Twentieth Century-Fox, because the former had obtained the rights to The Tower by Richard Martin and the latter (in association with Irwin Allen) had obtained the rights to The Glass Inferno by Thomas N. Scortia and Frank M. Robinson. Each book was about a catastrophic skyscraper fire. Because the books were independently written, neither set of authors could make a claim against the other, nor could their respective licensees make such claims. Since neither studio could forcibly stop the other, and since the provision of one film would undercut the market for the other to the extent that combined profit would probably be less,[3] the two productions were combined into one film.

I illustrated the notion of copyrights with an example of a secret recipe. It is fair and reasonable to wonder about the proper rôle of secrecy in the foundations of intellectual property rights. A great deal in the real world has been protected by legal copyright without seeming to be at all secret.

There is actually an easily grasped relationship of secrecy to patents. Setting aside the odd case of patents of designs that are kept secret for reasons of ostensible national security (as in the case of self-sustaining nuclear fission), those who apply for patents give-up all secrecy; indeed, that's often claimed to be the point of the institution. In the defense of patents applied to invention, it is frequently argued that the alternative to patents is secrecy, and that patents represent an institution whereby inventors agree to reveal their secrets, and ultimately to transform them to public property, in exchange for a temporary monopoly. Sometimes this arrangement is represented as win-win. The inventor wins because the present discounted value of the expected profit of the short-term monopoly exceeds the present discounted value of the design if kept secret, and society wins because they get the knowledge for unlimited use later. (I've yet to see an apology that notes that reducing the inventor's costs will typically give consumers greater volume at lower cost.) However, an immediate problem with this claim is in the partition of parties into the inventor and society. An inventor — whoever gets the patent — reaps the benefits of the guaranteed monopoly; every other inventor loses rights to the design, possibly exactly those rights which are of value. The society which gets knowledge that it otherwise wouldn't have are just those who hadn't and wouldn't have independently invented the same design.

Further, let us assume that, mirable dictu, each invention would only have one inventor, so that no other inventors ever suffer expropriation. For economic efficiency, one wants an act of production to be pursued to the point at which marginal cost is just at or just below marginal benefit; thus, the optimal level of reward for inventors would be the marginal value of the invention. There is no reason to suppose that a fixed period of monopoly will present such rewards across all inventions; those sorts of inventions which are over-rewarded will be over-produced, and those which are under-rewarded will be under-produced. The over-production and under-production each represent economic loss, and thus won't somehow each balance-out the other. Nor can we expect legislators or regulators to guess that period at which the sum of losses of each sort will be minimized. We also cannot expect legislators or ostensible experts to properly set different periods for different inventions. Fundamentally, choosing a period of monopoly amounts to administrative price setting, and as such is economic nonsense.

(In the case of things that would be independently reïnvented, the marginal contribution of any given inventor may in fact be very small, regardless of the value of the design itself, so that the reward of monopoly might be especially out-of-proportion.)

In the aforemention example of a secret recipe over which a copy-right was claimed, prior concealment, and the possibility of some indefinite continuation of that concealment would seem to be an essential feature. If one knew that the recipe would become otherwise available, without condition, before one needed it, there would be less reason (if indeed any at all) to agree to conditions.

It is easy to imagine such a foundation for copyright in the cases of, say, an ordinary printed and bound book. People buying the book could be presumed to have agreed to conditions. People accessing the collections of buyers (in bookstores and libraries) could be likewise presumed to have agreed to be so bound. And perhaps one could make the claim that an improperly discarded book were a sort of fruit-of-a-poisoned-tree, so that one could not then freely copy its content.

But a thorough concealment plainly hasn't been considered essential to the proper consumption of audible content. And yet I generally don't want to hear the alleged music of those near-by. How, then, can I be claimed to have consented to conditions on reproduction of the composition? And, in the age of radio, it isn't just sound waves that are deliberately vibrating our homes. At what point did we consent to restrictions on what we might do with those vibrations?

We should agree that various sorts of easements — claims against what is otherwise the property of others — exist that permit some degree of transmission (of sound, of EMR, and of other things) onto and through the property of others; otherwise, we have a system of property in which trespass is pervasive and inescapable. Various economists have noted that a system with a sort of exclusive easements (and no state licensing) could allow a radio broadcasting industry. But, as Donald Clayton Hubin has more than once noted, it isn't perfectly clear why someone should be more able to claim a property right in one part of the electromagnetic spectrum than in another (eg, red), though there are plainly more practical difficulties in parcelling-out colors in the same manner in which radio frequencies have been or are proposed to be allocated.[4]

If such easements are accepted, perhaps it will be claimed that going into an area in which an easement prevails entails consent in much the same way as does taking-up a book in a library, so that one were bound to respect a claim of copy-right to overheard music and so forth. However, this notion of consent seems bizarre and dangerous to me.

Whatever might be the resolution of attempts to provide an ethical foundation for efficacious copyrights for leaky information, copyrights lend themselves to fairly economically efficient provision of the material in question. Again, for economic efficiency, we need creätors to be able to reälize the full marginal benefit of their acts of creätion, so that they will produce to the point where marginal cost is just at or just below marginal benefit. They will be hampered in doing so if the copyright ever expires, because the work will still produce marginal benefits after the point of expiry. The fact that the creätor won't be around to see that is irrelevant — if the copyright were not to expire, then she could collect their value as a present discounted expected value, or she might prefer the reward of passing them on to her posterity. (And, of course, creätors who found sufficient reward in benefiting society could exercise their copyright by giving it to everyone.)

I find it appalling that some people insist that a creätor loses almost nothing by having copyrights expire, while society somehow gains significantly. If the present value of future claims were almost nothing, then they could be purchased now for almost nothing, and the purchasers could then forswear the claim to the property. Alternately, on the assumption that the rights being taken are presently worth almost nothing to the creätor, an interested party could invest almost nothing right now, and have enough to buy a perpetual copyright at the time of proposed expiry, and then toss the work into the public domain. Plainly, if almost nothing were the cost, no one should be fighting to force expiry.

[1] The explicit reference is in the Seventh Amendment.

[2] The Ninth Amendment reads

The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

thereby acknowledging that there are rights which are prior to any apparently creäted by the Constitution, and indicating that what appears to be creätion may instead be acknowledgement.

[3] In 1965, an independent company released Harlow with Carol Lynley and Paramount released Harlow with Carol Baker. The two films cut each other's throat at the box office.

[4] [Addendum (2009:10/13): See also my later discussion of radio broadcasting.]

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