Copy Fights

The Future of Intellectural Property in the Information Age

Adam D. Thierer, Clyde Wayne Crews

• Publisher: Cato Institute
• Year: 2002
• Print ISBN: 9781933995786
• eBook ISBN: 9781933995786
• Topic: Politica e relazioni internazionali
• Subtopic: Politica sociale

The Internet has often been labeled a disruptive technology, and nowhere has that been more clearly the case than in the field of intellectual property (IP) law. Although debates over IP policy have raged in academic circles and law and economics journals for decades, with the rise of the Internet, IP issues have captured the public's collective attention like never before. Suddenly, the teenage creator of file-swapping sensation Napster appeared on the cover of Time magazine as the mass media took notice of an explosion of interest in digital downloads, CD burning, and widespread peer-to-peer file sharing among the general public. But the mass movement to share songs and other digital content online was met with a firestorm of criticism from copyright and patent holders, who struck back with a vengeance, filing lawsuits and pursuing legislative and regulatory remedies for what they regarded as intellectual property piracy on a scale never before envisioned.

This debate has sparked a newfound interest in timeless questions about the nature of intellectual property and how it should be protected, including why do we protect intellectual property at all; do we really have "property rights" in our intangible creations the same way we have property rights to our homes and our land; aren't there better ways to encourage artistic creation and scientific discovery than through the use of copyright and patent laws that protect a limited monopoly? Copy Fights presents a thought-provoking exploration of these questions.

PART I

THEORY: WHAT RIGHTS DO WE HAVE IN OUR INTANGIBLE CREATIONS?

1. Indelicate Imbalancing in Copyright and Patent Law

Tom W. Bell

When we were kids, my brother and I quarreled at length about the color of the world. Our intractable dispute arose because my brother, David, favored blue, whereas I favored green. As proof that he had chosen the superior of the two colors, my brother claimed that the world had more blue in it. Being some four years younger and correspondingly smaller, I could not resort to David’s favorite rhetorical device (the argument from pummeling). I instead had to rely on my half-pint wits. To his claim on behalf of the color blue, I thus replied: “Does not!”

“Does too!” came David’s retort. “The sky is blue and so is the ocean.”

“The sky isn’t blue when it rains or at night,” I parried, “and the ocean isn’t blue—it’s green. And the grass is green. And the trees are green, too.”

You can well imagine where our colloquium on the world’s color went from there: whether the sky was blue, black, or even (as I averred) deep purple at night; how to reckon the color of the sky above the clouds and, relatedly, how many airline passengers get window seats; which of us had better claim to the Red and Yellow Seas; whether the “Sea of Green” the Beatles sang of really existed; “does not”; “does too”; and so forth.

I relate this tale for two reasons. First, I want to publicly concede that my brother almost certainly had the better of our factual dispute. As a five-year-old in rural Virginia, I perhaps had good reason to think that the world sports predominately green hues. I’ve since learned, however, that we call Earth “the Blue Planet” for good reason. (It bears noting, though, that scientists recently discovered that “the current color of the universe is a sprightly green.”)¹

Secondly, and more important, that childhood argument over color illustrates an important aspect of contemporary arguments over the proper scope of copyright and patent protection. Neither sort of argument could ever end by dint of quantitative measures. The necessary numbers do not exist and, even if they did, they could not alone suffice to settle the dispute in question. These types of arguments ultimately turn on questions of values—aesthetic in one case, ethical in the other—not on questions of facts.

Our ignorance about the relative amounts of blueness and greenness hardly mattered to me and my brother because we implicitly understood that our fight over facts served as a mere proxy for the ultimate, and ultimately irresolvable, issue: aesthetics. Ignorance of the relevant quantitative data does matter, however, to arguments over the proper scope of copyright and patent law. By all accounts, copyright and patent law aim to strike a “delicate balance” between public and private interests. By most accounts, moreover, and by the only convincing ones, the justifiability of copyright and patent protection relies on a showing that lawmakers have managed to at least approximate that balance.

But due to knowledge problems,² copyright and patent law has not and indeed cannot strike a delicate balance between public and private interests. Due to public choice problems,³ lawmakers can at best achieve only a rather indelicate imbalance between various private interests—namely, those private interests with sufficient clout to sway legislative deliberations.

Can the legislative process at least approximate the real goal of copyright and patent law, that of balancing public and private interests? That remains a difficult—and hotly contested—question. Merely to ask the question demonstrates the need to reevaluate the justifiability of state action protecting copyrights and patents. Copyrights and patents represent federal welfare programs for creators. As with other sorts of welfare programs, we may never know if copyright and patent work very well or even if they produce net benefits. But, as with other sorts of welfare programs, we should recognize copyrights and patents as evils—evils necessary at the best and susceptible to reform at the least.

Admittedly, some intellectual property theoreticians might object to the characterization of copyrights and patents as purely utilitarian devices for maximizing social utility. Such theoreticians characterize copyrights and patents as natural rights that vest in the creators of original expressions or novel inventions, respectively. To clear the way for the main topic—the indelicate imbalances struck by copyright and patent law—the next section offers a brief rejoinder to the natural rights argument for copyrights and patents. Then the paper discusses why copyright and patent law cannot demonstrably satisfy their utilitarian aims, and suggests what we should do about that problem.

Before turning to those arguments, allow me to clarify that I do not intend to analyze every sort of intellectual property. I focus here solely on copyrights and patents, which alone out of all intellectual property protections tout express authorization under the U.S. Constitution,⁴ which thus arise almost solely under U.S. federal law rather than the laws of the several states, and which have little or no plausible claim to natural or common law foundations. Trademarks and trade secrets, the two other main types of intellectual property, present issues different from those covered by this paper and, thus, beyond its scope.

The Unnaturalness of Copyright and Patent Rights

The instrumentalism that pervades cases, legislation, and commentary on copyright and patent law leaves scant room for natural rights.⁵ The Supreme Court has, for instance, described copyright as “the creature of the Federal statute”⁶ and observed, “Congress did not sanction an existing right but created a new one.”⁷ In another case, the Court observed: “The patent monopoly was not designed to secure to the inventor his natural right in his discoveries. Rather it was a reward, an inducement, to bring forth new knowledge.”⁸ Nonetheless, a few commentators have argued that the propriety of copyrights and patents could and should rely on a Lockean labordesert justification. That form of justification would run, in very brief, thus: 1) Because a creator owns himself, 2) he owns his labor and, thus, 3) those intellectual properties with which, by dint of his creative acts, he mixes his labor.⁹

That facially plausible extension of Locke’s theory does not, however, withstand close scrutiny. The labor-desert justification of property gives a creator clear title only to the particular tangible item in which he fixes his creativity—not to some intangible wisp of the metaphysical realm.¹⁰ It speaks only to the ownership of atoms, not to the ownership of bits. Locke himself did not try to justify intangible property.¹¹ Modern commentators who would venture so far beyond the boundaries of Locke’s thought, into the abstractions of intellectual property, thus ought to leave his name behind.

More pointedly, copyright and patent protection contradicts Locke’s justification of property. By invoking state power, a copyright or patent owner can impose prior restraint, fines, imprisonment, and confiscation on those engaged in peaceful expression and the quiet enjoyment of their tangible property.¹² Because it thus gags our voices, ties our hands, and demolishes our presses, the law of copyrights and patents violates the very rights that Locke defended.¹³

At any rate, Locke’s justification of the natural right to property runs little risk of convincing contemporary legislators or courts to forsake the prevailing utilitarian justification of copyright and patent. The Lockean labor-desert theory has only one realistic hope of influencing intellectual property law: via originalist interpretation of the U.S. Constitution.¹⁴ Many judges find appeals to the original meaning of constitutional language, such as that embodied in the copyright and patent clause, quite persuasive.¹⁵ We thus need to ask whether the Founders understood copyrights and patents to secure authors’ and inventors’ natural rights against unauthorized duplication. A careful review of the historical record indicates that the Founders almost certainly did not.¹⁶

Consider first the plain language of the Constitution’s copyright and patent clause, which authorizes Congress to “promote the Progress of Science and the useful Arts”¹⁷ The clause makes no reference to natural rights, instead offering only a utilitarian justification of copyrights and patents.¹⁸ Consider second the available evidence of substantial discussion about the clause during the Philadelphia Convention or the state ratification debates: no such evidence exists.¹⁹ Reconstructing the Founders’ views on copyright and patent law thus calls, third and last, for us to consider their extra-legislative comments.

In The Federalist Papers, James Madison defended the power granted by the copyright and patent clause to Congress on grounds that,

The utility of the 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.²⁰

Note first that Madison’s defense of the copyright and power sounds more in utility than natural rights. Note next that, intentionally or not, Madison misrepresented copyright’s standing at common law, which had some years prior to his comments lost what little nonstatutory protection it ever enjoyed.²¹

Most importantly, however, note that notwithstanding Madison’s reference to the “claims of individuals,” he appears not to have held a natural rights view of copyrights and patents. The telling evidence appears in what he said—or rather what he did not say—in his correspondence with Thomas Jefferson about the copyright and patent clause. Jefferson wrote from Paris critiquing the proposed Constitution for failing to include a bill of rights, advocating in particular that it “abolish … Monopolies, in all cases…”²² Jefferson explained that “saying there will be no monopolies lessens the incitements [sic] to ingenuity … but the benefit even of limited monopolies is too doubtful to be opposed to that of their general suppression.”²³

Madison’s reply gave ample credit to Jefferson’s concerns and, more pointedly, nowhere defended the clause as a measure necessary to protect the natural rights of authors and inventors.²⁴ Madison’s silence on that point would prove remarkable in any context.²⁵ In this case, though, writing to one of the foremost advocates of natural rights, in reply to his call for a bill of rights, and in defense of the copyright and patent clause, Madison’s silence speaks tomes. Madison regarded copyrights and patents not as natural rights but as admittedly dangerous tools for advancing industrial policy, and ones of dubious efficacy at that.

As his comments to Madison indicated, Thomas Jefferson likewise regarded copyrights and patents as unnatural—and presumptively unwise—rights. His view of patents carries particular weight, as Jefferson served, in effect, as the first Commissioner of Patents.²⁶ Jefferson quite plainly regarded patents as utilitarian and statutory devices, describing “the exclusive right to invention as given not of natural right, but for the benefit of society….”²⁷

In sum, then, the argument for natural rights in copyrights and patents cannot claim the support of the plain language of the Constitution, judicial interpretation of that language, Locke’s theory of property, or the Founders’ views of copyrights and patents. On that evidence I conclude that copyrights and patents represent notable exceptions to the default rule that a free people, respecting common law rights and engaging in market transactions, can copy original expressions and novel inventions at will.²⁸ In that, I think I follow the Founders, who viewed copyrights and patents as exceptions to natural rights so extraordinary as to require explicit constitutional authorization.

The Statutory Failure of Copyright and Patent Law

Courts and commentators agree that copyright and patent represent statutory responses to a looming market failure—namely, the market’s failure to provide adequate supplies of original expressions and novel inventions.²⁹ Why create copyright and patent rights? “To promote the Progress of Science and useful Arts,”³⁰ the Constitution explains. How do copyright and patent promote that end? By “securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries,” the Constitution’s text continues.³¹ The Supreme Court summed it up in Mazer v. Stein: “The economic philosophy behind the clause empowering Congress to grant patents and copyrights is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare.”³²

In other words, copyright and patent law provide emergency shelter to creations that, but for such special statutory protection, would have fallen between the common law’s cracks and been left wandering unprotected through the market economy. Just as commentators call the special treatment that lawmakers afford to influential commercial interests “corporate welfare,” we might thus call copyright and patent law “creators’ welfare.” Or, to draw a parallel with a type of welfare that, in contrast to corporate welfare, has seen bracing reform—the Aid to Families with Dependent Children (AFDC) program³³—we might call copyright and patent protection “ACPE,” for “Aid for Creators with Positive Externalities.”

As that analogy suggests, we ought to withdraw copyright and patent protections when and if they prove redundant. Understand that by analogizing them to welfare I do not mean to dismiss copyrights and patents as utterly illegitimate. For one thing, copyright and patent law can lay just claim to using a fairly efficient means of incentivizing creators: the creation of fungible and divisible rights. For another thing, copyright and patent law tackles a very difficult problem—one the Founders thought salient and important enough to expressly address in the Constitution. But the analogy with welfare does serve to remind us that the legitimacy of copyrights and patents remains a contingent question of fact.

But here we face a problem: Notwithstanding ubiquitous claims that copyright and patent policy strikes a delicate balance between public and private rights,³⁴ thus maximizing social utility, it almost certainly does not strike such a balance. Indeed, it cannot. Political authorities cannot measure even the economic factors that would have to go into a calculation of the optimal level of copyright and patent protection.³⁵ Still less can they measure the myriad fluctuating and intangible ones, such as the Internet’s effect on the production of new music or the social impact of parody.³⁶ Regardless of whether they could measure all the relevant economic, legal, technological, and cultural factors, moreover, politicians could not balance such incommensurable values.³⁷ The subject matter of copyright and patent law reaches so deeply into our lives that it has become not simply a matter of industrial policy, or even of information policy, but of social policy. Copyright law limits criticism of the Church of Scientology, for instance, while patent law raises the price of life-saving drugs. The intractable nature of those and related controversies ensures that no amount of open, sincere, and disinterested discourse will put copyright and patent law into delicate balance.

Does that sound discouraging? It gets worse. Public choice theory teaches that even if lawmakers could obtain the data necessary for delicately balancing all the public and private interests affected by copyright and patent law, it wouldn’t matter.³⁸ Lawmakers would not use those data—or, more precisely, those data would not control the laws they make. Instead, lobbying by special interests would invariably ensure that copyright and patent ...

Table of contents

• Foreword
• Introduction: The Great Intellectual Property Debate
• PART I
• PART II
• Contributors