Wednesday, January 7, 2015

Intellectual Property is Important

In the debate over patents and copyrights (intellectual property, or IP), activists tend to conflate IP use with IP abuse. To help distinguish the two, let's take two pretend people; Joe and Blake.

Joe is a writer, he has spent a great deal of time and effort to write a novel. Suppose it's pretty good, maybe it's got vampires in it, I don't know. Joe uses his copyright to shop the novel around. He's secure in the knowledge that the government keeps publishers from stealing his working and selling it on their own. That way, if a company thinks they can make money from selling the book, they have to share the proceeds with him. Let's also suppose Joe wrote the book to make money. He set out with that express purpose - write something people want to read, and make money doing it.

On the other hand, Blake is a patent attorney who, with his brother the "businessman", file frivolous patent claims with the Patent Office. One of his successful patents was "A Method for Disseminating Computer Files Through A Public Computer Network in Chronological Order". That is, "Putting files on the internet and sorting by date". Blake extorts money by suing small businesses and organizations, and offering to settle for roughly just under the cost of defending the lawsuit. Because he knows his patent is invalid and would not stand up to scrutiny, he files in the Eastern District of Texas, where the judges will violate the rights of defendants, ignore the Federal Rules Of Civil Procedure, and generally bend over backwards for plaintiffs who file there.

Clearly, these two cases are different. But many IP reformers are actually abolitionists, and want to end the concept of intellectual property as a whole. Why is this bad? Let's look at the possible outcomes;

Blake, now unable to file lawsuits against companies for violating a bad patent, finds a new racket. Maybe staging accidents on corporate premises or car accidents. He's lost his easiest racket, but he's already dishonest so he'll come up with another one.

Joe, on the other hand, doesn't write the book. If he does write the book, the first publisher he shows it too just steals it and prints it themselves and doesn't give a penny. If he self-publishes, the first buyer goes and makes copies of the book and sells the book, with the same title and Joe's name on the cover, for less than what Joe charges and without having to do the work to create the book, only make the copies.

Why would that be a good outcome?

Most of the works produced before the development of IP were produced either on commission by wealthy nobility, were scholarly in nature, or written by the owners of theaters and orchestras, were the training and practice time required would grant the creator some limited exclusivity time. There was not the huge amount of music and performances that we have today.

And that's the core issue - people mostly operate out of self-interest, and the best way to get people to produce something is to reward them for doing it. If you don't, what you're left with is a big pile of nothing.

Yes, the system today is widely abused. But the solution is to fix the abuses, starting in Texas, not to destroy the IP system. If a window breaks, you fix the window. You don't burn the house down, with or without lemons.

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