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Source link: http://archive.mises.org/7223/what-are-the-costs-of-the-patent-system/

What are the Costs of the Patent System?

September 27, 2007 by

I’m trying to find out if there are any recent estimates as to the cost of the patent system–e.g., what the annual dollar cost is in the US that would not be borne if not for the patent system.

As I’ve noted before (see There’s No Such Thing As A Free Patent), the standard utilitarian rationale for the patent system is that patent law encourages extra innovation; this innovation presumably is valuable. And the defenders of patent assume that the value of this extra innovation is clearly greater than the cost of the system.

Yet even if we assume the utilitarian framework for judging the merits of having a patent system–and ignore the economic and moral problems with utilitarianism–it’s obvious that the cost of the patent system is not trivial.

For example, I believe about 400,000 patent applications are filed per year in the US, of late. Assuming a ballpark cost of $15k (patent attorney fees, filing fees, prosecution costs for previously filed applications), we have $6 billion right there. However, patent prosecution costs are a little tricky here because many applications are continuing applications and so some of the prosecution cost has already been expended on the parent. So another way to do this (suggested to me by Meurer) is to find a lower bound to these costs by multiplying $15K or maybe $20K by the number issued patents rather than the number applied for. The number of utility patents alone issued in 2006 is about 174,000. Using this method, and $20k as the average cost, we get $3.5 billion. Let’s split the difference and call it $4.5 billion.What other costs are there? I suppose we could count the entire revenue of the PTO, but that would probably be double counting. And patent attorney salaries are already implicitly counted in this cost (patent prosecutors, not litigators).

Next, we have royalties paid for patent licenses. I have no idea what the total amount of royalty payments equals, but given that IBM alone gets about $1.3 billion a year from licensing fees, let’s be conservative and halve this (because some of it may be exaggeration; some may be for trade secrets, etc.), and then multiply this by ten (assuming IBM is no more than 1/10 of all patent license fees in the entire US economy); now we have $6.5 billion more. Our subtotal is $11 billion.

Then we have patent litigation costs. It’s well known that it can easily cost a million dollars or more to defend a patent lawsuit. Bessen & Meuer, if I read their paper correctly, estimate $16 billion in patent litigation costs in 1999; we can assume comparable costs now (again, conservative estimate, since they are probably higher — Bessen’s view (email to me) is the figure is only for public firms [and in 1992 dollars?] … since 1999 the rate of litigation has increased substantially, so current number are probably quite a bit higher”.) So we’ll use $20 billion, conservatively. And that’s not counting crazy damage awards, like the $100 or $1billlion awards occasionally handed out. Okay, now we have $20 billion from patent lawsuits. This might double-count licensing fees a bit, so let’s knock it to $15 billion to be safe. That’s $26 billion so far.

What else. There are lots of other costs, but they are too hard to measure, or even estimate with any certainty, along the lines of what is seen–and not seen. We can never know the value of some innovations that would have been produced if the threat of patents had not dissuaded the potential innovator from entering the field. It’s got to be in the billions. Let’s say $2 billion, being conservative. Okay, we’re up to $28 billion so far. I have a strong sense that this is a radical underestimate, but let’s go with it for now.

Julio Cole notes also that “The existence of patents also induces wasteful expenditure of resources by competitors trying to “invent around the patent,” i.e., to develop competing products that are sufficiently differentiated so as not to infringe on an existing patent.” Let’s give this another $5 billion. $31 billion so far.

Also, because the patent system rewards the more practical type of inventions that can be patented, R&D dollars are skewed toward this, and away from other types of research, or other investments or uses of the funds. So if the billions spent on patent filings, royalties, and defense costs were instead invested or spent on more fundamental R&D, surely this would reap valuable dividends. Let’s say $10 billion worth as another ballpark (assuming the $31 billion is invested, etc., yielding a decent return). So now we have $41 billion as our cost.

I’m sure there are others, so this is an underestimate, maybe by an order of magnitude.

I’m looking for some studies that ballpark it like this. Anyone aware of any such studies? Anything obvious and big I’m leaving out? My Mises blog post Revisiting Some Problems with Patents lists several studies on the effects of the patent system on innovation, but not sure if any of them look at it from this perspective of come up with any conclusions formatted in this way.

BTW, this cost number would have to be compared to the value of the marginal innovations stimulated by the patent system. Moreover, this number needs to be first discounted. Why? Let’s assume the patent system stimulates an extra amount of innovation in a given year that has a value of $20 billion. We can’t count all of this as a gain, since most scientific and engineering innovations will happen sooner or later. The patent system merely encourages them to happen sooner. So let’s assume that 75% of patent-stimulated innovation would have happened eventually, within 10 years of when it did occur. So we value 75% of the $20 billion only at the time value of that amount for 10 years.

These are all estimates so let me do a quick back of the envelope and say that we have $5 billion plus time value of getting $15 billion of value 10 years earlier. What’s this–maybe $5 billion plus another $5 billion, at most? So here we have a grand total of $10 billlion of gain. Compared to $41 billion cost. The patent system loses by $31 billion a year.

And it’s possible that there is no gain at all, or even negative gain. Which means the system is pure cost.

Let me note the conclusion of Bessen & Meurer, in the draft ch. 1 of their forthcoming book:

The results … show that chemical and pharmaceutical firms earn far more from their patents than they lose to litigation. But for other firms, Figure 1.1B tells a simple but dramatic story: during the 1980s, these firms may have, at best, broken even from patents, but beginning in the mid-1990s, litigation costs exploded. By almost any interpretation, the US patent system could not be providing overall positive incentives for these US public firms by the end of the 1990s. The risk of patent litigation that firms faced in their capacity as technology adopters simply outstripped the profits that they made by virtue of owning patents. A firm looking to invest in an innovative technology during the late 1990s, taking this risk into account, would expect the net impact of patents to reduce the profits from innovation rather than to increase them. Moreover, preliminary data for more recent years suggest that this problem has gotten worse since 1999.

Note that patents do provide profits for their owners, so it makes sense for firms to get them. But taking the effect of other owners’ patents into account, including the risk of litigation, the average public firm outside the chemical and pharmaceutical industries would be better off if patents did not exist.

Thoughts? Suggestions?

Update:

Costs of the Patent System Revisited

See Michele Boldrin & David K. Levine, Growth and Intellectual Property (draft). In this paper, Boldrin & Levine do a calculation, in the context of a model in which patents are good for innovation (in fact, an extreme version: no innovation at all without at least some patents). From an email by Boldrin to me, 9/28/07: “Then we compute what a ‘benevolent dictator’ would consider to be the socially optimal degree of patent protection. By assumption all the transaction/legal costs you are looking at are assumed away here. Then we go on and use data to figure out if the current level of IP protection in different industries/countries is too high or too low. We find it is too high, sometimes by orders of magnitude.” The paper assumes “a standard model in which IP protection is socially beneficial” (even though they reject the “standard model” and argue elsewhere “that IP is not generally socially beneficial”). Even assuming a world in which IP is “socially beneficial,” they conclude that

  • The elasticity of total monopoly revenue is increasing, hence the term of IP protection should decrease over time as the market size increases. Our best estimate, given the historical growth rate of market size, is that IP protection terms should decrease of about two months per year.
  • Current copyright and patent terms are equivalent to complete monopoly protection for the full economic life of new goods, and are dramatically higher than optimal ones, sometime by two orders of magnitude.
  • On the basis of the available evidence, our best estimate of the length of optimal copyright term is about one year, and that of patents is about seven to thirteen years.

{ 29 comments }

G September 27, 2007 at 12:53 am

While I don’t like the idea of IP at all, I do think that economists against IP need to show why IP is inferior (from an economic standpoint, not a moral one) to the lack of IP. Economists are big on internalizing costs, and I just can’t see any way to internalize the costs of easily replicated, but expensive to research, goods and capital.

In the increasingly wired and global economy, I don’t think IP is going to be terribly enforceable for long. But that still doesn’t disprove the central ideas of IP, which is that the cost of goods and services should always reflect all the costs of producing those goods and services, and that externalized costs should be eliminated.

Chris Heath September 27, 2007 at 3:52 am

I think the patent system is good for the inventors and developers who wont spend on R&D if they aren’t allowed to patent their product. Whoever if the product is a life saving medicine that is priced beyond joe averages afford ability then there are conscience issues.

Person September 27, 2007 at 9:19 am

You’re too easy Stephan. Let me do a rewrite:

***

I’m trying to find out if there are any recent estimates as to the cost of the property title system–e.g., what the annual dollar cost is in the US that would not be borne if not for the property title system.

As I’ve noted before, the standard utilitarian rationale for the property title system is that property title law encourages extra production; this product presumably is valuable. And the defenders of property system assume that the value of this extra innovation is clearly greater than the cost of the system.

Yet even if we assume the utilitarian framework for judging the merits of having a property title system–and ignore the economic and moral problems with utilitarianism–it’s obvious that the cost of the property title system is not trivial.

For example, I believe about 400,000 property title applications are filed per year in the US, of late. Assuming a ballpark cost of $15k (property title registration fees, patrolling costs, prosecution costs for previously filed applications), we have $6 billion right there.
What other costs are there? I suppose we could count the entire revenue of law enforcement, but that would probably be double counting. And property attorney salaries are already implicitly counted in this cost (property title prosecutors, not litigators).

Next, we have rental fees paid for property title licenses. I have no idea what the total amount of rental payments equals, but given that the Simon Group alone gets about $1.3 billion a year from renting mall space, let’s just quadruple it; reasonable (probably conservative) guess. So we now have $5 billion more.

Then we have property title litigation costs. It’s well known that it can easily cost a million dollars or more to defend a property title lawsuit. I’m not sure how many are fought each year, but it’s got to be in the hundreds. So let’s say 500 of them, or $500 million. And that’s not counting crazy damage awards, like the $100 or $1billlion awards occasionally handed out. So let’s say another $500 million. Okay, now we have a billion from property title lawsuits.
What else. There are lots of other costs, but they are too hard to measure, or even estimate with any certainty, along the lines of what is seen–and not seen. We can never know the value of some economic activity that would have happened if the threat of property titles had not dissuaded the potential innovator from entering the field. It’s got to be in the billions. Let’s say $2 billion, being conservative. Okay, we’re up to $14 billion so far. I have a strong sense that this is a radical underestimate, but let’s go with it for now.

Julio Cole notes also that “The existence of property titles also induces wasteful expenditure of resources by competitors trying to “produce around the property title,” i.e., to develop competing products that don’t use things to which they don’t have a title.” Let’s give this another $5 billion. $19 billion so far.
Also, because the property title system rewards the more practical type of production that requires extensive defense, capital is skewed toward this, and away from other types of investment, or other uses of the funds. So if the billions spent on property title filings, rentals, and defense costs were instead invested or spent on more versatile production, surely this would reap valuable dividends. Let’s say $25 billion worth as another ballpark (assuming the $19 billion is invested, etc., yielding a decent return). So now we have $44 billion as our cost.
I’m sure there are others, so this is an underestimate, maybe by an order of magnitude.
I’m looking for some studies that ballpark it like this. Anyone aware of any such studies? Anything obvious and big I’m leaving out? My Mises blog post Revisiting Some Problems with property titles lists several studies on the effects of the property title system on innovation, but not sure if any of them look at it from this perspective of come up with any conclusions formatted in this way.

BTW, this cost number would have to be compared to the value of the marginal production stimulated by the property title system. Moreover, this number needs to be first discounted. Why? Let’s assume the property title system stimulates an extra amount of production in a given year that has a value of $20 billion. We can’t count all of this as a gain, since most production will happen sooner or later. The property title system merely encourages them to happen sooner. So let’s assume that 75% of property title-stimulated innovation would have happened eventually, within 10 years of when it did occur. So we value 75% of the $20 billion only at the time value of that amount for 10 years. These are all estimates so let me do a quick back of the envelope and say that we have $5 billion plus time value of getting $15 billion of value 10 years earlier. What’s this–maybe $5 billion plus another $5 billion, at most? So here we have a grant total of $5 billlion of gain. Compared to $44 billion cost. The property title system loses by $39 billion a year.

Thoughts? Suggestions?

Stephan Kinsella September 27, 2007 at 9:58 am

Person, First off, property rights are a “natural” right and don’t need to be defended on utilitarian or wealth-maximization grounds. While patents are defended precisely on this ground. Jefferson, the drafter of the Declaration, and himself an inventor and also the first PTO examiner, had grave doubts about establishing this artificial government monopoly rights for mere utilitarian reasons. At the time the Constitution was ratified, Jefferson was in Paris as U.S. Ambassador to France, and thus was not in attendance at the Convention. He expressed reservations concerning the patent provision in correspondence with James Madison, the Constitution’s chief architect. He was not really an opponent of patents, but he was a skeptic. He believed that patents encourage invention and thus can be for the “benefit of society,” but he had reservations that if patents were extended too long or were too readily granted, the costs to society would outweigh the benefits.

As he wrote, long *after* his tenure as patent examiner and a lot of experience w/ the patent system, the following extremely interesting comments:

“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. Society may give an exclusive right to the profits arising from them, as an encouragement to men to pursue ideas which may produce utility, but this may or may not be done, according to the will and convenience of the society, without claim or complaint from anybody. Accordingly, it is a fact, as far as I am informed, that England was, until we copied her, the only country on earth which ever, by a general law, gave a legal right to the exclusive use of an idea. In some other countries it is sometimes done, in a great case, and by a special and personal act, but, generally speaking, other nations have thought that these monopolies produce more embarrassment than advantage to society; and it may be observed that the nations which refuse monopolies of invention, are as fruitful as England in new and useful devices.”

As Patent historian Edward C. Walterscheid notes, “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).

So the patent system is defended on this cost-benefit bases; therefore it is appropriate to inquire into these costs, and to challenge those who merely assert that the gain exceeds the cost, i.e. that there is a net gain.

Are you seriously maintaining that the costs of the patent system are irrelevant? Are you seriously arguing that if the cost far exceeds the gain, the system still makes sense?

Further, the anarcho-libertarians oppose state enforcement even of real property rights. In a free society, costs of enforcing even real property rights are of course taken into account. If the costs of protecting a given piece of property are too high, it just means that that particular property use is not economic. So?

Person September 27, 2007 at 10:11 am

Stephan_Kinsella: I’m saying that each and every dishonest argument you make against IP can be made against physical property.

Anthony September 27, 2007 at 10:34 am

Economic calculation is not even possible in the absence of private property. The losses resulting from its absence would far outweigh the gains, if any. Can the same be said of patents?

Person September 27, 2007 at 10:43 am

Anthony: Mises’s calculation argument applies just the same to the problem of calculating the economic merit of producing an intellectual good, such as a medicine. If everyone immediately gets the information necessary to make it for free, where is the price signal that tells you whether your investment was a profitable use of scarce resources?

Jean Paul September 27, 2007 at 12:32 pm

The greedy self-interested actors who derive their greedy satisfaction from capital accumulation will calculate, “If people copy our drug (as is their pure right), there will be a negative capital payback relative to the time & capital spent. Thus we will not innovate any new drugs.” Those people will go purchase a fleet of dumptrucks or something instead.

Meanwhile, the other greedy self-interested actors who derive their greedy satisfaction from the improved health of humanity will calculate, “If people copy our drug (as is their pure right), the improved health of humanity could be infinite relative to the time & capital spent. Thus we shall with great enthusiasm innovate as many new drugs as we can manage.”

Where will the time and capital come from, you ask? From some stream that does not involve institutionalized violence against humanity. I could speculate, but no doubt the free market will figure it out far better than I can.

For Ktibuk and Artisan, who seem best persuaded by emotional appeals: the TRUE artist, motivated by a PURE and NOBLE desire for self expression, will calculate: “My desire to express myself will be realized on an infinite scale when I permit the copying of ‘my’ creations. Thus I shall create and express and let these seeds flourish where they fall.”

Meanwhile the skilled technician of drawing or music, who has no desire for artistic self expression, but desires merely to make a buck with the skills they have – they can go work for a wage as a billboard illustrator or as a jingle-writer or something, at whatever market rate those skills command.

gulfwind September 27, 2007 at 6:04 pm

Does anybody remember the tragedy of the commons? Inventors invent because patents provide them property rights in their ideas. This allow them to realize profits that otherwise could just as easily go to their competitors who provided no work in orgination or proving the idea. Part of the reason that England and more particularly the United States have accounted for the lion’s share of progress in the world is thanks to intellectual property rights.

Share and share alike is for socialists, progressives and utilitarians. You know the same folks that almost starved to death before somebody turned on the light and people could have property rights in the food they grew.

Francisco Torres September 27, 2007 at 7:53 pm

Inventors invent because patents provide them property rights in their ideas.

This is a non sequitur. Many inventors have invented even when no patents were issued or even sought out.

Francisco Torres September 27, 2007 at 8:00 pm

Person,
It’s well known that it can easily cost a million dollars or more to defend a property title lawsuit.

Is THAT well known? Really? Because it is not the same to defend a piece of land than it is to defend a piece of faux property like IP (patent, copyright, et cetera). You cannot use the same argument.

Peter September 28, 2007 at 12:30 am

I do think that economists against IP need to show why IP is inferior (from an economic standpoint, not a moral one) to the lack of IP

Why? If you’re going to approach it from a utilitarian perspective, shouldn’t it be on the heads of IP supporters to show why IP is superior? The “default” position should always be the “null” one.

Marc Pickett September 28, 2007 at 11:06 am

“Then we have patent litigation costs. It’s well known that it can easily cost a million dollars or more to defend a patent lawsuit. Bessen & Meuer, if I read their paper correctly, estimate $16 billion in patent litigation costs in 1999; we can assume comparable costs now (again, conservative estimate, since they are probably higher). [Bessen informs me that the $16 billion figure is old — “actually the current figure is $19 billion in 1999 (in 1992 dollars, current dollars are higher) and that is only for public firms … since 1999 the rate of litigation has increased substantially, so current number are probably quite a bit higher”. So we’ll use $25 billion, conservatively.”

I am frequently seeing litigation costs in excess of 5 million through trial now.

bwp September 30, 2007 at 5:47 am

“Almost nothing has hindered worldwide economic and technological growth more than reoccurring iron clad patents, nor made so many lawyers extremely prosperous at everyone else’s expense. Plus the high cost of obtaining a patent deters many inventors from ever revealing their ideas.

The alternative to patents would need to be a system where any novel idea or discovery could be made public knowledge at a particular Internet site. There everyone could see it and test its priority and pass comment about it. This should generate a quicker review system with thousands of reveiwers instead of the overloaded few hundred patent assessors that work for various governments now. A Wiki Quiki Patent Office. In this system all patents could possibly have a world coverage instead of being limited to particular countries. Any company that used that invention would need to pay the inventor around 10% of the net profit their idea generated.

This way competition probably comes into play immediately and only true competition, which incorporates consistent quality gains, increases the benefit to everyone. Also instead of just one producer it could allow for many producers, all of which could quickly make the ‘idea owner’ much richer. Any breaches of this system would probably not be enforceable except through related industry group pressure, hopefully proving that regulators are not needed while simultaneously keeping the inventors and their investors happy.

The closing date of the US Patent Office should become a two day public holiday celebrated through out the whole world simply because it could beneficially effect the wealth of everyone on the planet.”
Excerpt from ‘What is the Primary Fundamental Right?

averros October 2, 2007 at 9:59 pm

Anyone who actually invented something worthwhile knows perfectly well that inventions do not exist in vacuum – they’re typically things “in the air” – the results of discussions, semi-baked ideas making rounds, and applying something other people do in different circumstances.

Who invented what is totally irrelevant – most things are independently reinvented many times. Just study some history of science; one would be hard pressed to find a law which is named after its earliest discoverer.

It follows that the whole “first one to the the goal line owns everything” concept is totally idiotic and only penalizes people who want to do a better job by doing careful thinking.

DC October 3, 2007 at 9:31 am

I see Person is still at it with the argument he feels settles the debate. Since I’m late to this one, I’ll just simulate our conversation. It will probably be about as productive as the conversation itself:

Person: Every one of Kinsella’s arguments against IP can be used against libertarian property rights with the same validity.

DC: No they can’t. See Kinsella’s oft-referred to article on IP.

Person: I’ve read it, and it only confirms my view.

DC: Look at it again. Kinsella first states that all claims to property must be justified. Then he deals with the typical IP claims. He assumes that they have made their reasons for justification known, which, by the way, always refer to some version of homesteading or owning ideas.

Person: That’s fine, but they don’t need to refer to owning ideas for their justification.

DC: What else might they use?

Person: It doesn’t matter! My point is that there are other methods.

DC: . . .then Kinsella would dismiss those claims as unjustified until some justification is made.

Person: No, no no. . .look at it this way. They can claim that “I own all physical objects to the extent that they instantiate idea X.” See? No reference to owning the idea X!

DC: But why is that claim justified – what about idea X means that they can claim property P?

Person: It doesn’t matter!

DC: Then Kinsella is right to reject it as an unjustified claim. I might as well claim to own this teapot because Mars revolves around the Sun.

Person: OK, fine. Suppose they homesteaded that idea.

DC: Now we’re into talk about idea ownership. Either IP claims on property will be unjustified, or they will rely on homesteading / ownership of ideas for the justification of their claims. That’s exactly what Kinsella was getting at in his original article.

Person: . . . .

DC: . . . .

Person: Every one of Kinsella’s arguments against IP can be used against libertarian property rights with the same validity.

DC: *slaps forehead*

Stephan Kinsella October 3, 2007 at 10:40 am

Dude, that is the most brilliant dissection of Person I have ever seen. Well played, my friend…. well played.

DC October 3, 2007 at 11:35 am

Stephan, it was arrived at through much trial and error. . .but thanks all the same. :)

I think I understand what Person is trying to say, and I’m open to new arguments, but as best as I can tell that’s the circle that he and I run in every time we interact.

the Other DC September 29, 2008 at 9:24 pm

The difference between IP and physical property is simple: physical property can only be used by one person at a time. Ideas can be used by many different people without diminishing their utility to anybody who uses it.
That is why Property Rights can only apply to physical things.

Or to put it differently: When I steal an idea, the other person ONLY notices the loss when a) I use it, and b) my use of the idea diminishes his income.

When I steal somebody’s car, this owner will notice and suffer the loss almost immediately (at least until they go to the spot they expect the car to be), not just when I start driving the car around.

An argument can be made to justify IP, but to treat it as equivalent to physical property is plain daft.

Jab September 29, 2008 at 10:34 pm

I think Person is exactly right on this.

@the Other DC

If someone is standing in your yard, and not “hurting anything,” you may not notice. However, your property rights still allow you to go out and tell that person to get the f’k off your property. That’s what property rights are all about.

The IP arguments are the only area where I dramatically differ from the Mises.org/LRC crowd. I just don’t see why everyone who claims to be a libertarian thinks they have an automatic right to the music, software, books, etc. written by other people. Well, actually, I do see why — it’s the same reason people vote themselves largess from the taxpayer. After all, tax dollars are just numbers in a ledger — the taxpayers don’t really own the fruits of their labor just like musicians, authors, and software producers don’t own the rights to the fruits of their labor . Right? /sarc

I truly don’t get how any libertarian can think they have automatic rights to the fruits of other people’s labor.

the Other DC September 30, 2008 at 8:13 am

Jab – if somebody stands on my property without doing anything, could i stand at the exact same spot at the same time?

If somebody reads book through a telescope, can I read the exact same book at the same time?

That’s the difference.

If somebody has the exact same idea as I had AFTER I had patented my idea, even if this person has never read my patent, and he wants to put it to use, but now MY patent restricts him from it, is that right?

Jab September 30, 2008 at 2:10 pm

@the Other DC

I’m not sure how the concept of simultaneity became the definition of ownership. A person standing in your yard may not interfere in any way with your use of the yard — you may not even know he’s there; that doesn’t define ownership. All you’re doing is defining ownership to be limited to something that is tangible. That’s a false definition.

Perhaps your definition would work if we were all cows without the ability for abstract thought, but people spend years of their lives developing things that are abstract in nature. When someone trades years of their life to create something, how suddenly is it as much yours as it it theirs?

Patents are more problematic than copyright, but Kinsella’s arguments don’t distinguish between the two. In reality, most things that are awarded patents would be more correctly awarded copyright instead. The VAST majority of patents are awarded for inventions that are not new or unique or even outside the realm or normal construction for an industry. The Patent Office mostly rubber stamps inventions (with a few token rejections to make it “look good”), but leaves the heavy work to the courts. The problem is that the minimum court battle is 7 figures making the larger company a heavy favorite to win, and you can’t select a jury that actually has a clue about how to decide a complex case.

If a person truly had the exact same idea after the patent, then I agree with you about the patent being problematic. However, it’s much easier to copy than invent, so that’s something that is difficult to prove. However, that isn’t all that different than someone owning a piece of property that you just “have” to have, but they happened to get there the day before to buy it first. The world is not a perfect place.

The Other DC September 30, 2008 at 4:40 pm

Ok, let’s cut through it. Only tangible things that can be directly measured either in area, volume, and/or weight can be property. Human beings cannot be property. Anything that cannot be measured in area, volume, and/or weight cannot be property.

That’s an axiomatic proposition which requires no proof.

If you disagree with this definition, that’s your prerogative. It also means that we have nothing to discuss.

makes sense?

Jab September 30, 2008 at 5:15 pm

@The Other DC

I think that’s roughly the point Person was trying to make (although I don’t pretend to speak for him). Marxist-oriented left wingers use Kinsella’s arguments (sometimes, almost word-for-word) to attack the whole concept of property because it is axiomatic. Historically, humankind has been better served my more property rights, not less.

Do you have a right to privacy? Why? By your definition, you can’t own your privacy because it’s not tangible.

Do you have a right to earn money that’s not handed to you in pure gold? Even gold-backed paper currency is abstract in nature and, by your definition, can’t be owned. Most transactions these days are computerized ledger entries — something you can’t own (by your definition).

In the future, when government or individuals can read your thoughts through EM radiation (or other means), will that be wrong? By your definition, you can’t own your thoughts and have no rights to them, so it won’t be.

If someone puts a camera off your property, but, through a window, videos you banging your pit bull and broadcasts it on JustinTV, do you have a right to stop the broadcast and take legal action against the perpetrator? What if it’s in infra-red through your wall? What if it’s using some yet-to-be-invented quantum coupling camera that can do perfect videos through any physical medium? By your definition, you don’t have a right to the images.

I could go on, but the point is made. The libertarian view has been that humanity is served though the use of property rights. Kinsella’s bizarre attacks on IP notwithstanding.

The Other DC September 30, 2008 at 8:20 pm

Jab,

whether humanity has been better served by private property than by other forms of property is irrelevant to a libertarian. The argument is axiomatic. There is nothing wrong with axiomatic statements. You even have them in mathematics (which is where they really come from).

Marxists can disagree with it on axiomatic grounds. That’s fine. But, that also means there is no discussion.

Your statement that “The libertarian view has been that humanity is served though the use of property rights.” is wrong. That’s a utilitarian argument, not a libertarian one. If any libertarian should use it, she better check her basic assumptions or stop claiming to be libertarian.

“If someone puts a camera off your property, but, through a window, videos you banging your pit bull and broadcasts it on JustinTV, do you have a right to stop the broadcast and take legal action against the perpetrator?”

Short answer: no. I could try to come to an agreement with the owners of JustinTV not to show it, but I don’t have a right to stop it.

“In the future, when government or individuals can read your thoughts through EM radiation (or other means), will that be wrong?”

No, it would be unpleasant. But not wrong. At least not for individuals. The fact you even mention government here clearly shows you are not very familiar with libertarian ideas.

“By your definition, you can’t own your thoughts and have no rights to them, so it won’t be.”

Yes. Correct.

“What if it’s using some yet-to-be-invented quantum coupling camera that can do perfect videos through any physical medium? By your definition, you don’t have a right to the images.”

Correct, I do not. I wouldn’t like the situation, but – that’s really irrelevant.

The Other DC October 2, 2008 at 4:14 pm

Not to gloat or anything, but: have I actually managed to make a point that Jab cannot find an argument against?

Sweet.

Jab October 6, 2008 at 1:34 pm

@The Other DC

I suppose you have nothing to do but endlessly comment on blogs. I guess that makes sense.

Typically, when an argument gets to the point of “you obviously don’t understand libertarianism” from someone who’s making non-libertarian arguments, I don’t bother replying.

The Other DC November 1, 2008 at 7:00 pm

Jab – in other words, you have the good sense of not continuing an argument when you have lost it.

Regarding your sentiment “Typically, when an argument gets to the point of “you obviously don’t understand libertarianism” from someone who’s making non-libertarian arguments, I don’t bother replying.”

Well, you obviously do not understand libertarianism, since you believe that a state-enforced law is necessary for libertarianism.

A little bit like a self-described Atheist who thinks morality requires a deity….

Lourindal Hempen February 19, 2010 at 12:35 pm

Here are some numbers to add into the calculation:
Cost of patents: http://www.inventionstatistics.com/Patent_Cost.html
Patent litigation costs and cost to defend a patent: http://www.inventionstatistics.com/Patent_Lawsuit_Litigation_Settlement_Damage_Awards.html
Patent licensing royalty streams: http://www.inventionstatistics.com/Licensing_Royalty_Revenues.html
Lourindal
San Juan Capistrano, CA

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