intellectual property

[mike_barskey]

@Jonas

I don’t think so…once you purchase something you own it. If the contract contained such a clause it would give the creator rights over your property…something which libertarianism strictly denounces.

These are interesting ideas. I think you’re right that if you agree to stipulations for ownership, then you don’t truly own the thing, or you own it conditionally. But we’re not talking about all ownership, all property; we’re only referring to IP (actually, to any contract-based ownership). I don’t see a problem with conditional ownership if I agree to it before making the trade. For example, if I know that the creator of a digital book (i.e., no physical property, just 1s and 0s, no scarcity) has the stipulation that any buyers must not share a copy of the file with anyone, and I still agree to buy the digital book, then I have voluntarily decided to “own” that property with stipulations (and the stipulations are that essentially the creator of the book has partial control over what can be done with “my” property). So I agree with you, but I don’t think it’s bad or wrong. This might be what Libertarian means by “renting” people and things. I don’t really get his post. inquisitor, can you please explain?

@Jonas

Also, I doubt anyone would ever agree to such a contract.

I don’t agree. People agree to such contracts all the time now, and I think they would continue to do so. When you buy almost any software, the EULA has significant stipulations about it’s use, yet millions of software packages are sold. When you buy a car, a third party (the government) tells you what you can and cannot do with it (e.g., can’t drive certain ways, can’t modify car certain ways).

@Jonas

In addition, as Kinsella points out in “Against Intellectual Property”, there is nothing stopping the friend from simply learning about the idea. So let’s say for giggles that the creator writes a book about Hobbits and a ring or something. The purchaser buys the book (either in physical or digital format) and agrees to a contract stating that they will not give nor lend it to any other person…ever. There is nothing stopping the purchaser from dictating the story to a friend, who then types it down and sells it as their own work. So will the contract state that you cannot read the book aloud? What if the purchaser just talked about the book to the friend? While the friend couldn’t make an exact copy, they could come up with a reasonable facsimile.

There is also no way for the creator to enforce the contract. What if the creator starts to see copies of the book being distributed online. Which purchaser broke the contract? Even if you find them, what’s to stop the purchaser from simply saying they lost the book on the bus and someone else (who would not be contractually bound to the creator) found it and copied it?

I think this is true, too. While some scenarios might allow you to stop other from learning the knowledge, and some scenarios might be enforceable, I think the vast majority of scenarios might make this troublesome or impossible. But should a type of transaction not exist in a free market because it’s difficult to enforce? I think, in a free society, the seller and buyer should decide if they want to trade with such an agreement that is difficult to enforce, if they want to.

@Jonas

I think contracts are best left for handling the physical representation of the media (a hardcover book, a limited-edition signed DVD, etc) and not the intangible media or ideas themselves.

I understand the difference between the tangible and intangible, but can you describe why a contractual agreement should differ from one to the other?

[Halevy]

Libertarian,

I appreciate your effort to make things clear for me, your counterexample is indeed one kind of protective measure against the misuse of one’s ideas, however from the economical viewpoint, the introduction of these devices would generate an undesirable cost increase to products in general, without adding value to their main functions, and also bring unnecessary complexity to the industry.

My main concern is still regarding the ethical issues involved in the concept that “ideas belong to nobody”, as the non-IP line states.

If only physical objects are subject to the concepts of property, economic survival within a non-IP libertarian environment would be largely concentrated on the manufacture and commercializing of goods, as most business areas associated with knowledge, creation, research and everything else would be subject to be copied at low cost by third parties who invested nothing in the development of the original ideas until they can be launched as new product into the market (e.g.: new, research-intensive drugs x generics manufacture).

Do you get the point?

[Halevy]

Mike Barsey,

“I don’t see a problem with conditional ownership if I agree to it before making the trade. For example, if I know that the creator of a digital book (i.e., no physical property, just 1s and 0s, no scarcity) has the stipulation that any buyers must not share a copy of the file with anyone, and I still agree to buy the digital book, then I have voluntarily decided to “own” that property with stipulations”.

IMO, if the creator has no “property” right to his own creation, even less would have the purchaser of said creation, thus, the digital book in question is the property of *nobody" and consequently is a “public” good [argh!], so that, at the end of this debate, all human creation is collective??

I’m beginning to get scared to think in which direction this line of thought would lead us…

Clarification, please!!!

[libertarian]

I appreciate your effort to make things clear for me, your counterexample is indeed one kind of protective measure against the misuse of one’s ideas, however from the economical viewpoint, the introduction of these devices would generate an undesirable cost increase to products in general, without adding value to their main functions, and also bring unnecessary complexity to the industry.

How about a contract that requires a private security guard to be occupied with that airplane to protect that airplane from de-assemblation? The private security guard can weapons more efficiently to prevent deassemblation. How about using cheaper weapons?

The airplane may be considerd so valuable by some people that it may worth the cost of including a weapon to self-defend it. If an airliner company can make travel just a little cheaper, it would be a huge gain for the airliner company.

Also, software is effectively protected by trade secrets. It is almost impossible to reverse engineer protected software.

@Halevy

IMO, if the creator has no “property” right to his own creation, even less would have the purchaser of said creation, thus, the digital book in question is the property of *nobody" and consequently is a “public” good [argh!], so that, at the end of this debate, all human creation is collective??

The digital books can be protected: They can be encrypted, and each book downloaded requires a different serial number to unencrypt the book to read. Each user that wants to read the book must pay to receive a unique key to unlock the book. The serial code is then validated online or via telephone, so subsequent unlocks using the same key would be prohibited. Also, the text in the book is stored in a human-like font as images, only showing a few sentences at a time. It would be hard to use optical character recognition to transform the text. Also, to make it hard to record and compress a video of its text, the text wobbles around 60 frames per second, but just enough for a human to perceive. The text automatically scrolls so you must need to type 300 words per minute to copy the book. The operating system is protected by trade secrets, so it is impossible to copy the book by copying the whole filesystem (if you are allowed to, but the OS prohibits you)…

[mike_barskey]

@Halevy

IMO, if the creator has no “property” right to his own creation, even less would have the purchaser of said creation, thus, the digital book in question is the property of *nobody" and consequently is a “public” good [argh!], so that, at the end of this debate, all human creation is collective??

I’m not sure I follow you, here. Why wouldn’t the creator have property rights to his own creation (before he sold it)? If we’re talking about knowledge (e.g., a song but not a CD, the words that make up a book but not the paper) and IP does not exist, then the creator doesn’t own it and hence the buyer can’t own it. But they could enter into an agreement, like: “I, the creator of this idea for a book, will tell you, the printer, the idea if you promise to print it for me and never print it for nor tell anyone else.” This is a contractual obligation regarding IP yet where no property is exchanging hands (well, property would likely trade hands as the printer would charge for his services, but the point is that this agreement is regarding the exchange of knowledge only, no physical property).

I think knowledge is a public good, or a natural resource. If you know something, or create an idea, it is yours so long as you can control it. As soon as you tell one other person or put your idea to the physical world (write it down, make a model, etc.) then it could also be intentionally, accidentally, or maliciously discovered by someone else, and you cannot control what someone else knows or does with their knowledge. And of course, knowledge is not scarce. If I have a secret and I tell 1 or 1,000,000 other people, I still have the knowledge; it would no longer be a secret, but that was my choice.

What I’m referring to is IP: knowledge. The scarcity of property, which is physical, means different rules regarding ownership; i.e., it can be owned. The creator owns his creation, and can choose to transfer ownership to a buyer. I think the trade of property can also have stipulations if voluntarily agreed upon. The difference is that with IP, contractual obligations are the only thing being agreed upon (the buyer agrees to behave in certain ways regarding knowledge), but with property a contractual obligation dictates rules for you you use the property (the buyer agrees to behave in certain ways and owns the property).

So I guess I’m saying that the idea of contractual stipulations are optional, and must not necessarily be extended to all property, hence all human creation is not collective

I’m mainly thinking “out loud” here, trying to figure this out. I’m not saying “this is how it is.” I appreciate everyone’s participation in this discussion.

[libertarian]

I am not thinking “out loud”. To be consistent, one must have the freedom to enforce contractual restrictions on ideas.

In practice, anarchy and minarchy is incompatable with contractualism.

[mike_barskey]

@libertarian

To be consistent, one must have the freedom to enforce contractual restrictions on ideas.

I agree completely.

@libertarian

In practice, anarchy and minarchy is incompatable with contractualism.

How is anarchy incompatible with contractualism?

[Inquisitor]

I don’t think so…once you purchase something you own it. If the contract contained such a clause it would give the creator rights over your property…something which libertarianism strictly denounces. Also, I doubt anyone would ever agree to such a contract.

Not if the purchase was made on the condition that you waive your right to copy it. Whether anyone would agree to such a contract is guesswork at best, but there is no a priori presumption against such a contract.

Halevy, why would anyone tolerate the drop in standards you mention? An academic institution, for instance, might make it conditional to enter its property that you do not cheat. If you do you are expelled. Problem solved.

Mike, I am not sure what Libertarian has in mind, but in effect when you sell your labour you are, in a way, renting that service out, the wage being the stipulated price for the service or the product thereof. I suppose Libertarian sees it as purchasing part of you? He’s better qualified to answer that than I am.

[Jonas]

Let me see if I can sum up some of what I am thinking…

I have no problem with two people agreeing upon an IP contract, and I agree that contracts should protect intangible as well as tangible things. As long as we realize the limits that these contracts would have on parties other than the two involved. If a contract will not prevent the spread of IP then what is the point?

As for why people would create IP if they cannot profit from their ideas, I talked about that in the first couple of pages. There are several examples already in the market where groups have created media and distributed it for free…and then make a profit by selling tangible items based on that IP. You can check out www.purepwnage.com or www.tikibartv.com as two examples…these are groups that create media (albiet of a low-production value) that is (IMHO) quite entertaining. They make all their money selling t-shirts, cups, and other swag. This would be the new entertainment economic paradigm that would exist in a place with no IP laws.

As for other types of IP such as patents you have other options available. Let’s say I come up with an idea for a new kind of motor. That idea is a “trade secret” and it has no value. I don’t even own it…since you can’t own ideas. But as long as I keep it secret then nobody else can have it. I now have two options:

1. I can scrounge up enough money to start building my own motor and go into business for myself. I would build a prototype motor and, if it works as I expect, I could show it to a few select potential investors. They are all, of course, required to sign detailed non-disclosure contracts. Existing non-disclosure contracts work very well and I see no reason why they would not continue to do so. Eventually I can build enough motors and start selling them.

2. I can simply sell my motor idea to an existing motor manufacturing company. They already have the infrastructure in place to produce my motor, and I can get fair compensation for my idea. This could be a single up-front price, a price based on how many motors they sell…it depends on the terms of the contract that we both can agree upon.

Of course, once the motor gets out into the marketplace there will be people who reverse engineer it to discover its secrets. They can even start selling their own version. But my company…or the company I sell my idea to…would have a head start and would also have the reputation as the initial inventor. I could even see a governmental office, like the existing patent system, where initial inventors get to register. They don’t get any protection of their ideas…but there is a public record of who came up with the idea first and who is simply copying. People tend to have a strong dislike for groups that simply copy their products from someone else…the media world is full of them. Sheesh…the public finds out you lip-sync a little on stage and next thing you know you can’t give your music away!

I don’t think that IP laws are required for innovation to exist…I think that contract law would work just fine. I think it would even boost creativity…you would have people creating entertainment because they want to, or because they have something they want to share. Sure, you wouldn’t have “American Idol” but, come on…after the Miami auditions do you really care?

[mike_barskey]

Inquisitor, thanks for explaining “renting.”

Jonas, nice summary. You’re examples show how the lack of IP would not harm trade, ownership, or market value of products and services. And you even reiterate that you can’t own ideas.

[libertarian]

@mike barskey

examples show how the lack of IP would not harm trade,

Intellectual property hurts more than it helps.

Patents create a monopoly company who would dominate the market because of efficiency advantages. They would raise the price very high. They would then threat predatory prices to any new competitor.

Patents create monopolies using a positive feedback cycle. The patent monopoly would gain profit, and would then use that profit to invest even more on R&D and them patent them. Then they would profit from those patnets and invest in the additional profits to create even more profit. Standard Oil was much more innovative than other forms because of this positive-feedback cycle. Therefore, don’t defend Standard Oil because they are innovative. It would be more efficient if a bunch of competitors innovate than one innovate.

Additionally, whenever a competitor oil company arises, Standard Oil would use predatory prices (yes they work in such cases, since patent monopolies would always have a asymptotic advantage).

I don’t believe this thread would get anywhere when do not entirely agree on a single collection of definitions and axioms. Axioms can only be supported morally, not logically. Axioms are emotional. We cannot agree on a single axiomatic system because qualia is a subjective phoenomenon.

Investment is to theorems as consumption is to axioms. Theorems are rational and axioms are irrational. Similarly, investment is requires rational mind and consumption requires the hedonistic irrational mind. Our irrationality drives rationality and consumption drives investment.

Anarchists work on abstractions, and then use a prior reasoning to deduce laws that are consistent within their abstraction. But in the real world, not everything can be implemented without some contradictions to their abstraction. For example, contractualism cannot be effectively implemented in the real world because children do not have the rational ability to consent. We thus invent axioms that is most closely consistent to their abstraction. (such as homesteading, dependency arguments and property arguments for children)

Abstractions always have faults, as they do not entirely formalize all the properties of our world, but anarchists should use their abstraction as a guide. Too much axioms would be too convoluted.

Another example, trade secrets sometimes would and sometimes would not work, depending on your axiomatic system. If all of our knowledge is transparent (such as some MMORPG games) then it is impossible to enforce ideas, since everyone can see everyone’s messages. In the simulation, there are no physical and geographical boundaries (such as walls, buildings, air, space) that blocks transportation and you seeing their ideas.

There is no such thing as rational, all are perceptual. All of these ideas are well-thought out and not formed from “out loud” thinking. IMO, thinking “out loud” slows down innovation. The reason I post here is that I am addicted to Austrian Forums.

[ryanpatgray]

I found this interesting. One record label has a very different approach to IP. One record label WANTS you give 3 copies of their music to friends.

http://magnatune.com/info/give

If they can profit from this, it may catch on.

[Jonas]

Well this isn’t the huge leap that you might think. I don’t think any major record label would “come after you” for giving 3 copies of a song to friends. The RIAA has been going after people who make large amounts of music available to download or people who download massive quantities of material.

Magnatune still makes you pay for the media, and their licensing fees are pretty hefty. I generated a quick licensing quote (video game usage, 50,000 copies, entire song used in advertising) and it ran up to $3000!!!

[RickWeber]

@Jonas

As for why people would create IP if they cannot profit from their ideas, I talked about that in the first couple of pages. There are several examples already in the market where groups have created media and distributed it for free…and then make a profit by selling tangible items based on that IP. You can check out www.purepwnage.com or www.tikibartv.com as two examples…these are groups that create media (albiet of a low-production value) that is (IMHO) quite entertaining. They make all their money selling t-shirts, cups, and other swag. This would be the new entertainment economic paradigm that would exist in a place with no IP laws.

This is a business model that works based on using the IP as a hook to sell the tangible products. By making the IP free they cast a wider net to sell their tshirts. However with something like music this becomes more difficult. Musicians make a sizable chunk of their money from CD and MP3 sales. Also the recording studio people are paid because of CD sales.

@Jonas

Of course, once the motor gets out into the marketplace there will be people who reverse engineer it to discover its secrets. They can even start selling their own version.

A monopoly could be maintained if the manufacturer sold the engines with a contractual stipulation that the buyer does not have a right to reverse engineer the engine and that if they sell it the new owner is subject to the same rules. A plate could be stamped on the engine stating the rules and if the engine is stolen and reverse engineered then whoever comes on to the market will be linked with the theft.

My biggest hang up on the issue is pharmaceutical patents. Let’s assume away the FDA for a moment (and reduce barriers to entry in doing so). If a pharmaceutical company can invest $100 million and find a cure for AIDs, how are they to get that $100 million back if they have to compete with generics with no research expenses? Contractually binding buyers from reverse engineering and competing is certainly one way, but then the company has an unlimited monopoly. The current 20 year patent seems to promote innovation while still allowing for delayed competition. Is the current method ideal? How do we decide what method would maximize utility?

[mike_barskey]

@RickWeber

If a pharmaceutical company can invest $100 million and find a cure for AIDs, how are they to get that $100 million back if they have to compete with generics with no research expenses?

Do you think that the reputation as the company that cured AIDS has no market value? Or, to abstract the principle, do you think reputation has no market value (e.g., a company could be known for innovation, or charitable donations, or community involvement, or quality products, etc., and thus have a reputation of being better than the cheap knock-offs). In fact, this occurs today.

[liberty_student]

Not to mention that we’d probably see completely different models emerge for research and development. Perhaps you would see pharma manufacturers collectively invest, that they may have that new product to sell as an industry.

Wealthy donors seeking to prolong or save their own lives, insurance companies, etc.

I always look at Linux, how it has developed and spread.

[Friedreich]

@RickWeber

This is a business model that works based on using the IP as a hook to sell the tangible products. By making the IP free they cast a wider net to sell their tshirts. However with something like music this becomes more difficult. Musicians make a sizable chunk of their money from CD and MP3 sales. Also the recording studio people are paid because of CD sales.

They learned how to bring their ideas to market. Musicians get most of their money from sales of band merchandise at their shows. Record companies are the first to complain because they used to have a stranglehold on anything new in the industry. How did Amazon become the second largest online distributor of music when all they offer no DRM like iTunes who managed to overtake Wal-Mart soon after making music DRM-free. I thought there would be no more than one sale of every song since we’re all petty thieves? Companies need to learn how to market the convenience and experience to the consumer.

@RickWeber

A monopoly could be maintained if the manufacturer sold the engines with a contractual stipulation that the buyer does not have a right to reverse engineer the engine and that if they sell it the new owner is subject to the same rules. A plate could be stamped on the engine stating the rules and if the engine is stolen and reverse engineered then whoever comes on to the market will be linked with the theft.

My biggest hang up on the issue is pharmaceutical patents. Let’s assume away the FDA for a moment (and reduce barriers to entry in doing so). If a pharmaceutical company can invest $100 million and find a cure for AIDs, how are they to get that $100 million back if they have to compete with generics with no research expenses? Contractually binding buyers from reverse engineering and competing is certainly one way, but then the company has an unlimited monopoly. The current 20 year patent seems to promote innovation while still allowing for delayed competition. Is the current method ideal? How do we decide what method would maximize utility?

Sure, they could put a reverse engineer clause but I don’t see how they could prove that in court.

There are foundations that pay the costs of the research and development for cures.

[Ego]

I’m sure my view of this will be unpopular (as usual)…

The concept of an “owner” is simply defined by who is allowed to decide what happens to an object or resource, acknowledging that only one person at a time can have that power without a prior agreement.

Looking at it that way, intellectual “property” makes no sense.

[Jonas]

A monopoly could be maintained if the manufacturer sold the engines with a contractual stipulation that the buyer does not have a right to reverse engineer the engine and that if they sell it the new owner is subject to the same rules.

But don’t forget what was talked about before…a contract preventing reverse engineering is only binding to the two parties involved. It does not prevent a third-party from reverse engineering the product. This breaks all monopoly protections.

If I purchase an engine from you, with a contractual agreement stating that I will not take it apart and examine it, there is nothing stopping me from handing that engine to a friend of mine and having HIM reverse engineer it. My friend never agreed to the contract.

[Jonas]

Musicians make a sizable chunk of their money from CD and MP3 sales.

Someone else beat me to it. Small bands make most of their money by selling merchandise. In fact, many small bands just give away CDs at clubs…to drum up market share and “spread the word”.

Big-time artists make most of their money through concert ticket sales as well as merchandise. Both of those would not be touched at all if there was a complete lack of IP laws.

Also the recording studio people are paid because of CD sales.

Actually the recording studio people are paid by the band (or manager if they are big enough)…the band recoups these costs through sales of merchandise and ticket sales.