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Friday, June 12, 2009

Intellectual “Property” Versus Real Property

What Are Copyrights and What Do They Mean for Liberty?

Intellectual “property” (IP) is a sleeper issue. It seems uncontroversial: Someone invents or writes something and therefore owns it. What could be plainer? But IP contains the power to destroy liberty.

IP isn’t merely about rock bands preventing kids from sharing MP3s over the Internet. (See “Weird Al” Yankovic’s musical commentary, “Don’t Download This Song,” here.) It’s about crusty incumbent firms trying to preserve market share by stifling competition, domestically and in the developing world.

The crux of the issue is this: Do IP laws protect legitimately ownable things? One’s view of the laws will proceed from one’s answer to that question, and that’s what I will concentrate on here. I leave for another time the issue of incentives. I do so because the justice of a claim must be decided before we consider the specific incentives and disincentives that flow from our decision. (No, this does not make me a “nonconsequentialist.” Consequences figure in our basic conception of justice.) Suffice it to say that the existence of disincentive effects from the abolition of IP cannot furnish proof that it is legitimate. That question must be decided on its own terms. (On incentives and many other related issues, see Michele Boldrin and David Levine’s Against Intellectual Monopoly; also online. The authors, along with Alessandro Nuvolari, contributed Freeman articles on IP here and here.)

What does IP refer to? What exactly is owned? It is not ideas per se that are owned, according to the law. But what is owned seems problematic. Stephan Kinsella (pdf) points out that “Copyright gives [the creators of original works] the exclusive right to reproduce the work, prepare derivative works, or to perform or present the work publicly.” However, “Copyrights protect only the form or expression of ideas, not the underlying ideas themselves” (emphasis added). Patents, Kinsella continues, grant exclusive use in “devices or processes that perform a ‘useful’ function…. A patent effectively grants the inventor a limited monopoly on the manufacture, use, or sale of the invention. However, a patent actually only grants to the patentee the right to exclude (i.e., to prevent others from practicing the patented invention); it does not actually grant to the patentee the right to use the patented invention.” Importantly, “laws of nature, natural phenomena, and abstract ideas” cannot be patented (emphasis added). But, Kinsella notes, “Reducing abstract ideas to some type of ‘practical application,’ i.e., ‘a useful, concrete and tangible result,’ is patentable….”

Note that in both cases ideas are said not to be the object of intellectual property. And yet, ultimately, it is ideas that are at issue. For what is a “form or expression of ideas” if not an idea? And what is a “pra

  • Sheldon Richman is the former editor of The Freeman and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families and thousands of articles.