Against Intellectual Property: Final Project

*This post is submitted as my final project for the course*

AGAINST INTELLECTUAL PROPERTY

        In this essay, I argue that intellectual property (“IP”) cannot be justified by property rights alone, as it is based on artificially created scarcity. IP rights are rights to intangible things, which, by definition, cannot be scarce. IP necessarily creates a monopoly over ideas, their expression, and their practical implementation. I also argue that much of IP is made redundant by preexisting torts, such as malicious falsehood, fraudulent misrepresentation, and defamation. Stephan Kinsella is one of the more prominent critics of IP and happens to be a patent attorney. Here, I engage with and build on some of his arguments from Against Intellectual Property (Auburn, AL: Ludwig Von Mises Institute, 2015) [AIP].

Artificial Property Rights

Do property rights justify IP?

In theory, at least, IP is based on and subject to property rights. We talk about “ownership”, “borrowing”, “licensing”, “transferring”, and “extinguishing” in relation to ideal objects, as well as tangible ones. It sounds intuitive that you can own a house as much as you can own the painting you’ve just painted. However, tangible goods are subject to property rights for one reason alone: scarcity.

Our human desires are infinite, while the objects of our desires are not. Because of the scarcity of desirable tangible objects, there can be conflict over those goods and their allocation. This gives rise to the need for ethical rules to govern their use. The resulting property rights system is one of assigning exclusive control over scarce means. Put in other words: the drawing up of borders between property. The fundamental social and ethical function of property rights, then, is to prevent interpersonal conflict over scarce resources by the allocation of exclusive ownership rights (AIP, at p.29).

However, the objects of IP are ideal and not tangible, and therefore not scarce. Scarcity must be artificially created. By way of example: my local public library “lends” audiobooks through an app. I’ve been on a five-week waitlist to “borrow” A Clockwork Orange. The system tells me that there are only two “copies” available, and that I must wait my turn to “get” one. It seems quite bizarre until you read the licensing agreements of the Vancouver Public Library, which limit the number of digital “copies” that can be “borrowed.” All the terms I put in quotation marks are artificially associated with the audiobooks, since their scarcity is itself artificially created. There is, however, a deeper issue.

IP laws grant the holder unjustifiable control and property rights in others’ property and physical bodies (AIP, at p.15). Let’s say you live in Vancouver and write a book, which is subject to copyright protection. If I then use pen and paper – that I own – in a manner which reproduces exactly the words you’ve put down, I can be subject to a claim for copyright infringement. The Copyright Act gives you the right to control what I can and cannot do with my own property. Further, if you happen to have composed a song, you can prevent me from using my own vocal cords to sing it (in certain circumstances). This is perhaps a suitable use of “gag order.” Are these not examples of violation of my own property rights, resulting from your ownership of artificially scarce, non-tangible objects?

Although I focus mostly on copyright, patent law yields similar principles. If I own a piece of wood, bits of metal, a spring, and a piece of cheese, can I build a mouse trap? Most likely not legally in America, since the mouse trap is the most patented US invention, with over 4400 registrations (according to the National Museum of American History). It follows that I do not fully own the listed materials, since patent law prevents me from building any type of mouse trap I want.

Copyright and patents do not appear to be based on property rights, or even on John Locke’s natural rights (“life, liberty, and property”). The justification – though still insufficient – seems to come from artificial scarcity and the creation of property rights in others’ property. Are IP laws then simply state-granted monopoly mechanisms?

The Charter and IP

Trademarks restrict what and how something can be expressed. Section 2b of the Charter, however, guarantees freedom of expression. At some point, the two statutes conflict with each other. Currently, I am limited in how I can express the words Velcro, Kleenex, and BandAid. There are certain colors, fonts, and borders I cannot use. The colors red and yellow by themselves are fair game, and so are the letters of the alphabet. But I am limited by the Trademark Act in arranging those in a way that reminds consumers of the “golden arches” of a certain fast food chain.

Section 2b, combined with s.1 in particular, provides a less extreme version of the American First Amendment. Perhaps the Oakes test permits the seemingly paradoxical coexistence of freedom of expression and IP laws. Trademarks, however, are usually registered by private entities (with some government exceptions), to which Charter protections do not extend. Could a valid Charter claim be brought against various levels of government for their trademarks? It has not happened yet, to my knowledge.

Alternatives

The imminence of AI notwithstanding, it seems unlikely that current IP laws will drastically change in the near future. However, some IP principles seem redundant, as they appear to be mere extensions of preexisting torts.

Moral Rights

Moral rights are divided into rights of integrity and rights of attribution and association. The tort of defamation, quite similarly, protects a person’s reputation from unjustified harm. The tort poses moral and ethical challenges, as it places an inherent economic value on people and protects against its diminishing. But the same can be said about moral rights, which seem to be a mere extension of “the person” to their intellectual creations. In this sense, moral rights significantly overlap with defamation.

Passing off

Passing off protects the goodwill of businesses by preventing competitors from passing off their goods as those of another. As with moral rights, the protections afforded are reputational and economic (which is arguably the same thing). It seems that the mere addition of fixation to the tort of defamation would equate the two. But theoretical alterations to defamation are not necessary.

Under the tort of malicious falsehood, also known as injurious falsehood, making a false statement that disparages another person’s goods or property constitutes a legal cause of action. As Denis Grigoras, a prominent defamation attorney, has clarified “interestingly, malicious falsehood is not just confined to tangible property. It can also involve false statements about a person’s intellectual property” (Denis Grigoras, www.grigoraslaw.com). Malicious falsehood, then, seems to cover both moral rights and passing off.

Contracts

Let’s suppose a Mr. Fon Jestinger runs a chocolate store, called “Allard’s Chocs,” whose products the citizens of Canvouver enjoy and know well. But Raham Greynolds, a competitor, opens a rival store across town with the same name. Under current law, Fon could potentially sue Raham under passing off. In my view, however, it is the consumer’s rights that are violated, and not Fon’s.

As Stephan Kinsella has argued, private contracts can serve a similar function to some IP statutory protections (AIP, at p.58). The tort of fraudulent misrepresentation occurs when a defendant makes an intentional or reckless misrepresentation of fact or opinion with the intention to coerce a party into action or inaction based on that misrepresentation. A consumer who enters into a contractual purchase with Raham has done so under the fraudulent misrepresentation that he is purchasing Fon’s chocolate. Here, consumer rights have been violated. Fon could potentially bring an action for malicious falsehood, but there is no contractual relationship between him and Raham.

Patents

Simply put, patents restrict competition, stifle innovation, and create state-enforced monopolies. My views align with Elon Musk’s. On the legal section of the Tesla website, he says: “I thought patents were a good thing and worked hard to obtain them. And maybe they were good long ago, but too often these days they serve merely to stifle progress, entrench the positions of giant corporations and enrich those in the legal profession, rather than the actual inventors” (Elon Musk, www.tesla.com/legal).

Conclusions

It seems obvious that we should be entitled to the fruits of our labor. But is it the labor itself or the fruits that generate entitlement? Property rights already protect the fruits against theft, destruction, and conversion. But that is because “the fruits” are scarce. And our labor is also scarce: there are only so many waking hours and only so much we can get done. However, labor is an action and actions are not capable of being owned, the way an apple is. Labor cannot be owned any more than a wink or a nod can. Yet under current IP law, the very act of manifesting an idea in a recognized way attracts protection. Put simply: labor itself is rewarded and protected, even though it is an action.

In my view, IP laws create monopolies, stifle competition, discourage innovation, and potentially conflict with the Charter. Further, much of IP is made redundant by preexisting torts. Tragically, IP laws can also be deadly: we will never see the creations and innovations Mr. Aaron Swartz could have brought to the world.