WEBVTT NOTE Summary of IP Law 1 00:00:00.000 --> 00:00:06.000 Against Intellectual Property by Stefan Kinsella 2 00:00:06.000 --> 00:00:10.000 A summary of intellectual property law 3 00:00:10.000 --> 00:00:13.000 Types of IP 4 00:00:13.000 --> 00:00:26.000 Intellectual property is a broad concept that covers several types of legally recognized rights arising from some type of intellectual creativity or that are otherwise related to ideas. 5 00:00:26.000 --> 00:00:37.000 IP rights are rights to intangible things, to ideas as expressed, copyrights, or as embodied in a practical implementation, patents. 6 00:00:37.000 --> 00:00:49.000 Tom Palmer puts it this way, intellectual property rights are rights in ideal objects, which are distinguished from the material substrata in which they are instantiated. 7 00:00:49.000 --> 00:00:59.000 In today's legal systems, IP typically includes at least copyrights, trademarks, patents and trade secrets. 8 00:00:59.000 --> 00:01:02.000 Copyright 9 00:01:02.000 --> 00:01:11.000 Copyright is a right given to authors of original works, such as books, articles, movies and computer programs. 10 00:01:11.000 --> 00:01:20.000 Copyright gives the exclusive right to reproduce the work, prepare derivative works or to perform and present the work publicly. 11 00:01:20.000 --> 00:01:28.000 Copyrights protect only the form or expression of ideas, not the underlying ideas themselves. 12 00:01:28.000 --> 00:01:36.000 While a copyright may be registered to obtain legal advantages, a copyright need not be registered to exist. 13 00:01:36.000 --> 00:01:55.000 Rather, a copyright comes into existence automatically the moment the work is fixed, in a tangible medium of expression, and lasts for the life of the author plus 70 years, or for a total of 95 years in cases in which the employer owns the copyright. 14 00:01:55.000 --> 00:01:56.000 Patent 15 00:01:56.000 --> 00:02:03.160 A patent is a property right in inventions, that is, in devices or processes that perform 16 00:02:03.160 --> 00:02:05.360 a useful function. 17 00:02:05.360 --> 00:02:10.960 A new or improved mousetrap is an example of a type of device which may be patented. 18 00:02:10.960 --> 00:02:15.720 A patent effectively grants the inventor a limited monopoly on the manufacture, use or 19 00:02:15.720 --> 00:02:17.520 sale of the invention. 20 00:02:17.520 --> 00:02:23.860 However, a patent actually only grants to the patentee the right to exclude, i.e. to 21 00:02:23.860 --> 00:02:27.860 to prevent others from practicing the patented invention. 22 00:02:27.860 --> 00:02:34.620 It does not actually grant to the patentee the right to use the patented invention. 23 00:02:34.620 --> 00:02:40.580 In a footnote, the author expands, Suppose A invents and patents a better mousetrap, 24 00:02:40.580 --> 00:02:46.380 which has a nitinol memory metal spring for better snapping ability. 25 00:02:46.380 --> 00:02:52.340 Now suppose B invents and patents a mousetrap with a nitinol spring covered with non-stick 26 00:02:52.340 --> 00:02:57.520 Nonstick Coating to improve the ability to remove mouse remains while still providing 27 00:02:57.520 --> 00:03:03.880 the nitinol driven snapping action. B has to have a mousetrap with a nitinol spring 28 00:03:03.880 --> 00:03:11.000 in order to use his invention, but this would infringe upon A's patent. Similarly, A cannot 29 00:03:11.000 --> 00:03:18.000 add the non-stick coating to his own invention without infringing upon B's improvement patent. 30 00:03:18.000 --> 00:03:24.240 In such situations the two patentees may cross license so that A can practice B's improvement 31 00:03:24.240 --> 00:03:30.760 on the mousetrap and so B can use his own invention. 32 00:03:30.760 --> 00:03:36.560 Not every innovation or discovery is patentable. The U.S. Supreme Court has, for example, identified 33 00:03:36.560 --> 00:03:42.400 three categories of subject matter that are unpatentable, namely laws of nature, natural 34 00:03:42.400 --> 00:03:49.000 Practical Phenomena and Abstract Ideas Reducing abstract ideas to some type of practical 35 00:03:49.000 --> 00:03:57.320 application, i.e. a useful concrete and tangible result, is patentable, however. U.S. patents 36 00:03:57.320 --> 00:04:03.360 since June 8, 1995, last from the date of issuance until 20 years from the original 37 00:04:03.360 --> 00:04:10.360 Trade Secret 38 00:04:16.000 --> 00:04:21.720 A trade secret consists of any confidential formula, device or piece of information which 39 00:04:21.720 --> 00:04:27.680 gives its holder a competitive advantage, so long as it remains secret. 40 00:04:27.680 --> 00:04:31.960 An example would be the formula for Coca-Cola. 41 00:04:31.960 --> 00:04:36.360 Trade secrets can include information that is not novel enough to be subject to patent 42 00:04:36.360 --> 00:04:43.360 protection or not original enough to be protected by copyright, for example, a database of seismic 43 00:04:43.360 --> 00:04:46.640 data or customer lists. 44 00:04:46.640 --> 00:04:53.600 Trade secret laws are used to prevent misappropriations of the trade secret or to award damages for 45 00:04:53.600 --> 00:04:56.920 such misappropriations. 46 00:04:56.920 --> 00:05:01.880 Trade secrets are protected under State law, although recent Federal law has been enacted 47 00:05:01.880 --> 00:05:06.380 to prevent theft of trade secrets. 48 00:05:06.380 --> 00:05:11.920 Trade secret protection is obtained by declaring that the details of a subject are secret. 49 00:05:11.920 --> 00:05:17.720 The trade secret theoretically may last indefinitely, although disclosure, reverse engineering or 50 00:05:17.720 --> 00:05:21.360 independent invention may destroy it. 51 00:05:21.360 --> 00:05:26.400 Trade secrets can protect secret information and processes, for example, compilations of 52 00:05:26.400 --> 00:05:33.400 One disadvantage of relying on trade secret protection is that a competitor who independently invents the subject of another's trade secret can obtain a patent on the device or process and actually prevent the original inventor, the trade secret holder, from using the invention. 53 00:05:56.400 --> 00:06:00.400 Trademark 54 00:06:00.400 --> 00:06:11.400 A trademark is a word, phrase, symbol or design used to identify the source of goods or services sold and to distinguish them from the goods or services of others. 55 00:06:11.400 --> 00:06:24.400 For example, the Coca-Cola mark and the design that appears on their soft drinks cans identifies them as products of that company, distinguishing them from competitors such as Pepsi. 56 00:06:24.400 --> 00:06:36.400 Trademark law primarily prevents competitors from infringing upon the trademark, i.e. using confusingly similar marks to identify their own goods and services. 57 00:06:36.400 --> 00:06:44.400 Unlike copyrights and patents, trademark rights can last indefinitely if the owner continues to use the mark. 58 00:06:44.400 --> 00:06:53.400 The term of a Federal trademark registration lasts 10 years, with 10-year renewal terms being available. 59 00:06:53.400 --> 00:07:03.400 Other rights related to trademark protection include rights against trademark dilution, certain forms of cyber squatting and various unfair competition claims. 60 00:07:03.400 --> 00:07:14.400 IP also includes recent legal innovations such as the mask work protection available for semiconductor integrated circuit IC designs, 61 00:07:14.400 --> 00:07:20.800 Designs, the sui generis protection, similar to copyright for boat hull designs, and the 62 00:07:20.800 --> 00:07:28.080 proposed sui generis right in databases or collections of information. 63 00:07:28.080 --> 00:07:33.800 In the United States, Federal law almost exclusively governs copyrights and patents, since the 64 00:07:33.800 --> 00:07:39.360 Constitution grants Congress the power to promote the progress of science and useful 65 00:07:39.360 --> 00:07:46.640 Despite the Federal source of patents and copyrights, various related aspects, such 66 00:07:46.640 --> 00:07:51.860 as ownership of patents, are based on state law, which nevertheless tend to be fairly 67 00:07:51.860 --> 00:08:00.120 uniform from state to state. Federal trademarks, by contrast, not being explicitly authorized 68 00:08:00.120 --> 00:08:06.000 in the Constitution, are based on the Interstate Commerce Clause, and thus only covers marks 69 00:08:06.000 --> 00:08:12.880 for Goods and Services in Interstate Commerce. State trademarks still exist, since they have 70 00:08:12.880 --> 00:08:18.760 not been completely pre-empted by Federal law, but Federal marks tend to be more commercially 71 00:08:18.760 --> 00:08:25.140 important and powerful. Trade secrets are generally protected under State, not Federal 72 00:08:25.140 --> 00:08:32.400 law. Many laymen, including libertarians, have a poor understanding of intellectual 73 00:08:32.400 --> 00:08:39.400 It is widely and incorrectly believed that in the U.S. system, the inventor who files first at the patent office has priority over those who file later. However, the U.S. system is actually a first-to-invent system, unlike most other countries which do have a first-to-file system for priority. 74 00:09:02.400 --> 00:09:06.040 In a footnote, the author expands, 75 00:09:06.040 --> 00:09:14.240 Ayn Rand mistakenly assumes that the first to file has property, and then she is at pains to defend such a system. 76 00:09:14.240 --> 00:09:25.640 See Ayn Rand, Patents and Copyrights, in Capitalism, the Unknown Ideal, New York, New American Library, 1967, page 133. 77 00:09:25.640 --> 00:09:31.540 She also confusingly attacks the strict antitrust scrutiny given to patent holders. 78 00:09:31.540 --> 00:09:37.940 However, since patents are government-granted monopolies, it is not unjust to use an anti-monopoly 79 00:09:37.940 --> 00:09:42.820 law to limit the ability of a patent owner to extend this monopoly beyond the bounds 80 00:09:42.820 --> 00:09:48.660 intended by the patent statute. The problem with anti-trust laws is in their application 81 00:09:48.660 --> 00:09:55.880 to normal, peaceful business dealings, not to limit real, i.e. government-granted, monopolies. 82 00:09:55.880 --> 00:10:00.620 A similar point might be made with regard to Bill Gates, whose fortune has largely been 83 00:10:00.620 --> 00:10:07.620 IP Rights and Relation to Tangible Property As noted above, IP rights at least for patents 84 00:10:30.620 --> 00:10:35.340 Copyrights and copyrights may be considered rights in ideal objects. 85 00:10:35.340 --> 00:10:41.180 It is important to point out that ownership of an idea or ideal object effectively gives 86 00:10:41.180 --> 00:10:47.820 the IP owners a property right in every physical embodiment of that work or invention. 87 00:10:47.820 --> 00:10:50.940 Consider a copyrighted book. 88 00:10:50.940 --> 00:10:55.900 Copyright holder A has a right to the underlying ideal object, of which the book is but one 89 00:10:55.900 --> 00:10:58.100 example. 90 00:10:58.100 --> 00:11:04.820 The copyright system gives A the right in the very pattern of words in the book. Therefore, 91 00:11:04.820 --> 00:11:11.820 by implication, A has a right to every tangible instantiation or embodiment of the book, i.e. 92 00:11:11.820 --> 00:11:17.900 a right in every physical version of the book, or at least to every book within the jurisdiction 93 00:11:17.900 --> 00:11:25.200 of the legal system that recognizes the copyright. Thus, if A writes a novel, he has a copyright 94 00:11:25.200 --> 00:11:26.960 in this work. 95 00:11:26.960 --> 00:11:30.760 If he sells a physical copy of the novel to B in book form, 96 00:11:30.760 --> 00:11:32.820 then B only owns 97 00:11:32.820 --> 00:11:35.960 that one physical copy of the novel. 98 00:11:35.960 --> 00:11:40.000 B does not own the novel itself and is not entitled to make a copy of the 99 00:11:40.000 --> 00:11:40.720 novel, 100 00:11:40.720 --> 00:11:44.560 even using his own paper and ink. 101 00:11:44.560 --> 00:11:48.600 Thus, even if B owns the material property of paper and printing press, 102 00:11:48.600 --> 00:11:53.040 he cannot use his property to create another copy of A's book. 103 00:11:53.040 --> 00:11:58.840 Only A has the right to copy the book, hence copyright. 104 00:11:58.840 --> 00:12:04.240 Likewise, A's ownership of a patent gives him the right to prevent a third party from 105 00:12:04.240 --> 00:12:10.040 using or practicing the patented invention, even if the third party only uses his own 106 00:12:10.040 --> 00:12:11.700 property. 107 00:12:11.700 --> 00:12:18.080 In this way, A's ownership of ideal rights gives him some degree of control, ownership, 108 00:12:18.080 --> 00:12:22.920 over the tangible property of innumerable others. 109 00:12:22.920 --> 00:12:29.920 Finance and Copyright invariably transfer partial ownership of tangible property from its natural owner to innovators, inventors and artists.