Against Intellectual Property by Stefan Kinsella
A summary of intellectual property law
Types of IP
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.
IP rights are rights to intangible things, to ideas as expressed, copyrights, or as embodied in a practical implementation, patents.
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.
In today's legal systems, IP typically includes at least copyrights, trademarks, patents and trade secrets.
Copyright
Copyright is a right given to authors of original works, such as books, articles, movies and computer programs.
Copyright gives the exclusive right to reproduce the work, prepare derivative works or to perform and present the work publicly.
Copyrights protect only the form or expression of ideas, not the underlying ideas themselves.
While a copyright may be registered to obtain legal advantages, a copyright need not be registered to exist.
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.
Patent
A patent is a property right in inventions, that is, in devices or processes that perform
a useful function.
A new or improved mousetrap is an example of a type of device which may be patented.
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
to prevent others from practicing the patented invention.
It does not actually grant to the patentee the right to use the patented invention.
In a footnote, the author expands, Suppose A invents and patents a better mousetrap,
which has a nitinol memory metal spring for better snapping ability.
Now suppose B invents and patents a mousetrap with a nitinol spring covered with non-stick
Nonstick Coating to improve the ability to remove mouse remains while still providing
the nitinol driven snapping action. B has to have a mousetrap with a nitinol spring
in order to use his invention, but this would infringe upon A's patent. Similarly, A cannot
add the non-stick coating to his own invention without infringing upon B's improvement patent.
In such situations the two patentees may cross license so that A can practice B's improvement
on the mousetrap and so B can use his own invention.
Not every innovation or discovery is patentable. The U.S. Supreme Court has, for example, identified
three categories of subject matter that are unpatentable, namely laws of nature, natural
Practical Phenomena and Abstract Ideas Reducing abstract ideas to some type of practical
application, i.e. a useful concrete and tangible result, is patentable, however. U.S. patents
since June 8, 1995, last from the date of issuance until 20 years from the original
Trade Secret
A trade secret consists of any confidential formula, device or piece of information which
gives its holder a competitive advantage, so long as it remains secret.
An example would be the formula for Coca-Cola.
Trade secrets can include information that is not novel enough to be subject to patent
protection or not original enough to be protected by copyright, for example, a database of seismic
data or customer lists.
Trade secret laws are used to prevent misappropriations of the trade secret or to award damages for
such misappropriations.
Trade secrets are protected under State law, although recent Federal law has been enacted
to prevent theft of trade secrets.
Trade secret protection is obtained by declaring that the details of a subject are secret.
The trade secret theoretically may last indefinitely, although disclosure, reverse engineering or
independent invention may destroy it.
Trade secrets can protect secret information and processes, for example, compilations of
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.
Trademark
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.
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.
Trademark law primarily prevents competitors from infringing upon the trademark, i.e. using confusingly similar marks to identify their own goods and services.
Unlike copyrights and patents, trademark rights can last indefinitely if the owner continues to use the mark.
The term of a Federal trademark registration lasts 10 years, with 10-year renewal terms being available.
Other rights related to trademark protection include rights against trademark dilution, certain forms of cyber squatting and various unfair competition claims.
IP also includes recent legal innovations such as the mask work protection available for semiconductor integrated circuit IC designs,
Designs, the sui generis protection, similar to copyright for boat hull designs, and the
proposed sui generis right in databases or collections of information.
In the United States, Federal law almost exclusively governs copyrights and patents, since the
Constitution grants Congress the power to promote the progress of science and useful
Despite the Federal source of patents and copyrights, various related aspects, such
as ownership of patents, are based on state law, which nevertheless tend to be fairly
uniform from state to state. Federal trademarks, by contrast, not being explicitly authorized
in the Constitution, are based on the Interstate Commerce Clause, and thus only covers marks
for Goods and Services in Interstate Commerce. State trademarks still exist, since they have
not been completely pre-empted by Federal law, but Federal marks tend to be more commercially
important and powerful. Trade secrets are generally protected under State, not Federal
law. Many laymen, including libertarians, have a poor understanding of intellectual
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.
In a footnote, the author expands,
Ayn Rand mistakenly assumes that the first to file has property, and then she is at pains to defend such a system.
See Ayn Rand, Patents and Copyrights, in Capitalism, the Unknown Ideal, New York, New American Library, 1967, page 133.
She also confusingly attacks the strict antitrust scrutiny given to patent holders.
However, since patents are government-granted monopolies, it is not unjust to use an anti-monopoly
law to limit the ability of a patent owner to extend this monopoly beyond the bounds
intended by the patent statute. The problem with anti-trust laws is in their application
to normal, peaceful business dealings, not to limit real, i.e. government-granted, monopolies.
A similar point might be made with regard to Bill Gates, whose fortune has largely been
IP Rights and Relation to Tangible Property As noted above, IP rights at least for patents
Copyrights and copyrights may be considered rights in ideal objects.
It is important to point out that ownership of an idea or ideal object effectively gives
the IP owners a property right in every physical embodiment of that work or invention.
Consider a copyrighted book.
Copyright holder A has a right to the underlying ideal object, of which the book is but one
example.
The copyright system gives A the right in the very pattern of words in the book. Therefore,
by implication, A has a right to every tangible instantiation or embodiment of the book, i.e.
a right in every physical version of the book, or at least to every book within the jurisdiction
of the legal system that recognizes the copyright. Thus, if A writes a novel, he has a copyright
in this work.
If he sells a physical copy of the novel to B in book form,
then B only owns
that one physical copy of the novel.
B does not own the novel itself and is not entitled to make a copy of the
novel,
even using his own paper and ink.
Thus, even if B owns the material property of paper and printing press,
he cannot use his property to create another copy of A's book.
Only A has the right to copy the book, hence copyright.
Likewise, A's ownership of a patent gives him the right to prevent a third party from
using or practicing the patented invention, even if the third party only uses his own
property.
In this way, A's ownership of ideal rights gives him some degree of control, ownership,
over the tangible property of innumerable others.
Finance and Copyright invariably transfer partial ownership of tangible property from its natural owner to innovators, inventors and artists.