WEBVTT NOTE Rethinking IP Completely 1 00:00:00.000 --> 00:00:06.000 I'd like to introduce the Murray and Rothbard Memorial Lecturer. It's a Stephen Kinsella. 2 00:00:06.000 --> 00:00:17.000 Stephen is General Counsel for Applied Optoelectronics in Houston and formerly a partner in the intellectual property group of the Philadelphia law firm Duane Morris. 3 00:00:17.000 --> 00:00:29.000 He is a registered patent attorney with over 15 years experience, having represented clients such as Intel, Lucent, General Electric, Motorola, Schlumberger and UPS. 4 00:00:29.000 --> 00:00:40.000 He received his LL.M. in International Business Law from King's College London and his law degree and B.S. and M.S. in Electrical Engineering from Louisiana State University. 5 00:00:40.000 --> 00:00:50.000 He has taught as adjunct professor at South Texas College of Law in Houston and has published numerous articles and books about intellectual property law and international law, 6 00:00:50.000 --> 00:00:54.720 Law, including International Investment, Political Risk and Dispute Resolution, A Practitioner's 7 00:00:54.720 --> 00:01:01.560 Guide, published by Oxford University Press in 2005. Other books include Trademark, Practice 8 00:01:01.560 --> 00:01:07.240 and Forms, World Online Business Law, Digest of Commercial Laws of the World, and Online 9 00:01:07.240 --> 00:01:12.760 Contract Formation. Stefan has also published articles on libertarian topics, such as rights 10 00:01:12.760 --> 00:01:18.400 theory, contract theory, legal theory and intellectual property law, and served for 11 00:01:18.400 --> 00:01:22.400 for several years as the book review editor for the Journal of Libertarian Studies. 12 00:01:22.400 --> 00:01:25.400 So it's my pleasure to give to you Stefan Kinsella. 13 00:01:32.400 --> 00:01:38.400 Thanks, Joe. For some reason all of a sudden I feel a little bit like I'm at a lawyer's anonymous meeting. 14 00:01:39.400 --> 00:01:44.400 Hi, I'm Norman. I am an intellectual property attorney. 15 00:01:44.400 --> 00:01:53.400 Jeff had titled this the Rethinking IP Completely, and I came up with a little bit more descriptive title here. 16 00:01:53.400 --> 00:01:59.400 And I'll come up with it in a little bit, but I spelled out what IP means. Apparently, a lot of people don't even know what IP is. 17 00:01:59.400 --> 00:02:09.400 So what I'm going to talk about is we live in an age of technological marbles, as we all know. I won't elaborate that. 18 00:02:09.400 --> 00:02:20.400 We have laser pointers, airplanes, computers, the Internet, plasma televisions. We have abundance of the arts, movies, film. 19 00:02:20.400 --> 00:02:30.400 Now, we libertarians would say this is because individual creativity in an unhampered free market or free enough has led to this. 20 00:02:30.400 --> 00:02:42.400 But many people say that's not sufficient. There's something else that's necessary for these intellectual creations to have occurred, which is intellectual property law, primarily patent and copyright law. 21 00:02:42.400 --> 00:02:51.400 Even libertarians have tended to accept this idea. After all, it's intellectual property, and we support property rights. It's a type of property. 22 00:02:51.400 --> 00:03:04.400 So is it? Well, I'm going to focus primarily tonight on patents and copyrights. Patents and copyrights, also mask works, trademarks, and trade secrets, are considered to be types of intellectual property. 23 00:03:04.400 --> 00:03:18.400 There are three types of patents, utility, plant, and design patents, and there's copyrights. And there's sort of related legislative rights like databases, which are pending, and boathole designs, which are of course very important. 24 00:03:18.400 --> 00:03:25.400 Design patents are similar to copyright, but no one really knows exactly how. 25 00:03:25.400 --> 00:03:35.400 So I'm going to just give a little bit of a background on what they are without boring you too much, and I'll give some funny examples in a minute to make it a little bit more interesting. 26 00:03:35.400 --> 00:03:41.400 But because most people, from what I've seen, especially on the pro-IP side, don't really know what IP is. 27 00:03:41.400 --> 00:03:51.400 is. I'll see trademark, copyright, and patent confused all the time. That's fine. It's specialized discipline. And yet they're in favor of this, even though they don't really know the difference. 28 00:03:51.400 --> 00:04:02.400 So a copyright protects original works of authorship that are fixed in a tangible form of expression. Songs, lyrics, novels, paintings, MP3 files. 29 00:04:02.400 --> 00:04:12.400 It's not just the right to copy. It's a bundle of rights, the right to reproduce or prepare derivative works, or to perform the work publicly in some other works as well. 30 00:04:12.400 --> 00:04:19.400 Now, the term of copyright nowadays is very long, 70 years after the life of the author, so it's practically infinite nowadays. 31 00:04:19.400 --> 00:04:30.400 One thing that's commonly misunderstood, and we'll talk about this in the panel tomorrow, Paul, copyright is secured automatically upon creation. 32 00:04:30.400 --> 00:04:34.400 You don't have to put a copyright notice on it. You don't have to register it. These are totally irrelevant. 33 00:04:34.400 --> 00:04:41.400 In fact, I have a copyright in this page right now, and it's self-referential as you can see. 34 00:04:41.400 --> 00:04:48.400 So what it means is you can't copy this without my permission, and copywriting is – sorry, it's a noun, not a verb. 35 00:04:48.400 --> 00:04:56.400 You can't copyright something. You just – once you write something original or create something original, federal law gives you a copyright, whether you want it or not. 36 00:04:56.400 --> 00:05:05.400 This is just a background of, I showed Jeff this the other day, this is a flow chart for figuring how long a copyright lasts. 37 00:05:05.400 --> 00:05:09.400 As you can see, this is clearly the product of natural law. 38 00:05:09.400 --> 00:05:25.400 Patents. We have utility, plant, design, and plant patents, and plant and design patents can mostly be ignored. 39 00:05:25.400 --> 00:05:30.400 Utility patents are what everyone thinks of. It's for inventions, things that have usefulness or utility. 40 00:05:30.400 --> 00:05:35.400 Now, you have to obtain this by filing a patent application with the Patent Office, a government agency. 41 00:05:35.400 --> 00:05:40.400 It's examined by an examiner and then later issues as an issued patent if you're lucky. 42 00:05:40.400 --> 00:05:49.400 And what it does is it gives you the right to stop other people from making, using, selling, importing, or offering for sale whatever is claimed in that patent. 43 00:05:49.400 --> 00:05:53.400 It doesn't give you the right to do it. It's the right to stop others. 44 00:05:53.400 --> 00:05:58.400 Now I'm just going to give you one quick example of a part of an actual issued patent so you can see what they look like. 45 00:05:58.400 --> 00:06:06.400 This is one I did for my company. It's on a spatially coherent surface emitting grading coupled quantum cascade laser with an unstable resonance cavity. 46 00:06:06.400 --> 00:06:19.400 The unstable is the key part. So this is the front page. It shows the title, the inventors, the company that owns it, the patent lawyer, the examiner, the patent office, a typical figure. 47 00:06:19.400 --> 00:06:27.400 And then there's several figures that illustrate the invention. Then you have a detailed description that explains it. 48 00:06:27.400 --> 00:06:32.400 Then it terminates in claim. This is where the property right is. Right here, claim one is the first claim. 49 00:06:32.400 --> 00:06:37.400 What is claimed is, and it's a sentence, starting with the word uh or the. That's just the way it works. 50 00:06:37.400 --> 00:06:44.400 So this is a unipolar surface emitting laser bulb that has the following features. Okay, it ends in a period. 51 00:06:44.400 --> 00:06:50.400 This is what a property – this is the meets and bounds of the patent. Again, clearly natural law. 52 00:06:50.400 --> 00:06:55.400 This is just some more – this is an example of the steps you go through when you prosecute a patent. 53 00:06:55.400 --> 00:07:00.400 Prosecuting is what you call going back and forth to the patent office to get a patent. 54 00:07:00.400 --> 00:07:06.400 This is an example of a flow chart we consult to determine whether a computer-implemented invention is patentable. 55 00:07:06.400 --> 00:07:13.400 Now, I'm going to give some examples of some patents just so you can see what was the outcome of this process of the government issuing patents. 56 00:07:13.400 --> 00:07:22.400 This is a patent for a bible-shaped bumper hitch. Otherwise, you better not rear end me. 57 00:07:22.400 --> 00:07:28.400 This is a toe puppet. Not a finger puppet, a toe puppet. 58 00:07:28.400 --> 00:07:38.400 Peanut butter and jelly sandwich with no crust. Pumpkin-shaped garbage bags. 59 00:07:38.400 --> 00:07:43.400 This is, now, if you ever swing on a swing and you go sideways instead of back and forth, you're infringing this patent. 60 00:07:44.400 --> 00:07:47.400 This is a Santa Claus-shaped Christmas watering tree stand. 61 00:07:48.400 --> 00:07:51.400 You know, it has two purposes, right? Decorative and... 62 00:07:52.400 --> 00:07:54.400 This is a way to initiate someone into Harvard. 63 00:07:58.400 --> 00:08:00.400 Okay? This is how you exercise a cat. 64 00:08:01.400 --> 00:08:04.400 You just chase it. If you ever do this with a cat, you're infringing this patent. 65 00:08:04.400 --> 00:08:09.400 And you can congratulate yourself for getting such a stupid patent with this one here. 66 00:08:09.400 --> 00:08:11.400 Pat on the back apparatus. 67 00:08:11.400 --> 00:08:14.400 Or if you're feeling guilty about it, you can kick yourself in the rear. 68 00:08:14.400 --> 00:08:21.400 User-operated amusement apparatus for kicking the user's buttocks. 69 00:08:21.400 --> 00:08:30.400 This is the Amazon one-click patent, which they sued Barnes & Noble for about four or five Christmases ago, 70 00:08:30.400 --> 00:08:39.400 You know, clicking once to order something instead of twice. Genius. This is something that people around here might like. 71 00:08:39.400 --> 00:08:49.400 You know, it speaks for itself. And this is the patent attorney who prosecuted that, by the way. He's in jail now for mail fraud. 72 00:08:49.400 --> 00:09:03.400 Totally unrelated, but interesting. A pooper scooper on the bottom of a pole. Who would have thought that one? Okay. For showing some cleavage in your pants. 73 00:09:03.400 --> 00:09:11.400 Now, in the old days, from what I hear, people were buried without being embalmed, and every now and then they would wake up. 74 00:09:11.400 --> 00:09:17.400 So this device was invented so that in case you wake up, you could pull the string and blow a horn and alert people. 75 00:09:17.400 --> 00:09:22.400 Seriously. This is old. 1891. Okay. 76 00:09:22.400 --> 00:09:28.400 I could use this one. This is a way of doing a creative comb-over. 77 00:09:28.400 --> 00:09:35.400 Okay. Anyone golfs here, do not hold your putter like this or you're in trouble. 78 00:09:35.400 --> 00:09:39.400 A better way of measuring bra size, just measure the breast directly. 79 00:09:39.400 --> 00:09:46.400 Sorry what I think about this. 80 00:09:46.400 --> 00:09:52.400 This is a design patent, by the way. This is a patent on the way this looks. 81 00:09:52.400 --> 00:10:02.400 This is, Hans might enjoy this, it's a smoking hood. 82 00:10:02.400 --> 00:10:06.400 This is one that bothers me. This is a method for drafting a patent application. 83 00:10:06.400 --> 00:10:11.400 It's really good. I just can't use it, unfortunately. 84 00:10:11.400 --> 00:10:18.400 Now, my wife has the new MacBook Air. It's wonderful. It has this great little drop-down, flip-down door with the ports. 85 00:10:18.400 --> 00:10:20.400 And, of course, they have patents on it. 86 00:10:20.400 --> 00:10:25.400 But, you know, when I saw this, I thought it reminds me of the overhead storage compartment on an airplane, right? 87 00:10:25.400 --> 00:10:30.400 Like we wrote today, and sure, they have a patent on that, too. So, okay. 88 00:10:30.400 --> 00:10:37.080 And there's plenty more ridiculous patents. I had about two, ten more pages of these, but we have to stop somewhere. 89 00:10:37.080 --> 00:10:44.240 So, the most recent one, just this week, Gibson says the guitar hero violates patents, Activision says no. 90 00:10:44.240 --> 00:10:51.480 Apple's been sued for the combination of iPod and iTunes, and Manuel told me at the Philadelphia airport, 91 00:10:51.480 --> 00:10:57.280 he saw the massage chair with the placards saying patent pending. I saw that too in the Houston airport today, by the way, too. 92 00:10:57.280 --> 00:11:03.280 So they're everywhere. Now let me talk about some of the – what people do with some of these patents. 93 00:11:03.280 --> 00:11:10.280 Again, there's another example almost every day, so let me just highlight a few. This is a study I saw as of March 2003. 94 00:11:10.280 --> 00:11:17.280 The top five patent infringement awards ranged from almost a billion dollars to 200 million, and settlements from a billion to 300 million. 95 00:11:17.280 --> 00:11:23.280 There's a recent judgment against AT&T for $156 million, which might be tripled. 96 00:11:23.280 --> 00:11:35.280 A New Jersey doctor was given $432 million as a royalty against Boston Scientific. Sprint recently won $70 million, and they settled for more because they were afraid they were going to get shut down by the patent injunction. 97 00:11:35.280 --> 00:11:48.280 Qualcomm has been enjoined from importing chips to help conserve power on cell phones. This new television design called SED, which is promised to be revolutionary, has been postponed for over a year or two now because of a patent lawsuit. 98 00:11:48.280 --> 00:12:04.280 It may just die on the vine because it's too late to compete with the other technologies. Black-Gray paid $600 million about a year and a half ago because of a patent injunction threat, even though the patents were being examined and likely to be overturned in the patent office because they could still get an injunction, so they paid that much. 99 00:12:04.280 --> 00:12:13.280 And Microsoft had a $1.5 billion jury award against it in a recent MP3 suit, which was reversed on appeal. 100 00:12:13.280 --> 00:12:24.280 I did an estimate, and others have done estimates. Patents probably cost on net $31 billion to the US economy alone or maybe more. This is just from hard numbers, looking at hard numbers. 101 00:12:24.280 --> 00:12:33.280 Now, in terms of copyrights, just a few examples of some apparent abuses of the copyright system. 102 00:12:33.280 --> 00:12:41.280 The RIA has been pushing for damages that would amount to about $1.5 million if you copy one CD with ten songs. 103 00:12:41.280 --> 00:12:49.280 For – and this is just a funny example. Ford recently – there was an enthusiast group of Ford owners, and they were posting pictures of their own cars to each other. 104 00:12:49.280 --> 00:12:59.280 Ford said you can't do that. We own the car. We own the design. NFL recently prohibited churches from having Super Bowl parties because the TV is more than 55 inches tall. This is true. 105 00:12:59.280 --> 00:13:06.280 There's a British proposal to ban you from the Internet if you illegally download music. 106 00:13:06.280 --> 00:13:15.280 There was one case where a guy got a cease and desist letter, and he posted it, and the company that sent him the letter said, oh, you have a copyright in that letter. 107 00:13:15.280 --> 00:13:22.280 You've got to take it down. And the court said yes. And finally, there was a kind of infamous case. 108 00:13:22.280 --> 00:13:32.280 There was a $220,000 verdict against Jami Thomas, this woman who just shared 24 songs, so it amounted to 9,000 bucks per song. It could have been up to $3.6 million. 109 00:13:32.280 --> 00:13:40.280 There's an interesting study by a guy named John Taranian, and he just kind of said, lookivid you do a typical set of things like we all do every day. 110 00:13:40.280 --> 00:13:47.280 No P2P downloading or anything like that, just sending emails to people, sending a few articles, sending a few pictures you find on the internet. 111 00:13:47.280 --> 00:13:55.280 He counted up to 83 acts of infringement with liability up to 12.45 million plus criminal charges. 112 00:13:55.280 --> 00:14:07.280 And if you multiply that for the rest of the year, that's one person. This is all of us, up to $4.5 billion of damages that you should owe if you're theoretically sued under all the copyright statutes. It's insane. 113 00:14:07.280 --> 00:14:17.280 This is a spoof CD liner, which says what you can do with this CD. It can be difficult to use this and not be arrested, but here's some things we think are acceptable. 114 00:14:17.280 --> 00:14:23.280 You can listen to it alone with a towel stuffed under the rock on the door, etc. This is just funny. 115 00:14:23.280 --> 00:14:33.280 So why would anyone favor this? Well, the typical rationale, as we all know, even for some libertarians, is more of a utilitarian or wealth-maximization rationale. 116 00:14:33.280 --> 00:14:39.280 The idea is that if you don't have IP rights, then IP will be understimulated or underproduced. 117 00:14:39.280 --> 00:14:44.280 So we need to stimulate innovation, creativity, and art by granting these rights. 118 00:14:44.280 --> 00:14:56.280 The interesting thing to me is that there seems to be almost universal belief on the part of economists who study this even from a utilitarian point of view. 119 00:14:56.280 --> 00:15:04.280 Almost everyone concludes that the patent system is either – you can't prove that it does any good or it's a net drain on the economy. 120 00:15:04.280 --> 00:15:11.280 I'm not aware of any study that concludes conclusively that the patent system is a net benefit. Everyone just seems to believe it. 121 00:15:11.280 --> 00:15:17.280 That's their argument, but they don't know. This is Mackleff back in 1958. He even said, you know, we can't know for sure. 122 00:15:17.280 --> 00:15:21.280 It'd be irresponsible to implement a patent system right now if we didn't have one. 123 00:15:21.280 --> 00:15:29.280 French researchers have concluded that even now we don't know anything more than we did back in the 50s. 124 00:15:29.280 --> 00:15:36.280 Recent professors, Boston Law School professors and economists, they have a book coming out I think this month. 125 00:15:36.280 --> 00:15:40.280 They concluded that the patent system discourages innovation on average. 126 00:15:40.280 --> 00:15:51.280 Some studies by economic historian Eric Schiff, he studied. He said when Switzerland and the Netherlands abolished patent law back in – I think in the 50s for a while, they actually measured that innovation was increased. 127 00:15:51.280 --> 00:15:57.280 There was more competition for the companies that had previously relied on the patent monopoly. 128 00:15:57.280 --> 00:16:06.280 And Petra Moser, she did a study of some World's Fair exhibits, and she concluded that countries without patent systems innovate just as much or more than those with patent systems. 129 00:16:06.280 --> 00:16:13.280 Now, these aren't conclusive, and they are utilitarian, but even by the utilitarian standards, all the studies seem to say this is just a big mess. 130 00:16:13.280 --> 00:16:20.280 No one knows. If you ask someone why are you in favor of the patent system, well, it encourages innovation. It helps to benefit the economy. 131 00:16:20.280 --> 00:16:26.280 You say, well, what does it cost? What are the benefits? What's the difference? They don't – they have no idea. They don't know. 132 00:16:26.280 --> 00:16:38.280 Just some more studies. Everyone includes the same thing. Now, what about libertarians who reject utilitarianism? Why do we favor it? 133 00:16:38.280 --> 00:16:44.280 How do we get started down this road of including intellectual property as a legitimate part of property rights? 134 00:16:44.280 --> 00:16:54.280 I'm calling this libertarian creationism. I think it stems from the notion that it snuck in the back door that creation is a source of rights. 135 00:16:54.280 --> 00:17:00.280 And this is sort of mixed up with the idea of labor and the Lockean idea of homesteading. 136 00:17:00.280 --> 00:17:07.280 So basically, if you believe the kind of simplistic idea that whatever you create with your labor is yours, then well, what's a whatever? 137 00:17:07.280 --> 00:17:13.280 Well, it could be anything. You can create a poem. You can create a field. You can create a house. So you own all those things, right? 138 00:17:13.280 --> 00:17:23.280 So the Lockean idea, we own our labor, and even Rothbard says this, and therefore, we own resources we mix our labor with. 139 00:17:23.280 --> 00:17:31.280 Now, to my mind, there's always been a problem with this. There's the idea that if you spit in the ocean, you own your spit, but then you lose the spit. You don't own the ocean, right? 140 00:17:31.280 --> 00:17:37.280 So just because you mix something you own with something else doesn't necessarily mean you own the thing you mix it with. 141 00:17:37.280 --> 00:17:49.280 But even if you did, do you own your labor actually? I'll get back to that in a second, but let me just – let me show how the objectivists really take off on this. 142 00:17:49.280 --> 00:17:59.280 As Ayn Rand said, IP protects a man's right to the product of his mind, and a recent quote from an objectivist law professor, Masafa. 143 00:17:59.280 --> 00:18:07.280 Property is the right to acquire, use, and dispose of the things that one has created through one's labor. Every person has a right to enjoy the fruits of his labor. 144 00:18:07.280 --> 00:18:16.280 So you see there's this focus on labor, creation. Now, let's think about what Rothbard said. Do we really own our labor? 145 00:18:16.280 --> 00:18:22.280 What do Rothbard say about free speech rights, for example? Is there really a right to free speech, standing alone, an independent right to free speech? No. 146 00:18:22.280 --> 00:18:31.280 There's a right to property. You can do what you want on your own property. So really, the right to own property is sufficient to let you speak on it if you want or not speak on it. 147 00:18:31.280 --> 00:18:36.280 But you don't have some independent free speech right that would let you speak on someone else's property. 148 00:18:36.280 --> 00:18:46.280 Although enshrining it as a right in the Constitution has in a way led to this, because the courts say that a private shopping mall has to let people speak there. 149 00:18:46.280 --> 00:18:54.280 So in a way, holding these things that are derivatives of real rights as independent rights infringes the rights that they're supposed to derive from. 150 00:18:54.280 --> 00:19:05.280 So what is – do we own labor? I think it's similar to the free speech idea. Labor is just an action. It's what we do with our bodies. 151 00:19:05.280 --> 00:19:15.280 You own your body. That's enough to give you the right to decide what to do with your body, right, to dispose of your labor, to sell it if you want, to bargain with it, to withhold it, to profit from it. 152 00:19:15.280 --> 00:19:25.280 But you don't own your labor, or to say that is misleading, it's an overuse of a metaphor. You can say it as long as you're aware that it really just means you own your body. 153 00:19:25.280 --> 00:19:36.280 It's not an independent right from your body. Speaking of labor, this is one more patent. This is a patent on having a child by centrifugal force. 154 00:19:45.280 --> 00:19:59.280 Imagine spinning around here. That was Nan Wells' idea to keep that one in here. 155 00:19:59.280 --> 00:20:06.280 Okay, so then why would we own – if we don't own our labor, why do we own things that we homestead? 156 00:20:06.280 --> 00:20:13.280 Well, we own it because when we appropriate it first, we have a better claim than anyone else because, with respect to us, they are a latecomer. 157 00:20:13.280 --> 00:20:20.280 as Hoppe shows extensively in his argumentation ethics. This is, in fact, in my view, is the distinct libertarian view. 158 00:20:20.280 --> 00:20:27.280 Everyone believes in property rights. Socialists believe in property rights. The communists, they just have a different view of who owns it. 159 00:20:27.280 --> 00:20:33.280 The state owns it, or the people own it, or the poor people have a right to a claim on part of your money. 160 00:20:33.280 --> 00:20:38.280 But it's always a dispute over a particular piece of property. The question is who gets to own it. 161 00:20:38.280 --> 00:20:49.280 In the libertarian view, what is distinct about it is we believe that property rights are going to be recognized in the first user to permit conflict-free use of scarce resources. 162 00:20:49.280 --> 00:21:05.280 This argument does not rest upon the assumption that we own our labor. It just rests upon the assumption that if you use or transform or imborder or appropriate a scarce resource that is unowned, first, you have a better claim than anyone else because with respect to you, they're a latecomer. 163 00:21:08.280 --> 00:21:14.280 Now, what about creation, this idea that whatever you create is yours? Actually it's not true. 164 00:21:14.280 --> 00:21:28.280 It's sort of commonly said that if you – you can acquire ownership and things by appropriating it from the unknown state or by buying it from someone else, contract, or by producing. 165 00:21:28.280 --> 00:21:33.280 But this is actually a little bit misleading. Actually, producing is not an independent source of rights. 166 00:21:33.280 --> 00:21:42.280 To produce, you actually already have to own the factors that you're producing the new thing from. Producing just means transforming the property you own already, right? 167 00:21:42.280 --> 00:21:49.280 So for an example, this is a simple example to show that creation is not sufficient or necessary for rights. 168 00:21:49.280 --> 00:21:55.280 So if you have a big hunk of marble and you carve a statue in it, you already own the statue because you own the marble. 169 00:21:55.280 --> 00:22:04.280 So you don't have a new property right. You just have transformed your marble. So that means creation is not sufficient, not necessary. Sorry. 170 00:22:04.280 --> 00:22:14.280 If you carve a statue in your neighbor's marble without his permission, you don't own the statue. It's still his statue, so creation is not sufficient. So it's neither one. 171 00:22:14.280 --> 00:22:20.280 Okay, so again, there's only two ways to acquire property, appropriation or contract. That's it. 172 00:22:20.280 --> 00:22:27.280 You can increase your wealth by producing. That is, by transforming products you own already, but it presupposes this. 173 00:22:27.280 --> 00:22:53.280 Okay. Back to the objectivist. This sort of over-reliance on an imprecise metaphor and on the idea of creation as a source of rights and on the idea that you own labor has led the objectivist, for example, to believe in reputation rights, libel and defamation law, intellectual property rights, the state, legislation, bureaucracies, because these things are all necessary for all these things. 174 00:22:53.280 --> 00:23:04.280 You create your reputation, inventions and art, and it has value to you. This is another thing. Another confusion is that a lot of these – they mix up value, labor, and creation. 175 00:23:04.280 --> 00:23:13.280 They believe that value is sort of an independent, objective thing that you don't create a value. You create a thing that has value to people, subjectively valued by different people. 176 00:23:13.280 --> 00:23:22.280 David Kelly, someone I respect and admire, wrote, the essential basis of property rights lies in the phenomena of creating value. 177 00:23:22.280 --> 00:23:29.280 You see this emphasis here. For things that one has created such as a new product, one's act of creation is the source of the right regardless of scarcity. 178 00:23:29.280 --> 00:23:38.280 Now, he said this trying to argue that IP rights are justified. Now, but for tangible things, the creation actually does not – is not the source of the right. 179 00:23:38.280 --> 00:23:43.280 He already owned the tangible things, so he's wrong. So creation is not necessary for that. 180 00:23:43.280 --> 00:23:49.280 For intangible things, I think he's just begging the question. I mean that's the question. 181 00:23:49.280 --> 00:23:55.280 So as Rothbard has argued and Hoppe has elaborated, there are no property rights and values. 182 00:23:55.280 --> 00:23:58.280 You have a property right and the physical integrity of your property. 183 00:23:58.280 --> 00:24:04.280 To have a property right and the value means you have a right to what other people believe or assess or feel about your own property. 184 00:24:04.280 --> 00:24:13.280 You don't have that right. It's the same reason Rothbard denies reputation rights, and it's the reason that Randians uphold reputation rights. 185 00:24:13.280 --> 00:24:21.280 So you don't have the right to what someone else thinks about you, so you don't have a right to your reputation, not directly. 186 00:24:21.280 --> 00:24:29.280 Now, in my opinion, patent and copyright – and from practicing from the inside, I mean I'm astounded when people think it could have arisen in the common law system. 187 00:24:29.280 --> 00:24:35.280 It's literally inconceivable to me, literally. I mean no more than the Americans with Disabilities Act could have arisen on the free market. 188 00:24:35.280 --> 00:24:43.280 It's just – I mean it's probably easier for monkeys to type Shakespeare. 189 00:24:43.280 --> 00:24:49.280 So think about what it would require anyway. It requires a state. It requires legislation, which is artificial law. 190 00:24:49.280 --> 00:24:54.280 And it would also require a government agency or bureaucracy to administer this program. 191 00:24:54.280 --> 00:25:00.280 I had a debate with an objectivist attorney, Murray Frank, and I made this point, and he said, no, no, no. 192 00:25:00.280 --> 00:25:07.280 He goes, I think they could arise on the common law, but even if they couldn't, there's no reason – there's nothing wrong with legislation. 193 00:25:07.280 --> 00:25:16.280 In fact, the same judges that make wise common law choices can use the deductive reasoning blah, blah, blah to legislate laws that legislate universal laws. 194 00:25:16.280 --> 00:25:24.280 I mean I don't know if this even needs a comment. I mean look at our government. These guys are supporting what the legislation does. 195 00:25:24.280 --> 00:25:35.280 And this is a recent one too. This is just kind of a side point. Another objectivist had something about producers deserve to be rewarded handsomely for their efforts. 196 00:25:35.280 --> 00:25:48.280 and this focus on labor and reward. Now, it makes you think, well, if labor deserves a reward, if you labor to create a statue or a book, like some objectivist book or something that doesn't sell enough. 197 00:25:48.280 --> 00:26:01.280 What if the copyright is not enough to give you enough profit? What if the patent is not enough to stimulate – what if you can't sell your bird-flipping symbol with a patent monopoly? 198 00:26:01.280 --> 00:26:05.280 But it's ingenious. You should be rewarded, so there's going to be an underproduction of labor. 199 00:26:05.280 --> 00:26:09.280 So actually there have been – I've seen four or five proposals in the last couple of years. 200 00:26:09.280 --> 00:26:19.280 The government should establish a board which has a panel of experts, which uses taxpayer-funded money to give awards to people that have ingenious inventions. 201 00:26:19.280 --> 00:26:26.280 It's sort of like a government MacArthur award or something. Stiglitz suggested this literally just in the last couple of years. 202 00:26:26.280 --> 00:26:34.280 A couple years, a medical prize fund to give large rewards for cures or vaccines that could be funded by governments in advanced industrial countries. 203 00:26:34.280 --> 00:26:41.280 So I think that this focus on rewarding labor leads to all kinds of the statist measures. 204 00:26:41.280 --> 00:26:49.280 Now, how's my time doing? Okay. My suggestion would be to abolish the patent and copyright system. 205 00:26:49.280 --> 00:26:57.280 I'll just flip through a few more modest reforms. If you could do a few things that would reduce the harm the most, I would say reduce the patent term. 206 00:26:57.280 --> 00:27:06.280 That would be the first thing. It's 17 years approximately now. Go down to five or seven years. Amazon CEO Jeff Bezos even proposed a three- to five-year term for business method and software patents. 207 00:27:06.280 --> 00:27:12.280 Remove patent injunctions. This is a little inside baseball because you have to understand why it's a bad thing. 208 00:27:12.280 --> 00:27:19.280 That's a bad thing, but if you're sued for a patent infringement, you can be shut down, not just forced to pay royalties. 209 00:27:19.280 --> 00:27:26.280 To me, that's bad enough to have to pay royalties, but at least if it was just a tax. You could pay the tax. It would hamper the economy a little bit, but you wouldn't be shut down. 210 00:27:26.280 --> 00:27:36.280 And remember, that's why I said that the Blackberry maker was shut down. I have some other proposals too. This is going to be in another paper I'm working on right now. 211 00:27:36.280 --> 00:27:43.280 But there should be a prior use in independent inventor defense too. Under the current law – and this is where Ayn Rand got this wrong by the way. 212 00:27:43.280 --> 00:27:50.280 She was defending something. She misunderstood the patent system, and she was at pains to defend what she misunderstood. 213 00:27:50.280 --> 00:27:56.280 She thought we had a first-to-file system, which most countries do. First one to the patent office beats another guy who came up with the same idea. 214 00:27:56.280 --> 00:28:07.280 Actually, in the American system, it's the first to invent who wins. So she came up with all kinds of reasons why it makes sense for the American system to reward the first to file, which we don't do. 215 00:28:07.280 --> 00:28:18.280 But under the current system, someone who invents something first in secret, however, it never files a patent on it. Or if you invent it independently later, you can be shut down by someone with a patent. 216 00:28:18.280 --> 00:28:26.280 So I think this could be provided for with a prior use in an independent inventor defense. This is inside baseball a little bit. 217 00:28:26.280 --> 00:28:37.280 Right now, when you file a patent application, it's published at 18 months after you file it, if you don't promise not to file it internationally, some exception. 218 00:28:37.280 --> 00:28:45.280 The idea is that – in fact, the patent system was meant to encourage inventors to publish their ideas, not necessarily to invent, but to publish. 219 00:28:45.280 --> 00:28:51.280 So the idea is there's a bargain. We're going to give you a temporary monopoly, and you have to publish everything to the world. 220 00:28:51.280 --> 00:28:55.280 So why is there an 18-month delay? It makes no sense. I think they should be published instantly. 221 00:28:55.280 --> 00:29:01.280 Give people notice that they're stepping into a minefield if they're infringing on your patent. 222 00:29:01.280 --> 00:29:07.280 Right now, there's willful damages. You can – damages can be as much as trebled if it's willful infringement. 223 00:29:07.280 --> 00:29:12.280 I think that should be abolished because it's punitive, and other requirements too. 224 00:29:12.280 --> 00:29:21.280 And there's some similar reforms I would suggest for copyright in addition to abolishing it. Reduce the term from infinity to a five to ten years. 225 00:29:21.280 --> 00:29:38.280 And require active registration. Right now, like I said, it's automatic. So it's impossible to determine who owns a copyright, whether there is a copyright quite often, especially for Orphan Works, which the Mises Institute deals with this problem quite often. 226 00:29:38.280 --> 00:29:49.280 So these are some reforms I would suggest. Also, get rid of the digital millennium copyright acts of criminalization of anti-circumvention technologies. 227 00:29:49.280 --> 00:29:59.280 Crazy. People copy, not machines. So – and one other reform I was – I think we should change the name of intellectual property. 228 00:29:59.280 --> 00:30:12.280 It's – intellectual property is a little too glorifying. I remember when I first started working in a law firm in Philadelphia, this old attorney got on the elevator with me, and he said, intellectual property, we're all intellectual, something like that. 229 00:30:12.280 --> 00:30:28.280 I'm like, okay. UIP guys aren't so smart. He was crusty. But – okay, so intellectual is a little bit of a positive term, so let's get rid of that. Property also has positive connotations, right? 230 00:30:28.280 --> 00:30:34.280 connotations, right? Now, there's an IP advocate named J. Neil Schulman, which most of you probably know of. 231 00:30:34.280 --> 00:30:41.280 He has an idea called logo rights. I think it's a little bit extreme on the wrong side, but the term is interesting. 232 00:30:41.280 --> 00:30:48.280 Logo in the Greek meaning pattern. We don't want to use the Greek word. Rights has positive connotations. 233 00:30:48.280 --> 00:30:59.280 I think what gets at the essence of what IP rights are, especially for patent and copyright, is it's a government-granted privilege that protects patterns. 234 00:30:59.280 --> 00:31:11.280 The pattern, the way your machine is designed, the steps you take to create something which is a recipe, or the pattern that describes a painting or a book or a music performance. 235 00:31:11.280 --> 00:31:16.280 So basically what IP is, it's a state-granted pattern privilege. 236 00:31:16.280 --> 00:31:27.280 So in conclusion, I would say down with the state, down with state law, down with legislation, and down with pattern privileges. Thank you.