IP – Is "Intellectual Property" a Misnomer?

At Slate’s “Jurisprudence: The law, lawyers, and the court”, Tim Wu, Professor of Law at Columbia and a teacher of copyright law, has a nice October 17, 2005 article titled Leggo My Ego – GooglePrint and the other culture war, in which he makes the following comparison between the planned GooglePrint “book searches” and ordinary “maps”:

“Consider what it would mean, by analogy, if map-makers needed the permission of landowners to create maps. As a property owner, your point would be clear: How can you put my property on your map without my permission? Map-makers, we might say, are clearly exploiting property owners, for profit, when they publish an atlas. And as an individual property owner, you might want more control over how your property appears on a map, and whether it appears at all, as well as the right to demand payment.”

This idea by Wu mirrors the argumentation made by Larry Lessig at Lessig Blog:

“Property law since time immemorial had held that your land reached from the ground to the heavens. Then airplanes were invented — a technology oblivious to this ancient law. A couple of farmers sued to enforce their ancient rights — insisting airplanes can’t fly over land without their permission. And thus the Supreme Court had to decide whether this ancient law — much older than the law of copyright — should prevail over this new technology.

The Supreme Court’s answer was perfectly clear: Absolutely not. “Common sense revolts at the idea,” Justice Douglas wrote. And with that sentence, hundreds of years of property law was gone, and the world was a much wealthier place.”

The concept of “property by law” is as unnatural as it is thought to be natural. There was a day when nothing on the Earth was owned by anyone, prior to the emergence of Mankind. In the beginning, property was anything that could be defended as such. Indeed, most land property rights are rooted in the exercise of sheer force, the force by which a piece of property, at some distant point in history, was taken and occupied either from other men or from nature.

Let us take America as an example. Did Native Americans “own” all of the Americas just because they were there? And what about their own legends of having driven out other – former – groups from this property?

“As Europeans settled Michigan they crowded out the native Indian populations, destroying ancient burial sites and raiding them for treasures and artifacts. They were particularly fascinated by the burial mounds scattered throughout the state.

Even the native Indians claimed not to know who the mound builders were. Some recalled old legends that their ancestors had conquered and ousted an ancient evil civilization which had dug for copper and built mounds. “

So. Even in this traditional sphere of “real property claims”, there are no absolutes.

What about intellectual property?

If we look historically at copyrights, trademarks and patents, we find that in the good old days, there were no intellectual property rights at all. Rather, all of these rights are modern legal inventions which have dynamically expanded in the modern age.

Mark A. Lemley (William H. Neukom Professor of Law and Director of the Stanford Program in Law, Science and Technology) has an abridged article on Property, Intellectual Property, and Free Riding in the Fall, 2005 Issue of the Stanford Lawyer (Vol. 40, No. 1, pp. 34-39) which was originally published in the Texas Law Review, March, 2005.

Lemley writes that intellectual property law (IP Law) has nothing to do with common-law based property law as taught in the law books. Rather, IP Law is pure “statutory law”, created by legislation.

Lemley writes that “the basic economic justification for intellectual property law comes from what was only an occasional problem with tangible property – the risk that creators will not make enough money in a market economy to cover their costs“.

This original compensatory view, which was adopted to give holders of intellectual property rights a proper incentive to be creative, has recently mushroomed into a view “that creators will not have sufficient incentive to invent unless they are legally entitled to capture the full social value of their inventions“.

But that of course is a horse of a different color, which, in our own view, involves countervailing economic costs to society which are – thus far – not compensated for by the copyright holder (whereas e.g. real property holders have to pay property taxes).

According to Lemley, there are five such significant economic costs which attach to the granting of “overbroad intellectual property rights”. These are:

1. Market distortion, creating static inefficiencies (deadweight losses)
2. Dynamic inefficiencies, created by interfering with the ability of other creators to work
3. Socially wasteful rent-seeking behavior
4. Administrative costs
5. Distortionary overinvestment in research and development

In other words, or so we interpret Lemley’s view, if an intellectual property right holder wanted to capture the full social value of their inventions or writings, then that same holder should also be prepared to pay for the costs to society of granting that holder that full social value, costs which someone has to pay. Regretably, many intellectual property right holders do not see this aspect of the issue.

Of course, no one can capture the full social value of the works that they produce any more than they can pay for the costs to society which the protection of their work engenders. As a result, intellectual property rights are not absolute and permit a “fair amount” of “free riding”, of which something like “fair use in copyrights” would be a good example.

As Lemley writes:

“Granting intellectual property rights imposes a complex set of economic costs, and it can be justified only to the extent those rights are necessary to provide incentives to create. The economics of intellectual property simply do not justify the elimination of free riding.”

Lemley concludes that:

“Intellectual property law is in need of reform. Many of the problems stem from the association that lawyers and judges often make between intellectual property and real property. In fact, there are very few similarities between the two fields of law….”

“If people think of intellectual property as a form of property because of its name, then the name should probably go…let’s start talking about “IP.”

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