Intellectual Property (IP)

General General Discussion
1

Earlier tonight a debate regarding IP came up between myself and two friends. Specifically, we were discussing whether or not it should exist at all; if an idea is an actual thing that can be owned by one person. Many good points were made on each side and needless to say, nobody convinced anyone else to change their mind. Now I know we have a lot of intelligent people on this board and many who actually deal in this with their line of work (any manufacturer who invents a new product or wants to make one similar to someone else’s) so the question I have for all of you is simply put, can you own an idea?

My personal take on the issue is that no, you cannot. An idea is not a scarce good. By me knowing the same thing you do, even if you thought it up first, I take away nothing at all from you. Similarly, by using that idea for productive means, I still take nothing from the originator of the idea.

Going the other way though, if one can claim ownership over an idea and prevent me, by force of law, from using that idea for my own gain, they are claiming possession over a portion of my actual, scarce, property. For example, if I figure out how to manufacture a Glock, and I have all the parts and tools required to do so and I decide I’m going to start cranking them out and selling them at a cheaper price, under the current laws, Glock could step in and stop me from doing so. What gives them or anyone else the right to tell me what I can and cannot make out of my own property though? And why is it that they can say who I can sell my property to after I transform it in any way I desire? It seems to be completely contradictory to property rights. IP laws claim a non existent scarcity over an idea and give its ownership to someone just because they create it while simultaneously taking away my right to do whatever I damn well please with the property I own.

Additionally, it seems to me that IP laws are detrimental to innovation and progress as well. If I was able to do what I described above with the manufacturing of Glocks, it would force Glock to innovate in order to compete. Seeing as Glock is the creative force to begin with, the innovator, then they will likely be able to innovate once again to stay on top of the market. If not, if they were simply a one hit wonder with a single good idea before their intellectual capacity ran dry, then they would at least need to start producing at a lower cost or they would go out of business.

This is simply my opinion on the matter and its one that is somewhat difficult to figure out. I would love to hear what the rest of you think on the issue and welcome any debate regarding this topic. Its one that I am currently trying to gain a firm grasp on and seeing what other people think about it is always helpful in forming that understanding and belief.

2

Really, IP? Why not take on something simple like religion. :wink:

On the face of it your example isn’t the best. I don’t think you could patent a ‘glock’. You could patent the operating mechinism, some trigger feature, how the frame is made- and I think the key is that is has to be new, useful and different (i forgot the real terms).

I think your real issue is that people get patents for things that aren’t really that new or innovative. I think the patent offices SMEs have not really been up on the state of the art in a lot of fields. Non being a very imaginative lot of people, they give out patents for things that people in the field wuld say ‘duh’ to. We have had people get patens for applications that use our raw material. We have been touting that application for ten years, but for some reason the patent office can’t find prior art using two word search terms in google.

Just a laymans view and experience with it, it is becoming more a part of my job. What to patent, how to get around patents and such.

3

Completely the opposite is true. If I thought the world needed something called a wiget. If spend time and money to design, test, and manufacture the product only to have you copy my design and then sale it, you have removed any incentive for me to develop it.

4

Exactly.

For the same reason that music isn’t free, books aren’t free, and drugs aren’t free - if there’s no incentive to come up with something new, there won’t be much development of new products.

Would you work for free? But that’s different, huh?

5

It seems like it would be difficult to prove, in court, the difference between two original ideas and someone copying an original idea. I see what you’re saying about owning an idea, but I also see the point of the people that pay me to create original things. They’d certainly like to see a return on my salary.

6

[quote]it seems to me that IP laws are detrimental to innovation and progress as well[quote]
Actaully the exact opposite is true. With out IP laws innovation and progress would be stymied. Why should anyone try to come up with a better mousetrap when there will be no gain for doing so? Oh sure you could do the whole “betterment of your fellow man” argument, but that really only works in fictional utopia. Like Gordon Gecko said, “Greed is good”. Greed is the engine that drives ourselves to be better. Greed is the reason why I will put my time, energy, and resources into designing a better mousetrap. Why? Because I know that at the end of the day it will pay off for me and I wont also have to worry about running my garbage route at the same time. However if there is no way for me to capitalize on what I have done, then why do it?

7

Having an idea is good; doing something with your idea is what counts.

8

There is no provision in the law for ownership of a bare idea.

Patents: protection for an invention (article of manufacture - product, composition of matter - such as a pharmaceutical, process - such as a way of growing the epitaxial layers of a semiconductor chip).

Copyrights: protection for the creative expression in a work of authorship (such as book, play, song, sculpture, etc.). Does not cover facts or ideas in the work.

Trademark: protection for words or logs which designate the source or origin of a product. Example: Tide(r). Does not cover generic words in the English language.

Trade secret: information not generally available to competitors which gives a company a competitive advantage. Example: formula for Coca-Cola. Does not protect against reverse engineering.

Are ideas used in all forms of IP? Yes.

Do any of the forms of IP protect a bare idea? No.

Does IP impede progress? No. It encourages progress by rewarding those who invest in research and development. Compare the economic state of countries that do not protect IP well (Central and South America, Africa, much of Asia) to countries that offer strong protection for IP (USA, Europe, Australia, Japan). IP is crucial to development of a nation’s wealth.

9

if you’re innovative enough to figure out a better or cheaper way of manufacturing Glocks, why not come up with your own gun design?

as others have pointed out, copying does not foster innovation. instead, it discourages it.

An idea is not a scarce good. By me knowing the same thing you do, even if you thought it up first, I take away nothing at all from you. Similarly, by using that idea for productive means, I still take nothing from the originator of the idea.

an idea isn’t a scarce good - everyone has ideas all the time. GOOD ideas are scarce goods (relatively speaking - compared to the number of overall ideas that people come up with). if an idea is put to use to produce goods, someone else using that same idea takes away business from the originator by becoming competition.
so, while two competitors can independently come up with the same idea, the one who does something with it first (assuming it’s something that can be protected) will reap the benefits. the guy who didn’t do anything with his idea will need to move on and innovate and come up with something better.

i believe that IP fosters innovation - if all ideas are ‘shared’, then the cheapest producer comes out on top. the goal then becomes cheap production instead of product innovation. that’s easily solved by making it where they don’t pay people as much.
protection of IP forces people to think about different ways of coming up with new products.

10

In general the idea of IP is good.

Implementation-wise there have been lots of mistakes and lots of patents given that were bad.

I am in the software field and this is one area where lots of patents get given that should not have been given.

There are lots of patents out there that are on “ideas”. They are not on items or processes like they should be. Lots of software patents (and probably some patents in other fields) are so general and nebulous and do not show the processes involved in any meaningful way that they do cause problems.

(An example of a bad SW patent is the “one click” purchase patent that Amazon has)

They also now give patents on “business methods” or something similar to that. That is how the “reverse auction” “name your own price” patent got awarded to priceline.com. Other similar business method patents have been given which IMNSHO are abuses of the patent system.

But a problem with the patent process does not mean that patents are bad in and of themselves. We just need to fix the process of granting patents so that fewer bad patents get issued.

Patents are only good for something like 17 years so it keeps people on their toes as they have to keep being innovative in order to have superior stuff that no one else has.

11

I see lots of good points here, as I expected. I’ll do my best to present my side and respond to these points after class today.

12

Ok so it took me longer to get to this than I expected but here we go.

I saw books, movies, etc. mentioned. A hard copy of a book or an actual dvd movie of course is not free because the paper or disk is in fact a scarce good. However, If I want to take a copy of a book that I own and run it through a copier to give out to all my friends, who are you to stop me? I own the book, the pages that make up the book, and the ink on all the pages. All of it belongs to me and as such I should be able to do whatever I want with it.

The free transfer of these books can also be helpful for business as the Mises Institute has shown. Almost every book they sell on their site is also offered for free as a pdf file right there on the site as well. They state that since putting the books up for free, sales of them have actually increased, helping out their business.

Another person mentioned that good ideas are scarce but I think we need to take a closer look at what a scarce good is here. A scarce good is something that has a finite quantity. Because of this basic fact, not everyone can have the good and it therefore has an intrinsic value. A nonscarce good is something that can be replicated infinitely without ever degrading the original. An example of this is a thought or a digital file. These can be shared with everyone on Earth without taking it away from anyone and therefore is what is known as a “free good”.

Jefferson said on this principle,

If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property.

Now once we have established that an idea is not scarce, the next step is the practical replication of these ideas. Once again, if I have all the metal and plastic required to make say a pistol, and I have the tools to actually turn the basic materials into that pistol, and of course I have the knowledge of how to make it (from measuring each part individually or by whatever other means) why can I not turn MY materials using MY labor into a M&P or a Glock? Do I own the materials or not? If I do then the answer should be pretty clear.

Finally we come to innovation. Look at what patents and the like have done with innovation. ARMS is able to simply sit on their asses and make money by suing people over patent infringements. If someone comes along and takes an existing idea, makes changes they see as improvements, and then tries to sell it, they can be sued for the same thing (S&W Sigma ringing any bells?) These patents discourage new firms from innovating because if they cant afford to dick around with patent laws, they better stay away from any existing technology even if they could improve on it and make a better product for consumers.

They also prevent companies from innovating on their own products because there is no need to, nobody else is going to and put any competition on them. After all, they have a twenty year monopoly on the product and anything very similar. James Watt for example was able to prevent other engineers from developing and improving on the steam engine all because he had a patent according to IP lawyer Stephan Kinsella.

Additionally, there are many costs that come with patents that firms could be using to innovate. All the money they have to spend to build up patents and pay patent attorneys to defend against other companies and their patents and patent attorneys for example.

So what good do these laws serve? They destroy property rights. They artificially grant “scarcity” to what should be a free good. They stifle innovation from both the original innovator as well as would be competitors. It seems to me that they do the opposite of what they were intended to do.

13

Ahhh But that is where you are wrong. You do own that copy of the book yes, but you don’t own the ideas in that book. When you purchase an item you are entering into an agreement with the seller. When you purchase books, CD, etc a part of that agreement is that you are not going to copy it and give it away because you don’t have the rights to that idea to do that with.

That is the gist of Copyright law. You own X number of the physical media and can do whatever you want with that. But you can’t turn it into X+1 copies of the physical media and start doing other things with it like giving away or selling the copies.

Now don’t get me wrong, the law is antiquated and needs to be fixed. But the core idea of it is still sound.

14

You’re all messed up.

Here’s a better example: Do you have any idea what it costs to get a drug from an idea to approval and to the market? The average is $802,000,000.00.

How about the fact that for every drug that does make it to market, 5,000 (that’s right, 5,000) have to be discarded for lack of efficacy or other problems? That means that the drug that DOES make it to market not only has to recoup its own R&D costs, but the costs for the other 4,999 drugs that didn’t make it.

So after a company spends 802 MILLION dollars on one drug to get it to market, they have to make back that 802 MILLION dollars before they can make a dime on it - and here’s the kicker: Patent protection only lasts 20 years. A drug is typically patented for around 10 years by the time it gets to market, so the company has 10 years or so to make back their 802 million dollars and then make a little money on their investment.

Sooooo… Some Indian pharma company tools up and starts making the drug that the first company spent $802,000,000.00 to develop and bring to market without spending a dime other than setup costs, and they’re selling it cheaper because they don’t have to recoup their R&D costs. In your world, that’s perfectly okay.

In the real world, here’s what will happen: There will be no new drugs, because there is no incentive to come up with a new idea if some idiot with a chemistry set can start manufacturing whatever you come up with just because he can read. If you don’t understand why that’s bad, then I don’t know what to say to you.

15

if you copy a book and distribute it, you steal from the person who wrote the book, who depends on the sales of the book for a living. as kwelz said, you may own the physical book itself, but you do not own the content. like anyone who works to earn a living, the author has a right to get paid for his time spent writing the book.

the free transfer of books may help a business, but it can also hurt all the businesses involved with the sale of the book. are you okay with that?

ideas ARE scarce goods, and they DO have intrinsic value. you only have to look at coca-cola, KFC or companies that were built around ‘secret recipies’.

an ‘idea’ itself doesn’t get diminished or degraded when spread, but the benefits to the individual or company that spent THEIR money developing will be diminished or degraded. if there is nothing preventing that, then there is no incentive to create your own products - only copy other ideas.

if you have all you need to build a pistol, you can certainly build your own. but once you start SELLING it for profit, you then take away from the original designer/manufacturer. if you were allowed to do so freely, by choosing to do so rather than designing your own pistol, you have contradicted your arguement stating that patents and IP laws stifle innovation. the laws that prevent you from profiting from someone else’s work force you to think up new ideas and innovate.

patent laws don’t prevent innovation - how could they? in fact, patents a great database of ideas that are have been documented, that people can use as springboards for innovation - to build on and come up with new ones. the ideas are out there for everyone to see. when something is patented, everyone is free to see in detail what the idea is. the idea is basically described in minute detail. what the patent prevents is others from profiting from the original idea - not building on it and innovating.

if james watt wasn’t able to prevent other engineers from developing and improving on the steam engine, maybe we’d still be driving cars with steam engines. instead, someone was forced to think outside the box and come up with the internal combustion engine.

these laws don’t destroy property rights because you have no right to someone else’s property. what entitles you to someone else’s property? if a shoemaker makes his living from making shoes, and an author makes his living writing books, there is no difference between copying his book and giving it to someone else and going into the shoemaker’s store, stealing a pair of shoes, and giving it to someone else.

again, ideas ARE scarce goods. everyone has ideas. not everyone has ideas that work. the pharmaceutical industry that quietshootr brought up is a good example. for every drug that is brought to market, the company has spent millions getting there, trying out different combinations that didnt work etc.
part of the money earned from successful drugs work go back into research and development. if the formulas weren’t protected, what incentive would any company have to do any R&D instead of just manufacturing? progess would slow down, and grind to a standstill, as no company would be able to make enough to fund R&D.

protection of IP is no different from protecting the money you have earned in the bank from working or what you have bought with it. protecting ideas fosters and encourages innovation - it doesn’t stifle it or prevent it.

16

So you believe in theft? The content of the book are what make it unique. The paper and ink are immaterial to what the value of the book is. You are not buying paper and ink. You are buying the content. The ideas, thoughts, etc contained in the book.

The free transfer of these books can also be helpful for business as the Mises Institute has shown. Almost every book they sell on their site is also offered for free as a pdf file right there on the site as well. They state that since putting the books up for free, sales of them have actually increased, helping out their business.

That is nice for them but not transferable to all books. While there are lots of reasons for the decline in sales of music, copying of music is probably the single biggest reason. (That does not excuse the other bad business practices the music industry operates under)

Another person mentioned that good ideas are scarce but I think we need to take a closer look at what a scarce good is here. A scarce good is something that has a finite quantity.

A good idea is scarce under this definition. Not all ideas are good. Not all ideas are equal. Good ideas are scarce.

Because of this basic fact, not everyone can have the good and it therefore has an intrinsic value.

Again according to your definition content is a scarce good. With a minor tweaking of your wording, not everyone has (originates) good ideas, therefore good ideas have intrinsic value.

A nonscarce good is something that can be replicated infinitely without ever degrading the original. An example of this is a thought or a digital file. These can be shared with everyone on Earth without taking it away from anyone and therefore is what is known as a “free good”.

No. It cannot be shared with everyone without taking away from anyone (yes I know I left the word “it” out). The content itself has value and by sharing it you are diminishing the value of that content to the originator.

Jefferson said on this principle,

Now once we have established that an idea is not scarce, the next step is the practical replication of these ideas. Once again, if I have all the metal and plastic required to make say a pistol, and I have the tools to actually turn the basic materials into that pistol, and of course I have the knowledge of how to make it (from measuring each part individually or by whatever other means) why can I not turn MY materials using MY labor into a M&P or a Glock? Do I own the materials or not? If I do then the answer should be pretty clear.

Finally we come to innovation. Look at what patents and the like have done with innovation. ARMS is able to simply sit on their asses and make money by suing people over patent infringements. If someone comes along and takes an existing idea, makes changes they see as improvements, and then tries to sell it, they can be sued for the same thing (S&W Sigma ringing any bells?) These patents discourage new firms from innovating because if they cant afford to dick around with patent laws, they better stay away from any existing technology even if they could improve on it and make a better product for consumers.

They also prevent companies from innovating on their own products because there is no need to, nobody else is going to and put any competition on them. After all, they have a twenty year monopoly on the product and anything very similar. James Watt for example was able to prevent other engineers from developing and improving on the steam engine all because he had a patent according to IP lawyer Stephan Kinsella.

Additionally, there are many costs that come with patents that firms could be using to innovate. All the money they have to spend to build up patents and pay patent attorneys to defend against other companies and their patents and patent attorneys for example.

So what good do these laws serve? They destroy property rights. They artificially grant “scarcity” to what should be a free good. They stifle innovation from both the original innovator as well as would be competitors. It seems to me that they do the opposite of what they were intended to do.

They do not destroy property rights. They uphold property rights.

There is abuse in the field but that abuse does not invalidate the whole regimen. We need to correct the potential for abuse not kill the system.

As someone who is in the SW industry, I certainly would not create new SW if people could freely copy it without buying it.

Your system would lead to no new movies, music, books, etc because those who create them would never get just compensation for their work.

17

This is what I am talking about, NOBODY owns the idea. You cannot claim ownership over something that does not have a finite quantity. What I do own however is all the actual scarce goods that make up that book and all the goods required to copy it. Why is it that someone else can take away my right to do whatever I want with those materials that I own just to protect some imaginary nonsense about an idea being a scarce good that they can own?

18

You should read your own sig line very closely.

What do you do for a living?

19

Yes actually you can. Without a way to protect ideas you have no reason to progress. If I come up with a radical new design for a way to produce power, but I have to give it away for free then why should I even bother? Once the idea is out there everyone else could just copy it and do whatever they wanted.

By copying that CD, or book, or movie and giving it to others you are stealing from the creators of those products. Not the physical medium but the actual work recorded on those medium.

20

You’ve spent a lot of time talking about the philosophical idea of ownership of an idea. I think we understand your take on that. What do you have to say about the drive to innovate under your rules? How would you feel if someone simply copied what you spent hundreds of thousands of YOUR dollars to create and started competing with you? They’ll make more money than you did on your own idea, since they spent almost nothing copying it. Why would you create the thing in the first place if you couldn’t reasonably expect to make any money on it?