The absurdity of IP law never ceases to amaze

lightbulb_07Yeah, the little guy socked it to the big guy!  Well, not really.  The real little guy, that’s you, Joe Sixpack, gets denied access to technology because the state enforces erroneous IP laws on non-scarce, baloney notions of property.

In plain language: Some small nobody came up with a clever idea, used state granted monopolistic privilege to block others from using this idea, and you’re the poor sucker who a) can’t use the improved products or b) must pay higher than market-related prices for them if you want to use them.

As the article blithely states,

“Microsoft now only sells versions of the word-processing software that do not contain the technology.”

Mmmm, awesome. So half the planet isn’t using it then?  Great invention!!

And the small nobody who came up with the idea?  Oh he’s doing just fine…

“Microsoft has lost its final appeal against a judgment ruling that it must pay a small Canadian company $290m (£177m) to settle a patent dispute.”

But, you may ask, shouldn’t the inventor be allowed to secure income from his invention?  Tempting to answer yes, but alas…no.  The only income anyone “deserves” is when someone promises to pay them for a service rendered (and even then, just desert can only be claimed after the rendering of service).  The rest is what the market is willing to pay you or willing to agree to.  If I invent something that is easy to copy and replicate, I better not have any high hopes about profiting from it (at least not in a free society).

But somehow a lot of people, nay almost all people, don’t see how the lack of scarcity in ideas means we cannot confer upon them legitimate property rights like we can scarce goods.  When you drill down into the issue, you see that the world of IP law is one big arbitrary old boys club.

Deep down though I think us humans know this – at our core. We know that an idea can’t be ‘owned’.  Once shared, it is set free.  Free to influence and be influenced, free to change things and to be changed and modified and improved.  I say we know this deep down because all of us are constantly coming up with new and novel ways of doing things that we then readily share with others.  New recipes for dinner, a clever way of watering your garden using a bunch of random implements in the shed, a way to get your child to sleep better (vodka shots?).  We share these ideas because we know trying to turn them into profit making ventures is a waste of time, doomed to fail, and because we derive tremendous subjective utility from seeing these methods widely adopted by friends and family and even people we don’t know, and thereby adding value to their lives.

These ideas are easy to replicate, and quite frankly people wouldn’t see why they had to pay for them even if you did try to sell them and even if your idea was original.

But suddenly we get to that category of idea one rung above the kind I’ve just described.  It’s more sophisticated, maybe requires a bit of basic engineering and assembly, and actually makes life around the house much easier.  Now suddenly our inventor gets a rush of blood to the head.  He realises people might actually pay for this as making it themselves would be too costly and time-consuming.  So he starts a business manufacturing these delightful goodies, and they sell like hotcakes at the neighbourhood fair.

Then another bright spark, after buying the goodie, realises it’s a piece of cake to make (a piece of hotcake!), makes some of his own, and sets up a competing stall at the fair.  The original inventor seethes inside, “THIS IS MY IDEA, MINE, ALL MINE. ILLEGAL!! MY IP!!!”

But business no.2 has not stolen any resources to make his goodies, and nor in fact has he stolen any ideas, for the ideas were on display in the first goodie he bought, and he simply discovered by reverse engineering how it was made.  The knowledge now known, he took his own resources and fashioned his own goodie.  He then showed this goodie to someone, and that someone offered to exchange some money for this goodie, and he agreed to make this trade.

Is the original inventor worse off now that business no.2 is operating?  Well, it’s definitely become harder to sell as many goodies as before, but without any act of theft or deviousness on the part of business no.2, he hardly has a moral complaint.  Business no.2 couldn’t have stolen the idea because the product was freely sold to him.  And we surely cannot claim that business no.2 did something illegal by satisfying his curiosity and reverse engineering the goodie. And we certainly cannot bar him from using his own resources to make a similar goodie.  And because the resulting goodie is in every sense HIS personal property, it is surely not a crime either when he voluntarily exchanges it for apples, or a motor car, or for money.

But nonetheless, business no.1 will soon be off the patent office to register the ‘goodie patent’.  At next weekend’s neighbourhood fair, some policemen show up, confiscate business no.2’s private property and fine him and send him home with unpaid suppliers and labelled a criminal.

Suddenly goodie prices go up and business no.1 does fantastically well, even though fewer people can now afford goodies, meaning they go without as they once did, and life around the house gets harder again.

A few weeks later, an inventor of one of the components used in the goodie knocks on business no.1’s door with an order from the court, demanding back payment of royalties for the use of this intellectual property in the goodie.  The goodie cannot function without this component, and even though business no.1 could easily make the component himself, he’s not allowed to BY LAW because of the component patent.  So he reluctantly pays royalties to the component inventor, but this means less profit on his goodie sales, so he is forced to retrench his assistant and raise his prices.  One person is newly out of a job, and even fewer people can afford goodies.

Goodness, the awful world we have created for ourselves…




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