Intellectual Property: Enough, Already!

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Hours and hours and hours — that’s how long I’ve been listening to various writers expound on IP and the U.S. economy.  Their “thoughts” run the full range from idiotic to stupid.  One of the best so far: owners of IP should make their inventions available at a price of zero to anyone who agrees they will not compete with the inventor of the IP.  Such a vast misunderstanding of the ways technology impacts firms and markets is only possible among lawyers, writers, and politicians.

Let’s be clear about this: patents, copyrights, trademarks, and all the other IP protections in the U.S. only protect the specific expression of an idea.  You cannot copyright or patent an idea.  Only the specific expression of an idea can be protected.

For example, take this blog entry.  If you copy and paste the entire entry somewhere without changing a word, I could technically sue you for violating my copyright.  (Yes I own a copyright on this even without filing anything with the government.  Go read copyright law for a while.)  BUT if you copy this entry and change every third word, then post it, I no longer own the copyright.  You have stolen my ideas — so what?  The idea behind IP is not to protect ideas.  After all, most of us have far more ideas than we can possibly develop, explore, or even think through.  To obtain legal protection you must do the hard work.  That means writing, developing a product or process, creating an original art work, or creating a unique performance.  Ideas?  They’re overpriced at a dime a dozen.

IP protection is a bad compromise between economic efficiency (which advocates perfect competition) and the desire to encourage development of new products and processes (temporary monopolies).  In a perfect world each patent would be evaluated for its social benefit and the length of the patent granted would be proportional to social benefit.  In the real world, we grant patents for 20 years from the date of filing and call that a good compromise.  After all, in the real world no one really knows what direction an invention will lead you.  “If we knew what we were doing, we wouldn’t call it research.” (attributed to Albert Einstein).

Consider, for example, tamoxifen.  According to an admittedly imperfect source, tamoxifen was originally viewed as a possible contraceptive.  Today thousands of women are alive because tamoxifen is an incredibly valuable chemotherapy drug used to treat breast cancer.  Imagine if ICI (the company that first investigated tamoxifen) had granted the kind of license proposed above.  Clearly breast cancer drugs do not compete with contraceptives.  ICI would, in effect, have given away incredibly valuable IP under the idiotic proposal outlined above.  (Time for sources:  a letter to the editor in the Wall Street Journal dated Oct. 22, 2010 and titled “Tamoxifen Is [sic] an Example of a Patent-Settlement Drug.”  Currently available at http://online.wsj.com/article/SB10001424052702304741404575564431637850288.html?KEYWORDS=tamoxifen#articleTabs%3Dcomments. Good luck — the Murdochization of wsj.com has now proceeded to a point that the web site is almost completely useless.)

So all you pundits out there who are worried about the theft of ideas, relax.  Ideas cannot be protected under U.S. law.  For better or worse, anyone can sue anyone over anything in  the U.S., meaning that lawsuits attempting to protect ideas will continue to be filed.  I only hope that most judges know the law at least as well as me.

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About Tony Lima

Retired after teaching economics at California State Univ., East Bay (Hayward, CA). Ph.D., economics, Stanford. Also taught MBA finance at the California University of Management and Technology. Occasionally take on a consulting project if it's interesting. Other interests include wine and technology.