The Mickey Mouse world of intellectual property

April 24, 2016 § 32 Comments

I don’t have strong views about intellectual property. Modern understandings of property and commerce are perverse, immoral, and unreal. It seems likely that at least some of what IP law sanctions, asserts, and prohibits goes against the natural law. But I haven’t personally done the due diligence required to credibly advance particular arguments about particular laws or practices.

Generally speaking intellectual property has similarities to cash — once we have an adequate grasp of what cash actually is and is not.

The sovereign is, qua sovereign, the ‘owner’ of certain marketplaces: that is, he sets the terms upon which transactions are permitted and carried out in the marketplaces over which he is sovereign.

Cash – or more specifically, sovereign-issued currency[1] – entitles the bearer to engage in certain kinds of taxable transactions in the sovereign’s marketplaces. (People often use it for non-taxable transactions too, and in other marketplaces owned by different sovereigns: insulin is valuable for barter in trade by non-diabetics).

Fiat currency does not authorize all conceivable transactions, of course: various transactions such as selling yourself outright into slavery are not “allowed” (that is, enforced); and usurious contracts are allowed/enforced but should not be.

Intellectual property, then, is like a lease or easement in the sovereign’s markets. Leases and easements are a kind of financial security, that is, claims against property.  A patent permits the patent holder to sell the patented invention in the sovereign’s marketplaces, while forbidding other parties to sell the patented invention.  A patent, then, is a financial security; the property against which it entitles a specific claim is the sovereign’s marketplaces.

It is similar to Disney allowing only Starbucks to sell coffee in Disneyland.  When you are in Disneyland, you must commercially transact within the rules of Disneyland.


[1] Modern economists use the label “money” to refer to many essentially different kinds of security: actual paper currency, individual currency-denominated claims against the balance sheets of banks, bank claims agains the balance sheet of the Federal Reserve, etc etc.  All mainstream modern economic theories — Austrian, Keynesian, Chicago, MMT, Labor Theory of Value, etc — are metaphysically anti-realist, that is, are disconnected from reality and therefore insane and incoherent. In fact I am not personally aware of any metaphysically realist economic theory (an economic theory which competently distinguishes between imaginary reality and actual reality) at all, mainstream or fringe.

§ 32 Responses to The Mickey Mouse world of intellectual property

  • Mike T says:

    In its purest form, most IP law is fine. It is in the more advanced state that we run into problems. For instance, there is a trend of using IP and contract law to effectively cripple the degree of actual ownership a customer has over their purchased good. Typically, the vendor will claim that you have no ownership interest in the software that is required to make the product actually do what it is marketed for and thus you are at their whim of how to support it and use it (particular state laws notwithstanding). Vendors also increasingly work overtime to make it more difficult to repair the goods you buy. That’s one of the reasons why the smartphone market is in shambles compared to the PC market.

    There is a marked hostility toward ownership in many IP circles. In fact, it is probably safe to say that a great deal of the people that run the industries that produce IP as a primary product are very hostile to the constitutional stated purpose in Article II, Section 8 among other common good issues surrounding IP.

  • Zippy says:

    Mike T:

    For instance, there is a trend of using IP and contract law to effectively cripple the degree of actual ownership a customer has over their purchased good.

    Agreed. In those kinds of cases IP law is reaching beyond the regulation of transactions in the sovereign’s marketplaces.

    Tentatively, if the justification of IP is that it involves a grant of easement or the like in the sovereign’s marketplaces to a private party, then extending that to regulate use of purchased property could be a form of property theft — unless that regulation-of-use by a private party were grounded on some other basis entirely.

  • CJ says:

    The “pro-IP” answer on the software issue is that they are only licensing its use rather than selling it. Its like Uhaul renting you a van at an in town rate, and you drive it to Burning man. They never relinquished ownership, just usage under a certain set of conditions.

  • Zippy says:

    CJ:

    I understand that, but again that involves – because software (for example) and ideas or techniques are not physical objects – the specific regulation of the behaviors of one private party by some other private party. It is not regulation of transactions in the sovereign’s marketplaces, and it is not restriction on the use of an object owned by another person: it is something categorically different.

    There is no question that the sovereign may regulate the behaviors of private parties through criminal law. Whether the sovereign’s authority to criminalize private behavior can be delegated to a private party is a different question though from whether the sovereign can grant exclusive license for the sale of particular goods and services in his marketplaces.

  • CJ says:

    There’s definitely a materialistic side to the anti-IP argument that contributed to my rejection of it, although I can still be convinced otherwise. But I first encountered the anti IP argument with a libertarian argument against defamation laws (because you don’t have a right to be thought of a certain way). The two are linked in a bad way in my mind.

  • Zippy says:

    CJ:
    I think it is true enough that without a robust understanding of authority it is impossible to talk coherently about the limits of authority. Only discriminating authoritarians can resist tyranny.

  • The argument I would make for why IP law (as actually practiced, not some completely hypothetical set up that at some level resembles the current one), is that it is a use of state power to pursue the private good of individuals, rather than the common good. It allows private parties to impose taxes on the sovergien’s marketplace and use the proceeds for their own enrichment.

  • Zippy says:

    ArkansasReactionary:
    I have little doubt that some or even the majority of current practices are morally wrong. But you do seem to presume, in your criticism, that the common good and the benefit of particular individuals are orthogonal: that is, that pursuit of the common good is possible without any express favoritism toward particular individuals. That kind of rhymes with the modern conceit that metaphysically neutral politics is possible.

  • Not at all, I only presume that the common good and the private good of individuals are distinct.

    It’s certainly the case that particular individuals can be benefited by the same acts that benefit the common good (e.g. A king receiving taxes which support among other things himself and the royal family), but the issue with IP is that there is no obligation for the taxes it imposes to be put to the common good, as the holders of IP generally do not have any special duties to the common good (unlike e.g. a king).

  • Zippy says:

    So IP rights for aristocrats are acceptable?

  • If an aristocrat (or a bureaucratic state for that matter) has responsibility for a jurisdiction, then yes, he may acceptably tax the market there.

  • Zippy says:

    What if things aren’t so formal?

  • Zippy says:

    For example, is only a monolithic and uniform bureaucracy morally acceptable?

  • You misunderstood me. I wasn’t saying that a monolithic bureaucracy would be the ideal, I was just saying that in this case the same reasoning that would apply to an aristocratic ruler would also apply to a bureaucratic state. I consider the latter to be inferior though.

  • Zippy says:

    In case I am being too oblique in my reply to ArkansasReactionary: I suspect that the basic problem is not that IP (which is not a tax: it is limited exclusive access to the sovereign’s marketplaces for specific products and services) benefits the mythical autonomous individual unfairly. The problem is, in the first place, the myth of the autonomous private individual who has no co-responsibility for the common good. It is the anti-subsidiarian myth of a monolithic public authority strictly orthogonal to everyday “private” life.

    Who is to say that Bill Gates is not by nature the Baron of Microsoft Products?

    The contention that IP is morally wrong because it benefits “private individuals” is entirely too pat and modernist in its background assumptions.

  • “A tyrannical government is directed not to the common good, but to the private good of the ruler” St. Thomas Aquinas

    To be clear, I’m not using this as a proof of my main point, only to show that the distinction between the common good and private good is not modernist.

    Anyway, while everyone has an abstract duty to the common good, real direct responsibility for the common good does not rest with everyone. And I haven’t asserted anything about authority being monolithic, that is entirely something you’ve read into my posts.

    Also, IP royalties, which are the subject of my point, are a tax. And “Microsoft Products” is not a community.

  • Zippy says:

    AR:

    To be clear, I’m not using this as a proof of my main point, only to show that the distinction between the common good and private good is not modernist.

    That has never been in contention.

    Also, IP royalties, which are the subject of my point, are a tax.

    No they are not. Royalties are part of an agreement between the IP owner (or “owner”) and a reseller or resellers. It is not the case that anyone may sell (say) Microsoft Windows or a particular Pink Floyd song, but when they do they have to pay the “tax”.

    Characterizing IP as a tax is a category error.

    And “Microsoft Products” is not a community.

    The collection of people who make, provide, support, and use Microsoft products is certainly a community of sorts; unless you have a monolithic view of community such that a given person only ever belongs to one community.

  • Perhaps it’s more analogous to fee that has to be paid to obtain a business license. Either way, the point is that it’s an exaction that’s charged on the use of the marketplace.

    Let me rephrase regarding Microsoft. Microsoft’s delegated authoirty (which authority is sovergien in nature, being a delegation from the sovergien) to regulate the production of Microsoft products is in force across the entire country (also in other countries but that’s besides the point), so the royalties gained should be applied to the common good of the country generally.

    And I don’t hold that “Microsoft purchasers” isn’t a real community because its members are members of other communities, but because it doesn’t have the quality of a real community, as it’s an inherently unstable grouping of people (all the time people buy Mucrosift products who haven’t before, or buy them once and only once, etc.)

  • Zippy says:

    Even very fleeting communities, such as a group gathered for a retreat for the weekend, are still communities. And that IP involves authority granted in sovereign marketplaces is of course true: I say it right in the OP.

  • It technically being a community doesn’t change the point. The common good doesn’t mean “the good of any community”, it refers to the good of the community that is the subject of the sovergien in question.

  • Zippy says:

    AR:

    The common good doesn’t mean “the good of any community”, it refers to the good of the community that is the subject of the sovergien in question.

    Sure. And… ?

    Does the Microsoft community receive no benefits from the activities of Microsoft? Do no other communities receive any benefits from the activities of Microsoft? Is the common good not furthered in any way whatsoever by the activities of Microsoft?

    If Bill Gates is by nature the Duke of the Microsoft community of employees, users, maintainers, etc, it seems as though the problem is not so much that Microsoft has exclusive rights to sell the software it developed in sovereign marketplaces as that its public responsibilities – its responsibilities to the common good and its constitution qua community – may be misconceived.

    In any event we are a long way from the false dichotomy of “a use of state power to pursue the private good of individuals, rather than the common good” (emphasis mine) at this point. The common good and the private good of individuals are distinguishable, but they are not mutually exclusive.

    And if they are not mutually exclusive then a general objection to IP (as opposed to criticism of some specific practice) on the grounds that it is “a use of state power to pursue the private good of individuals” falls apart.

  • Mike T says:

    It would probably make things easier if we broke “IP” up into the three main areas:

    1. Patents, which are grants of formal protection from unauthorized competition via a replication of a process or idea.
    2. Trademarks, which are primarily an anti-fraud mechanism intended to link a particular brand with a word or phrase.
    3. Copyright, which is the attempt to turn a particular media property into a form of artificially scarce property that can be bought and sold like a consumer good.

    The real problem for society comes primarily from copyright law because it is quite often extremely draconian and intrusive upon physical property claims. For example, sharing a single song online can warrant more statutory damages from federal law than a smash and grab of 5 copies of a CD from a store. There’s also the DMCA’s anti-circumvention rules which are very harsh and make things as simple as breaking the encryption on a DVD so you can make an iPad-appropriate copy for your kid into a felony. Simply making a media player that cheerfully ignores those aspects of the technology, such as allowing unfiltered access to a HDMI data stream makes you as a vendor liable for all sorts of grief. Several companies have been bankrupted because of how consumers were able to use their products.

    The “pro-IP” answer on the software issue is that they are only licensing its use rather than selling it. Its like Uhaul renting you a van at an in town rate, and you drive it to Burning man. They never relinquished ownership, just usage under a certain set of conditions.

    Bear in mind that the software industry, much like banking, operates on a model that uses a lot of bait and switch between “salt of the Earth understanding” and their legalese. Just like the banks use formal law to get into a “no, it’s not really your money it’s a……” while promoting the common notion “it’s your money, we just hold it for you!” outside of the legalese, the software industry goes out of its way to make the act of buying software feel like buying a physical good from Wal-Mart. Can’t even remember the number of times I’ve had to explain to people who see a shrink-wrapped “educational version” sold like it’s a normal product that it is technically illegal for them to use that for business even though there is no effort to enforce the contract up front.

    It’s a real eye opener for a lot of people when they find out just how devious a lot of enterprise software licensing is. The amount of #$%^ that vendors will put a company through so they can come in later, audit them and bludgeon well-meaning businesses with scare tactics is outrageous. One of the things that’s been a real boon for them is switching to models like “per-core licensing” and adding special terms for virtual machine installations. By the time companies are done, it feels like holding a pot of money from the politburo in a communist country.

  • Mike T says:

    Another thing, CJ, is that under existing IP law it is not even obvious to the extent that you could legally reverse engineer and clean room replace some of the software in some of these systems. IP law is increasingly totalitarian. Even messing with someone’s IP so you can understand it and replace it is not straight forwardly legal anymore in some scenarios. The various industries involved are also fighting to increasingly make it that way. So when John Deere stops supporting the software in your vehicle, but the hardware is fine better hope you don’t need a patch. Like, you know, someone decided to leave the Bluetooth system hooked into the transmission and someone thinks it’d be really hilarious to drive your vehicle around the field like a mad man.

  • Zippy says:

    Mike T:
    Trade secrets are another legally protected category. Choosing between trade secret and other IP approaches can be a dilemma, because patents and copyrights expire whereas trade secrets never expire.

    There is definitely a trend away from ownership and toward ‘licensing’, which allows vendors to sell you something without actually selling it to you: they retain a kind of poison-pill ownership of the software which renders the property useless unless you pay ongoing rents or fees. I intuitively expect that this in some cases involves, to borrow Aquinas’ terminology, selling things twice or selling what does not exist: not usury per se, but certainly a property injustice in the vicinity of usury.

  • Mike T says:

    This is one area where open source software is really bringing some sanity and justice to the situation. Most critics are only really cognizant of the GPL which is more “leftist” in some of its planks, but unaware of the Apache, BSD and MIT licenses which are very pro-market. One thing they all have in common is an attempt to turn IP law into a mechanism by which ordinary users have as much ownership as IP law will allow.

    A very interesting facet of open source development is that a lot of companies have realized that they can “dual license” software and keep everyone happy. Typically, the company will allow you to use the full product under an open source license if that is how you want to use it. If you WANT to enter into a proprietary relationship, they have a mechanism to do that which would allow you certain freedoms that open source licenses often don’t allow. A common case for that is you are building a product you want to sell, but don’t want to be at risk of having to release anything you wrote that touches the open source licensed code. As a general rule, I’ve never heard of such companies abusing their licensees the way Microsoft, Oracle and others often do.

  • Mike T says:

    An excellent example of the danger of this license model is what happened with one of Nest’s product lines. They just bricked an entire product line and effectively told their users to piss off when it comes to forking the code and keeping their products working. So now they have a very fancy $300ish door stop/hockey puck where a home device management system once worked. Because IP law.

  • Zippy says:

    Open source hardware is interesting too, though still very much in its infancy. A Raspberry Pi based home-made phone isn’t quite up to snuff with the Apple/Droid hegemony — yet.

  • Zippy:

    Again, my criticism is of IP as it is actually practiced in the real world. Arguing that some completely hypothetical version of it could be just is a red herring.

    Under current IP law, there is no understand, explicit or implicit, that IP owners have any duties.

  • Zippy says:

    AR:
    I understand that; but I take issue with the principles you invoke in your criticism.

    A great deal of modernity involves nature asserting herself anyway beneath the surface of modern sociopathy. The OP is about general concepts and realities, not specific current practices, and deliberately so. If your comments in no way address, involve, or invoke general principles, concepts and realities, then they are off topic.

  • Fair enough. I’ll state my position more consisely:

    The imposition of taxes, fees, royalties, etc. on the sovergien marketplace, is licit only if they are in principle and practice directed to the common good.

  • […] the “owners” really own is exclusive leasing rights: a kind of financial security.  That isn’t nothing, but there is much less there than meets the eye. Real estate “ownership” where there […]

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