A Case for Perpetual Copyrights and Patents

Is there such a thing as intellectual property, which the state should protect by issuing or recognizing copyrights and patents? (The other principle type of intellectual property is the trademark, which is less contentious and not of interest here.)

I am aware of three plausible arguments against copyright and patent laws:

  1. Copyrights and patents are legal contrivances that enable their owners to extract artificially high returns (rent, in the jargon of economics) by slowing the proliferation of marketable ideas.
  2. It is impossible to “steal” an idea from someone. The person who first has the idea still has it even if someone else learns of and uses it.
  3. It follows that when A earns money by using his own idea (e.g., producing a song of his own composition, building a better mousetrap of his own design), B cannot rightly taken any of A’s earnings; that would be theft. But if B earns money by using A’s idea, the earnings are B’s, not A’s, because B’s earnings are due to his own efforts.

The first argument stands alone, as a proposition that might be tested empirically. The second and third arguments are moral and linked. The following discussion is organized accordingly.


Stephan Kinsella relies on the first point in “Ideas Are Free: The Case Against Intellectual Property“:

Material progress is made over time in human society because information is not scarce. It can be infinitely multiplied, learned, taught, and built on. The more patterns, recipes, causal laws that are known add to the stock of knowledge available to all actors and act as a greater and greater wealth multiplier by allowing actors to engage in ever-more efficient and productive actions. It is a good thing that ideas are infinitely reproducible, not a bad thing. There is no need to impose artificial scarcity on these things to make them more like scarce resources, which, unfortunately, are scarce.

I refer to Kinsella because his is a prominent “libertarian” voice against intellectual property. But his argument — if one can call it that — is, at best, incomplete. It treats ideas as if they were free goods, simply floating in the air to be plucked. But good ideas — alternating current, the light bulb, the telephone, the graphical user interface, and on and on — are the products of hard work that is financially risky.

What is needed, on the first point, is not a Kinsella-like assertion but empirical evidence. This is on offer in Michele Boldrin and David Levine’s Against Intellectual Monopoly (.pdf version here). The following, with my comments in bold type and enclosed in brackets, is from Chapter I, “Introduction”:

The U.S. Constitution allows Congress “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”… From a social point of view, and in the view of the founding fathers, the purpose of patents and copyrights is not to enrich the few at the expense of the many…. [C]ommon sense and the U.S. Constitution say that these rights must be justified by bringing benefits to all of us. [Utilitarian obiter dicta; assumes away property rights of creators.]

The U.S. Constitution is explicit that what is to be given to authors and inventors is an exclusive right – a monopoly. Implicit is the idea that giving this monopoly serves to promote the progress of science and useful arts. The U.S. Constitution was written in 1787. At that time, the idea of copyright and patent was relatively new, the products to which they applied few, and their terms short. In light of the experience of the subsequent 219 years we might ask: is it true that legal grants of monopoly serve to promote the progress of science and the useful arts?

Certainly common sense suggests that it should…. Would not the world without patent and copyright be a sad cold world, empty of new music and of marvelous new inventions?

So the first question we will pose is what the world might be like without intellectual monopoly. Patents and copyrights have not secured monopolies on all ideas at all times. It is natural then to examine times and industries in which legal protection for ideas have not been available to see whether innovation and creativity were thriving or were stifled. It is the case, for example, that neither the internet nor the jet engine were invented in hopes of securing exclusive rights. In fact, we ordinarily think of “innovative monopoly” as an oxymoron. We shall see that when monopoly over ideas is absent, competition is fierce – and that as a result innovation and creativity thrive. Whatever a world without patents and copyrights would be like, it would not be a world devoid of great new music and beneficial new drugs. [To be proved, or not.]

You will gather by now that we are skeptical of monopoly– as are economists in general. Our second topic will be an examination of the many social costs created by copyrights and patents. Adam Smith – a friend and teacher of James Watt – was one of the first economists to explain how monopolies make less available at a higher price. In some cases, such as the production of music, this may not be a great social evil; in other cases such as the availability of AIDS drugs, it may be a very great evil indeed. [But without the promise of monopoly would there have been AIDS drugs?] However, as we shall see, low availability and high price is only one of the many costs of monopoly…. [Generalize the preceding comment.] We shall also see that because there are no countervailing market forces, government-enforced monopolies such as intellectual monopoly are particularly problematic. [There are always countervailing market forces; even “monopolists” do not have monopolies on everything that consumers might want. Substitution is a powerful but under-appreciated force.]

While monopoly may be evil [Whoa, there! Evil is Stalin, Hitler, and al Qaida, not a bunch of aspiring plutocrats.], and while innovation may thrive in the absence of traditional legal protections such as patents and copyrights, it may be that patents and copyrights serve to increase innovation….

In the final analysis, the only justification for intellectual property is that it increases – de facto and substantially – innovation and creation. [Not the only justification. There is the property right to be reckoned with.] … Is it a fact that intellectual monopoly leads to more creativity and innovation? Our examination of the data shows no evidence that it does. [We shall see.] Nor are we the first economists to reach this conclusion. After reviewing an earlier set of facts in 1958, the distinguished economist Fritz Machlup wrote

it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting [a patent system].

Since there is no evidence that intellectual monopoly achieves the desired purpose of increasing innovation and creation, it has no benefits. So there is no need for society to balance the benefits against the costs. This leads us to our final conclusion: intellectual property is an unnecessary evil. [To repeat, this ignores the property right.]

I will not suggest that the various expansions and extensions of copyright and patent protection over the past decades have been necessary or desirable. But there is the reasonable question whether some degree of copyright and patent protection is economically beneficial. What do Boldrin and Levine have to offer on that score?

They offer page after page of theorizing and many special cases. The most interesting cases, for my purposes, are those that cover broad swaths of time, and thus are less likely to have been influenced by transient events. One such case involves the effects of the expansion of copyright protection on the output of literary works:

[B]eginning in 1919, the length of copyright has been continually extended. At the turn of the century it was 28 years and could be extended for another 14. Prior to the Copyright Term Extension Act (CTEA, or Sonny Bono Act in the popular press) of 1998 it was 75 years for works for hire, and the life of the author plus 50 years otherwise, its last major extension having been approved in 1976. Thus, the length of copyright term roughly doubled during the course of the century. If this approximate doubling of the length of copyright encouraged the production of additional literary works, we would expect that the per capita number of literary works registered would have gone up. Below is a graph of the number of literary copyrights per capita registered in the United States in the last century. Apparently economic theory works whereas the theory according to which extending copyright term boosts creativity in the long run, does not. The various copyright extensions have not led to an increase in the output of literary work. (pp. 111-2 of the .pdf version)

The graph, which I am unable to reproduce here, yields no discernible trend. This counts in favor of Boldrin and Levine, who (it is evident) are much opposed to copyright and patent protection. There is much in the tone of their writing to suggest that their opposition preceded their analysis, rather than being a result of it.

Later, one finds the following “evidence” about the general effects of copyright laws on the output of musical compositions:

[Professor Frederic Scherer] … compared the average number of composers born per million population per decade in various European countries. Turning first to England, he considers the precopyright period 1700-1752, and the post copyright period 1767-1849. As controls he looks also at what happened in Germany, Austria and Italy[,] in which here was no change in copyright during this period [1700-1849, presumably]….

We see that the number of composers per million declined everywhere, but it declined considerably faster in the UK after the introduction of copyright than in Germany or Austria, and at about the same rate as Italy. So there is no evidence here that copyright increased musical output. (pp. 212-3 of the .pdf version)

Nor is there evidence that the introduction of copyright led to a reduction in the ranks of composers. Continuing:

However, the evidence is mixed, because the same experiment in France is more favorable to copyright. In France the precopyright period is 1700-1768, and the post copyright period is 1783-1849….

Here we find that, in France, when copyright is introduced the number of composers per million increased substantially more than in other countries. This should be noted, as it is pretty much the only piece of evidence supporting the idea that copyright increased classical music production we have been capable of finding. (p. 213 of the .pdf version)

But the case of France should be accorded a lot of weight because of the time period it covers.

Despite Boldrin and Levine’s obvious biases (especially against “big corporations”), I am satisfied that the economic case for any level of copyright and patent protection is mixed, at best. The case for such protection, if any, must stand on moral grounds.


This brings me to the second argument against copyrights and patents, namely, that an idea cannot be stolen. This, if true, supports the third argument, namely, that a person who “copies” someone else’s “idea” and sells the copies he makes is not stealing from the originator of the idea.

Boldrin and Levine do not resist the idea that ideas can be property:

We do not know of any legitimate argument that producers of ideas should not be able to profit from their creations. (p. 9 of .pdf version)


Why … should creators have the right to control how purchasers make use of an idea or creation? (ibid.)

Timothy Sandefur puts it this way:

There are two elements of property that are usually merged, but which in the context of intellectual property are not necessarily connected: (1) the moral right of a person to the use and enjoyment of the property in question, and (2) the moral right of the owner to forbid another person from using or enjoying the property in question.

In the case of tangible property, real or personal, the second flows naturally from the first, because the property is naturally exclusive, meaning that if I have it, you simply cannot; if I take it, you no longer have it—you have been “disseised.” Intellectual property, however, is not like this. I can “take” it from you, and yet you still have it. If, for example, you are the greatest musician in the history of rock and roll (that is, John Fogerty) and you have written the greatest song ever (that is, “Born on The Bayou,” from the glorious 1968 album Bayou Country), then I can sing “Born on The Bayou” in my shower, and you can still, at the same time, use and enjoy your “property” as you wish: you can perform it, sell it, or leave it alone. Elements (1) and (2) are separated—your moral right (assuming it exists) to use and enjoy your song does not necessarily entitle you to forbid me from simultaneously using and enjoying your song.

The business about singing a song in the shower is a diversion from the real issue, which is making a copy of an original work (of art, music, literature, mechanical design, etc.). The making of a copy encompasses not only the physical reproduction of an original work in a medium (including electronic media) but also the performance of a song, staging of a play, reading of a book, and the like, especially for an audience (whether paying or not). The making of a copy, thus properly defined, has the potential of depriving the work’s creator of “a penny” or more, by fraud or theft, and is therefore tantamount to the initiation of force against the work’s creator.

Sandefur, it seems, would disagree with that. He says, in another post, that there is a

difference between one’s right to his earnings, and one’s right not to have his earnings taken from him. With regard to tangible property, these two things fit together perfectly, like the convexity and concavity of the same curved line. But with regard to intellectual property, which is non-exclusive, these two things are pried apart. A man who invents a new mousetrap certainly deserves what he can earn for producing that mousetrap. (And nobody may take either his earnings or his particular mousetrap from him.) But he does not necessarily have the right to stop others from “taking” his mousetrap idea from him, because even when a person does so, he still retains that idea. It is nonexclusive.

Is the idea (the design of a mousetrap) really separable from the product (the mousetrap that is manufactured according to the design)? Or, to put it in terms of Sandefur’s musical example, is the idea (the song “Born on the Bayou”) really separable from the product (performances and recordings of the song)?

Consider the following hypothetical “facts” and situations relating to “Born on the Bayou.” The “facts” are predicated on the reasonable assumption that the use of copyright notices by creators of original works is merely a substitute for the kind of contract that those creators (or most of them) would insist upon before performing, recording, or displaying their works. The expectation of a contract (of the kind outlined below) is the proper starting point for an analysis of the legitimacy of copying.

Hypothetical “facts”: John Fogerty writes “Born on the Bayou,” performs it in a recording studio (and only there), and offers copies of the recorded performance for sale. Each copy authorized for sale by Mr. Fogerty displays (in lieu of a copyright notice) the following statement:

TERMS AND CONDITIONS OF USE:  This product consists of these terms and conditions and the enclosed CD, which contains the song, “Born on the Bayou.” The song and the musical performance of it that is recorded on the enclosed CD are the property of John Fogerty. Mr. Fogerty grants the purchaser of this product a limited license to play the CD for private, non-commercial use. The purchaser may make one copy of the CD, but only as a backup in case the purchased copy is damaged. The purchaser may not otherwise make a copy or copies of the CD for distribution to others (with or without remuneration). The performance of “Born on the Bayou” by any other person before an audience (with or without remuneration) requires the express, written consent of Mr. Fogerty and the payment of a royalty to Mr. Fogerty, according to a schedule that is available at <bornonthebayou.com>. Broadcasting companies may play this CD (or portions) thereof) on radio, television, the internet, or via other telecommunications media when they adhere to the notification requirements and royalty schedule that is available at <bornonthebayou.com>. These terms and conditions are an integral part of this product, and may not be detached from it. The initial purchaser of this product, as a condition of the purchase of this product, accepts these terms and conditions and agrees to convey them to a subsequent purchaser or grantee of this product. These terms and conditions thereby become binding on each and every party to whom this product is conveyed by sale or grant.

In the absence of copyright laws, this kind of statement would document the contract between an artist (or his assignee) who creates, performs, or exhibits an original work (of any kind) and persons who are allowed to see or hear the work and/or own authorized copies or recordings of it. (Similar statements accompany software and tickets for sporting events, musical performances, and theatrical productions.) In other words, the removal of copyright protection need not result in a an “open season” on original works of artistic creation.

The following hypothetical situations, which rely on the above “facts,” are therefore reasonable tests of Sandefur’s distinction between an idea and the products derived from it.

Hypothetical situation #1: Joe Smith buys a “Born on the Bayou” CD, makes copies of it, and sells the copies for far less than the price of copies authorized by John Fogerty. Smith may even choose to give away the copies. In either event, Fogerty’s “right not to have his earnings taken from him” is violated because the availability of cheap or free copies of Fogerty’s performance reduces (in some amount) the number of authorized copies that Fogerty is able to sell.

Hypothetical situation #2: Jack Brown buys a copy of the CD, teaches himself to perform “Born on the Bayou” in the style of John Fogerty, records a performance of the song, and sells copies of the recording. Brown would not know of “Born on the Bayou,” or how to perform it, were it not for the CD that he had purchased, with its accompanying agreement. Brown’s action may not deprive Fogerty of his ability to perform “Born on the Bayou,” but it could deprive Fogerty of sales of his creation. And, artistic self-actualization aside, it was the prospect of selling copies of the song that led Fogerty to write and record it in the first place. Brown, like Smith, has violated Fogerty’s “right not to have his earnings taken from him.”

These hypotheticals suggest that Sandefur’s distinction between “one’s right to his earnings, and one’s right not to have his earnings taken from him” is a false one in the case of an unauthorized copying of an original work. In such a case, the two things cannot be “pried apart.” Even though Smith and Brown would not have stolen any of Fogerty’s earnings from his sales of CDs or his performances of “Born on the Bayou,” their actions would have had the same effect. That is, they would have reduced Fogerty’s earnings by depriving him of customers for his CDs and performances. Sandefur’s distinction applies if, and only if, a Smith or a Brown competes with Fogerty by composing and recording an original work.

A logician might accuse Sandefur of sophistry. The sophistry — unintended, I’m sure — arises from the use of “idea” to describe a creative work. As Sandefur puts it (in the second of the posts quoted above), the inventor of a mousetrap

not necessarily have the right to stop others from “taking” his mousetrap idea from him, because even when a person does so, he [the inventor] still retains that idea.

An “idea” (a design, a song, etc.) that exists in a person’s mind becomes more than an “idea” when that person has documented it in some form (a drawing, a set of specifications, a musical score, a recording, etc.). Another person — unless he is a mind-reader — cannot steal an “idea,” but he can steal the external manifestation of the idea. It is the external manifestation — not the “idea” — that is stolen by copying (in one way or another). And it is the external manifestation that the creator may rightly seek to protect from being copied, by attaching to it a contract like the “Terms and Conditions of Use” sketched above.

By what “right” does the creator of a work “dictate” the terms and conditions of its use? By his ownership of the property (the external manifestation of his “idea”), to which he attaches the terms and conditions. Prospective buyers are free to accept the terms and conditions (by buying the property) or to reject them (by declining to buy the property). As long as the terms and conditions are stated openly, there is no question of fraud or coercion.  The choice — to buy or not to buy, given the terms and conditions — is entirely in the hands of a prospective buyer. (I have no idea how my position squares with statutory and common law, but I can see no moral objection to it.*)


Boldrin and Levine make an economic case against perpetual copyrights and patents, but it is a narrow one that does not really address the broadly disincentivizing effects of the complete loss of copyright and patent protection across all fields of endeavor. (This is not to say that Boldrin and Levine ignore the contractual alternative that I discuss here. See, for example, page 9 of the .pdf version of their book.)

On the other hand, there is a strong moral case for copyrights and patents — even perpetual ones. When faced with a choice between economic efficiency and morality, I choose morality.
* The terms and conditions attached to a creative work, as I have sketched them, are like restrictive covenants in a residential subdivision, which

may govern what color a home’s exterior is painted, what and how many exterior decorations are allowed, where cars are allowed to be parked, or even who lives in the house (outside of the owner’s nuclear family).

Such covenants apply not just to the original owner of a house, but also subsequent owners. They restrict what may be done to a property, but not to whom a property may be conveyed. The latter kind of restriction long ago ran afoul of the U.S. Supreme Court, in Shelley v. Kraemer (1948). Here is the key language of the Court’s opinion (references to other cases and footnotes omitted):

We hold that, in granting judicial enforcement of the restrictive agreements in these cases, the States have denied petitioners the equal protection of the laws, and that, therefore, the action of the state courts cannot stand. We have noted that freedom from discrimination by the States in the enjoyment of property rights was among the basic objectives sought to be effectuated by the framers of the Fourteenth Amendment. That such discrimination has occurred in these cases is clear. Because of the race or color of these petitioners, they have been denied rights of ownership or occupancy enjoyed as a matter of course by other citizens of different race or color. The Fourteenth Amendment declares “that all persons, whether colored or white, shall stand equal before the laws of the States, and, in regard to the colored race, for whose protection the amendment was primarily designed, that no discrimination shall be made against them by law because of their color.”

Only recently, this Court had occasion to declare that a state law which denied equal enjoyment of property rights to a designated class of citizens of specified race and ancestry was not a legitimate exercise of the state’s police power, but violated the guaranty of the equal protection of the laws. Nor may the discriminations imposed by the state courts in these cases be justified as proper exertions of state police power.

Respondents urge, however, that, since the state courts stand ready to enforce restrictive covenants excluding white persons from the ownership or occupancy of property covered by such agreements, enforcement of covenants excluding colored persons may not be deemed a denial of equal protection of the laws to the colored persons who are thereby affected. This contention does not bear scrutiny. The parties have directed our attention to no case in which a court, state or federal, has been called upon to enforce a covenant excluding members of the white majority from ownership or occupancy of real property on grounds of race or color. But there are more fundamental considerations. The rights created by the first section of the Fourteenth Amendment are, by its terms, guaranteed to the individual. The rights established are personal rights. It is, therefore, no answer to these petitioners to say that the courts may also be induced to deny white persons rights of ownership and occupancy on grounds of race or color. Equal protection of the laws is not achieved through indiscriminate imposition of inequalities.

Nor do we find merit in the suggestion that property owners who are parties to these agreements are denied equal protection of the laws if denied access to the courts to enforce the terms of restrictive covenants and to assert property rights which the state courts have held to be created by such agreements. The Constitution confers upon no individual the right to demand action by the State which results in the denial of equal protection of the laws to other individuals. And it would appear beyond question that the power of the State to create and enforce property interests must be exercised within the boundaries defined by the Fourteenth Amendment.

The problem of defining the scope of the restrictions which the Federal Constitution imposes upon exertions of power by the States has given rise to many of the most persistent and fundamental issues which this Court has been called upon to consider. That problem was foremost in the minds of the framers of the Constitution, and, since that early day, has arisen in a multitude of forms. The task of determining whether the action of a State offends constitutional provisions is one which may not be undertaken lightly. Where, however, it is clear that the action of the State violates the terms of the fundamental charter, it is the obligation of this Court so to declare.

The historical context in which the Fourteenth Amendment became a part of the Constitution should not be forgotten. Whatever else the framers sought to achieve, it is clear that the matter of primary concern was the establishment of equality in the enjoyment of basic civil and political rights and the preservation of those rights from discriminatory action on the part of the States based on considerations of race or color. Seventy-five years ago, this Court announced that the provisions of the Amendment are to be construed with this fundamental purpose in mind. Upon full consideration, we have concluded that, in these cases, the States have acted to deny petitioners the equal protection of the laws guaranteed by the Fourteenth Amendment. Having so decided, we find it unnecessary to consider whether petitioners have also been deprived of property without due process of law or denied privileges and immunities of citizens of the United States.

Whether the Court’s legal reasoning is also morally sound I leave as an exercise for the reader.