Intellectual Property: Silly or Sinister?

Published September 2, 2011

Imagine that some lobbyists have staked out part of Antarctica and brought suit in federal court against tourists who trespassed on “their” land. Fine, you say: After all, the lobbyists got there first. Replace “Antarctica” with “ideas,” however, and you have the surreal world of “intellectual property.”

In the 1998 case State Street Bank & Trust v. Signature Financial Group, a panel of judges ruled that software was patentable, thereby starting the intellectual property equivalent of the California gold rush. Every child knows how to answer the door when someone says, “Knock knock.” “Who’s there?” But what if I taught a computer how to say, “Who’s there?” and patented the idea? Absurd, you say.

Well, we all understand how to run an auction, but don’t try doing it with a computer, because the holder of U.S. Patent 7,702,540—also known as e-Bay—will sue you. And that, in a nutshell, is what software patents are all about.

The entire concept of being able to patent a commonly used idea because it is implemented on a computer is silly, but this article is too short to review all the millions of software patents issued since 1998. A famous and not-so-famous example may serve to reinforce the point. Raise your hand if you have not heard about the Amazon “one-click” patent (U.S. Patent 5,960,411). No hands? Okay, if you can patent one click, why not two? Sorry, that you cannot do. Why not? Microsoft beat you to it (U.S. Patent 6,727,830).

Incarnation of Ancient Evil
Software patents are only a modern incarnation of an ancient evil. How about patenting the peanut butter and jelly sandwich? Too late, already done—in 2005, no less (U.S. Patent 6,874,409). That one did not hold up in court. There are so many silly patents that there are two Web sites, and, to publicize them. Many seem to tell a tale of inventors with little sense—and a government patent office with even less.

The truth is that trademarks—unlike patents and copyright—have a legitimate purpose. Why should someone be allowed to do business pretending to be me? That’s how trademark law is written. Yet no law has been written that lawyers cannot distort.

There are copyright holders who want to prevent things from being read at all. The Diebold Corporation sued a group of students. Their offense? They made public internal company emails documenting that Diebold voting machines do not work especially well and are vulnerable to the casting of fraudulent votes. Pretty serious stuff. How did Diebold sue these students? It sued them for copyright violation.

Diebold claimed the internal emails were copyrighted and the students had reproduced them without permission. In this instance the courts behaved sanely. Judge Jeremy Fogel wrote in his decision, “no reasonable copyright holder could have believed that portions of the e-mail archive discussing possible technical problems with Diebold’s voting machines were protected by copyright.” But although threatening and carrying out meritless lawsuits is not as bad as winning them, it imposes a real tax on free speech. And more to the point, the history of intellectual property is the history of absurd requests being repeatedly rebuffed by the courts (think “software patents before 1998”) until a panel of judges finally caves in.

Abusive by Nature
Let us be realistic: People sue each other for all sorts of silly reasons having nothing to do with intellectual property—and often win in court.

So why condemn intellectual property law over, say, tort law more broadly? Why focus on IP and not on the broader problem of excess litigation? The answer is that intellectual property is abusive by its very nature. Despite what its propagandists say, intellectual property is not about protecting land from trespassers. It is about controlling what belongs to other people.

Is it a coincidence that the main accomplishment of the patent system is to encourage rent-seeking behavior? Well, consider that originally the only purpose of the patent system was to encourage rent-seeking behavior. There was no fiction that it was a reward for invention: The king simply granted favored rent-seeking courtiers monopolies over the production of salt, the land in Virginia, or whatever the favorite with the largest bribe happened to desire.

Is it a coincidence that the main use of copyright is to suppress free speech? Well, consider that originally the entire purpose of copyright was to suppress free speech. When the printing press became widespread, a monarchy deathly afraid of popular dissent granted printing companies “copyright” monopolies over the printing of (government-authorized) books, along with the right (and obligation) to burn any books the monarchy disapproved of.

Patent Absurdity?
Where is this all headed? Intellectual property is not merely a threat to freedom of trade and speech. It is also a threat to freedom of thought. Sound farfetched? A ridiculous straw man? A wild exaggeration?

Just wait until we all have video cameras implanted in our retinas! Then you will have to pay a fee to some big company each time you look down the street. Or perhaps you will have to pay me: I’m thinking of patenting the idea.

David K. Levine ([email protected]) is John H. Biggs Distinguished Professor in the Department of Economics at Washington University in St. Louis. This article originally appeared in The Freeman, published by the Foundation for Economic Education. Edited and reprinted by permission of The Freeman.