Ask the Expert: Timothy B. Lee

Diana Lopez from Illinois Wesleyan University asks:

"What is the libertarian position on intellectual property rights?"

Timothy B. Lee, adjunct scholar at the Cato Institute, answers:

Copyright and patent law, the legal regimes most often described as "intellectual property," are controversial among libertarians, who tend to split into three camps. The first camp regards copyright and patent rights as analogous to the property rights people have in land or personal possessions. These thinkers, which include the eminent legal theorist Richard Epstein, [PDF] tend to favor broad and strictly-enforced patents and copyrights. They believe that giving copyright and patent holders broader rights and stronger enforcement powers will create positive incentives for creativity that will make everyone better off in the long run.

At the opposite extreme, some libertarians completely reject the analogy between "intellectual property" and traditional property rights. These thinkers, including Cato's own Tom Palmer [PDF], regard patent and copyright protections as illegitimate government monopolies. They point out that traditional property rights are a mechanism for allocating scarce resources (such as houses, bushels of corn, or automobiles). Ideas are non- rivalrous—once one has been created they can be reproduced an infinite number of times—so these thinkers argue that there's no need to allocate them at all. They argue that the restrictions imposed by copyright and patent law conflict with our fundamental rights. And they dispute the claim that copyrights and patents are necessary for innovation.

A third camp takes a middle view, which is best exemplified by the United States Constitution. Article I, Section 8 of the Constitution says that Congress has the power "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." There are a couple of things to note about this language. First, the Framers did not regard copyright and patent protection as natural rights that the state has a duty to protect. Rather, they regarded them as rights that Congress may, but isn't required to, recognize and secure. Second, this language suggests that the Framers took a fundamentally pragmatic view of the moral justification of copyright and patent law. They believed that copyright and patent laws are justified to the extent that they "promote the progress of science and the useful arts"—that is, patents and copyrights are justified to the extent that they benefit the general public, not authors and inventors in particular. On this view, some patent and copyright protection is beneficial, but such protections must be subordinate to peoples' more fundamental rights to life, liberty, and property. These libertarians believe that too much copyright or patent protection can become counterproductive, and that vigilance is required to ensure that copyright and patent protections promote, rather than hinder, "the progress of science and the useful arts."

Personally, I'm in this latter camp, and I think that recent changes to copyright and patent law have given too much power to patent and copyright holders and thereby undermined the utilitarian justification for copyright and patent protections. Here are three quick examples of what has happened:

* Copyright terms: The original copyright term in 1790 was 14 years, renewable once. As recently as the mid-20th Century, copyrights were still limited to just 28 years, renewable once. This meant that works fell into the public domain relatively quickly: if those laws were still on the books today, most work published before 1980 and all works published before 1952 would now be in the public domain.
Unfortunately, Congress has repeatedly extended the terms of copyrights, so that copyrights now apply for the life of the author plus 70 years. There are works still under copyright that were published in the 1920s, and no new works will fall into the public domain for another decade. I fully expect Congress to extend copyright terms once again as we approach the expiration of extant copyrights. Despite the Constitution's requirement that copyrights be for limited times, we now effectively have a system of perpetual copyrights on an installment plan.

This is a particularly serious problem because there are hundreds of thousands of "orphan works", creative works that have ceased to have any commercial value but still have cultural or historical value. It is now technically possible to digitize these works and make them available to the public, but no one is able to do so because the works are still under copyright and in many cases no one knows who the copyright holder is. These excessive copyright terms do nothing to encourage the production of new creative works, but they've become a serious obstacle to the re-use of works that have reached the end of their commercial lives.

* Copy protection: You may have noticed that if you buy music from the iTunes music store, that music will only play on Apple- branded devices. If you want to play your music on another company's music player, your only option is to burn it to a CD and then re-rip it to the new format. That's a pain if you have a lot of music, and it also entails a loss of quality. One might think this would be a business opportunity for an entrepreneur to offer conversion software that would take your iTunes library and convert it to other formats. Unfortunately, Congress passed a law called the Digital Millennium Copyright Act in 1998 that effectively makes such conversion software illegal.

The DMCA was billed as an anti-piracy measure, but it hasn't had much effect on piracy rates. What it has done is stunt innovation in the market for digital media products. For example, more than a decade after the introduction of the DVD format, there still aren't any DVD jukeboxes—set-top boxes that allow you to "rip" your DVDs to an internal hard drive—on the market. The primary reason for this is that the cartel that controls the DVD format has decided not to allow anyone to create such a device. And building such a device without the DVD cartel's blessing is a federal crime under the DMCA.

* Abstract patents: Traditionally, the courts have held that laws of nature, mathematical algorithms, and other abstract concepts are not eligible for patent protection. This important principle ensured that these basic concepts were left in the public domain for anyone to use. Unfortunately, over the last two decades the court in charge of patent appeals has largely abandoned it, holding that patents can be granted for almost anything--software, "business methods," tax planning strategies, and other abstract concepts. The result has been a sharp increase in patenting. Some freshly-minted patents cover extremely abstract or vague patents. And that, in turn, has led to an explosion of litigation.

The fundamental problem is that when there are too many broad patents, it becomes almost impossible to create any new technologies without inadvertently infringing numerous patents. The costs of hiring a lawyer to read and interpret all the existing patents becomes so high that people just start ignoring the patent system altogether. Well-designed property systems promote efficiency by providing legal certainty. In some industries, including the information technology industries, the patent system has come to have just the opposite effect, creating legal uncertainty without creating significant incentives for innovation.

At present, the copyright and patent systems give too much power to authors and inventors, respectively. The function of the copyright and patent systems is to provide incentives for the creation of new writings and inventions, not to give them comprehensive control over the use of creative works. Reforms are needed to make copyright and patent protections the limited monopolies the founders intended, rather than the all-encompassing powers they have become. However, abolishing these regimes would be a step too far. If properly designed, copyright and patents can provide socially-beneficial incentives. Abolishing them would amount to throwing out the baby with the bathwater.