Muutokset

== Chapter Luku 1: Introduction Johdanto ==

Boldrin & Levine: Against Intellectual Monopoly, Chapter 11Chapter 1: IntroductionIn late Vuoden 1764loppupuolella, while repairing a small korjatessaan pientä Newcomen steamengine-höyrykonetta, the idea of allowing steam to expand and condense inseparate containers sprang into the mind of James WattWattin mieleen tuli ajatus erillisissä astioissa laajenevasta höyrystä. He spentthe next few months in unceasing labor building a model of thenew engineMuutamat seuraavat kuukaudet hän uurasti lakkaamatta rakentaakseen mallin uudesta koneesta. In Vuoden 1768elokuussa, after a series of improvements and substantialborrowinguseiden parannusten ja huomattavan lainanottamisen jälkeen, he applied for a patent on the idea, requiring him totravel to London in Augusthän matkusti Lontooseen hakemaan patenttia idealleen. He spent the next six months workinghard to obtain his patentHän teki seuraavat kuusi kuukautta paljon työtä patentin eteen. It was finally awarded in January of thefollowing yearSeuraavan vuoden tammikuussa se vihdoinkin myönnettiin. Nothing much happened by way of productionuntil Tuotannon osalta ei tapahtunut juuri mitään ennen vuotta 1775. ThenSilloin, with a major effort supported by his businesspartneryhteistyökumppaninsa, the rich industrialist rikkaan teollisuusmiehen Matthew BoultonBoultonin tuella, Watt secured anAct of Parliament extending his patent until the year sai parlamentin myöntämään patentille jatkoaikaa vuoteen 1800asti. Thegreat statesman Suuri valtiomies Edmund Burke spoke eloquently in Parliament inthe name of economic freedom and against the creation ofunnecessary monopoly – but to no avail.1The connections ofWatt’s partner Boulton were too solid to be defeated by simpleprinciple.Once Watt’s patents were secured and production started, asubstantial portion of his energy was devoted to fending off rivalinventors. In 1782, Watt secured an additional patent, made“necessary in consequence of ... having been so unfairlyanticipated, by [Matthew] Wasborough in the crank motion.”2More dramatically, in the 1790s, when the superior Hornblowerengine was put into production, Boulton and Watt went after himwith the full force of the legal system.3During the period of Watt’s patents the U.K. added about750 horsepower of steam engines per year. In the thirty yearsfollowing Watt’s patents, additional horsepower was added at arate of more than 4,000 per year. Moreover, the fuel efficiency ofsteam engines changed little during the period of Watt’s patent;while between 1810 and 1835 it is estimated to have increased by afactor of five.4After the expiration of Watt’s patents, not only was therean explosion in the production and efficiency of engines, but steampower came into its own as the driving force of the industrialrevolution. Over a thirty year period steam engines were modifiedand improved as crucial innovations such as the steam train, thesteamboat and the steam jenny came into wide usage. The keyinnovation was the high-pressure steam engine puhui parlamentin edessä kaunopuheisesti taloudellisen vapauden nimissä tarpeettoman monopolin luomista vastaan – development ofwhich had been blocked by Watt’s strategic use of his patent.Boldrin & Levine: Against Intellectual Monopoly, Chapter 12Many new improvements to the steam engine, such as those ofWilliam Bull, Richard Trevithick, and Arthur Woolf, becameavailable by 1804: although developed earlier these innovationswere kept idle until the Boulton and Watt patent expired. None ofthese innovators wished to incur the same fate as JonathanHornblower.5Ironically, not only did Watt use the patent system as alegal cudgel with which to smash competition, but his own effortsat developing a superior steam engine were hindered by the verysame patent system he used to keep competitors at bay. Animportant limitation of the original Newcomen engine was itsinability to deliver a steady rotary motion. The most convenientsolution, involving the combined use of the crank and a flywheel,relied on a method patented by James Pickard, which preventedWatt from using it. Watt also made various attempts at efficientlytransforming reciprocating into rotary motion, reaching,apparently, the same solution as Pickard. But the existence of apatent forced him to contrive an alternative less efficientmechanical device, the “sun and planet” gear. It was only in 1794,after the expiration of Pickard’s patent that Boulton and Wattadopted the economically and technically superior crank.6The impact of the expiration of his patents on Watt’sempire may come as a surprise. As might be expected, when thepatents expired “many establishments for making steam-engines ofMr. Watt's principle were then commenced.” However, Watt’scompetitors “principally aimed at...cheapness rather thanexcellence.” As a result, we find that far from being driven out ofbusiness “Boulton and Watt for many years afterwards kept uptheir price and had increased orders.”7In fact, it is only after their patents expired that Boulton andWatt really started to manufacture steam engines. Before then theiractivity consisted primarily of extracting hefty monopolisticroyalties through licensing. Independent contractors produced mostof the parts, and Boulton and Watt merely oversaw the assembly ofthe components by the purchasersilman vaikutusta.In most histories, James Watt is a heroic inventor,responsible for the beginning of the industrial revolution. The factssuggest an alternative interpretation. Watt is one of many cleverinventors working to improve steam power in the second half ofthe eighteenth century. After getting one step ahead of the pack, heremained ahead not by superior innovation, but by superiorexploitation of the legal system. The fact that his business partnerBoldrin & Levine: Against Intellectual Monopoly, Chapter 13was a wealthy man with strong connections in Parliament, was nota minor help.Was Watt’s patent a crucial incentive needed to trigger hisinventive genius, as the traditional history suggests? Or did his useof the legal system to inhibit competition set back the industrialrevolution by a decade or two? More broadly, are the two essentialcomponents of our current system of intellectual property – patentsand copyrights – with all of their many faults, a necessary evil wemust put up with to enjoy the fruits of invention and creativity? Orare they just unnecessary evils, the relics of an earlier time whengovernments routinely granted monopolies to favored courtiers?That is the question we seek to answer¹ Wattin kumppanin Boultonin yhteydet olivat liian vahvoja tullakseen voitetuksi pelkän periaatteen avulla.

In the specific case of Kun Wattin patentti oli varmistettu ja tuotanto aloitettu, huomattava osa hänen energiastaan kului kilpailevien keksijöiden torjumiseen. Vuonna 1782 Wattvarmisti itselleen ylimääräisen patentin, the granting of the 1769 andespecially of the 1775 patents likely delayed the mass adoption ofthe steam engine: innovation was stifled until his patents expired;and few steam engines were built during the period of Watt’s legalmonopoly. From the number of innovations that occurredimmediately after the expiration of the patentjoka tuli ”tarpeelliseksi sen seurauksena, it appears thatWatt’s competitors simply waited until then before releasing theirown innovationskun [Matthew] Wasborough ennätti niin epäreilusti kehittää ensimmäisenä kampiliikkeen”. This should not surprise us: new steam engines² Vieläkin dramaattisemmin 1790-luvulla,no matter how much better than Watt’skun ylivoimainen ja itsenäisesti suunniteltu Hornblower-moottori saatettiin tuotantoon, had to use the idea of aseparate condenser. Because the 1775 patent provided Boulton andja Watt with a monopoly over that idea, plentiful other improvementsof great social and economic value could not be implemented. Bythe same token, until 1794 Boulton and Watt’s engines were lessefficient they could have been because the Pickard’s patentprevented anyone else from using, and improving, the idea ofcombining a crank with a flywheelkävivät sen kimppuun koko oikeusjärjestelmän voimalla.³

Also, we see that Watt’s inventive skills were badlyallocated: we find him spending more time engaged in legal actionto establish and preserve his monopoly than he did in the actualimprovement and production of his engineWattin patenttien aikakaudella Iso-Britanniassa höyrykoneiden yhteenlaskettu teho lisääntyi 750 hevosvoimalla vuosittain. From a strictlyeconomic point of view Watt did not need such a long lastingpatent – it is estimated that by 1783 – seventeen years before hispatent expired – his enterprise had already broken even30 vuotena patenttien jälkeen lisää tehoa tuli yli 4000 hevosvoimaa vuosittain. Indeed,even after their patent expired, Boulton and Watt were able tomaintain a substantial premium over the market by virtue of havingbeen firstSen lisäksi höyrykoneiden polttoainehyötysuhde muuttui vain vähän Wattin patentin aikana, despite the fact that their competitors had had thirtyyears to learn how to make steam engineskun taas vuosien 1810 ja 1835 välillä sen on arvioitu parantuneen viisinkertaiseksi.⁴

The wasteful effort to suppress competition and obtainspecial privileges is referred to by economists as rent-seekingbehavior. History and common sense show it to be a poisoned fruitof legal monopoly. Watt’s attempt to extend the duration of hisBoldrin & Levine: Against Intellectual Monopoly, Chapter 141769 patent is an especially egregious example of rent seeking: thepatent extension was clearly unnecessary to provide incentive forthe original invention, which had already taken place. On top ofthisKun Wattin patentit raukesivat, we see Watt using patents as a tool to suppress innovation byhis competitors, such as Hornblowerei koettu pelkästään räjähdysmäistä kasvua höyrykoneiden tuotannossa ja tehossa, Wasborough and others.Hornblower’s engine is a perfect case in point: it was asubstantial improvement over Watt’s as it introduced the newconcept of the “compound engine” with more than one cyclindermutta höyryenergiasta tuli viimeinkin teollista vallankumousta eteenpäin ajava voima.ThisSeuraavan 30 vuoden aikana höyrykoneita muunneltiin ja paranneltiin, and not the Boulton and Watt designja olennaiset keksinnöt kuten höyryjuna, was the basis forfurther steam engine development after their patents expiredhöyrylaiva ja höyryllä toimiva kehruukone tulivat yleiseen käyttöön.However, because Hornblower built on the earlier work of Watt,making use of his “separate condenser” Boulton and Olennainen innovaatio oli korkeapaineinen höyrykone – kehitys jonka Watt wereable to block him in court and effectively put an end to steamengine developmentesti strategisesti patenttiaan käyttämällä. The monopoly over the “separate condenserMonet uudet parannukset höyrykoneeseen,”a useful innovationkuten esimerkiksi William Bullin, blocked the development of another equallyuseful innovationRichard Trevithickin ja Arthur Woolfin, the “compound enginetulivat saataville vuonna 1804: vaikkakin ne oli kehitetty jo aikaisemmin,” thereby retardingeconomic growthniitä ei voitu ottaa käyttöön ennen kun Boultonin ja Wattin patentti oli rauennut. This retardation of innovation is a classical caseof what we shall refer to as Intellectual Property-inefficiency, or IPinefficiency for shortKukaan näistä keksijöistä ei halunnut samaa kohtaloa kuin Jonathan Hornblower.⁵

FinallyIronisesti, there is the slow rate at which the steam enginewas adopted before the expiration of Watt’s patentsama patenttijärjestelmä, jota Watt käytti kilpailijoidensa murskaamiseen, haittasi myös hänen omaa työtään paremman höyrykoneen kehittämisessä. Olennainen rajoite alkuperäisessä Newcomenin moottorissa oli kyvyttömyys tuottaa tasaista pyörivää liikettä. Kätevin ratkaisu ongelmaan, jossa yhdistyi kampi ja vauhtipyörä, riippuivat rakennustavasta, jonka James Pickard oli patentoinut, mikä esti Wattia käyttämästä sitä. By keepingprices high and preventing others from producing cheaper or bettersteam enginesWatt teki myös itse useita yrityksiä tehokkaamman voimansiirron kehittämiseksi, ilmeisesti päätyen kuitenkin samaan lopputulokseen kuin Pickard. Patentin olemassaolo pakotti Wattin kehittämään tehottomamman ”aurinko ja planeetta” -vaihteiston. Vasta vuonna 1794, Pickardin patentin rauettua, Boulton and ja Watt hampered capital accumulationand slowed economic growthottivat käyttöön taloudellisesti ja teknisesti ylivoimaisen kammen.⁶

The story of James Watt is a damaging case for the benefitsof a patent systemWattin patenttien raukeamisen vaikutus hänen imperiumilleen voi myös tulla yllätyksenä. Kuten saattoi odottaa, patenttien rauetessa ”useita höyrykoneita valmistavia yrityksiä perustettiin, but we shall see that it is not an unusual storyjotka käyttivät herra Wattin kehittämiä periaatteita”.A new idea accrues almost by chance to the innovator while he iscarrying out a routine activity aimed at a completely different endKuitenkin Wattin kilpailijat ”pääasiallisesti tähtäsivät ennemminkin halpuuteen kuin laatuun.The patent comes many years after that and it is due more to amixture of legal acumen and abundant resources available to “oilthe gears of fortune” than anything else. Finally” Lopputuloksena voimme havaita, after the patentprotection is obtainedettä heitä ei suinkaan ajettu markkinoilta, it is primarily used as a tool to preventeconomic progress and hurt competitorsvaan ”useita vuosia jälkeenpäin Boulton ja Watt pitivät hintojaan ylhäällä ja saivat silti enemmän tilauksia.”⁷

While this view of Watt’s role in the industrial revolutionmay appear iconoclasticItseasiassa vasta sen jälkeen, kun heidän patenttinsa raukesi, alkoivat Watt ja Boulton todenteolla valmistamaan höyrykoneita. Sitä ennen he lähinnä keskittyivät suurten monopolististen rojaltien keräämiseen lisenssien avulla. Aliurakoitsijat tuottivat suurimman osan osista, ja Boulton ja Watt lähinnä valvoivat, it is neither new nor particularly originalkun asiakkaat kokosivat komponentit.Frederic Scherer, a prestigious academic supporter of the patentsystemSuuressa osassa historiikkeja James Wattia pidetään sankarillisena keksijänä, after going through the details of the Boulton and vastuullisena teollisen vallankumouksen alkamisesta. Faktat viittaavat toisenlaiseen tulkintaan. Wattstoryoli yksi monista höyryvoimaa kehitelleistä älykkäistä keksijöistä 1700-luvun loppupuoliskolla. Sen jälkeen kun hän pääsi askeleen edemmäs muita, hän pysyi siellä – ei paremman innovaation, vaan tehokkaamman oikeusjärjestelmän hyväksikäytön ansiosta. Eikä siitä, että hänen yhteistyökumppaninsa oli rikas mies, jolla oli vahvoja yhteyksiä parlamenttiin, concluded his 1986 examination of their story with theollut ainoastaan pientä apua.following illuminating wordsHad there been no patent protection at allOliko Wattin patentti ratkaiseva kannustin, joka tarvittiin tuomaan esille hänen sisäinen keksijänsä,…Boulton andWatt certainly would have been forced to follow a businesskuten perinteisesti historiankirjat ehdottavat? Vai myöhästyttikö hänen oikeusjärjestelmän hyväksikäyttönsä kilpailun tukahduttamiseksi teollista vallankumousta vuosikymmenen tai kaksi? Vielä laajemmin, ovatko kaksi olennaista nykyisen immateriaalioikeutemme osaa – patentit ja tekijänoikeudet – lukuisine vikoineen, välttämätön paha jota meidän on ylläpidettävä nauttiaksemme keksimisen ja luomisen hedelmistä? Vai ovatko ne vain täysin turhia, jäännöksiä ajalta jolloin valtiot myönsivät rutiininomaisesti monopoleja suosituille ylhäisille? Tähän kysymykseen etsimme vastausta. policy quite different from that which they actuallyBoldrin & LevineWattin tapauksessa vuoden 1769 ja erityisesti vuoden 1775 patentit todennäköisesti myöhästyttivät höyrykoneen laajaa käyttöönottoa: kehitys tukahtui kunnes Wattin patentti raukesi, ja hyvin harvoja höyrykoneita rakennettiin hänen monopolinsa aikana. Välittömästi patentin raukeamisen jälkeen tapahtuneiden keksintöjen määrästä voimme päätellä, että Wattin kilpailijat vain odottivat ennen omien keksintöjensä julkistamista. Tämän ei pitäisi tulla yllätyksenä: Against Intellectual Monopolyuusien höyrykoneiden, Chapter 1olivat ne kuinka paljon Wattin koneita parempia, piti käyttää erillistä lauhdutinta. Koska vuoden 1775 patentti tarjosi Boultonille ja Wattille monopolin kyseiselle idealle, monet muut sosiaalisesti ja taloudellisesti arvokkaat muutokset jäivät ottamatta käyttöön. Samalla tavalla, vuoteen 1794 asti Boultonin ja Wattin koneet olivat tehottomampia kuin ne olisivat voineet olla, koska Pickardin patentti esti käyttämästä ja parantamasta ideaa kammen ja vauhtipyörän yhdistelmästä.5followedNäemme myös kuinka huonosti Wattin keksijäntaidot olivat huonosti allokoitu: huomaamme hänen käyttäneen enemmän aikaa lakijärjestelmän parissa muodostaakseen ja säilyttääkseen monopolinsa kuin hän käytti aikaa varsinaiseen koneensa paranteluun ja tuotantoon. Most of the firm’s profits were derived fromroyalties Taloudellisesta näkökulmasta katsoen Watt ei olisi tarvinnut niin pitkään kestänyttä patenttia – on the use of engines rather than from the sale ofmanufactured engine componentsarvioitu että vuoteen 1783 mennessä – 17 vuotta ennen hänen patenttinsa raukeamista – hänen yrityksensä oli päässyt omilleen. Edelleen patentin raukeamisen jälkeen Boulton ja Watt kykenivät ylläpitämään huomattavaa markkinaosuutta, vain koska olivat ensimmäisiä, and without patenthuolimatta siitä faktasta että heidän kilpailijoillaan oli 30 vuotta aikaa oppia tekemään höyrykoneita.protection the firm plainly could not have collectedroyaltiesVahingollista yritystä tukahduttaa kilpailua ja hankkia erityisiä etuoikeuksia kutsutaan taloustieteilijöiden piirissä ylivoiton tavoitteluksi (rent-seeking). Historia ja arkijärki ovat osoittaneet sen olevan laillisen monopolin myrkyllinen hedelmä. Wattin yritys jatkaa hänen vuoden 1769 patenttiaan on erityisen törkeä esimerkki ylivoiton tavoittelusta: patentin jatkaminen oli selkeästi tarpeeton antamaan kannustin alkuperäiselle keksinnölle, joka oli jo tapahtunut. Sen lisäksi näemme, kuinka Watt käyttää patentteja työkaluna kilpailijoidensa, kuten Hornblowerin, Wasburoughin ja muiden innovaatioiden tukahduttamiseksi. The alternative would have been to emphasizemanufacturing and service activities as the principalsource of profitsHornblowerin kone on täydellinen esimerkki asiasta: se oli huomattava parannus Wattiin verrattuna, koska se esitteli uuden käsitteen ”compound enginestä” jossa oli enemmän kuin yksi sylinteri. Tämä, eikä Boultonin ja Wattin malli, oli pohjana höyrykoneiden kehitykselle sen jälkeen, kun heidän patenttinsa oli rauennut. Kuitenkin, which in fact was the policy adoptedwhen the expiration date of the patent for the separatecondenser drew near in the late 1790s…koska Hornblower rakensi Wattin aiemman työn pohjalta käyttäen hyväksi ”erillistä höyrystintä”, Boulton ja Watt pystyivät pysäyttämään hänet oikeusteitse ja laittamaan tehokkaasti lopun höyrykonekehitykselle. Monopoli ”erilliselle höyrystimelle”, eli hyödylliselle innovaatiolle, esti samalla tavalla hyödyllisen innovaation, eli ”compound enginen” kehitystä, hidastaen täten taloudellista kasvua. Tällainen innovaation hidastaminen on klassinen esimerkki siitä, mitä kutsumme aineettoman omaisuuden tehottomuudeksi, tai IP-tehottomuudeksi lyhyemmin. It is possible toconclude more definitely that the patent litigation activitiesof Lopuksi, höyrykone otettiin käyttöön hitaassa tahdissa ennen Wattin patentin raukeamista. Pitämällä hinnat korkealla ja estämällä muita tuottamasta halvempia ja parempia höyrykoneita, Boulton & ja Watt during the 1790s did not directly incitevaikeuttivat pääoman kasautumista ja hidastivat talouskasvua.further technological progress…. Boulton and Watt’srefusal to issue licenses allowing other engine makers toJames Wattin tarina on vahingollinen tapaus patenttijärjestelmän hyödyllisyydelle, mutta me tulemme näkemään, ettei se ole epätavallinen. Uusi idea kehittyy melkeinpä sattumalta keksijälle kun hän on rutiininomaisesti toimimassa jonkin aivan toisenlaisen lopputuloksen saamiseksi. Patentti tulee vasta vuosia sen jälkeen ja se johtuu enemmänkin lainopillisen terävyyden sekä käytettävissä olevien resurssien käyttäminen ”hyvän onnen rattaiden voitelemiseen” kuin minkään muun. Viimein, kun patenttisuoja on hankittu, käytetään sitä usein työkaluna taloudellisen kasvun estämiseen ja kilpailijoiden satuttamiseen. employ the separate-condenser principle clearly retardedthe development and introduction of improvementsVaikka näkemys, jota tässä esitämme, voi vaikuttaa ikonisoivalta, se ei ole varsinaisesti uusi, eikä erityisemmin alkuperäinen.Frederic Scherer, patenttijärjestelmän arvovaltainen akateeminen tukija, tutkittuaan Boultonin ja Wattin tarinaa, totesi vuonna 1986 seuraavanlaisesti:8***The industrial revolution was long ago''Jos patenttisuojausta ei olisi ollut olemassa, ... But the issue ofintellectual property is a contemporary oneBoulton ja Watt olisivat varmasti joutuneet seuraamaan varsin toisenlaista bisnestaktiikkaa siihen verrattuna mitä he käyttivät. At the time we wrotethisSuurin osa yrityksen voitoista oli saatu moottorien käytön rojalteista eikä valmistettujen moottorien komponenteista, U.Sja ilman patenttisuojaa yritys ei olisi tietenkään kyennyt keräämään rojalteja. District Judge James Spencer had been threatening forVaihtoehtona olisi ollut keskittyä tuotantoon ja huoltopalveluihin päätulonlähteenä, joka itseasiassa oli käytäntö, jota alettiin omaksua 1790-luvulla kun erillisen höyrystimen patentin raukeaminen alkoi lähestyä... On mahdollista todeta vieläkin varmemmin, että patenttiriitely 1790-luvulla ei suoraan kannustanut teknologista kehitystä... Boultonin ja Wattin kieltäytyminen lisenssien myöntämisestä muille moottorinvalmistajille erillisen höyrystimen valmistamiseksi selkeästi haittasi sekä kehitystä että parannusten omaksumista.''⁸three years to shut down the widely used Blackberry messagingnetwork – over a patent dispute.* * *9And Blackberry itself is notwithout sinTeollisesta vallankumouksesta on jo aikaa, mutta kysymys aineettomasta omaisuudesta on edelleen ajankohtainen. Tätä kirjaa kirjoitettaessa yhdysvaltalaistuomari James Spencer on uhkaillut kolmen vuoden ajan sulkea laajasti käytetyn Blackberryn viestintäverkon – patenttikiistan takia.⁹ Eikä Blackberry ole itsekään synnitön: in vuonna 2001 Blackberry sued haastoi oikeuteen Glenayre Electronics forElectronicsin, koska kyseinen yritys loukkasi Blackberryn patenttia, joka koski "informaation puskemista isäntäsysteemistä mobiilidatakommunikaatiolaitteeseen".¹⁰ infringing Samanlainen sota on its patent for “pushing information from a hostsystem to a mobile data communication devicekäynnissä tekijänoikeuksien puolella - Napster-palvelu suljettiin liittovaltion tuomarin toimesta heinäkuussa 2000 kiistassa koskien tekijänoikeudella suojattujen tiedostojen jakoa.¹¹ Tunteet käyvät kuumina kummallakin puolella. Jotkut tekijänoikeusvastaiset libertaristit käyttävät slogania “informaatio vain haluaa olla vapaana”. Toisessa ääripäässä suuret musiikki- ja ohjelmistoyhtiöt väittävät maailman ilman immateriaalioikeuksia olevan maailma ilman uusia ideoita.”10A similar war is taking place over copyright – the NapsterOsa tekijänoikeusväittelyn katkeruudesta heijastuu Stephen Manesin hyökkäyksessä Lawrence Lessigiä kohtaan:network was shut down by a federal judge in July of 2000 in adispute over the sharing of copyrighted files''Stanfordin lakiprofessorin ja median suosikin Lawrence Lessigin mukaan “liikkeen täytyy alkaa kaduilta”, jotta korruptoitunutta kongressia, ylikeskittynyttä mediaa ja ylihintaista oikeusjärjestelmää vastaan voidaan taistella. Vastoin Lessigin avautumista..11Emotions run highon both sides. We have the anti“fair use” -poikkeukset nykyisessä tekijänoikeuslaissa... ovat niin ekspansiivisia, että melkeinpä ainoa asia, jota leikkaamalla-ja-copyright slogan “information justliittämällä ei voi tehdä tekijänoikeuden alaiselle teokselle laillisesti, on kopioida merkittävää osaa siitä..¹²'' wants to be free” promoted by some civil libertariansVarmastikaan Lessig ei ole nykyisen tekijänoikeuslain ystävä. Mutta huolimatta Stephen Manesin väitteestä, hän uskoo tuottajien ja kuluttajien välisten oikeuksien tasapainottamiseen: hänen kirjansa Free Culture puhuu jatkuvasti tästä tasapainosta ja siitä, kuinka se on menetetty nykyaikaisessa laissa. On the other¹³ extremeKuten Lessig, large music and software companies argue that a worldwithout intellectual property would be a world without new ideasmonet taloustieteilijät ovat skeptisiä nykyisen lain suhteen - 17 huomattavaa taloustieteilijää, mukaanlukien useita Nobel-palkinnon voittaneita, jättivät kirjelmän Yhdysvaltain korkeimmalle oikeudelle kannattaakseen Lessigin haastetta tekijänoikeuden pituuden kyseenalaistamiseksi. Kuten Lessig, myös taloustieteilijät tunnustavat immateriaalioikeuksien roolin: kun lakimiehet puhuvat oikeuksien tasapainottamisesta, taloustieteilijät puhuvat kannustimista.Lainataksemme kahden huomattavan taloustieteilijän, Robert Barron ja Xavier Sala-i-Martinin oppikirjaa:Some of the bitterness of the copyright debate is reflectedin Stephen Manes’ attack on Lawrence LessigAccording to Stanford law professor and media darlingLawrence Lessig''Olisi hyvä antaa kaikki olemassa olevat keksinnöt vapaasti kaikkien tuottajien käyttöön, a “movement must begin in the streets”to fight a corrupt Congress, overconcentrated media andan overpriced legal systemmutta tämä käytäntö epäonnistuu tarjoamaan...kannustimia myöhempiin keksintöihin.Contrary to LessigVastakkain ovat olemassaolevien ideoiden käyttö ja innovatiivisen toiminnan kannustin.¹⁴''srantsTosiaan, kun monet meistä nauttivat mahdollisuudesta ladata vapaasti musiikkia internetistä, me olemme myös huolissamme siitä, kuinka muusikko voi ansaita elantonsa mikäli hänen musiikkinsa on välittömästi jaossa ilmaiseksi. Vaikka keskustelu tekijänoikeuksista ja patenteista käykin kiivaana, on olemassa yleinen hyväksyntä sille, että jonkinlaista suojaa tarvitaan keksijöille ja luojille, jotta he voisivat nauttia työnsä hedelmistä."Informaatio vain haluaa olla vapaana" -retoriikka vihjaa, ettei kukaan saisi ansaita omilla ideoillaan.Tästä huolimatta ei näytä olevan kovinkaan vahvaa vaatimusta, että samalla kun muiden on aivan hyväksyttävää kerätä oman työnsä hedelmät, keksijöiden ja luojien täytyisi tulla toimeen muiden hyväntekeväisyydellä.“Fair use” exceptions in existing copyright law Kaikesta tunteellisuudesta huolimatta näyttää siltä, että kummatkin osapuolet ovat samaa mieltä siitä, että immateriaalioikeuslakien tarvitsee löytää tasapaino luomistyön kannustimien tarjoamisen ja olemassa olevien ideoiden käytön vapauden välille.Toisin sanoen, kummatkin osapuolet ovat yksimielisiä siitä, että immateriaalioikeuslait ovat "tarpeellinen paha" joka synnyttää uutta innovaatiota, ja erimielisyys koskee sitä, mihin kohtaa viiva olisi piirrettävä.Aineettoman omaisuuden puolustajat pitävät nykyisiä monopolituottoja juuri ja juuri riittävinä, kun taas sen vastustajat pitävät niitä aivan liian korkeina.areso expansive that just about the only thing cut-and-pastersBoldrin & LevineOma analyysimme johtaa erimielisyyteen kummankin puolen kanssa. Järkeilymme kulkee seuraavanlaisesti. Jokainen haluaa monopolin. Kukaan ei halua kilpailla omien asiakkaidensa tai matkijoiden kanssa. Tällä hetkellä patentit ja tekijänoikeudet antavat tiettyjen ideoiden tuottajille monopolin. Luonnollisesti muutamat ihmiset tekevät jotain myös vastikkeettomasti. Uusien hyödykkeiden luojat eivät eroa vanhojen hyödykkeiden tuottajista: Against Intellectual Monopolyhe haluavat saada korvauksen vaivannäöstään. On kuitenkin pitkä ja vaarallinen hyppäys väitteestä, että keksijät ansaitsevat korvaukset vaivannäöstään siihen, että patentit ja tekijänoikeudet, Chapter 16clearly caneli monopolioikeudet, ovat paras tai ainoa tapa tuottaa se korvaus. Väitteet kuten "patentti on ''se''t do legally with a copyrighted work is directlycopy a sizable portion of ittapa, jolla jotakuta palkitaan arvokkaan kaupallisen idean keksimisestä, ovat yleisiä bisnes-, laki- ja talouslehdissä. Kuten tulemme näkemään, on olemassa monia muitakin tapoja, joilla keksijöitä palkitaan, jopa huomattavan suuresti, ja joista monet ovat parempia yhteiskunnalle kuin se monopolivoima, jonka patentit ja tekijänoikeudet nykyisellään suovat.Koska keksijöitä voidaan palkita myös ilman patentteja ja tekijänoikeuksia, meidän tulee kysyä: Onko totta, että aineeton omaisuus saavuttaa halutun päämäärän, eli luo kannustimia uuden keksimiselle ja luomiselle, jotka puolestaan korvaavat niistä aiheutuvat haitat?12Certainly Lessig is no friend of current copyright lawTämä kirja tarkastelee sekä todisteita että teoriaa. YetJohtopäätöksemme on, despiteettä luojien omistusoikeudet voivat olla hyvin suojattuja ilman aineetonta omaisuutta, eikä aineeton omaisuus kasvata innovaatiota eikä uuden luomista. Se on tarpeeton paha.Stephen Manes assertions to the contrary, he does believe inbalancing the rights of producers with the rights of users: his book* * *Free Culture speaks repeatedly of this balance and how it has beenlost in modern lawTämä kirja kertoo taloustieteestä, ei laista.13Like LessigTai toisin sanoen, tämä ei kerro millainen laki on, many economists are skeptical of current law– seventeen prominent economistsvaan millainen sen pitäisi olla. Jos olet kiinnostunut siitä, including several Nobel Prizewinnerskuinka todennäköisesti joudut vankilaan tiedostojen jakamisesta internetissä, filed a brief with the Utämä kirja ei ole sinulle.SJos olet kiinnustunut siitä, onko hyvä idea antaa lain estää sinua jakamasta tiedostoja internetissä, niin silloin tämä kirja on sinulle. Supreme Court in support ofLessig’s lawsuit challenging the extension of the length ofcopyrightHuolimatta siitä, että tämä kirja ei ole laista, jotain taustatuntemusta laista silti tarvitaan ymmärtämään taloustieteelliset kysymykset. Also like LessigTulemme tarkastelemaan taloustieteellisesti sitä, mitä viime aikoina on alettu kutsumaan "aineettomaksi omaisuudeksi", economists recognize a role forintellectual propertyerityisesti patentteja ja tekijänoikeuksia. Itseasiassa on olemassa kolme erilaista aineettoman omaisuuden tyyppiä, jotka suurin osa lakijärjestelmistä tunnustaa: where lawyers speak of balancing rightspatentit,economists speak of incentivestekijänoikeudet ja tavaramerkit. To quote from a textbook by twoprominent economists Robert Barro and Xavier Sala-i-MartinIt would be [good] to make the existing discoveries freelyavailable to all producersTavaramerkit ovat luonnostaan erilaisia verrattuna patentteihin ja tekijänoikeuksiin: niiden tarkoitus on identifioida hyödykkeiden, palveluiden ja ideoiden tuottajat. Kopiointi – mikä olisi tekijänoikeuden loukkaus – on hyvin erilaista verrattuna valehteluun – mikä olisi tavaramerkin loukkaus. Me emme tiedä hyvää syytä antaa markkinaosapuolten varastaa toisten identiteettejä tai naamioitua ihmisiksi, but this practice fails to providethejoita he eivät ole.Päinvastoin, on olemassa vahvoja taloudellisia hyötyjä siitä, että markkinaosapuolten annetaan vapaaehtoisesti identifioida itsensä.Vaikka voimmekin pohtia, onko välttämätöntä antaa Intelille monopolioikeutta käyttää sanaa "inside", on yleisesti ottaen hyvin vähän taloustieteellistä epäselvyyttä tavaramerkkien ansioista.incentives for further inventions. A tradeoff arisesbetween restrictions on the use of existing ideas and therewards to inventive activityPatentit ja tekijänoikeudet, kaksi tekijänoikeuden muotoa joihin keskitymme, ovat debatin ja kiistelyn kohteena. Ne eroavat toisistaan suojan laajuudessa, jonka ne tarjoavat. Patentit koskevat erityisenlaista toteutusta ideasta – joskin viime vuosina Yhdysvalloissa on viime vuosina kiinnitetty yhä vähemmän huomiota erityisyyteen. Patentit eivät kestä ikuisesti: Yhdysvalloissa 20 vuotta patenteille, jotka suojaavat valmistustekniikkaa, ja 14 vuotta muotoa suojaaville. Patentit tarjoavat suhteellisen laajan suojan: kukaan ei voi laillisesti käyttää samaa ideaa, vaikka hän keksisikin sen itsenäisesti, ilman patentin haltijan lupaa.¹⁶14IndeedTekijänoikeudet ovat skaalaltaan kapeampia, while many of us enjoy the benefits of being able to freelydownload music from the internetsuojaten vain tiettyä yksityiskohtaista ja ainutlaatuista teosta – joskin samaan tapaan patenttien kanssa, we worry as well how theskaala on laajentunut viime vuosina. Tekijänoikeus on myös paljon pidempi kestoltaan kuin patentti – tekijän elinikä plus 50 vuotta monissa Bernin sopimuksen allekirjoittaneissa valtioissa, ja – Yhdysvalloissa Sonny Bono Copyright Extension Actin ansiosta – tekijän elinikä olus 70 vuotta.¹⁷musician is to make a living if her music is immediately givenaway for freeYhdysvalloissa tekijänoikeuksille asetettuja rajoituksia ei löydy patenttilaista.While a furious debate rages over copyrights and patentsKuten Stephen Manes aivan oikein tuo esiin hyökkäyksessään Lawrence Lessigiä vastaan, "fair use" antaa tekijänoikeudella suojatun teoksen omistajalle rajoitettuja oikeuksia käyttää sitä, tehdä osittaisia kopioita siitä ja myydä niitä, riippumatta tekijänoikeuden omistajan mielihaluista. Sen lisäksi tietyt johdannaisteokset ovat sallittuja ilman lupaa: esimerkiksi parodia on sallittua,kun taas jatko-osat eivät.there is general agreement that some protection is needed to securefor inventors and creators the fruits of their laborsSekä patenttien että tekijänoikeuksien tapaukessa, taloustieteellisestä näkökulmasta, laki on kaksiosainen: oikeus ostaa ja myydä kopioita ideasta, ja oikeus kontrolloida kuinka ihmiset käyttävät omia kopioitaan. Ensimmäinen oikeus ei ole kiistanalainen. Tekijänoikeuslaissa, kun sitä sovelletaan teoksen luojaan, tätä kutsutaan usein "ensimmäisen myynnin oikeudeksi". Kuitenkin se jatkuu myös laillisena oikeutena muille myydä omistamiaan kopioita. Toinen oikeus sen sijaan on kiistanalainen, antaessaan aineettoman omaisuuden omistajalle oikeuden kontrolloida omaisuutta myynnin jälkeen. Tämä oikeus tuottaa monopolin – valtio velvoitetaan toimimaan sellaisia henkilöitä tai organisaatioita vastaan, jotka käyttävät ideaa tekijänoikeuden tai patentin omistajan kiellosta huolimatta. The rhetoricthat “information just wants to be free” suggests that no one shouldbe allowed to profit from her ideasAineettoman omaisuuden paremmin tunnettujen muotojen – patenttien ja tekijänoikeuksien – lisäksi on myös vähemmän tunnettuja tapoja suojata ideoita. Despite thisNäitä ovat sopimukset, there does notseem to be a strong lobby arguing that while it is ok for the rest ofus to benefit from the fruits of our laborskuten shrink-wrap- ja click-through-ehdot, inventors and creatorsshould have to subsist joita kukaan ei ikinä lue ostaessaan ohjelmistoa. Sellainen on the charity of othersmyös perinteisin suojauksen muoto – liikesalaisuus – sekä sen sopimusoikeudelliset ja juridiset muodot kuten salassapitosopimukset. Kuten patentit ja tekijänoikeudet, nämä kaikki keinot auttavat idean alkuperäistä omistajaa pitämään monopolin siihen.For all the emotionMe emme tiedä yhtään legitiimiä argumenttia sen puolesta, että ideoiden tuottajat eivät saisi hyötyä keksinnöistään. Vaikka ideoita voisikin myydä ilman laillisia oikeuksia, markkinat toimivat parhaiten kun on olemassa selkeästi määritellyt omistusoikeudet. Ei ainoastaan keksijän omistusoikeus tulisi olla suojeltu, vaan myös niiden oikeudet, jotka ovat laillisesti hankkineet kopion ideasta, suoraan tai epäsuoraan, alkuperäiseltä keksijältä. Ensimmäinen kannustaa keksimään, jälkimmäinen kannustaa keksintöjen leviämistä, it seems both sides agree thatomaksumista ja parantamista.intellectual property laws need to strike a balance betweenproviding sufficient incentive for creation and the freedom to makeuse of existing ideasMiksi kuitenkin pitäisi keksijöillä olla oikeus kontrolloida kuinka ostajat käyttävät ideaa tai luomusta? Tämä antaa keksijälle monopolin ideaan. Put it differentlyMe viittaamme tähän oikeuteen "aineettomana monopolina", korostaaksemme, että se on tämä kaikkia kopioita ideasta koskeva monopoli, joka on kiistanalainen, ei oikeus ostaa ja myydä kopioita. Valtio ei yleensä ylläpidä muiden hyödykkeiden tuottajien monopoleja. Tämä siksi, both sides agree thatintellectual property rights are a “necessary evil” that fostersinnovationkoska on laajalti huomioitu, and disagreement is over where the line should bedrawnettä monopolit luovat monia sosiaalisia kustannuksia. Aineeton monopoli ei eroa tässä suhteessa. For the supporters of intellectual propertyHaluamme esittää kysymyksen, currentBoldrin & Levine: Against Intellectual Monopolyluoko se myös sosiaalista hyötyä, Chapter 1joka ylittäisi nämä sosiaaliset kustannukset.7monopoly profits are barely enough; for its enemies currently* * *monopoly profits are too high.Our analysis leads to conclusions that are at variance withboth sidesThe U. Our reasoning proceeds along the following linesS.Everyone wants a monopoly. No one wants 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 compete against hisown customers, or against imitatorstheir respective writings and discoveries. Currently ”¹⁸ Our perspective on patents andcopyrights grant producers copyright is a similar one: promoting the progress of certain ideas science and the useful arts is a monopoly. Certainlyfew people do something in exchange for nothing. Creators crucial ingredient of newgoods are not different economic welfare, from producers of old ones: they want solving such profound economic problems as poverty, to becompensated for their effortsuch mundane personal nuisances as boredom. HoweverFrom a social point of view, it is a long and dangerousjump from in the assertion that innovators deserve compensation fortheir efforts to view of the founding fathers, the conclusion that purpose of patents and copyrights, that ismonopoly, are not to enrich the best or few at the only way expense of providing the many. Nobody doubts that rewardJ.Statements such as “A patent K. Rowling and Bill Gates have been greatly enriched by their intellectual property – nor is the way it surprising that they would argue in favor of rewarding somebodyfor coming up with a worthy commercial idea”it. But common sense and the U.S. Constitution say that these rights must be justified by bringing benefits to all of us.15abound in thebusiness, legal and economic pressThe U. As we shall see there are manyother ways in which innovators are rewarded, even substantially,S. Constitution is explicit that what is to be given to authors and most of them are better for society than inventors is an exclusive right – a monopoly. Implicit is the idea that giving this monopoly powerpatents serves to promote the progress of science and copyright currently bestowuseful arts. Since innovators may berewarded even without patents and copyrightThe U.S. Constitution was written in 1787. At that time, we should ask: is ittrue that intellectual property achieves the intended purpose idea ofcopyright and patent wascreating incentives for innovation and creation that offset theirconsiderable harm?This book examines both relatively new, the evidence products to which they applied few, and the theorytheir terms short. Ourconclusion is that creators’ property rights can be well protected inIn light of the absence experience of the subsequent 219 years we might ask: is it true that legal grants of monopoly serve to promote the progress of intellectual property, science and that the latter does notuseful arts? increase either innovation or creationCertainly common sense suggests that it should. They are an unnecessaryevil.***This How is a book about economics, not about law. Or putdifferentlymusician to make a living if the moment she performs her music, everyone else can copy and give it is not about what away for free? Why would the law is but rather what large corporations pay the lawshould be. If you are interested in whether or not you are likely small inventor when they can simply take his idea? It is hard towind up in jail for sharing your files over imagine life without the internet, this is notandthe book for you. If you today we are interested in whether it is a good ideafor the law to prevent you from sharing your files over the internet,then this book is for youall jet setters.However, while this book is Is not about the law, somebackground on explosion of creativity and invention unleashed since the law is necessary to understanding writing of the economicissuesU.S. We are going Constitution a testimony to examine the economics powerful benefit of what has, inrecent years, come to be called “intellectual intellectual property,” especiallypatents ? Would not the world without patent and copyright. In factbe a sad cold world, there are three broad types ofBoldrin & Levine: Against Intellectual Monopoly, Chapter 1empty of new music and of marvelous new inventions?8intellectual property recognized in most legal systems: patents,copyrights and trademarksSo the first question we will pose is what the world might be like without intellectual monopoly.Trademarks are different in nature than patents Patents andcopyrights: they serve to identify the providers of goods, servicesor have not secured monopolies on all ideasat all times. Copying – which would be a violation of copyright – It isquite different from lying – natural then to examine times and industries in which would be a violation oftrademark. We do legal protection for ideas have not know of a good reason for allowing marketparticipants been available to steal identities see whether innovation and creativity were thriving or masquerade as people they arenotwere stifled. Conversely, there are strong economic advantages in allowingmarket participants to voluntarily identify themselves. While wemay wonder if it It is necessary to allow the Intel Corporation amonopoly over case, for example, that neither the use of internet nor the word “inside,” jet engine were invented in general there islittle economic dispute over the merits hopes of trademarkssecuring exclusive rights.Patents and copyrightsIn fact, the two forms of intellectualproperty on which we focus, are a subject ordinarily think of debate andcontroversy“innovative monopoly” as an oxymoron. They differ from each other in the extent of coveragethey provide. Patents apply to specific implementations of We shall see that when monopoly over ideas is absent, competition is fierce –although in recent years in the Uand that as a result innovation and creativity thrive.S. there has been decreasingemphasis on specificity. Patents do not last forever: in the UnitedStates, 20 years for Whatever a world without patents covering techniques of manufacture,and 14 years for ornamentationcopyrights would be like, it would not be a world devoid of great new music and beneficial new drugs. Patents provide relatively broadprotection: no one can legally use the same idea, even if theyindependently rediscover it, without permission from the patentholder.16Copyrights You will gather by now that we are narrower in scope, protecting only thespecific details skeptical of a particular narrative monopoly – although as with the caseof patents, the scope has been increasing are economists in recent yearsgeneral. Copyrightis also much longer in duration than patent – the life Our second topic will be an examination of the authorplus 50 years for the many signatory countries of the BerneConvention, social costs created by copyrights and patents. Adam Smith – in the U.S. since the Sonny Bono CopyrightTerm Extension Act a friend and teacher of James Watt – the life was one of the author plus 70 years.17first economists to explain how monopolies make less available at a higher price. In some cases, such as the U.S. there are limitations on copyright production of music, this may not present inpatent law. As Stephen Manes correctly points out be a great social evil; in his attack onLawrence Lessig, other cases such as the right of fair use allows the purchaser availability of AIDS drugs, it may be acopyrighted item limited rights to employ itvery great evil indeed. However, as we shall see, make partial copies ofit low availability and resell them, regardless high price is only one of the desires many costs of the copyright holdermonopoly.In addition, certain derivative works are allowed withoutpermissionThe example of James Watt is a case in point: parodies are allowed, for example, while sequels arenot.In by making use of the case of both patents and copyright, from the point ofview of economicslegal system, he inhibited competition and prevented his competitors from introducing useful new advances. We shall also see that because there are two ingredients in the law: the rightno countervailing market forces, government-enforced monopolies such as intellectual monopoly are particularly problematic.to buy and sell copies of ideasWhile monopoly may be evil, and while innovation may thrive in the right to control how otherpeople make use absence of their copiestraditional legal protections such as patents and copyrights, it may be that patents and copyrights serve to increase innovation. The first right presumption in the U.S. Constitution is not controversial.Boldrin & Levine: Against Intellectual Monopolythat they do, Chapter 19In copyright law, when applied to and that the creator this right isbenefits of more entertainment and moresometimes called innovation outweigh the “right costs of first salethese monopolies.” However, it extends alsoto Certainly the legitimate rights of others to sell their copies. It monopolies created by patents and copyright may be troublesome – but if that is the secondright, enabling the owner to control the use cost of intellectual propertyafter salehaving blockbuster movies, that automobiles and flu vaccine, most of us are prepared to put up with it. That is controversial. This right produces a monopoly –enforced the position traditionally taken by the obligation economists, most of the government to act againstindividuals or organizations that use the idea whom support patents and copyright, at least in ways prohibited bythe copyright or patent holderprinciple.In addition to Some of them take the well-known forms of view that intellectual property– patents and copyright – there monopoly is an unavoidable evil if we are also lesser-known ways to have any innovation at all; other simply argue that at least some modest amount ofprotecting ideas. These include contractual agreements, such as theshrink-wrap intellectual monopoly is desirable to provide adequate incentive for innovation and click-through agreements that you never readwhen you buy softwarecreation. They also include Our third topic will be an examination of the most traditionalform of protection – trade secrecy – theoretical arguments supporting intellectual monopoly, as well as its contractual andlegal manifestations such as noncounter-disclosure agreementsarguments about why intellectual monopoly may hurt rather than foster creative activity. Likepatents and copyright all of these devices serve to help theoriginator of an idea maintain It is crucial to recognize that intellectual monopoly is a double-edged sword. The rewards to innovative effort are certainly greater if success is awarded a government monopoly over it.We do not know of any legitimate argument that producersof ideas should not be able to profit from their creations. Whileideas could be sold in But the absence existence of a legal right, markets functionbest in monopolies also increases the presence cost of clearly defined property rights. Not onlycreation. In one extreme case, a movie that cost $218 to make had to pay $400,000should for the property music rights of innovators be protected but also therights of those who have legitimately obtained a copy of the idea.¹⁹ As we will argue at length,directly theoretical arguments alone cannot tell us if intellectual monopoly increases or indirectly, from the original innovatordecreases creative activity. The formerencourages innovation, In the latter encourages the diffusionfinal analysis,adoption the only justification for intellectual property is that it increases – ''de facto'' and substantially – innovation and improvement of innovationscreation.Why, however, should creators What have the right to controlhow purchasers make use last 219 years taught us? Our final topic is an examination of an idea or creation? This givescreators a the evidence about intellectual monopoly over the ideaand innovation. We refer to this right as“intellectual Is it a fact that intellectual monopoly,” leads to emphasize more creativity and innovation? Our examination of the data shows no evidence that it is does. Nor are we the first economists to reach this monopoly overall copies conclusion. After reviewing an earlier set of an idea that is controversialfacts in 1958, not the right to buy anddistinguished economist Fritz Machlup wrotesell copies. The government does not ordinarily enforcemonopolies for producers ''“it would be irresponsible, on the basis of our present knowledge of other goodsits economic consequences, to recommend instituting [a patent system]. This is because it ”²⁰'' Since there iswidely recognized no evidence that intellectual monopoly creates many social costsachieves the desired purpose of increasing innovation and creation, it has no benefits.Intellectual monopoly So there is no different in this respect. The questionwe address is whether it also creates social need for society to balance the benefits commensuratewith these social against the costs. This leads us to our final conclusion: intellectual property is an unnecessary evil.***The U.S. Constitution allows Congress “To promote the'''Comments''' progress of science We are grateful to George Selgin and useful artsJohn Turner, by securing for limited times toauthors of the University of Georgia Terry College of Business, for pointing out a number of factual mistakes and inventors imprecisions in our rendition of the exclusive right to their respectiveBoldrin & Levine: Against Intellectual MonopolyJames Watt story, Chapter 110writings as it had appeared in earlier versions of this chapter and discoveriesin our 2003 Lawrence R.”18Our perspective on patents Klein Lecture, published in Boldrin andcopyright is Levine [2004]. In a similar one: promoting recent article, Selgin and Turner [2006], also take issue with our interpretation of the progress of science facts andthe useful arts is add a crucial ingredient of economic welfarefew additional ones that, fromsolving such profound economic problems as povertyin their view, to suchmundane personal nuisances contradict our vision of James Watt as boredom. From a social point primary example ofviewan intellectual monopolist. It seems clear, even from the references quoted by Selgin and in Turner, that many students of the Industrial Revolution share our view of the founding fathers, the purpose of– more properly: we shared theirs. patents Selgin and Turner’s argument and copyrights is facts do not to enrich , however, address the few at the expense of themanyissues we raise about Boulton and Watt. Nobody doubts that JTake their discussion of the hypothetical “Watt sans patent. K. Rowling ” Obviously Boulton and Bill Gates have beengreatly enriched by Watt fought hard for their intellectual property – nor is it surprisingthat patents, and obviously they claimed innovation would argue in favor of ithave been impossible without them. But common sense and theU.S. Constitution say Our point is another: could they have made enough money to compensate their opportunity cost without the patent? All the evidence, including that these rights must be justified reported by bringingbenefits to all of usSelgin and Turner, suggests this is the case.The UIn fact they make our case quite convincingly: quoting F.SM. Constitution is explicit Scherer they assert that what is to be given toauthors seventeen years before the second patent expired they, Boulton and inventors is an exclusive right – a monopolyWatt, were already breaking even. Implicitis the idea In economics, “breaking even” means that giving this monopoly serves to promote your opportunity costs have been paid, and your capital has received theprogress of science risk-adjusted, expected return, and useful artsScherer is a distinguished economist. The U.S. Constitution waswritten in 1787. At Whatever profits Boulton and Watt made after that time, the idea of copyright were all extra rents due to monopoly power and patent wasrelatively new, the products economically, not needed to which they applied few, and pay theirterms shortopportunity costs. In light of So, we all agree that, at least for the experience of final 17 years, the subsequent 219 yearswe might ask: is patent was not serving a useful economic purpose, hence it was damaging because it true that legal grants of created monopoly serve topromote the progress of science and the useful arts?Certainly common sense suggests that it should. How is amusician to make a living if the moment she performs her music,everyone else can copy and give it away for free? Why would thelarge corporations pay the small inventor when they can simplytake his idea? It is hard to imagine life without the internet, andtoday we are all jet setters. Is not the explosion of creativity andinvention unleashed since the writing of the U.S. Constitution atestimony to the powerful benefit of intellectual property? Wouldnot 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 mightbe like without intellectual monopoly. Patents and copyrights havenot secured monopolies on all ideas at all times. It is natural then toexamine times and industries in which legal protection for ideashave not been available to see whether innovation and creativitywere thriving or were stifled. It is the case, for example, thatneither the internet nor the jet engine were invented in hopes ofsecuring exclusive rights. In fact, we ordinarily think of“innovative monopoly” as an oxymoron. We shall see that whenmonopoly over ideas is absent, competition is fierce – and that as aresult innovation and creativity thrive. Whatever a world withoutBoldrin & Levine: Against Intellectual Monopoly, Chapter 111patents and copyrights would be like, it would not be a worlddevoid of great new music and beneficial new drugs.You will gather by now that we are skeptical of monopoly– as are economists in general. Our second topic will be anexamination of the many social costs created by copyrights andpatents. Adam Smith – a friend and teacher of James Watt – wasone of the first economists to explain how monopolies make lessavailable at a higher price. In some cases, such as the production ofmusic, this may not be a great social evil; in other cases such as theavailability of AIDS drugs, it may be a very great evil indeed.However, as we shall see, low availability and high price is onlyone of the many costs of monopoly. The example of James Watt isa case in point: by making use of the legal system, he inhibitedcompetition and prevented his competitors from introducing usefulnew advances. We shall also see that because there are nocountervailing market forces, government-enforced monopoliessuch as intellectual monopoly are particularly problematic.While monopoly may be evil, and while innovation maythrive in the absence of traditional legal protections such as patentsand copyrights, it may be that patents and copyrights serve toincrease innovation. The presumption in the U.S. Constitution isthat they do, and that the benefits of more entertainment and moreinnovation outweigh the costs of these monopolies. Certainly themonopolies created by patents and copyright may be troublesome– but if that is the cost of having blockbuster movies, automobilesand flu vaccine, most of us are prepared to put up with it. That isthe position traditionally taken by economists, most of whomsupport patents and copyright, at least in principle. Some of themtake the view that intellectual monopoly is an unavoidable evil ifwe are to have any innovation at all; other simply argue that atleast some modest amount of intellectual monopoly is desirable toprovide adequate incentive for innovation and creation. Our thirdtopic will be an examination of the theoretical argumentssupporting intellectual monopoly, as well as counter-argumentsabout why intellectual monopoly may hurt rather than fostercreative activity.It is crucial to recognize that intellectual monopoly is adouble-edged sword. The rewards to innovative effort are certainlygreater if success is awarded a government monopoly. But theexistence of monopolies also increases the cost of creation. In oneextreme case, a movie that cost $218 to make had to pay $400,000for the music rights.19As we will argue at length, theoreticalBoldrin & Levine: Against Intellectual Monopoly, Chapter 112arguments alone cannot tell us if intellectual monopoly increasesor decreases creative activity.In the final analysis, the only justification for intellectualproperty is that it increases – de facto and substantially –innovation and creation. What have the last 219 years taught us?Our final topic is an examination of the evidence about intellectualmonopoly and innovation. Is it a fact that intellectual monopolyleads to more creativity and innovation? Our examination of thedata shows no evidence that it does. Nor are we the firsteconomists to reach this conclusion. After reviewing an earlier setof facts in 1958, the distinguished economist Fritz Machlup wrote“it would be irresponsible, on the basis of our presentknowledge of its economic consequences, to recommendinstituting [a patent system].”20Since there is no evidence that intellectual monopolyachieves the desired purpose of increasing innovation and creation,it has no benefits. So there is no need for society to balance thebenefits against the costs. This leads us to our final conclusion:intellectual property is an unnecessary evil.Boldrin & Levine: Against Intellectual Monopoly, Chapter 113CommentsWe are grateful to George Selgin and John Turner, of theUniversity of Georgia Terry College of Business, for pointing out anumber of factual mistakes and imprecisions in our rendition of theJames Watt story, as it had appeared in earlier versions of thischapter and in our 2003 Lawrence R. Klein Lecture, published inBoldrin and Levine [2004]. In a recent article, Selgin and Turner[2006], also take issue with our interpretation of the facts and add afew additional ones that, in their view, contradict our vision ofJames Watt as a primary example of an intellectual monopolist. Itseems clear, even from the references quoted by Selgin and Turner,that many students of the Industrial Revolution share our view –more properly: we shared theirs.Selgin and Turner’s argument and facts do not, however,address the issues we raise about Boulton and Watt. Take theirdiscussion of the hypothetical “Watt sans patent.” ObviouslyBoulton and Watt fought hard for their patents, and obviously theyclaimed innovation would have been impossible without them. Ourpoint is another: could they have made enough money tocompensate their opportunity cost without the patent? All theevidence, including that reported by Selgin and Turner, suggeststhis is the case. In fact they make our case quite convincingly:quoting F.M. Scherer they assert that seventeen years before thesecond patent expired they, Boulton and Watt, were alreadybreaking even. In economics, “breaking even” means that youropportunity costs have been paid, and your capital has received therisk-adjusted, expected return, and Scherer is a distinguishedeconomist. Whatever profits Boulton and Watt made after that,were all extra rents due to monopoly power and, economically, notneeded to pay their opportunity costs. So, we all agree that, at leastfor the final 17 years, the patent was not serving a useful economicpurpose, hence it was damaging because it created monopolydistortions. '''Notes'''

1 ¹ Lord [1923] p. 5-3.htm.2 ² Carnegie [1905] p. 157.3 ³ Much of the story of James Watt can be found in Carnegie[1905], Lord [1923], and Marsden [2004]. Information on the roleBoldrin & Levine: Against Intellectual Monopoly, Chapter 114 role of Boulton in Watt’s enterprise is drawn from Mantoux [1905]. Alively description of the real Watt, as well of his legal wars againstHornblower – and many other – and of how he subsequently usedhis status to alter the public memory of the facts, can be found inMarsden [2004]. That Pickard’s patent was unjust is also the viewof Selgin and Turner (2006), who, like Watt, do not seem toprovide any evidence of why it was so. As both the Lord and Carnegie works are out of copyright,both are available online at the very good Rochester site on thehistory of steam power www.history.rochester.edu/steam. Laterdrafts of this chapter benefited enormously from the arrival ofGoogle Book Search, which allowed us to check so many originalhistorical sources about James Watt and the steam engine wewould have never thought possible.4 ⁴ Lord [1923] gives figures on the number of steam enginesproduced by Boulton and Watt between 1775 and 1800, while the''The Cambridge Economic History of Europe '' [1965] provides dataon the spread of total horsepower between 1800 and 1815 and thespread of steam power more broadly. However, Kanefsky [1979]has largely discredited the Lord numbers, which is why we usefigures on machines and horsepower from Kanefsky and Robey[1980]. Our horsepower calculations are based on 510 steamengines generating about 5,000 horsepower in the U.K. in 1760.During the subsequent forty years we estimate that about 1,740engines generating about 30,000 horsepower were added. Thisgives our estimate that the total increased at a rate of roughly 750horsepower each year. For 1815 we estimate about 100,000horsepower – that is, the average of the figures Kanefsky andRobey [1980] give for 1800 and 1830. This together with the35,000 horsepower we estimate for 1800 gives our estimate thatthe total increased at a rate of roughly 4,000 horsepower each yearafter 1800. Data on the fuel efficiency, the “duty,” of steam engines isfrom Nuvolari [2004b].

5 ⁵ Kanefsky and Robey [1980] together with Smith [1977-78]provide a careful historical account of the detrimental impact of theNewcomen’s, first, and of Watt’s patents, later, on the rate ofadoption of steam technology. Apart from the books just quoted,information about the Hornblower’s engine and its relation toBoldrin & Levineto Watt’s are widely available through easily accessible web sites, such as Encyclopedia Britannica, Wikipedia, and so on. Some details of Hornblower’s invention may be of interest. It was patented in 1781 and consisted of a steam engine with two cylinders, significantly more efficient than the Boulton and Watt design. Boulton and Watt challenged his invention, claiming infringement of their patent because Hornblower engine used a separate condenser, and won. With the 1799 judicial decision against him, Hornblower had to pay Boulton and Watt a substantial amount of money for past royalties, while losing all opportunities to further develop the compound engine. His compound steam engine principle was not revived until 1804 by Arthur Woolf. It became one of the main ingredients in the efficiency explosion that followed the expiration of Boulton and Watt’s patent. Watt’s low-pressure engines were a dead end for further development; history shows that high-pressure, non-condensing engines were the way forward. Boulton and Watt’s patent, covering all kinds of steam engines prevented anyone from working seriously on the high-pressure version until 1800. This included William Murdoch, an employee of Boulton and Watt, who had developed a version of the high-pressure engine in the early 1780s. He named it the “steam carriage” and was legally barred from developing it by Boulton and Watt’s successful addition of the high-pressure engine to their patent, although Boulton and Watt never spent a cent to develop it. For the details of this story the reader should check the on line site Cotton Times at http: Against Intellectual Monopoly//www.cottontimes.co.uk/ or Carnegie [1905, pp. 140-141]. The “William Murdoch” entry in Wikipedia provides a good summary. More generally various researchers directly connect Murdoch to Trevithick, who is now considered the official “inventor” (in 1802) of the high-pressure engine. Quite plainly, the evidence suggests that Boulton and Watt’s patent retarded the high-pressure steam engine, Chapter 1and hence economic development, of about 16 years.15⁶ The story about Pickard’s patent blocking adoption by Watt is told in von Tunzelmann [1978]. ⁷ Thompson [1847] p. 110 and quoted also in Lord [1923]. ⁸ Scherer [1984] pp. 24-25.

Watt’s are widely available through easily accessible web sites,such as Encyclopedia Britannica, Wikipedia, and so on. Somedetails of Hornblower’s invention may be of interest. It waspatented in 1781 and consisted of a steam engine with twocylinders, significantly more efficient than the Boulton and Wattdesign. Boulton and Watt challenged his invention, claiminginfringement of their patent because Hornblower engine used aseparate condenser, and won. With the 1799 judicial decisionagainst him, Hornblower had to pay Boulton and Watt a substantialamount of money for past royalties, while losing all opportunitiesto further develop the compound engine. His compound steamengine principle was not revived until 1804 by Arthur Woolf. Itbecame one of the main ingredients in the efficiency explosion thatfollowed the expiration of Boulton and Watt’s patent.Watt’s low-pressure engines were a dead end for furtherdevelopment; history shows that high-pressure, non-condensingengines were the way forward. Boulton and Watt’s patent,covering all kinds of steam engines prevented anyone fromworking seriously on the high-pressure version until 1800. Thisincluded William Murdoch, an employee of Boulton and Watt,who had developed a version of the high-pressure engine in theearly 1780s. He named it the “steam carriage” and was legallybarred from developing it by Boulton and Watt’s successfuladdition of the high-pressure engine to their patent, althoughBoulton and Watt never spent a cent to develop it. For the detailsof this story the reader should check the on line site Cotton Timesat http://www.cottontimes.co.uk/ or Carnegie [1905, pp. 140-141].The “William Murdoch” entry in Wikipedia provides a goodsummary. More generally various researchers directly connectMurdoch to Trevithick, who is now considered the official“inventor” (in 1802) of the high-pressure engine. Quite plainly, theevidence suggests that Boulton and Watt’s patent retarded thehigh-pressure steam engine, and hence economic development, ofabout 16 years.6 The story about Pickard’s patent blocking adoption by Watt istold in von Tunzelmann [1978].7 Thompson [1847] p. 110 and quoted also in Lord [1923].8 Scherer [1984] pp. 24-25. Boldrin & Levine: Against Intellectual Monopoly, Chapter 116 9 ⁹ U.S. District Court for Eastern District of Virginia Plaintiff NTP,Inc. v. Defendant Research In Motion Ltd. Civil Action Number3:01CV767-JRS.10 ¹⁰ U.S. Patent 6219694.11 ¹¹ United States Court of Appeals for the 9th Circuit Court, In Re:Napster.12 ¹² Stephen Manes [2004] .13 ¹³ Lessig [2004].14 ¹⁴ Robert Barro and Xavier Sala-i-Martin [1999] p. 290.15 ¹⁵ ''The Economist'', June 23rd 2001, page 42, with italics added.16 ¹⁶ Information on U.S. Patent Law can be found at the U.S. PatentOffice at www.uspto.gov/main/patents.htm. In addition to utilityand design patents, there is also a third class of patent, the plantpatent. Like a utility patent, a plant patent lasts 20 years.17 ¹⁷ The Sony Bono Copyright Extension Act can be found online atlibrary.thinkquest.org/J001570/sonnybonolaw.html, while theBerne Convention on Copyright can be found atwww.law.cornell.edu/treaties/berne/. A useful discussion of fairuse, including parodies, is Gall [2000].18 ¹⁸ U.S. Constitution Article 1, Section 8. The U.S. Constitution, notbeing copyrighted, is online at various places, such ashttp://www.law.cornell.edu/constitution.19 ¹⁹ The $218 movie was Tarnation and the information from BBCNews, is at http://news.bbc.co.uk/2/hi/entertainment/3720455.stm.20 ²⁰ Machlup [1958], p. 80. He nevertheless concluded that weshould keep the patent system. We discuss his position further inour conclusion.[[Luokka:Käännöstyöt]]