Muutokset

***The industrial revolution was long ago. But the issue ofintellectual property is a contemporary one. At the time we wrotethisTeollisesta vallankumouksesta on jo aikaa, Umutta kysymys aineettomasta omaisuudesta on edelleen ajankohtainen.S. District Judge Tätä kirjaa kirjoitettaessa yhdysvaltalaistuomari James Spencer had been threatening forthree years to shut down the widely used on uhkaillut kolmen vuoden ajan sulkea laajasti käytetyn Blackberryn viestintäverkon – patenttikiistan takia.⁹ Eikä Blackberry messagingnetwork – over a patent dispute.9And Blackberry itself is notwithout sinole 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 Napsternetwork was shut down by a federal judge in July of 2000 in aOsa tekijänoikeusväittelyn katkeruudesta heijastuu Stephen Manesin hyökkäyksessä Lawrence Lessigiä kohtaan:dispute over the sharing of copyrighted files.11Emotions run highon both sides''Stanfordin lakiprofessorin ja median suosikin Lawrence Lessigin mukaan “liikkeen täytyy alkaa kaduilta”, jotta korruptoitunutta kongressia, ylikeskittynyttä mediaa ja ylihintaista oikeusjärjestelmää vastaan voidaan taistella. We have the anti Vastoin Lessigin avautumista... “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. On the otherextremeMutta huolimatta Stephen Manesin väitteestä, large music and software companies argue that a worldwithout intellectual property would be a world without new ideashän uskoo tuottajien ja kuluttajien välisten oikeuksien tasapainottamiseen: hänen kirjansa Free Culture puhuu jatkuvasti tästä tasapainosta ja siitä, kuinka se on menetetty nykyaikaisessa laissa.¹³Some of the bitterness of the copyright debate is reflectedin Stephen Manes’ attack on Lawrence LessigAccording to Stanford law professor and media darlingLawrence Kuten Lessig, a “movement must begin in the streets”to fight a corrupt Congressmonet taloustieteilijät ovat skeptisiä nykyisen lain suhteen - 17 huomattavaa taloustieteilijää, mukaanlukien useita Nobel-palkinnon voittaneita, overconcentrated media andan overpriced legal systemjättivät kirjelmän Yhdysvaltain korkeimmalle oikeudelle kannattaakseen Lessigin haastetta tekijänoikeuden pituuden kyseenalaistamiseksi...Contrary to Kuten Lessig'srants, myös taloustieteilijät tunnustavat immateriaalioikeuksien roolin: kun lakimiehet puhuvat oikeuksien tasapainottamisesta, taloustieteilijät puhuvat kannustimista...“Fair use” exceptions in existing copyright law...areso expansive that just about the only thing cutLainataksemme kahden huomattavan taloustieteilijän, Robert Barron ja Xavier Sala-andi-pastersBoldrin & LevineMartinin oppikirjaa: Against Intellectual Monopoly, Chapter 16clearly can't do legally with a copyrighted work is directlycopy a sizable portion of it'Olisi hyvä antaa kaikki olemassa olevat keksinnöt vapaasti kaikkien tuottajien käyttöön, mutta tämä käytäntö epäonnistuu tarjoamaan... kannustimia myöhempiin keksintöihin. Vastakkain ovat olemassaolevien ideoiden käyttö ja innovatiivisen toiminnan kannustin.¹⁴''12Certainly Lessig is no friend of current copyright lawTosiaan, 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. Yet Vaikka keskustelu tekijänoikeuksista ja patenteista käykin kiivaana, despiteStephen Manes assertions to the contraryon olemassa yleinen hyväksyntä sille, että jonkinlaista suojaa tarvitaan keksijöille ja luojille, jotta he does believe invoisivat 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. balancing the rights of producers with the rights of users: his bookFree Culture speaks repeatedly of this balance and how it has beenlost in modern lawKaikesta 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.13Like LessigToisin sanoen, many economists are skeptical of current law– seventeen prominent economistskummatkin osapuolet ovat yksimielisiä siitä, including several Nobel Prizewinnersettä immateriaalioikeuslait ovat "tarpeellinen paha" joka synnyttää uutta innovaatiota, filed a brief with the Uja erimielisyys koskee sitä, mihin kohtaa viiva olisi piirrettävä.SAineettoman omaisuuden puolustajat pitävät nykyisiä monopolituottoja juuri ja juuri riittävinä, kun taas sen vastustajat pitävät niitä aivan liian korkeina. Supreme Court in support ofLessig’s lawsuit challenging the extension of the length ofcopyrightOma 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: he haluavat saada korvauksen vaivannäöstään. Also like LessigOn kuitenkin pitkä ja vaarallinen hyppäys väitteestä, että keksijät ansaitsevat korvaukset vaivannäöstään siihen, economists recognize a role forintellectual property: where lawyers speak of balancing rightsettä patentit ja tekijänoikeudet, eli monopolioikeudet,economists speak of incentivesovat paras tai ainoa tapa tuottaa se korvaus. To quote from a textbook by twoprominent economists Robert Barro and Xavier SalaVäitteet kuten "patentti on ''se'' tapa, jolla jotakuta palkitaan arvokkaan kaupallisen idean keksimisestä, ovat yleisiä bisnes-i, laki-MartinIt would be [good] to make the existing discoveries freelyja 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?available to all producers, but this practice fails to providetheTämä kirja tarkastelee sekä todisteita että teoriaa.Johtopäätöksemme on, että luojien omistusoikeudet voivat olla hyvin suojattuja ilman aineetonta omaisuutta, eikä aineeton omaisuus kasvata innovaatiota eikä uuden luomista.Se on tarpeeton paha.incentives for further inventions. A tradeoff arisesbetween restrictions on the use of existing ideas and therewards to inventive activity* * * Tämä kirja kertoo taloustieteestä, ei laista. Tai toisin sanoen, tämä ei kerro millainen laki on, vaan millainen sen pitäisi olla. Jos olet kiinnostunut siitä, kuinka todennäköisesti joudut vankilaan tiedostojen jakamisesta internetissä, tämä kirja ei ole sinulle. Jos olet kiinnustunut siitä, onko hyvä idea antaa lain estää sinua jakamasta tiedostoja internetissä, niin silloin tämä kirja on sinulle.14IndeedHuolimatta siitä, että tämä kirja ei ole laista, while many of us enjoy the benefits of being able to freelydownload music from the internetjotain taustatuntemusta laista silti tarvitaan ymmärtämään taloustieteelliset kysymykset. Tulemme tarkastelemaan taloustieteellisesti sitä, mitä viime aikoina on alettu kutsumaan "aineettomaksi omaisuudeksi", erityisesti patentteja ja tekijänoikeuksia. Itseasiassa on olemassa kolme erilaista aineettoman omaisuuden tyyppiä, jotka suurin osa lakijärjestelmistä tunnustaa: patentit, we worry as well how thetekijänoikeudet ja tavaramerkit.musician is to make a living if her music is immediately givenaway for freeTavaramerkit ovat luonnostaan erilaisia verrattuna patentteihin ja tekijänoikeuksiin: niiden tarkoitus on identifioida hyödykkeiden, palveluiden ja ideoiden tuottajat.While a furious debate rages over copyrights and patentsKopiointi – 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, joita 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.there is general agreement that some protection is needed to securefor inventors and creators the fruits of their laborsPatentit 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. The rhetoricthat “information just wants to be free” suggests that no one shouldbe allowed to profit from her ideasPatentit eivät kestä ikuisesti: Yhdysvalloissa 20 vuotta patenteille, jotka suojaavat valmistustekniikkaa, ja 14 vuotta muotoa suojaaville. Despite thisPatentit tarjoavat suhteellisen laajan suojan: kukaan ei voi laillisesti käyttää samaa ideaa, vaikka hän keksisikin sen itsenäisesti, there does notilman patentin haltijan lupaa.¹⁶seem to be a strong lobby arguing that while it is ok for the rest ofus to benefit from the fruits of our laborsTekijänoikeudet ovat skaalaltaan kapeampia, suojaten vain tiettyä yksityiskohtaista ja ainutlaatuista teosta – joskin samaan tapaan patenttien kanssa, inventors and creatorsshould have to subsist skaala on the charity of otherslaajentunut viime vuosina.For all the emotionTekijänoikeus on myös paljon pidempi kestoltaan kuin patentti – tekijän elinikä plus 50 vuotta monissa Bernin sopimuksen allekirjoittaneissa valtioissa, it seems both sides agree thatja – Yhdysvalloissa Sonny Bono Copyright Extension Actin ansiosta – tekijän elinikä olus 70 vuotta.¹⁷intellectual property laws need to strike a balance betweenproviding sufficient incentive for creation and the freedom to makeuse of existing ideasYhdysvalloissa tekijänoikeuksille asetettuja rajoituksia ei löydy patenttilaista. Put it differentlyKuten Stephen Manes aivan oikein tuo esiin hyökkäyksessään Lawrence Lessigiä vastaan, both sides agree thatintellectual property rights are a “necessary evil” that fostersinnovation"fair use" antaa tekijänoikeudella suojatun teoksen omistajalle rajoitettuja oikeuksia käyttää sitä, tehdä osittaisia kopioita siitä ja myydä niitä, and disagreement is over where the line should bedrawnriippumatta tekijänoikeuden omistajan mielihaluista. For the supporters of intellectual property, currentBoldrin & LevineSen lisäksi tietyt johdannaisteokset ovat sallittuja ilman lupaa: Against Intellectual Monopolyesimerkiksi parodia on sallittua, Chapter 1kun taas jatko-osat eivät.7monopoly profits are barely enough; for its enemies currentlymonopoly profits are too highSekä patenttien että tekijänoikeuksien tapaukessa, taloustieteellisestä näkökulmasta, laki on kaksiosainen: oikeus ostaa ja myydä kopioita ideasta, ja oikeus kontrolloida kuinka ihmiset käyttävät omia kopioitaan.Our analysis leads to conclusions that are at variance withboth sidesEnsimmäinen oikeus ei ole kiistanalainen. Our reasoning proceeds along the following linesTekijänoikeuslaissa, kun sitä sovelletaan teoksen luojaan, tätä kutsutaan usein "ensimmäisen myynnin oikeudeksi".Everyone wants a monopolyKuitenkin se jatkuu myös laillisena oikeutena muille myydä omistamiaan kopioita. No one wants to compete against hisown customersToinen oikeus sen sijaan on kiistanalainen, or against imitatorsantaessaan 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. Currently patents andcopyrights grant producers of certain ideas a monopoly. Certainlyfew people do something in exchange for nothingAineettoman omaisuuden paremmin tunnettujen muotojen – patenttien ja tekijänoikeuksien – lisäksi on myös vähemmän tunnettuja tapoja suojata ideoita. Creators of newgoods are not different from producers of old ones: they want to becompensated for their effortNäitä ovat sopimukset, kuten shrink-wrap- ja click-through-ehdot, joita kukaan ei ikinä lue ostaessaan ohjelmistoa. Sellainen on myös perinteisin suojauksen muoto – liikesalaisuus – sekä sen sopimusoikeudelliset ja juridiset muodot kuten salassapitosopimukset. HoweverKuten patentit ja tekijänoikeudet, it is a long and dangerousnämä kaikki keinot auttavat idean alkuperäistä omistajaa pitämään monopolin siihen.jump from the assertion that innovators deserve compensation fortheir efforts to the conclusion that patents and copyrightsMe emme tiedä yhtään legitiimiä argumenttia sen puolesta, that ismonopolyettä 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, are the best or the only way of providing that rewardomaksumista ja parantamista.Statements such as “A patent is the way of rewarding somebodyfor coming up with a worthy commercial idea”15abound in thebusinessMiksi kuitenkin pitäisi keksijöillä olla oikeus kontrolloida kuinka ostajat käyttävät ideaa tai luomusta? Tämä antaa keksijälle monopolin ideaan. Me 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, koska on laajalti huomioitu, legal and economic pressettä monopolit luovat monia sosiaalisia kustannuksia. Aineeton monopoli ei eroa tässä suhteessa. As we shall see there are manyother ways in which innovators are rewardedHaluamme esittää kysymyksen, even substantiallyluoko se myös sosiaalista hyötyä,joka ylittäisi nämä sosiaaliset kustannukset. and most * * * The U.S. Constitution allows Congress “To promote the progress of them are better science and useful arts, by securing for society than limited times to authors and inventors the monopoly powerpatents exclusive right to their respective writings and copyright currently bestowdiscoveries. Since innovators may berewarded even without ”¹⁸ Our perspective on patents and copyright, we should askis a similar one: is ittrue that intellectual property achieves the intended purpose promoting the progress ofcreating incentives for innovation science and creation that offset theirconsiderable harm?This book examines both the evidence and the theory. Ourconclusion useful arts is that creators’ property rights can be well protected inthe absence a crucial ingredient of economic welfare, from solving such profound economic problems as poverty, to such mundane personal nuisances as boredom. From a social point of intellectual propertyview, and that in the latter does view of the founding fathers, the purpose of patents and copyrights is notincrease either innovation or creationto enrich the few at the expense of the many. They are an unnecessaryevilNobody doubts that J.***This K. Rowling and Bill Gates have been greatly enriched by their intellectual property – nor is a book about economics, not about law. Or putdifferently, it is not about what surprising that they would argue in favor of it. But common sense and the law is but rather what the lawshould beU.S. If you are interested in whether or not you are likely Constitution say that these rights must be justified by bringing benefits toall of us.wind up in jail for sharing your files over the internet, this is notthe book for youThe U.S. If you are interested in whether it Constitution is explicit that what is to be given to authors and inventors is an exclusive right – a good monopoly. Implicit is the ideafor the law that giving this monopoly serves to prevent you from sharing your files over promote the internet,then this book is for youprogress of science and useful arts. The U.S. Constitution was written in 1787.HoweverAt that time, while this book is not about the law, someidea of copyright and patent wasbackground on relatively new, the law is necessary products to understanding the economicissueswhich they applied few, and their terms short. We are going to examine In light of the economics experience of what has, inrecent the subsequent 219 years, come we might ask: is it true that legal grants of monopoly serve to be called “intellectual property,” especiallypatents promote the progress of science and copyright. In fact, there are three broad types ofBoldrin & Levine: Against Intellectual Monopoly, Chapter 1the useful arts?8intellectual property recognized in most legal systems: patents,copyrights and trademarksCertainly common sense suggests that it should.Trademarks are different in nature than patents andcopyrights: they serve How is a musician to identify make a living if the providers of goodsmoment she performs her music, servicesor ideas. Copying – which would be a violation of copyright – everyone else can copy and give it away for free? Why would the large corporations pay the small inventor when they can simply take his idea? It ishard to imagine life without the internet, andquite different from lying – which would be a violation oftrademarktoday we are all jet setters. We do Is not know the explosion of creativity and invention unleashed since the writing of the U.S. Constitution a good reason for allowing marketparticipants testimony to steal identities or masquerade as people they arethe powerful benefit of intellectual property? Would not. Converselythe world without patent and copyright be a sad cold world, there are strong economic advantages in allowingmarket participants to voluntarily identify themselves. While weempty of new music and of marvelous new inventions?may wonder if it is necessary to allow the Intel Corporation amonopoly over So the use of first question we will pose is what the word “inside,” in general there islittle economic dispute over the merits of trademarksworld might be like without intellectual monopoly.Patents and copyrights, the two forms of intellectualproperty have not secured monopolies on which we focus, are a subject of debate all ideas at all times. It is natural then to examine times andcontroversy. They differ from each other industries in the extent of coveragethey provide. Patents apply to specific implementations of which legal protection for ideas –although in recent years in the Uhave not been available to see whether innovation and creativity were thriving or were stifled.S. there has been decreasingemphasis on specificity. Patents do not last forever: in It is the UnitedStatescase, 20 years for patents covering techniques of manufactureexample,and 14 years for ornamentation. Patents provide relatively broadprotection: no one can legally use that neither the same idea, even if theyindependently rediscover it, without permission from internet nor the patentholderjet engine were invented in hopes of securing exclusive rights.16Copyrights are narrower in scopeIn fact, protecting only thespecific details we ordinarily think of a particular narrative – although “innovative monopoly” as with the caseof patentsan oxymoron. We shall see that when monopoly over ideas is absent, the scope has been increasing in recent years. Copyrightcompetition is also much longer in duration than patent fierce – the life of the authorplus 50 years for the many signatory countries of the BerneConvention, and – in the Uthat as a result innovation and creativity thrive.S. since the Sonny Bono CopyrightTerm Extension Act – the life Whatever a world without patents and copyrights would be like, it would not be a world devoid of the author plus 70 yearsgreat new music and beneficial new drugs.17In the U.S. there You will gather by now that we are skeptical of monopoly – as are limitations on copyright not present economists inpatent lawgeneral. As Stephen Manes correctly points out in his attack onLawrence Lessig, the right 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 fair use allows the purchaser of acopyrighted item limited rights first economists to employ it, explain how monopolies make partial copies ofit and resell themless available at a higher price. In some cases, regardless of such as the desires production of the copyright holder.In additionmusic, certain derivative works are allowed withoutpermission: parodies are allowed, for example, while sequels arethis may not.In be a great social evil; in other cases such as the case availability of both patents and copyrightAIDS drugs, from it may be a very great evil indeed. However, as we shall see, low availability and high price is only one of the point many costs ofview monopoly. The example of economics, there are two ingredients James Watt is a case in the lawpoint: by making use of the rightto buy and sell copies of ideaslegal system, he inhibited competition and the right to control how otherpeople make use of their copiesprevented his competitors from introducing useful new advances. The first right is not controversial.Boldrin & Levine: Against Intellectual MonopolyWe shall also see that because there are no countervailing market forces, Chapter 19In copyright lawgovernment-enforced monopolies such as intellectual monopoly are particularly problematic. While monopoly may be evil, when applied to and while innovation may thrive in the creator this right issometimes called the “right absence of first sale.” Howevertraditional legal protections such as patents and copyrights, it extends alsomay be that patents and copyrights serve to increase innovation. The presumption in the legitimate rights of others to sell their copiesU.S. It Constitution is the secondrightthat they do, enabling and that the owner to control the use benefits of intellectual propertymore entertainment and moreafter sale, that is controversial. This right produces a monopoly –enforced by innovation outweigh the obligation costs of these monopolies. Certainly the government to act againstindividuals or organizations that use the idea in ways prohibited monopolies created bythe copyright or patent holder.In addition to the well-known forms of intellectual property– patents and copyright may be troublesome – there are also lesser-known ways but if that is the cost ofprotecting ideas. These include contractual agreementshaving blockbuster movies, such as theshrink-wrap automobiles and click-through agreements that you never readwhen you buy software. They also include the flu vaccine, most traditionalform of protection – trade secrecy – as well as its contractual andlegal manifestations such as non-disclosure agreementsus are prepared to put up with it. LikeThat is the position traditionally taken by economists, most of whom support patents and copyright all , at least in principle. Some of these devices serve to help them take theoriginator of view that intellectual monopoly is an idea maintain a monopoly over it.We do not know of unavoidable evil if we are to have any legitimate argument innovation at all; other simply argue that producersat least some modest amount of ideas should not be able intellectual monopoly is desirable to profit from their creationsprovide adequate incentive for innovation and creation. Whileideas could Our third topic will be sold in an examination of the absence of a legal righttheoretical arguments supporting intellectual monopoly, markets functionbest in the presence of clearly defined property rights. Not onlyshould the property rights of innovators be protected but also theas well as counter-arguments about why intellectual monopoly may hurt rather than foster creative activity.rights of those who have legitimately obtained a copy of the idea,directly or indirectly, from the original innovatorIt is crucial to recognize that intellectual monopoly is a double-edged sword. The formerencourages innovation, the latter encourages rewards to innovative effort are certainly greater if success is awarded a government monopoly. But the diffusion,adoption and improvement existence of monopolies also increases the cost of innovationscreation.WhyIn one extreme case, however, should creators have the right a movie that cost $218 to controlhow purchasers make use of an idea or creation? This giveshad to pay $400,000creators a monopoly over for the ideamusic rights. We refer to this right as“intellectual monopoly¹⁹ As we will argue at length,” to emphasize that it is this theoretical arguments alone cannot tell us if intellectual monopoly overincreases or decreases creative activity. all copies of an idea that is controversialIn the final analysis, not the right to buy andsell copies. The government does not ordinarily enforcemonopolies for producers of other goods. This only justification for intellectual property is because that it iswidely recognized that monopoly creates many social costs.Intellectual monopoly is no different in this respectincreases – ''de facto'' and substantially – innovation and creation. The questionwe address What have the last 219 years taught us? Our final topic is whether it also creates social benefits commensuratewith these social costsan examination of the evidence about intellectual monopoly and innovation.***The U.S. Constitution allows Congress “To promote theprogress Is it a fact that intellectual monopoly leads to more creativity and innovation? Our examination of science and useful arts, by securing for limited times toauthors and inventors the exclusive right to their respectiveBoldrin & Levine: Against Intellectual Monopolydata shows no evidence that it does. Nor are we the first economists to reach this conclusion. After reviewing an earlier set of facts in 1958, Chapter 1the distinguished economist Fritz Machlup wrote10writings and discoveries.”18Our perspective ''“it would be irresponsible, on patents andcopyright is a similar one: promoting the progress basis of our present knowledge of science andits economic consequences, to recommend instituting [a patent system].”²⁰'' Since there is no evidence that intellectual monopoly achieves the useful arts is a crucial ingredient desired purpose of economic welfare, fromsolving such profound economic problems as povertyincreasing innovation and creation, it has no benefits. So there is no need for society to suchmundane personal nuisances as boredombalance the benefits against the costs. This leads us to our final conclusion: intellectual property is an unnecessary evil. From a social point ofview, and in the view of the founding fathers, the purpose ofpatents '''Comments''' We are grateful to George Selgin and copyrights is not to enrich John Turner, of the few at the expense University of themany. Nobody doubts that J. K. Rowling Georgia Terry College of Business, for pointing out a number of factual mistakes and Bill Gates have beengreatly enriched by their intellectual property – nor is imprecisions in our rendition of the James Watt story, as it surprisingthat they would argue had appeared in favor earlier versions of itthis chapter and in our 2003 Lawrence R. But common sense and theUKlein Lecture, published in Boldrin and Levine [2004].S. Constitution say that these rights must be justified by bringingbenefits to all In a recent article, Selgin and Turner [2006], also take issue with our interpretation of us.The U.S. Constitution is explicit the facts and add a few additional ones that what is to be given toauthors and inventors is , in their view, contradict our vision of James Watt as a primary example of an exclusive right – a monopolyintellectual monopolist. Implicitis It seems clear, even from the idea references quoted by Selgin and Turner, that giving this monopoly serves to promote many students of theIndustrial Revolution share our view – more properly: we shared theirs.progress of science Selgin and Turner’s argument and useful arts. The U.S. Constitution waswritten in 1787. At that timefacts do not, however, address the idea of copyright and patent wasrelatively new, the products to which they applied few, issues we raise about Boulton and Watt. Take theirterms short. In light discussion of the experience of the subsequent 219 yearswe might ask: is it true that legal grants of monopoly serve topromote the progress of science hypothetical “Watt sans patent.” Obviously Boulton and the useful arts?Certainly common sense suggests that it shouldWatt fought hard for their patents, and obviously they claimed innovation would have been impossible without them. How Our point is amusician to make a living if another: could they have made enough money to compensate their opportunity cost without the patent? All the moment she performs her musicevidence,everyone else can copy including that reported by Selgin and give it away for free? Why would Turner, suggests this is thelarge corporations pay the small inventor when case. In fact they can simplytake his idea? It is hard to imagine life without make our case quite convincingly: quoting F.M. Scherer they assert that seventeen years before the internetsecond patent expired they, Boulton andtoday we are all jet settersWatt, were already breaking even. Is not the explosion of creativity In economics, “breaking even” means that your opportunity costs have been paid, andinvention unleashed since your capital has received the writing of the Urisk-adjusted, expected return, and Scherer is a distinguished economist.S. Constitution atestimony Whatever profits Boulton and Watt made after that, were all extra rents due to the powerful benefit of intellectual property? Wouldnot the world without patent monopoly power and copyright be a sad cold world,empty of new music and of marvelous new inventions?economically, not needed to pay their opportunity costs. So , we all agree that, at least for the first question we will pose is what final 17 years, the world mightbe like without intellectual patent was not serving a useful economic purpose, hence it was damaging because it created monopolydistortions. 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 & Levine: Against Intellectual Monopoly, Chapter 115 to 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 ⁶ The story about Pickard’s patent blocking adoption by Watt istold in von Tunzelmann [1978].7 ⁷ Thompson [1847] p. 110 and quoted also in Lord [1923].8 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]]