Muutokset

***Teollisesta vallankumouksesta on jo aikaa, mutta immateriaalikysymyksetovat edelleen esillä. Tätä kirjaa kirjoitettaessa yhdysvaltalaistuomariJames Spencer on uhkaillut kolme vuotta sulkea laajasti käytetyn Blackberry- viestintäverkon – patenttikiistan takia.9Eikä Blackberry ole itsekään mikään puhdas pulmunen:vuonna 2001 Blackberry haastoi oikeuteen Glenayre Electronicsin,koska kyseinen yritys loukkasi Blackberryn patenttia, joka koski push-tekniikkaa.10

Samanlainen sota käytiin tekijänoikeuksien kanssa. Napster-palvelusuljettiin liittovaltion tuomarin toimesta heinäkuussa 2000Teollisesta vallankumouksesta on jo aikaa,koska palvelussa jaettiin tekijänoikeussuojattuja tiedostojamutta kysymys aineettomasta omaisuudesta on edelleen ajankohtainen.11Tunteet käyvät kuuminamolemmilla puolilla. Jotkut tekijänoikeusvastaiset libertaristit käyttävät slogania “informaatio vain haluaa olla vapaa”. Toisessa ääripäässä, suuret levy- ja ohjelmistoyhtiötväittävät “maailman ilman immateriaalioikeuksia olevan maailma ilman uusia ideoita”.Osa tekijänoikeusväittelyn katkeruudesta Tätä kirjaa kirjoitettaessa yhdysvaltalaistuomari James Spencer on heijastunutStephen Manesin hyökkäyksessä Lawrence Lessigiä kohtaanuhkaillut kolmen vuoden ajan sulkea laajasti käytetyn Blackberryn viestintäverkon – patenttikiistan takia.Stanfordin lakiprofessorin ja median suosikin LawrenceLessigin mukaan⁹ Eikä Blackberry ole itsekään synnitön: vuonna 2001 Blackberry haastoi oikeuteen Glenayre Electronicsin, “liikkeen täytyy alkaa kaduilta”jotta korruptoitunutta kongressiakoska kyseinen yritys loukkasi Blackberryn patenttia, ylikeskittynyttä mediaa jaylihintaista oikeusjärjestelmää vastaan voidaan taistellajoka koski "informaation puskemista isäntäsysteemistä mobiilidatakommunikaatiolaitteeseen". ¹⁰

Contrary to LessigSamanlainen sota on käynnissä 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. Osa tekijänoikeusväittelyn katkeruudesta heijastuu Stephen Manesin hyökkäyksessä Lawrence Lessigiä kohtaan: ''srantsStanfordin 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...“Fair “fair use” exceptions in existing copyright law-poikkeukset nykyisessä tekijänoikeuslaissa...areso expansive that just about the only thing cut-and-pastersclearly canovat niin ekspansiivisia, että melkeinpä ainoa asia, jota leikkaamalla-ja-liittämällä ei voi tehdä tekijänoikeuden alaiselle teokselle laillisesti, on kopioida merkittävää osaa siitä..¹²''t do legally with a copyrighted work is directlycopy a sizable portion of it.12Certainly Varmastikaan Lessig is no friend of current copyright lawei ole nykyisen tekijänoikeuslain ystävä. Yet, despiteMutta huolimatta Stephen Manes assertions to the contraryManesin väitteestä, he does believe inbalancing the rights of producers with the rights of usershän uskoo tuottajien ja kuluttajien välisten oikeuksien tasapainottamiseen: his bookhänen kirjansa Free Culture speaks repeatedly of this balance and how it has beenlost in modern lawpuhuu jatkuvasti tästä tasapainosta ja siitä, kuinka se on menetetty nykyaikaisessa laissa.¹³13Like Kuten Lessig, many economists are skeptical of current lawmonet 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:– seventeen prominent economists, including several Nobel Prizewinners''Olisi hyvä antaa kaikki olemassa olevat keksinnöt vapaasti kaikkien tuottajien käyttöön, filed a brief with the Umutta tämä käytäntö epäonnistuu tarjoamaan...Skannustimia myöhempiin keksintöihin. Supreme Court in support ofVastakkain ovat olemassaolevien ideoiden käyttö ja innovatiivisen toiminnan kannustin.¹⁴''Lessig’s lawsuit challenging the extension of the length ofcopyright. Also like LessigTosiaan, kun monet meistä nauttivat mahdollisuudesta ladata vapaasti musiikkia internetistä, economists recognize a role forintellectual property: where lawyers speak of balancing rightsme olemme myös huolissamme siitä,kuinka muusikko voi ansaita elantonsa mikäli hänen musiikkinsa on välittömästi jaossa ilmaiseksi.economists speak of incentives. To quote from a textbook by twoprominent economists Robert Barro and Xavier SalaVaikka 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" -i-Martinretoriikka 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.It would be [good] to make the existing discoveries freelyavailable to all producersKaikesta tunteellisuudesta huolimatta näyttää siltä, että kummatkin osapuolet ovat samaa mieltä siitä, but this practice fails to provideettä 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. theOma 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.incentives for further inventionsLuonnollisesti muutamat ihmiset tekevät jotain myös vastikkeettomasti. A tradeoff arisesbetween restrictions on the use of existing ideas and therewards to inventive activityUusien hyödykkeiden luojat eivät eroa vanhojen hyödykkeiden tuottajista: he haluavat saada korvauksen vaivannäöstään.14IndeedOn kuitenkin pitkä ja vaarallinen hyppäys väitteestä, että keksijät ansaitsevat korvaukset vaivannäöstään siihen, että patentit ja tekijänoikeudet, while many of us enjoy the benefits of being able to freelydownload music from the interneteli monopolioikeudet, we worry as well how themusician is to make a living if her music is immediately givenaway for freeovat paras tai ainoa tapa tuottaa se korvaus.While a furious debate rages over copyrights and patentsVäitteet kuten "patentti on ''se'' tapa, 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? there is general agreement that some protection is needed to secureTämä 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.for inventors and creators the fruits of their labors. The rhetoricthat “information just wants to be free” suggests that no one should* * *be allowed to profit from her ideasTämä 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. Despite thisJos olet kiinnustunut siitä, onko hyvä idea antaa lain estää sinua jakamasta tiedostoja internetissä, there does notniin silloin tämä kirja on sinulle.seem to be a strong lobby arguing that while it is ok for the rest ofus to benefit from the fruits of our laborsHuolimatta siitä, että tämä kirja ei ole laista, jotain taustatuntemusta laista silti tarvitaan ymmärtämään taloustieteelliset kysymykset. Tulemme tarkastelemaan taloustieteellisesti sitä, inventors and creatorsshould have to subsist mitä viime aikoina on the charity of othersalettu kutsumaan "aineettomaksi omaisuudeksi", erityisesti patentteja ja tekijänoikeuksia.For all the emotionItseasiassa on olemassa kolme erilaista aineettoman omaisuuden tyyppiä, jotka suurin osa lakijärjestelmistä tunnustaa: patentit, it seems both sides agree thattekijänoikeudet ja tavaramerkit.intellectual property laws need to strike a balance betweenproviding sufficient incentive for creation and the freedom to makeuse of existing ideasTavaramerkit 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, joita he eivät ole. Päinvastoin, on olemassa vahvoja taloudellisia hyötyjä siitä, että markkinaosapuolten annetaan vapaaehtoisesti identifioida itsensä. Put it differentlyVaikka voimmekin pohtia, onko välttämätöntä antaa Intelille monopolioikeutta käyttää sanaa "inside", both sides agree thaton yleisesti ottaen hyvin vähän taloustieteellistä epäselvyyttä tavaramerkkien ansioista. intellectual property rights are a “necessary evil” that fostersinnovationPatentit ja tekijänoikeudet, kaksi tekijänoikeuden muotoa joihin keskitymme, ovat debatin ja kiistelyn kohteena. Ne eroavat toisistaan suojan laajuudessa, and disagreement is over where the line should bedrawnjonka ne tarjoavat. Patentit koskevat erityisenlaista toteutusta ideasta – joskin viime vuosina Yhdysvalloissa on viime vuosina kiinnitetty yhä vähemmän huomiota erityisyyteen. For the supporters of intellectual propertyPatentit eivät kestä ikuisesti: Yhdysvalloissa 20 vuotta patenteille, jotka suojaavat valmistustekniikkaa, currentBoldrin & Levineja 14 vuotta muotoa suojaaville. Patentit tarjoavat suhteellisen laajan suojan: Against Intellectual Monopolykukaan ei voi laillisesti käyttää samaa ideaa, vaikka hän keksisikin sen itsenäisesti, Chapter 1ilman patentin haltijan lupaa.¹⁶7monopoly profits are barely enough; for its enemies currentlymonopoly profits are too highTekijänoikeudet ovat skaalaltaan kapeampia, suojaten vain tiettyä yksityiskohtaista ja ainutlaatuista teosta – joskin samaan tapaan patenttien kanssa, skaala 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.¹⁷Our analysis leads to conclusions that are at variance withboth sidesYhdysvalloissa tekijänoikeuksille asetettuja rajoituksia ei löydy patenttilaista. Our reasoning proceeds along the following linesKuten 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.Everyone wants a monopoly. No one wants to compete against hisown customersSekä patenttien että tekijänoikeuksien tapaukessa, or against imitatorstaloustieteellisestä näkökulmasta, laki on kaksiosainen: oikeus ostaa ja myydä kopioita ideasta, ja oikeus kontrolloida kuinka ihmiset käyttävät omia kopioitaan. Ensimmäinen oikeus ei ole kiistanalainen. Currently patents andcopyrights grant producers of certain ideas a monopolyTekijänoikeuslaissa, 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. Certainlyfew people do something in exchange for nothingTämä oikeus tuottaa monopolin – valtio velvoitetaan toimimaan sellaisia henkilöitä tai organisaatioita vastaan, jotka käyttävät ideaa tekijänoikeuden tai patentin omistajan kiellosta huolimatta. Creators of newgoods are not different from producers of old ones: they want to becompensated for their effortAineettoman omaisuuden paremmin tunnettujen muotojen – patenttien ja tekijänoikeuksien – lisäksi on myös vähemmän tunnettuja tapoja suojata ideoita. HoweverNäitä ovat sopimukset, it is a long and dangerouskuten 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. Kuten patentit ja tekijänoikeudet, nämä 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 of them are better for society than the monopoly powerpatents and copyright currently bestowThe U.S. Since innovators may berewarded even without patents Constitution allows Congress “To promote the progress of science and copyrightuseful arts, we should ask: is ittrue that intellectual property achieves the intended purpose ofcreating incentives by securing for innovation limited times to authors and creation that offset inventors the exclusive right to theirconsiderable harm?This book examines both the evidence respective writings and the theorydiscoveries. ”¹⁸ Ourconclusion perspective on patents and copyright is that creators’ property rights can be well protected ina similar one: promoting the absence progress of intellectual property, science and that the latter does notincrease either innovation or creation. They are an unnecessaryevil.***This useful arts is a book about economicscrucial ingredient of economic welfare, not about lawfrom solving such profound economic problems as poverty, to such mundane personal nuisances as boredom. Or putdifferentlyFrom a social point of view, it is not about what and in the law is but rather what view of the founding fathers, the lawshould be. If you are interested in whether or purpose of patents and copyrights is not you are likely towind up in jail for sharing your files over enrich the internet, this is notfew at the book for you. If you are interested in whether it is a good ideafor expense of the law to prevent you from sharing your files over the internet,then this book is for youmany.However, while this book is not about the law, somebackground on the law is necessary to understanding the economicissuesNobody doubts that J. K. We are going to examine Rowling and Bill Gates have been greatly enriched by their intellectual property – nor is it surprising that they would argue in favor of it. But common sense and the economics of what has, inrecent years, come U.S. Constitution say that these rights must be justified by bringing benefits to be called “intellectual property,” especiallypatents and copyrightall of us. In fact, there are three broad types ofBoldrin & Levine: Against Intellectual Monopoly, Chapter 18intellectual property recognized in most legal systems: patents,copyrights and trademarksThe U.S.Trademarks are different in nature than patents andcopyrights: they serve Constitution is explicit that what is to be given to identify the providers of goods, servicesor ideas. Copying – which would be a violation of copyright – authors and inventors isquite different from lying an exclusive right – which would be a violation oftrademarkmonopoly. We do not know Implicit is the idea that giving this monopoly serves to promote the progress of a good reason for allowing marketparticipants to steal identities or masquerade as people they arenotscience and useful arts. The U. Conversely, there are strong economic advantages S. Constitution was written in allowingmarket participants to voluntarily identify themselves1787. While wemay wonder if it is necessary to allow At that time, the Intel Corporation aidea of copyright and patent wasmonopoly over relatively new, the use products to which they applied few, and their terms short. In light of the word “inside,” in general there islittle economic dispute over the merits experience of trademarks.Patents and copyrights, the two forms of intellectualproperty on which subsequent 219 years we focus, are a subject might ask: is it true that legal grants of monopoly serve to promote the progress of debate science andcontroversy. They differ from each other in the extent of coverageuseful arts?they provideCertainly common sense suggests that it should. Patents apply How is a musician to specific implementations of ideas –although in recent years in make a living if the U.S. there has been decreasingemphasis on specificity. Patents do not last forever: in the UnitedStatesmoment she performs her music, 20 years for patents covering techniques of manufacture,everyone else can copy and 14 years give it away for ornamentation. Patents provide relatively broadprotection: no one free? Why would the large corporations pay the small inventor when they can legally use the same simply take his idea, even if theyindependently rediscover it, without permission from ? It is hard to imagine life without the patentinternet, andholdertoday we are all jet setters.16Copyrights are narrower in scope, protecting only Is not thespecific details explosion of a particular narrative – although as with creativity and invention unleashed since the casewriting of patents, the scope has been increasing in recent yearsU.S. Copyrightis also much longer in duration than patent – Constitution a testimony to the life powerful benefit of intellectual property? Would not the authorplus 50 years for the many signatory countries world without patent and copyright be a sad cold world, empty of the BerneConvention, new music and – in the U.S. since the Sonny Bono Copyrightof marvelous new inventions? Term Extension Act – So the life of first question we will pose is what the author plus 70 yearsworld might be like without intellectual monopoly.17In the U.S. there are limitations Patents and copyrights have not secured monopolies on copyright not present inpatent lawall ideas at all times. As Stephen Manes correctly points out in his attack onLawrence Lessig, the right of fair use allows the purchaser of acopyrighted item limited rights It is natural then to employ it, make partial copies ofit examine times and resell them, regardless of the desires of the copyright holder.In addition, certain derivative works are allowed withoutpermission: parodies are allowed, industries in which legal protection for example, while sequels areideas have notbeen available to see whether innovation and creativity were thriving or were stifled.In It is the case of both patents and copyright, from the point ofview of economicsfor example, there are two ingredients in that neither the law: internet nor the rightto buy and sell copies jet engine were invented in hopes of ideassecuring exclusive rights. In fact, and the right to control how otherpeople make use we ordinarily think of their copies“innovative monopoly” as an oxymoron. The first right We shall see that when monopoly over ideas is not controversial.Boldrin & Levine: Against Intellectual Monopolyabsent, Chapter 19In copyright law, when applied to the creator this right competition issometimes called the “right of first sale.” Howeverfierce – and that as a result innovation and creativity thrive. Whatever a world without patents and copyrights would be like, it extends alsoto the legitimate rights would not be a world devoid of others to sell their copiesgreat new music and beneficial new drugs. It is the secondright, enabling the owner to control the use of intellectual propertyafter sale, You will gather by now that is controversial. This right produces a we are skeptical of monopoly –enforced by the obligation as are economists in general. Our second topic will be an examination of the government to act againstindividuals or organizations that use the idea in ways prohibited many social costs created bythe copyright or patent holdercopyrights and patents.In addition to the well-known forms of intellectual propertyAdam Smith – patents a friend and copyright teacher of James Watt – there are also lesser-known ways was one ofprotecting ideasthe first economists to explain how monopolies make less available at a higher price. These include contractual agreementsIn some cases, such as theshrink-wrap and click-through agreements that you never readwhen you buy software. They also include production of music, this may not be a great social evil; in other cases such as the most traditionalform availability of protection – trade secrecy – as well as its contractual andlegal manifestations such AIDS drugs, it may be a very great evil indeed. However, as non-disclosure agreements. Likepatents we shall see, low availability and copyright all high price is only one of these devices serve to help theoriginator many costs of an idea maintain a monopoly over itmonopoly.We do not know The example of any legitimate argument that producersJames Watt is a case in point: by making use of ideas should not be able to profit the legal system, he inhibited competition and prevented his competitors from their creationsintroducing useful new advances. Whileideas could be sold in the absence of a legal rightWe shall also see that because there are no countervailing market forces, markets functiongovernment-enforced monopolies such as intellectual monopoly are particularly problematic. best While monopoly may be evil, and while innovation may thrive in the presence absence of clearly defined property rights. Not onlyshould the property rights of innovators traditional legal protections such as patents and copyrights, it may be protected but also that patents and copyrights serve to increase innovation. The presumption in therights of those who have legitimately obtained a copy of the ideaU.S. Constitution is that they do,directly or indirectly, from and that the original innovator. The formerbenefits of more entertainment and moreencourages innovation, outweigh the latter encourages the diffusion,adoption and improvement costs of innovationsthese monopolies.WhyCertainly the monopolies created by patents and copyright may be troublesome – but if that is the cost of having blockbuster movies, howeverautomobiles and flu vaccine, should creators have the right most of us are prepared to controlhow purchasers make use of an idea or creation? This givescreators a monopoly over put up with it. That is the idea. We refer to this right as“intellectual monopolyposition traditionally taken by economists,” to emphasize that it is this monopoly overall copies most of an idea that is controversialwhom support patents and copyright, not the right to buy andsell copiesat least in principle. The government does not ordinarily enforcemonopolies for producers Some of other goods. This is because it iswidely recognized them take the view that monopoly creates many social costs.Intellectual intellectual monopoly is no different in this respect. The questionan unavoidable evil if we address are to have any innovation at all; other simply argue that at least some modest amount of intellectual monopoly is whether it also creates social benefits commensuratewith these social costsdesirable to provide adequate incentive for innovation and creation.***The U.S. Constitution allows Congress “To promote theprogress of science and useful artsOur third topic will be an examination of the theoretical arguments supporting intellectual monopoly, by securing for limited times toauthors and inventors the exclusive right to their respectiveBoldrin & Levine: Against Intellectual Monopoly, Chapter 110writings and discoveriesas well as counter-arguments about why intellectual monopoly may hurt rather than foster creative activity.”18Our perspective on patents andcopyright 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 similar one: promoting government monopoly. But the progress existence of science andmonopolies also increases the useful arts is a crucial ingredient cost of economic welfarecreation. In one extreme case, fromsolving such profound economic problems as povertya movie that cost $218 to make had to pay $400, to such000mundane personal nuisances as boredomfor the music rights. From a social point ofview¹⁹ As we will argue at length, and in theoretical arguments alone cannot tell us if intellectual monopoly increases or decreases creative activity. In the view of the founding fathersfinal analysis, the purpose ofpatents and copyrights only justification for intellectual property is not to enrich the few at the expense of themany. Nobody doubts that J. K. Rowling it increases – ''de facto'' and Bill Gates have beengreatly enriched by their intellectual property substantially – nor is it surprisingthat they would argue in favor of itinnovation and creation. But common sense and What have theUlast 219 years taught us? Our final topic is an examination of the evidence about intellectual monopoly and innovation.S. Constitution say Is it a fact that these rights must be justified by bringingbenefits intellectual monopoly leads to all more creativity and innovation? Our examination of usthe data shows no evidence that it does.The U.S. Constitution is explicit that what is Nor are we the first economists to be given toauthors and inventors is reach this conclusion. After reviewing an exclusive right – a monopoly. Implicitearlier set of facts in 1958, the distinguished economist Fritz Machlup wroteis ''“it would be irresponsible, on the idea that giving this monopoly serves to promote theprogress basis of science and useful artsour present knowledge of its economic consequences, to recommend instituting [a patent system]. The U.S. Constitution was”²⁰'' written in 1787. At Since there is no evidence that time, intellectual monopoly achieves the idea desired purpose of copyright increasing innovation and patent wasrelatively newcreation, it has no benefits. So there is no need for society to balance the products benefits against the costs. This leads us to which they applied few, and theirour final conclusion: intellectual property is an unnecessary evil. terms short. In light '''Comments''' We are grateful to George Selgin and John Turner, of the experience University of Georgia Terry College of the subsequent 219 yearswe might ask: is it true that legal grants Business, for pointing out a number of monopoly serve topromote the progress factual mistakes and imprecisions in our rendition of science and the useful arts?Certainly common sense suggests that James Watt story, as it shouldhad appeared in earlier versions of this chapter and in our 2003 Lawrence R. How is amusician to make Klein Lecture, published in Boldrin and Levine [2004]. In a living if the moment she performs her musicrecent article,everyone else can copy Selgin and give it away for free? Why would thelarge corporations pay the small inventor when they can simplyTurner [2006], also take his idea? It is hard to imagine life without issue with our interpretation of the internetfacts and add a few additional ones that, in their view, andtoday we are all jet setters. Is not the explosion contradict our vision of creativity andinvention unleashed since the writing of the U.S. Constitution James Watt as atestimony to the powerful benefit primary example of an intellectual property? Wouldnot monopolist. It seems clear, even from the world without patent references quoted by Selgin and copyright be a sad cold worldTurner,empty that many students of new music and of marvelous new inventions?So the first question Industrial Revolution share our view – more properly: we will pose is what the world mightshared theirs. be like without intellectual monopoly. Patents Selgin and Turner’s argument and copyrights havefacts do not secured monopolies on all ideas at all times, however, address the issues we raise about Boulton and Watt. It is natural then toexamine times Take their discussion of the hypothetical “Watt sans patent.” Obviously Boulton and industries in which legal protection Watt fought hard for ideastheir patents, and obviously they claimed innovation would have not been available to see whether innovation and creativitywere thriving or were stifled. It impossible without them. Our point is another: could they have made enough money to compensate their opportunity cost without the patent? All the caseevidence, for exampleincluding that reported by Selgin and Turner, thatneither suggests this is the internet nor the jet engine were invented in hopes ofsecuring exclusive rightscase. In fact, we ordinarily think of“innovative monopoly” as an oxymoronthey make our case quite convincingly: quoting F.M. We shall see Scherer they assert that whenmonopoly over ideas is absentseventeen years before the second patent expired they, competition is fierce – Boulton and that as aresult innovation and creativity thriveWatt, were already breaking even. Whatever a world withoutBoldrin & Levine: Against Intellectual MonopolyIn economics, “breaking even” means that your opportunity costs have been paid, Chapter 111patents and copyrights would be likeyour capital has received the risk-adjusted, expected return, it would not be and Scherer is a worlddevoid of great new music distinguished economist. Whatever profits Boulton and beneficial new drugs.You will gather by now Watt made after that we are skeptical of , were all extra rents due to monopoly– as are economists in generalpower and, economically, not needed to pay their opportunity costs. Our second topic will be anexamination of the many social costs created by copyrights andpatents. Adam Smith – So, we all agree that, at least for the final 17 years, the patent was not serving 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 economicpurposeuseful economic purpose, 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.