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An article of total wisdom
Why the U.S. shouldn't export its IP laws through free trade agreements, by James Surowiecki.
Posted by Tyler Cowen on May 14, 2007 at 04:05 PM in Economics | Permalink
Comments
Our IP laws are execrable.
American IP is one of the *worst* things we can export to the rest of the world. Here's a perfect example of the idiocy of US IP law.
Posted by: Matthew at May 14, 2007 4:43:17 PM
Agreed. 70 years worth of protection, especially in this day and age when obsolescence is a week away, is a travesty.
Posted by: fustercluck at May 14, 2007 8:45:31 PM
This was one of the hardest things to explain in my intro macro courses. Students readily understood that zero property rights "created" in ideas was a bad idea, but had a hard time with the idea of an optimum, especially one that could vary by country.
Posted by: hamilton at May 14, 2007 9:17:56 PM
The term of protection granted by this Convent tion (BERNE)tion shall
be the life of the author and fifty years after his death.
The USA refused for years to ratify it
Posted by: Mja at May 14, 2007 9:25:40 PM
The rights of an author of a literary or artistic work run for the life of the author and for 70 years after his death.
European directive.Like the USA
The term of a new patent is 20 years in the USA, the same for Europe.
Obsolescence can be true for inventions not for copyright.
Posted by: Mja at May 14, 2007 9:38:15 PM
Do you know if FTAs usually require the country to respect existing US patents? Where couild I find this sort of thing out?
Posted by: jsalvati at May 14, 2007 11:07:30 PM
I have a number of issues with the sprawling patent regime that exists in the US -- why should an individuals right to their own work; whether a musical recording or textbook -- be fundamentally different than anything else they might own. An individual dose not have a limited right to their car or home that expires 20 years after they are produced or 70 years after their death, they have a practical right to transfer ownership of that property to any person of their choosing, even upon their death.
As a matter of principle – I cant imagine a sensible and consistent argument for depriving someone of personal property they obtain lawfully (including a copyright) -- unless we assume that such rights of ownership are granted by the state, and so can be arbitrarily revoked whenever policy makers see fit.
Posted by: kmeleanthony at May 15, 2007 2:02:27 AM
The whole thing will implode on itself. Microsoft claims open source violates hundreds of its patents and at the same time learned computer scientists such as Knuth at Stanford question the very notion of software patent. There was a Supreme court decision last week that was clearly against the trend to patent everything but ht kitchen sink in hope of collecting economic rents onf commone sense...the end is...or should be near.
Posted by: jonfernquest at May 15, 2007 3:03:20 AM
kmeleanthony, IP rights are exactly that - state-granted monopolies. At least according to the traditional US view. There, copyrights and patents are limited monopolies of things that are really non-exclusive. In the european tradition, however, the idea was that an artist had a "natural right" to his work. As I see it, with the US position you have to admit that IP rights are a necessary evil, and should be only the minimum necessary to encourage artists, but with the european position you would have a hard time arguing for transferability (either through contracts or to the next generation).
Posted by: Harald Korneliussen at May 15, 2007 4:04:14 AM
But Surowiecki contradicts himself by beginning the article with, "Free trade is supposed to be a win-win situation. You sell me your televisions, I sell you my software, and we both prosper." But, of course, the U.S. cannot sell software to countries that lack IP protection and/or effective enforcement and use pirated software rather than buy it from the publisher.
So -- should the U.S. insist that its trading partners adopt and enforce patent and copyright laws? Absolutely. Should they insist that the periods of protection be as long as our own? Perhaps not, but that's a different argument. Is our own enforcement of IP excessive? Yes, I agree that it is. The copyright extension was a very bad idea, and the DMCA is noxious. Software patents have been very badly handled (but the Supreme Court's decision regarding 'obviousness' is a step back in the right direction). But again, that's another argument -- about our IP policies within the U.S., not about trade.
So, roll back the copyright extension and DMCA? I'd love to see that. Allow different standards for developing countries? OK. But leave IP out of trade negotiations entirely? Why on earth would we do that? Some of our biggest exporters produce and sell IP -- how can we leave *that* out of trade negotiations?
why should an individuals right to their own work; whether a musical recording or textbook -- be fundamentally different than anything else they might own
Because with a tangible, physical asset, there's only one, and it's a question of preventing burglary or robbery. Absent any effort by society, and individual can protect his own property with security systems, locks, and a gun. But with IP an individual is helpless on his own. Instead, an enormous, expensive, national and international legal enforcement system is needed to prevent copies of the work from being created and sold. Society is willing to take on this expensive effort on behalf of writers and inventors, but only for a limited time and in exchange for the work passing into the public domain eventually.
Posted by: Slocum at May 15, 2007 7:15:10 AM
You’ll get no favorable argument's from me regarding the monopolies created by patent protections - I would even challenge the assumption that patent protections are absolutely necessary to spur innovation. A copyright however is fundamentally about rights of contract.
Existing copyright laws is far from perfect, and practical enforcement challenges steaming from legal nuance would persist under the most ideal conditions. Yet, when an author writes a novel, or artist produces an album – contracts govern the production, distribution and compensation associated with these goods. The production or publishing company has a set of obligations; the author may have another set of obligations. And an individual that purchase these goods is also party to a contract, and should understand that by purchasing these items they are for example agreeing not to reproduce them for distribution. I’m not at all convinced that a unique and expansive IP legal framework is needed to protect what are essentially contract rights, domestically or internationally.
Posted by: kmeleanthony at May 15, 2007 8:58:19 AM
A patent violates the property rights of a reinventor. You may have reinvented something; tough -- you don't own your own idea because the government has given it to somebody else. How does THAT respect your property rights??
Posted by: Russ Nelson at May 15, 2007 9:03:05 AM
The only truly natural property right is ownership of what one is carrying on one's person. Anything beyond that requires social agreements regarding what can be property, how property is to be marked as property, and what privileges and responsibilities accrue to the property owner. In complex societies where such social agreements are formalized in the laws of the state, then yes, property rights are subject to arbitrary legal (re)definition. We can talk about whether a given right is pragmatically good or no, and we can talk about the benefits of stability in the contours of property law, but only in very few instances can we talk about an ab initio moral right to a given kind of property ownership.
Posted by: Cyrus at May 15, 2007 10:59:48 AM
Quote: " there’s little evidence that writers and artists are made more productive or creative by the prospect of earning profits for seventy years after they die"
I think that misrepresents what is going on in that case. The IP protection is for the record company to protenct their investment in the artist. It is that protection that enables them to take risks with more artists. This does benefit t artists
Posted by: PenskeFile at May 15, 2007 12:00:11 PM
"Our recent free-trade agreement with South Korea is a good example. Most of the deal is concerned with lowering tariffs, opening markets to competition, and the like, but an important chunk has nothing to do with free trade at all ."
The US International Trade Commission considers Intellectual Property Rights an aspect of international trade in services. IPR (listed as royalties and license fees in the balance of payments) includes rights to industrial process, techniques, formulas and designs, copyrights and trademarks, franchise rights and broadcast rights, computer software, management services, and brand rights. Seems to me this stuff IS a form of trade, so I think Surowiecki is wrong to state that it has "nothing to do with free trade at all". Perhaps Mr. Surowiecki thinks the term "trade" only applies to goods.
Still, I don't necessarily disagree with his contention that developing countries may be hurt by the adoption of the US' more stringent IPR rules. My gut tells me he's probably right in many cases. And while I understand and support the existence of IPR rights here in the US, I think we may have created rights that are too strong (innovation stifling) in certain areas.
Posted by: Whit Stevens at May 15, 2007 12:01:55 PM
Cyrus:
What an English definition you have. But it is rather incomplete. For instance, you are stating that if I can kill you, then I have a natural right to whatever of your natural posessions I can carry? If you are correct, then I posit that this is one of those rights which we simply must modify in order to civilize ourselves.
Interesting note: In English, we "have" things--our arms are around them, as you have stated. In Russian, things are "beside" us. In Hebrew, they are "to" us (as in, we have received them). I'm sure other cultures have other fundamental denotives of posession, and all affect the cultural understanding of the "natural" right to property.
The founders granted a limited, absolute monopoly to inventors to encourage the risk-taking of inventino. I find denyers, in the general sense, hard to follow. But we clearly have gone astray, with the DMCA, a patent office which makes to effort to validate patents it issues, and the Disney invention of lengthening copyright to cover then entire commercial life of a product.
Posted by: Nathan Zook at May 15, 2007 2:00:17 PM
Hate to double post, but...
Go to your favorite location whose inhabitants include fifteen-month-olds. Display to such a person a bight object which makes sounds (not too loud). Observe what occurs.
The only "natural right" to property is "I see. I want. I get." "Rights", are necessarily social constructs. They are claims which are enforcable in some social environment. If your social environment includes a god, then the idea of a "natural" right may be sensible. Otherwise, I don't see how one can claim that they exist.
Posted by: Nathan Zook at May 15, 2007 2:25:44 PM
Any copyright longer than 7 to 10 years is inconsistent with the economic models that govern corporate decisionmaking. 70 years is so long, it is laughable. Economists and investors are worried about getting the CEOs to think in terms of 3 or 5 years, instead of *quarters*! The 70 years is law only due to corruption in the lawmaking process.
Returns required by investors are discounted to net present values which are negligible beyond 5 to 7 years, and are overshadowed by other factors (markets and the company's strategies) beyond about 3 years. But go ahead calculate what is the value of $1 to be received in 2074 if the interest rate is 6% (less than 2 cents).
To me this suggests that copyright laws are more about maintaining oligopoly by a concentrated industry, than they are about ensuring a pipeline of creative or intellectual works - locking up the creative people and production apparatus and eliminating competition.
Copyrights in published material are anyways, a social and legal invention pursuant to some social good-- promoting knowledge.
Information technology obviously has reduced the relative cost of transmitting information. IT professionals compete to describe a geometric increases int power and geometrically declines in cost. Moore's Law, Metcalf's law. At what point do we recompute the IP laws?
Why are they growing *stronger*?
Copyrights over factual documentary content are not legitimate. There is a physical universe. There are recorded images or sounds, which are merely reproductions of the material world. And there are words and symbols which describe or represent the material world and abstract things which are no less real.
To begin with, there can be no functioning society without an informed population. In the 21st century the problem of ignorance is so extreme that the survival of the species is at stake.
Documentary content is distinct from fiction. Property rights over the simple, objective truth should be disobeyed, repudiated if they are not repealed.
The justification for copyrights seems to lie in encouraging *creative* works. Over time, copyrights have resulted in degradation of the information environment- synthetic representations that are not accurate, that mislead, in ways profitable to media corporations, software companies, etc.
A social policy intended to produce more creative works would anyways NOT operate system where media corporations capture 90% of the gross sales, and distribute the remaining cash via lottery, awarding 1% of the artists too much money, while 99% of the artists starve. Real industries operate on regular paychecks.
Over time, technology has reduced costs and allowed an abundance of factual content. Humanity does not face any scarcity of content. However, there has been a breakdown in distribution of information. Creative or fictional content is anyways of less importance than political, economic and scientific information.
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