The efficiency of patents

Dean’s brief complaint on Dean’s World on the evils of our current regime of intellectual property and Casey Tompkins’s follow-up post there on the bizarre evolution of software copyright have crystallized my intention to post on the problems of patents. And, yes, I know that copyrights and patents are different things but we’ve come to conjoin them through the term “intellectual property”. In my view the term should be banned from the lexicon because they’re ain’t no such animule—just a construct of enterprising attorneys and others interested in profiting by ownership rather than by creating ideas.

But back to the subject: patents. As best as I can tell the intellectual basis behind both patents and copyrights can be traced back to Locke’s Second Treatise on Government. In that work Locke posited that the central function of government was the protection of private property and traced the notion of property from personal property (your coat, your hat, your pocket-knife) to the ownership of real estate, mines, and so on. I’ve traced how copyright law sprouted from that soil.

Locke’s argument rested on the rights conveyed by applying one’s labor. A farmer applied his labor to the land and by so doing gained a right of ownership to the land. A miner dug in the earth for minerals and by his labor gained a right of ownership to the mine. And so on.

In the United Kingdom patents derived from the practice of the crown granting an exclusive right to an individual to produce all sorts of things from salt to stained glass. This practice evolved to granting to inventors an exclusive right to the production or use of their inventions, requiring written descriptions of inventions as a prerequisite for the granting of such monopolies,and other features of our current patent system. But the intellectual basis resides in Locke and his labor argument: an inventor has a right to his or her invention because he or she created it.

There are a number of problems with this theory. First, we can now be pretty confident that Locke’s hypotheses have little basis in anthropology or history. Governments and real property just didn’t evolve that way. Second, it’s harder to extend Locke’s right of ownership to property through labor to “intellectual property” than meets the eye. In Locke’s system the worker gains ownership to things that already exist (land, minerals, etc.) by contributing labor. Extending this process to ideas requires a Platonic concept of the ideas: that they pre-exist and the mind of the creator, like a sort of butterfly net, is collecting these independently existing ideas.

Third and most importantly, the underlying basis of Locke’s ideas is the negative right: the right to exclude. This is different from our constitutional notion of rights as represented by the First Amendment to the Constitution:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

Patents do not only secure the right of inventors to the product of their labor: they prohibit others from the right to use the product of their own labor.

Consider this example. Two engineers begin on the same day using identical resources development which leads to the construction of a unique widget on the very same day. Both have exerted the same amount of labor (and other resources). By luck (or whatever) the patent application of one engineer arrives before the other’s and that engineer is granted the patent.

What becomes of the other engineer’s right to the product of his or her labor?

I think it’s clear that there is, actually, no philosophical basis for patents only a legal basis. Here’s the basis for our patent system from our Constitution:

To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;

This comes immediately after authorizing Congress to establish post offices and post roads and before authorizing Congress to consitute courts inferior to the Supreme Court. It no more argues for a natural right to indefinite monopolies on writings or discoveries than it does to a right to post roads or inferior courts.

The problem arises when the exclusive right is conjoined to work for hire. If ownership resides, not in the inventor or author, but in the commissioner of the work or subsequent conveyee, the patent is no longer an efficient subsidy to inventors or authors but is an efficient subsidy to owners of patents and copyrights.

Two questions arise from this. First, do we want to subsidize the ownership without actual discovery or authorship? I think that 200 years ago when distribution and communication were difficult there was a good argument to be made for motivating people to spread ideas around. Things have changed, distribution and communication are much less expensive, and we needn’t subsidize that anymore.

The second question is “Is there a more efficient approach to motivating research and innovation?” Perhaps some clever economist could comment on that.

But as we’ve seen there is no rights argument to be made and the “free market” argument would be to abandon patents entirely. Trying to make a free market argument for patents is macabre, like arguing that you can enhance the freedom of part of the population by enslaving the rest.