Intellectual property rights are too strong

Intellectual property was so important to the founders of the USA than they put it right in the first section of the Constitution (Article 1) and they wrote that the reason is “To promote the progress of science and useful arts”.

So the whole point of copyright law is to increase the production of books, music, and other media so that there is more available for people to enjoy.  If copyright is too weak, then there is little incentive to make an expensive move or produce an expensive satellite image because there will be no way to recoup the expenses by selling copies.  If copyright is too strong, that will stifle creativity and freedom of speech because all expression depends on prior art that we copy from other.  I cannot write this sentence without language that someone else created and a computer interface that someone invented (keyboard & mouse).  If people could claim copyright some of these particular phrases, it would stifle my ability to express myself and if someone patented the computer keyboard, then they could charge extra fees for every computer and that would make computing excessively expensive and reduce computer use rather than increasing it.

In the realm of book publishing, a new paper analyzes whether book copyright is too weak or too strong.  They find that copyright seems to be too strong and should be shorter because copy-written books are rarely available at all after a short time and then disappear.  Once copyright expires, they tend to reappear on the market again.  Here is a selection that Freakonomics snipped:

Influential copyright lobbyists presently circle the globe advocating ever longer terms of copyright protection based on this under-exploitation hypothesis–that bad things happen when a copyright expires, the work loses its owner, and it falls into the public domain. By analyzing present distribution patterns of books and music, this article tests the assumption that works will be under-exploited unless they are owned and therefore questions the validity of arguments in favor of copyright term extension…

[Our research] collects data from a random selection of new editions for sale on http://www.amazon.com (“Amazon”) and music found on new movie DVD’s for sale on Amazon. By examining what is for sale “on the shelf,” the analysis of this data reveals a striking finding that directly contradicts the under-exploitation theory of copyright: Copyright correlates significantly with the disappearance of works rather than with their availability. Shortly after works are created and proprietized, they tend to disappear from public view only to reappear in significantly increased numbers when they fall into the public domain and lose their owners. For example, more than twice as many new books originally published in the 1890’s are for sale by Amazon than books from the 1950’s, despite the fact that many fewer books were published in the 1890’s.

It turns out that books from the 19th century are much easier to find than books from the 20th century because more recent books are copyrighted!  Freakonomics comments that:

Heald’s findings speak to a disconnect between politics and economics in copyright law. There are clearly some 20th century works that are quite old (think Mickey Mouse), that have enduring commercial value, and for which their owners (think Disney) carefully study how best to exploit them in a 21st century market. But for the typical older work, no one is paying any attention because demand for the work in the market is low. Books from the 1940s, for instance, are very often out of print and while they may be available in some libraries and in the occasional well-stocked used book store; you or I would have a very hard time tracking one down for purchase.

An economically-rational copyright policy would balance these sorts of works against the very rare works that maintain high demand over long periods of time. Instead, our copyright policy in Congress is driven by the interests of copyright owners such as Disney, for whom longer terms are better and the best copyright term (for their own works, at least) is infinite. At their behest, copyright terms have grown longer and longer—now life of the author plus 70 years. Yet, as Heald suggests, availability to consumers has diminished.

Similarly, the whole point of patents is to increase innovation, but research shows that more patents isn’t associated with more innovation as Kevin Drum reports:

Via James Pethokoukis, here’s a chart from a new CBO report on federal policies and innovation… It shows the growth since 1963 of total factor productivity (roughly speaking, the share of productivity growth due to technology improvements), and there are lots of possible reasons that TFP hasn’t changed much over the past five decades. At a minimum, though, the fact that patent activity has skyrocketed since 1983 with no associated growth in TFP suggests, as the CBO report says dryly, “that the large increase in patenting activity since 1983 may have made little contribution to innovation.”

The CBO report identifies several possible innovation-killing aspects of the US patent system, among them a “proliferation of low-quality patents”; increased patent litigation; and the growth of patent trolls who impose a substantial burden on startup firms. The report also challenges the value of software patents:

The contribution of patents to innovation in software or business methods is often questioned because the costs of developing such new products and processes may be modest. One possible change to patent law that could reduce the cost and frequency of litigation would be to limit patent protections for inventions that were relatively inexpensive to develop. For example, patents on software and business methods could expire sooner than is the case today (which, with renewals, is after 20 years), reducing the incentive to obtain those patents. Another change that could address patent quality, the processing burden on the USPTO, and the cost and frequency of litigation would be to limit the ability to obtain a patent on certain inventions.

Another option would be to use Posner and Weyl’s idea to impose a property tax on intellectual property and base the amount on how much the companies themselves value the property. At least that would reduce some of the orphaned copyright and patents that are only being held in case there is a future opportunity for litigation.

Posted in Medianism

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