IP Laws for Dragons

On Quora, I was asked to answer this question:

Do US intellectual property laws stills serve society or just corporations and countries that are large and rich?

Historically, patents have been the domain of countries (and city states) and the trades. That is, patents are something of an arrangement—part deal and part truce—between governments and trades regarding inventions and trade secrets. Similarly, early copyright laws were largely arrangements between governments and publishers. Authors were ancillary. Trademark—much more ancient, and much more rooted in commercial mores—appears to have always been different, being a means to manage various forms of fraud in the selling of product.

We might expect that U.S. patent and copyright laws, at least, might be made to serve both “society” and government—and also serve corporations and also serve inventors or authors. But that’s just nice theory. We might also expect that over time, as conditions change and law changes and the interpretation of law changes, the nature of the arrangement also changes. Some things in the law will lag changed conditions, and some things in the law will get exploited in ways that weren’t originally anticipated. The result is that some people who thought things in IP law were once great now complain, and some that used to complain have now got their way and are happier for it.

“Society” is also a difficult concept to pin down. Who is “society”? Well, no one. Same with “the public” and “the public good.” I have a feel for it—a placeholder for where in conversation I might appeal to the public good or service to society, but darn it’s hard to pin down just what the nature of that idea might be. When my wife plays Scrabble, she sometimes puts down letters to make a word “for the good of the board.” That is, she doesn’t score the most points that she could, and she leaves new opportunities for her opponents to play their letters, but having a good game is more fun than strictly always, mercilessly “winning.” Put another way, playing the game so that there’s good fun for everyone playing the game is more important than playing the game no matter how dully so long as one wins. The “winning” is in the social activity of playing (including the prospect for having the highest score), but not so much in winning at the expense of the fun of the game itself.

Nothing in the rules of Scrabble require players to have fun, or to play to maximize the fun for all players, or to play “for the good of the board.” Scrabble rules could be changed in all sorts of ways—”Why is an “X” worth 8 points?” But simple changes—X will be worth 7 points!—won’t have much at all to do with how individuals play the game. And sure—the rules could be changed so that the game isn’t much fun at all. “All letters are worth 0.231876 points.” “The board is infinite and the number of letter tiles is infinite—the game never ends!” Then no one would play.

The point is that given the current US laws for patent, copyright, and trademark, some people find the game of IP worth playing, and others do not. It is a tall order to draft a law that creates a set of IP rules that will make everyone happy. My sense is that more people play IP out of duty or habit than because it’s fun—socially or financially. I did meet a patent owner on a flight who held patents on laser disk and DVD inventions. Sony paid royalties on those patents. He took out an office across the street from Sony headquarters. He said he wanted to remind Sony executives every day how important Sony’s business success was to him. He clearly was having fun.

The worst thing would be to have a set of IP rules that makes ideologists happy—”the rules appeal to our sense of ideology about what rules should look like—now if only we were despots and could make everyone say they like the rules, too.” We are luckily doomed to have IP laws that are sort of dumpy and illogical and often unproductive. The law—the rules of the game—won’t be perfect. All the laws need to be is close. It is up to those playing the game to establish what will be “sporting”—how to make the game worth playing. An integrity in the game, as it were. For that, we might insist that IP laws be simple enough that whatever game gets played can be in its way “fun.”

As soon as the game ceases to be “fun”—the rules make the game too difficult to play, the players don’t respect the rules of the game, those playing can afford to have no sense of sportmanship, or enough players subvert the playing of the game so no one has fun except those people taking delight in disrupting the game—then we might say that IP laws fail to have a useful purpose and don’t “serve society.”

We might even say, then, that in looking for revisions in IP laws, we might desire revisions that simplify rather than complicate, that push back on those who would break the rules rather than to add complexities to try to appease special interests. (Just try to figure out when a given copyright expires or what constitutes “fair use.”) We might also consider whether we want IP laws that are directed to individuals—people who invention, who write, who want to mark products with their distinctive mark of origin or approval—or to corporations, fictional “persons” that then exercise a kind of sovereignity over potentially country-sized numbers of employees.

Back in 1941, Yale law professor Walton Hamilton published a book (Patents and Free Enterprise) that presented a social and legal history of US patent law and circumstances. When the US formed its patent law, in the late 18th century, there were no corporations of the form we have now. Patents were for inventors, not for corporations. Now, however, corporations dominate patent ownership. Hamilton pointed out that only 9 patents were required to produce an electric lamp, but GE held 300 patents at the time. In a world of inventors publishing their inventions in exchange for a personal limited period of exclusivity, 9 inventors (or thereabouts) would have to make some arrangement to produce a single lamp. That might be an interesting game to play. But when a single corporation holds all the rights, then the public dealing ends and the game gets played a different way.

According to Sylvia Kraemer, former NASA chief historian, in the 1920s, as an aircraft industry emerged, American companies patented so many elements of an aircraft that no one could build an airplane in the U.S. without infringing someone else’s patents. The federal government finally stepped in and threatened to require compulsory licensing of inventions if companies did not reach some agreement on standards so that airplanes could be built without the constant threat of infringement claims. People had stopped playing for the “good of the board” and had used IP to create gridlock rather than innovation.

Walton Hamilton argued that GE’s then 300 patents served to exclude others from competing in the general area of making better light bulbs than GE’s light bulbs. Is it “good for society” that a corporation corners the market, as it were, for a class of technology and forces everyone else to the distant margins where they can neither innovate or compete? University technology transfer, for instance, posits that it is a social good for university administrators to claim ownership of faculty inventions, file patent applications, and present the ownership of these inventions to chosen corporations for their exclusive control, so the proverbial GE will have 301 patents rather than 300.

Think, for instance, of a patent in medicinal chemistry—the basis for many prescription drugs. Such a patent routinely claims hundreds to thousands of compounds, all variations on a theme. The “invention” that gets commercially produced (if ever) is just one of these variations. There may be other inventions as well—on formulations, methods of delivery, monitoring doses for clinical effect, and the like. And each of these other inventions also may claim scores of variations and functional equivalents. The patents held by a corporation in such a case will have some few claims directed at the commercially available “medicine” that others then cannot replicate without permission—but the patents also prevent anyone else from producing any variation using any of thousands of combinations that the patent owner has not used.

I think of dragons sitting in their caves on piles of treasure. The IP deal appears to be a good one for the dragons. Are the rest of us better off with such dragons and their treasures? What about all of us who have pension plans that depend on the stock value of pharmaceutical companies? What direction are we going to grumble? Do we care about individual inventors having a fun game of it? Is it necessary, for us to have “medicines” that we also have dragons in caves sitting on their treasures, when those treasures may include other medicines that might work just as well or even better than the ones offered on sale? Do we need “strong” dragons with so much treasure that they can afford to make medicines whenever it appears profitable for them to do so? Should IP laws serve the whims of dragons?

One might say—it’s an unfair image. Even if inventors individually owned their inventions, they would hire patent attorneys to make their claims as broad as possible, and then they would sell the inventions to dragons and be happy with whatever the dragons were willing to pay, and we would be back to dragons, caves, and treasure by another, less efficient route. We might conclude, then, that so long as there are dragons, caves, and treasure, then the dragons will take as much as they can and use only what they want to use, keeping the rest in their caves. If we went this route, we would end up buying a copy of Joel Baken’s The Corporation and thinking thoughts about how to rid the land of such conscience-less things that play with IP in a way that is unfun for other people.

Thucydides, in his account of the Peloponnesian War, recounts a debate between the Athenians and the Melians, who have come to beg the sieging Athenians for their city and their lives. The Athenians argue thus:

You know as well as we do that right, as the world goes, is only in question between equals in power, while the strong do what they can and the weak suffer what they must.

The Melians eventually surrender and the Athenians put all the Melian men to death and sell the women and children into slavery. So that’s that.

If corporations now are powerful, then according to the Athenian dictum, any discussion about IP laws is a matter for equals to discuss. One powerful corporation debating another. What remains for the weak is to suffer what they must. We might, were we to think about it oddly, arrange it so that corporations have their own legislature—one senator from every corporation over a given net worth and representatives from the ranks of corporate employees. Let corporations legislate the IP rules for corporations. Equals debating equals. Laws for dragons, as it were.

As for the individual author or inventor up against the dragons—there’s still some value in IP positions. Not all dragons play foul. But there’s also a whole lot of individuals who also are willing to ignore IP positions, and it’s difficult to enforce those positions. In the end, it would appear, that it is not the laws nor the threat of penalties that drives whatever is good in IP law for society, but rather that there are people who choose to play the IP game in part for the “good of the board.”

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