The past and current situation of Intellectual Property.

What is currently understood by "Intellectual Property Rights"?

In the USA, close to the end of this millennium, four different flavors of legal frameworks are commonly lumped together under the term "Intellectual Property Rights". They are:

< copyright
< patents
< trademarks
< trade secret

More information on these topics can be found under "Intellectual Property Law" on the main page.

Upon closer examination, one will notice that these flavors divide into two very different categories. Copyright and patents are in one, and they will be examined in detail in the remainder of this discussion. These are two clearly non-contractual institutions, enforced against parties who never have given their consent towards accepting any particular obligations. In the other category we have trade secret, which in principle is unobtrusive and based on contract law. Simply put, it involves multiple parties voluntarily agreeing to keep crucial information in secret, and it is very important in an industrial context. The remaining flavor, trademarks, is somewhere in between, in my opinion. It is a bit of a grey zone, and seems currently in flux. On one hand, it is desirable for companies and products to bear unique labels to avoid confusion in the name space. On the other hand, there has been quite some abuse with over-broad claims, and it is one of the so-called "rights" which can aggressively interfere with other people's freedom. Elsewhere at this EXTRO-2 conference, Tom Morrow is devoting a presentation to this entire topic. I will not comment on it further. [1]

The History of Intellectual Property

It seems that nowadays the romantic notion is very widespread and in-grained in the general population, that the creators of intellectual products somehow deserve to be rewarded by society for their special efforts. Furthermore, in order to ensure that this reward can be collected, it seems to be justifiable to rely on the machinery of copyright and patent protection, mechanisms which intrinsically rely on the presence of an all-powerful government, which can enforce these institutions. Surprisingly, there even seems to be a branch of libertarianism that seems to strongly promote and favor such "Intellectual Property Rights". This is quite a puzzle to me, as this is in direct contradiction to much more basic and fundamental rights, as Tom Palmer has already argued in detail [Pal90], and which, by the way, is quite obvious, in my opinion.

However, if this popular romantic notion is analyzed in any historic depth, it evaporates rather quickly, and the true and unsavory origin of these institutions surfaces. The U.S. system of copyrights and patents goes back to the English system, which in turn is rooted in old practices of the kingdom. In mediaeval times, the English Crown granted patents in order to raise funds and to secure control over industries that were considered to be of political importance. Copyright was granted as a measure for ensuring government control over the printing press, in a time of great religious and political dissent. The historical root for "Intellectual Property Rights" is monopoly privilege and censorship.

The grants of monopoly covered a variety of industries, including everyday items such as production of salt and leather. The processes protected needed not be novel. Furthermore, there was only a weak differentiation between production monopolies and import franchises. This shows the purely political origin of these monopolies. Protecting the interests of inventors and other intellectual workers seems to not have been an important concern of the kingdom.

Understandably, the restrictions of this pervasive monopoly system eventually became so intolerably broad and burdensome that they resulted in widespread dissatisfaction and unrest in the population. This situation finally led to the prohibition of the old system, a change formulated in the "Statute of Monopolies" of 1624. However, there remained notable exceptions, activities over which the Crown continued to exert control, claiming national security concerns as an excuse. Among these domains were production of munitions, gunpowder, saltpeter, glass, alum, and the printing press. It is particularly noteworthy that the authorities continued to censor religious and political dissenters.
The current patent system, and more broadly "Intellectual Property Rights" in general, are remnants of monopoly privilege. Rather than spontaneously evolving to meet new needs, as real property rights do, they go back to a deliberate creation of scarcity through heavy-handed state action. Machlup and Penrose [MacPen50] make the following, illuminating point:

Those who started using the word property in connection with inventions had a very definite purpose in mind: they wanted to substitute a word with a respectable connotation, 'property', for a word that had an unpleasant ring, 'privilege'.
Copyright likewise emerged from the exercise of state power, rather than from a concern for the rights of authors. Barbara Ringer has commented in the following manner on the confusion about the real origin of copyright [Rin76]:

The pro-copyright theologians argue that copyright as a natural property right emerged from the mists of the common law and took definite form as the result of the invention of the printing press and the increase in potential and actual piracy after 1450. They dismiss the historical ties between copyright and the Crown's grants of printing monopolies, its efforts to suppress heretical or seditious writing, and to exercise censorship control over all publications. This line of argument tends to infuriate the anti-copyright scholars who point out that the first copyright statute in history, the Statute of Anne of 1710, was a direct outgrowth of an elaborate series of monopoly grants, Star Chamber decrees, licensing acts, and a system involving mandatory registration of titles with the Stationers' Company.

This was a time of new technologies; the printing press was relatively new, and it is clear that the powers in place were threatened by the fast technological change. An additional goal was suppression of Protestantism, which was furthered by swift transmission of memes through the new medium. In 1637, the Company of Stationers was authorized by a Star Chamber decree to seize and destroy any unauthorized books and printing presses. However in 1641, the Star Chamber was finally abolished, and there was a short period of freedom. Lots of interesting books were probably printed during the temporary lapse of control. The first official and significant mentioning of rights for actual authors, as opposed to merely the Crown and obedient printers, came shortly thereafter, when the Company of Stationers was facing all this unregulated competition. So they presented a petition to the parliament for renewal of their monopoly privileges. More weight was now being placed on the compensation that authors, as well as publishers, should obtain for their uniquely valuable efforts. Thus as government control faded away somewhat, we see a shift in the focus for the justification of copyrights. In 1710, the Statute of Anne was passed, initiating an additional shift of emphasis from the rights of publishers towards the rights of authors. Publishers saw it as a tactical advantage to push for authors' rights as well as for their own. It is from here where the myths emerged that copyright originated to secure authors' rights. One of the arguments presented, even back in the those days, was that a copyright system is needed as an incentive to produce something valuable that otherwise would be a public good, which would thus be supposedly under-produced on a free market.

In the U.S. there was a similar tendency: copyright, at first, only covered the rights of publishers, not authors. Publishers, of course, had a vested interest in copyright and had enough power to lobby for obtaining these rights and restrictions. It seems like authors were only added later as an afterthought to make it sound better. In the U.S. constitution, it is made clear that originators of intellectual products have no natural rights per se. Article I, Section 8, Clause 8 of the U.S. Constitution states:
"The Congress shall have power ...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;..."
As the granting of such exclusive rights was instantiated for a purely political purpose, an analysis should be made of whether or not enforcing these restrictive laws indeed has benefited society over all (not just some special interest parties), as was intended by the above quote from the U.S. Constitution.[2]

References

SCO to enforce its Linux intellectual property rights [3]