Editorial on Patents and Property Rights
Patents: Monopoly Privilege or Justified Property?
The word "patent" derives from the Latin word "patere," which means "to be open." A patent is a document that is open to the public for inspection, and which recognizes particular rights to some property such as land or an invention during some time interval. Nowadays the term is most often used for the legal protection of an invention, prohibiting others from copying it.
by Fred E. Foldvary, Senior Editor
The primal question is whether an inventor should have property rights to his creation of a mental construct. The right would be not just to the physical manifestation of the invention but to the concept itself. In the case of copyrights, my analysis has been that the creator of a text should have lifetime rights to the text in whatever physical form it takes. The rule of the market should be that to the creator belongs his creation.
Suppose we are primitive farmers, and I think I could invent a new plow that would double production. The other farmers would like to have these plows too, and I would gladly produce and sell them, but I am afraid after selling the first few, others might copy them and sell them too. Since we have a good court system that enforces contracts, I spend a great deal of time and resources researching metals, soils, and mechanics, until I finally create the plow. After testing it, I offer it for sale to others.
When a farmer buys one of my plows, I require that he sign a contract promising not to copy the plow or to let others make reproductions. If he should violate the agreement, he would have to forfeit all profits and pay a penalty. This contract would be enforced by the courts.
When my lawyer was drawing up the contract, he thought about how long the contract could be enforced. Since the contract is between me and my customers, it could be in effect as long as I live. But when I no longer exist, is the contract still valid? The contract could specify that my property right be inherited by my heir, and then by his heir, and so on in perpetuity.
But such a contract clause could only apply to that particular plow, not to all plows. Someone could build a similar plow from the public knowledge about such plows, and it would not violate any contract. How can we tell whether somebody copied a particular plow or if he just created the plow from the knowledge that is now available to the public?
To help clarify this matter, the members of our local community hold an assembly to resolve the issue. We decide that everyone will recognize my property rights, and those of my heirs, to the concept of my new plow, which prohibits others from copying it; but this right will last for only 20 years. To help with any disputes, a drawing of my plow will be kept in public record.
Comes now farmer Smith, who says he had been working to invent a similar plow, and it is not fair to penalize him, just because his plow appeared a little later. He has documents proving that he did not copy my plow, and that it was his own invention. Since he did not copy my plow, he did not violate my property rights, and he may also obtain a patent. We get similar agreements from other communities, and we now have a system of patent rights.
In contrast to a copyright, a patent protects a novel concept or idea, rather than any particular physical expression of it. There are two problems with patents. First is the ethical question of whether an inventor should have property rights over his new concept. Second is the problem of implementation, since ideas are fuzzy things.
An inventor should be able to sell his creation with a contract binding others not to copy it. But this gets tied to the second problem, since if others do copy it, they can claim that they did not copy the particular tool that was sold. It is useful therefore to have some legal compromise that allows inventors to have rights to their ideas, but with limits that do not lock out others forever, such as the now-common time duration of about 20 years.
David Friedman in his book Law's Order notes that patent protection creates rights which are difficult to define and enforce. "Hence we give patents grudgingly and for short term." The protection of intellectual property provides a social benefit, since we obtain some inventions that otherwise would not have been made. How much benefit this provides is difficult to answer. Friedman states that the case for patents that protect concepts is weaker than that for copyright that protects expressions.
One of the problems with current law is that it rewards the first inventor and penalizes others who were independently working on similar concepts. Patent law should be reformed to grant protection also to those who can demonstrate that their creations were not copies. Also, since it is government that is granting the property right, the right can be conditional on providing the good to some parties at marginal cost. For example, new drugs that can save lives could be made available to those who cannot afford the higher prices, with safeguards against exploiting this to deprive the firm of its property rights.
This seems to be one of those cases where the perfect should not be the enemy of the good. Patents are an imperfect solution to the issue of rights to creation, and of being able to sell a novel good conditional on not copying it. Not having such patent protection may be the worse option. My conclusion is that limited patents are useful and morally proper, but this does not necessarily justify current patent law, which may well need reforming.
-- Fred Foldvary
Copyright 2001 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.
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