Free-Market Case For Intellectual Property Remains As Strong As Ever

Ross Marchand Director of Policy, Taxpayers Protection Alliance
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April 26 marks World Intellectual Property (IP) Day, but not too many right-of-center groups will be celebrating. Too many libertarians and conservatives, having the federal government enforce claims against college students for illegally downloading music, is akin to punishing low-level drug users for victimless crimes. The (now-defunct) copyright for the “Happy Birthday” song has served to further highlight the alleged ridiculousness of robust IP protection. And, purported free-market solutions to the healthcare affordability crisis commonly include the relaxation of patent protection for pharmaceuticals.  These examples miss the point and importance of protecting IP.

The general decline in patent, trademark, and copyright enforcement weakens market exchange, and encourages government interference across the economy. In order for a truly limited-government vision to be realized, inventors and entrepreneurs must have assurance that their latest ideas are safeguarded regardless of location, industry, or income status.

Over the past few years, IP enforcement in the United States has unfortunately failed to keep up with the robust economic recovery. The US Chamber of Commerce’s Global Intellectual Property Center notes increased costs and uncertainty in the patent opposition system over the past decade, as forced “transparency” requirements and allowable damages have made it increasingly difficult for individuals and businesses to hold onto their brain-children.

This decline has been welcomed by many right-of-center thinkers, who think that IP enforcement is still far too invasive.  One commonly cited argument points out that copyright terms are considerably longer than at the beginning of the 19th century, and that new patents for software or business methods look nothing like the traditional definition of inventions.  

On the surface, IP protection appears to be just another symptom of an ever-expanding federal government, similar to data showing expanding regulation across the economy. But, if intellectual property belongs in the same class of physical property, then more detailed claims over time should be celebrated. Few complain, after all, that the rise of forensics and security cameras have allowed property owners to safeguard more acres. Even if property crime investigations have grown in scope and manpower, this is widely acknowledged as a positive effort to defend property against a wide array of threats.

But should IP be regarded similarly to physical property? Libertarian thinker Roderick T. Long says no, in his influential argument against IP made over twenty years ago. Long claims that, “information is not a concrete thing an individual can control; it is a universal, existing in other people’s minds and other people’s property, and over these the originator has no legitimate sovereignty.” But this statement betrays confusion over the purpose of intellectual property. Nobody is arguing that pure bits of knowledge, such as number of quarts in a gallon or the end date of World War II, should be patented. The issue is whether or not certain activities done on/with various physical objects should be monopolized.

IP opponents such as Long will have a hard time answering “no” without excluding physical possessions as property. Owning land, after all, boils down to whether or not the owner (and others) can perform certain activities on his/her parcel. There is no absolute right to the land; others can interact with the physical space in specific, legally-defined ways.

The owner, for instance, can’t stop the eyes of others from peering onto the premises, or stop the (certain) sounds of others from echoing throughout their property. And, under emergency situations, others are allowed to venture onto the land. The definition of property as a right to certain actions on a certain space extends to digital spaces as well. If someone learns my email password, types it into a specific space within the internet, and hits “enter,” they will be trespassing on my account. This may sound different than intellectual property, but the underlying principle of “actions on spaces” remains the same.

These arguments are anything but theoretical. As Chamber of Commerce data clearly shows, higher IP protection scores are highly correlated with higher investment and research levels. Countries totaling above the median IP aggregate score are 42 percent more likely to attract venture capital and private equity funds and 36 percent more likely to attract private investment in research and development.

Researchers from Iowa State University, Washington University, and the Swedish House of Finance found that, of various government measures to foster innovation, only patent protection and basic financial market rules seem to do the trick. These measures are found to be superior to “traditional tax subsides at promoting the innovative investments that drive economic growth.”

But if America and other developed countries allow IP enforcement to fall by the wayside, governments will readily respond with less effective taxpayer-funded research. A robust regime of patent, trademark, and copyright protection is not only theoretically sound, but delivers the goods of economic growth and limited government. By agreeing on these basic truths, the right can unite around sound policy.

Ross Marchand is the director of policy for the Taxpayers Protection Alliance.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.