Property Rights and Transcendental Nonsense

-- By CamilaTapernoux - 16 Feb 2012

Introduction

Rousseau famously said that “the first man who, having enclosed a piece of ground, bethought himself of saying this is mine, and found people simple enough to believe him, was the real founder of civil society. From how many crimes, wars, and murders, from how many horrors and misfortunes might not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying to his fellows: Beware of listening to this imposter; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody.”

The argument against property rights has been around for, well, as long as there have been property rights. And so it goes today with the arguments against intellectual property rights. I have been trying to wrap my mind around Eben’s and his academic peer’s approach to this debate, because the main reason I came to law school because out of an interest in IP law, and a desire to shape the direction of this evolving field. A vague underlying goal was the desire to adjust, or change, the system so that pharmaceutical development remained incentivized while distribution became equalized, namely with regards to providing needed drugs that are still under patent to those in third world countries who cannot afford them.

A (Very Small) Sampling of the Arguments

I began looking for answers by surveying some of the arguments advocating to various degrees the abolishment of IP. The first criticism of the system I came to was that of Felix Cohen in his consideration of What’s In a Trade Name? He provides the rhetoric of courts in enforcing unfair competition laws (through trademark protection) as an example of circular reasoning, of transcendental nonsense. Trademark law, he says, “purports to base legal protection upon economic value, when, as a matter of actual fact, the economic value of a sales device depends upon the extent to which it will be legally protected.” He boils the problem down to the existence of property rights at all, and contends that the actual effect of unfair competition is to “create and distribute a new source of economic wealth or power…through establishing inequality in the commercial exploitation of language.” Professor Moglen’s dotCommunist Manifesto extends Cohen’s wealth redistribution argument beyond trademark law to Intellectual Property law as a whole. He applies Marx’s argument to Intellectual Property, that IP’s existence “is solely due to its non-existence in the hands of everyone else,” that “the necessary condition for [its] existence is the non-existence of any such property for the immense majority of society.”

Moglen then addresses the same counterargument that N. Stephen Kinsella explains in Against Intellectual Property, which is that “wealth is optimized, or at least increased, by granting copyright and patent monopolies that encourage authors and inventors to innovate and create. He uses Marx’s argument to aptly attack this view by pointing out that “there ought to have been no music, art, technology, or learning before the advent of the bourgeoisie, which alone conceived of subjecting the entirety of knowledge and culture to the cash nexus.” According to Moglen, then, when “faced with the advent of free production and free technology, with free software, and with the resulting development of free distribution technology, this argument simply denies the visible and unanswerable facts. Fact is subordinated to dogma, in which the arrangements that briefly characterized intellectual production and cultural distribution during the short heyday of the bourgeoisie are said, despite the evidence of both past and present, to be the only structures possible.”

Complementing this practical take on the illegitimacy of the utilitarian argument, Kinsella provides a more theoretical criticism: “Wealth maximization is not the goal of law; rather, the goal is justice—giving each man his due. Even if overall wealth is increased due to IP laws, it does not follow that this allegedly desirable result justifies the unethical violation of some individuals’ rights to use their own property as they see fit.” Reading this immediately brought to mind our discussion of the law treating the rich man kindly and the poor man justly. Among the myriad of arguments against IP that I have come across the past few days, some coherent, some too dense for me to understand, and some too unsubstantiated to hold my attention, perhaps this is the one from which all the others stem.

Free Software vs Free Pharma

Yet as convincing as the impassioned critiques of IP law, or of property law in general, may be, they are functionally useless without an accompanying solution. And I wonder if grouping three distinct forms of property rights under the uniform umbrella of “intellectual property law” does more harm to the movement for their abolition than good. As Eben pointed out, “[t]he phrase "intellectual property" not only wraps up incommensurable legal arrangements such as copyright and patent together, by doing so it creates a metaphorical relationship to real property that is deceptive.” So is there anything to be learned from the “Free Software” movement that could be applied to some sort of “Free Pharma” movement in the future? I’m not sure. In “Freeing the Mind,” Eben contemplates that “[i]f I can provide to everyone all goods of intellectual value or beauty, for the same price that I can provide the first copy of those works to anyone, why is it ever moral to exclude anyone from anything? If you could feed everyone on earth at the cost of baking one loaf and pressing a button, what would be the moral case for charging more for bread than some people could afford to pay?” And this argument applies seamlessly to the zero-marginal-cost good of software, but loses traction in the world of pharmaceutical development.

There is, however, conceivably a parallel in the fact that once a drug is developed, the cost of mass producing the pills or serums or what have you is but a miniscule percentage of the cost of development. Another possible similarity is in the incremental nature of innovation in both software and pharma. Eben describes executable software as “an inherently incremental intellectual product,” which, he points out, is a technical argument against the application of the patent system to it. His reasoning is that the “appropriate invocation of the principal of novelty and non-obviousness to software results in zero software patents. All persons reasonably skilled in the art are capable of achieving each result incrementally, from where the art is at any given moment. But more importantly, for our purposes, the process of making software is massively parallelizable, when the costs of communication and coordination are reduced near zero.” It may be that the capacity of pharma R&D has reached a similar point of incremental progress. If that were the case, then Eben’s perspective of the evolution of governmental spectrum regulation might also apply to governmental pharma regulation, namely, that the problem has gone away, but the underlying system of social relations has not changed.

Perhaps by carrying out a more in depth analysis of these similarities, it will be possible to present a unique proposition of a way to change the patent system as it relates to pharmaceutical development in order to eliminate the barriers that that system creates to the distribution of the output whose production it seeks to incentivize—drugs—everywhere it is needed.