Saturday, August 28, 2010

Paul Allen: I Patented Silicon Valley Years Ago

Billionaire Microsoft co-founder Paul Allen is suing Silicon Valley's biggest players, including  Apple, Google, eBay, Facebook, for patent-infringement, accusing them of taking technology from his research lab.

Allen did not sue Amazon, which presumably uses some of the same technologies but also rents space from Allen in Seattle. Microsoft, also was not sued.

Particularly puzzling about this lawsuit is that Allen closed his research lab more than a decade ago.

My view on copyright and patents, which I expound upon in an upcoming book, is that the concept of copyright and patent (aside from government's questionable role in the process) is currently faulty in that it bestows all rights to what I call "first creators" versus "independent creators".

For example, under current law of "first creators", the first person to invent the wheel would own exclusive rights of patent protection for the wheel.

Yet, it is entirely possible, indeed very likely, that a separate independent creators of the wheel could emerge, in fact many such independent crerators. There is no moral or ethical reason that these people should not have the same patent protection as first creators. Thus,  inventors of the wheel, boiling water, even air conditioning, would have extremely limited patent protection, for all practical purposes none, since the number of likely independent creators would be significant.

On the other hand, more complex creatiotions, say a Shakespeare  play, which obviously no one else would would independently create would have full copyright protection.

In a world where "independent creators"  are awarded protection versus a monopoly grant to the "first creators",  researchers are very likely to record their ongoing development work to prove their independent work.

Obviously, there would still be occasional patent disputes, with cases that wind up in court (a private property society court or otherwise) . In such a court the patent/copyright equivalent of innocent until proven guilty should hold. That is, it should be assumed that a creator of  a product  (in the broad sense) has done so independently, unless it can be proven otherwise. Thus, it would be extremely difficult for someone who invented the wheel to prove that someone else did not invent the wheel independently. On the other hand, it would be very easy for Shakespeare to prove his writing was his own and that anyone else claiming rights to the writings was in fact stealing.

Curiously, this "independent creatorr" method of protection provides incentive in a way that would tend to increase the standard of living, since creations that obviously can be made relatively easily by more than one person are significantly not as protected as under the concept of first creator., On the other hand, the "independent creator" method of protection provides strong protection for those who are likely to invent something complex that  no others arenot  likely to invent, such as a Shakespeare play. This strong protection (against theft), almost monopoly like protection, will provide the potential for more lucrative streams of earnings and thus draw out more of these talents.

I suspect the majority of the infringements. that Allen claims, would fall under independent creation status and hold very little weight under an "independent creation" method of patent protection.

19 comments:

  1. What study are you going by to justify the claim that IP creates more wealth? Shakespeare didn't need IP to create his wonderful works and neither did Mozart. Also how do you determine whether the costs of imposing your IP system are worth the supposed increase in production?

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  2. Well, as an Austrian, I do not believe there are any empirical studies that can prove or disprove that IP creates wealth. I rest on the completely deductive observation that the more incentive the more likely it will draw out more great creators.

    How Shakespeare or Mozart acted under the rules of the game in their period says nothing about what the market would have been under properly structured IP.

    If price controls are institited on apples, it does not mean no apples will be produced, nor that the apples will be untasty. The deductive logic of economics simply tells us that fewer apples will be produced, although the specifics of a free market in apples will be unkown to us under price controls. To point to a farmer that produces tasty apples, says nothing about how much larger the market without the price controls.

    Protect the work of writers from theft of their work and there are likely to be more writers. Simple deductive logic.

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  3. That is actually the best response I have seen in defense of IP. I agree with deductive observation as well and I just come to the opposite conclusion. I think Mozart thrived because of a lack of IP laws. In fact, he would have been guilty of copyright infringement with some of his work. Being able to copy and emulate allowed him to improve at his craft.

    The reason I bring up empirical studies is because in order to enforce IP you give someone else a veto right on how I use my own property. My right to use my property in any peaceful way I see fit is limited because of IP. So I think if someone is going to defend IP they have to make a better case for how it will create more wealth. I think it is just as plausible that if writers could copy and emulate each other more freely that we would see an improvement in literature. Maybe IP gives hacks a better way to stifle their competition.

    Ideas are not scarce goods and can be reproduced as much as anyone wants without anyone else losing theirs. If there is no scarcity, there can be no conflict.

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  4. There is nothing that would prevent Mozart from using the work of others, as long as he paid them for the service, just as home builders build houses by using lumber, nails etc. It is not the fact that these are available and that a house can be made out of them that gives the home builder the right to just take the lumber and nails. They pay for what they didn't create and start their creation from that point.

    I'm not sure how you get the belief that ideas are not scarce goods. I have many thoughts about the economy and investments that I keep to myself. For a good some of money I would probably reveal them, but I would like to see you reproduce these ideas of mine right now, if they are not scarce, go ahead do it.

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  5. Yes, I agree that an idea is scarce but only as long as you keep it to yourself. Once you let your idea out it ceases to become scarce anymore. Every person on the planet could then have your idea without you losing the idea.

    Thomas Jefferson said it very well,

    "If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property."

    Kinsella and Tucker also had a great article on scarce and non-scarce goods recently on Mises.

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  6. I grant that Jefferson does hold your view. However, I do believe it is incorrect. If I have an idea and go to you and say, "I will tell you my idea under two conditions: 1. You pay me $50 and 2. You must reveal my idea to no one."

    Now we have two people with the idea, are you advocating that this contract be broken or ognored?

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  7. No, I believe you could set up a deal to pay you contractual damages, but if he breaches the contract there is nothing to stop third parties from using and spreading the information. They are not bound by the contract.

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  8. This sounds like a confused view of things. First, it's not patent AND copyright that are based on who is first--this is only the case for patent. Copyright already is based on originality. Under copyright law it's theoretically possible for multiple independent creators to have their own copyrights to the same work--if they all came up with it on their own. It's just that this is very unlikely.

    As for patent, it's not really based on the first to invent. It's based on first to file in most of the world. In the US it's sort of based on first to invent--but not really. It's possible to get a patent on something that someone else has been using (in secret) for decades.

    Even if you allow "patents" only for "independent" inventions, this is fraught with problems. First, it's arbitrary in that it would protect a guy B who (independently) re-invents a product X a month after A patents it, but then C who was on the cusp of it, but who sees A's patent right before he finalizes his re-invention, is unable to invent it now b/c he has been "tainted" with information from A's patent. This makes no sense at all.

    But a more serious problem is this whole scheme of yours to find a way to have a "fair" idea-monopoly grant is based on the presumption that we should have innovation-monopoly grants in the first place. What nonsense. It's not a "problem" to be solved that people can learn. Learning and emulation are good things.

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  9. Well, you will agree, won't you that if I am not willing to allow anyone to use the idea for less then a payment of $50 to me, that anyone using the idea in say a book should be stopped from doing so unless they pay me $50?

    Otherwsie how is this different from someone who rents my car for a day and then turns around and rents it out for a year? Shouldn't the car be returned to me ASAP or do I have to sit around for a year because the person who had no authority to rent the car for a year rented it out for that period?

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  10. Wenzel: "I grant that Jefferson does hold your view. However, I do believe it is incorrect. If I have an idea and go to you and say, "I will tell you my idea under two conditions: 1. You pay me $50 and 2. You must reveal my idea to no one."

    Now we have two people with the idea, are you advocating that this contract be broken or ognored? "

    First you need to be clear on what your theory of contract is: is it merely a payment of damages (title transfer) that is triggered by the revealing of the idea? Or is it some kind of trespass?--with assocatiated damages?

    In either case, third parties are not bound by this agreement. If a third party uses information to manipulate his own property he does not breach any contract with "the" "originator" of "the" information, nor invade the borders of the "originator's" property. This is all nonsense and hocus-pocus talk.

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  11. "Well, you will agree, won't you that if I am not willing to allow anyone to use the idea for less then a payment of $50 to me, that anyone using the idea in say a book should be stopped from doing so unless they pay me $50?

    Otherwsie how is this different from someone who rents my car for a day and then turns around and rents it out for a year? Shouldn't the car be returned to me ASAP or do I have to sit around for a year because the person who had no authority to rent the car for a year rented it out for that period? "

    no no no. the car is a scarce resource, owned by the owner. information is not. to say it is, is question-begging.

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  12. @Stephan Kinsella

    This sounds like a confused view of things. First, it's not patent AND copyright that are based on who is first--this is only the case for patent. Copyright already is based on originality. Under copyright law it's theoretically possible for multiple independent creators to have their own copyrights to the same work--if they all came up with it on their own. It's just that this is very unlikely.

    Thank's for the correction. It's good to see at least the copyright law taking my view. Although I am a bit confused when, for example,then-Los Angels Laker's coach Pat Riley copyrighted the word "ThreePeat". In my world this would be a waste of time since how could Riley prove that I didn't come up with the term on my own.

    As for patent, it's not really based on the first to invent. It's based on first to file in most of the world. In the US it's sort of based on first to invent--but not really. It's possible to get a patent on something that someone else has been using (in secret) for decades.

    Even if you allow "patents" only for "independent" inventions, this is fraught with problems. First, it's arbitrary in that it would protect a guy B who (independently) re-invents a product X a month after A patents it, but then C who was on the cusp of it, but who sees A's patent right before he finalizes his re-invention, is unable to invent it now b/c he has been "tainted" with information from A's patent. This makes no sense at all.


    This wouldn't be a problem in my world since as I note, if my world comes about inventors would leave a trail as to the work they are doing on inventions. If inventor C starts looking at patents rights where he is doing work, of course he should be banned from a patent on the same material. It would be a dumb thing for him to do.

    I believe this is the reason for example that comedians and late night show hosts send back material unopenned just so they don't get into such a pickle, i.e. stealing someone elses material they supposedly saw.


    But a more serious problem is this whole scheme of yours to find a way to have a "fair" idea-monopoly grant is based on the presumption that we should have innovation-monopoly grants in the first place. What nonsense. It's not a "problem" to be solved that people can learn. Learning and emulation are good things. I'm not working from the premise of "innovation monopoly grants" I am working from the premise of individual contracts that if I create a product, be it a novel or some other product, that I have the right to stipulate in my contract the conditions under which the product can be reproduced. In my world, I recognize that an automobile, for example, that I may create will be emulated, just as the invention of the wheel or fire may be emulated.

    It is more products that are clearly the product of a specific person, such as a song or a novel, that in my view contracts can be binding based on the wishes of the creator of the product.

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  13. @Stephan Kinsella

    This is all nonsense and hocus-pocus talk.

    I'm not sure how strong an argument this is.

    Back to my point:

    Let me ask you this. In your world, if someone who has access to an upcoming major motion picture only under the condition that he not reprodouce it, then goes and reproduces and sells it to you, do you then have the right to sell it? More interesting, can you then create a contract with another person whereby you include in that contract that you are providing the reproduction only under the terms that the person does not reproduce it?

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  14. I should add that I believe what Riley technically did was register "Three-Peat" as a trademark. However in my world everything would be either patent or copyright, with trademarks falling under copyright, as a kind of special case. That said I would find it very difficult for him to defend such a copyright (in my world), since it would be near impossible for him to prove the term was stolen.

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  15. "Thank's for the correction. It's good to see at least the copyright law taking my view. Although I am a bit confused when, for example,then-Los Angels Laker's coach Pat Riley copyrighted the word "ThreePeat". In my world this would be a waste of time since how could Riley prove that I didn't come up with the term on my own."

    There is no libertarian rationale whatsoever to give someone a monopoly on the use of a pattern or information that guides their use of their own property. In any case, you are confused. This is trademark, not copyright. You can't "copyright" something--it's not a verb. You are automatically granted a copyright in original works of authorship fixed in a tangible medium of expression, as soon as you do it. Whethre you want it or not. Short phrases, words, titles are considered too short for copyright protection; this is a trademark issue. Trademark has nothing to do with patent and copyright; it is based on the idea of fraud. Patent and copyright are not.
    ""Even if you allow "patents" only for "independent" inventions, this is fraught with problems. First, it's arbitrary in that it would protect a guy B who (independently) re-invents a product X a month after A patents it, but then C who was on the cusp of it, but who sees A's patent right before he finalizes his re-invention, is unable to invent it now b/c he has been "tainted" with information from A's patent. This makes no sense at all."

    " This wouldn't be a problem in my world since as I note, if my world comes about inventors would leave a trail as to the work they are doing on inventions. If inventor C starts looking at patents rights where he is doing work, of course he should be banned from a patent on the same material. It would be a dumb thing for him to do."

    I don't think you understand how patents work. This is understandable as it's a complex, technical, arcane area of law--I see this all the time: laymen have strong opinions about a system they don't even understand. I'm not talking about the second guy getting a patent. It's just his right to use his property as he sees fit. You don't need a patent to do that. Patents don't grant anyone any permission anyway. They only give you a bludgeon to use against others. NOt the right to do anything at all with your own property.

    "I believe this is the reason for example that comedians and late night show hosts send back material unopenned just so they don't get into such a pickle, i.e. stealing someone elses material they supposedly saw."

    No. This has nothing to do with patents or inventions. Now you are apparently talking about copyright.

    "'But a more serious problem is this whole scheme of yours to find a way to have a "fair" idea-monopoly grant is based on the presumption that we should have innovation-monopoly grants in the first place. What nonsense. It's not a "problem" to be solved that people can learn. Learning and emulation are good things.'

    "I'm not working from the premise of "innovation monopoly grants" I am working from the premise of individual contracts that if I create a product, be it a novel or some other product, that I have the right to stipulate in my contract the conditions under which the product can be reproduced."

    You use "stipulate" like it's some magic wand type word. What does "stipulate" even mean, and what does it have to do with assigning title to owned scarce resources (which is what contracting does)? You apparently are not aware of the limitations of contract. IP requires third parties to be bound. Contracts can't do this.

    ""In my world, I recognize that an automobile, for example, that I may create will be emulated, just as the invention of the wheel or fire may be emulated."

    ... so... if I read you right, you agree there is no IP.

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  16. "It is more products that are clearly the product of a specific person, such as a song or a novel, that in my view contracts can be binding based on the wishes of the creator of the product."

    Contracts don't bind third parties. Thus your idea fails.

    "'This is all nonsense and hocus-pocus talk.

    "I'm not sure how strong an argument this is."

    I am. The burden is on you to justify the insane system of IP law. Now you, like most IP advocates, seem to be saying you don't believe in modern IP law as it's instantiated. And you clearly don't understand IP law at all... even though you claim you'll write a "book" on it. You seem to have strong opinions about a system you don't really favor and that you don't really understand. I guess I don't have really disagree with the IP system you advocate since I have no idea what it is.

    "Let me ask you this. In your world, if someone who has access to an upcoming major motion picture only under the condition that he not reprodouce it, then goes and reproduces and sells it to you, do you then have the right to sell it?"

    You can't technically "sell" a patttern of information since you can't own it.

    " More interesting, can you then create a contract with another person whereby you include in that contract that you are providing the reproduction only under the terms that the person does not reproduce it?"

    You can create whatever contract you want. Doesn't mean it's magic. If you have a secret--say, you are a closet homosexual and no one knows it--and you reveal this to a friend under some kind of solemn promise of secrecy, and he breaches it--so what if it's a breach of contract? So what if you can sue him for money damages. The world now knows you are gay. Are they supposed to pretend like they don't know this now?

    "I should add that I believe what Riley technically did was register "Three-Peat" as a trademark. However in my world everything would be either patent or copyright, with trademarks falling under copyright, as a kind of special case. That said I would find it very difficult for him to defend such a copyright (in my world), since it would be near impossible for him to prove the term was stolen. "

    Trademark is a species of copyright now? But this makes no sense. Trademark is based on consumer confusion--misidentification of the source of goods. It's based on fraud. Copyright, even in your imagination, is based on being some kind of independent creator of a pattern. A trademark, to work, need not be original at all. It is just a way of identifying who is selling or making something. What in the world does this hvae to do with copyright? How can you write a book on IP knowing so little about IP??

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  17. I added a few more comments and tweaked some wording and formatting, here: http://www.stephankinsella.com/2010/08/30/wenzel-on-copyright-and-patent/

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  18. Stephan,

    I haven't had a chance to read in full your last 2 or 3 three comments. I have a pretty hectic schedule for the next day or two.

    When I do have time to I'm sure I'll have further thoughts and respond here or at your post.

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  19. This is distressing; how come Wenzel gets to suck up so much of the great Stephan Kinsella's time?

    "...if I create a product, be it a novel or some other product, that I have the right to stipulate in my contract the conditions under which the product can be reproduced"

    Stipulate that it can only be reproduced in a 105-degree-Fahrenheit yoga studio! Stipulate that your novel can only be reproduced in tattoo form on Angelina Jolie's bare bum if you want! Stipulate away!

    When you're done stipulating, it's time to try to persuade someone to *agree* to your terms. People you do not persuade are not bound by them.

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