Who Owns Ideas? The War Over Global Intellectual Property

David S. Evans

From Foreign Affairs, November/December 2002

Summary:  Copy Fights provides a provocative and balanced introduction to the brewing global battle over intellectual property rights.

David S. Evans is Senior Vice President at NERA Economic Consulting, Inc.

Copy Fights. Edited by Adam Thierer and Wayne Crews. Washington: Cato Institute, 2002, 295 pp. $19.95.

Last year, in a South African courtroom, global pharmaceutical firms challenged a law that permitted the manufacture and importation of generic aids drugs. The companies quickly dropped this claim, however, when the defense of their patent rights became a public relations fiasco. Indeed, just prior to last year's World Trade Organization meeting in Doha, Qatar, South Africa's health minister called the high prices for lifesaving medicines a "crime against humanity." Ten thousand miles away in San Francisco, the music industry tried to take down Napster, a service that allowed users to swap digital music files over the Internet. In this case, the courts agreed that Napster's file-sharing technology violated music copyrights. And across the Atlantic, advocates of "software libre" are introducing legislation in several European parliaments to give preferences in government procurement to software that can be freely copied and distributed. The Eurolinux Alliance argues that only free software "preserves privacy, individual liberties, and the right for every citizen to access public information."

Battles such as these are erupting all over the globe. At stake are decisions about how society can best encourage the creation of ideas, when someone can stake a claim to intellectual property, and how far copyright- and patent-holders can go in preventing others from taking their property. The scope of the controversy is vast. It might encompass debates about ownership of the formula for an aids vaccine, a Miles Davis riff, a software algorithm, or a new way of uncorking a wine bottle. Each of these is an idea embodied in physical forms: formulas, notes, code, or drawings are turned into capsules, records, cd-roms, or corkscrews. The economic consequences of the dispute are also immense. The resolution of who gets to own what, where, and for how long will determine how much corporations and entrepreneurs invest in creating intellectual property, where they will sell products based on intellectual property protection, and how much they will be able to charge for these products.

BATTLE LINES

The meaning of these disputes and how they should be resolved is the focus of Copy Fights, a new book of essays on intellectual property published by the libertarian Cato Institute. It is a provocative and balanced collection that examines both the current theories and the practice of intellectual property protection. Its contributors are a diverse group. They include a member of Congress, a lobbyist for the recording industry, a chief executive of a communications company, and a mix of lawyers, journalists, and academics. All of them seek to address the new questions raised about intellectual property in the digital era.

Aside from abortion it is hard to think of a public-policy controversy in which the positions are more polarized, the claims more apocalyptic, and the language more colorful. Disney's chief, Michael Eisner, claims, "There must be a reasonably secure environment to prevent widespread and crippling theft of the creative content that drives our economy." In contrast, Stanford law professor Lawrence Lessig has suggested that most existing intellectual property law protects the establishment against aspiring innovators. "It's like giving the Communists control over the future of the new Russia," he recently told BusinessWeek. And one cannot identify the partisans in this conflict by their usual colors. Greens and Libertarians doubt anyone should own ideas, while spike-haired musicians and entertainment moguls do not want their creations Napsterized. The fervor is reminiscent of religious debates and for the same reason: "arguments over the proper scope of copyright and patent law ... assume knowledge of things unknown and unknowable," as Tom Bell, a professor at Chapman University, writes in his contribution to Copy Fights.

Bell is right up to a point. We have known for centuries that owning mathematical theorems and other ideas raises more puzzles than does owning horses or other tangible property. Although no culture has allowed anyone to own a theorem, many modern ones let artists assert ownership over their writing, paintings, or music for some period of time, and most industrialized countries have given inventors of a better mousetrap a monopoly for a decade or two. These conventions vary across and within countries in maddening ways. But societies have not adopted these standards thoughtlessly. The fact that the U.S. patent office gave a 20-year monopoly to the inventor of the Santa Claus detector (patent #us5523741) should not make us lose sight of the fact that there is order amid this chaos. Broad principles that advance the public interest govern the ownership of intellectual property.

As the contributors to Copy Fights demonstrate, intellectual property protection is not a field of bright lines and clear rules. Protecting ideas always demands a delicate balance between competing objectives and values: stimulating creativity but thwarting monopoly; creating knowledge yet disseminating it broadly; enforcing rules while responding to change. Economic, technical, and social changes have complicated the balance between these competing goals and renewed debate over who should own what ideas and for how long. Nevertheless, it is a time-tested proposition that society benefits enormously when the expression or product of some ideas is owned and exploited for profit. The time has come to discuss once again the limits of that proposition, not its centrality.

WHY NOW?

The current explosion in controversy over the protection of ideas has three main causes. First, brainpower drives the modern economy: there are more demands to own ideas and more demands for cheaper access to ideas. Second, technological change has made it harder to protect ideas. More people want to use technology to get access to intellectual property. The owners of this property want to stop or at least limit these attempts. Third, globalization has made it easier for intellectual property to spread to parts of the world with weaker protection of ideas. In a variant of Gresham's Law, the one nation that does not protect patents within its borders can drive down global standards, making it harder to enforce ownership rights everywhere.