Against Intellectual Monopoly

provided similar protection. By 2001, all E.U. countries had fully
implemented the directive.
    How about the United States? Stephen Maurer and Suzanne Scotchmer
summarize the situation here in the following terms: "Except for opposition
from the scientific and engineering communities, the United States probably would have signed a database protection treaty in 1997 and adopted
corresponding domestic legislation in 1998. A revised bill known as H.R.
354, the Collections of Information Antipiracy Act, is currently pending in
Congress."32 As far as we know, the revised bill has not yet been approved,
and the discussion is still open. This means that in the United States, until
now at least, databases are not the objects of intellectual monopoly.
    Databases, if you think of it, come extremely close to the idealized pure
information that intellectual monopoly supporters talk about and that,
according to dominant economic theory, is expensive to produce but absolutely cheap to copy. Maurer and Scotchmer are aware of this, and of the
puzzling fact that very expensive databases keep being produced and traded
without intellectual property protection:
    The usual argument for statutory protection sounds simple and compelling.
Databases are expensive to make but cheap to copy. For this reason, private and
commercial database owners cannot compete with copiers in an open market. If
databases cannot earn a fair return under existing law, no rational business would
invest in them until Congress changed the rules. Instead, databases flourish.33
    Furthermore:
    Finally, many of the most popular and powerful methods depend on the marketplace. If consumers want frequent updates, a would-be copier has little to gain by
offering last month's database at a bargain price. Similarly, consumers may think
that a particular database is more valuable if it comes with copyrighted search software. In either case, copiers can only compete by making substantial investments
of their own. The resulting protection is particularly effective in the sciences, where
up-to-date, searchable data sets are at a premium.34
    It beats us as to why - after pointing out all this and convincingly documenting the dramatically negative impact that introducing protected coverage of databases would have on both academic research and business activity
in the United States - Maurer and Scotchmer decide to open up the door
to some amount of intellectual monopoly by adding that "Congress could
strengthen these methods still further by protecting each update or correction for 1 to 2 years. Such legislation would be far less restrictive than H.R.
354's proposed 15-year period."" But that is a different debate, which we
leave for later.

    In the meanwhile, the experiment continues along another dimension.
Which one do you think is higher: the rate of creation of databases in the
European Union, where they are protected, or in the United States, where
they are not? Well, you guessed it right: in the United States. In fact, it is not
even a race; the United States wins hands down, as Block points out. After
documenting in details the excellent state of the U.S. database industry, its
amazing growth rate and productivity, and the fact that the adoption of
the directive does not seem to have produced any sustained increase in the
European Union's production of databases, he adds: "For the entire period
measured, U.S. online database production outpaced all of Europe by a factor of nearly 2.5:1.... American dominance of database production cannot
be explained by incentives given to creators because American protection of
database rights is much weaker than the Directive."36 To which we add only
that, most probably, American dominance of the industry can be explained
by economic incentives to creators as measured by the actual profits accruing to them and by the competitive environment in which they operate,
and that, almost certainly, neither of them is increased much by the E.U.
directive. Our conjecture is that, within a few years, some smart applied
economist will write an interesting Ph.D. dissertation showing just this.
Simultaneous Discovery
    Insofar as inventors have unique ideas, it may make sense to reward them
with monopolies to make sure that we get advantage of their unusual talents.
For example, if, in the absence of James Watt, the steam condenser would
not have been invented until long after his patent expired, there is