Against Intellectual Monopoly

"necessary evil"
that fosters innovation, and disagreement is over where the line should
be drawn. For the supporters of "intellectual property," current monopoly
profits are barely enough; for its enemies, currently monopoly profits are
too high.
    Our analysis leads to conclusions that are at variance with both sides. Our
reasoning proceeds along the following lines. Everyone wants a monopoly.
No one wants to compete against their own customers, or against imitators. Currently patents and copyrights grant producers of certain ideas a
monopoly. Certainly, few people do something in exchange for nothing.
Creators of new goods are not different from producers of old ones: they
want to be compensated for their effort. However, it is a long and dangerous
jump from the assertion that innovators deserve compensation for their
efforts to the conclusion that patents and copyrights, that is, monopoly, are
the best or the only way to provide that reward. Statements such as, "A patent
is the way of rewarding somebody for coming up with a worthy commercial
idea"" abound in the business, legal, and economic press. As we shall see,
there are many other ways in which innovators are rewarded, even substantially, and most of them are better for society than the monopoly power
that patents and copyright currently bestow. Because innovators may be
rewarded even without patents and copyright, we should ask, Is it true that
"intellectual property" achieves the intended purpose of creating incentives
for innovation and creation that offset its considerable harm?

    This book examines both the evidence and the theory. Our conclusion is
that creators' property rights can be well protected in the absence of "intellectual property," and that the latter does not increase either innovation or
creation. They are an unnecessary evil.

    This is a book about economics, not about law. Or, put differently, it is not
about what the law is but rather what the law should be. If you are interested
in whether you are likely to wind up in jail for sharing your files over the
Internet, this is not the book for you. If you are interested in whether it
is a good idea for the law to prevent you from sharing your files over the
Internet, then this book is for you.
    However, although this book is not about the law, some background
on the law is necessary to understand the economic issues. We are going
to examine the economics of what has, in recent years, come to be called
"intellectual property," especially patents and copyright. In fact, there are
three broad types of "intellectual property" recognized in most legal systems:
patents, copyrights, and trademarks.
    Trademarks are different in nature from patents and copyrights: they
serve to identify the providers of goods, services, or ideas. Copying, which
would be a violation of copyright, is quite different from lying, which would
be a violation of trademark. We do not know of a good reason for allowing
market participants to steal identities or to masquerade as people they are
not. Conversely, there are strong economic advantages in allowing market
participants to voluntarily identify themselves. Although we may wonder
whether it is necessary to allow the Intel Corporation a monopoly over the
use of the word inside, in general there is little economic dispute over the
merits of trademarks.
    Patents and copyrights, the two forms of "intellectual property" on which
we focus, are a subject of debate and controversy. They differ from each other
in the extent of coverage they provide. Patents apply to specific implementations of ideas - though in recent years in the United States there has been
decreasing emphasis on specificity. Patents do not last forever: in the United
States, patents covering techniques of manufacture last twenty years, and
fourteen years for ornamentation. Patents provide relatively broad protection: no one can legally use the same idea, even if he or she independently
rediscovers it, without permission from the patent holder.16
    Copyrights are narrower in scope, protecting only the specific details of
a particular narrative - though as with the case of patents, the scope has
been increasing in recent years. Copyright is also much longer in duration than patents - the life of the author plus fifty years for the many signatory
countries of the Berne Convention, and - in the United States since the
Sonny Bono Copyright Term Extension Act - the