Against Intellectual Monopoly

life of the author plus
seventy years.'7

    In the United States, there are limitations on copyright not present in
patent law. As Stephen Manes correctly points out in his attack on Larry
Lessig, the right of fair use allows the purchaser of a copyrighted item limited
rights to employ it, make partial copies of it, and resell them, regardless of
the desires of the copyright holder. In addition, certain derivative works
are allowed without permission: parodies are allowed, for example, while
sequels are not.
    In the case of both patents and copyright, from the point of view of
economics, there are two ingredients in the law: the right to buy and sell
copies of ideas, and the right to control how other people make use of their
copies. The first right is not controversial. In copyright law, when applied
to the creator, this right is sometimes called the right of first sale. However,
it extends also to the legitimate rights of others to sell their copies. It is
the second right, enabling the owner to control the use of "intellectual
property" after sale, that is controversial. This right produces a monopoly -
enforced by the obligation of the government to act against individuals or
organizations that use the idea in ways prohibited by the copyright or patent
holder.
    In addition to the well-known forms of "intellectual property" - patents
and copyright - there are also lesser-known ways of protecting ideas. These
include contractual agreements, such as the shrink-wrapped and clickthrough agreements that you never read when you buy software. They also
include the most traditional form of protection - trade secrecy - as well as
its contractual and legal manifestations, such as nondisclosure agreements.
Like patents and copyright, all of these devices serve to help the originator
of an idea maintain a monopoly over it.
    We do not know of any legitimate argument that producers of ideas should
not be able to profit from their creations. Although ideas could be sold in
the absence of a legal right, markets function best in the presence of clearly
defined property rights. We should protect not only the property rights of
innovators but also the rights of those who have legitimately obtained a copy
of the idea, directly or indirectly, from the original innovator. The former
encourages innovation; the latter encourages the diffusion, adoption, and
improvement of innovations.
    Why, however, should creators have the right to control how purchasers
make use of an idea or creation? This gives creators a monopoly over the
idea. We refer to this right as "intellectual monopoly," to emphasize that it is this monopoly over all copies of an idea that is controversial, not the right to
buy and sell copies. The government does not ordinarily enforce monopolies
for producers of other goods. This is because it is widely recognized that
monopoly creates many social costs. Intellectual monopoly is no different
in this respect. The question we address is whether it also creates social
benefits commensurate with these social costs.

    The U.S. Constitution allows Congress "to promote the progress of science
and useful arts, by securing for limited times to authors and inventors the
exclusive right to their respective writings and discoveries."18 Our perspective on patents and copyright is a similar one: promoting the progress of
science and the useful arts is a crucial ingredient of economic welfare, from
solving such profound economic problems as poverty to such mundane
personal nuisances as boredom. From a social point of view, and in the view
of the founding fathers, the purpose of patents and copyrights is not to
enrich the few at the expense of the many. Nobody doubts that J. K. Rowling
and Bill Gates have been greatly enriched by their "intellectual property" -
nor is it surprising that they would argue in favor of it. But common sense
and the U.S. Constitution say that these rights must be justified by bringing
benefits to all of us.
    The U.S. Constitution is explicit that what is to be given to authors and
inventors is an exclusive right - a monopoly. Implicit is the idea that giving
this monopoly serves to promote the progress of science and useful arts. The
U.S. Constitution was written in 1787. At that time, the idea of copyright
and patent was relatively new; the products to which they applied, few; and
their terms, short. In light of the experience of the subsequent 219 years,
we