On the surface a person might believe, “If we didn’t have intellectual property laws, it would open the floodgates for copycats everywhere, reducing incentive for people to create. We would have Chinese phones that look like iPhones and poor Apple! Innovation would be lost because no one needs to innovate in order to get sales.”
I get and understand that some entities will copy instead of innovate. I get it that many believe the government is the only way to prevent this scenario.
Nine points that weigh in favor of reforming or even completely removing intellectual property laws
(1) How many of these “copycats” will do this and be successful at it? Not everyone will do this or even want to. The fact that we have anything new in the world is a testament to that.
(2) Reputation, brand, first to market, quality, and integrity. These factors all influence the market and have value.
(3) Consumers win (price, etc.). Example: If a Chinese company succeeds in making an iPhone copy equal in every way (price, perceived quality/looks, AND quality), then one would assume they would try to sell it cheaper to draw away Apple customers. This is a big “IF” because Apple has agreements with their suppliers, economies of scale, etc. where it might be difficult for most companies to exactly dupe the iPhone in all ways, including quality, and afford to sell it cheaper. BUT let’s say they can. Then that means Apple is overpricing their product (it does cost Apple around $400 to make an iPhone X 2018), so the Chinese iPhone would force a market reckoning to a more fair price and keep Apple on their toes INNOVATING instead of SUING. The other, and more likely scenario is that the Chinese copy would be inferior. So yay, customers have a choice to buy the inferior version and save money. Given the number of tech review sites, word of mouth, Internet, etc., it would not be a secret for very long that the Chinese version is substandard. But hey if some people want a cheaper knockoff then why not?
(4) Joe Blow Middle Income Guy Inventor wants to make a new phone/OS that blows away Android and iOS. He has some revolutionary ideas but does need to at least use some of the basics that came before him, standing on the shoulders of his predecessors. Think touch screen or swiping or removable battery or long touch or… Get the point? But if you look at all the patents that exist in the phone market, you would see that Joe Blow has no chance in hell of creating his badass new phone/OS unless he joins Google/Apple or finds some super rich investor so he can afford licensing basic ideas from Google and Apple. Patents actually make it harder for the small guy!
(5) If Joe decides to stand on the shoulders of those before him and one of them uses the force of government to prosecute Joe, his time and efforts are being stolen.
(6) More often than not, copying increases the popularity of the author and/or work that was copied. Sure, there are cases where the opposite happens, but overall, publicity is good and “negative publicity is better than no publicity” is a saying for a reason. And heck, in this case, the “negative” publicity has the negative pointing at the copycat, not you.
(7) Removing patent/copyright law does not prevent creators from making private agreements to increase security for their innovative ideas.
(8) “Inventors and creators express a skill that CANNOT be copied, but it can be learned, and so a patent amounts to HIDING the value of the creators and inventors.” ~ Dave Scotese
(9) Copyrighting and patenting are often the reason a brilliant new idea gets stolen because these ideas are published where the public can see.
So yes, I believe that if we radically changed patent law or even removed it, some would copy even more than we see now but the real question is: when you consider the potential small negatives as well as the big positives [to removing all government-controlled copyrights and patenting] I mentioned above, will the net affect [to us all] of that happening be positive or negative? And bonus: less rules and less bureaucracy means a more efficient system!
A real world example to put these ideas into perspective
What Katy Kelly has to say on the issue
Imagine two children building sandcastles side by side on the beach. Bobby comes up with the inventive idea of decorating his castle with shells that he finds in the sand. Susie sees this and thinks it looks really cool, so she also collects shells to decorate her sandcastle. Now her sandcastle also looks really cool. Upon seeing this, Bobby gets angry, says “Hey! You stole my idea!” and knocks down Susie’s creation, reducing it to a scattered pile of sand.
If you see a problem with Bobby’s behavior, you can see the problem with patents.
A patent is “the exclusive right granted by a government to an inventor to manufacture, use, or sell an invention for a certain number of years.” In other words, if Bobby had gotten a patent on his unique shell-siding technique, the government would have kicked down Susie’s sandcastle for him. There are two main arguments for patents: one is to protect the inventor’s “intellectual property rights” and the other is to encourage innovation by rewarding inventors for their ideas. Both of these arguments are flawed.
On protecting Intellectual Property
– Property is a mechanism to allocate scarce goods. Since not everybody can have access to the same piece of land at the same time, we need a system of property to determine who gets access. IP is not scarce. Ideas can be copied without stealing anything.
– If I see you make your bread and cheese into a sandwich, and I take my bread and cheese and make it into a sandwich, I haven’t stolen anything from you. Same thing if I see you make a rubber band gun, mousetrap, pulley system, engine, time machine, etc.
– Two people can come up with the same idea independently of one another, but because a guy on the other side of the country registered the idea first, the other guy no longer is able to use his idea!
– Enforcing IP rights violates actual property rights, it requires someone to forcibly stop you from using your property in a certain way, and/or to hand over property, including money.
– Patents are not based on any kind of principle; we grant them for mechanical inventions but not for recipes, for example.
– Patent “rights” as property rights are invalid.
On encouraging innovation
– Turn the idea on its head: imagine if the wheel had been patented, if the use of fire had been patented, etc. In the years where only one person had the right to do those things, do you think that would help or hurt the course of human innovation?
– Patents create a barrier to innovation because there are so many patents floating around that inventors need lawyers before they take their invention to market, just to make sure they haven’t unknowingly violated someone else’s patent.
– There is an entire industry of patent trolls, people who buy up patents just to sue people.
– This [IP] system forces people to “reinvent the wheel”. Rather than making iterative improvements, which is how technology mostly develops over time, the patent system forces people to completely start over. You cannot build a better mousetrap, you have to completely reinvent the mechanism behind the mousetrap.
– Patents have devolved into ridiculousness (google apple rounded corners patent, slide to unlock, amazon one-click checkout, etc.).
– There are industries where patents do not exist, cooking for example, and innovation is still present. Anyone can make a pizza.
“Without a patent system, how can I protect my invention?”
– Trade secret – If you don’t want others to be able to recreate your invention, don’t publish how to make it.
– First mover’s advantage – The inventor has a significant first mover’s advantage before anyone can try to reverse engineer their product.
– Crowdfunding for medical and other research – This also solves the problem of people needing to pay exorbitant prices for their medication because of legal [?/monetary?] barriers preventing competition.
– Voluntary agreements – If an inventor is presenting his ideas to a company, there could be an agreement that the company would not use his invention without agreed upon compensation BEFORE the inventor reveals his product to them.
Another article on rethinking patent law: https://mises.org/library/rethinking-patent-law.