Here’s Why the Pro-IP Crowd Is Right About Intellectual Property

On February 13, 2020, The Niskanen Center, a center-left think tank, published a piece condemning pro-intellectual property voices for what they consider flawed views on intellectual property.

In the article, author Daniel Takash explicitly attacks the “unearned moral high ground,” which supporters of IP supposedly occupy. “Supporters of free markets and property rights,” he proclaims, “must stop thinking of the unauthorized use of ideas … as ‘theft.’” Instead, they must “wholesale reject the notion that patents and copyrights are property.” This position is incredibly naïve and demonstrates a profound ignorance of intellectual property and, quite frankly, innovation in general.

Takash’s Mistakes

First, Takash suggests that supporters of robust IP protections believe patents and copyrights are property. This is, of course, wrong. Patents and copyrights are actually legal recognition of intellectual property; they’re the government’s commitment to provide the owner of intellectual property with an exclusive right to that property. Much like a deed grants a homeowner with legal rights to physical property, so too does copyright protect an innovator’s intellectual property. It is illogical to suggest that the deed—not the home itself—is the property. But that’s one mistake that Takash makes.

Another mistake is that Takash makes a distinction between IP and what he calls “actual”—or physical—property and suggests that IP isn’t really property. To make his point, Takash cites the upcoming Supreme Court case, Google v. Oracle, as a key example. In this case, Google is credibly accused of copying Oracle’s copyright-protected intellectual property—its well-known Java software—and illegally putting the copied code into its Android operating system.

To support his argument, Takash wrongly claims that software copyrights aren’t like other legitimate forms of IP protection. Whereas IP protections are necessary to recoup costs in fields like pharmaceutical R&D, he argues, copyrights within the software industry only hinder the creative process.

But Takash fails to recognize that, regardless of the industry, exclusive rights, the very essence of private property, are essential to attract investment into that property, whether intellectual or physical. You would not seek a mortgage to build your house if your deed did not enable you to keep others from living there, and no bank would loan the money if you did not have full ownership and control of the house. Likewise, why would anyone put in the hard work and money needed to create new software if a company like Google could so easily take it and make it their own? Rather than promote innovation, forcing software to become open-sourced would only result in more theft and less investment. This would stifle innovation—not encourage it.

The Fundamental Flaw

According to Takash, taking IP belonging to someone else shouldn’t be considered “theft” because the owner, Oracle, “has not been deprived of anything” and Java’s code “[works] just as well as before.” Takash is arguing that because software inventions are easy to replicate, they can’t be stolen. Using that logic, music piracy, which costs the U.S. economy an estimated $422 million annually, should be completely legal. After all, the musicians themselves haven’t been deprived of anything since their original recording still works. Takash has no clue as to how intellectual property rights create scarcity, and that scarcity is what attracts investment and promotes innovation.

The fundamental flaw in Takash’s argument is clear: the dangers of intellectual property theft lie not in the physical nature of the theft itself, but rather the loss of control the theft causes. Oracle may not have been physically deprived of Java’s code, but Google took something more valuable. It converted what was Oracle’s private control over their own creation into public property free for all to take. This makes Java an un-investable proposition. Had this been known before its inception, nobody would have invested the time and money to create it.

Oddly, Takash scoffs at the legitimacy of exclusive IP rights, calling them “monopoly rights.” He argues, “Copyright and patent holders suffer no loss, other than that of monopoly profits, when others are able to use their own property as they see fit.” Given Oracle’s loss of much of its investment in the creation of Java, this admission clearly contradicts his previous claim that Oracle “has not been deprived of anything.” But more than that, the argument reveals precisely why intellectual property protections are essential—they enable profit, the incentive for innovation, which is also lost under Takash’s argument.

IP laws do create the potential for financial windfalls—and why shouldn’t they? If an individual had the creativity, drive, and risk tolerance to develop a novel, functional, coveted piece of technology—say, Java, for instance—shouldn’t they benefit from their intellectual labor? More importantly, shouldn’t our system encourage people to develop innovation that improves the lives of large numbers of people in the first place? Takash says no.

In his dogged determination to defend Google’s theft of Oracle’s property, the author goes so far as to shrug off the value of IP entirely. “My position is that [intellectual property rights] do not deserve the same moral or rhetorical treatment as the right to physical property,” he writes.

Hypocrisy, Thy Name is Google

He attacks so-called “IP hawks,” but ironically fails to recognize Google itself has been a stalwart defender of intellectual property when it stood to benefit. Google’s Android mobile operating system, while free for consumers, requires a license for manufacturers to use. Incredibly, this was precisely the case with the Java software—a quasi-open source platform free for coders but requiring licenses for competitors like Google.

That’s right. For all the noise Google makes about the value of open-source software and the harm of Java’s application programming interface (API) copyrights, Google remarkably hides some of its own APIs to prevent companies like Amazon from making Android apps (in Java) that compete with Google apps (also coded in Java). They protect what they stole and call it Google Services.

So, in the case of Java, Google was happy to steal Oracle’s copyright-protected intellectual property, and rather than pay a licensing fee, unashamedly claim the moral high ground with its “everything should be free for us” position. However, when the shoe is on the other foot, Google locks up their own API and expects that manufacturers pay to license it. But if someone steals their IP, they jealously protect it – even with criminal charges.

So, where exactly is the monopoly power Google claims to hate so much? Hypocrisy, thy name is Google.

And why is an organization like the Niskanen Center bending over backward to spin an argument for Google’s incoherent position on intellectual property? The likely answer comes right at the close of the article: “In the interest of full disclosure, the Niskanen Center receives support from Google.” Indeed, the arguments in Takash’s piece reflect those presented by Google in its upcoming Supreme Court lawsuit. And unfortunately for Google, they don’t hold up under scrutiny. Google’s self-serving perspective on IP is massively out of step with understanding intellectual property and promoting innovation. Hopefully, that’s a reality the Supreme Court recognizes.

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