Thursday, January 10, 2013

Tom W. Bell on Laws of Creation

Posted by Tom W. Bell

Laws of Creation, by Ronald A. Cass and Keith N. Hylton, offers a studied explanation of the various legal devices popularly styled as “intellectual property” or simply “IP”. In calm and lucid prose, it describes the policy ideals that do (or at least should) shape copyright, patent, trade secret, and trademark law. The Laws of Creation offers about as good a defense of the status quo as anyone could ask, and as such deserves to become a standard reference point in future debates about IP policy. This review of the book’s treatment of copyright aims to show, moreover, that Laws of Creation has much to teach us even when it fails.

Laws of Creation takes a soberly utilitarian approach to the question of whether we should recognize property rights in copyrights and other forms of IP. The text frankly admits that “little empirical evidence exists to shed light on the issues central to the design of intellectual property rights.” (P. 45). Rather than hard data, therefore, Laws of Creation seeks “the most plausible predictions respecting the operation of the law.” (P. 47). It applies this methodology—light on practice, heavy on theory—to conclude that “copyright law seems to provide a reasonable set of rules.” (P. 99).

On this and other points, the Laws of Creation shows admirable modesty. When in doubt, however, it tends to err on the side of making copyrights more powerful. With regard to copyright’s term, for instance, it suggests making a core set of rights last forever. (P. 124). In that, Laws of Creation goes beyond even what the Constitution would allow.

Whence comes this bias in favor of copyrights? It starts with the otherwise commendable presumption that “in most instances secure property rights with voluntary exchange provide the best prospect for enhancing wealth.” (p. 24). Laws of Creation frankly admits that expressive works, being non-excludable and non-rivalrous in consumption, differ fundamentally from tangibles such as land, cars, and apples. It nonetheless calls the whole lot “property,” a popular but misguided rhetorical move that evidently sways the analysis. If property is good, and copyright is property . . . the conclusion follows all too quickly.

Laws of Creation would do better to understand copyrights as a form of intellectual privilege. Seen in that light, copyright appears not as a type of property but instead as a limitation to it. Only thanks to a special statutory exception, after all, can copyright holders limit the rights we would otherwise enjoy to use our printing presses, computers, guitars, throats, and other tangible assets in echo of others’ expressions. To be pro-copyright is to be anti-property.

Various theoretical missteps also render Laws of Creation unduly sympathetic to copyright. For instance, it treats the expansion of international trade as little more than an occasion to worry about the prospect of copyright infringements abroad. Once lawmakers have calibrated copyright policy to provide sufficient incentives to supply domestic markets with expressive works, however, the opening of international markets—even ones with rampant piracy—threatens to overdo the icing on the cake. A more careful analysis would suggest that lawmakers reduce the power of copyright every time the size of the market for expressive works grows.

Laws of Creation similarly errs in focusing on how technological change might leave copyright holders worse off to the exclusion of focusing on what should be our ultimate concern: its impact on consumers. Advances in reproduction and distribution technology threaten to make copyrights less lucrative, of course, and should give us cause to worry about the incentives faced by would-be creators and publishers. Laws of Creation stops there, however, citing the wonders of the Internet only as an excuse for increasing copyright’s power. A more realistic and complete analysis would recognize that copyright holders might on net benefit from the lower costs and wider reach afforded by new technologies.

To get to the root of the issue, we should ask whether technological progress has made the consumers of copyrighted works worse off. Have recent years seen a reduction in the supply of original expressive works? Even though this, the most important question, nearly answers itself, Laws of Creation does not even ask it.

Most fundamentally, Laws of Creation evinces the sort of simple positivism, all too common in contemporary legal theory, in which legislation merits the same respect as the common law and in which natural rights matter not at all. Laws of Creation offers a wholly unsatisfying analysis of the public choice pressures that have afflicted copyright in recent decades, for instance, dismissing as “a recent phenomenon” (p. 214) the sort of legislation-by-lobbyists that by its own account has been going on for more than half a century. Remarkably, Laws of Creation expresses concern not that special interests have taken over the Copyright Act but instead that skepticism about the results might “become a powerful force that drives changes in those laws through the legislative process.” (P. 216.)

A more sophisticated approach would follow Friedrich A. Hayek, Bruno Leoni, Randy Barnett, and other classical liberal scholars in recognizing that property rights arise not grace of legislative fiat but as a spontaneous order. Property rights qualify as natural rights in that they are natural to human society—they alone allow us to live together in peace and prosperity. The common law process, at least in its traditional form (as opposed to merely litigation-driven interpretation of statutes), discovers the parameters our natural property rights through a decentralized and iterative process.

Copyrights, in contrast, are neither property rights nor common law rights, but instead arise only via legislated privileges. That is not to say copyrights are thereby unjustified; as with other government programs, the question is whether or not they produce a net public good. The answer to that question remains subject to great uncertainty, something that to its credit Laws of Creation fully recognizes. Laws of Creation should also recognize, however, that the way the law has created copyrights and other types of IP can tell us a great deal about their presumptive justification. The burden of proof should fall on those who advocate such legislative privileges in derogation of our natural and common law rights—a burden that Laws of Creation picks up, but does not fully carry.

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