The Anti-IP Crusaders

The B-L analogy strikes me as being very erroneous. I am not telling you how to drink the coffee, I am protecting myself from you copying my new methods for producing the cup of coffee. Telling you how to drink it is like your Microsoft example of terms in a contract. This is similar to real estate purchases that contain clauses restricting the behavior of the new owners.

BL make a strawman argument. Paragraph 1 -- Copyright and Patents do not protect ideas. Copyright protects a particular expression of an idea. Patents protect a specific methodology. Paragraph 2 -- Patents do no protect laws of nature or discoveries in the natural world (except for a small class of patents known as "gene patents" where it is recognized that the process of discovery might as well be invention based on the investment and brain power required -- it isn't Columbus sailing west). The paper reads like a whiney lower division survey paper from there...

Speaking of lower division... IP Law is a legal framework that codifies informal rules about how we assign credit for expression of ideas. I have no idea what rank Boldrin has achieved in academia. Levine is a professor. Let's say they were both Freshmen at UCLA. Presumably, they got in partly because they wrote better essays than their peers or provided better test answers. These were "their" essays and test answers. Without recognizing those as de facto property, UCLA has no way to judge that they are worthy of admission. Morally, it would be reprehensible for them to pass off essays or test answers of others in order to secure positions in UCLA's freshman class. All I can say is that if Levine were my professor, I'd feel obligated to plagiarize blatantly. I wonder if he'd get the irony...

Speaking of lower division... IP Law is a legal framework that codifies informal rules about how we assign credit for expression of ideas.

Untrue, at least in its Anglo-American expression. For example, in the realm of copyright, this claim inflates the copyright with the droite d'auteur to be known as the author of a work. If I try to profit from being known as the creator of a work I did not create, even if that work is in the public domain, I am still committing a fraud.

In the realm of copyright, I am not sympathetic to the general claim that copyright is bad, but I am quite firmly convinced that presently, copyright lasts longer than serves any public interest. I could present on net-present-value principles an argument that, for a discount rate of 2%, a flat term of 35 years is a fair term of copyright.

In the realm of patents, there are some fields that patents work fairly well for. They work well for pharmaceuticals, where what is being patented is usually well-defined. They are not presently working so well for fields where what the innovation is, is not so well-defined. As a result, claims are being granted that should not be granted. This has led to the practice of patent-squatting, which I think can be widely agreed upon as an abuse of the system.

In my opinion, a good corrective to abuse of the patent system would be a greatly expanded notion of "obviousness." In contrast to the Blackberry case, where (in part) the court rejected RIM's case that the patented art would occur to any reasonably competent programmer, because the Blackberry had been successful (i.e., the doctrine that the principal reason for the Blackberries success was that hypothetical competitors lacked the patented art), I would like to see a legal doctrine where a clean-room re-implementation of a patented art is prima facie evidence of obviousness -- a reasonably skilled person could have figured it out on their own, because, well, they did.

This would also impede patent squatting, because if a firm implements their patent in some notorious, widespread product, it is far more difficult for an accused infringer to demonstrate ignorance of the patented art, and a clean re-implementation, than if the patent holder does not use the patented art it any way.

You can find Boldrin and Levine's book, Against Intellectual Monopoly here http://www.econ.umn.edu/~mboldrin/aim.html

That IP encourages greater creativity is an assertion often made but never demonstrated. Where is the controlled experiment? Where is the epidemiological evidence?

Fields where IP protections are weak, such as cooking and fashion, have a reputation for being among the most innovative ones. Charles Murray in his book Human Accomplishment demonstrates that the density of innovation was higher in the 19th Century than at present, a time with weaker IP protections.

One problem with Microsoft's making a contract prohibiting copying is that it's unenforceable.
Another is that it can't bind downstream users. If I buy a Microsoft product and give or sell it to someone, that person is not bound by the terms of the contract between me and Microsoft.
The standard (old-style) libertarian defense of copyright is encapsulated in Rothbard's copyright stamp, but it's a nonstarter. We're in a new libertarian dawn, baby, and we won't get fooled again by IP.
I'll try to get back later re: pharma innovation and patents, maybe between innings of the all-star game.

B-L are right that pharma innovation was high where patents didn't get in the way. In England the Sargent Committee claimed in 1937 that patents stifled drug innovation.
While statistically valid drug trials raised the cost of drug development after WW II, these (and other) costs were offset to a great extent by the state's enlarged role in funding basic R&D.
That point is only one in their arsenal, as a reading of chap. 9 of their book shows.

They cite an Oct. 2002 NBER paper (it's online)
by James W. Hughes, Michael J. Moore, and Edward A. Snyder, " 'Napsterizing' Pharmaceuticals: Access, Innovation, and Consumer Welfare," in which the authors discount the costs and benefits of drug patents with an interest rate of 2%--a number that would get a rookie analyst fired on Wall Street--and claim with a straight face, that the benefits outweigh the cost. They allow though that with any rate higher than just under 5%, the costs are greater than the benefits.
At the very least they should have used the drug industry's costs of capital, roughly 10%. In the real world, drug firms probably use a hurdle rate of 15% or so to build in a margin of error. B-L say that using 15% would make more sense.
Either way, the case for pharma patents is exceedingly weak, and is one of the great hoaxes of our time. B-L should publish an op-ed in the WSJ on this. That would put up the dander of the pharma CEOs.