TechKnowledge No. 10

When Rights Collide: Principles to Guide the Intellectual Property Debate

By Clyde Wayne Crews Jr. and Adam D. Thierer
June 4, 2001

Is there anything more contentious than the debate over intellectual property (IP) protection? The “Napsterization” of just about everything digital has one side jumping with joy, and the other claiming the end times are near. Is there any common ground? We’d like to suggest there is, but first everyone must realize that there are no clean-cut, easy answers in this debate. Let’s start by acknowledging the fact that both sides make some excellent points. This debate is thorny because two important principles collide: legal protection for intangible works butts up against free expression and exchange of ideas. IP disputes have always involved the fundamental trade-off between these two principles.

The most radical voices have suggested that there is no such thing as a right to own intangible ideas and, therefore, the whole regime of limited grants of monopoly is an unjust and outdated political construct that should be tossed aside. To this line of thinking, the cost of protecting IP is just another cost of doing business, so why attempt to socialize it?

Of course, the folks in this crowd acknowledge that there is value to ensuring that innovators are rewarded for their intellectual creations. After all, there is merit to the theory that limited terms of protection provide entrepreneurs with an incentive to generate important life-enriching products and ideas. A good argument can be made that in a world without IP protection, some individuals would be discouraged from producing important goods or ideas (consider pharmaceuticals or genetically altered foods to feed hungry populations).

On the other hand, the “protect-everything-under-the-sun” folks go too far when they lobby for excessive terms of protection-which go beyond any possibility of motivating creators, who often are deceased (think Mickey Mouse and The Wind Done Gone)-and seek to expand what is covered by copyright and patent law in the first place. One begins to believe record companies would assert the right to copyright the 12-bar blues chord progression if they could get away with it. Aggressive protection schemes would require nothing short of an IP police state and would greatly discourage entrepreneurialism by others.

So, succinctly stated, the problem we face when it comes to issues of IP and the Internet is how to balance artistic and entrepreneurial incentives with the interests of the larger community of users in a free, unhindered exchange of ideas and products. Again, there are no easy answers, but the following principles can help guide the debate and perhaps create some common ground:

(1) Take the principle “To Promote the Progress of Science and Useful Arts” seriously: Reasonable people can legitimately debate the appropriate time periods over which works should be protected. Any term set in law will be arbitrary. But copyright protection that extends far beyond the life of the originator provides diminishing incentives for that person to innovate. Terms of protection may need to be rethought. We should adhere to the Constitution’s goal of promoting the progress of science and useful arts, not unnecessary government monopoly.

(2) Don’t ban new technologies or business models to solve patent or copyright problems: In the raging file-sharing dispute, one side wants to ban or restrict file-sharing technologies that reduce copyright control. Meanwhile those who eagerly share copyrighted files often ridicule or condemn experimental technologies by which copyright holders hope to shield works from reproduction, such as digital watermarking, enhanced encryption and attempts to incorporate digital rights management into secure hardware. Some users even regard such efforts as technical threats to free expression (even though they also claim that encryption or watermarking can always be cracked!).

Policymakers shouldn’t ban any category of technology as the marketplace works through these difficult issues. Likewise, force should not be used to “aid” the sharing of IP, such as emerging calls for the imposition of compulsory licensing requirements on record companies. Such forced “contracts,” with their accompanying price controls and regulatory dynamics, have no place in a nascent industry that desperately needs to embrace voluntary deals. If companies go too far in locking up information, other companies (and consumers) have the option of dealing with less-restrictive entrepreneurs. If technology is to contribute to solving the problems it has created, we must give it that chance. Digital rights management-while it will never fully prevent copying-can make it inconvenient enough so that cracking encrypted songs won’t likely be worth the trouble. Perhaps a twenty-cent download that also includes liner notes, lyrics, a photo or two, and discount coupons on merchandise and concerts is a better deal than a free song. Both sides should avoid injecting government coercion into the copyright resolution process as “Napsterization” proceeds. Perhaps technology can be a better means of managing copyright, in some applications, than can law-even if law is in place as a backup.

(3) Remove government barriers to the marketplace’s ability to protect intellectual property: To what extent are secrecy and privacy contracts enough? To lessen the reliance on traditional copyright protections, policymakers should ensure that government regulations don’t stand in the way of private efforts to protect intellectual property. For example, overzealous antitrust enforcement might hamper collective private efforts to license songs. Restrictive contracts that antitrust law might eye suspiciously could benefit consumers by ensuring returns for producers. Some academics have suggested that regulation such as antitrust law may force the “need” for more intellectual property law and enforcement than would otherwise be warranted.

The Constitution gives Congress the power to protect intellectual property. Yet the Internet invites new perspectives on the old models of IP protection. File sharing technology clearly creates a problem, but an arguably transitory one involving the existing body of copyrighted work. In the post-Napster world, every musician and songwriter realizes there exist new methods for distributing and pricing products. Technology can increasingly serve as a partial replacement for copyright law for the artists of tomorrow-and today-if they embrace it.

Clyde Wayne Crews Jr. (wcrews [at] cato [dot] org) the Director of Technology Studies and Adam Thierer (athierer [at] cato [dot] org) is the Director of Telecommunications Studies at the Cato Institute in Washington, D.C. To subscribe, or see a list of all previous TechKnowledge articles, visit www.cato.org/tech/tk-index.html.