Counterfeit Property Rights

One of the reasons to oppose intellectual property is that it assigns partial ownership rights to real, tangible, and already-owned property to non-first-comers. For example, that copy you made of Microsoft Office, although you own the disk, you are restricted by law in how you may use this disk, e.g. installing the program, or selling it.

In some cases, IP laws assign a complete ownership, as demonstrated this week when Brooklyn District Attorney Charles Hynes obtained the permission of certain trademark owners to redistribute seized counterfeit clothing items which didn’t belong to either party on condition that their trademarks and identifying labels be removed from the articles.

What I would like is to hear an explanation for is this inconsistency– if there was a counterfeited Nike ‘swoosh’ label once attached to this sneaker, now that it has been removed, why is the sneaker still being treated in the eyes of the law as the rightful property of Nike?

Honestly, I find the concept of IP laws to be illogical in any of its various manifestations whether copyright, trademark, patent, or otherwise. This is not to say that I condone either fraud or misrepresentation, both of which can be reduced to theft– the obtainment of property without the consent of the owner. But merely producing and offering for sale an article of clothing that resembles the output of another producer doesn’t violate anyone else’s rights, even if for the sake of argument we were to concede with sloppy semantic quibbles that it “harms” the potential sales of the other party, since the other party does not enjoy a right to not have his sales diminished by competition.

This is all beside the point that in the common arrangement where counterfeit goods are offered for sale, both the buyer and seller are well aware that the goods are knock-offs, and we can safely assume that no fraud or misrepresentation has transpired.

To conclude, after being robbed suffering a coerced charitable giving, the de facto owner was made further victim to kidnapping and is now serving a seven month prison sentence. As is usually the case, existing positivist law has enshrined principles antithetical to property right in the name of property rights.

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  • “[T]he other party does not enjoy a right to not have his sales diminished by competition.”
    Very well. Now suppose that the other party created the market for its special type of shoe by its innovative design. Creation of that market required a substantial investment. Do you say that anyone should be able to pillage that investment by copying that design?

    • Very well. Now suppose that the other party created the market for its special type of shoe by its innovative design. Creation of that market required a substantial investment. Do you say that anyone should be able to pillage that investment by copying that design?

      You ask a good question. The answer is that I could only condone means that are compatible with real property rights in order to stymie the “copying”, not that I actually agree with efforts to stop it. But I can readily agree with you that in certain situations, the person doing the copying might be intensely disliked by others for his actions.

      Such efforts to dissuade the copying may include boycotts, public censure, etc. Lest you think that such efforts don’t have teeth– this may be true of a statist society. In a free market a person’s reputation is the only thing that holds him attached to society. If he dare ruin that trust, he may find himself blacklisted from renting or buying a home, purchasing groceries, etc.

      In short, once the state is removed from the picture, people will not be forced to associate with others and will only do so if the other party is perceived to be of good repute. If society dislikes people who copy, they may just adopt such voluntary measures to dissuade people from doing such actions, which although are not technically rights-violating, are frowned upon.

      • OK, just to run the thread to the end: Copying of unique shoe designs is OK, constrained of course by the copier’s valuation of his reputation above a fat bank account, or by the threat that boycotts may diminish both.
        Now then: Would this same principle apply to the copying of software?

        • Potentially yes, the market may devise methods to boycott known violators of software/music/media/etc sharing. It doesn’t mean that they will be successful in eradicating such activities, and I certainly don’t think that every community will necessarily agree to the premise that “copying” is morally wrong, and I, for one, do not think so. We may see different societies coexisting where each covenant restrictions that demand adherence to certain norms as a requirement to be included.

          But short of such voluntary measures, it would be a gross violation of property rights (in real things) to enforce intellectual “property” laws.

          • Just when I think I’m on the thread or trail (Socratic spoor of an error), I get a surprise.
            I had thought you would say, No, software is different from shoe design. To which I would have said, Then you have no ethical or principled opposition to copying, it’s just that software is inherently harder copy — the intellectual property is hidden in the software, while it is exposed in the shoe.
            But no, you are saying something quite different. You seem to be saying that your (entire?) opposition to intellectual property rights is that they are enforced/protected by the state. Are you saying that the term “intellectual property rights” is meaningless outside the notion of state enforcement/protection, or do you say that yes, these rights are meaningful, but that they will be adequately protected by the market?

        • My primary reason for rejecting intellectual property laws is that I don’t believe it is property, plain and simple. There are other reasons for which I reject it, as I explained in this post, because its (wrongly) assigns property rights to other people’s already owned property, which is incompatible with libertarian property theory.

          I will try to expand on my thoughts in another blog post.

  • Mr. Bergman,
    I don’t wish to be tiresome, but at the same time I don’t feel that we have come to a logical punctuation mark.
    You reject IP not because it is enforced/protected by the state, but without condition. And yet you have qualms about the fairness of this result! If I were to claim property rights on the air for having once breathed it, your categorical rejection would come without a second thought. Yet despite having named IP as a similar fiction, you are clearly uneasy with its rejection. This is because, plainly, an innovator will suffer a loss of income if the value created by his intellectual effort can be taken by anyone.
    As for “libertarian property theory,” I’m not so sure that there is either an agreed canon or a consistent one. I suspect that a number of libertarians have latched onto the Boldrin/Levin book without fully considering the implications.
    Nevertheless, I am just embarking on a consideration of the issue, so I am open to instruction.

  • Ketman,

    I too am just embarking on a consideration of the issue. At first I took a pro-intellectual property stance, but was soon moved by the works of Kinsella on the issue. I don’t have anything greatly substantive to add to this debate, but I do have some questions to pose.

    “This is because, plainly, an innovator will suffer a loss of income if the value created by his intellectual effort can be taken by anyone.”

    Since when is security of value an economic right or privilege? Or monopolistic guarantee of profit?

    The problem with Intellectual Property protection is that it essentially gives a person, company or government the monopoly over an intangible commodity (thought). Because it establishes a monopoly, it creates the same market distortion and negative effects produced by all other government-enforced monopolies. Less competition (obviously), higher prices, less innovation, etc.

    Fun example: We have an IHOP in our town. A number of years ago, the IHOP changed locations and left their old location vacant. Last year, a new restaurant (It’s Hoppin Home Cooking) started serving breakfast, lunch and dinner. IHOP sued the new establishment because they said the name too closely resembled IHOP, and because the building looked too much like an IHOP (primarily, because it was an old IHOP).

    The court ruled with IHOP. It’s Hoppin Home Cooking had to change it’s name to Langley’s (after the owner), and had to paint it’s roof another color so as not to resemble an IHOP. These things were done, but the legal fees, and the time that they spent inactive when court ordered the restaurant closed until the court decision, left them extremely in debt. They were forced shut down. The court’s decision was based on IP laws.

    So your point that without IP laws “the innovator will suffer a loss of income if the value created by his intellectual effort can be taken by anyone” is at the very least canceled out by the fact that IP laws shut down the innovation and profit of many other entrepreneurs seeking to engage in a new market.

    More than that, IP laws rely on the idea that one can steal something that is intangible. What philosophical idea leads one to believe that that is even possible? Where does the theft occur? Is it when the Person B thinks the same idea as Person A? Thought-theft or thought-crime? Is it when the Person B creates a product similar to another product? That can’t be so, because Person B has created that product using his/her own labor, time and resources. Having taken none of those from Person A, how could that be classified as theft? Is it when Person B makes profit off of that idea or product, of which Person A first made a profit? If that is the case, then competition is illegal because competition implies using similar products to make a profit. If IP is real, then we should have thousands of private monopolies over ideas and products. If this is where the theft occurs, it would lend credence to the Old World view that profit is finite, or that there is a limited amount of wealth in the world. That idea is based in collectivism and planned economics. To copy something is to create, not to steal.

    IP law is worthless until we define the point of theft, and I can guarantee that the majority of arguments in support of IP are based in socialist ideas such as the right to profit or the protection from competition.