KOL012 | “The Intellectual Property Quagmire, or, The Perils of Libertarian Creationism,” Austrian Scholars Conference 2008

Kinsella on Liberty Podcast: Episode 012. Related Libertarian and Lockean Creationism: Creation As a Source of Wealth, not Property Rights; Hayek’s “Fund of Experience”; the Distinction Between Scarce Means and Knowledge as Guides to Action “Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors,” Mises Economics Blog (April 19, 2011) Locke on IP; Mises, Rothbard, and Rand on Creation, Production, and ‘Rearranging’, C4SIF (Sep. 29, 2010) (with links to Mises version) Succinct Criticism of Utilitarianism and Libertarian Creationism, StephanKinsella.com (Sep. 27, 2010) Masnick: Creation Does Not Equal Ownership, Techdirt (Dec. 2, 2008) Libertarian Creationism (April 4, 2008) This is my Rothbard Memorial Lecture at the Mises Institute's Austrian Scholars Conference (2008), “The Intellectual Property Quagmire, or, The Perils of Libertarian Creationism" [Originally entitled Rethinking IP Completely"] (Ludwig von Mises Institute, Auburn AL, March 13, 2008; Powerpoint; Slideshare.net Presentation; PDF version). [Mises audio] Transcript and Grok summary below. Youtube: https://youtu.be/e2qOcFK6IhU Original Youtube version: https://youtu.be/oRqsdSARrgk?si=FkiZgKzJr8Bsj-Dm and mirror version. Grok Shownotes: Show Notes: KOL012 | The Intellectual Property Quagmire, or, The Perils of Libertarian Creationism (Austrian Scholars Conference 2008) Episode Overview In this thought-provoking presentation from the Austrian Scholars Conference 2008, intellectual property attorney Stephan Kinsella delivers a critical examination of intellectual property (IP) law, focusing on patents and copyrights. Titled “The Intellectual Property Quagmire, or, The Perils of Libertarian Creationism,” Kinsella challenges the conventional justification for IP, arguing that it is not only economically detrimental but also philosophically incompatible with libertarian principles. Through a blend of legal expertise, libertarian theory, and real-world examples, Kinsella critiques the notion that IP is a legitimate form of property and proposes its abolition, sparking lively discussion with the audience. Introduction to Intellectual Property (00:00:03) Kinsella begins with a humorous nod to his role as an intellectual property attorney, likening the setting to a “Lawyers Anonymous” meeting. He introduces the topic by clarifying the term “intellectual property” (IP), which many misunderstand, and outlines his goal to rethink IP completely. Originally titled “Rethinking IP Completely” by the conference organizer, Kinsella refines it to address the perils of what he calls “Libertarian Creationism”—the flawed belief that creation inherently grants property rights. The Role of IP in Technological and Artistic Innovation (00:00:30) Kinsella acknowledges the technological marvels of the modern age—laser pointers, airplanes, computers, the Internet, and plasma televisions—as products of individual creativity in a relatively free market. However, he notes that many attribute this innovation to IP laws, particularly patents and copyrights, which are seen as necessary to incentivize creation. Kinsella challenges this view, arguing that even some libertarians accept IP as a form of property rights without questioning its foundations. He narrows his focus to patents and copyrights, briefly mentioning related IP types like mask works, trademarks, and trade secrets. Defining Patents and Copyrights (00:01:34 - 00:03:47) Kinsella provides a concise overview of patents and copyrights. He explains that patents come in three forms—utility, plant, and design—with utility patents covering functional inventions. Patents require a government application process and grant the right to exclude others from making, using, or selling the invention. Copyrights, on the other hand, protect original works fixed in a tangible medium (e.g., songs, novels, paintings) and are automatically granted upon creation, lasting 70 years past the author’s death. Kinsella highlights the complexity of copyright duration with a humorous reference to a convoluted flowchart, underscoring its artificial nature. Examples of Absurd Patents (00:05:35 - 00:08:59) To illustrate the absurdity of some patents, Kinsella presents a series of real-world examples, including a Bible-shaped bumper hitch, a toe puppet, a crustless peanut butter and jelly sandwich, and a method for swinging sideways on a swing. He also mentions the infamous Amazon One-Click patent, which led to a lawsuit against Barnes & Noble, and a patent for a “user-operated amusement apparatus for kicking the user’s buttocks.” These examples highlight the often trivial or overly broad nature of patent grants, questioning their legitimacy and economic value. Economic Costs and Abuses of IP (00:09:53 - 00:12:29) Kinsella delves into the economic toll of IP, citing patent infringement awards and settlements ranging from $200 million to nearly $1 billion, including high-profile cases like BlackBerry’s $600 million settlement and Microsoft’s reversed $1.5 billion MP3 verdict. He estimates patents cost the U.S. economy at least $31 billion annually. On the copyright front, he discusses abuses like the RIAA’s push for $1.5 million in damages for copying a single CD, the NFL banning Super Bowl parties on large TVs, and a $220,000 verdict against Jammie Thomas for sharing 24 songs. A study by John Tehranian illustrates how everyday actions could lead to $4.5 billion in annual copyright liability, exposing the system’s overreach. Critiquing the Utilitarian Defense of IP (00:13:18 - 00:14:53) Kinsella critiques the utilitarian argument that IP stimulates innovation, noting that no conclusive study supports this claim. Economists like Fritz Machlup (1958) and modern researchers, including Boston Law School professors, suggest the patent system may discourage innovation or have no net benefit. Historical data from Switzerland and the Netherlands, which temporarily abolished patents, and studies of World’s Fair exhibits show that innovation thrives without IP. Kinsella argues that proponents lack evidence for IP’s benefits, relying instead on unproven assumptions. Libertarian Creationism and Property Rights (00:15:29 - 00:22:42) Kinsella introduces “Libertarian Creationism,” the mistaken belief that creation or labor inherently grants property rights, rooted in Lockean homesteading ideas. He challenges the notion that we “own” our labor, arguing that labor is an action of the body, which we already own. Drawing on Rothbard and Hoppe, he asserts that property rights arise from first use or appropriation of scarce resources, not creation. For example, carving a statue from owned marble doesn’t create a new right—it transforms existing property. Creation is neither necessary nor sufficient for ownership, undermining IP’s philosophical basis. IP’s Dependence on the State (00:23:16 - 00:25:05) Kinsella argues that IP cannot arise from common law, as it requires state legislation and bureaucracy, akin to the Americans with Disabilities Act. He recounts a debate with an objectivist who defended legislation as a valid means to establish IP, a view Kinsella rejects as statist. He critiques proposals for government-funded innovation awards, like a medical prize fund, as extensions of the flawed labor-reward focus, leading to further state intervention. Proposed Reforms and Abolition (00:25:39 - 00:29:22) While advocating for the complete abolition of patents and copyrights, Kinsella offers modest reforms: reducing patent terms to 5-7 years, removing patent injunctions, introducing prior use and independent inventor defenses, and publishing patent applications immediately. For copyrights, he suggests shortening terms to 5-10 years, requiring active registration, and repealing the Digital Millennium Copyright Act’s anti-circumvention provisions. He also proposes renaming “intellectual property” to “state-granted pattern privilege” to reflect its true nature, rejecting the positive connotations of “intellectual” and “property.” Q&A: Addressing Audience Concerns (00:30:36 - 00:54:11) The Q&A session features robust audience engagement. Kinsella clarifies that labor is not independently ownable—it stems from body ownership, negating IP’s basis. He discusses contract law as a potential free-market alternative to copyright but notes its limitations, especially for third parties. Addressing a musician’s concern about losing control over digital works, Kinsella acknowledges the challenge but argues that market solutions, like touring or voluntary fan support, could emerge without state-backed IP. He also addresses questions on fraud, corporate collusion, and the Constitution’s IP authorization, consistently emphasizing that IP’s harms outweigh its benefits and that property rights should be limited to scarce, tangible resources. Conclusion Kinsella’s presentation is a compelling libertarian critique of intellectual property, blending legal analysis, economic data, and philosophical reasoning. By exposing the inefficiencies and injustices of patents and copyrights, he challenges listeners to reconsider IP’s legitimacy and envision a free-market alternative. The lively Q&A underscores the topic’s complexity and the audience’s engagement with Kinsella’s radical proposal to dismantle the IP system. Update: James R. Edwards, To Invent Is Divine: Creativity and Ownership (Fidelis Publishing, 2025). See Why Creativity Needs Ownership: James Edwards on the Biblical Roots of IP & the Future of Patents. TRANSCRIPT “The Intellectual Property Quagmire, or, The Perils of Libertarian Creationism," the Rothbard Memorial Lecture at the Ludwig von Mises Institute's Austrian Scholars Conference (Ludwig von Mises Institute, Auburn AL, March 13, 2008; by Stephan Kinsella Grok revised transcript: Corrected Transcript with Topical Headings