Thursday, December 29, 2016

An Invention Takes Years of Commitment and Tangible Resources; It's Not Something You 'Just Pull Out Your Ass'

Stuart K. Hayashi

Preface:  The following essay is an adaptation of a Facebook Note I published on December 29, 2016.  As of my posting this here, two Murray Rothbard-influenced libertarian anarchists informed me over Facebook that they didn't even need to read the following essay to know it is wrong and foolish.  One cannot help but marvel at their ESP powers of precognition.  😒

Since Howard Hughes was an inventor and entrepreneur, I have long been fascinated by his life story.  This drawing of mine is supposed to be of him in his younger days, complete with the flight goggles.

Some libertarians on my Facebook Friends List have approvingly Facebook-shared this insipid image:

The story in the image is as follows. The caveman inventor came up with the wheel -- rather easily, apparently, and showed it to a copycat caveman. In just a day, the copycat was able to produce another unit of the invention with no payment to the caveman inventor. To employ the crude sort of slang that normally accompanies memes such as this one, the copying got the caveman inventor quite "butt-hurt"[!!!]. The caveman inventor thus wishes the government could use force on the copycat to prevent him from producing any units of the caveman inventor’s invention if the copycat does not obtain the caveman inventor’s permission first.

But, implies the image, that would be an initiation of the use of force on the caveman inventor’s part; in producing his own unit of the wheel, the copycat was peaceably doing what he wanted with his own private property, hurting no one; it is not as if the caveman inventor lost his prototype unit. The caveman inventor is unjustly demanding a government-enforced monopoly on the industry that is the production of units of wheels. Besides, the caveman inventor can simply go invent something else; he pulled this invention out of his ass quite easily -- just as the copycat duplicated it so easily --and now the inventor can quickly dream up his next invention. Easy!

That is a typical straw man employed by opponents of intellectual property rights (IP rights or IPRs) -- it is also found in The Adventures of Jonathan Gullible -- and it is built on lies.

The meme above practices what it preaches in an important respect -- very similar to the Facebook Libertinius page, it flagrantly disrespects a specific party's intellectual property. The meme is a vandalization of a work by the cartoonist Baloo, and it doesn't even credit Baloo.

What Baloo's cartoon looked like before being vandalized.

The argument, such as in the meme above, conflates vague general ideas with patents. Going by the worldview of those who denigrate patents, we are to believe that patents are legal claims of exclusive ownership over vague general ideas that anyone can pull out of his ass. If it were true that patents were on vague general ideas that anyone could come up with, then it would indeed be petty for a patent holder to sue you for using the same obvious idea that the patent holder pretends to have devised on his own. That is the imagery that opponents of patents rely on -- they want you to believe that anyone who enforces his patent is petty and a bully. “Who is this petty party,” we are expected to ask angrily, “to use the force of law to deprive other people of using simple ideas?”

But a patent does not attempt to claim legal ownership over a general idea for a category of product, and it is not a government-enforced monopoly on an industry.

The Myth of “IP As Monopoly”
Ponder something as relatively simple as paperclips. You might think that if a man obtained a patent on his paperclip, he would then monopolize the paperclip industry for at least seventeen years. If you think that, you would be wrong. Since the late nineteenth century, in the USA alone there have been many patents on the paperclip, often granted in intervals shorter than seventeen years. That is, prior to one party’s paperclip patent expiring, a patent on yet another paperclip would be granted.

Notice that in every instance on this table where a new paperclip patent is granted, it is fewer than 17 years subsequent to the approval of the paperclip patent immediately preceding it. (Click on the image to get a magnified view of the table.)

The reason for this is that a patent is not a claim of ownership over a general idea or a whole category of product. A utility patent protects the aspects of your specific original design for a product pertaining to how that product functions. A design patent, on the other hand, protects the aspects of your specific original design for a product pertaining to that product’s aesthetic qualities. When George Lucas obtained a design patent on his “Boba Fett action figure,” for example, it meant that you would need to obtain George Lucas’s permission if you were to produce a toy that carried an obvious deliberate likeness to the character of Boba Fett from The Empire Strikes Back and Return of the Jedi.

Your receiving a patent on your paperclip does not preclude others from patenting or selling their own paperclips. Every time a patent is granted on a paperclip, it is not on the general idea of having a device that holds more than one sheet of paper together. Rather, the patent is on a specific original aspect of the design. The reason why there are so many patents on paperclips is that different designers have made them from different materials, arranged them in different shapes, and employed new methods of producing units of paperclips in bulk quantities.

A common straw man used to denigrate patents is “Two separate parties, completely unbeknownst to each other, can each come up with the exact same invention at the exact same time.” As is typical of opponents of patents, this argument relies on a misunderstanding. Many parties, each working independently, can each arrive at the same general idea at separate times that are within relatively close proximity to one another, but that general idea is not what they patent. Each of those parties arrives at a different specific design, and each party’s patent has features distinct from the others’.  A party patents not a general idea, but instead patents its own unique new method for implementing that idea. All the while, there remain myriad different methods whereby this idea can still be implemented. 

Where two separate parties’ patents are similar -- where there is “overlap” in their function-related features -- the common result has been for those separate parties to pool their patents in a single trust, such as when Robert Noyce invented one aspect of the microprocessor at Fairchild Semiconductor while Jack Kilby invented another aspect of it while at Texas Instruments. None of that evinces anything unjust about the principle of intellectual property as such.

When Jack Northrop received his patent on his “flying wing” design for airplanes, that did not grant him a government-enforced monopoly on the production of airplanes; other parties still designed and patented their own airplanes. Not even the Wright brothers had a patent on the general product category of “airplane”; their patents were on the method of steering. Their innovation was steering the airplane by means of warping the shape of its wings. This did not stop their competitor, Glenn Curtiss, from making his own airplanes. Before the Wright brothers’ patents expired, Curtiss patented the way in which he arranged his ailerons on airplane wings. Ailerons are fins on the wings of airplanes that change direction in unison and thereby change the direction in which the airplane is to head. (The Wright brothers did ultimately use ailerons, but their patents didn't describe them in the same manner that Curtiss's did.)

A general idea for a product is something that can be dreamt up quickly, but that is not something that is patentable.  One does not need a working physical model -- a prototype unit -- as a condition for obtaining a patent, but patents that lack an accompanying working model are relatively difficult to enforce in court.

If you actually want to be able to sue other parties successfully for patent infringement, such a strong patent normally includes a detailed model.  Throughout the rest of this essay, when I say model, I do not mean it as physical model synonymous with prototype unit. By model, I mean "theoretic model," such as what is explained in the series of diagrams that is frequently found in patent applications.  In any case, a patentable invention requires some model that can, in scientific terms, plausibly function as promised and can be operated by someone skilled in the art, skilled in the trade. That is, if you invent a new sort of furnace for steel-making, obtaining a reliably enforceable patent for it calls upon you to provide a detailed theoretic model (this often includes diagrams) that produces steel as promised, and the explanation for how it is to be used must be understandable enough to steelmakers so that they can operate the prototype successfully once this prototype is produced. Contrary to the insipid caveman image at the top, as well as The Adventures of Jonathan Gullible, that is not something you can just pull out of your ass.

What It Takes to Produce a Design Both Patentable and Reliably Enforceable in Court
Consider Chester F. Carlson and the development of the xerographic photocopier -- what is more conventionally known as a Xerox machine. He first came up with the idea in 1934 working at a law firm. He found it tedious to copy documents in his own penmanship, and wished there was an effective low-cost method for making clear, legible duplicates of documents. He spent hundreds of dollars on equipment (money he could have instead spent on other amenities, such as better housing) and hours of his life each week (hours he could have spent earning money at a second job with steadier prospects for supplementing his income) to run experiments to test his theories on how this device could accomplish its intended task. It was not until 1938 when he finally finished a detailed theoretic model ready for patenting. This patent was granted in 1940.

Even then, nothing was easy for Carlson. He approached multiple big, capital-heavy corporations with his proposal to license this technology to them, hoping they would develop units of this device. Twenty of these big firms turned Carlson down. It was not due to a lack of capital on their part -- far from it! They had enough money to produce multiple units of Carlson’s design. Rather, for them the issue was that they judged that there would not be enough demand for this product to justify allocating their capital for this purpose.

Carlson’s fortunate break came in 1944 when Carlson finally -- finally! -- was able to license the invention to the Battelle Memorial Institute. in 1947, Battelle turned over this technology to Joseph Wilson’s Haloid Corporation -- a company whose name Wilson would change to Xerox.

It was not until 1949 when Xerox had developed a model that it felt confident about putting on the market -- the Xerox Model A. This turned out to be a commercial flop. Upon a cost-benefit analysis, the target market for this product -- corporate offices, law firms, and schools -- decided that this machine was not even worth renting. Joseph Wilson had to go back to the drawing board to find a method of producing a model that would satisfy consumer demand adequately while remaining cost-effective for Xerox to manufacture. This led to the firm unveiling the Xerox 914 in 1959. This was the first model of a xerographic photocopier to generate a profit for any party. Carlson’s original patent had already expired before Xerox could profit from xerographic photocopying. Fortunately for Carlson and Xerox, Joseph Wilson was able to obtain patents on other design aspects on the Xerox 914 that the company had developed during its own R and D process. In the 1960s, royalty payments made Carlson one of the richest people in the country -- well-earned.

Examine those durations. It took Carlson four years to develop a model that he could patent. The duration between Carlson’s initial inspiration and the introduction of any xerographic photocopier in any market was a whopping fifteen years. And the time it took between Carlson’s generation of the idea and the moment that this idea first generated a profit for any party was twenty-five years.

What happens in all those years? What happens is research and development and experimentation. In the four years it took Carlson to make his original vague general idea into a patentable model, Carlson had to purchase his own equipment -- tangible goods can only exist as a finite number of units -- to test his models to determine whether they functioned as he intended. The same happened in the twelve years between the moment in which Joseph Wilson first gained access to this technology and the moment on which anyone profited from it. Xerox spent thousands of dollars employing engineers and technicians to run tests on how they could minimize costs while still producing units of this technology that were able to satisfy consumer demand. To run such experiments, they too had to acquire tangible equipment coming in a finite number of units.

Here is why that point is important. Yes, your patent is on something that is intangible -- a theoretical model on how a product is to be structured physically and how it is to function. But, by that same token, you would not have been able to come up with the intangible model if not for your using up tangible goods that come in finite units -- units that are, more often than not, relatively perishable. That is an important point overlooked by opponents of intellectual property, such as Arnold Plant and Timothy Sandefur.  The fact is glossed over by those who claim that private property rights revolve entirely around settling disputes over who gets to access and use up goods that are necessarily tangible and which necessarily come in a finite number of units.

Yes, Timothy Sandefur and Arnold Plant, Intellectual Property Rights Do Address What Economists Call “Scarcity” of Units
Timothy Sandefur is a lawyer widely beloved by Objectivists and I have met him face-to-face in Honolulu, but he rejects the very Objectivist foundation for private property rights and propagates the usual pernicious misconceptions about IP. Timothy Sandefur says,

In the case of tangible property, real or personal,…the property is naturally exclusive, meaning that if I have it, you simply cannot; if I take it, you no longer have it -- you have been "disseissed." Intellectual property, however, is not like this. I can "take" it from you, and yet you still have it. If, for example, you are the greatest musician in the history of rock and roll (that is, John Fogerty) and you have written the greatest song ever (that is, "Born on The Bayou"...), then I can sing "Born on the Bayou" in my shower, and you can still, at the same time, use and enjoy your "property" as you wish: you can perform it, sell it, or leave it alone.

We will come back to this later: Sandefur's example of singing a famous copyrighted song in the shower is a straw man. For now, note the similarity between Sandefur’s statement and the assumptions of the people who Facebook-share that caveman cartoon: when the copycat makes his own unit of a wheel, that does not deprive the caveman inventor of his prototype or any other unit of wheel that the caveman inventor produces. Therefore, the caveman inventor lost nothing, right?  That same idea comes across in this Facebook meme:

Timothy Sandefur’s misrepresentation, as well as the arguments of most IP-denouncers from the twentieth century onward, derives from this statement from University of Chicago economist Arnold Plant:

It is a peculiarity of property rights in patents (and copyrights) that they do not arise out of the scarcity of the objects which become appropriated. They are not a consequence of scarcity. They are the deliberate creation of statute law, and, whereas in general the institution of private property makes for the preservation of scarce goods... property rights in patents and copyrights make possible the creation of a scarcity of the products appropriated which could not otherwise be maintained.

Here is a rephrasing of the argument that Timothy Sandefur and Arnold Plant present. Private property rights, primarily being the law’s method of resolving disputes over how finite resources are distributed and allocated, are applicable exclusively to tangible goods coming in a finite number of units. If apples and apple trees are commercialized, then private property rights apply to them. If widgets are machines made for human consumption, then private property rights apply to them. As there is presently a finite number of units of widgets in existence, then if you acquire more units of widgets, that is fewer available for me. If you have more apples, that is fewer apples for me. I could grow my own trees and then graft my own branches on them to grow more apples (all apples on the market are clones from the same ancestral branch; wild apples grown from wild apple trees are not uniform in quality). More units can be produced in the future -- this would take time and resource inputs -- but the fact remains that in this precise moment, there is a finite number of units of apple trees and widgets in existence.

That is what conventional economists mean when they say that economics is about “scarcity.” (Contrary to the fears of many Objectivists, when conventional economists say that markets address “scarcity,” they are seldom ever implying agreement with Rev. Malthus that humans just use up nonrenewable resources and one day will be left with nothing; they just mean that there is presently a finite number of units on the market.)

If there were no private property rights, say Arnold Plant and his followers, people would always be violently fighting over who gets what -- over who gets this apple orchard. Once private property rights are established, it reduces the risk that such fights will break out. Private property rights, say Arnold Plant and his followers, mean that you and I agree that this-and-that belongs to you, whereas this-and-this belongs to me, and we leave each other be. On that interpretation, then, private property rights are nothing more than a means of settling disputes over who gets to access and use up highly tangible goods that are finite in number.

Then Arnold Plant and those who argue in his vein, such as Timothy Sandefur, continue that because intellectual property rights are intangible, they cannot be authentic private property rights. This is question-beginning on their part. To “win” their argument, they decide that, from the outset, they have to define private property rights as referring exclusively to tangible goods that come in a finite number of units. Upon pretending that that arbitrary premise is some well-established fact, they then point out that intellectual property rights are intangible and that, by their own (arbitrary) definition of private property rights, patents and copyrights are precluded from being authentic property.

 First off, the government’s attempt to resolve some potential dispute over the allocation of tangible goods -- goods coming in a finite number of units -- is not the main justification for private property rights. The main justification is that you should maintain legal control over the very economic value that you have created -- I explain that in this blog post. You deserve to maintain control over your art and inventions for the same reason that you, as a homesteader, deserve to maintain control over the patch of land that you have rendered inhabitable.

The economic value that a homesteader wrings out of a patch of land is an emergent property. Emergent property refers to what happens when, once the same old components are arranged in a particularly fortuitous fashion, some new (sometimes even wholly unprecedented) phenomenon occurs. For example, there was a time when there was no life on Earth; for billions of years, it was the same old chemicals lying around.   But one day, those same chemicals were arranged in a new fashion, and what was nonliving matter became the first primitive living matter, some proto-micro-organism.

Similarly, when a homesteader improves a plot of land --meaning she makes it inhabitable for human use -- she is not creating any new matter; she is rearranging the matter that already exists.  But this new arrangement has rendered this land, once previously uninhabitable, into land that is inhabitable, and that habitability is the new phenomenon, the emergent property.  It is also the new economic value created.  That same principle applies to patentable inventions.  The patent for a highly profitable invention is a set of instructions for arranging already-existing matter in a fashion that produces some effect that satisfies consumer demand, and what makes this patent lucrative is that the patent's instructions allow for a manufacturer to educe this demand-satisfying effect in a manner that is cost-effective enough to allow the manufacturer to sell units of this arrangement at a net profit. This invention produces a net increase in utility in the economy, utility that previously had not existed.  That net increase in utility, that unprecedented economic value that has been created, is also an emergent property.

Both (1) a homesteader's improvement in the land and (2) an inventor's contribution of a net increase in utility, are emergent phenomena whereby new economic value has been created, economic value previously unexplored.

For the law to recognize this newly created economic value as being the private property of the party that created it does both of the following: (a) it justly allows the party that created this value to sustain itself while (b) it also signals to other market participants that they, too, will be free to reap the rewards of their own value creation if they, too, produce these new forms of utility. 

Secondly -- and this is what Arnold Plant and Timothy Sandefur conveniently elide -- intellectual property rights do address the allocation and usage of tangible goods that are finite in number. They do address what Arnold Plant calls “scarcity” and what Timothy Sandefur calls the fact that tangible goods, coming in a finite number of units, can be “disseised.”

In the four years it took for Carlson to develop a xerographic photocopier model worthy of licensing, he had to acquire equipment for testing this model. That equipment came in the form of perishable tangible goods that always had, and always would, come in a finite number of existing units. As Carlson used up these goods in his experiments, they depreciated in value, meaning that if other people tried to use these units of goods afterwards, they would not be able to derive the same value from those goods if Carlson had not acquired and used them up first. After all, tangible goods are frequently perishable in the long run. When, in the development of his model for a xerographic photocopier, Carlson used units of tangible goods for his experiments, it meant that those units would not be used by anyone else.

The same principle applied in the twelve years it took for Xerox to produce a model of xerographic photocopier that satisfied enough consumer demand to generate a profit. In its own testing, Xerox employed engineers and technicians running their own tests, again using tangible equipment that came in the form of units that would always be finite in number. For any firm to run its own tests in R and D, it must use up resources, and those are units of resources which other parties are not able to access. Even if those resources remain intact once R and D is done, those resources have usually depreciated, meaning the same value cannot be wrung out of them as was wrung when the R and D process began.

The Tragedy of the Public-Domain Commons
Recall that before Carlson won a deal with the Battelle Memorial Institute, he approached twenty corporations for licensing and got rejected by each of them. Imagine what those twenty firms could have done if there was no intellectual property protection for the xerographic photocopier:once the Xerox 914 hit the market in 1959 and finally generated a profit for Xerox -- after a quarter-century of being in development and profiting no one -- those twenty corporations could pirate that model with legal impunity.

Arnold Plant’s followers would celebrate that as wonderful, as they proclaim that patent protection imposes an artificial “scarcity” on the number of units of xerographic photocopiers on the market. With the Xerox 914 having patent protection, Xerox did not even have to sell these units; organizational clients had to pay rent to use any units. By contrast, continues the reasoning of Arnold Plant’s argument, if the twenty corporations that rejected Carlson were able to pirate Carlson's design, then that would put that many more units of xerographic photocopiers on the market by the early 1960s. The increased competition would lower prices; maybe Xerox Corporation would be motivated to sell units of the product rather than be stingy and only lease them out.

Such an argument is shortsighted.

An intellectual property is intangible -- it is a theoretical intellectual construct. But it is a theoretical intellectual construct that generates a financial profit for a party only to the extent that this theoretical construct is scientifically accurate enough to produce the practical results that it purports to produce. And putting together that theoretical intellectual construct requires experimentation whereby the IP holder or her investors must invest in tangible equipment that exists on the market in the form of a finite number of units.

It took four years of Carlson’s life to come up with a model that was patentable. It took a span of twenty-five years for Carlson’s initial vague idea to become a profitable unit. In that span, Carlson and Xerox Corporation used up and depreciated thousands of dollars worth of units of tangible goods, which they paid for themselves. If there was no IP protection for xerographic photocopying, and the twenty corporations pirated the Xerox 914, those twenty corporations could use their extensive capital exclusively on turning out units of Xerox 914 knockoffs while not having spent a penny on the man-hours and perishable equipment that Carlson and Xerox Corporation labored to acquire and employ to develop the Xerox 914's useful design.

By pirating Xerox’s intellectual property, those twenty corporations would, in effect, be stealing the tangible goods that Carlson and Xerox needed to use up and depreciate in the process of developing the Xerox 914. That, Timothy Sandefur, is what gets “disseised” when someone pirates intellectual property.

The four years that Carlson spent on his model would be for naught. The twenty-five years it took for Carlson’s idea to come to fruition, culminating in the first profitable xerographic photocopier, would be for naught. Would-be inventors who saw what happened to Carlson after twenty-five years of this work would be discouraged from coming up with their own practicable original designs for useful products.

The Adventures of Jonathan Gullible treats inventions and artworks as if they can easily be pulled out of one’s ass. That can be done with vague general ideas, but that is not what patents protect. Patents protect viable specific models -- models that come with diagrams and detailed explanations for how members of the intended market can use the device in its intended purpose. And such models are developed from years of experimentation that require using and depreciating tangible goods that always exist in units that are finite in number.

That creating such a model -- such a practicable design -- takes up so many man-hours and material resources, is the reason why such models themselves come in units that are finite in number. People have billions of throwaway ideas every day. By contrast, patentable designs that satisfy consumer demand and change the world are much fewer in number, numbering in thousands per year at the most. And if inventors could not profit from such models, or could not even recoup what it cost them to produce those models, then there would be fewer such models still.

If the law did not protect an apple grower’s right to the orchard he homesteaded, and anyone could trespass onto the orchard and pick off the apples freely, then in the long run there would be fewer apples grown. Likewise, if the law does not protect Chester F. Carlson’s right to have exclusive control over the model he produced, and any capital-rich corporation can pirate his model, then in the long run there will be fewer such practicable models being thought up by inventors. This will happen:

If an inventive party's right to exclusive control over its own specific original design is not recognized by law as the rightful private property that it is, most inventors will be Atlases who "shrug."

There is a reason why so many people who claim to be free-marketers stubbornly reject recognition of this. It is because the economist who most influenced them on this issue, Arnold Plant, failed to observe that intellectual property protection does address what Arnold Plant would call a preexisting “scarcity” -- a finitude in the number of available units that existed prior to the legal establishment of patents and copyrights.

Artwork -- IP That Is Copyrighted and Trademarked -- Also Cannot Be Created Without the Usage of Tangible Goods Coming in a Finite Number of Units
The same principle applies to the pirating of artwork. No matter how easy it is to duplicate an artwork, the original version of it was the product of many inputs of tangible goods that always existed as a finite number of units. If Justin uploads an image of a painting he did, it might take me a second to make a JPG or GIF of the image and pay him nothing for it. But the painting did cost Justin. He spent hours on that painting, hours he could have spent on a more secure form of employment. He used units of tangible goods, units finite in number. Natural resources went into the creation of the paint he used; those are units of natural resources and paints that other people will not have.

The same principle would apply to someone who does professional-quality artwork in Photoshop or Microsoft Paint. It takes years of practicing one's craft to reach that level of quality, and that is time one could otherwise spend on some steadier source of income.

Consider Justin making a feature-length motion picture that takes place in a haunted house -- one that is very low-budget but which he intends should still be of professional quality. Either he must construct the set himself or he must rent a set that was already constructed. Either way, that involves tangible goods that will always be finite in number. When Justin uses the set, other people cannot use the set. When specific objects are added to the set to give it the needed ambiance, those objects are not being used by other people. Maybe this process costs Justin and his investors $10,000, and they plan to recoup the costs by selling DVDs of the movie. Now imagine people pirating this work, producing perfect digital copies of the movie and paying nothing to Justin and Justin’s investors. According to the argument of Timothy Sandefur and the caveman image, no theft occurred. After all, Justin and his investors still have the set; they have not lost any of the props they purchased and which remained intact once shooting had been completed. That the movie was pirated does not deprive Justin and his investors of the original print of the movie.

But that is a lie.

When various parties decide to pirate Justin’s movie and pay nothing for it, they are stealing the thousands of dollars worth of value of the tangible goods that Justin used up and depreciated in order to make the movie a reality. And once Justin and others like him realize that they will not be able to recoup the costs they incurred from using up such tangible goods, such independent-but-still-professionally-produced feature-length motion pictures will become scarcer.

When an artist puts out a copyrighted work for commercial purposes, he does so on the contractual condition that any time another party obtains custody over another unit of this artwork, this is done with the permission of the copyright holder.  Normally such permission is granted on the condition that the copyright holder receives the monetary compensation it sets as its price.  Likewise, when an inventor puts out a patentable design for commercial purposes, she does so on the contractual condition that any time another party obtains custody of another unit of a contraption that is designed according to the patent's novel specifications, this is done at the permission of the patent holder.  Here, too, usually such permission is granted on the condition that the patent holder receives the licensing fee that it sets as its price.  Suppose I hire you to do manual labor for me. Then you do it. Then I refrain from paying you.  This contractual breach would, in effect, involve me stealing the value of your time and labor -- time and labor you otherwise could have spent on some other endeavor. The same principle applies to the pirating of IP.  To pirate IP is to breach contract with the IP holder, stealing the value of the time and labor and tangible inputs that the IP holder had used up in the process of availing the artwork or invention to the market.   

In sum: if I make an unauthorized duplicate of Justin's motion picture, that does not deprive Justin of the master copy of that motion picture; he still has it.  What I have stolen, though, is the monetary value of the tangible units of resources that Justin invested, consumed, and destroyed for the purpose of making that motion picture.  These are tangible units that Justin invested for the movie's consumers -- its viewers -- on the implicit contractual condition that those consumers financially recompense him for the expenses of using up and destroying those resources.  After all, Justin and his other investors had to trade away their own belongings to gain access to the resources they invested and destroyed in producing a motion picture that I have opted to consume (the experience of viewing the motion picture is the experience of consuming it).

At this juncture, those desperate to continue disparaging IP might equivocate IP protection with protectionism.  If I make an unauthorized duplicate of Justin's movie, I don't deprive him of the original copy of the movie but I have rendered him unable to recoup the wealth he invested to make this motion picture available to me in the first place. One might say, "Isn't that the purpose of protectionism? If Chrysler demands tariffs against automobiles imported from Japan, isn't this on the basis that Chrysler already invested lots of capital -- fixed costs -- on producing units of its product, and that, without tariffs, Chrysler's ability to recoup its investment will be jeopardized?"

Someone who advances such an argument would not be doing anything new, because this rationalization for undermining IP was common in the 1800s.  It was advanced by a Member of Parliament -- John Lewis Ricardo, nephew to free-trade economist David Ricardo.  As University of Chicago historian Adrian Johns phrases it, John Lewis Ricardo maintained that patents are "the equivalent, in effect, to the navigation acts or the Corn Laws themselves."

Here is the reason why that comparison fails.  It is true that, in both examples, filmmaker Justin and  protectionist Chrysler are trying to protect their investments.  Moreover, both Justin and Chrysler expect to be recompensed financially by customers who consume their respective products.  The difference is this: if Chrysler goes out of business because Americans all purchase Toyota cars instead, the reason why Chrysler is not receiving money from Americans is that Americans are not using Chrysler's product. Chrysler received money from no one, but that is because no one consumed Chrysler's product.  No one stole the fruit of Chrysler's labors. By contrast, if Justin goes out of business because all his potential customers made unauthorized free downloads of his movie, people are using Justin's product but still refusing to pay him, violating the implicit contractual terms upon which Justin made his movie accessible at all.

If the absence of tariff enforcement allows Chrysler to go out of business, it's the case that this happens because no one bothered to exchange money for -- and then consume -- Chrysler's product.  If the absence of copyright enforcement causes Justin to go out of business, it's the case that many people consumed Justin's product and then refused to pay him anyway.  The reason the motorist never paid money to Chrysler is that the motorist didn't initiate a business contract with Chrysler to begin with. Conversely, the reason the movie buff never paid money to Justin is that the movie buff did enter a business exchange with Justin but then stiffed him on what he was billed. Chrysler is unable to recoup its investment because the customers it desired discern no value in what Chrysler is trying to sell; Justin's movie business is unable to recoup its investment because its customers got value out of Justin's work and then cheated their way out of paying for that value.

Notice How Opponents of IP Resort to Caricatures and Straw Men About IP Enforcement? They Have No Case Without the Caricature: A Case Study
Let us go back to Timothy Sandefur saying, “If, for example, you are...John Fogerty...and you have written...‘Born on The Bayou’..., then I can sing ‘Born on the Bayou’ in my shower, and you can still, at the same time, use and enjoy your ‘property’ as you wish: you can perform it, sell it, or leave it alone.”

The activity of singing in the shower is generally regarded as comical, and therefore this example might seem to be just levity on Timothy Sandefur’s part. Whether or not that was his main conscious intention, this statement of his happens to be misleading in a way very convenient to Sandefur and other opponents of intellectual property. It is convenient for their straw man. If you sing a famous song in the shower -- off-key, as is common for those of us who are not professional musicians -- and then the recording artist behind the song sues you over it, that would be rather petty on the part of the recording artist, wouldn’t it? This is in keeping with the same theme as the caveman cartoon above -- the attempt to caricature anyone trying to protect his IP as petty. On some level, opponents of IP recognize that their argument will fall apart if they do not construct this straw man wherein they caricature enforcement of IP as generally something very petty.

In real life, no professional musician -- not even Lars Ulrich or Roger Hodgson -- will sue you for singing his song in the shower. My father is a musician who had paid gigs in his younger days, but I still sing off-key (my refusal to learn about music was part of my rebellion against him). No one is going to pay to hear me sing “Born on the Bayou” off-key. Fans of the song will still pay money to iTunes to hear the original recording of this song; my singing in the shower is not stealing any of the value of the tangible goods that were inputted when Creedence Clearwater Revival recorded the song. By contrast, if people make perfect digital copies of the original Creedence Clearwater Revival recording and pay nothing to the owner, that is stealing the value of the work of Creedence Clearwater Revival and the value of the sophisticated equipment, which could only exist in a finite number of units, operated to produce such a sharp recording.

Likewise, if a professional musician, who has had years of his own musical training, is paid to perform in front of large paying audiences while he performs John Fogerty’s songs without John Fogerty’s permission, that is stealing the value of the perishable tangible goods that John Fogerty had to use up as he wrote those songs. If a professional musician got paid to perform John Fogerty’s songs at packed houses against John Fogerty’s consent, there would be nothing petty about John Fogerty having his lawyer send a letter to that professional musician.

When Timothy Sandefur conflates enforcement of intellectual property with John Fogerty suing you for singing “Born on the Bayou” off-key in the shower, that conflation amounts to a propagandistic "package deal." You are to associate IP enforcement with pettiness. Then, when you hear about a plausible instance of IP enforcement -- say, John Fogerty suing a professional musician for performing his songs, against his consent, at a paid gig in front of a crowd of paying fans -- you are expected, by extension, to think, “That’s petty, too.” But it isn’t.

By the way, this disclaimer appears on the bottom of an authorized reproduction of the chapter of "The Adventures of Jonathan Gullible" that denounces intellectual property rights protection as invalid.

When someone implies that intellectual property rights enforcement is petty, here is the principle behind what is really going on. Suppose you own a huge apple orchard. One night, I trespass onto the orchard and fill up just one basket with your apples. Before I leave, you catch me. I then reproach you for your self-righteousness. “What's the big deal?” I say. Then I point out, “You still have an entire orchard full of apples; I just took a basket's worth. You still have the trees and the branches you grafted onto them. You can always grow more apples.” That defensive retort ignores all of the inputs you had to pay for when growing your apples. Likewise, those who say that pirating IP is no big deal  are people who just as easily and just as conveniently ignore all of the "scarce" inputs that the IP holder had to pay for in producing or acquiring the IP.

Protecting your inventions and artworks from piracy is not petty. What is petty is how the enemies of intellectual property rights have resorted to caricatures and straw men to misrepresent the creators and holders of intellectual property. It is petty how they pretend that invention is easy or accidental and something anyone can do without effort. There are no accidental inventions. The initial inspiration for an invention is often accidental, such as how, during the wintertime, Frank Epperson absentmindedly left his fruit drink outside overnight, only to find it frozen the next day, which inspired him to see if he could market his own frozen snack. But that was not the patentable invention. The invention was the culmination of years of R and D that Frank Epperson did afterward to develop what came to be known as the Popsicle.

Also petty is the crude manner in which IP holders are relentlessly caricatured as whiny control freaks who just hate that they might not be able to micromanage other people’s applications of their obvious ideas, such as in the caveman cartoon we started with.

But no, the production of a patentable invention or copyrightable artwork is an arduous process, and we owe it to those who produce these designs that we recognize that they deserve to exercise legal control over the new value they have created.

On March 9, 2017, I added the second meme about copying (the one that mentions Netflix) and I added the explanation about protectionism, John Lewis Ricardo, and the difference between a pro-tariff company going out of business versus an IP holder going out of business.  On Sunday, March 12, 2017, I added the table showing the different years wherein a new patent on the paperclip was granted in the United States.  On Monday, April 3, 2017, I added an updated version of the table, this time including entries from 1867,1877, and 1889.  On June 5, 2017, I added the image of what the original Baloo cartoon looks like.