Thanks to the social media turn of more and more academics, I recently came across a new essay by Prof Mark Lemley, one of the most prolific IP personalities around today, focusing specifically on an issue we’ve noted as problematic for years on the blog now – the conflict between “Faith” and “Fact” based IP. From World IP Day in 2008 (“Faith based IP to Fact based IP“), to a post just a couple of months ago (“Dodgy IP Dogma“) – this topic has been one close to our heart.
It’s interesting to note that this essay of his has quickly received comments from other blog oriented IP folks, including: Amy Landers, Jeremy Sheff, Lawrence Solum, Lisa Ouellette & James Grimmelmann. In my post below, I take a quick stock of this essay, noting that it brings up several valid points that seem to be lost in today’s IP debates, but also seems to be missing an important nuance. (Long post ahead!)
In his paper, “Faith-based Intellectual Property Rights” (available on SSRN), It appears that Lemley encapsulates his point best when he says:
Rather than following the evidence and questioning strong IP rights, more and more scholars have begun to retreat from evidence toward what I call faith-based IP, justifying IP as a moral end in itself rather than on the basis of how it affects the world. I argue that these moral claims are ultimately unpersuasive and a step backward in a rational society.
As he points out – we’ve moved on from Fritz Machlup’s now famous words, written way back in 1958, where he said: “If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting one. But since we have had a patent system for a long time, it would be irresponsible, on the basis of our present knowledge, to recommend abolishing it.” (In fact, even earlier, in 1951, Edith Penrose had also expressed a similar sentiment). He then goes on to note, with plenty of citations, that the last three decades have seen an incredible amount of empirical work on IP and innovation and creative markets. And the result seems to be that the evidence paints a very complicated picture, with possible evidence for a positive IP-innovation relationship in some sectors but not others, with financial incentives seen not only as an irrelevant incentive in some cases but also as a negative incentive in certain cases. [See page 6]. For e.g., on patents, Lisa Ouellette, in Patent Experimentalism, notes, “none of these studies resolves whether patents have a net positive effect on innovation, much less their net welfare effect, or whether alternative innovation incentives such as grants, prizes, and tax credits are inferior.”
Thus, Lemley points out:
If we had evidence that any other kind of government regulation—or medical advice, for that matter—probably wasn’t helping much, or was only helping people in a few specialized areas, and might in fact be making things worse, the enlightened, reasonable thing to do would be to reassess that policy. When you are spending a lot of time and money every year in a government-sponsored departure from the free market, even maintaining the status quo ought to require some evidentiary support. And doubling down on that policy certainly should.
And as has been clear to anyone even vaguely observant of the IP space, there has been a constant trend towards maximizing IP policy rather than pausing to question it. It was quite interesting to see Lemley call top IP scholar Rob Merge’s spade a spade – calling out his ‘belief’ in IP as one that dismisses facts and evidence, in favour of ‘faith’. Referring to Merges, and others like him as ‘adherents’ to the religion of IP, he says they tend to believe in IP as an end in itself. Merges, in his book “Justifying IP” admits that the data does not allow him to state that the IP system can be justified as one in which people are better off with it, than without it — but then states that this has led him to believe that IP rights must have intrinsic value, and are “rights in the moral sense”. There certainly is an IP-maximalist crowd that seems to believe, or at least likes to state that ever expanding IP rights are desirable, despite the lack of evidence towards this. Internationally, this has been seen in the recent past by the failed ACTA, the TPP, bilateral and multilateral trade agreement, etc. More worringly, on the home front, we now have our Prime Minister making troubling statements, which seem to indicate that the Government may be considering aligning India’s patent laws with the more maximalist patent laws of US and EU, which have been pressurizing India for a while now.
Coming back to Lemley’s paper – while he doesn’t get into discussing why one moral framework is preferable to another (i.e., natural rights vs utilitarian claims; understandably avoided as this is the subject matter of a much larger debate) he does speak a bit as to why moral claims to IP shouldn’t be used to justify IP in the face of utilitarian evidence that those IP rights aren’t helpful to society. I won’t go into it for this post but the short paper is worth a read to see for yourself – Sections II is the relevant section to read.
He goes on to state that it’s not only one camp (i.e., the IP maximalist/proponents) who are ‘faithful’ rather than reliant on ‘facts’, but there are also those in the ‘information wants to be free’ crowd who misuse/ignore data/facts. And I’d agree – there certainly are folks from both ‘sides’ of the traditionally framed IP debate who ignore and misuse data as per their convenience. However, confusingly (to me at least), Lemley cites, amongst others, Amy Kapczynski’s “The Cost of Price” to support this statement – which leads me to think that possibly there is a nuance missing here – or that I am missing something. Kapczynski’s piece, (my earlier review here) argues, that because the IP system isn’t justified on utilitarian/efficiency grounds, (and because we are now more or less stuck with IP systems of some sort), we should look for other non-efficiency-based normative frameworks which IP policy should consider. Two ‘values’ she identifies (“distributive justice” and “privacy”) are chosen because they are negatively affected by the current un-justified IP system.
In other words, as Lemley himself notes, the IP rights impose significant costs on freedoms we value, and does this for the sake of benefits, despite not being sure if these benefits actually occur. Therefore, there are known negatives, and uncertain positives. Scholars such as Kapczynski seem to be looking to gear IP policy such that it reduces or offsets these known negatives; while scholars such as Merges are trying to prove the presence of a positive effect of the IP system. As I see it, these are two very different things, and should be treated as such. [Side note: (1). It would also be good to see discussion on the lack of sector and context specific customization of innovation incentives — as this would reduce the troubling generalizations about whether IP rights can create any positive at all. Software and pharmaceuticals (for e.g.) would no longer need to compete for the same type of state granted incentive mechanism].
Some of the other critics of Lemley’s piece seem to be saying that he unfairly uses utilitarianism, his preferred normative framework, to dismiss the ‘natural rights’ framework – these folks claim it is unfair as, by their very nature, natural rights cannot be judged on a utilitarian scale. I think this might be a fair criticism to make if these natural rights proponents were claiming that an IP system is for a ‘better’ society (thus privileging a certain vision of ‘progress’), and not for claiming increased rates of creation and innovation, since the former claim could fall within a non-utilitarian framework, however, the latter claim is a utilitarian claim. And if they are indeed privileging a certain vision of progress (other than increased rates of creation and innovation), it is upon them to explain this vision and then show that a natural rights based IP system would lead to such a vision.
Admittedly, I haven’t spent as much time as I’d have liked to in putting together this post — so, would like to emphasise that corrections, thoughts, comments are more than welcome.
Rounding up the post — while there may have been plenty of empirical evidence over the last few decades in the west, as we’ve often noted on the blog, India still sorely suffers from a lack of empirical data / evidence. We are indeed the land of many faiths, but if anything, let’s ‘pray’ that we aren’t stuck with faith based IP policy as well! It would be much appreciated if our policy makers and stakeholders instead tried to shift our IP sermons from ‘faith’ based to ‘fact’ based. And the first step for that would be to start appreciating, collecting and focusing data, to appropriately ‘align’ our IP system to one that is most beneficial to us! And on that note: Happy World IP Day to our readers!
Thanks for a good post; Lemley’s article, too, is balanced. Two further thoughts. (1) There is a noticeable correlation, justified or not, between the level of IP protection and the level of development of an economy. (2) The digital context creates a further complexity, and paradoxically an argument for IP, at least for copyright: see Jarold Lanier’s highly perceptive book, “Who owns the future?”.