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Do Business without Intellectual Property Discussion
Kick off the discussion on Stephan Kinsella’s guide, Do Business without Intellectual Property! Questions, comments, observations or elaborations? Either reply here or create a new discussion using the tag Guide_do-business-without-intellectual-property
I really want to know how people get around having to patent designs and inventions in the current marketplace. I’m a product design student interested in submitting ideas to various pitch competitions put on by my university’s business school (and elsewhere). It seems like the endgame for pretty much all the winners of these things is the patenting of the product. In some cases it’s even a requisite for getting the money.
Any ideas for how to participate in these things as a designer/inventor, and in the market in general? It seems like Venture Capitalists like the “security” patents provide. How can we convince them otherwise?
Well, you don’t have to have a patent to make a product. The main reasons to get a patent:
1. To use it to stop, deter, or intimidate or sue competitors. But you don’t need to do this to make a product.
2. To impress VC’s who want to ensure you have IP “locked up” or to value it to add value to your company valuation.
3. As a defense mechanism: to prevent a competitor from getting a patent or to use as a counter claim if you are ever sued for patent infringement.
To take these one by one:
1. as noted, you don’t have to have a patent to make something. So unless you want to sue others (which costs millions) or use the state to impede competition, you can ignore 1.
2. the VC’s mainly care about your freedom to operate. Not your ability to sue others. If you rest your profit forecasts on patent lawsuits instead of your product sales, …. it might seem like you can’t rely on the latter. Bad sign. Just tell them you have a strategy to defend yourself–freedom to operate. On this see 3:
3. THe ability to countersue is not without value, and for this you need patents. But this is a thin reed. Why? Because once you are sued, you are in trouble; the legal costs can run in the millions. And the likelihood, for a small company at least, that your patent just happens to cover one of the products made by the guy suing you (it might a be a troll, for example, whom you can’t sue, as they make nothing; or some other company that doesn’t make what your patent covers) is small.
So the main problem: is someone patenting what you are making or want to make or that you have invented yourself. There are two main defenses against this.
a. rely on the prior commercial user defense of the 2011 America Invents Act. But this is narrow and limited.
b. prevent the competitor from getting a patent on what you invented, by publishing it — on a blog, etc. See the strategies in this regard discussed here: http://www.fastcompany.com/<wbr />1822846/untangling-real-<wbr />meaning-first-file-patents
I am facing a similar pickle with my photography business as everybody else in the photography industry is using copyright law to protect their work. I have decided to release my work under creative commons. Would love to continue the conversation with experts on the topic. Canadian copyright law is complicated and ridiculous.
I don’t think the patent issue is similar to the copyright one, really. First, in patent law, even if you invent something, someone else can patent the same thing as long as they independently invent it. So you have a dilemma if you have an invention and you dont’ patent it or don’t publicize it. Luckily you can cheaply make it public, to block others from patenting it. Further, in patent law you have to actively apply for a patent to get one. If you don’t it eventually will become public domain, unless someone else patents it first, as noted.
In copyright, it’s automatic: you get copyright protection whether you like it or not, from the moment you write something down. It’s almost impossible to get rid of. Creative Commons might be a good way to free it up, given that you can’t get rid of your copyright. YOu give people a permission to use your “property”.
But the risks are not the same, as in patent law. If you come up with an original idea, you have a copyright in it and others cannot get a copyright on that unless they happen to come up independently with the same original work, which is rare if not impossible. And even if they did, they could not stop you from using your own work. So artists really can ignore copyright and just market and sell their work, without much fear of IP liability. They don’t need to become copyright trolls or copyright aggressors.
In fact IMO the main thing artists and creators can do re copyright, other than ignore it and go about their business of creating and marketing and selling–is to make sure they never sign an agreement with a publisher etc. where they give up their own copyright. That way lies ruin.
Thank you Stephan for the clarification. This is the conclusion I have come to doing my research. Some publications do seem to ask for copyright when using someone’s photographs. I guess it’s all about reading the fine print. Creative commons does helps with selling my services as it gives my customers more freedom to use the images.
How does business go under that model, if you don’t mind my asking?
As a designer, I see my skills as what I’m being paid for, not my product. In a pitch competition, any money I revive would be used to compensate me for the mental effort and time spent coming up with the idea and go toward any manufacturing costs (although honestly a manufacturer could just take the designs and run with it and I wouldn’t have a problem, as long as they credit me by name, which is just good manners). All of it would be a means to getting hired as a designer who gets paid to come up with solutions to problems. I think it’s a decent model, but the current systems seems to be set up such that I would be paid for “ownership” of the idea, which means I could come up with one really good idea and live off it for the rest of my life, which doesn’t seem right. I want to constantly be innovating, not riding off of one accomplishment.
For some ideas see:
Conversation with an author about copyright and publishing in a free society
and
Also do not forget that Michael Masnick of techdirt has spent years working on precisely this problem. A good place to start is “The Sky is Rising” : https://www.techdirt.com/skyisrising/
Seems we’re all on similar pages. My photography hobby keeps gaining more and more traction and I’ve been posting images watermarked with my a QR code in the corner so those that appreciate my images or use them can throw me a tip or payment for use. The reason I take pictures is to share my view of the world with others, not to make money – so my perspective is different than a “professional”.
As a product design engineer though many of the things I make/design/invent are covered under either a patent my company owns or go completely without patent. When it comes to building widgets there’s more to it than the idea, there’s volume, tooling, connections, sales, etc that all prevent others from entering my market and taking my cheese. Not to say that my competition isn’t watching, but once I’ve made something i’m off to making the next thing – innovate or die.
I’m extremely interested in Kinsella’s upcoming guide – hope its available soon or that he finds his way into these discussions soon.
UPDATE: Stephan Kinsella’s guide is now available to all Liberty.me members.
AND Stephan Kinsella is teaching an L.mU class tonight: Clarifying Libertarian Theory.
Read, sign up, discuss, enjoy!
Hello,
My wife and i discussed this topic the other night, i was spurred on by reading your guide, and my wife has a small business on etsy, and she has seen all these horror stories of people on alibaba stealing these small guys products idea and posting their photos with their watermarks even trying to sell their product designs. and its not always alibaba, Sears and other big companies like target have been caught doing this as well.
She was arguing that IP is better than no ip because these small guys can at least hope to shame these big companies that do this on Social media, and have some threat, even of they can’t enforce it, on these companies. I argued this only entrenches larger companies and makes it so they con only take form the small guys and the small guys get stomped for taking, even if its inadvertently, from the big guys,which protects the big guys from the small guys. she agreed to this and still stuck that a threat on social media would be better accepted if there was a system that could enforce this, even if the small guy is too poor to participate in it.
Subsequent arguments on how this is harmful to the free market and society as a whole and would stifle creativity had her asserting that the small protection on social media is still worth it.
Also, i think she sees it as a legal way to prevent plagarism. Which leads to tjhe question how IP affects plagiarism. It would be your own integrity that would keep you from this, unless there is a misrepresentation idea in law i am not familiar with. for example, to continue with the harry potter example from the guide, if a second production company claimed that J.K. rowling was helping them too, aside from rebuttals from J.K. rowling, what else could be done to prevent such a claim from being made, despite it being false?
another unrelated question. Disney sells some fabric with Eeyore prints on it, it has a strip of cloth on the side that says its not allowed to be resold,just personal use. is this legal?can disney bar me from using their product, that i legally buy from them and then resell as a pillow cover or sheet i then make? this seems a bit draconian, and an unrealistic stipulation on a transaction i make in a store. I am not saying it should be allowed to buy 1 yard and copy 10 yards, but that i should be able to use their product that they sell however i see fit. thanks
Regards,
Scire
A discussion of “intellectual property” that lumps copyright and patent together is intellectually dishonest. Copyright and patent are 2 completely different things.
Kinsella’s “argument” is just the old trick of smuggling the conclusion into the premise. Here is an accurate summation of Kinsella’s entire body of work:
Premise 1: Property must be rivalrous (by definition, according to Hoppe et. al)
Premise 2: Rivalry must be physical (assumed).
Conclusion: Therefore, property must be physical (QED).
That’s it. There is nothing more to Kinsellism than this.
The entertainment industry (songs, movies, tv shows, software, games) could not exist but for copyright. It could not exist legally, because one can only contract with that which is property. If there is no property right in patterns of information, then patterns of information cannot be the subject of a contract.
The entertainment industry could not exist practically without copyright either. Nobody is going to invest any amount of money creating a pattern of information, if the pattern cannot be owned and controlled. This is the utilitarian problem with Kinsellism.
Premise 2: Rivalry must be physical (assumed).
You keep using that word. I do not think it means what you think it means.
The entertainment industry (songs, movies, tv shows, software, games) could not exist but for copyright. It could not exist legally, because one can only contract with that which is property.
What about service contracts?
Nobody is going to invest any amount of money creating a pattern of information, if the pattern cannot be owned and controlled.
Crowd-funded movies exist already. Creative Commons movies exist already.
One waits in vain for an actual, coherent, positive argument from “Ace Baker” (or whatever his name is) for IP.
@ Dave Burns: Service or labor contracts are legally impossible absent a property right in one’s own body (see Hoppe). I can contract to work for you. I cannot contract for Stephan Kinsella to work for you.
One may only contract to buy and sell that which is one’s own property. Period.
So, no need for copyright, right? You own your body, write a contract for using your body to make music.
Below is the section “Music Without Intellectual Property” from Stephan Kinsella’s “Do Business Without Intellectual Property”. Kinsella would have done well to learn just a little about the subject before writing about it. Had he done so, he might have discovered that music must be written (by a writer) before it is performed (by an artist).
Here are Kinsella’s talking points (quoted) with my comments (interspersed)
Music without Intellectual Property
• Free distribution. Musicians make their money from other sources. Let people copy your hits. Let YouTube flourish. People will want to buy tickets to hear your concerts.
There’s no free lunch, and no free distribution. YouTube enforces copyright. And, uh, writers don’t have concerts.
• Artists have learned that covers are actually great. It’s a great compliment. It never harms the original artist.
Of course artists think covers are great. That’s what recording artists do – they cover material written by writers. Writers have always wanted artists to cover their songs – the more, the better. Of course, as valid property owners, writers may seek rent. In music, that rent takes a couple of forms – “mechanical royalties” which pay per unit sold, and “performance royalties”, which pay for a performance on TV or radio.
When a second artist covers a song, and fails to pay the writer royalties, of course it doesn’t harm the first artist. It harms the writer.
Of course it is a “great compliment” when someone steals your stuff. Like, when I steal the shirt off your back and wear it, I’m complimenting you on your sophisticated taste in clothing.
• If someone steals your stuff, try cheering for a change. Welcome emulation and competition!
Competition means everybody is free to write their own songs, like everybody is free to homestead and farm their own land. Competition does not mean that everybody gets to use my song for free, any more than everybody gets to use your farmland for free.
No one is obligated to provide the means for an old business model to continue operating after technology has made it obsolete. Copyright depends on copying being difficult and expensive. It is now easy and cheap. Time to find a new business model.
”
Of course it is a “great compliment” when someone steals your stuff. Like, when I steal the shirt off your back and wear it, I’m complimenting you on your sophisticated taste in clothing.”
More question begging. It’s only theft if IP isnlegotate property.
If the cost of committing a tort gets low enough, then the property rights of the victim disappear?
No tort is being committed, so your question seems irrelevant. Was it a tort when automobile technology put buggy whip makers out of business, or when Edison put a dent in the candle business? Photography and portrait painting? Printing press and hand-copying?
No actual property rights are at stake, either.
Ironically Dave Burns, you’re arguing by analogy. Let’s go with it.
The light bulb replaced the candle. Consumers didn’t mind, because “candles” are not necessarily what people want. Light is what people want. A different thing solved the same problem, better and cheaper.
Photography replaced portrait painting. Consumers didn’t mind, because “portrait paintings” are not necessarily what people want. A realistic image is what people want.
The printing press replaced hand-copying. Consumers didn’t mind, because “hand-copying’ is not necessarily what people want. Accurate copies are what people want. A different thing solved the same problem, better and cheaper.
Computer technology replaced songwriters, screen writers, software writers, book writers? (FAIL, computers do not replace writers). Consumers didn’t mind, because “writing” is not necessarily want people want? (FAIL, writing is what people want). Computer technology (with no written information inside) is what people want? (FAIL, people are seeking information and entertainment, which must be written by humans). A different thing solved the same problem, better and cheaper? (FAIL, computers do not solve the problem of how to get entertainment written).
Knock down strawmen all you want. The industry will change, the jobs will change, the business model will change. People will still write songs and software and movies, they’ll just get paid in a different way. The middlemen may disappear, or maybe they will also morph.
Crowd-funded movies are copyrighted. Creative Commons is a form of copyright.
Crowd-funded movies are copyrighted.
Naturally. You claimed no one will invest in movie if they don’t think they can make their investment back. Crowdfunders do not (ever? typically?) make their investment back.
Creative Commons is a form of copyright.
Yes, but one that gives up most of the tyranny you love. One that gets as close to no copyright as one may in an environment dominated by copyright trolls. That is to say, depending on what country you are in, if you try to make something public domain, either someone will come along and copyright it and use the tyranny against the creators, or in some countries it will be effectively illegal to use it at all. Creative Commons is an ugly defensive hack required to patch the corrupt copyright system.
“One that gets as close to no copyright as one may in an environment dominated by copyright trolls. That is to say, depending on what country you are in, if you try to make something public domain, either someone will come along and copyright it and use the tyranny against the creators, or in some countries it will be effectively illegal to use it at all.”
I think this may not be quite right. there is something to such a defensive move for trademark and patent, but to obtain a copyright you have to be the author. So if somehow you had a copyright protected work and you put it into the public domain, I’m not aware of how someone else can “copyright” it as they are not the author. They might be able to make a derivative work which has copyright protection, but that’s a different matter. The problem is that there is no easy way to get rid of copyright. Creative Commons is simply one of the techniques people use to voluntarily divest themselves of, or to choose not to enforce, some of the copyright protection the state automatically foists on them.
Let me qualify slightly:
Without copyright, recorded entertainment will be reduced to amateurs (Creative Commons) and charity (kickstarter).
How there could be a professional writer (songs, movies, tv shows, software, games) in a world without copyright?
Someone wants to make a movie, so they pay a professional writer to write the script. The movie company makes money from selling tickets at the movie theater. Easy.
Or: someone writes novels and sells them on Createspace for $1.99 each, develops a following and a large fan base and makes money off of sales. Etc. It’s not hard to imagine.
If you free the slaves, who will pick the cotton? Your lack of imagination proves nothing. When old business models die, new ones replace them.
Recognizing that the author holds copyright is simply the homestead principle. Writing is homesteading.
In our current state-run copyright system, there are several forms of copyright. There is a copyright in the authorship (“writer share”) which is generally held to be non-transferable. There is second copyright in the authorship (‘publisher share”) which initially belongs to the writer, but can thereafter be transferred to a third party. Then there can be a another copyright in a recording (a “master”).
@ Kinsella –
Assuming the existence of professional writers, I could imagine hiring one. I’m asking how there could ever get to be professional writers in the first place. It’s the same as asking how there could ever get to be professional farmers without a property right in the farm produce.
Do you agree that there cannot be professional farmers without a property right in produce? What’s the difference?
CreateSpace enforces copyright. If they didn’t, authors could sell approximately 1 copy for $1.99. That’s it.
https://www.createspace.com/Help/Rights/CopyrightGuidelines.jsp
If I need some text, I write it, or I hire someone to write it. Where is the problem?
”
Assuming the existence of professional writers, I could imagine hiring one. I’m asking how there could ever get to be professional writers in the first place. It’s the same as asking how there could ever get to be professional farmers without a property right in the farm produce.”
no, it’s not the “same.” You keep assuming your conclusions, and engaging in question-begging. It is quite amazing you cannot see even this.
Anyway, a question *is not an argument*. So what if you have questions?
“Do you agree that there cannot be professional farmers without a property right in produce? What’s the difference?”
Asking me to explain the difference between A and B is not an argument that A and B are the same.
“CreateSpace enforces copyright. If they didn’t, authors could sell approximately 1 copy for $1.99. That’s it.”
You are just asserting this. There is no basis for this assertion. And anyway, it’s not an argument. The answer could be “so what? Suck it up, find a way to compete in the free market.”
I’m imagining an investor spending $100,000,000 building a new car factory. The very first car, he sells for $100,000,001. From then on, all cars produced are free.
What’s wrong with this model?
@ Dave Burns – “If I need some text, I write it, or I hire someone to write it. Where is the problem?”
That’s like saying “If I need some food, I will grow it, or hire a farmer to grow it.” That is a good solution UNLESS you remove the property right in the produce.
Imagine there was no property right in the tomatoes grown on a farm. You’re not going to find a professional farmer, because nobody will become a professional farmer without a property right in produce.
So you are left to grow the food yourself.
Extend that problem to all things, and everyone lives in self-sufficient isolation. I.e. pre stone age.
That’s like saying “If I need some food, I will grow it, or hire a farmer to grow it.”
Not really. A farmer needs a farm. A writer needs a pen or a PC, which I can supply.
Do we agree that there will be no professional farmers absent a property right in produce?
Irrelevant. Are you saying a lawyer can’t give me legal advice without owning … What? An auto mechanic can’t fix my car without owning it and selling it back to me? I can’t hire the kid next door to install my stereo unless he owns something? They own their bodies, their minds, their skills, and they are renting out the use of these. Please stop playing dumb.
@ Kinsella
You recommend publishing one’s own work under a CC-0- or CC-BY-Licence.
Is there something I can do as a translator of a work for that I cannot get a free licence but only a permission for publishing?
Can I drop my right to file a lawsuit for copyright infringement?
When the original author might change his mind in the future and will use a free licence at some point in the future, I would like to make my translation automatically available under the free licence, too. Is that possible?
I think that’s the idea of a CC-BY license–you are giving someone permission ahead of time. That is equivalent to “dropping a lawsuit”–or, rather, agreeing not to file one. Or it’s similar. The problem in both cases is … how does the other side prove you made this “agreement”? What was the consideration paid? Etc. I suppose that CC-BY or some similar statement or declaration is the best you can do as a general matter. The only other thing I can think of would be some kind of period copyright assignment you do every year, assigning in writing all your copyrights acquired so far, to some trust, which has as part of its mission the pledge never to use the copyright offensively, etc. But of course, this is unrealistic because no one would do it and no one would pay for this.
