Notes

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¹ Terms like “realty,” “personalty,” and “tangible” are common-law terms; analogous civil-law terms are “immovables,” “movables,” and “corporeals,” respectively. See N. Stephan Kinsella, “A Civil Law to Common Law Dictionary,” Louisiana Law Review 54 (1994): 1265-305 for further differences between civil-law and common-law terminology. The term “things” is a broad civil-law concept that refers to all types of items, whether corporeal or incorporeal, movable or immovable.

² Debate over this issue manifests itself in differences over the issue of inalienability and with respect to the law of contract, i.e., can we “sell” or alienate our bodies in the same manner that we can alienate title to homesteaded property? For arguments against body inalienability, see N. Stephan Kinsella, “A Theory of Contracts: Binding Promises, Title Transfer, and Inalienability” (paper presented at the Austrian Scholars Conference, Auburn, Alabama, April 1999); and N. Stephan Kinsella, “Inalienability and Punishment: A Reply to George Smith,” Journal of Libertarian Studies 14, no. 1 (Winter 1998-99): 79-93. For arguments favoring such alienability, see Walter Block, “Toward a Libertarian Theory of Inalienability: A Critique of Rothbard, Barnett, Gordon, Smith, Kinsella, and Epstein,” Journal of Libertarian Studies 17, no. 2 (Spring 2003): 39-85.

³ For views in opposition to blackmail laws, see Walter Block, Toward a Libertarian Theory of Blackmail,” Journal of Libertarian Studies 15, no. 2 (Spring 2001); Walter Block, “A Libertarian Theory of Blackmail,” Irish Jurist 33 (1998): 280-310; Walter Block, Defending the Undefendable (New York: Fleet Press, 1976), pp. 53-54; Murray N. Rothbard, The Ethics of Liberty (New York: New York University Press, 1998), pp. 124-26; and Eric Mack, “In Defense of Blackmail,” Philosophical Studies 41 (1982): 274.

For libertarian views in favor of blackmail laws, see Robert Nozick, Anarchy, State, and Utopia (New York: Basic Books, 1974), pp. 85-86; and Richard Epstein, “Blackmail, Inc.,” University of Chicago Law Review 50 (1983): 553.

For libertarian arguments against defamation (libel and slander) laws, see Block, Defending the Undefendable, pp. 50-53; and Rothbard, The Ethics of Liberty, pp. 126-28; in favor, see David Kelley in David Kelley vs. Nat Hentoff: Libel Laws: Pro and Con, audiotape (Free Press Association, Liberty Audio, 1987).

⁴ In some European countries, the term “industrial property” is used instead or “intellectual property.”

⁵ De La Vergne Refrigerating Mach. Co. v Featherstone, 147 U.S. 209, 222, 13 S.Ct. 283, 285 (1893).

⁶ Tom G. Palmer, Are Patents and Copyrights Morally Justified?’ The Philosophy of Property Rights and Ideal Objects,” in “Symposium: Intellectual Property,” Harvard Journal of Law & Public Policy 13, no. 3 (Summer 1990): 818. As one commentator has noted, “intellectual property may be defined as embracing rights to novel ideas as contained in tangible products of cognitive effort.” Dale A. Nance, “Foreword: Owning Ideas,” in “Symposium: Intellectual Property,” Harvard Journal of Law & Public Policy 13, no. 3 (Summer 1990): 757.

⁷ A useful introduction to IP can be found in Arthur R. Miller and Michael H. Davis, Intellectual Property: Patents, Trademarks, and Copyrights in a Nutshell, 2nd ed. (St. Paul, Minn.: West Publishing, 1990); see also “Patent, Trademark, and Trade Secret,” http://profs.lp.findlaw.com/patents/index.html. For a good introduction to patent law, see Ronald B. Hildreth, Patent Law: A Practitioner’s Guide, 3rd ed. (New York: Practising Law Institute, 1998). More in-depth treatises with further information on IP law include Donald S. Chisum, Chisum on Patents (New York: Matthew Bender, 2000); Melville B. Nimmer and David Nimmer, Nimmer on Copyright (New York: Matthew Bender, 2000); Paul Goldstein, Copyright: Principles, Law, and Practice (Boston: Little, Brown, 1989); J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, 4th ed. (St. Paul, Minn.: West Group, 1996); and Roger M. Milgrim, Milgrim on Trade Secrets (New York: Matthew Bender, 2000). Useful information, brochures, and pamphlets are available from the United States Copyright Office, http://lcweb.loc.gov/copy-right, and from the Patent and Trademark Office of the Department of Commerce, http://www.uspto.gov. Other useful sites are listed in this article’s appendix and bibliography.

⁸ 17 USC §§ 101, 106 et pass.

⁹ Modern copyright law has superseded and largely preempted “common law copyright,” which attached automatically from the moment of a work’s creation, and which essentially conferred only a right of first publication. Goldstein, Copyright, §§ 15.4 et seq.

¹⁰ 17 USC § 302. Due to recent legislation, these terms are twenty years longer than under previous law. See HR 2589, the Sonny Bono Copyright Term Extension Act/Fairness in Music Licensing Act of 1998.

¹¹ 35 USC § 1 et seq.; 37 CFR Part 1.

¹² Suppose A invents and patents a better mousetrap, which has a Nitinol (memory metal) spring for better snapping ability. Now suppose B invents and patents a mousetrap with a Nitinol spring covered with non-stick coating, to improve the ability to remove mouse remains while still providing the Nitinol-driven snapping action. B has to have a mousetrap with a Nitinol spring in order to use his invention, but this would infringe upon A s patent. Similarly, A cannot add the non-stick coating to his own invention without infringing upon B’s improvement patent. In such situations, the two patentees may cross-license, so that A can practice B’s improvement to the mousetrap, and so B can use his own invention.

¹³ Diamond v Diebr, 450 US 175, 185 (1981); see also 35 USC § 101.

¹⁴ In re Alappat, 33 F3d 1526, 1544, 31 USPQ2d 1545, 1557 (Fed Cir 1994) (in banc). See also State Street Bank & Trust Co. v Signature Financial Group, 149 F3d 1368 (Fed Cir 1998).

¹⁵ 35 USC § 154(a)(2).

¹⁶ See, e.g., R. Mark Halligan, esq., Restatement of the Third Law—Unfair Competition: A Brief Summary,” §§ 39-45, http://execpc.com/~ mhallign/unfair.html; also see the Uniform Trade Secrets Act (UTSA), http://nsi.org/Library/Espionage/usta.htm.

¹⁷ See the Uniform Trade Secrets Act (UTSA).

¹⁸ Economic Espionage Act of 1996, 18 USC §§ 1831–39.

¹⁹ 15 USC § 1501 et seq.; 37 CFR Part 2.

²⁰ 15 USC §§ 1125(c), 1127.

²¹ 15 USC § 1125(d); Anticybersquatting Consumer Protection Act, PL 106–113 (1999); HR 3194, S1948.

²² See 17 USC § 901 et seq.

²³ See 17 USC § 1301 et seq.

²⁴ See, e.g., HR 354 (introduced 1/19/1999), Collections of Information Antipiracy Act. See also Jane C. Ginsburg, “Copyright, Common Law, and Sui Generis Protection of Databases in the United States and Abroad,” University of Cincinnati Law Review 66 (1997): 151.

²⁵ U.S. Cons., Art I, § 8; Kewanee Oil Co. v. Bicron Corp., 415 US 470, 479, 94 S.Ct. 1879, 1885 (1974).

²⁶ See Paul C. van Slyke and Mark M. Friedman, Employer’ s Rights to Inventions and Patents of Its Officers, Directors, and Employees,” AIPLA Quarterly Journal 18 (1990): 127; and Chisum on Patents, § 22.03; 17 USC §§ 101, 201.

²⁷ U.S. Constitution, art. 1, sec. 8, clause 3; Wickard v Filburn, 317 US 111, 63 S. Ct. 82 (1942).

²⁸ But see the federal Economic Espionage Act of 1996, 18 USC §§ 1831-39.

²⁹ Ayn Rand mistakenly assumes that the first to file has priority (and then she is at pains to defend such a system). See Ayn Rand, “Patents and Copyrights,” in Capitalism: The Unknown Ideal (New York: New American Library, 1967), p. 133. She also confusingly attacks the strict antitrust scrutiny given to patent holders. However, since patents are government-granted monopolies, it is not unjust to use an anti-monopoly law to limit the ability of a patent owner to extend this monopoly beyond the bounds intended by the patent statute. The problem with antitrust laws is in their application to normal, peaceful business dealings, not to limit real—i.e., government-granted—monopolies. A similar point might be made with regard to Bill Gates, whose fortune has largely been built based on the government-granted monopoly inherent in copyright. Moreover, as Bill Gates is no libertarian, and doubtlessly does not oppose the legitimacy of antitrust laws, one can hardly wring one’s hands in pity over his having to lie in the very bed he helped make.

³⁰ For conventional theories of intellectual property, see “Bibliography of General Theories of Intellectual Property,” Encyclopedia of Law and Economics, http://encyclo.findlaw.com/biblio/1600.htm; and Edmund Kitch, “The Nature and Function of the Patent System,” Journal of Law and Economics 20 (1977): 265.

³¹ See Andrew J. Galambos, The Theory of Volition, vol. 1, ed. Peter N. Sisco (San Diego: Universal Scientific Publications, 1999); J. Neil Schulman, “Informational Property: Logorights,” Journal of Social and Biological Structures (1990); and Rand, “Patents and Copyrights.” Other Objectivists (Randians) who support IP include George Reisman, Capitalism: A Treatise on Economics (Ottawa, Ill.: Jameson Books, 1996), pp. 388-89; David Kelley, “Response to Kinsella,” IOS Journal 5, no. 2 (June 1995): 13, in response to N. Stephan Kinsella, “Letter on Intellectual Property Rights,” IOS Journal 5, no. 2 (June 1995): 12-13; Murray I. Franck, “Ayn Rand, Intellectual Property Rights, and Human Liberty,” 2 audio tapes, Institute for Objectivist Studies Lecture; Laissez-Faire Books (1991); Murray I. Franck, “Intellectual Property Rights: Are Intangibles True Property,” IOS Journal 5, no. 1 (April 1995); and Murray I. Franck, “Intellectual and Personality Property,” IOS Journal 5, no. 3 (September 1995): 7, in response to Kinsella, “Letter on Intellectual Property Rights.” It is difficult to find published discussions of Galambos’s idea, apparently because his own theories bizarrely restrict the ability of his supporters to disseminate them. See, e.g., Jerome Tuccille, It Usually Begins with Ayn Rand (San Francisco: Cobden Press, 1971), pp. 69-71. Scattered references to and discussions of Galambos’s theories may be found, however, in David Friedman, “In Defense of Private Orderings: Comments on Julie Cohen’s ’Copyright and the Jurisprudence of Self-Help’,” Berkeley Technology Law Journal 13, no. 3 (Fall 1998): n. 52; and in Stephen Foerster, “The Basics of Economic Government,” http://www.economic.net/articles/ar0001.html.

³² Lysander Spooner, “The Law of Intellectual Property: or An Essay on the Right of Authors and Inventors to a Perpetual Property in Their Ideas,” in The Collected Works of Lysander Spooner, vol. 3, ed. Charles Shively (1855; reprint, Weston, Mass.: M&S Press, 1971); Herbert Spencer, The Principles of Ethics, vol. 2 (1893; reprint, Indianapolis, Ind.: Liberty Press, 1978), part IV, chap. 13, p. 121. See also Wendy McElroy, “Intellectual Property: Copyright and Patent,” http://www.zetetics.com/mac/intpro1.htm and http://www.zetetics.com/mac/intpro2.htm; and Palmer, “Are Patents and Copyrights Morally Justified?” pp. 818, 825.

³³ Palmer, Are Patents and Copyrights Morally Justified?” p. 819.

³⁴ Richard A. Posner, Economic Analys is of Law, 4th ed. (Boston: Little, Brown, 1992), § 3.3, pp. 38–45.

³⁵ David D. Friedman, Standards As Intellectual Property: An Economic Approach,” University of Dayton Law Review 19, no. 3 (Spring 1994): 1109-29; and David D. Friedman, Law’s Order: What Economics Has to Do with Law and Why it Matters (Princeton, N.J.: Princeton University Press, 2000), chap. 11. Ejan Mackaay also advocates IP on utilitarian grounds, in “Economic Incentives in Markets for Information and Innovation,” in “Symposium: Intellectual Property,” Harvard Journal of Law & Public Policy 13, no. 3, p. 867. Earlier utilitarian advocates of IP include John Stuart Mill and Jeremy Bentham. See Arnold Plant, “The Economic Theory Concerning Patents for Inventions,” in Selected Economic Essays and Addresses (London: Routledge & Kegan Paul, 1974), p. 44; Roger E. Meiners and Robert J. Staaf, “Patents, Copyrights, and Trademarks: Property or Monopoly?” in “Symposium: Intellectual Property,” Harvard Journal of Law & Public Policy 13, no. 3, p. 911.

³⁶ See Palmer, Are Patents and Copyrights Morally Justified? pp. 820–21; Julio H. Cole, “Patents and Copyrights: Do the Benefits Exceed the Costs?” http://www.economia.ufm.edu.gt/Catedraticos/jhcole/Cole%20_MPS_.pdf

³⁷ See Murray N. Rothbard, Man, Economy, and State (Los Angeles: Nash Publishing, 1962), pp. 652-60; Murray N. Rothbard, The Ethics of Liberty, pp. 123-24; Wendy McElroy, “Contra Copyright,” The Voluntaryist (June 1985); McElroy, “Intellectual Property: Copyright and Patent”; Tom G. Palmer, “Intellectual Property: A Non-Posnerian Law and Economics Approach,” Hamline Law Review 12 (1989): 261; Palmer, “Are Patents and Copyrights Morally Justified?”; on Lepage, see Mackaay, “Economic Incentives,” p. 869; Boudewijn Bouckaert, “What is Property?” in “Symposium: Intellectual Property,” Harvard Journal of Law & Public Policy 13, no. 3, p. 775; N. Stephan Kinsella, “Is Intellectual Property Legitimate?” Pennsylvania Bar Association Intellectual Property Law Newsletter 1, no. 2 (Winter 1998): 3; Kinsella, “Letter on Intellectual Property Rights,” and “In Defense of Napster and Against the Second Homesteading Rule.”

F.A. Hayek also appears to be opposed to patents. See The Collected Works of F.A. Hayek, vol. 1, The Fatal Conceit: The Errors of Socialism, ed. WW Bartley (Chicago: University of Chicago Press, 1989), p. 6; and Meiners and Staaf, “Patents, Copyrights, and Trademarks,” p. 911. Cole challenges the utilitarian justification for patents and copyright in “Patents and Copyrights: Do the Benefits Exceed the Costs?” See also Fritz Machlup, U.S. Senate Subcommittee On Patents, Trademarks & Copyrights, An Economic Review of the Patent System, 85th Cong., 2nd Session, 1958, Study No. 15; Fritz Machlup and Edith Penrose, “The Patent Controversy in the Nineteenth Century,” Journal of Economic History 10 (1950): 1; Roderick T. Long, “The Libertarian Case Against Intellectual Property Rights,” Formulations 3, no. 1 (Autumn 1995); Stephen Breyer, “The Uneasy Case for Copyright: A Study of Copyright in Books, Photocopies, and Computer Programs,” Harvard Law Review 84 (1970): 281; Wendy J. Gordon, “An Inquiry into the Merits of Copyright: The Challenges of Consistency, Consent, and Encouragement Theory,” Stanford Law Review 41 (1989): 1343; and Jesse Walker, “Copy Catfight: How Intellectual Property Laws Stifle Popular Culture,” Reason (March 2000).

³⁸ McElroy, Intellectual Property: Copyright and Patent. Also strongly opposed to IP was the nineteenth-century Jacksonian editorialist William Leggett. See Palmer, “Are Patents and Copyrights Morally Justified?” pp. 818, 828-29. Ludwig von Mises expressed no opinion on the issue, merely drawing the economic implications from the presence or absence of such laws. See Human Action, 3rd rev. ed. (Chicago: Henry Regnery, 1966), chap. 23, section 6, pp. 661-62.

³⁹ According to Justinian, “Justice is the constant and perpetual wish to render every one his due.... The maxims of law are these: to live honestly, to hurt no one, to give every one his due.” The Institutes of Justinian: Text, Translation, and Commentary, trans. J.A.C. Thomas (Amsterdam: North-Holland, 1975).

⁴⁰ On the defects of utilitarianism and interpersonal utility comparisons, see Murray N. Rothbard, “Praxeology, Value Judgments, and Public Policy,” in The Logic of Action One (Cheltenham, U.K.: Edward Elgar, 1997), esp. pp. 90-99; Rothbard, “Toward a Reconstruction of Utility and Welfare Economics,” in The Logic of Action One; Anthony de Jasay, Against Politics: On Government, Anarchy, and Order (London: Routledge, 1997), pp. 81-82, 92, 98, 144, 149-51.

On scientism and empiricism, see Rothbard, “The Mantle of Science,” in The Logic of Action One; Hans-Hermann Hoppe, “In Defense of Extreme Rationalism: Thoughts on Donald McCloskey’s The Rhetoric of Economics,” Review of Austrian Economics 3 (1989): 179.

On epistemological dualism, see Ludwig von Mises, The Ultimate Foundation of Economic Science: An Essay on Method, 2nd ed. (Kansas City: Sheed Andrews and McMeel, 1962); Ludwig von Mises, Epistemological Problems of Economics, trans. George Reisman (New York: New York University Press, 1981); Hans-Hermann Hoppe, Economic Science and the Austrian Method (Auburn, Ala.: Ludwig von Mises Institute, 1995); and Hoppe, “In Defense of Extreme Rationalism.”

⁴¹Mises states: Although it is usual to speak of money as a measure of value and prices, the notion is entirely fallacious. So long as the subjective theory of value is accepted, this question of measurement cannot arise.” “On the Measurement of Value,” in The Theory of Money and Credit, trans. H.E. Batson (1912; reprint, Indianapolis, Ind.: Liberty Fund, 1980), p. 51. Also: “Money is neither a yardstick of value nor of prices. Money does not measure value. Nor are prices measured in money: they are amounts of money.” Ludwig von Mises, Socialism: An Economic and Sociological Analysis, 3rd rev. ed., trans. J. Kahane (Indianapolis, Ind.: Liberty Press, 1981), p. 99; see also Mises, Human Action, pp. 96, 122, 204, 210, 217, and 289.

⁴² For an excellent survey and critique of the cost-benefit justification for patent and copyright, see Cole, “Patents and Copyrights: Do the Benefits Exceed the Costs?” For useful discussions of evidence in this regard, see Palmer, “Intellectual Property: A Non-Posnerian Law and Economics Approach,” pp. 300-2; Palmer, “Are Patents and Copyrights Morally Justified?” pp. 820-21, 850-51; Bouckaert, “What is Property?” pp. 812-13; Leonard Prusak, “Does the Patent System Have Measurable Economic Value?” AIPLA Quarterly Journal 10 (1982): 50-59; and Leonard Prusak, “The Economic Theory Concerning Patents and Inventions,” Economica1 (1934): 30-51.

⁴³ See Cole, Patents and Copyrights: Do the Benefits Exceed the Costs? for further examples of costs of patent and copyright laws.

⁴⁴ Plant, The Economic Theory Concerning Patents for Inventions, p. 43. See also Rothbard, Man, Economy, and State, pp. 658-59:

It is by no means self-evident that patents encourage an increased absolute quantity of research expenditures. But certainly patents distort the type of research expenditure being conducted.... Research expenditures are therefore overstimulated in the early stages before anyone has a patent, and they are unduly restricted in the period after the patent is received. In addition, some inventions are considered patentable, while others are not. The patent system then has the further effect of artificially stimulating research expenditures in the patentable areas, while artificially restricting research in the nonpatentable areas.

⁴⁵ Rand, Patents and Copyrights, p. 130.

⁴⁶ Plant is correct in stating that [t]he task of distinguishing a scientific discovery from its practical application, which may be patentable ... is often baffling to the most subtle lawyer.” “The Economic Theory Concerning Patents for Inventions,” pp. 49-50. On a related note, the U.S. Supreme Court has noted that “[t]he specification and claims of a patent ... constitute one of the most difficult legal instruments to draw with accuracy.” Topliff v Topliff, 145 US 156, 171, 12 S.Ct. 825 (1892). Perhaps this is because patent law has no moorings to objective borders of actual, tangible property, and thus is inherently vague, amorphous, ambiguous, and subjective. For the latter reason alone, one would think that Objectivists—ardent, self-proclaimed defenders of objectivity and opponents of subjectivism—would oppose patent and copyright.

⁴⁷ In re Trovato, 33 USP2d 1194 (Fed Cir 1994). Recent case law has expanded the types of mathematical and computer algorithms and business methods that can be protected by patent. See, e.g., State Street Bank & Trust Co. v Signature Financial Group, 149 F3d 1368 (Fed Cir 1998). However, no matter where the line is drawn between unpatentable “laws of nature” and “abstract ideas” and patentable “practical applications,” patent law still necessarily makes a distinction between the two.

⁴⁸ Spooner, The Law of Intellectual Property; McElroy, Intellectual Property: Copyright and Patent”; Palmer, “Are Patents and Copyrights Morally Justified?” pp. 818, 825.

⁴⁹ See Galambos, The Theory of Volition, vol. 1. Evan R. Soulé, Jr., What Is Volitional Science?” http://www.tuspco.com/html/what_is_v-50_.html. I have read only sketchy accounts of Galambos’s theories. I also met a real, live Galambosian once, much to my surprise (I had supposed that they were fictional creations of Tuccille [It Usually Begins with Ayn Rand, pp. 69-71]), at a Mises Institute conference a few years ago. My criticism of Galambos’s ideas in what follows only applies to the extent that I am properly describing his views.

⁵⁰ Friedman, In Defense of Private Orderings”, n. 52; Foerster, “The Basics of Economic Government.”

⁵¹ Rand, Patents and Copyrights, p. 133.

⁵² Friedman, “In Defense of Private Orderings”, n. 52.

⁵³ Tluccille, It usually Begins with Ayn Rand, p. 70. Of course, I suppose that any Galambosian other than Galambos himself, having the same type of dilemma, would be unable to change his name as a solution to the problem, because this solution was Galambos’s inalienable, “absolute” idea.

⁵⁴ Harry Binswanger, ed., The Ayn Ran d Lexicon: Objectivism from A to Z (New York: New American Library, 1986), pp. 326-27, 467.

⁵⁵ The fundamental economic, or catallactic, role for private property rights, along with money prices arising from exchanges of property, is to permit economic calculation. See N. Stephan Kinsella, “Knowledge, Calculation, Conflict, and Law: Review Essay of Randy E. Barnett, The Structure of Liberty: Justice and the Rule of Law,” Quarterly Journal of Austrian Economics 2, no. 4 (Winter 1999): 49-71.

⁵⁶ Hans-Hermann Hoppe, A Theory of Socialism and Capitalism (Boston: Kluwer Academic Publishers, 1989), p. 235 n. 9.

⁵⁷ Plant, The Economic Theory Concerning Patents for Inventions, pp. 35-36; David Hume, An Inquiry Concerning the Principles of Morals: With a Supplement: A Dialogue (1751; reprint, New York: Liberal Arts Press, 1957); Palmer, “Intellectual Property: A Non-Posnerian Law and Economics Approach,” pp. 261-66 and n. 50 (distinguishing between “static” and “dynamic” scarcity), also pp. 279-80; Palmer, “Are Patents and Copyrights Morally Justified?” pp. 860-61, 864-65; and Rothbard, “Justice and Property Rights,” in The Logic of Action One, p. 274; on Tucker, see McElroy, “Intellectual Property: Copyright and Patent.”

⁵⁸ Hoppe, A Theory of Socialism and Capitalism, pp. 140-41. I do not mean to restrict rights to the sighted; the term “visible” here means observable or discernible. I owe this clarification to Gene Callahan.

⁵⁹ Robert Frost, The Mending Wall, in North of Boston, 2nd ed. (New York: Henry Holt, 1915), pp. 11-13. (Please do not e-mail me about this. I do not care what Frost “really” meant in that poem. I just like the saying.)

⁶⁰ Hoppe, A Theory of Socialism and Capitalism, p. 138.

⁶¹ See, on the proper approach to homesteading and the first-user rule (the prior-later distinction), Hoppe, A Theory of Socialism and Capitalism, pp. 141-44; Hoppe, The Economics and Ethics of Private Property (Boston: Kluwer Academic Publishers, 1993), pp. 191-93; Jeffrey M. Herbener, “The Pareto Rule and Welfare Economics,” Review of Austrian Economics 10, no. 1 (1997): 105: “Once the item is owned by the first-user, others no longer have the option of being its first-user; thus, their preferences at that point in time have no bearing on the Pareto-superior nature of the acquisition by the first-user”; and de Jasay, Against Politics, pp. 172-79. On the ethical justifications of such a property-rights scheme, see Hoppe, A Theory of Socialism and Capitalism, chap. 7; Hoppe, The Economics and Ethics of Private Property; Rothbard, The Ethics of Liberty; Rothbard, “Justice and Property Rights,” in The Logic of Action One; N. Stephan Kinsella, “A Libertarian Theory of Punishment and Rights” Loyola of Los Angeles Law Review 30 (Spring 1996): 607; N. Stephan Kinsella, “New Rationalist Directions in Libertarian Rights Theory,” Journal of Libertarian Studies 12, no. 2 (Fall 1996): 313-26.

⁶² Thomas Jefferson to Isaac McPnerson, Monticello, August 13, 1813, letter, in The Writings of Thomas Jefferson, vol. 13, ed. A.A. Lipscomb and A.E. Bergh (Washington, D.C.: Thomas Jefferson Memorial Association, 1904), pp. 326-38. Jefferson recognized that because ideas are not scarce, patent and copyright are not natural rights, and can be justified only, if at all, on the utilitarian grounds of promoting useful inventions and literary works (and, even then, they must be created by statute, since they are not natural rights). See Palmer, “Intellectual Property: A Non-Posnerian Law and Economics Approach,” p. 278 n. 53. Yet this does not mean that Jefferson supported patents, even on utilitarian grounds. Patent historian Edward C. Walterscheid explains that “throughout his life, [Jefferson] retained a healthy skepticism about the value of the patents system.” “Thomas Jefferson and the Patent Act of 1793,” Essays in History 40 (1998).

⁶³ Rand, Patents and Copyrights, p. 131. Mises, in Human Action, p. 661, recognizes that there is no need to economize in the employment of “formulas,” “because their serviceableness cannot be exhausted.” On p. 128, he points out:

A thing rendering such unlimited services is, for instance, the knowledge of the causal relation implied. The formula, the recipe that teaches us how to prepare coffee, provided it is known, renders unlimited services. It does not lose anything from its capacity to produce however often it is used; its productive power is inexhaustible; it is therefore not an economic good. Acting man is never faced with a situation in which he must choose between the use-value of a known formula and any other useful thing.

See also p. 364.

⁶⁴ Plant, The Economic Theory Concerning Patents for Inventions, p. 36. Also Mises, Human Action, p. 364: “Such recipes are, as a rule, free goods as their ability to produce definite effects is unlimited. They can become economic goods only if they are monopolized and their use is restricted. Any price paid for the services rendered by a recipe is always a monopoly price. It is immaterial whether the restriction of a recipe’s use is made possible by institutional conditions—such as patents and copyright laws—or by the fact that a formula is kept secret and other people fail to guess it.”

⁶⁵ Bouckaert, “What is Property?” p. 793; see also pp. 797–99.

⁶⁶ Bouckaert, What is Property? pp. 799, 803.

⁶⁷ It could also be argued that ideal objects deserve legal protection as property because they are “public goods,” that is, because of negative externalities which arise if IP is not legally protected. However, the concept of public goods is neither coherent nor justifiable. See Palmer, “Intellectual Property: A Non-Posnerian Law and Economics Approach,” pp. 279-80, 283-87; Hans-Hermann Hoppe, “Fallacies of the Public Goods Theory and the Production of Security,” Journal of Libertarian Studies 9, no. 1 (Winter 1989): 27; also Hoppe, The Economics and Ethics of Private Property, chap. 1. As Palmer points out:

the cost of producing any service or good includes not only labor, capital marketing, and other cost components, but also fencing (or exclusion) costs as well. Movie theaters, for example, invest in exclusion devices like ticket windows, walls, and ushers, all designed to exclude non-contributors from enjoyment of service. Alternatively, of course, movie owners could set up projectors and screens in public parks and then attempt to prevent passers-by from watching, or they could ask government to force all non-contributors to wear special glasses which prevent them from enjoying the movie. ’Drive-ins,’ faced with the prospect of free riders peering over the walls, installed—at considerable expense—individual speakers for each car, thus rendering the publicly available visual part of the movie of little interest.... The costs of exclusion are involved in the production of virtually every good imaginable. There is no compelling justification for singling out some goods and insisting that the state underwrite their production costs through some sort of state-sanctioned collective action, simply because of a decision to make the good available on a nonexclusive basis.

Palmer, “Intellectual Property: A Non-Posnerian Law and Economics Approach,” pp. 284-85. There is no way to show that ideas are clearly public goods. Moreover, even if ideas were public goods, this does not justify treating them as property rights, for the same reasons that even wealth-increasing measures are not necessarily justified, as discussed above.

⁶⁸ Palmer, Intellectual Property: A Non-Posnerian Law and Economics Approach,” p. 264.

⁶⁹ See Rand, “Patents and Copyrights”; Kelley, “Response to Kinsella”; Franck, “Intellectual and Personality Property” and “Intellectual Property Rights: Are Intangibles True Property?”

⁷⁰ See Hoppe, A Theory of Socialism and Capitalism, chap. 7, esp. p. 138.

⁷¹ Hoppe, A Theory of Socialism and Capitalism, p. 142; de Jasay, Against Politics, pp. 172-79; and Herbener, “The Pareto Rule and Welfare Economics,” p. 105.

⁷² Occupancy or taking possession can take three forms: (1) by directly grasping it physically, (2) by forming it, and (3) by merely marking it as ours.” Palmer, “Are Patents and Copyrights Morally Justified?” p. 838.

⁷³ I also do not need to rely on “ownership” of my labor; strictly speaking, labor cannot be owned, and labor ownership need not be relied on to show that I maintain ownership of my property as I transform it.

⁷⁴ Palmer, “Are Patents and Copyrights Morally Justified?” p. 838 (emphasis added), citing Georg W.F. Hegel, Hegel’s Philosophy of Right, trans. T.M. Knox. (1821; reprint, London: Oxford University Press, 1967), pp. 45-46.

⁷⁵ Even such advocates of IP as Rand do not maintain that creation per se is sufficient to give rise to rights, or that creation is even necessary. It is not necessary because unowned property can be homesteaded by simply occupying it, which involves no “creation” unless one stretches the concept without limit. It is also not sufficient, because Rand would certainly not hold that creating an item using raw material owned by others gives the thief-creator ownership of the item. Rand’s view even implies that rights, including property rights, only arise when there is a possibility of conflict. Rand, for example, views rights as a social concept arising only when there is more than one person. See Rand, “Man’s Rights,” in Capitalism: The Unknown Ideal, p. 321: “A ’right’ is a moral principle defining and sanctioning a man’s freedom of action in a social context.” Indeed, as Rand argues, “Man’s rights can be violated only by the use of physical force,” i.e., some conflict over a scarce resource. “The Nature of Government,” in Capitalism: The Unknown Ideal, p. 330. On p. 334, Rand attempts (unsuccessfully) to justify government, the agent that enforces rights, based on the fact that there can be “honest disagreements”—i.e., conflict—even among “fully rational and faultlessly moral” men. So, in Rand’s theory, creation per se is neither necessary nor sufficient, just as in the theory of property advocated herein.

⁷⁶ It is for these reasons that I disagree with the creation-centered approach of Objectivists David Kelley and Murray Franck. According to Franck, “Intellectual and Personality Property,” p. 7, “although property rights help ’ration’ scarcity, scarcity is not the basis of property rights. The view that it is ... appears to reverse cause and effect in that it sees rights as a function of society’s needs rather than as inherent in the individual who in turn must live in society.”

I am not sure what it means to say that rights, which are relational concepts that only apply in a social context, are “inherent” in an individual, or that they are “functions” of anything. The former notion verges on the positivistic (in implying rights have a “source,” as if they could be decreed by God or government), and the latter borders on the scientistic (in using the precise mathematical and natural-sciences notion of “functions”). And the argument for property rights is not based on a need to “ration” scarce items, but, instead, on the need of individuals to employ means to achieve ends, and to avoid interpersonal conflict over such means. Thus, scarcity is not the “basis” for property rights, but a necessary background condition that must obtain before property rights can arise or make sense; conflict can arise only over scarce resources, not abundant ones. (As pointed out in the preceding footnote, Objectivism also holds that conflict-possibility is just such a necessary condition for property rights.)

Moreover, the scarcity-based argument set forth here is no more a “function of society’s needs” than is Franck’s Objectivist approach. Franck believes that men “need” to be able to create things in order to survive—in a social setting where the presence of other men makes disputes possible. “Thus,” law should protect rights to created things. But the scarcity-based argument recognizes that men “need” to be able to use scarce resources and that this requires conflicts to be avoided; thus, law should allocate property rights in scarce resources. Whatever the relative merits of the creation-based and the scarcity-based positions, the scarcity argument is not more collectivist than the creation argument, and the creation argument is not more individualist than the scarcity argument.

Kelley, in “Response to Kinsella,” p. 13, writes:

Property rights are required because man needs to support his life by the use of his reason. The primary task in this regard is to create values that satisfy human needs, rather than relying on what we find in nature, as animals do.... [T]he essential basis of property rights lies in the phenomenon of creating value....Scarcity becomes a relevant issue when we consider the use of things in nature, such as land, as inputs to the process of creating value. As a general rule, I would say that two conditions are required in order to appropriate things in nature and make them one’s property: (1) one must put them to some productive use, and (2) that productive use must require exclusive control over them, i.e., the right to exclude others.... Condition (2) holds only when the resource is scarce. But for things that one has created, such as a new product, one’s act of creation is the source of the right, regardless of scarcity.” (emphasis added).

My reasons for disagreeing with Kelley here should be apparent, but let me point out that all human action, including creation of “values,” has to rely on the use of scarce means, that is, the material stuff of the world. Each act of creation employs things made of already existing atoms; neither this fact, nor the recognition of it, is animal-like in any pejorative sense. That men, as opposed to animals, wish to create higher-order values by using scarce resources does not change this analysis. Second, Kelley advocates two separate rules for homesteading scarce resources: by first use of the resource, and by creating a new, useful, or artistic pattern with one’s own property, which gives the creator the right to stop all others from using a similar pattern, even with their own property. As discussed below, these two homesteading rules are in conflict, and only the former can be justified. Finally, Kelley states that the creator of a new product owns it because he created it, regardless of scarcity. If Kelley here means a tangible product, such as a mousetrap, such a good is an actual, scarce, tangible thing. Presumably, the creator owned the scarce raw materials which he transformed into the final product. But he does not need to have a right in the ideal object of the mousetrap-idea or pattern in order to own the final product itself; he already owned the raw materials, and still owns them after he reshapes them. If Kelley instead means that, by creating a pattern or idea, one acquires the right of control over all others’ scarce resources, then he is advocating a new type of homesteading rule, which I criticize below.

⁷⁷ See, e.g., Murray N. Rothbard, Economic Thought Before Adam Smith: An Austrian Perspective on the History of Economic Thought, vol. 1 (Brookfield, Vt: Edward Elgar, 1995), p. 453: “It was, indeed, Adam Smith who was almost solely responsible for the injection into economics of the labour theory of value. And hence it was Smith who may plausibly be held responsible for the emergence and the momentous consequences of Marx.” Even otherwise sound thinkers sometimes place undue stress on the importance of labor to the homesteading process and its ability to be “owned.” Rothbard himself, for instance, implies that an individual “owns his own person and therefore his own labor.” Rothbard, “Justice and Property Rights,” p. 284, emphasis added; see also Rothbard, The Ethics of Liberty, p. 49. It is a misleading metaphor to speak of “owning one’s labor” (or one’s life or ideas). The right to use or profit from one’s labor is only a consequence of being in control of one’s body, just as the right to “free speech” is only a consequence, or a derivative, of the right to private property, as Rothbard recognized in The Ethics of Liberty, esp. chap. 15.

⁷⁸ See also Reisman, Capitalism, pp. 388–89.

⁷⁹ Hoppe, A Theory of Socialism and Capitalism, pp. 139-41, 237 n. 17.

⁸⁰ see McElroy, “Intellectual Property: Copyright and Patent”; Roy Halliday, “Ideas as Property,” Formulations 4, no. 4 (Summer 1997); Bouckaert, “What is Property?” pp. 804-5; Palmer, “Intellectual Property: A Non-Posnerian Law and Economics Approach,” pp. 280, 291-95; Palmer, “Are Patents and Copyrights Morally Justified?” pp. 821 n. 8, 851-55, 864; and Richard O. Hammer, “Intellectual Property Rights Viewed as Contracts,” Formulations 3, no. 2 (Winter 1995-96).

⁸¹ See, e.g., Kinsella, “A Theory of Contracts”; Rothbard, The Ethics of Liberty, chap. 19; Williamson M. Evers, “Toward a Reformulation of the Law of Contracts,” Journal of Libertarian Studies 1, no. 1 (Winter 1977): 3-13; and Randy E. Barnett, “A Consent Theory of Contract,” Columbia Law Review 86 (1986): 269-321.

⁸² Under the international law meta-rule pacta sunt servanda (contracts are to be observed), contracts between sovereigns (states, in the international law context) create a “law of the agreement” between the parties. See Paul E. Comeaux and N. Stephan Kinsella, Protecting Foreign Investment Under International Law: Legal Aspects of Political Risk (Dobbs Ferry, N.Y.: Oceana Publications, 1997), chaps. 2, 5.

⁸³ For a definition of privity of contract, see Black’ s Law Dictionary, 6th ed. (St. Paul, Minn.: West Publishing, 1990), p. 1199. See also, in the IP context, Bouckaert, “What is Property?” pp. 795, 805.

⁸⁴ Hoppe, A Theory of Socialism and Capitalism, pp. 139-41, 2 37 n. 17.

⁸⁵ Rothbard, The Ethics of Liberty, p. 123.

⁸⁶ Palmer, “Are Patents and Copyrights Morally Justified?” p. 853. Palmer also quotes the following illuminating passages.

Hegel argued:

The substance of an author’s or an inventor’s right cannot in the first instance be found in the supposition that when he disposes of a single copy of his work, he arbitrarily makes it a condition that the power to produce facsimiles as things, a power which thereupon passes into another’s possession, should not become the property of the other but should remain his own. The first question is whether such a separation between ownership of the thing and the power to produce facsimiles which is given with the thing is compatible with the concept of property, or whether it does not cancel the complete and free ownership on which there originally depends the option of the single producer of intellectual work to reserve to himself the power to reproduce, or to part with this power as a thing of value, or to attach no value to it at all and surrender it together with the single exemplar of his work. (Hegel’s Philosophy of Right, p. 55, quoted in Palmer, “Are Patents and Copyrights Morally Justified?” p. 853 n. 138)

And, as Kant noted:

Those who regard the publication of a book as the exercise of the rights of property in respect of a single copy—it may have come to the possessor as a [manuscript] of the author, or as a work printed by some prior publisher—and who yet would, by the reservation of certain rights, ... go on to restrict the exercise of property rights, maintaining the illegality of reproduction—will never attain their end. For the rights of an author regarding his own thoughts remain to him notwithstanding the reprint; and as there cannot be a distinct permission given to the purchaser of a book for, and a limitation of, its use as property, how much less is a mere presumption sufficient for such a weight of obligation? (Immanuel Kant, “Was ist ein Buch?” in Die Metaphys ic die Sitten, ed. W. Weischedel [Frankfurt a.M..: Suhrkamp Verlag, 1977], p. 581, translated and quoted in Palmer, “Are Patents and Copyrights Morally Justified?” p. 853 n. 138)

For an alternative translation, see Immanuel Kant, Essay Three: Of the Injustice of Counterfeiting Books, trans. John Richardson, ed. and rev. Stephen Palmquist (Philopsychy Press, 1994).

⁸⁷ Rothbard, The Ethics of Liberty, p. 123.

⁸⁸ Kinsella, “Knowledge, Calculation, Conflict, and Law”; Jörg Guido Hülsmann, “Knowledge, Judgment, and the Use of Property,” Review of Austrian Economics 10, no. 1 (1997), p. 44.

⁸⁹ Of course, in anarcho-capitalism, it is difficult to predict what extensive contractual regimes, networks, and institutions will arise. Various enclaves or communities may well require their customers, patrons, or “citizens” to abide by certain IP-like rules. On anarcho-capitalism, see, e.g., Hans-Hermann Hoppe, “The Private Production of Defense,” Journal of Libertarian Studies 14, no. 1 (Winter 1998-1999): 27-52.

⁹⁰ Palmer, “Intellectual Property: A Non-Posnerian Law and Economics Approach,” pp. 280, 292-93; and Palmer, “Are Patents and Copyrights Morally Justified?” pp. 854-55.

⁹¹ UTSA, § 1; Halligan, Restatement of the Third Law—Unfair Competition: A Brief Summary,” § 40, comment d.

⁹² On responsibility for conduct of another or tor conspiracy, see, e.g., Texas Penal Code, §§ 7.02 (Criminal Responsibility for Conduct of Another), and 15.02 (criminal conspiracy). For definitions of “abet,” “accessory,” “accomplice,” “aid and abet,” “concert,” and “conspiracy,” see Black’s Law Dictionary.

⁹³ Palmer, “Intellectual Property: A Non-Posnerian Law and Economics Approach,” p. 280.

⁹⁴ see Palmer, “Intellectual Property: A Non-Posnerian Law and Economics Approach,” p. 281; and Palmer, “Are Patents and Copyrights Morally Justified?” pp. 831, 862, 864-65.

⁹⁵ These and other patents may be retrieved at http://www.delphion.com, http://www.uspto.gov/patft/index.html, or http://www.patentgopher.com. See also “Wacky Patent of the Month,” http://colitz.com/site/wacky.htm; IBM, “Gallery of Obscure Patents,” http://www.patents.ibm.com/gallery; and Greg Aharonian, “Bustpatents,” http://www.bustpatents.com.

⁹⁶ Final Report, National Commission on New Technological Uses (CONTU) of Copyright Works, July 31, 1978 (Washington, D.C.: Library of Congress, 1979); Apple Computer, Inc. v Franklin Computer Corporation, 714 F2d 1240 (3d Cir 1983); NEC Corp. and NEC Electronics, Inc. v Intel Corp., 1989 Copr.L.Dec. ¶ 26,379, 1989 WL 67434 (ND Cal 1989).