The assumption here is that a piece of property can be used by only one person at a time. In other words, a piece of property cannot be in two places at the same time. If it is used for one thing, it cannot be used for another. If it is used by one person in order to benefit that person, another person is not allowed to take the property or the fruits of that property without permission from the owner.
The idea here is that the property is physically identifiable. It is under the control of the owner. He has the responsibility of putting it to use. If he chooses incorrectly, he suffers a loss. If he injures someone else or someone else's property, he is legally liable. The courts are in a position to determine who caused what damage, and on what basis. The injured party is entitled to restitution from the person who inflicted the injury or the damage. In other words, private property is an extension of an existing legal system that defends specific kinds of property.
A person can establish property in his name. His name belongs to him. Someone else cannot legally take credit for what the other person has physically produced. The imposter may do something that injures somebody else, and the original individual with a particular name gets blamed. This injures his reputation. He suffers a loss.
The application of property rights doctrine in the defense of the name is an extension of custom. It is an aspect of a hierarchy of responsibility. The civil government imposes negative sanctions against the theft of property, but it does so within the framework of widely shared opinions regarding the legitimacy of private property and the necessity of establishing legal liability for the use of this property.
People have property in their own physical or intellectual labor. If they use their time as a way to gain income by selling it to one person, they cannot legally sell the same labor to somebody else unless the paying party agrees.
An idea is intangible. The problem from the point of view of ownership is this: is the idea defined as property in the way that a physical invention is? This is the debate with respect to patents and copyright. If I use somebody else's idea to increase my income, have I stolen from him? Over the last 400 years, the state has increasingly said that the use of somebody else's words or ideas without paying for the use of the ideas as a form of theft. But this is only for a limited period of time. Somehow, property rights are not permanent, according to the defenders of patents and copyrights. There is a time in which the right must not be defended. Why is this? What is the ethical foundation of the state's unwillingness to enforce property rights after a specific period of time? There is no moral logic to this. It is completely arbitrary. It can be changed by politicians, and this is what they did with respect to copyright. Prior to 1978, copyright extension was 50 years if renewed in year 28. Today, it is death of the author plus 70 years. Congress passed this in 1978, and at the time, a lot of critics commented on the fact that Mickey Mouse was about to come in the public domain. But I digress.
There is a fundamental moral discontinuity involved in all patent and copyright legislation. That is the element of arbitrariness. The defense of patents and copyrights is based on the fact of a supposed ownership right. But then government says that, in the long run, it is not a good thing for the economy to make patents and copyrights permanent. This form of ownership will be used to establish a monopoly, which will lead to abnormally high profits, which will restrict access to something valuable by the public. So, U.S. politicians have put a 20-year limit on patents. It is completely arbitrary for politicians to establish a time limit. It means that they have acknowledged that patents are counterproductive, but only after 20 years. Why not 19 years? Why not five years? What is it about a patent that is a tremendous benefit to the society, but not after 20 years? There is no logical answer for this. It is completely arbitrary. It is completely political.
Do we wish to trust property rights, meaning the moral case for property rights, to the United States Congress? I don't think we should. Neither did economist Ben Rogge [ROWEguee]. He said there should be no copyright law and patent law unless they are perpetual. He recognized that the principle of arbitrary limits of time on the grant of property right is strictly political, and he did not trust the politicians to make the determination. Neither do I.
If I come up with an idea, I can legally sell the fruits of it. Somebody may be willing to pay me. But how do I establish a moral claim on my idea? It is not physical. It came to me out of the blue, perhaps. Even if it took me 20 years to figure it out, how do I establish a property right in the same sense that I establish a property right in an actual physical device? I own the device. I bought the components to build it. I put it together. Nobody is allowed to steal it from me. But why is the idea itself exclusively mine? How can I prove that I did something unique that nobody else could have done to get the idea? I can show that I did something unique to build the device. I can show receipts for the equipment. I can show that I hired somebody to help me. I have all kinds of proof that a particular device was the product of my money and my effort. But how do I do that with respect to an idea? I can't. It's just my say-so.
Alexander Graham Bell got the patent for the telephone because he got to the patent office two hours before his competitor. His legal advantage was immense, but it was strictly the product of federal law. The society as a whole would have been far more benefited if the other individual had been able to sell his idea, too. There would have been more phones, cheaper phones, and so forth. The public would have decided on the winner. But the public was not given an opportunity to decide. The federal patent office had exclusive right to grant the benefit to Bell. That decision created the most important private monopoly of the 20th century. The rise of the Internet took place primarily because the Supreme Court ceased to defend the monopoly that the Bell companies and AT&T possessed. That was the Carterfone decision after 1975. That led to the greatest developments in telecommunications in a century.
I can sell my physical labor legally. I don't see any case for my being able to establish a property right in the product of my mind, as distinguished from a product by my labor, money, and equipment. I can prove that what I did was unique in terms of physical labor. I can't establish this with respect to an idea. It doesn't hurt me that somebody else takes one of my ideas and does something productive with it. This is why I have pulled the copyrights on all of my books. But they may not be legally rewritten in my name. I own my reputation.
Ownership in the form of physical labor and physical implements has been established in almost every society from the beginning of time. Patents were the product of the late 18th century. Copyright was primarily a matter of state monopoly up until the mid-19th century. The government of Great Britain in 1629 established the monopoly over the production of English language Bibles by Oxford University and Cambridge University. This kept Bibles from being produced in North American English colonies. As soon as the revolution began in 1775, Congress authorized the production of King James Bibles within the colonies. The story is here. What kind of legal system could authorize a monopolistic sale of Bibles by two bureaucratic educational institutions? It was preposterous. But it was a law of the land for over two centuries.
A great article on the distinction between copyrighting ideas vs. copyrighting the container of ideas was written by John Perry Barlow in 1994, the year of the graphical user interface. He is a serious legal philosopher. He was a co-founder of the Electronic Freedom Foundation. He was also a song writer for the Grateful Dead. This article is here.
The Mises Institute has published articles on Patents. Here are links.
Here is Mises Institute scholar David Gordon's review of Against Intellectual Monopoly (2008).
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