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Nature of Property: Objective or Subjective

- - - - - property patents trade secrets law inventions Rearden metal

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#1
Swerve of Shore

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Having introduced myself already, I am now making my first substantive post. This is the first of an intended series of interrelated posts. While it might change based on the flow of discussion, I expect to advance the following argument: because property rights are subjective by nature and must be defined by government, democracy must therefore be a more fundamental principle than property rights.

I question whether there are any fundamental property rights or whether all property rights flow from the social contract, i.e., are necessarily defined, and therefore created, by government. The most difficult case, to which I plan to devote my next post, is the question of ownership of natural resources, including land. This post explores what seems to be a far simpler case, a case closer to being fundamental: ownership of inventions of the mind. To put it in terms of Atlas Shrugged, I will save the case of d’Anconia copper for my next post and take on Rearden metal here.

The principle that one should own the product of one’s own invention seems, at a minimum, to be reasonable: among other things, it encourages progress and productivity. But I wonder whether it is truly a fundamental and inviolable principle. The case becomes more difficult when we think of the most common type of invention in this era: inventions for hire. If one man (or corporation) hires another (or an entire workforce) to develop an invention, should the invention belong to the one who puts up the money or the one(s) whose mind and work actually creates the invention? But, let’s leave that aside and take the easier case: Rearden metal, which was created almost entirely by Henry Rearden’s tireless individual efforts of sweat and mind over many years.

Unless Rearden keeps the metal entirely to himself, property rights in even this most personal of inventions must be defined by government. Under current U.S. law (and that of most other nations), Rearden has essentially two options for maintaining his property rights: trade secret protection and patent filing protection. If he chooses the first option, trade secret protection, Rearden’s rights are perpetual … at least until somebody else duplicates his invention, either by independent research or by reverse engineering. As long as Rearden puts contracts and other confidentiality procedures in place, the law protects him from others wrongfully appropriating his trade secrets, principally by giving him the right to monetary compensation (i.e., transferring the thief’s profits to Rearden). Rearden’s other option is to file for a patent on his invention, which requires him to publicly disclose all of the invention details, but provides him with a monopoly on it over a fixed number of years, even against those who might independently develop the same invention. Patent law is clearly a creation of government, designed to balance the rights of the individual inventor against the collective benefit to the public of disclosure of the details of the invention.

It would be difficult to argue that the exact contours of this legal regime can be objectively determined. At a minimum, the government must make a subjective decision as to the number of years that the patent monopoly is afforded. Until reading The Virtue of Selfishness, I thought that this fact was an indictment of Objectivism itself. However, I now see that Ayn Rand recognized the need for government to set out the details and that there could be well-intentioned disputes among the law makers: Objectivism, it seems, only requires that government set out its standards in an objective way (“the rule of law”) rather than through arbitrary and subjective guidelines that must be interpreted by an outside arbiter (“the rule of man”). The question I have for this forum is whether there is a central kernel to property rights in inventions that objective reason requires. That is to say, is there some fundamental property right that no legitimate government can modify or impinge?
In any compromise between food and poison, it is only death that can win. - Ayn Rand, Atlas Shrugged

But not all compromises involve only food or poison, so let's discuss!

#2
mdegges

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The principle that one should own the product of one’s own invention seems, at a minimum, to be reasonable: among other things, it encourages progress and productivity. But I wonder whether it is truly a fundamental and inviolable principle. The case becomes more difficult when we think of the most common type of invention in this era: inventions for hire. If one man (or corporation) hires another (or an entire workforce) to develop an invention, should the invention belong to the one who puts up the money or the one(s) whose mind and work actually creates the invention? But, let’s leave that aside and take the easier case: Rearden metal, which was created almost entirely by Henry Rearden’s tireless individual efforts of sweat and mind over many years.

It would be difficult to argue that the exact contours of this legal regime can be objectively determined. At a minimum, the government must make a subjective decision as to the number of years that the patent monopoly is afforded. Until reading The Virtue of Selfishness, I thought that this fact was an indictment of Objectivism itself. However, I now see that Ayn Rand recognized the need for government to set out the details and that there could be well-intentioned disputes among the law makers: Objectivism, it seems, only requires that government set out its standards in an objective way (“the rule of law”) rather than through arbitrary and subjective guidelines that must be interpreted by an outside arbiter (“the rule of man”). The question I have for this forum is whether there is a central kernel to property rights in inventions that objective reason requires. That is to say, is there some fundamental property right that no legitimate government can modify or impinge?


An interesting question. One of my family members works for Amazon and he was deciding whether to submit an invention idea to Amazon, or just patent it himself. At this company, employees can submit an invention idea, and Amazon will determine if they want to invest in it or not. If they believe it's a good idea, they will pay all the thousands of dollars in legal fees to patent it. But because they've done that, you (as the inventor) have sold all your rights to the product. You can decide to actually produce your item, but if Amazon has already paid to own it, they have the power to determine what percentage of your profits they will take. If Amazon decides to produce the item, you won't get any profits. But either way, you'll have some amount of 'fame' around the office because you will be an 'inventor.'

Although you get no money for giving the company your idea, they've spent thousands to protect it. If you're not able to pay all that money, it's something to consider, especially if you aren't in the business field and you don't want to spend a lot of time/money on it. This is the boat my family member's in. If you get someone else (namely, a company) to patent your idea, the chance of it actually being produced is greater than if you were to do it yourself (while having a full time job and other commitments).

I think the knowledge that you created an idea is good enough for most people, especially if it isn't their primary concern. Even if your invention is mass-marketed with Amazon stickers all over it, you'll know that you created the idea and that it was good enough to actually be backed and marketed. In this sense, the world won't know that you created it, but you will. Do you deserve any other rights to the product because you came up with the idea? I would say no.

#3
Nicky

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The question I have for this forum is whether there is a central kernel to property rights in inventions that objective reason requires.

I think your question is "why are property rights in inventions objective and rational?". But I could be wrong. I'll answer anyway:

Property rights in inventions are objective for the same reason all property rights (and in act all rights) are objective: all individuals have the same rights, and no one's rights come at the expense of another's. And they are rational because they allow individuals to be rational, the only way one can be rational: by being free.

That is to say, is there some fundamental property right that no legitimate government can modify or impinge?

Yes, all of them.

Patent law is clearly a creation of government, designed to balance the rights of the individual inventor against the collective benefit to the public of disclosure of the details of the invention.


All laws are the creation of the government. But other than that, you're wrong. A patent is meant to allow an inventor to commercialize their invention (share it with the world) without having it be stolen.

The time limit should be long enough to allow the inventor to fully commercialize the invention. It shouldn't "balance" between rights and "the public good".

The reason for the limit has nothing to do with the public good. It has to do with the nature of inventions: they become obsolete as technology advances.

In the case of Rearden steel for instance, the patent should last until Rearden steel becomes an obsolete material (obsolete in the specific ways Rearden envisioned it to be used - just because 1000 years from now some sculptor might choose Rearden steel, on a whim, to build his statue out of it, that doesn't mean Rearden steel hasn't yet become obsolete). But as long as Rearden steel remains a practical solution for rail, bridges, etc., Rearden should keep his "monopoly" on it.

Edited by Nicky, 02 February 2012 - 01:34 PM.


#4
Swerve of Shore

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Nicky, your restatement of my question as "why are property rights in inventions objective and rational?" captures my broader inquiry reasonably well. But, with this first post, I am asking a more specific question: what elements of the property rights in inventions are truly fundamental and what elements are just a creation of government. Again, the specific number of years of a patent monopoly cannot be fundamental: government must make a more or less arbitrary choice. It is not true that the time limit for patents relates to technological obsolescence, but the obsolescence period varies from product to product and so is inconsistent with a fixed period for all patents. If there IS some fundamental element in the property right in inventions then I believe it would relate to the trade secret line rather than the patent side. In fact, I would not be surprised if some Objectivists found the patent regime to be a looters' creation: what gives the government the right to give one inventor a monopoly over an invention that another inventor might independently develop? The problem with this view is that many products can be easily reverse engineered, so trade secret protection is not adequate to give inventors an incentive to commercialize their inventions. As a student of legal theory, I can say with certainty that the time limit for patents reflects a balancing of rights. The specific intention is that the invention falls into the public domain at the end of the period, which would be meaningless if it has become obsolete. Having said this, it is actually the requirement of full disclosure in patent filings that reflects a notion of the public good, not the time limit. One could conceive of a patent regime that gave a monopoly over an invention for a period of time but did not require disclosure - i.e., a patent regime that worked in parallel with broader trade secret protection. Under such as regime, it is the rights of the original developer that are being balanced against the rights of a potential subsequent developer; collectivist rights or the public good would not be considered per se.

Michele - That is an interesting conundrum your relative faces. I'm curious: was the invention developed in whole or in part "on company time" or using company resources? Or was it entirely in the inventor's spare time at home?
In any compromise between food and poison, it is only death that can win. - Ayn Rand, Atlas Shrugged

But not all compromises involve only food or poison, so let's discuss!

#5
Nicky

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I'm responding to Swerve of Shore's post above, in all of these. I just got lazy about quoting him properly. Also, I think the first answer explains my point fully. The rest are just a conversation.

But, with this first post, I am asking a more specific question: what elements of the property rights in inventions are truly fundamental and what elements are just a creation of government.

The concept of rights, including the right to life, liberty and property, is not a legal concept first. It's a philosophical one (political, specifically). As such, it is more fundamental than any legal concept.

A legal system serves to concretize abstract political principles, not to make up its own principles. It does not make up any rights, it merely applies the political principle of rights to a specific society and economy. The reason why philosophers aren't concerned with how long a patent in IT should be is because not all societies and economies have an IT sector, and the ones that have them don't have the same kind of IT sector. So that issue is too concrete for Politics to handle. But the law itself doesn't solve the issue from scratch: it merely applies the principle of rights to the IT sector of a specific economy, in a specific point in time. Just because a law isn't "fundamental", and a creation of the government (all laws are), that doesn't mean it's arbitrary. It's still the application of something more fundamental.

If a law is based only on logic and the reality of the economy in question, then there is nothing arbitrary about it. It is never necessary to add anything arbitrary to any law. There is always an objective solution, to any problem. Arbitrary answers are always the result of someone refusing to actually solve the problem, they are never the solution.


But, with this first post, I am asking a more specific question: what elements of the property rights in inventions are truly fundamental and what elements are just a creation of government. Again, the specific number of years of a patent monopoly cannot be fundamental: government must make a more or less arbitrary choice.

No, they don't. They need to study the marketplace, and determine how long it takes for inventions in an industry to be fully commercialized. They need to set the length of patents accordingly.

It is not true that the time limit for patents relates to technological obsolescence, but the obsolescence period varies from product to product and so is inconsistent with a fixed period for all patents.

I never said all patents have to have the same length. A category of patents should, but there can be more than one category, depending on various relevant criteria.

In fact patent length should not be set in stone, even within a category of patents. Specialized Courts should be allowed to make judgments on the length of individual patents, whenever there is proof that the length prescribed by the law is inappropriate.

. In fact, I would not be surprised if some Objectivists found the patent regime to be a looters' creation:

Would they? So some Objectivists would argue that when Thomas Edison invented the phonograph, and exercised his right to be the only one who can make and sell it, he committed theft? Who are these Objectivists, and what and from whom do they claim Mr. Edison stole?

As a student of legal theory, I can say with certainty that the time limit for patents reflects a balancing of rights.

I don't doubt it. I was responding to your claim that this is how things should be. They shouldn't. Patents should be aimed strictly at preserving the inventors' rights, not any kind of "common good".

Edited by Nicky, 05 February 2012 - 03:27 PM.


#6
mdegges

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I'm curious: was the invention developed in whole or in part "on company time" or using company resources? Or was it entirely in the inventor's spare time at home?


I believe he developed the idea on his own time, but I'm sure he discussed it with friends in and out of work. As far as I know, the actual product hasn't been patented or developed yet.

As a student of legal theory, I can say with certainty that the time limit for patents reflects a balancing of rights. The specific intention is that the invention falls into the public domain at the end of the period, which would be meaningless if it has become obsolete. Having said this, it is actually the requirement of full disclosure in patent filings that reflects a notion of the public good, not the time limit.


That's something I didn't know, but it's not suprising.

#7
Swerve of Shore

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Thanks, Nicky. Some very good points. I do still maintain that certain laws are of necessity arbitrary. For example, the law that says you must drive on the right (or the left) side of the street. This example is so trivial that I don't seriously think it could be an indictment of Objectivism. More interesting is the area of social mores, such as whether burping after a meal is polite or impolite. This sort of thing, while felt deeply by people of each culture, are clearly culturally relative, not objectively defined. And this kind of social mores have been codified as law at times: the Jewish Law found in Deuteronomy is an example. Consider whether our drug and prostitution laws are also examples. I do not think Objectivism supports any such laws, so they do not advance my hypothesis that the rights posited by Objectivism are culturally relative. Stay tuned for my next post on ownership of land and natural resources to explore this issue more deeply.

As for the Objectivist who would consider the patent law to be a looter's creation, I do not know whether there is any such person. Such a person would not object to Mr. Edison profiting from his invention to the greatest extent he can. Rather, he or she would object to the patent law preventing a subsequent independent inventor from profiting from his or her own invention.
In any compromise between food and poison, it is only death that can win. - Ayn Rand, Atlas Shrugged

But not all compromises involve only food or poison, so let's discuss!

#8
Hairnet

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This is where I may diverge heavily from Objectivists in my understanding of the nature of government. However it is the very reason that I am not an Anarchist or Libertarian, so maybe people here will agree with me on this.

I read your question this way "So yeah we agree on property rights, but does that mean anything".

I say no, and this is the reason we need a state.

All good men know in principle that we should respect one another's rights, and that people have certain general rights, such as the right to life, liberty, and property.

However when it comes down to what all of that means, all we know is that we must be in agreement for society to function. Once everyone agrees on capitalism as a system, we have to start asking questions about how to deal with certain issues that are not obvious ethical issues. While we all know theft, rape, kidnapping, and murder is wrong, things like the status of children, animals, bodies of water, and intellectual property could be hotly contested by two reasonable, well meaning, ethical men. And in all arguments about all issues I have seen that both sides have good points.

However, a geographic area must have one answer to these questions otherwise what was once a matter for lawers to squabble about to judges, becomes a matter of diplomats attempting to talk stop a war between to rival gangs who disagree on the matter.

However does this mean property is subjective? Absolutely not, I believe that these questions are beyond the scope of general politics. These questions would be best answered and debated by philosophers of law, who would argue for a legal code that fits the most properly with the principles of capitalism.
Peace is not an absence of war, it is a virtue, a state of mind, a disposition for benevolence, confidence, justice. - Baruch Spinoza

#9
Grames

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Hi. I'm following this topic and intend to reply to it at some point.

#10
Grames

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I may be less of a student of legal theory than 'Swerve of Shore' but I do have the experience of two years employment as a patent examiner at the U.S. Patent and Trademark Office (digital and pulse communication technologies) and some familiarity with applying the principles of Objectivism to the justification of intellectual property.

Having introduced myself already, I am now making my first substantive post. This is the first of an intended series of interrelated posts. While it might change based on the flow of discussion, I expect to advance the following argument: because property rights are subjective by nature and must be defined by government, democracy must therefore be a more fundamental principle than property rights.

It might first be asked whether all rights are subjective by nature or just property rights. No, actually what should first be asked is "what is a right?"

The principle that one should own the product of one’s own invention seems, at a minimum, to be reasonable: among other things, it encourages progress and productivity. But I wonder whether it is truly a fundamental and inviolable principle.

It is a good question, because that "progress and productivity" are good things is not a fundamental principle but a derived principle. Appealing to the public good (and even employing public good theory in any form) as a justification for non-public individual rights employs the logical fallacy of reification, treating the abstraction "public" as if it were a single entity, and also the fallacy of division in assuming an attribute of the whole can be assigned to all of its parts.

Patent law is clearly a creation of government, designed to balance the rights of the individual inventor against the collective benefit to the public of disclosure of the details of the invention.

All laws are clearly the creation of governments. It is not clear that the underlying rights are the creations of government.

One might say the same thing of the establishment of government offices for registering ownership claims to land. The case can be made that rights to land and other property are prior to (justified apart from) a theory of government. It is often a rhetorical move employed in arguing about intellectual property (either in favor or against) to make an analogy to real property but without justifying why land is property. We do need to cover this, and it should be considered in this thread rather than a subsequent thread because it is not a separable issue. The principle of property is destination to which all such threads lead, so it would also be redundant.

It would be difficult to argue that the exact contours of this legal regime can be objectively determined. At a minimum, the government must make a subjective decision as to the number of years that the patent monopoly is afforded. Until reading The Virtue of Selfishness, I thought that this fact was an indictment of Objectivism itself. However, I now see that Ayn Rand recognized the need for government to set out the details and that there could be well-intentioned disputes among the law makers: Objectivism, it seems, only requires that government set out its standards in an objective way (“the rule of law”) rather than through arbitrary and subjective guidelines that must be interpreted by an outside arbiter (“the rule of man”). The question I have for this forum is whether there is a central kernel to property rights in inventions that objective reason requires. That is to say, is there some fundamental property right that no legitimate government can modify or impinge?

As a minor principle of practical wisdom, the selection of a value from within a range is not to be condemned as arbitrary when the criteria of the range itself is not arbitrary. "Age of consent" laws vary according to the activity and the state but all are based on discriminating between a child and an adult, which are valid concepts having real objective referents regardless of the fuzziness of the border between them.

In fact, I would not be surprised if some Objectivists found the patent regime to be a looters' creation: what gives the government the right to give one inventor a monopoly over an invention that another inventor might independently develop?

That question has in fact been asked here by posters otherwise sympathetic to the idea of rights. The response is to unpack and review the full identification and justification of rights.

The problem with this view is that many products can be easily reverse engineered, so trade secret protection is not adequate to give inventors an incentive to commercialize their inventions. As a student of legal theory, I can say with certainty that the time limit for patents reflects a balancing of rights. The specific intention is that the invention falls into the public domain at the end of the period, which would be meaningless if it has become obsolete. Having said this, it is actually the requirement of full disclosure in patent filings that reflects a notion of the public good, not the time limit. One could conceive of a patent regime that gave a monopoly over an invention for a period of time but did not require disclosure - i.e., a patent regime that worked in parallel with broader trade secret protection. Under such as regime, it is the rights of the original developer that are being balanced against the rights of a potential subsequent developer; collectivist rights or the public good would not be considered per se.

Actually the disclosure is logically necessary to give context and meaning to the language used in the claims. Bare claims could not be understood and therefore not enforced. The standard of "one of ordinary skill in the art" is repeatedly employed in U.S. patent law, but it must be known from which art "one of ordinary skill" is to be drawn. The language employed in the case law is to interpret claims "in light of the specification" but without importing restrictions on the claims from the specification.



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