Intellectual property and its discontents

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By any material measure, this is the greatest of times to be alive. Technological innovation has resulted in higher productivity and living standards across the planet. Even many infected with the AIDs virus, albeit still awaiting a cure, are living full and productive lives.

This didn't just happen by accident. Make no mistake: Our lives have been made healthier, more pleasant and more productive because of the property-rights model of innovation, where those who invest their time, money, creativity and effort in developing new products and services get to direct their own efforts, own the results and profit from their inventions.

An increasing number of workers and investors are finding a home in the innovative and creative professions. It's called the information economy. The U.S. Patent Office says applications for patent, copyright and trademark protection have exploded, and that they have trouble keeping up with innovation.

But some attack this successful property-rights model of innovation. They reflect a few, vocal group activists who insist there is something terribly wrong with the way research and innovation is done. And they want it changed.

These activists, perhaps best broadly described as the free culture movement, cloak a radical agenda beneath their innocuous idea that "information wants to be free." They demand that nations (and even individual U.S. states) pass legislation requiring purchase of open-source software. They are uncomfortable with corporations directing investment in research and development and owning their innovations.

The activists thus want to radically change how pharmaceutical innovation is accomplished. They propose that governments should nationalize intellectual property, levy new taxes to fund R&D, and then incentivize R&D through prizes administered by new government-sponsored enterprises or, even better, international nongovernmental organizations (NGOs) staffed by technocrats unaccountable to voters.

The free culture movement asserts that strong intellectual property protection inhibits incremental innovation, and that ownership tempts owners to horde intellectual property and to keep it away from the public.

But these assertions are obviously false. It is precisely ownership of intellectual property that makes it widely available. The much-vaunted public domain is better viewed as a vast wasteland of works unknown and practically unavailable, because no one has an incentive to make them available.

Disney's ownership of Mickey Mouse doesn't inhibit anyone from creating something new inspired by Mickey; it simply keeps them from stealing Mickey and making him their own. That someone owned "The Honeymooners" TV show did not keep Hanna-Barbera from creating the "Flintstones," it just kept them from calling their new cartoon "The Honeymooners" and naming the main character Ralph Kramden.

And a record company expecting to be compensated for its venture capital investment in a band it discovered playing in a garage somewhere does not keep other artists from innovating, and does not keep teenagers from enjoying music. It just keeps other artists and teenagers from stealing the property of others. Tuesday's Supreme Court decision was not a defeat for intellectual property, and it does not preclude the Recording Industry Association of America (RIAA) or other owners of intellectual property from enforcing their rights. It just denies them use of subpoenas as a means to do so.

Lately the free culture activists have taken to using the Third World as emotional cover for their campaign to control what others create and to take what they desire from those to whom it belongs. They blame the proprietary software industry for the Third World's lack of technological expertise, blame the entertainment industry for cultural destruction, and blame the pharmaceutical industry for the lack of cures. This is particularly detestable since the Third World has the most to gain from the continued spread of innovation.

No change in policy is necessary to allow a free culture model to compete with the proven proprietary model of innovation. Anyone is free to develop new drugs, write new software, write a song or produce a movie and then exert as little control over their intellectual property as they wish.

But instead of demonstrating the superiority of their proposed free culture model, they attempt to undermine intellectual property through changing purchasing practices at the state and national level, and taking over international organizations like the World Intellectual Property Organization (WIPO).

Policymakers should resist the call of the free culture movement to give favorable treatment to free culture products under the assumption they are somehow economically or morally superior. Let free culture proponents try to compete. But in the meantime, it would be foolish to weaken or undermine the property-rights model of innovation -- the model that continues delivering incredible benefits to society.

Tom Giovanetti is president of the Institute for Policy Innovation (IPI), a public policy research organization with offices in D.C. and Dallas.