“You are perpetuating the insatiable greed of mega corporations by creating unjust monopoly on precious ideas,” was the accusation thrown at me by a young impressionable man-boy upon hearing what I do for a living during lunch one day. I simply reached over and appropriated his food. “This,” I said, “is the resultant mischief if people have no notion of proprietary rights.” You’ve just got served proletariat hippy.
Monopoly has long been condemned (most often justifiably so) by most as a system which breeds inefficiency and extortion. To be honest, monopoly probably deserves its reputation, but that’s not the whole story. This article will argue that some forms of monopoly, Intellectual Property Rights (IPRs) being one of them, are essential to the advancement of civilisation.
Preventing Identity Theft
No one would like to have their identity stolen. Trademarks are like identities or names, they enable consumers to identify the source of products/services, and knowing which company is responsible for them adds accountability. In a sense the monopoly provided to trademarks are beneficial to society as consumers would not be confused by two companies selling the same products but perhaps with differing quality under the same trademark.
The area where trademarks most commonly come under fire is in the monopoly of words or characteristics which are common to the trade by avaricious companies. To counter the selfish hoarding of words which should be free for public use, a firewall is normally built-in to the trademark laws of most countries, such that words or any characteristics that are descriptive of the goods/services for which the trademark is applied may not be registered. For example, if I operate a café, I cannot call it Good Coffee as those are words which other cafés would need to use to describe their products/services.
In a similar way, industrial designs also protect the identity of a product, as sometimes consumers would rely on the design of a product as a distinguishing feature. Think Coca-Cola bottles or the shape of a VW Beetle. Providing the creator of the design with a monopoly over it will also prevent other companies from using the same design on their products to confuse consumers.
“It has always seemed strange to me,” said Doc from Cannery Row by John Steinbeck, “the things we admire in men, kindness and generosity, openness, honesty, understanding and feeling, are the concomitants of failure in our system. And those traits we detest, sharpness, greed, acquisitiveness, meanness, egotism and self-interest, are the traits of success. And while men admire the quality of the first they love the produce of the second.”
Acquisitiveness (knowing that I will get something in return) is the most effective incentive for hard work. Which boy or girl would dream that one day he or she would sit behind a desk, staring at the computer for 10 hours a day, 5 days a week? Why would we then as adults subject ourselves to such an inhumane treatment? Our employers have been led to think that it is because of our unquenchable passion for the industry. But in reality, it is because it pays for the Swiss watch on your wrist, the Parisian bag in your clutch and the German car in your garage. So it is with Intellectual Property. It is a government-sanctioned monopoly which purpose is to reward the creators of technologies, art, literature and designs by ensuring that they will be able to profit from their hard work. Without this promise of remuneration, no one will be in a rush to create anything.
“The right of an inventor to his invention is no monopoly – in any other sense than a man's house is a monopoly,” saidthe 19th century senator Daniel Webster. Webster was of course referring to patent protection for inventions. To a certain extent, he is right, no one in their right mind would buy a Ferrari and give the keys away to a random stranger, would they?
Patents and industrial designs allow companies who have invested considerable resources and time in the R&D of their inventions a chance to recoup their expenses and also to profit from them (commonly for a maximum period of 20 years for patents and 25 years for industrial designs). The catch is, in order for a subject to be granted patent or industrial design protection, the subject must be “new” in the sense that it has not been exposed to the public whether by the owner or by another party using the same technology or design.
Further, for patents, the subject must not only be new, it has to have an inventive step. The requirement of an inventive step sets quite a high bar for registration. It ensures that patents are only granted to solutions that could solve problems in a way that a person having ordinary skill in the field would not have thought of. In most countries, there is also an escalating cost to the maintenance of patents. An owner would have to pay annuities in increasing amounts as the patent ages to preserve its validity.
Monopoly granted by copyright protection for creative works serves the same purpose, i.e., to reward the author’s effort and originality in creating the work of art. Take movies for example, movie studios in Hollywood pay hundreds of millions of dollars to make a summer blockbuster. How would they recoup all of this expenditure if everyone is free to copy and sell their movies? Without monopoly, the film industry would collapse into a heap of rubble like everything in a Quentin Tarantino movie.
“It ain't no fun if the homies can't have none,” sang Snoop Dogg (now known asSnoop Lion). A fact that is not known by many is that the same laws and regulations which grant monopoly to owners of IPRs can be put to more benevolent use by ensuring that crucial ideas are available to the public.
Compulsory licenses are sometimes used by governments to ensure that an important technology or work that is covered by a patent or copyright will be made available to the public if the circumstances call for it. Under a compulsory license, a person who wishes to use the patent or copyright of another person will be able to do so without first obtaining a license or consent from the IP owner. A compulsory license can be imposed on patents or copyright works of public importance. For example, the Indian government recently granted a compulsory license to a generic drug manufacturer for the cancer treating drug Sorafenib that was patented by Bayer.
IP owners can take matters into their own hands too. A collective mark can be registered by a group of people to identify themselves with a level of quality and/or other characteristics set by the group. The members of the group will all have a right to use the trademark. This effectively enables consumers to still rely on the trademark being an indication of source as well as quality, at the same time allowing other traders to get a bite of the cherry by being members of the group. We see this sort of collective mark mostly in Geographical Indications, i.e., Swiss chocolate or Champagne.
Charitable and saintly inventors may choose to disclose their patentable inventions to the public via defensive publications to ensure that another party may not own the patent to their inventions (because the invention is no longer “new”), thereby allowing them to fall into the public domain for all to use.
Creative Commons (CC) is a non-profit organization which assists copyright owners in drafting creative commons licenses. Copyright owners who are parties to creative commons licenses will allow the public to use, share or improve upon their works so long as they abide by the terms and conditions that the owner has specified. With a creative commons license, other authors can use copyright protected material knowing that they will not be sued by the copyright owner as long as they play by the owner’s rules. This allows ideas to spread freely among the populace but also affords the copyright owners some control on how their works are used.
“Taxes are not good things, but if you want services, somebody's got to pay for them so they're a necessary evil,” declared the incumbent Mayor of New York, Michael Bloomberg. Yes, monopoly may be a bit of a bummer, depending on which side of the political spectrum you are on, but it is a necessary evil at least in the forms of IPRs. The price of social, economic and technological advancement will have to be borne by those who wish for it and benefit from it.