So who decided to privatize IPRs?

Facebook was already problematic, as I’ve written before. When you post your IPR on Facebook (your logo, trademark, music, etc.), Facebook has effectively an unlimited right to do with your IPR whatever they want. For free.

But there is more: Facebook has asked trademark owners to register their trademark with Facebook. What does that mean? Can Facebook grant trademark protection? How will Facebook decide between competing claims? Is Facebook creating a new, privatized form of “Facebook-Mark”, the “ⒻⓂ”? Does Facebook recognize geographic boundaries? Many questions are open, and you will not find many answers on the Facebook website. Trust me, I tried.

Similar things happen elsewhere. On the website, you are invited to post your ideas, and then they are “protected”.

They are not actually protected, of course, but the site owners would like to put the government office of patent and trademarks out of work.

Interestingly, the site offers to protect “ideas”, which are never protected under existing IPRs.

The creative designers have been at it too: allows you to register your work, and embeds a digital code, so that the work can be traced to the original creator. Members can buy a digital protection system for their work, before they share it with others.

So what we see before us are attempts at privatizing and spreading IPRs.  I will call such privatized IPRs “Pirate IPRs”.

Is that a good idea, and could it work?

To see if it’s a good idea, we should take a look at the original purpose of IPRs.

All existing formal IPRs have a specific function. An Intellectual Property Right is a government created right to restrict other people’s behavior. An IPR-holder obtains from the government a limited, specific monopoly, subject to specific limitations and conditions.

The features of that monopoly, such as its duration, and which behavior it targets, depend on the trade-off that is created with it.

Each IPR has, or is supposed to have, a trade-off, in that the monopoly, which is generally considered bad economic policy, is accepted in order to obtain a more important benefit for society.

For patents, that benefit is the disclosure of the secrets of the new invention. In theory, you can only obtain a patent if you disclose to others how they can copy your invention. So it’s a trade-off. You publish the secret, and get government protection in return.

But there are limits. It’s only for 20  years, it’s limited to a country, and it only protects the bits that are truly innovative and essential about your invention, the so-called patent claims.

Similar reasoning, but with other trade-offs, exists for other IPRs. As a result, their characteristics and conditions are different. Copyright lasts a lot longer, trademarks need to be used effectively to have protection, etc.

The general trade-off for IPRs as a concept, is that they need to be structured in such a way that they promote and encourage innovation, and cause the economy as a whole to be more innovative, and increase productivity.

So does privatizing a system like this make sense?

In order to answer that question, we have to simply ask: “Where’s the trade-off?”

And here’s the catch: I haven’t found it yet. This privatization of IPRs is based on the concept “I own my ideas”. But that concept is fundamentally wrong.

Ideas are free. They always have been. Freedom of ideas is not only an essential part of the freedom of speech in a democratic society, but the right to copy is also a fundamental principle of the free-market economy. IPRs and exclusive rights to specific expressions of an idea are exceptions to the general rule of freedom of enterprise.

It is also clear that any privatized system of IPR will cause everyone to want to own as much as possible, with a protection as wide as possible. Pirate IPRs would then start to cover anything and everything, and everyone would want to have a monopoly as wide as possible.

So it looks like privatisation of IPRs is actually a pretty crazy idea. It will not promote innovation, it will slow it down. If not properly resisted, it may seriously harm innovation.

Luckily, it can’t work.

“Old” IPRs only exist because governments enforce them. When you download a song without paying for it, you are actually a criminal. You’re in good company, because more than 95% of all downloads is “illegal”. Just as well our law enforcement system doesn’t actually prosecute in this field, or there would be more people in jail than outside.

Already today, we see that enforcing IPRs is difficult and costly. Only deep pocket IPR holders actually go after infringers, and the few court cases we see in the area of illegal copying sometimes look more like advertisements for the Napsters of this world.

And although large companies from time to time have a go at each other on the basis of their patent portfolios, a neutral observer might mistake this for an elaborate mating dance, where each side means to impress the other, before they sit down and get to business.

As the cost of copying continues to drop, the return on investment on IPR litigation also drops.

Moreover, Pirate IPRs will not necessarily be granted the strong legal weapons available to government-created IPRs. Higher costs and lower efficiency may be hurdles too high to cross for Pirate IPRs.

Other phenomena are threatening Pirate IPRs, together with real IPRs. The declining cost of copying is set to spread to hardware production once additive manufacturing has become mainstream. Open source and creative commons approaches are likely to spread to many more elements of society, together with the increased importance of Information Technology. And finally, when the contribution of artificial intelligence overtakes the human component in innovation, and most “ideas” are generated by a Turing machine, it will probably become, in practice, impossible to own ideas.

What certainly seems to be true today, is that the idea of Pirate IPRs, if not a good one or workable one, is, at the moment, not protected or protectable. Ironic, in a way.