Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.

Copyright Notice: We don't think much of copyright, so you can do what you want with the content on this blog. Of course we are hungry for publicity, so we would be pleased if you avoided plagiarism and gave us credit for what we have written. We encourage you not to impose copyright restrictions on your "derivative" works, but we won't try to stop you. For the legally or statist minded, you can consider yourself subject to a Creative Commons Attribution License.


Intellectual Property Rights and Innovation: Evidence from the Human Genome

NBER Working Paper #16213 by Heidi L. Williams


This paper provides empirical evidence on how intellectual property (IP) on a given technology affects subsequent innovation. To shed light on this question, I analyze the sequencing of the human genome by the public Human Genome Project and the private firm Celera, and estimate the impact of Celera's gene-level IP on subsequent scientific research and product development outcomes. Celera's IP applied to genes sequenced first by Celera, and was removed when the public effort re-sequenced those genes. I test whether genes that ever had Celera's IP differ in subsequent innovation, as of 2009, from genes sequenced by the public effort over the same time period, a comparison group that appears balanced on ex ante gene-level observables. A complementary panel analysis traces the effects of removal of Celera's IP on within-gene flow measures of subsequent innovation. Both analyses suggest Celera's IP led to reductions in subsequent scientific research and product development outcomes on the order of 30 percent. Celera's short-term IP thus appears to have had persistent negative effects on subsequent innovation relative to a counterfactual of Celera genes having always been in the public domain.

The paper is here.


But, but . . . why isn't the paper free, why isn't the paper free . . . this isn't fair, this isn't fair. Boo-hoo, poor me. I think I'll write a paper about how I wanted to get this paper and spread it around the world, for the good of everyone . . . but it wasn't FREE (poor me), so, wow, what a big hassel, and, and, it's censorship, yea, that's it, it's censorship! Down with censorship!! Down with censorship!! So I'll write a paper because I have "empirical evidence" that this paper wasn't FREE (poor me), and then I'll "analyze" something . . . and then I'll "estimate" the impact it's had on the world, and then, then, I'll have a "complimentary panel" analyze something else and show how this paper not being FREE (poor me) led to a BIG reduction in everyone being able to get it . . . or in the alternative . . . maybe I'll get a life.
First of all, IP abolitionists do not necessarily advocate IP communism. You may have a monopoly on your idea until you sell a copy to someone, at which point there are two people with that idea in their possession.

The issue is not that you want to receive money for selling a copy, the issue is that you then want to control a copy that you have just sold to someone else. Sale, after all, means transferring control of something in return for money.

The logic of a sale - you receive money, the other person receives control of what you were selling - seems so natural to me that I can't wrap my head around most people's intuition for intellectual property.

Most people seem to think that we treat intellectual property similar to tangible property. However, an analogy with tangible property would mean that you own not only your copies but ALL copies - surely a ridiculous notion if we would apply it to tangible property. If I create a chair, do I own all subsequent chairs?

Copyright and patent, as they currently exist, are completely new forms of property and NOT analogous to tangible property rights. Copyright and patent entail a monopoly privilege in a discovery or work of art. We don't ordinarily award monopoly privileges: most people agree that, if I were to get a monopoly on the sale of chairs, that would be bad for the furniture industry.

The justification for awarding a monopoly for works of art and discoveries is that it would lead to more innovation and creativity. If this turns out not to be the case - and there is strong evidence that it is not - then copyright and patent are damaging to society, and we should abolish them as soon as possible.

Ah, yes. I remember the days of the cheap Korean copies well. One of the popular things for people to do was to bring back multiple pairs of Korean knock-offs that could be purchased for as little as $2 a pair, while the U.S. equivalents could sell for up to $100 a pair.

There was only one, rather significant problem with the Korean knockoffs. They were no where near as well made as the U.S. equivalents. The knockoffs would often last for a few months before the shoes fell apart, or the soles wore through. The knockoffs were also typically much less comfortable than the genuine article. You can copy a look, but hard to copy materials, especially when the materials are produced in a certain way that is important to the performance of the shoe that is not understood by the copier. ------------- RH202 ll 642-446 ll 70-648 ll 650-195 ll 642-873

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