IT - Innovation Social Justice and Ethics - Essay Assessment

INTRODUCTION: WHAT IS THE CENTRAL ISSUE?

Let's be very clear at the outset. The problem is NOT whether intellectual property rights (IP) should exist, or not. The issue is whether the practices characterising the IP regime over the last thirty years are justifiable.

So if you are preparing work on this topic (essay, debate, exam etc) - it is important that you at least briefly sketch what has happened in IP since the mid 1990s. This is your context and the debate is to some extent non-issue outside of this context. Boldrin and Levine detail the changes quite well. Refer to the guide to the readings.

WHAT ARE INTELLECTUAL PROPERTY RIGHTS?

There are three main kinds of IP - trademark, copyright and patents. It is patent and copyright which have become an issue.

Patents traditionally apply to production techniques, ideas or approaches.
Copyright is narrower in scope - it covers particular products.

Over the past 30 years patenting and copyright activity has expanded exponentially, connected to the growth of what is called "the Knowledge Economy."

WHAT IS THE DIFFERENCE BETWEEN 'INTELLECTUAL PROPERTY' AND 'INTELLECTUAL MONOPOLY'?

Boldrin and Levine distinguish;

Intellectual Property: the right to buy and sell ideas or knowledge from;

Intellectual Monopoly: once another person or company has purchased the right to use an idea or technique over which you have claimed copyright - intellectual monopoly gives you the right or power to decide HOW they can use this and under what circumstances.

Boldrin and Levine claim it is Intellectual monopoly which is the problem and it is this practice which has become widespread in the last 30 years. However, think carefully, are the two always distinguishable in practice? Students debating this topic may wish to play with the distinction.

CONTEXT: HOW HAS IP PRACTICE CHANGED OVER THE LAST 30 YEARS?

Here the landmark event is the 1994 TRIPS legislation (Trade Related Aspects of Intellectual Property Rights) enforced as part of the establishment of the World Trade Organisation. This involved a significant extension in the number of practices and technologies which could be covered by IP. It also substantially increased the length of patents and the fines that were paid in the case of breaches.

(I have uploaded some readings which focus on the significance of this for individuals and firms in less developed countries. Bello, Shah, Singh). TRIPS has consequences however, for all countries. )

In the last 30 years there has been a 440% increase in annual patent applications (from 112,379 to 520,000) in the US alone. Traditionally, patents lasted for around 20 years. This increased to the lifetime of the patent holder PLUS 50-70 years. (Readings will have more detail on the changes. See, for example, Boldrin and Levine).

There has also been a phenomenal increase in the power and practice of IP law. For example in a few years - between 1997 - 2001 - the IP section of the American Bar Association grew from 5,500 members to 22,000.

Developing practices: the rise of the "patent troll" - the powerful company or individual who specialises in buying up (and sometimes selling) patents and copyright without actually inventing or developing any product or idea themselves.

Developing practices - "defensive IP" - a growing number of well-resourced companies that have successfully claimed "rights" over techniques or ideas that have not yet been invented or produced.

(In preparing your debate, you may want to distinguish between these various practices. You may find some are justifiable, others are not.)

Critics (including authors of some of our key readings) argue that these developments have consequences which go well beyond merely protecting intellectual property. In order to assess this, let us consider some famous justifications of IP.

Regardless of which side you are taking on this issue, you should at least consider the arguments "for" and "against".

THE CASE FOR INTELLECTUAL PROPERTY RIGHTS: PROCEDURALIST VERSUS CONSEQUENTIALIST ETHICS:

Here we have TWO key arguments corresponding to two approaches to ethics. (Property, remember, is about socially and legally enforceable rights and obligations not objects to things.)

A "procedural" approach to ethics claims that a person should obey a rule or law, they should act in a certain way because this action is right IN ITSELF. When we act ethically, by this account, we don't think primarily of the outcomes, we just do what we think is right regardless of the outcome. ("the means justify the ends").

A "consequentialist" approach to ethics claims that we should choose our actions to bring about the greatest good or benefit to ourselves, society or human kind. (The "ends justify the means." a classic example, - although a bit extreme in our case - the consequentialist would sharpshoot the driver of a runaway freight train to save a busload of children that would be crossing the tracks just around the corner. A proceduralist would claim ti is wrong to kill one person to save dozens or even millions of others. What do you think?)

THE CONSEQUENTIALIST ARGUMENT FOR IP:

Famously put by the Austrian economist, Josef Schumpeter (see the key reading, "Monopolistic Practices")

NOW - I suggest to you that this reading will make a LOT more sense (especially if you are debating this topic) - if you read it in conjunction with those KEY FACTS about innovation that we summarised in Week 1 - you can scroll up to Week 1 reading materials and re-read the Vernardakis excerpt on risk, length of time between inception of ideas and profit/reward, etc. All of this is crucial for making sense of Schumpeter's argument.

Basic argument, innovation by its very nature involves so much EXPENSE on one hand, and so many uncertainties/unknowns on the other (mainly related to the unusually long gestation period between the developments of ideas and their production and sale) that no firm in its right mind would take the RISK unless they could be guaranteed some security over the profits and rewards. (Of course, here you might want to raise with Schumpeter the argument that surely the rewards to entrepreneurship are for risk taking? However he might reply that the case of innovations is different. ITs up to you to decide.)

Part of Schumpeter's argument here is that is that landmark innovations, inventions and practices that change the world and improve millions of lives, are especially expensive to develop and especially long term in their gestation. DO you agree?

Schumpeter's argument develops: Of course none of us like monopoly - including monopoly over ideas and practices - however in this case not only is IP necessary to enjoy the fruits of ideas (or to motivate great ideas) - we can rest assured that the pain (higher monopoly prices factoring in technical rents or Schumpetarian rents ) will be a temporary pain. Once the company has recovered the cost of its research and development, the patent can be dropped and future generations have the benefit of the invention.

THE PROCEDURALIST ARGUMENT FOR IP:

The procedualist argument for IP is based on the argument for private property rights generally - most famously expressed by the philosopher, John Locke. If we have time, we may discuss this in class. However a nicely summarised version is presented in the article by SHAH (uploaded under Week 4 Learning Materials) and SINGH (ditto).

The argument here is that an individual is intrinsically entitled to absolute control over the fruits of his or her own labour (including bequeathing it to others upon his or her death) since that labour involves "mixing" his or her own body with nature - and individual's rights over the consequent "hybrid" product should be the same as his or her rights over his or her own body. What do you think? Some hidden assumptions here? If we don't discuss this in detail in Week 4 - we shall return to this crucial idea in a later week in the unit.

Note, however that Locke established some important "provisos" - many of which have been simply ignored by later advocates for absolute private property rights (such as Robert Nozik). Locke: absolute private property rights are justified provided that there is justice in initial acquisition, justice in transfer (no cheating in buying and selling) and justice in redress (states fairly compensating individuals if they take their property.) The first is the most controversial - it is justified by the "extension of rights over my own body" argument above. However Locke also stipulated that, even then, private property rights have to meet an "equality of opportunity" test. I have the rights to the fruits of my own labour so long as my ownership of property does not somehow PREVENT other individuals (present or future) from also having a chance to produce or earn wealth from their labour. This is often ignore in contemporary justifications of private property allegedly based on Locke.

THE ARGUMENTS AGAINST INTELLECTUAL PROPERTY AND/OR INTELLECTUAL MONOPOLY

Here it’s up to you if you choose to argument against either of this or both. You may think it’s artificial to separate them, as Boldrin and Levine have done.

Here the arguments against the proceduralist defence and the consequentialist defence of IP and private property somewhat merge. They focus on whether claims to exclusive rights over key resources (ideas, techniques etc.) actually prevent other firms or individuals from actively exercising their creative and innovative talents. More significant - are ideas and is knowledge actually the same as property in material objects. For many items regulated by private property rights - there is a kind of exclusivity in use. One person ploughing a field means fewer OTHER people being Abe to plough that field. One firm making cars will use resources that are diverted from other firms making cars or other products.

However does that kind of exclusivity apply to knowledge? It could be that, unlike "things", knowledge is actually enhanced and expanded by OPEN SHARING. IT could be that one firm registers IP with such severity that other firms or individuals have such limited access that the development of the idea is halted in its tracks or severely impeded. How do we strike the balance. More importantly, can any rule actually exist for striking the balance? What does the evidence tell us here? Boldrin and Levine give detailed examples of whether IP has actually helped or hindered innovation in a range of key industries - in both a contemporary and a historical context.

Connected to this question: Is any landmark innovation REALLY the "fruit" of one person's, family's, firm's "labour?" What if that firm (etc) only put the "finishing touches" on knowledge that had been developing for centuries? (e.g. a particular kind of engine that draws on centuries of knowledge in physics, chemistry, traditional industrial practice? A particular pharmaceutical that draws on centuries of traditional medical practice as well as freely available (or state funded university generated) knowledge in biology and bio-chemistry? (Shah and Singh readings discuss examples here from multinational corporate control of the pharmaceutical industry in INDIA).

Finally, EVEN IF, all the proceduralist and consequentialist justifications of IP were on balance plausible - are there still other reasons for not supporting strict IP regimes?

THE DILEMMA OF RIGID AND HIGH LEVEL PATENTING OVER TECHNIQUES FOR PRODUCING LIFE SAVING MEDICINES (EG HIV TREATMENTS)
Shah and Singh discuss these issues in beautifully written arguments.

THE PROBLEM OF LEGAL EXPENSES:

Discussed by Boldrin and Levine, Shah and Singh.

The issue here is that rich and powerful companies can and allegedly HAVE "stolen" and profited from the traditional ideas and techniques practised by communities and have been able to get away with this because the communities in question just could not afford the same legal resources.

A similar problem allegedly arises when individual inventors get "bought off" cheaply or their ideas are simply taken and modified slightly - either the inventor does not care about the money or they are financially inexperienced and do not really understand what they are signing away OR they cannot afford the legal representation. (A famous example here - see uploaded video - the Australian IT expert living in a caravan fighting Microsoft for years over the rights to profit from the security login systems we use on our computers every day.) Microsoft and Apple, in particular, have been accused of numerous "misdeeds" in this regard. You may wish to consider examples in your debate - HOWEVER - be aware that this may be an issue related to access to adequate legal resources rather than to justification of IP as such. IT still matters and you can still discuss it as an important, but indirect argument.

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