IP is a social good

While private property is treated as a personal right and has been recognized, in different forms, for millennia, intellectual property is a much more recent legal creation, whose existence is justified by a set of arguments that ultimately hinge on the balance. This is not the balance with empty pans held by Lady Justice, but a balance whose contents are dictated by the specific goals and justification of the law: balancing the interests of inventors with those of the public. Far from being construed metaphorically, this is a balance that ought to weigh evidence to find a just equilibrium. Should we think of it as a kind of instrument? And, if so, can it perform the balancing act that the law expects and requires?

The works of authors and inventors are of an unusual nature. The economists call them “public goods,” goods that are expensive to make but easy to copy, making them unlikely to be produced under normal market conditions unless special measures are introduced to make their copying illegal. Intellectual property law provides that. At the same time, while inventions and works of authorship are easy to appropriate, their appropriation, unlike theft, does not produce a loss of the original. Consequently, the law does not give inventors the same rights in their innovations that landowners have in their estates. As indicated by the limited length of patent and copyright protection, authors and inventors “own” their work in a significantly qualified sense, and to an extent that is limited by the opposing rights of the public. In Thomas Jefferson’s words: “[I]nventions […] cannot in nature be a subject of property. Society may give an exclusive right to the profits arising from them as an encouragement to men to pursue ideas which may produce utility. But this may, or may not be done, according to the will and convenience of the society, without claim or complaint from any body.”

Jefferson’s views match the U.S. Constitution’s conceptualization of intellectual property (IP) as a tool to achieve a social good – what it refers to as the “Progress of Science and useful Arts” – innovation that would be unlikely to come into being unless authors and inventors could be granted temporary protection from copying. Progress is ultimately accomplished when inventions and works of authorship are released into the public domain at the expiration of their term or protection, thus becoming free for everybody to use. As a result, granting intellectual property rights to authors and inventors is politically justifiable only by assuming that it is possible to balance the social benefits and costs of IP protection. More than an emblem of the just application of the law by the courts, the balance thus provides the conditions of possibility of intellectual property. IP is not born just but becomes so when it achieves balance. Here is a textbook formulation:

[Because intellectual property rights impose social costs on the public], the intellectual property laws can be justified by the public goods argument only to the extent that they do on balance encourage enough creation and dissemination of new works to offset those costs[…] The key to economic efficiency lies in balancing the social benefits of providing economic incentives for creation and the social costs of limiting the diffusion of knowledge.

That balance is also what construes intellectual property as a right rather than as a monopoly – a protection that benefits the inventor at the expense of the public. As the chairman of the U.S. Senate Subcommittee on Patents, Trademarks, and Copyrights put it in 1958: “The patent system has, from its inception, involved a basic economic inconsistency. In a free-enterprise economy dedicated to competition, we have chosen, not only to tolerate, but to encourage individual limited islands of monopoly in the form of patents.”

Being at the roots of intellectual property, that “economic inconsistency” is unavoidable, but it can be rationalized by claiming that balancing the conflicting interests of the inventors and the public would transform those “islands of monopoly” into more acceptable “islands of strategically limited rights.” IP’s necessary balancing act is then operationalized by adjusting key elements and requirements of the law. In the case of patents, this includes the requirements of novelty, utility, nonobviousness, and restrictions over acceptable patentable subject matter. For instance, in his 2006 dissenting opinion in Labcorp v. Metabolite (an intriguing case testing the demarcation between what kind of inventions are and are not patent eligible), Justice Breyer argued that to navigate the murky “product of nature” doctrine (which he invoked to argue that this specific patent concerned a “law of nature” and should thus be voided), one has to keep in mind the doctrine’s balance-keeping function.

[S]ometimes too much patent protection can impede rather than “promote the Progress of Science and useful Arts,” the constitutional objective of patent and copyright protection. U. S. Const., Art. I, §8, cl. 8. […] Patent law seeks to avoid the dangers of overprotection just as surely as it seeks to avoid the diminished incentive to invent that underprotection can threaten. One way in which patent law seeks to sail between these opposing and risky shoals is through rules that bring certain types of invention and discovery within the scope of patentability while excluding others.

Similar balancing acts are invoked in discussions of the appropriate length of the term of protection – a discussion that, in copyright, goes from the landmark (and ill-fated) Eldred v. Ashcroft (2003) case, all the way back to the articulation of copyright law in the eighteenth century. In the case of patents, the work of economist William Nordhaus exemplifies a theoretical approach to determining the proper term length to balance positive incentives for innovation and the social cost of the patent monopoly – a balancing that also frames recent discussions about possible industry-specific length of protection based on the different development costs and incentives in different fields of invention (software, pharmaceuticals, etc.).

Far from being a metaphor, an emblem, or a rhetorical figure, the balance thus functions as a comprehensive framing device for the whole discourse of modern U.S. intellectual property, especially patent law. Not unlike the way nineteenth-century patent models became the templates through which the law conceptualized patentable invention, the balance functions as a model of how IP law operates and to what end. While not a material instrument or model, the figure of the balance still retains a distinct machinic dimension in the sense that it instantiates an unnegotiable protocol – the balancing of social costs and benefits – that needs to take place and needs to be free from subjective judgment.