Tuesday, November 28, 2006

Rethinking Intellectual Property

By Dr Abdullah Robin
New Civilisation Magazine

Dr Abdullah Robin looks at innovation and economic growth in a knowledge based economy and traces the development of the concept of intellectual property from its capitalist origins as a monopoly right through its transformation into an allegedly universal concept of property in ideas. He examines the integrity of the concept and argues that it is a brake rather than an engine for economic progress; a brake that Islam dispenses with for the betterment of humanity.

A generation that grew up in fear of 'Mutually Assured Destruction' leaving the survivors with the prospect of 'nuclear winter' witnessed the spread during the early 1990s, not of global communism or genetically engineered bubonic plague, but a highly contagious computer game from one of the Soviet Union's most esteemed academies. The game was called Tetris and it marked a turning point in the handheld and console games industry in the West. It nearly ended up on the agenda of Gorbachov's 1989 meeting with British PM Margaret Thatcher because of the grievance of Robert Maxwell at the loss of his 'MIRRORsoft' group's rights to the game. Eighteen months later Robert disappeared mysteriously from his luxury yacht into murky waters-along with the pension hopes of many-after the bubble burst on his pyramid style borrowing schemes.

Tetris was there at a turning point in world history as the civilisational clash between capitalism and communism came to a conclusion-and it was created by a man on a $200 a month job in the Moscow Academy of Science, Alexey Pajitnov. He conquered hearts and minds in the West where the might of the Red army had failed!

As the sun was setting over a nation that put the first man into space two heavyweight contenders-Atari and Nintendo-were lining up for the exclusive rights to the game. Atari seemed to have the early advantage in the larger console market but clever manoeuvring from Nintendo secured them the exclusive rights to the game. The deal knocked the teeth out of Atari who had spent millions of dollars on pre-launch advertising and had already produced hundreds of thousands of games cartridges in readiness for their expected launch. Their stock was worthless. Indeed they would have been sued if they had tried to sell their now 'pirate' copies of Tetris. Nintendo, with sole monopoly on the game, sold 40 million cartridges. As for the game's inventor, Alexey Pajitnov, he never received a penny in royalties till the original rights expired in 1996. This was because the rights to Tetris belonged to the Soviet State that paid his salary and which didn't recognize a private right in any property, let alone intangible intellectual property.

Monopoly Rights - a licence to print money and burn the competition.

As for the Capitalist West, the 'winner takes all' story of Tetris has provided a caricature of monopoly rights. These rights exclude competition for a limited period of time and are covered by copyright and patent law. Copyright law deals with original forms of expression such as the latest song by Britney Spears while patent law covers inventions such as genetically engineered rice or a new way to make toast.

These legal rights are often euphemistically bundled together under the term 'intellectual property' which gives them an unwarranted moral sense. These rights amount to monopoly in their historical conception and clearly fit the definition of monopoly in the Oxford English dictionary as, "exclusive possession of the selling of some commodity or service; this conferred as privilege by State…" For an economic textbook definition the following should suffice, "the impact of a patent is to effectively create monopoly rights to the commercial exploitation of an idea".i So it is simply a right to monopolize price by excluding competition-even if the competition goes up in smoke like Atari's copies of Tetris.

The burning of Atari's games cartridges illustrates a standard negative textbook characterization of monopoly; 'deadweight loss'. In Adam Smith's foundational treatment of free market economy an ideal called 'perfect competition' should lead to something beneficial for the economy known as consumer surplus. In our example, the games market suffers from an abnormality in the demand and supply curve resulting in 'lost consumer surplus' which economists call 'deadweight loss of monopoly' and that simply means that less of a product is produced (or even burned!) and what is produced costs more. That is why DVDs, CDs, videos and computer games seem to cost much more than they are worth.

Monopolists vigorously defend their right, in court, to make us pay more. Having destroyed Napster's 'fair use' defence for its online music file sharing system at the US Court of Appeals on 12th February 2001 they went after German media giant Bertelsmann for allegedly funding Napster. The British music group EMI filed a copyright infringement suit in June 2003 that followed a class-action case filed in February in pursuit of $17 billion in damages. A recent victim in their sights was another type of offender, a clever little import company called 'CD Wow'. CD Wow could not afford to fight their case in court against the powerful music industry barons so they made an out of court settlement which is now costing purchasers an extra £2 per CD. Not only is this another classic case of deadweight loss but it also illustrates a further textbook principle of monopoly, 'price discrimination'. It comes in three flavours and the CD-Wow case illustrates 'third degree price discrimination' which is charging different prices in different markets.ii The music and DVD industry does this by selling its products in Europe at a higher price than it does in non-European markets.iii One of the textbook conditions that must hold for a monopolist to exercise effective price discrimination is the prevention of 'arbitrage.' Arbitrage is where a consumer buys in one market where prices are low and resells in another market where prices are higher. CD-Wow was doing just this, nominally based in the Far East, it exported cheaper non-European CDs by post to customers in Britain via its website for just £8.99. The British Phonographic Industry managed to put a stop to CD-Wow's arbitrage. Consumers could be forgiven for feeling themselves victims of a 'third degree' rip off! How can this be justified?

Legitimisation of Monopoly Under the Pretext of Property Rights

In order to mask the uglier side of these monopoly rights the World Intellectual Property Organization (WIPO) is trying to give universal legitimacy to a relatively recent, and softer, alternative term-'intellectual property'. It: "believes that intellectual property is native to all nations and relevant in all cultures." That is a bold claim because while ideas are at least as old as the invention of the wheel the term 'intellectual property' itself can be traced back only as far as the French author A Nion who uses the term 'propriété intellectuelle' in his Droits civils des auters, artistes et inventeurs published in 1846.iv

Terminology can of course change with time, but what is important to note is where and how the concept of physical property was first applied to intangible ideas. The ownership of ideas came into British common law from the majority ruling in the case of Millar v. Taylor (1769)v and lasted just 5 years before being overturned by Parliament. The judiciary was divided from the beginning concerning this case, which was brought as a trespass against property. The property in question was the right to control the printing of a book that was not protected by the copyright Act of 1709. The act established the concept of a statutory limited monopoly, but not a right of property. While the majority of judges in the case decided to recognise a right of property there was a dissenting judge, Justice Yates, who said, "This claim of a perpetual monopoly is by no means warranted by the general principles of property". Argument continued until the House of Lords deliberated upon the issue in 1774 and ruled that any common law right of property was abrogated by the 1709 Act of Parliament that imposed an arbitrarily defined period of protection after which ownership of the exclusive right to publish would expire.vi

In this way, not as property proper but as a right, intellectual property found its way into Capitalist law, along with a host of other intangible opportunities to profit that set the legal basis for capitalism as a distinct political economy.

If ideas, once released to the world, held the legal status of property then by what right could the state limit this property for a fixed period of years? When Justice Mansfield ruled, with the majority, in the case of 1769 he appealed to the sense of justice as propounded by John Locke whose political philosophy began with individual property from which he concluded that "The great and chief end, therefore, of men's uniting into commonwealths, and putting themselves under government, is the preservation of their property".vii The parliamentary decision of 1774 undermined its own moral legitimacy by recognising a property right only to limit its duration to 28 years. Property rights precede government and are the reason for its legitimacy according to Locke.

If the logic of intellectual property is to be sustained then not only must it overcome the insult of being taken away by the state after a given period of time but those who steal it should be treated as the criminals that WIPO would have us to believe they are. The process of criminalisation has already begun so this contradiction may soon disappear-along with several freedoms that have hitherto been taken for granted.

The term 'intellectual property' is misleading because it gives the impression that ideas themselves are the subject of ownership! However, what Capitalism actually did for the law was to make the expectation of future profit from ideas the subject of ownership. What it did for ideas themselves was, arguably, to strangle them.

Intellectual Property and the Morality Pretence

Western political institutions have nevertheless canonised these rights with the stamp of morality.

The US is currently the most vigorous upholder of these 'moral rights' and, perhaps not coincidentally, the 'moral rights' covered by copyright were estimated to have contributed $791.2 billion to the US economy in 2001.viii Computer software 'piracy' in China during the 1990s for example has triggered a much sterner reaction from the United States than has widespread human rights violations.ix It took the invention of the 'war on terror' to provide the US with a challenger to its erstwhile anti-piracy 'moral focus.' Not to be outdone though by the victims of the September 11th Attacks on the World Trade Centre, Michael Greene then president of the National Academy of Recording Arts and Sciences, warned of a worldwide threat, "…pervasive, out of control, and oh so criminal." He exhorted his Grammy ceremony audience to, "embrace this life and death issue", and he wasn't referring to al-Qaida!

Since the end of the nineteenth century 'intellectual property' rights have increasingly gained protection on an international scale. First came the Paris Convention of 1883 on patents and other industrial property, and then the Berne Convention of 1886 for literary and artistic works. These treaties resulted in equal treatment of patent and copyright holders at a national level along with harmonization of procedures across countries. The Paris and Berne Conventions did not, however, make any provisions for enforcement. The world Intellectual Property organization (WIPO) now coordinates the working of Intellectual Property Offices (IPOs) of member states but has only weak enforcement powers. The latest and most far reaching agreement, administered by the World Trade Organisation (WTO), is the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). It has stronger enforcement powers because the World Trade Organization, which can seriously damage the health of any third world economy, arbitrates disputes. These powers gained deadly clarity when applied to the 25.3 million people expected to die of AIDS in Southern Africa.x Fortunately for them, Brazil, India and Argentina were able to provide cheap anti-retroviral drugs much to the vocal dismay of US, British and Swiss pharmaceutical companies. Threats from the US trade corps, led by the then Vice-President Al Gore put a stop to this during the Clinton administration, which briefly taxed some South African imports to the US by way of retaliation followed by a much publicised offer of billions of dollars of aid. In reality these loans were to be paid back at commercial interest rates and on condition that the drugs were purchased from US companies at full cost. The main supplier of cheap alternatives, Argentina, soon backed down after US threats.xi

The odd thing about America's enthusiasm for international enforcement is that it was itself once a major 'pirate' of foreign copyrighted or patented materials right up until the middle of the nineteenth century.xii The famous British author Charles Dickens found the American government completely uninterested in the, "pleas of foreign authors that American publishers were reprinting their works without permission."xiii It wasn't until 1989 that the US found it worthwhile to sign up to the Berne Convention. Why was the U.S. 103 years late to assert this particular incarnation of the 'moral right'? In the 1950s the U.S. had been lobbying for the Universal Copyright Convention, which did not have such stringent requirements for harmonized protection, procedures and length of protection but by 1989: "the U.S. had become a major exporter of copyrighted works, and wanted both protection abroad and a voice in the international policy making process".xiv More recently the U.S. has been a leader in terms of harmonization, aligned with her commercial interests, first in it's own neighbourhood with The North American Free Trade Association (NAFTA) and then with TRIPS.

Morality and Economics

Morality seems to be subservient to the dictates of economic growth in a capitalist system. New ideas lie at the heart of today's knowledge economy and economic growth is the only heart capitalism will ever have. Nigel Lawson, Chancellor of the Exchequer throughout much of the reign of British PM Margaret Thatcher, wrote, "It is the moral dimension that lies at the heart of the matter. For man is a moral animal, and no political or economic order can long survive except on a moral base … (Yet) the apologists of capitalism have hoped to win the day on the merits of its fruits."xv

Continued economic growth is therefore the concern of those who hope that capitalism can survive the future. John Maynard Keynes had earlier presented a bleak argument for the future of capitalism in his 1930 essay 'Economic Possibilities for our Grandchildren'-a future in which the massive economic growth that has characterized the industrialized countries would run out of steam, thanks to the 'Law of Diminishing Returns' whereby adding any additional factor of production gives less of an increase than the previous one. The prediction was that after some two centuries of growth, unparalleled in human history, the capitalist bubble would burst forever and be replaced by some more stable form of society.

Seventy four years later the bubble has still not burst on the grandchildren of the 1930s, and post war economists such as Joseph Schumpeter, Robert Solow, Keneth Arrow and Joseph Stiglitz have sought to explain this unexpected reprieve from the ravages of the law of diminishing returns. They theorised that it was the ongoing pace of technological change that was sustaining growth. But there was still a problem, because new technologies are themselves limited and subject to the law of diminishing returns like any other tangible factors of production.

The Economic Power of Ideas

It is at this point that Paul Romer, named one of America's 25 most influential people by Time magazine in 1997, steps into the fray. Spelling out his position on the special status of ideas as the engine of economic growth in 1986 in a groundbreaking article in the Journal of Political Economy - 'Increasing Returns and Long run Growth' - he drew attention to the fact that ideas are intangible and thus what he calls 'non-rival'. Ideas being non-rival can benefit all at the same time and be transmitted at practically zero cost. His 'new growth theory' is thus driven by a fuel that in his view should never run out because ideas are virtually limitless. Tipped for a Nobel prize himself, Romer's new growth theory is praised by many including Nobel laureate Robert Solow. All agree that ideas are precious to any progressive society with a vision for the future.

So how should ideas be promoted? Romer has been an ardent advocate of the need for controversial increases in State support to be injected into Scientific Research. He has also taken on board the standard arguments, which his work has invigorated, for strong intellectual property laws to provide the right level of incentive for inventors to keep producing ideas. In this call for subsidies and monopoly rights upon ideas he reiterates the disturbing conclusion of Kenneth Arrow some 40 years ago that if the free market were left to itself it would, "under invest in invention and research".

Escape from the conundrum of the law of marginal returns seems, however, to have dropped economists into a new paradox. The fundamental principle of the free market economy, which Western politicians and economists alike espouse with passionate vigour, decries monopoly power. Adam Smith in his foundational 'Inquiry into the Nature and Causes of the Wealth of Nations', published in March 1776 - four months before the American Declaration of Independence, berated all forms of monopoly. Monopolists, he wrote, "by keeping the market constantly understocked, by never fully supplying the effectual demand, sell their commodities much above the natural price, and raise their emoluments, whether they consist in wages or profit, greatly above their natural rate." He went on to say, "The natural price, or the price of free competition, on the contrary, is the lowest which can be taken."xvi The espousal of monopoly power is a clear contradiction within capitalist economies.

Romer argues that monopoly power is essential so that inventors can recover their costs. Giving an example from the software industry he says "Developing new and better instructions is equivalent to incurring a fixed cost… Once the cost of creating a new set of instructions has been incurred, the instructions can be used over and over again at no additional cost … it follows directly that an equilibrium with price taking cannot be supported".xvii, xviii So the huge fixed cost of development and the negligible cost of reproduction are the two obstacles he sees in the path of invention which can be addressed by monopoly power.

Now, with the price mechanism broken, governments must set the extent to which companies can monopolise ideas. The problem according to Romer is setting the right balance between the best cost from the perspective of production, which ought to be the highest possible, and the best price for efficiently using new ideas in society, which should be zero.

This is an impossible balancing act. Monopolists have a disproportionate ability to make their voices heard by democratic politicians because they are the ones who provide the funding to their parties. As for the electorate in whose name they govern: it is easy to manufacture consent and sell it through the same media giants that have most to gain by powerful patent and copyright law. The draconian EU Property Rights Enforcement Directive is a chilling example. It is giving powers to the music and software industry to spy on people's home computers and prosecute individuals found copying files over the Internet and empowers police to raid the homes of those found visiting file sharing sites. The bill was put forward by French MEP Janelly Fourtou. Her husband is the head of Vivendi Universal, which owns several record labels.

The received wisdom is not without its critics from within the economic science community. Two UCLA economists, Michele Boldrin and David K Levine have recently caused a stir amongst their fellow economists by attacking, in a series of publications over the last three years, the economic justifications for the widely held utility of copyrights and patents. They separate intellectual property into two components.xix Firstly, "the right to own and sell ideas", and second, "the right to control the use of those ideas after sale". They accept the first component and reject the second as, "a socially inefficient monopoly". They argue,

"What is commonly called intellectual property might be better called, 'intellectual monopoly.' When you buy a potato you can eat it, throw it away, plant it or make it into a sculpture. Current law allows producers of CDs and books to take this freedom away from you. When you buy a potato you can use the 'idea' of a potato embodied in it to make better potatoes or to invent french fries. Current law allows producers of computer software or medical drugs to take this freedom away from you."

They argue against Romer's theory proposing that the cost of, "creation is not a fixed but a sunk cost" which is "very ordinary in economics and poses no particular threat to perfect competition. As far as we know there is no organized movement to provide producers of potatoes, or any other commodity involving sunk costs, with a government monopoly".xx They further argue that ideas have no economic value until they are embodied in something and this allows a 'slim element of rivalry'.xxi They put their case in the technical mathematical language of economic modelling but leave no shortage of examples in plain language. Invention in their view gives a huge "first mover" advantage establishing a company as a market leader that others cannot copy immediately. The first mover advantage establishes reputation for quality, opens the door to demand for lucrative live musical performances and autographed copies, establishes the expert status that people remember and trust for years to come. While any businessman would love monopoly on a plate, most know that they have to invest huge sums in capital equipment along with manpower training, that others might poach, in order to seek out and maintain a lead. The key is ingenuity and dynamism.

Debate is ongoing in economic circles. LSE's Danny Quah, for example, finds that his mathematical models generally endorse the findings of Boldrin and Levine. However the debate proceeds one thing is clear-the simple dogmatic slogans portraying patents as the way of rewarding innovation cannot be accepted from an economic standpoint at face value. Furthermore, there exist many clear examples of recent innovation spurred on without monopoly power.

Knowledge Based Economic Growth Without Monopoly

The huge success of the Linux operating system, upon which millions of business users depend because it is more stable than Microsoft's inflated offerings, was built upon foundations established by Linus Torvalds in 1991 and Richard Stallman of MIT in 1984. They did something which in the machine world view of many capitalist economists would be called irrational behaviour - they developed software and published the source code for it absolutely free of charge and open for the world to access and build upon. And build upon it people did - in droves, making it a growing threat to Microsoft which is currently doing its monopolistic best to crush the growth of Linux. Indeed the World Wide Web that made the revolutionary free flow of information possible in the first place was designed and given to the world for free by Tim Berners-Lee. While a software engineer at CERN, the European Laboratory for Particle Physics in Geneva, he developed a programme in 1980 that allowed files on his computer to be linked to each other by a 'hypertext' protocol. He then extended the idea to allow users anywhere in the world to 'jump' from computer to computer sharing files with the ease of a telephone call by developing HTML (HyperText Mark-up Language) and a set of rules for communication called HTTP (HyperText Transfer Protocol). For this contribution of inestimable value to the world he was recently honoured in the Queen's New years Honours list. When asked what were the most important milestones in the Web's development he began his reply, "One crucial step was, after 18 months of asking, CERN's signing of a document renouncing the rights to charge royalties for the technology…"xxii He has worked tirelessly at the head of the W3C (World Wide Web Consortium) to constantly update standards and prevent any company from monopolizing the web. By championing free open access standards for the webxxiii he is the antithesis of 'intellectual property' devotees who have embarked upon a programme of total ownership ranging from patents on toast to continuing attempts to secure patents on the genes in our own bodies.

One thing is sure. Human creativity will flourish if set free from the restraint of greedy dinosaurs that want to grow fatter sitting alone on mountains of gold.

From Renaissance to Industrial Revolution

Proponents of monopoly rights quote historical precedents to add legitimacy to their arguments such as the granting of the first patent in England by King Henry VI, which was the beginning of a long tradition of the English crown granting 'letters patent' to favoured persons. This was the year 1449, a turbulent year during the 'hundred years war' when the French were besieging English forces in Normandy - and just 2 years before the birth of Christopher Columbus, and 3 years before the birth of the man who epitomised the renaissance - Leonardo da Vinci. The great thinkers adventurers and artists of the renaissance period established completely new ways of thinking about the world without the so-called protection of intellectual property rights. Kepler was working out the orbit of Mars. Galileo was studying the craters on the moon and coming to the conclusion, that he was later to publish and then abjure before the Church on pain of death in 1633, that the moon was actually controlling the ebb and flow of the tides on earth. As this explosion of heroic thinking and creativity, often at great personal risk to the innovators, was taking place the granting of patents had led to such grubby and restrictive monopoly practices that the whole process of granting patents was abolished, only to be reopened a few short years later in 1623 under the more restrictive conditions that we are familiar with today. The statute of Monopolies act 1623 restricted the scope of these patents to, "projects of new invention". The first United States patent legislation to be enacted was the Patent Act of 1740. The Statute of Anne 1709/1710 marked the beginning of statutory copyright in the UK.

By the time that the revolutionary expansion of renaissance creativity had reached a more moderate level monopoly rights were well enshrined in law just in time for the industrial revolution. The industrial revolution is often credited to the enhancement of the Newcomen steam engine by James Watt in 1768. The hollowness of a revolution built on new machines rather than new ideas was not to sink in until men started to kill each other using these machines. As for Watt, thanks to the idea of monopoly rights being in place at this time, he was able to divert most of his creative abilities into lobbying parliament for a series of patents, which prevented other innovators from mass producing improvements to his design for another 20 years. In 1781 Jonathan Hornblower began production of a superior, and in fact independently designed, machine but was forced out of business by Watt who brought the full force of the law against Hornblower leaving him ruined and in jail while Watt died a rich man. New innovation was thereby strangled till the expiry of the patents in 1800 and the industrial revolution was in fact stalled for a generation.xxiv

A 'New Kind of Dark Ages'

Seth Shulman, writing in the MIT Technological Review argued that in some scientific fields "warring fiefdoms guarding their knowledge" would lead to a "new kind of dark ages"! Those words ring true for me personally because I have experienced something of this over my 8 years of post-doctoral research experience in the field of molecular biology. It seems that I am not alone. A review of geneticists in the Journal of the American Medical Association showed that secrecy and hoarding of information linked to the desire to patent was widespread and causing harm to science.xxv One of the survey respondents, Nelson Kiang, professor emeritus of physiology at MIT wrote "…our common enemy is ignorance, and we should be helping each other as fast as possible."

The WIPO, which is actively spreading the gospel of intellectual property, fancifully employs Einstein, posthumously, as a supporter for its cause asserting, "Einstein understood that it is the ability to stand on an existing foundation of accepted knowledge, and see beyond to the next frontier of discovery." This is a reference to Newton's famous often repeated statement, "If I have seen further than other men, it is because I have stood upon the shoulders of giants".xxvi My question is: would Einstein have stood on the shoulders of giants if those giants were using monopoly rights to put their hands tightly around his throat?

Two sets of authors have recently discussed the issue in a Canadian Research Journal making reference to a declaration in June 2001 by a U.S. company called Myriad that hospitals in several Canadian provinces were violating its patents on a test for genetic susceptibility to breast cancer. Myriad demanded that all tests must be carried out only in its own lab at a cost of US$2500, almost 5 times what was previously being charged.

People are dying because of ignorance and being forced to pay extortionate sums of money for treatment and diagnosis! That is tragic, because there are tens of thousands of biologists who have been working for decades in order to get to the bottom of the causes and treatment of cancer and other disease only to have the benefits of their research, mostly financed by government or charitable sources, held back from the people who need them. It is also odd that financial advantage from monopoly rights are meant to motivate scientists while the vast majority of them work for a lower salary than that given to train drivers on the London underground and have been coerced to sign waivers in their contracts assigning all rights from their inventions to the universities or institutes that employ them anyway. On the other hand, one studyxxvii showed that the number of intellectual property lawyers employed per dollar spent on research and development increased 70% between 1986 and 1994.

Islam and freedom of information

Monopoly and ownership of intangible so-called property are anathema to Islam. Political Islam has already drawn a line in the sand by the distribution of a powerful rebuttal to this dogma on the streets of most Arab capital cities in January 2001. Issued as a leaflet by the Jordanian branch of the international Islamic political party Hizb ut-Tahrir it declared that the aim of international intellectual property laws is "to hoard the scientific knowledge and prevent others from benefiting of it … Thus the Muslims are obliged to reject these laws and not adhere to them." Freedom of information is not an absolute concept in Islam, but the freedom to use information that has been published is upheld. In the future it may be an Islamic civilisation that takes an international lead in resisting the ever-tightening net of international intellectual property agreements. The great libraries such as those formally at Cordoba and Baghdad, that flourished during the West's 'Dark Ages', could now make available online every conceivable piece of knowledge, not only to local citizens but also to the whole world.


Orchard,E.W., Glen,J., and Eden,J. Business Economics. p211.

The motivation for this is increasing the marginal revenue obtained from the sale of extra units of output.

The DVD industry is trying to keep the markets separate by sabotaging DVDs so that they have region specific codes that will not play properly unless used with a DVD player from the same region and the law courts are a backup for where the technology fails.

Wikipedia free on-line encyclopedia. http://en.wikipedia.org/wiki/intellectual_property

Millar v. Taylor, 4 Burr. 2303 (1769).

Commons J.R ©1924 Legal Foundations of Capitalism chapter VII p275.

Locke J, Two Treatises of Governemt. 1690. chapter IX section 124.

World Intellectual Proprty Organization (WIPO) June 2003, "Intellectual Property - A power Tool for Economic Growth" by Kamil Idris, Director General of WIPO obtainable at http://www.wipo.int/ebookshop.

Aoki,K. "(Intellectual) Property and Sovereignty: Notes Toward a Cultural Geography of Authorship," Stanford Law Review (1996) 1293,1297-98. Quoted in Fisher,W.W. "The Growth of Intellectual Property A History of the Ownership of Ideas in the United States".

This story is presented with wit in Palast.G, "The Best Democracy Money Can Buy"pages181-189.

More recently the AIDS story has taken a more bizarre turn with Microsoft's Bill Gates' February 2002 appearance on the cover of Newsweek offering $200 million, on a par with his investments in drug company stocks, for helping Africa's AIDS crisis. George Bush has also promised a great increase in financial assistance. This was followed by a reversal of South Africa's policy of refusing to buy antiretrovirals on the grounds that AIDS is not actually caused by HIV anyway. It looks like a game of chicken between the head of a dying nation and the head of a greedy one in which Bill gates has hedged his bets and the American tax payer has split the bill (no pun intended) with the South African tax payer to purchase US drugs at a greatly reduced price, which is still better than no sale at all for the drugs companies who are the only real winners in this story.

Fisher,W.W. "The Growth of Intellectual Property A History of the Ownership of Ideas in the United States".

Sidney Moss, Charles Dickens' Quarrel with America (1984); Benjamin Kaplan, An Unhurried View of Copyright quoted in Fisher,W.W. "The Growth of Intellectual Property A History of the Ownership of Ideas in the United States".

Scotchmer,S. "The Political Economy of Intellectual Property Treaties" Revised January 2003. National Bureau of Economic Research Cambridge, MA 02138. Working Paper 9114.

Lawson, N (1978). "Will the Open Society Survive to 1989" published as an essay in "The Coming Confrontation".

Adam Smith, 1776, The Wealth of Nations, I.vii.26,27.

Romer, P.M. (1990a), "Are Nonconvexities Important for Understanding Growth?" The American Economic Review (Papers and Proceedings), 80, 97-103.

P.M. (1990b), "Endogenous Technological Change," Journal of Political Economy 98, S71-S102.

Boldrin, M and D.K. Levine. (2002), "The case against intellectual property" University of Minnesota and UCLA.

Boldrin, M and D.K. Levine. (2002), "The case against intellectual property" University of Minnesota and UCLA.

Boldrin.M. and D.K.Levine (2001), "Perfectly Competetive Innovation" mimeo University of Minnesota and UCLA. "Take the classical and abused case of a software program. To write and test the first version of the code requires a large investment of time and resources. This is the cost of invention mentioned before, which is sunk once the first prototype has been produced. The prototype, though, does not sit on thin air. To be used by other it needs to be copied, which requires resources of various kinds, including time. To be usable it needs to reside on some portion of the memory of your computer. To put it there also requires time and resources. If other people want to use the original code to develop new software, they need to acquire a copy and then either learn or reverse-engineer the code. Once again, there is no free lunch: valuable ideas are embodied in either goods or people, and they are as rivalrous as commodities containing no ideas at all, if such exist. In our view, these observations cast doubts upon Romer's influential argument according to which the nonrivalrous nature of ideas and their positive role in production a fortiori imply that the aggregate production function displays increasing returns to scale

Paul Festa writing for Cnet News.com December 2001.

Director's Decision, W3C Patent Policy, 20th May 2003 http://www.w3.org; "Based on overwhelming support of the W3C Membership, consensus in the Patent Policy Working Group and support from interested members of the public, I have determined that the proposed Royalty-Free Patent Policy should become the Patent Policy for W3C. The Policy affirms and strengthens the basic business model that has driven innovation on the Web from its inception. The availability of an interoperable, unencumbered Web infrastructure provides an expanding foundation for innovative applications, profitable commerce, and the free flow of information and ideas on a commercial and non-commercial basis."

The detailed history of these events is presented over several paragraphs in; Boldrin,M and Levine.D.K. (2002), "The case against intellectual Monoply", chapter 1.

Campbell.E.G., et al. "Data Withholding in Academic Genetics." 2002. JAMA 287:473-480

This apparently courteous quote was actually an insulting reference to the very diminutive stature of the experimental scientist Robert Hook with whom he was feuding bitterly at the time over who owned the idea of gravity.

Barton.J.H. Reforming the Patent System. Science 200;287:1933-4.


Abu yahya said...


May Allah reward the author for his effort to shed light on 'intellectual property' one of the great tools of harm inflicted on mankind to keep the wealth in the hands of the few while simultaneously hoodwinking the masses in to buying in to it's supposed benefits which are far greater than the harm. There are so many norms in western economics that are taken to be normal and in line with natural development but after greater inspection are found to be harmful to the masses such as fractional reserve banking. It will not be until there is a physical alternative in place embodied by a truly Islamic state that the masses will be able to compare the impact capitalist ideas of intellectual property have as most people are not willing to employ sufficient effort in seeking the good of mankind in direct conflict with those who would like to maintain the status quo who motivated by profit and have far deeper pockets and 'residial' ethics.

Anonymous said...

I think there needs to be harder thinking on this issue and a better understanding of intellectual property rights. While intellectual property provides a limited monopoly on an owner's invention which can lead to large rewards and the setting up of high prices, it doesn't prevent innovation as access to the knowledge is available and alternative ways of achieving and end point can be reached. For example, in the pharmaceutical industry, patents haven't prevented competition, as alternative drugs that have the same net results can be developed and brought to market. What patents do is to prevnt copying of drugs which would have the effect of reducing cost. But without the original development, which was off the back of the patent that allowed investors to finance the drug development, the drug would never have been made and would not be available to copy at a later date. Therefore, one can argue that IP actually drive innovation and do not hinder it, rather what they do is keep the price high for a limited period while the patent owner has a market monopoly.

As regard the issue of what the Shara says on this matter, there are differences of opinions and we need to examine this issue rigourously.

Islamic Revival said...

The shar'a rule is not determined by the potential benefit or harm of an issue, it is determined exclusively by the evidence. See: http://islamicsystem.blogspot.com/2008/12/shariah-rule-on-patents-copyrights.html

Anonymous said...

Actually patent system does hinder innovation and prevents real competition. In particular the pharmaceutical industries harm the general health and well being of the people because of patents. 

Firstly, drug companies put exuberant amounts on their patented drugs that burdens the tax payer and resulted in a lack of value for money. Eg zocor was marketed at around £30 per 28 tabs. Simvastain which is the generic version is about £1. Patented drugs last for 10 years before anyone can copy them. That means for ten years the tax payer is paying 30 times the actual cost of medicine.

 Some may say that patents are an incentive to undertake research and development. Therefore these exuberant prices placed on patented goods are not only an incentive but also help to cover costs for drugs that fail to reach the Market and the cost of development. However there's three main problems. Firstly it would have been more cost effective for govt to directly fund the research rather than expecting private companies to do this. The govt will ultimately be paying for the research either by direct investment or indirectly by paying for the patented price. It's therefore more cost effective to have an allocation of money that can be directly invested in necessary areas which private companies can then compete for.  Secondly private companies look at highly profitable research and not necessarily research needed. Eg there is dire need for a new generation of antibiotics yet little research is done because the medicines are used for short term thus they do not accrue as much profits than long term disease states. Thirdly many people are unable to afford treatment for these highly expensive patented goods. Even in the uk effective treatment isn't used becuSe some local Heath authorities (pcts) cannot afford to pay for them till they become off patent. Obviously this problem is further exascerbatd in the third world. 

Furthermore research done in the 18th century on a closed economy in mining and steam engines before and after the patent system (south west of englNd) showed that before the patent system knowledge transfer allowed allowed a faster rate of innovation in technology. After patent system we saw that innovation slowed in this area. Even if we want to use contemporary examples like open source software we see that this has proven to produced more technologically advanced operating systems than the patented versions like windows which stifled innovation. And it has made the expertise monetarised such that the best innovators in open source software are also accruing high wages from it. 

Finally the big innovations were all state sponsored and very rarely initiated by purely private companies. Eg Internet, world wide web, space travel, satellite technology, gps, lasers, manhattan project (nucleR power), human genome project, stem cell research, trains, antibiotics etc. All these were either directly done by the state or were research sponsored by the state. 

Anonymous said...

In fact we know that ussr was for many years more advanced technologically than the Americans. Problem for the ussr is that they lacked the private sector and a Market economy in order for technological transfer to take place to the ordinary individuals thus helping to raise their standard of living. 

By understanding this we can see how Islam and the khilafah can become a leading technological state. Firstly, by funding research in a cost effective manner to private companies that allow the development of techs needed for the society at large. Secondly allowing the free flow of technology and innovation in society. So research in dyes may have a impact in stem cells or vice versa, thus leading to development for both industries or technological areas. Thirdly Islam allows private tech firms to utilise the free information and monetarised it to either develop it further or to make money from the already existent research available. Fourthly a Market economy allows the technology to find it's way to the consumer thus helping to raise the standard of living. A quick point many ppl consider apple products on the cutting edge of technology. However all they've done was taken already existent research and worked out the way to present this to the consumer.  This is but a brief point and more could be said.