Weekly Worker 509 Thursday December 18 2003

Review

A bridge too far

Graham Dutfield, 'Intellectual property rights, trade and biodiversity', Earthscan Publications, 2002, pp238, £24.95
Michael Perelman, 'Steal this idea: intellectual property rights and the corporate confiscation of creativity', Palgrave, 2002, pp242, £17.65
Peter Drahos, 'A philosophy of intellectual property', Ashgate, 1996, reprint 2002, pp272, £60

In the last 25 years a new branch of law has risen to prominence both on the national and the international stage. This is the law of ‘intellectual property’ or, as the titles of these books have it, ‘intellectual property rights’, usually abbreviated to IPRs. This prominence has given rise to significant controversy and to a good deal of ideological garbage about the ‘knowledge economy’. It does, however, raise important questions for Marxists.

‘Intellectual property law’ is in reality some old legislative branches repackaged and greatly extended - the law of patents and related rights, and the law of copyright and related rights.

Patents are legal monopoly rights to make specific, usually newly invented, products. They were introduced by the Venetians in the 15th century and spread to England in the late 16th. The Tudor and Stuart monarchies in the late 16th and 17th century tended to sell monopoly patents for common commodities, like soap, which was regarded as abusive. As a result the parliamentary opposition forced through the 1623 Statute of Monopolies, which established the requirements (common to modern patent law internationally) that patents must be only for new inventions, and must be for a fixed time limit. English government action in the reign of Queen Anne (1703-14) invented the general modern requirement that the patentee provide details of the invention.

Copyright is the legal right to prevent other people copying text that you have written, or bought from the author, and published (or, in modern law, filmed, photocopied, or scanned or transcribed into e-text). It emerged in England initially through the internal anti-competition arrangements of the Stationers’ Company. This was a publishers’ guild monopoly, which formed part of the censorship arrangements of the later Stuart monarchy. After the revolution of 1688 the censorship system first became unenforceable in practice, and then was abandoned (in 1696). As a result, the publishers lobbied for statutory protection of copyrights (under pretence of protecting the interests of authors) and obtained it in 1710. Initially limited to the life of the author, in modern law it has been extended to a substantial period after his or her death (and, by way of copyrights ‘initially created’ by corporations, may be effectively perpetual). After the invention of the gramophone it was extended to audio recordings, and from there to broadcasts and, in current law, to computer software. Similarly, after the invention of photography it was extended to photographs (and from there to photocopies and so on).

There are a variety of other rights analogous either to copyright or to patents: trade marks, plant varieties, registered designs and so on. Most of them were invented in the later 19th or 20th centuries.

‘Intellectual property’ seems to have been originally a French term (propriété intellectuelle) for copyright. Until the 1970s, patents and related rights were more commonly called ‘industrial property’. In the United States, however, the expression ‘intellectual property’ was used as a collective synonym for all these rights from the 1940s at the latest. Following a 1967 international convention, the existing international copyright protection organisation was converted into the World Intellectual Property Organisation of Geneva, with a very broad remit. Even so, it took until 1981 for the first general textbook on intellectual property law to appear in England (WR Cornish Intellectual property: patents, copyrights, trade marks and allied rights London 1981). Since the 1980s, the US has lobbied vigorously on the international level for strengthened protection of IPRs. Its major achievement was the Agreement of Trade-Related Aspects of Intellectual Property Rights (usually abbreviated to Trips), which came into force in 1995, but US pressure to expand these rights continues and was an element in the failure of the Cancun talks earlier this year.

Underlying this US-led expansion of private monopoly rights in the use of information is the gradually increasing role in the US economy since the mid-20th century of rents derived from these rights, as opposed to sale of physical goods or direct investment in overseas production. This US shift into ‘technical rents’ from the 1950s was identified by Marxist economists in the late 1960s and early 1970s. It may have dated back to US relations with Latin America after British imperialism’s 1914-18 sale of its Latin American interests to the US: an early US book on intellectual property is William Sanders’ The protection of intellectual property of American citizens in Latin America (Washington DC 1942). The 1950s shift, and the growth of third world government debt, were intimately associated with the shift in the cold war period from direct colonialism to neo-colonialism. Since then it has accelerated. Dutfield (p10) quotes an estimate that the share of IPRs in US exports rose from 9.9% in 1947 to 27.4% in 1999. In general the US is massively in deficit with its trade partners; in relation to royalties and licensing fees on IPRs it was in 1995 in surplus by $20 billion (Dutfield, pp10-11).

The books reviewed here are part of the controversial literature which has been generated by the expansion of IPRs and their role in the modern imperialist world order. Dutfield focuses narrowly on the implications of IPRs in the world trade regime for biodiversity. Perelman offers a vigorous polemic against the expansion of IPRs in US law, concentrating on the US economy, but also addressing international trade issues. Drahos’s book, first published in 1996, addresses very general theoretical issues about IPRs as a particular species of property right.

Dutfield

Dutfield’s book is, as already indicated, concerned with the relation between IPRs, the world trade regime and biodiversity. The problem is that - some green authors have argued - the expansion of IPRs, especially in the field of biology, threatens to allow (mainly US-based) corporations to demand a rent from third world peasants and hunter-gatherers for their existing economic activities; and, by so doing, to drive forwards a replacement of peasant agriculture and indigenous forms of production with commercial agriculture. This can tend to lead to a monoculture of crop varieties controlled by the corporations. And this, in turn, threatens global ecological collapse through loss of species, or global crop pandemics leading to general human starvation (since crop monocultures are exceptionally biologically vulnerable to newly emerging diseases).

Dutfield’s book suffers from being written in the style of a government committee report or NGO submission to a government committee, which makes it a rather tedious read. It is, on the other hand, a mine of information about the details of debates on the place of IPRs in the world trade regime, and contains a very extensive annotated bibliography. It can be recommended, therefore, for anyone who wants a starting point for getting a detailed grasp of the narrow questions it addresses.

Dutfield writes from a very mildly reformist, green perspective; though he discusses briefly the objections which have been made to broad IPRs, he is mainly concerned with micro-questions within the existing regime, as to how it could be subjected to small adjustments, making it more friendly to the “traditional knowledge” of indigenous peoples and peasant farmers in the colonial third world. The limited recommendations he makes (pp128-131) are mainly addressed to “governments”: for example, “Governments will need to consider the extent and breadth of patent claims that their laws will permit ... Claiming excessive monopoly protection should not be allowed in law or in the practice of examining patents.” But how is this recommendation to be implemented? Does it not, inevitably, raise questions of the interests of governments in the balance of trade and in the profitability of ‘their own’ transnational corporations, and of the dependency of political regimes (eg, in the US and UK) on political donations and lobbying by corporations?

Perelman

Perelman’s book is a vigorous polemic against the recent expansion of intellectual property rights. This polemical character makes it a cracking good read. It is stuffed full of examples of the outrageous abuse of IPR claims by corporations and the adverse effects of IPRs on scientific and technical development.

Chapter one gives a potted history of IPRs, especially patents, and argues that the growth of IPRs is generally a response by major market players to adverse market conditions. Patents were controversial in the high period of laissez-faire between 1850 and 1875, then were extended in response to the long depression of the late 19th century; they were used as a device to get round anti-monopoly legislation; the great extension of IPRs from the 1970s is a response to the declining relative position of the USA in the markets for physical goods.

Chapter two analyses the hypocrisies of IPRs, including ‘expropriation’ of the traditional information of indigenous peoples, government action to override patents for war needs, and US government industrial espionage against non-US businesses. Chapters three and four argue that there is an antagonistic relationship between IPRs and scientific and technical development, while chapter 3 focuses on the corrosive effects of patents and commercialisation in university science and chapter 4 on the distortion by IPRs of technical choices in corporate research.

Chapter five gives Perelman’s core argument against broad property rights in information. This is that the underlying argument for markets and private property is that these are rationing devices for the allocation of scarce resources, which allocate them to the person who values them most highly. This is perfectly conventional bourgeois marginal utility economics. But, within this framework, information is not a scarce resource. The marginal cost of producing it is very low and, no matter how many people use it, the supply of information is not reduced. The private property/markets regime is therefore inappropriate to information. As a result, markets are unable to deal with information. IPRs are, in fact, a response to this failure, but they are an inappropriate one. Conventional Chicago ‘law and economics’ arguments in favour of IPRs are an inappropriate metaphorical use of economic concepts. These are, Perelman argues, in any case really only appropriate to early modern economies with low levels of fixed costs.

Chapter six summarises Perelman’s view of the social costs of IPRs: there is a substantial cash cost, but in addition strengthened IPRs are closely associated with growing monopolisation and social inequality, attacks on human rights and subversion of democratic political processes. In a very brief conclusion Perelman argues that patents should probably be restricted to very narrow and specific technical innovations, but more broadly that the inability of market approaches to deal with information implies that we should be looking for fundamental changes in economic institutions.

Limitations

Perelman’s book is an excellent source of IPR horror stories. But his arguments need to be used with some caution. In the first place, many of the horror stories are not, in fact, results of the existence of IPRs. They derive, rather, from the corrupt character of capitalist political systems (donations to political parties, etc) and judicial systems (free market in legal services, so that litigants with ‘deep pockets’ usually defeat those with less money available to spend on lawyers). These forms of corruption affect areas in which IPRs are relatively insignificant, as well as those where they are important.

Thus, for example, the abuse of the patents system by corporations’ vexatious patenting and litigation has older counterparts. These include monopolisation of land and of mineral resources through corrupt payments to public officials, and judicial decisions, from the 19th century on, enabling businesses to offload injury costs onto their employees and pollution costs onto their neighbours. The drive - across the capitalist world - to ‘marketise’ universities and to cut state expenditure on research is part of the same process as privatisation, commercialisation, etc of other public services. Growing inequality and homelessness in the USA - and elsewhere! - is only very indirectly associated with the growth of IPRs. It is primarily caused by tax cuts for the rich, welfare cuts for the poor, and the deliberate use of economic management tools to maintain a high level of unemployment. Both the attacks on universities and the deliberate increases in unemployment and inequality are also responses of the ruling classes to the scare they had in the late 1960s and early 1970s, when full employment, welfare and the expansion of education produced an assertive working class which began to threaten capitalist control.

Secondly, Perelman’s argument that information should not be treated as property rests on the logic of the standard argument of neoliberal academic economics that property and markets originate and are justified because they provide the most efficient possible means of rationing scarce goods. But this involves buying a whole package of ideas of extremely dubious merits. Perelman in fact refers tangentially to his own critique of this sort of reasoning in The end of economics (1996). One could add Geoffrey M Hodgson’s How economics forgot history (2001) or, going a lot further back, Nikolai Bukharin’s Economic theory of the leisure class (1914); Bukharin’s arguments against marginal utility economics still have considerable force. It is paradoxical that Perelman should argue that we need a fundamental change of economic institutions - ie, to get beyond capitalism - while making use of a marginal-utility economic argument which assumes that capitalism is transhistorically justified.

Drahos

As its title indicates, Drahos’s book focuses on the philosophical justification of a legal concept of intellectual property. After an introductory chapter one, chapter two offers a brief discussion of the history, which starts with Roman lawyers’ invention of the idea of intangible property, before leaping forward to arguments about copyright in 18th century England and the origin of patents in 17th century England. Chapter three attempts to relate Locke’s general theory of property to intellectual property. Locke argued that all things are originally unowned, but that individuals acquire property rights in them by mixing their labour with them. Drahos is quite critical of Locke’s account, but he draws from it the idea of an “intellectual commons”, that information is unowned or socially owned in the absence of social property institutions. Chapter four similarly attempts to critique and appropriate Hegel’s concepts of property, civil society and the state, suggesting that Hegel’s critique of the corrosive character of civil society may be helpful in understanding the growth of IPRs.

Chapter five engages briefly with Marx. Drahos is not a Marxist and considers Marx’s “class instrumentalism” unhelpful, but he does find Marx’s theories of ideology and commodity fetishism useful in understanding how capitalism tends to produce IPRs in order to “integrate abstract objects and creative labour into the commodity life of capitalism”. Chapter six addresses orthodox bourgeois economists’ arguments about property, starting with Adam Smith, and chapter seven deals with issues for liberal theory arising from these. The conclusions are, broadly, that the nature of abstract objects (ideas) is such that strong property rights are likely to lead to opportunistic behaviour by their owners and to produce private concentrations of “threat power” which menace general liberty (both these abstract conclusions are extensively documented, for the recent USA, by Perelman). Chapter seven uses John Rawls’s theory of justice to conclude that broad and strong IPRs are in principle unjust. Chapter eight cashes in the argument in a general conclusion. The fundamental task is to break from the idea of IPRs as a kind of property analogous to other forms of property. Instead, limited forms of IPRs may be justified as socially useful monopolies.

Drahos’s book raises some interesting theoretical questions, but his method of argument is highly eclectic. It is hard to see how a little Locke, a smidgen of Hegel, a spoonful of Marx, a couple of pinches of standard classical and neoclassical economics and a lump of Rawls can actually stand together to make a coherent argument. As with Perelman, there is also a problem of overstating how different IPRs are from property rights in general. Exactly the same complaints about the loss of the commons, about civil society, and about opportunistic behaviour and concentrations of power, can be made about private ownership of land and of large concentrations of money. The history of these objections goes back to Greek and Roman political thought; they were live elements of political debate in England in the early 18th century and in the USA through the late 18th and 19th.

Common concerns

These three books share a common general theme beyond that of IPRs. This is that IPRs are somehow a ‘bridge too far’. There is some special feature of ideas which means that property rights in them are - for Dutfield, Perelman and Drahos - problematic. But the critique of IPRs is not extended to a critique of property rights in general.

Now it is clear that IPRs are, as both Perelman and Drahos point out, capable of being anti-democratic. To give a concrete English example, in Ashdown v Telegraph Group (2001) Paddy Ashdown obtained an injunction against publication of notes of his secret meetings with Tony Blair, on the basis that publication would infringe his copyright (http://www.courtservice.gov.uk/judgmentsfiles/j677/civil_ash-down.htm). So much for freedom of political information. In contrast, in Derbyshire CC v Times (1993) the House of Lords held that the public’s right to know meant that a local authority could not sue a newspaper for defamation ([1993] AC 534).

But the same applies to property rights in land. In Appleby v UK (2003) the European Court of Human Rights agreed with the UK government’s submission that the owner of a shopping mall - in fact, the rebuilt town centre of Washington, Tyne and Wear, which had been privatised in 1987 - was entitled to exclude protesters from his land (http://www.sbg.ac.at/oim/orig/03_3/Appleby%20v%20UK). So much for freedom of speech and assembly. In contrast, in DPP v Jones (1999), where the land was a public highway, the House of Lords held that the rights of freedom of speech and assembly prevailed over the rights of the owner of the underlying land (http://www.parliament.the-stationery-office.co.uk/pa/ld199899/ldjudgmt/jd990304/jones01.htm).

The attempt to separate IPRs from private property rights in general is thus slightly peculiar. Perelman’s arguments potentially imply a general critique of the property rights framework; Drahos works from theories of property rights. The idea that private property rights can be anti-democratic is not exactly new or strange. Leaving aside the historical critique of feudal property claims by the revolutionaries of the 17th-19th centuries, it was an element in American populism and a standard element in Lenin’s critique of bourgeois democracy (when the bourgeoisie monopolises the printing presses there is no true free speech). The standard liberal answer to this critique is that Leninism leads to Stalinism, so we need private property to set limits on state power, etc. But the implication of the Ashdown and Derbyshire and the Appleby and Jones cases is that public rights in relation to public property may yield more political liberty than the regime of private property rights. Our authors should at least have addressed these issues in passing. Why not?

Legal property rights and social relations

A legal property right is not identical to the social relationship of “property”. I could, for example, speak of “my dope” (if I had any) - though, since possession of cannabis is illegal, I would not have a lawful right to it. Equally, slavery - ownership of other people - is illegal in most countries, but slavery in practice is regrettably common (see www.antislavery.org). The social relationship of property is about practical, not legal, control and ability to dispose of (sell, give away, destroy) the thing (or person) owned. It is for this reason that Marxists can properly speak of medieval English villeins owning their family plots of land, though in the eye of English medieval law the land belonged to the manorial lord and the villeins had no property rights to it.

The relevance of this point to IPRs is that, though the law of “intellectual property rights” is a recent innovation and patents and copyrights an invention of capitalism, the underlying social relation of private ownership of ideas is considerably older. If, as an ancient or medieval artisan, I know an exceptionally efficient way to make shoes, that knowledge is in my private control: I am under no obligation to disclose it to anyone else (even my apprentice, whom I could properly teach the standard methods while using my own special methods out of his sight). If, as a medieval cleric, lawyer, etc, I write a book, I am under no obligation to publish it. If I do not write my knowledge down, it is even more strongly within my control.

Medieval artisans characteristically had not only fully individual property in ideas, like the example given above, but also trade secrets owned in common by the masters of the trade guild. Because these are separable from any individual, they were protected by guild rules against the disclosure of trade secrets to outsiders, backed by sanctions; these in turn were backed by borough jurisdictions, which the citizens vigorously defended against the encroachments of other towns and of central government. In relation to any individual master-craftsman the trade secrets, and the jurisdictions which protected them, were a ‘commons’; in relation to outsiders, they were private property. The legal property right, however, was the jurisdiction, not the secrets it protected. These were not yet capable of being thought of as property by lawyers. Similar, but usually less formal devices protected the common trade secrets of clergy (episcopal examination; writing in Latin) and lawyers (examination in the Inns of Court; writing in Norman-French). These ‘intellectual commons’ were the artisans’ and intellectuals’ equivalent of the physical commons attached to manors and peasant villages, which were in theory owned by the manorial lord, but in practice controlled by the peasant community.

Destroying the intellectual commons

The English transition from feudalism to capitalism famously involved the enclosure of the physical commons between the 16th and 18th centuries and, thereby, the expropriation of the peasantry as a class. Without the commons small peasant production was unsustainable, and the peasantry differentiated into employer-farmers and landless labourers (rural proletarians). In relation to the artisan class the process was slightly different. What happened was that the jurisdictions which protected the collective intellectual property of the artisans were destroyed or emasculated through the intervention of the central courts, or evaded through the creation of centres of production outside corporate towns. Without their right to control the use of their trade secrets, the artisans became vulnerable to competition. They too differentiated into employers and workers.

This process was by no means complete. The professions - doctors, lawyers, clergy and academics - retained and ‘modernised’ their guild monopolies. New professions were created in the 19th and 20th centuries on the basis of a variety of specialist skills - accountants, architects ... In addition, certain types of artisan were able through craft union organisation to convert into skilled workers with their own ‘entry barriers’: ie, apprenticeship.

Separation of ideas from people

Patents and copyrights in their early form can in theory be conceived as a form of enclosure of the intellectual commons. In practice the limits on both meant that they had very little effect in this way. Publication in Dublin could evade copyright; the early use of patents seems to have been as often as not to facilitate stock market frauds, like Woollaston’s patent for extracting oil from English radishes, which raised £20,000 during the stock market bubble of 1719-20 (Colt v Woollaston [1723]). Genuine trade secrets remained primarily protected by simple secrecy into the 19th century.

What the emergence of patents and copyrights does reflect is the development of printing. The possibility of wide dissemination of an idea through the printing press makes it possible to think of the idea as a thing separate from the people in whose heads it is, and therefore as a tradable object of property. Similarly, but on a larger scale, the machines of the later 18th and early 19th century took the skills of craftsmen and women and turned them into a concrete entity, the machine, deskilling the craftspeople. This development evoked organised resistance from the Luddites, who sought to defend their intellectual property (craft skills) against capital.

Enclosing the intellectual commons

This history may perhaps put us in a better position to understand why we now have a run of books arguing that intellectual property is a bridge too far. Since the 1950s there has been a gradual development towards the proletarianisation of intellectual labour. What this means is that it is decreasingly the case that lawyers, doctors, etc can work as freelancers or in small family firms. They are increasingly integrated as employees in substantial businesses. They still command premium wages; like the premium wages of craft-skilled workers, these contain both a wage element for the cost of subsistence, and a rent element derived from the professional guild’s monopoly control of certain information. However, this information is no longer sufficient for their work: they also need resources (libraries, computers, etc) which only substantial firms can provide.

At the same time we also see two converging processes. On the one hand, as already indicated, US capital was developing from the 1950s towards an increased reliance on technical rents as its mode of exploiting the world. This reliance reflects the geopolitical conditions of the cold war, which made an overt assertion of US power politically unattractive. On the other, new forms of reproduction of ideas - especially computers, but also the photocopier, video and so on - pushed towards a further separation of ideas from the people who have them in their heads.

These changes in the social practice of intellectual property begin to be reflected in its legal form in the extension of corporate intellectual property forms. As capitals become more and more concerned with these forms, they begin to exert increasing pressure on the state to extend and strengthen their protection. From the 1980s we really do begin go move into a process of enclosure of the intellectual commons. Understandably, the intelligentsia resist. For the first time they are beginning to experience what happened to peasants and artisans in the 16th-19th centuries. Dutfield, Drahos and Perelman are in different ways part of this movement of resistance.

... and Marxism

Marx commented somewhere that the emergence of capitalism enabled a clearer view of the underlying secret of pre-capitalist modes of production - that is, the differing ways in which surplus is pumped out of the working population. The development of legal intellectual property rights and, most recently, of the common concept of intellectual property has a similar advantage for us. It enables us to see that the specialist skills and collective secrets of artisans and intelligentsy, forms of intellectual property, are themselves a form of petty property.

This perception, in turn, should enable us to see that the trade union, Labour, Stalinist and on a small scale Trotskyist bureaucracies are also a component of the class of petty proprietors. They cling to their control over information and their bureaucratic career paths because these are the property rights - the intellectual commons - which elevate them above the proletariat proper. Stalinism is revealed as not a new class formation, but as the temporary ascendancy of an old class, the petty proprietors resisting capitalist differentiation and capitalist ‘socialisation’ through expropriation of their petty property.

From this point of view it would be futile for Marxists to join the movement to ‘cut IPRs down to size’. Our alternative is not the preservation of petty property and its attendant private commons, but the general socialisation of property. Since private ownership of political careers, ideas and information is also a form of petty property, this reinforces Marx’s original claim that there can be no socialism without radical democracy.

At the same time, there is also a sense in which intellectual property is indeed a bridge too far - for the regime of the free market and private property. IPRs render transparent the character of property claims as monopolistic and, in a complex interconnected society, parasitic. They are transparently opposed to basic democratic rights. But, when we investigate more closely, we find that this opposition is in fact shared by the right of private property in the means of production more generally.

The rise of intellectual property is thus one of the many signs in today’s society of the decline of capitalism.

Mike Macnair

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