By Gordon Hull
A couple of years ago, Mark Lemley, one of the most influential and prolific of intellectual property scholars, published his “Faith-Based Intellectual Property,” a manifesto against what he characterizes as non-utilitarian or non-empirical theories of intellectual property. In other words, “participants on both sides of the IP debates are increasingly staking out positions that simply do not depend on evidence at all” (1336). He adds, “I call this retreat from evidence faith-based IP, both because adherents are taking the validity of the IP system on faith, and because the rationale for doing so is a form of religious belief” (1337). He treats Robert Merges’ Justifying Intellectual Property (2012) as the paradigmatic example of this phenomenon, though he cites others. A couple of months ago, Merges’ response, “Against Utilitarian Fundamentalism” appeared, arguing that it was the militant utilitarian position – which as Merges reads it assumes that “to abandon the solid world of empirical foundations is to automatically commit to a stubbornly irrational set of foundations” – that “commits precisely the error that [it] attributes to others” which “takes an extreme position, cutting off conversation and debate” (n5)
The point I want to make here (in this post and a follow-up) – and I should say that I absolutely agree with Lemley both that IP protections are too strong now, and that there is a good-sized body of evidence that supports this proposition – is that Lemley’s argument presupposes that IP is a form of biopower (or perhaps biopolitical governmentality) insofar as it sets policy, the aim of which is to optimize the welfare of the bios by pushing the “conduct of the conduct” of individuals within it toward higher levels of creative productivity (if you are uncomfortable calling that “biopower,” then it’s fine to stick with “governmentality” here – the point is the contrast with other kinds of thought). I would also argue, though again not a lot hangs on the distinction here, that Lemley’s framework is almost entirely dependent on law and economics, as it developed out of the University of Chicago from the 1960’s onward. In this, he is accepting what one might call a neoliberal understanding of intellectual property (on the move to law and economics, see especially William Davies).
It is a great virtue of Lemley’s work that it demonstrates that neoliberal economics need not justify the endless expansion of IP rights, as is typically asserted by what Phillip Mirowiski calls the neoliberal thought collective. Indeed, in a paper coauthored with Brett Frischmann, Lemley demonstrates not only that externalities can be positive (“spillovers”), but that the Demsetzian, neoliberal framing of IP can be called deeply into question by a proper accounting of positive externalities, something that the notion of proprietization as internalizing externalities resists:
“The obvious implication of the property rights theory is that spillovers are bad, since they drive a wedge between private and social value and prevent the perfectly informed inventor from making optimal decisions. From the supply side, spillovers are uncaptured benefits that could be captured to increase incentives to invest, and from the demand side, spillovers reflect unobserved, lost signals of consumer demand that fail to guide investment and management decisions. For a property rights theorist, we could solve a great number of problems if only we could eliminate spillovers” (111)
However, allowing these positive externalities to remain external benefits any number of third parties, and even drives innovation, a point for which they adduce considerable empirical support. The move to account for public welfare pushes the neoliberal envelope considerably, and the paper (and work that comes out of it, such as Frischmann’s Infrastructure) is extremely important for that reason. But this is still a theory of intellectual property dependent on developments in law and economics around efficiency and welfare maximization.
In any event, Lemley’s theoretical commitments are so deeply held that he not only sees empirical work as the only rational basis for IP, but he sees his particular interpretation of what counts as empirical work as the only rational basis for IP. I will defend this reading even though Lemley explicitly rejects it; noting that “I do not want to make you focus exclusively on money or the rational actor assumptions of classical law and economics. A number of scholars have usefully reminded us that a utilitarian calculus can and should value more than simply dollars” (1345). In this he is prescriptively right, but I think the text suggests his commitment to the point is wavering.
Lemley argues that “once one abandons utilitarianism it is hard to find a basis for a pre-political right to IP” (1338). I don’t doubt that it’s hard to find a basis for a pre-political right to IP, and I suspect that’s why Merges tries very hard to come up with a Rawlsian justification, in what is one of the most innovative chapters in his book. But of course the decision to apply a Rawlsian, a “utilitarian” or any other basis for IP is itself a political one, as nothing in nature says that we have to have utilitarian policy all the time. Indeed, invocations of rights are often (construed as) counter-utilitarian (exhibit A: privacy versus security). This is even more the case when one realizes that utilitarianism here means “aggregate welfare” in the manner of the law and economics movement.
Lemley’s first presupposition is that the Market is Good: “almost all of the debate” in economics these days “takes place at the margins of the fundamental discovery that market mechanisms supplemented with some infrastructure investment and health and safety regulation generally work better than anything else in providing most goods and services” (1330). His second presupposition is that IP is a “form of government regulation of the free market designed to serve a useful social end – encouraging innovation and creation” (1330). He then makes the central claim of the biopolitical state:
“The fact that IP is government regulation of the marketplace doesn’t mean it is a bad thing. Many regulations are desirable, and I think IP rights of some form are among them. But it does mean that it is not an inherently good thing. In a market-based economy, regulation requires some cost-benefit justification before we accept it” (1331).
He then cites a number of recent studies that present an empirical debate about the merits of IP, noting that they don’t support either the status quo or, more to the point, the continuing upward ratcheting of IP rights. However, “when you are spending a lot of time and money every year in a government-sponsored departure from the free market, even maintaining the status quo ought to require some evidentiary support. And doubling down on that policy certainly should” (1335).
He then argues that the emergence of “faith-based IP” arises among IP defenders who don’t want to confront the evidence that current IP isn’t all it’s cracked up to be. Merges thinks this is a brutally unfair characterization of his work, which relies on cherry-picking some comments from its introduction, and I am inclined to agree, even though I also think Merges tends to provide more IP rights than necessary. The complaint about lack of evidence is particularly odd; Merges, for example, cites a lot of empirical evidence to conclude that the pharmaceutical industry needs patents to spur innovation – exactly the same evidence Lemley cites. More generally, Merges also is at pains to point to the ecumenical nature of his system – because he focuses on intermediate values like property, he is able to argue (convincingly, I think) that his “applied” theory is at least partially independent of the deeper normative theory that underpins it. But most importantly, he is proceeding from the same empirical position as Lemley: the empirical evidence in favor of IP is highly indeterminate. The question is what one does with that, which I will take up next time.
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