In preparation for something special that I will finally complete this week (Rothbard willing) lets talk about this editorial from the New York Times.
The article starts accurately enough explaining the US government’s monopoly power of ideas saying:
The Constitution gives Congress the power to grant inventors a temporary monopoly over their creations to “promote the progress of science and useful arts.”
I am actually shocked at the strong language used here, the four letter word “monopoly” is rarely used in reference to any government service. At least in polite company. I would also like to point out the subjective language quoted from the constitution. “Useful arts”. Useful to whom? To the inventor? To consumers? To the government? To humanity? Like most state activities the ability to decide what is “useful” is left to bureaucrats in service to the government rather than in the free market where useful services will generate profits and those that generate disuse (or disutility) are met with losses. Back to the article though:
“But in recent years, the government has too often given patent protection to inventions that do not represent real scientific advances.”
No argument there. The “copyright troll” phenomenon is more than enough to make this libertarian squeamish. Where is this editorial going I wonder?
“The issue in this case, Alice Corporation Pty. v. CLS Bank International, is whether using a computer to implement a well-established economic concept can be patented. The court should rule that such ideas are not eligible for patent protection.
Alice Corporation obtained four American patents that cover a method of settling trades between investors in currency and other financial markets. The approach depends on a neutral middleman to make sure traders complete the transactions they have agreed to. The corporation, which is based in Australia, has accused CLS Bank, a London-based company that settles foreign exchange trades for investors around the world, of infringing its patents.”
To make a long story short the US patent office granted the Alice Corporation a copyright on a form of interaction between a buyer, a middleman and a seller. An absurd concept to be sure. Now the question is what does the editorial suggest?
“The Supreme Court should make clear that nobody should be allowed to claim a monopoly over an abstract idea simply by tying it to a computer.”
I agree; but why stop there? Why the artificial endpoint of “abstract ideas tied to a computer”? If we shouldn’t allow patents on abstract ideas what would the author suggest if we proved that all ideas are necessarily abstract and therefore not able to be owned, sold, or monopolized? Would he follow his logic to the conclusion that perhaps all patents are invalid?