 like they don't even exist. Okay, coming up next, I got a clip from the John Stossel show and Stefan Kinsella is gonna join me to talk about intellectual property. America grants certain rights to creators of songs, books, movies, paintings. The idea is to encourage the creation and proliferation of new ideas by providing a brief and limited period of exclusivity. I'm an intellectual property attorney and you've still in my client's melody. You can be sued and found liable for monetary damages. And yet, some of you watch my show and you too. That's stealing. And that's our show tonight. That was the voice of John Stossel last week as he discussed intellectual property and one of the guests on the show was patent attorney and libertarian writer Stefan Kinsella who joins me now. Stefan, thanks for joining me today. How are you? I'm very well, glad to be here. Yeah, I thought it was very encouraging actually that the John Stossel show decided to take on this issue. Of course, he leans libertarian, but he has pretty much a mainstream audience, I think. And so you were part of that segment, but I wanna talk about the segments that preceded you. They had a pro libertarian, sorry, a pro IP advocate and an anti IP advocate. And I thought it was very interesting because they started with a utilitarian argument. John Stossel framed it this way and they brought up, I would say over the course of the show, five different examples, perhaps there are some that I missed, but five or six and the ones that I remember are magic tricks, music, fashion, TV, literature and comedy. And the interesting thing about those were three of them are protected by IP three or not. And if you don't really think about these things you wouldn't really know which ones were because there's so much innovation in all six areas. Correct. Yeah, the show was a very good show, I think. I was very heartened that they had it. I mean, to have a mainstream show deal with IP policy from a libertarian perspective, I think it's probably the first time it's ever been done. And I give Stossel credit for being open-minded and I think he's leaning in our direction. He did say he wasn't sure where the line should be. He wants there to be some IP, but he recognized that it's not always necessary and he recognized lots of problems with it. The interesting thing about the show I found out after I was there is that each of the segments had different producers. So it's just a big operation. And I was actually contacted twice by two producers independently. So I was contacted for my segment and then a few days later I was contacted by the other producer for that first segment which was a debate, but I said, I'm already gonna be on the show. And he said, well, who else can we get? And I said, well, here's three or four really good free market anti-IP people including David Kepsel who was the guy that appeared on the first segment. And so they took him because he's very similar to me. In fact, he and I are co-editing a book later this year on sort of a collection of anti-IP but free market writings over the centuries and decades. So we're working on that together right now. But yes, Stossel show, the first segment was a debate between an IP attorney from California and Kepsel. And then there was the other guests other than me and Kepsel were not really anti-IP but the points that they were brought out to make I think were ended up supporting my side because you had Chris Brigman who was talking about how the fashion industry thrives in the lack of copyright protection and in the face of piracy and copying if you wanna call it piracy. And then there was a comedian who showed that you really can't get protection for magic tricks with standard copyright and patent but the community has a way to self-enforce people who sort of take credit for others tricks. And the same in the comedian industry there was that comedian Doug Stanhope who's a libertarian comedian who was the last guest. So I thought it was a really balanced and good show overall and pretty much predominantly anti-IP. And a couple of the points that were raised I thought they were excellent point, the fashion expert. He basically said that these high profile leading edge fashion designers, they actually benefit from copying. And you wonder if those leading fashion designers could even exist or enjoy the trend-setting position that they do without copying. It seems like their position is almost reliant on copying. And then the example of the literature basically talking about the anti-copyright I guess or the lack of IP in the US resulted in so many people gaining access to literature and becoming literate because of it. Well, not only that, they gave a great example of Dickens who was upset at first, if I remember the story correctly, that his work was being pirated widely in the US because copyright protection at the time did not apply to works of foreign authors. And he was dismayed by it, but it made him so popular over here that he was able to come over here and go on this big speaking circuit because he was famous and revered. And he made so much money on that trip from speaking that it constituted a large share of his estate when he died actually. And so that was the discussion and then the pro IP person in the debate. He almost immediately conceded the utilitarian argument by just shifting focus almost immediately to the morality aspect. And I think the problem here, you might disagree, but I've seen it before where you can win an argument and I think we did so convincingly here, even just by letting this person talk, I think, was enough because he switched to the morality play. But then he talks about the different aspects of how you would have to enforce IP, even in the absence of actual legislation. He talks about Shakespeare helping to close down theaters violently. Stossel says, what do you do? Just go down there with a gang and go ahead. Right, he kind of exposes the thuggery behind it really and that it's really censorship. And of course this guy, it's a case of special pleading. I think he's a patent or he's an IP attorney. So of course he has an interest in the system. So he's really didn't have the most credibility on the show. The other guests didn't really get to talk about the morality on the other side. So we didn't have time. It was more utilitarian focus, but I thought one of the most damning things that the guy said, which we could have explored was, they were talking about, I think it was a George Harrison song, My Sweet Lord or something like that. Yes. That has like a very small clip in it that it resembles some older song. And I think there was a settlement or something like that. But basically the IP lawyer said, yeah, he was infringing other people's copyright when he did that. And if you take that logic to the extreme, what that means is if copyright had been enforced properly, we would never have had that song. In other words, the original person whose tune was sort of being borrowed as part of the background in that song could have vetoed that song. And we wouldn't have one of the most beautiful pop songs in history to grace humanity with. It could have ended up stopping it. At least the copyright lawyer could argue for some kind of non-injunction regime where you can always do what you want. You might have to pay a little bit of a tax later, some kind of damages, but they don't argue for that. They want the copyright holder to be able to stop people from doing things. In fact, this has been done before. People don't realize that in the US, there was a judge that literally banned the publication of a book, which was a sequel to Catcher and the Rye because it was a derivative work and not authorized by the estate. He just said, no, you just can't publish this book. It wasn't even like you can publish it and then you might have to pay damages. You just can't publish it. That's outright book banning by the state. Copies of this German film, Nosferatu, a vampire film, were ordered destroyed and seized and destroyed and just erased from the face of the earth because it was supposedly a knockoff of Dracula or something like that. So this kind of book banning and censorship of ideas is literally the result of these systems. And in my view, this is just the tip of the iceberg because as important as music and culture and art are to society, I mean, there are other things too, scientific discovery, health breakthroughs, things like that, things that could actually literally save lives that could be banned because of IP. Oh, and that actually is happening and does happen. There are literally people that have died because of patents. I mean, to take a simple example, there are various patents on seat belt mechanisms and safety mechanisms in cars. And if one manufacturer gets a patent on it, they can prevent others from using a similar lifesaving mechanism. And so others have to design around. And there are drugs. There's a drug called, and I have it on my website, c4sif.org. If you look up, just go to my site and look up Faberzyme, F-A-B-R-A-Z-Y-M-E. It's a drug that treats, I think it's called Fabri's disease. It's one of these weird debilitating diseases and people can die from it. There's only one type of drug that apparently works and there's one manufacturer in the US that has a patent on it. And they can't make enough. Now, this was a few years ago. I don't know where it's resulted, but there's two drugs in Europe that work, but they can't be imported here because of FDA regulations. So there's only one here. And we were shipping this one to the Europeans because the market was better for some reason. So there was a shortage and no one else could make it here because of the patent. And we couldn't import the alternative drug because of the FDA regulations. So you have all these patients in America suffering from Fabri's disease, unable to buy legally the drug from the manufacturer and no one else could make it. So it's really killing people. So it seems like the moral argument is also a slam dunk. And when the pro IP attorney was confronted with basically the coercion that takes place to implement and enforce these laws, he says, well, I don't shut anyone down in their workshop. I do it in a courtroom as if that legitimized the whole process. Yeah, it's like they think hiding the fangs makes it like they're not there. They're just hiding the wolf's fangs. But I'd almost rather an honest, it's like the Spooner quote about the highwaymen versus the state. You'd almost prefer the highwaymen who robs you once and leaves you alone and he doesn't have the gall to pretend like he's doing you a favor. He doesn't follow you around your whole life and pretend he's doing something good for you. And it's a one-time deal. But the state always pretends like they're doing you a favor and they never let you go. Doing it through the courts almost makes it worse and institutionalizes it. And it's so expensive to defend from these suits that bullying is a big part of it. There are copyright trolls and patent trolls and they go around extorting money from people even when they arguably have a good defense against the patent infringement or the copyright infringement, but they know that they don't wanna go through a two or three or $4 million lawyer legal fees just to defend themselves and to win. So they cough up half a million dollars or something like that or $100,000 to make them go away. And there are estimates that in, I think since around 1990 to about five years ago when this study was done over about a 2015, 25 year period, estimates that patent trolls alone had extracted half a trillion dollars. And I think the latest trend I'd seen was about $80 billion a year in recent years. So patent trolls are taking about 80 to $100 billion a year in royalties from companies all across the US probably often based upon just a threat of an expensive lawsuit that they might not even be able to win. Now that's just patent trolls. There's also real patent lawsuits from non-trolls which are probably 10 times bigger than that. So we're talking hundreds of billions of dollars a year are just taken from companies or that impose that much cost in terms of lost innovation or lost competition or increased prices because there's less competition and more oligopolies and cartels. So the cost of the patent system in terms of dollar costs and innovation costs is gargantuan. I like that they brought in the issue of basically corporate interests. And one of the gentlemen brought up, it could have been Stossel actually brought up the case of I think it was Snow White that Disney or someone had received a copyright on that story or something like that. And so you can't tell the story anymore. And then this is something that they actually had extended as well. Can you explain that? Yeah, I guess and it gets a little complicated because of the way copyright law works and because most people that aren't really deep experts in this field get confused by it which is understandable even Stossel on his show even with all the, in fact everyone on the show I believe except for the comedian was a lawyer. They didn't say that but everyone was a lawyer. David Kepsel has a law degree. He's a philosopher, the law professor of course and me. And also the magician apparently has a law degree. I was wondering about that. He seemed very knowledgeable. He did, I was surprised. And then later on I looked at his bio and he's like, oh, he's like he a polymath kind of guy. But in any case, but even Stossel kind of mixed up trademark and copyright and patent at one point in one of his little monologues. And the term in copyright, the way it works and the copyright lawyer in the beginning sort of alluded to this, but basically Disney took a story that's in the public domain which was the German folk tale of Snow White or whatever and they made their own version of it. And that's basically a derivative work of a public domain work. So the copyright is held by Disney and it's in the new derivative work but it really wouldn't prevent someone from making their own Snow White. However, Disney might sue them for trademark infringement if they used the word Snow White because they probably also claim trademark in that term. But the hypocrisy if you wanna call it is Disney was using things that are in the public domain to make a new work that they got a copyright on. And the work was in the public domain only because copyright doesn't last forever or because those works were created so long ago before copyright existed. But Disney keeps lobbying Congress to extend the term of copyright. Every time one of their major characters like Mickey Mouse is about to go into the public domain. They did this in the 90s with the Sunny Bono copyright term extension and gave Mickey Mouse yet another life. The US is now at life of the author plus 70 years or it's a different term for corporate works but that's roughly the term. Most, a lot of the other parts of the world only have life of the author plus 50 years. So the US is now using this TPP, Trans-Pacific Partnership which is allegedly a trade agreement, right? Meant to lower barriers to trade and the countries that it's negotiating with we already have pretty much low barriers to trade. So really this is meant to extend US style IP protection and I believe just in the last couple of days I think Canada has agreed finally and probably some of the other countries too that are part of this TPP negotiation to go ahead and add 20 more years to the term of their copyright from 50 to 70 after the life of the author to match the US term. And I guarantee you that in a few years when some of these other characters start expiring or entering the public domain you're gonna have strong pressure on Congress to make it life of the author plus 90 years. So they keep, it basically makes it in perpetuity. They've even done this before for works that have entered the public domain and then they get Congress to change the law and make it retroactive. So you've had works and characters that have entered the public domain because the copyright term finally expired. Then Congress passes an extension of the copyright term and it snatches something that was already public domain and puts it back into the copyright coverage. It's crazy. Okay, and now we get to your segment basically because now we're talking about what this is really about and you made a great point that I wish you guys had time to elaborate on because it's also someone brings up the issue of property rights and he says as libertarians this is something that we feel very strongly about property rights. You made an interesting point. You said, look, I'm a libertarian. I value property rights probably more than anyone else, definitely more than conservatives and property rights never expire. Yet patents and copyrights and these things do expire. So that should be a hint as to what's really going on here. So Stefan, what's really going on here? Right, and I do think that was a good point to make because I could make it very shortly and it gave people time to think but I didn't have time to elaborate as much. I actually did talk more about that but they cut some of that out for time reasons. But, and Tom Bell makes this point, by the way, in his book on intellectual privilege. And most supporters of IP don't want it to last forever. So even they, I mean, you could overcome this sort of contradiction or this inconsistency by saying, well, then IP rights should last forever just like regular property rights do. And a few people do advocate that like Lysander Spooner actually believed it and Gallambos did, Alexander Gallambos, Andrew Gallambos, sorry, two libertarians who supported IP. Most libertarians who support IP, even the non-utilitarians like Ayn Rand, even she thought that they should only last for a certain amount of time. And her argument as to why they should last 17 years or 70 years or whatever is so contorted and so sort of reverse engineered to justify this arbitrary rule that Congress passed. That's actually what made me a skeptic in the first place. Reading Ayn Rand's contorted convoluted attempts to justify this arbitrary copyright and patent term. As Tom Bell points out, the founders who were favor of copyright and patent, that's why they put this clause in the Constitution, they never did treat them as property rights. They never thought they were property rights. And that's exactly why the Constitution says Congress can enact these rights for limited times. It was just supposed to be like a temporary infringement into the market to induce more innovation and otherwise what happened, et cetera. So as a utilitarian basis, they weren't considered to be property rights by the founders. They were never considered to be property rights. They were called monopoly rights or they were called privileges. In fact, Thomas Jefferson proposed an amendment that was going to be included in the Bill of Rights, which he tried to limit how long these terms could be. And he had a proposed amendment to the Constitution, which would have been in the Bill of Rights, which was rejected. But it would have said something like, Congress shall have the power to grant monopolies to inventors and artists, but only for X years. So he wanted them to put a term in there, like 15 years or 40 years or something. He wanted a maximum cap in there, but he called them monopolies because that's what they are. Now he was in favor of them with hesitation, with misgivings, but he didn't think that they were property rights. None of the founders did. It wasn't until the free market economists in the mid-1800s started really opposing the growing threat of patents and copyrights and calling them monopolies and privileges and protectionism and censorship that the defenders of IP who were now, in fact, it wasn't called IP at the time, it was just called patent and copyright or monopolies. They started referring to them as property rights as a propaganda campaign to defend these rights. So they just made this term up to appeal to people's natural sympathy towards property rights, but they're not property rights. Of course, property rights don't expire. They've done an excellent job at that propaganda. Now overall, I would say this was a great episode and I'm glad they did it, but in the end, there was a little bit of disappointment at the end where Stossel basically says, look, it takes money. He used his own show as an example. Takes money to put on show like this. I employ many people. There's a lot of capital involved. I don't know if we'd do it if we didn't have copyright. And so in the end, he falls back on this, basically this tired defense of IP, which is basically utilitarian, but it's personal utility. IP works for me and therefore I support it. Although to be honest, I think, well, I think he moved in our direction. He seemed to nod at some of my points. I think actually he may be more on our side than he led on. I think he feels compelled to take his employer's side, which is Fox, which is a big media empire, which thinks that it relies upon copyright. I actually think they're probably wrong about that, but they think that they need copyright. So he even said he likes when people pirate his show on YouTube. He personally likes it, but he's worried about whether his employer likes it. So you can see he's got this sort of conflict of interest almost. If I had had time, I would have pointed out two things to him. Number one, I would have said as a really principled libertarian, with a principled view towards property rights, I would have said, look, if there's a certain business model that cannot make sense absent copyright law, then unfortunately that business model has to go. That's the bottom line. It's just like antitrust law or taxes. If people want to collude and set prices on the free market, they have the right to, even if they could. I don't think they could in most cases because there's too much competition to permit that. But bottom line is people have the right to do what they want with their own property rights. The same thing here. But I would also argue that I don't think they really need copyright to make a profit. He can still have a show. He can have advertisers. Maybe he wouldn't make quite as much money on the secondary and tertiary streams of income because there would be more and more competition for that. But they would have a reputation. They'd have a channel. They'd have good quality content. They'd be reliable. People would still sell ads. People make ads now on the internet with popular websites, even though piracy and copying of their content is possible. Why is that possible? So just because someone hasn't yet figured out a business model that would work in a copyright free world doesn't mean we need to have copyright. People need to adapt to a just property order rather than a property order adapting to the business models people are used to. Yeah, these are all great points. And it's basically the basics of a free market and just society, right? The producers and the businesses adapt to the markets, not the other way around. And in business, think about technology and other things. We solve so many more difficult problems than how to have a product without someone copying it. I mean, the problems that we solve are so much more difficult than that. If we just put a little bit more of our resources into figuring out how to secure the profit, I don't think we would have to rely on these laws. And not to mention all of the money that's wasted as it stands on internal legal teams and whatnot. I just think it's a slam dunk. But the work is not done, Stefan. So I think you're gonna have to go back on that Stossel show and just work on John a little bit more. He is doing a great job. I think you're right. And he's got an obligation to his employer. So that was a good point too. But it wouldn't hurt if you could get on there again and maybe sway things a little bit more in our direction. Well, I would never turn down a trip to New York. I tell you, that's a lot of fun. All right, thanks for joining me, Stefan. And I hope you'll come back again. I really wanna get into that TPP issue because that is a very important issue. And I think not a lot of people know about that. So please, thanks for joining me. And I hope you'll come back again. Be happy to do it. Thanks a lot. And that is the economy for Friday, February 6th. My thanks to Stefan Kinsella for joining me today. Please visit his website at cforsif.org. That's C, the letter for S-I-F dot O-R-G. If you have a question or comment, please send it along to questionatpowerandmarket.com where you can tweet at Albert K. Liu. Thanks for joining me today. I'm Albert Liu. Until next time, take care. The economy was brought to you by WB Wealth Management, an independent fee-based financial advisory firm and the Woodlands Bullion Company, your exclusive source for precious metals. Visit us online at wbadvisors.com. The economy is produced by WB Wealth Management in cooperation with Mixingnell Innovations, LLC. This program is intended for informational purposes only and is not an offer to buy or sell securities or alternative investments.