 Hello, everybody. Thank you so much for coming out. We really appreciate it as always. You are so awesome. You are so much fun. So tonight we have a really great speaker. He's from Houston at Steffan Concella. Steffan Concella is an intellectual property lawyer and he also happens to be an anarchist. And so he is really at the forefront of the scholarly work around how would intellectual property law, patent law, copyrights work in a world without legislatures enforcing them. In other words, without patents and maybe copyright, actually. I'm not entirely sure about that. So I'm waiting here at Steffan Concella to explain how this world would basically operate in the short amount of time that we have here tonight. So feel free to ask questions after he's done speaking. I want to introduce Steffan. Thank you very much. I'm really glad to be here. I think this is my second or maybe third appearance at Liberty on the Rocks. It's a great group. It's strange to get applause from a group of people about talking on a Thursday night about intellectual property law. So I'm not going to talk about intellectual property law too much because that would bore even you guys. What I want to talk about is the policy around it, right? And how it affects rights and liberty and why we should care about it. I am a patent lawyer. I've been one for 20 years. I've also been intimately involved with the libertarian movement for over 20 years. I've been doing research in Austrian-oriented anarchists. Although tonight I decided to believe in government. Just joking, kidding. So actually IP is not my favorite topic, but I've probably given 50 speeches on this or interviews. People keep wanting to hear about it. And I think the reason is IP, and I will define it in a minute for you guys. It basically means patents and copyrights and trademarks and trade secrets, things like this. It sounds boring and it is to even lawyers, but why is it important? Let me just, before I go into one argument, I'll try to present you guys with. And by the way, feel free to interrupt me any time. Any time. We have Q&A later or we can have questions. If I say something that makes no sense, feel free to interrupt me. But IP, just don't discombobulate me. I got contacted today about a patent lawsuit which is threatening to shut down podcasting. Have you ever heard of podcasting? Is the internet important? Is communication important? Is podcasting important? Yes. There's a patent troll that's threatening Adam Carolla and a lot of other people, maybe even all of us, and we don't have money to pay for a lot of licensing fees to make this guy go away. They could literally kill podcasting. Edward Snowden, chem.com was invaded in New Zealand by federal goons in another country under copyright law. People are being put in jail for downloading and uploading movies. It's hard to get articles, it's hard to get information out there. Patents cost at least $200 to $500 billion a year in America alone on innovation, or maybe even more. So the costs of these laws are seen and hideous and they're growing. I could give you one example for every day of the year. I can't even keep up with it on the blogs that I write. So this is why IP is interesting. Again, it's not my main interest but I'm a specialist in it and I've written about it and everyone wants to know about it. Ever since 1995 when the internet arose, we see more and more examples of abuses and outrages. People call them abuses and outrages. The question we need to ask is are they really abuses or are they just the way the system works out? Do we need to reform patent and copyright law or do we need to get rid of them? Now my answer is we need to totally and completely abolish patent and copyright today and trademark and trade secret. And I can give reasons for that too. There's no basis whatsoever in libertarian law for keeping these legal systems in place. Well, of course, the question is should we get rid of it from a governmental perspective and what about NDAs? Let me hold the NDA question off to the Q&A period. That's more of a question of what your question is getting at us. Assume that the government's not legislating. Could we come up with a system by private contract that's similar? The answer is, in my opinion, absolutely not. Nothing similar whatsoever. In NDA, a non-disposure agreement, a private contract where you agree to keep the information secret perfectly legitimate. But if you understand anything about property rights and law, if you think about this you'll see that a property right is a right that's what we call in realm, good against the world. A contract is impersonal between two people. There's just simply no way to create by a contract a right that's against the world. You and I can have an agreement, I can agree to pay you damages, we can have a special arrangement about what we do with our property. It's not a good against the world, like a property right is. And this is what, and believe me, if you approach any patent or copyright advocate and you tell them, well, we don't want to abolish patent and copyright, we just want to replace it with a system of private contracts. They will go completely crazy because they know what it means. It would mean the end of patent and copyright. So I'd be happy to make that a replacement. Sorry, what was your question? Yeah, I want to get rid of the legislation, but I also believe in a private libertarian society there is no justification for any kind of property right that protects ideas for information. Now, I've been talking on this for years and I've tried different angles and different ways of explaining, different approaches, economic and empirical, ethical, moral, historical. Let me try something I've been talking about lately as a thought experiment, something that shouldn't require you to have a master's degree in law to understand all the bizarre legal terms. Okay, everyone here is probably familiar with what's called restrictive covenants, right? This is a neighborhood agreement, like people live next to each other. And they all agree, or really what happens is the guy, the master, the developer builds a neighborhood and to make it attractive to people, he builds into the property rights among the purchasers of the tracks, he puts a restrictive covenant in place. And what this says is, because we don't have zoning in Houston, right? Theoretically, right? So you can't go to the government to tell people they can't have an orange house or a red, or a purple and gold house if you're an LSU fan. Something like that, right? But if you want to live in the neighborhood without a pig farm next to you, or without a stripper joint, right? Or without the garish colors on my houses, you might prefer a neighborhood where everyone has agreed to give up a little bit of control over their property, or the master developer has put that into the covenants of the neighborhood. So what does this mean? So we're libertarians. We agree that we own property rights. We think that scarce resources like land and our bodies and cars and food are things that we need to have rules that specify who owns them. This is about that controversial. And we pretty much agree that the rules should be basically the Lockean rules, which means the guy that first took it from the state of nature, or in the case of your body, yourself. You know, unless you commit some horrible act of murder, in which case maybe you can be shot. But basically the presumption is you own your body, you own things that you first take out of the state of nature that are unowned. Because who's got a better claim to this thing than you? Because unowned before, no one can object to you homesteading it. So the first user is going to have the best plan, unless he does what? Contractually gives it to someone else. I give it as a gift to someone, that's a contract. I co-own it with someone. I put a mortgage on it to secure a loan, etc. The point is the owner of the property, like a piece of land, a house, has the right, under property rights, to make a contract. This is why this restrictive covenant idea makes sense. Now we don't object that this is libertarians. In fact, we're in favor of it. This is the exercise of property rights. The libertarian believes that people that own these scarce resources has the and should have the right to enter into agreements with these resources. Now what's the key thing here? It's an agreement. You can sense it to it. So let's say that my neighbor, all my neighbors have the right under this agreement to keep me from painting my garage purple. Unless what? Unless I get their permission. Obviously if I have 10 neighbors and they all have a contractual property right to prevent me from painting my house purple, I can do it as long as I go to them and they give me consent. So basically all of my neighbors have been given by a contract that I granted them of what I call a veto. Now in the law, one legal term. This is called a negative easement or a negative servitude. Servitude in the civil law systems, easement in the common law systems. The point is they shouldn't shock us libertarians because this is what we talk about all the time. We believe what we call negative rights, right? Because we don't believe, we don't believe in negative obligations. We all believe that you have an obligation to refrain from murdering your neighbors, right? But you don't have an obligation, a positive obligation to give them welfare or to rescue them if they're in trouble. You might have a moral obligation but not a positive legally enforceable obligation. This is why libertarians say that the only rights are negative rights because negative rights imply negative obligations. A positive right, a right to education, a right to a home, a right to a job, implies a positive obligation on the part of someone else. Which means that a positive right implies other people are your slaves. This is why, now we're actually not against positive obligations or positive rights in general. We're only as libertarians opposed to positive rights that are not voluntarily agreed to. We're not opposed to positive obligations except those that are voluntarily entered into. If you voluntarily, this is a controversial topic in libertarianism, but if you voluntarily have a child, someone argue, I would argue, you have performed a voluntary act by creating this little kid who has natural needs and you're in the best position to provide that. So you could argue that a parent has a positive obligation to feed his child. I don't think that should be that controversial even to anarchists. But the point is, it's a result of voluntary action. And so is the same thing with restrictive covenants. In a neighborhood, anytime your property, there's a limit on how you can use your property. There's only a couple of reasons this can be justified. Number one, it can be justified if you are trying to use your property to invade someone's property. So I can use my gun however I want as long as I don't point it in your head and shoot it or as I don't fire a cannon into your home. But the presumption is you can use it however you like. A second reason would be if you voluntarily entered into a contract where you gave your neighbors basically a partial property right in your property and you said, listen, you can veto my use of my property for certain purposes and I can veto yours and we all think that we're going to be happier neighbors as a result. Our property values are going to be higher, whatever. The point here is consent and voluntariness. Now, what is IP, patent, copyright, trademark and trade secret? The fundamental, the two big bad days are patent and copyright. In my opinion, I've changed my mind over the years. I think copyright is worse. Copyright lasts for over 100 years and it's threatening internet freedom. It's the justification for SOPA and PIPA and right now the United States government has the Trans-Pacific Partnership Pending which is a free trade agreement. It's trying to strong arm other countries into signing and we're saying if you want the benefit of free trade with the U.S. which is a good thing although you only need one sentence for this you don't need a 1,000 page agreement. You don't need NAFTA, you don't need a 1,000 page agreement. You need one sentence saying the government shall have no right to restrict free trade. Very simple. They want a real free trade agreement and you can do it unilaterally. You don't need to do bilaterally. But my point is the U.S. government is holding out this promise of free trade if they agree to other IP protections, right? Which Hollywood, the music industry, the pharmaceutical industry, the special interests in America have twisted the arms of Congress in twisting the arms of foreigners to adopt. So in the name of so-called free trade, the U.S. is about to take force over the world. By the way, ACTA, the Interpenetrating Trade Agreement, is not dead either. That could very well be revived very soon. The TPP may be signed in secret by the end of this year. And what it could do is make every country in the world add 20 more years to their copyright terms to mimic the U.S. system which is already 20 years beyond the current convention, which the United States forced on the world 20 or 30 years ago. At the same time, I had people coming to me saying, oh, we need the lobby Congress to reform the patent law because it's patent troll that's threatening podcasting. So we really need these heroic senators to reform patent law. I'm like, wait a second. The patent law that you guys foisted on us, at the same time that you're trying to twist the arms of other countries to increase the IP protections at the expense of liberty and freedom, I don't believe me. I don't want the help of the Congress. And you can't trust these guys at all. So what is IP law? IP is patent, which says if I get a certificate from the government where I register my invention, this is a new way of doing something useful, then the government gives me this piece of paper that lets me march into court, a federal court, a bunch of Nazi thug goons, point their guns at my competitors, tell them you cannot use your property in this way. You can't make a mousetrap similar to mine. You know why? Because they're afraid of what we used to call competition. This is the free market. There is nothing wrong, in my opinion, with competition, with copying, with emulating, with learning. If you want to put information out there, don't be surprised that people are going to learn from it and maybe compete with you. This is what's really called free market, okay? You know, the copyright is even worse. What copyright says is you have a certificate from the government that lets you go into a federal court and have the guns of the state pointed at people who want to print certain words, right? Or they'll send a DMCA, Digital Millennium Copyright Act, take down notice, and force your ISP, your Internet Service, take down your website. And even if it's a groundless claim, you can't fight that. You know, there's millions of people. And if you fight it, you have no damages, okay? So think about what this has in common with what I brought up earlier, restrictive covenants. What the law does is it basically says, I'm the federal government. I'm going to give everyone in the country a property right in your property. I'm giving them a negative servitude or a negative easement. So he gives these IP holders a negative servitude, which is a property right in my property. So I'm just minding my own business. I'm trying to make a mousetrap. You know, I'm trying to make a new printer. I'm trying to print a book. I'm trying to do a sequel. I'm trying to do a hip-hop video. I'm trying to remake something, trying to make a documentary that happens to have some famous building in the background, right? And all of a sudden I get a notice from the state goons at the behest of some IP holder, usually a patent or a copyright holder. And they say, stop. And if you don't stop, you go to jail. Contempt of court, or we're going to take millions of dollars from you. Or we're going to put you in the legal court, in the federal court system, and we're going to just destitute you. So you basically have a threat that tells me you can't use your body in this way. You can't sing that song. You can't sing happy birthday in a movie unless you pay a million dollars to the heirs of this guy. You can't play Martin Luther King's videos without paying royalties. In fact, the federal government, as I understand it, or the foundation that put up a Martin Luther King statue recently in D.C., had to pay half a million dollars ransom to the heirs of Martin Luther King just to promote Martin Luther King. I mean, it's insane. So what the patent laws do, what the copyright laws do, is the government is saying, we're granting to these IP holders a veto right over how other people use their property. But what's the missing ingredient? It was never agreed to. It's a pure act of theft, thievery, and taking. Patent and copyright law originated three, four, five hundred years ago. Copyright originated in the attempt of the government and the church to stop the spread with the printing press of books that they don't want people to read without their permission and approval. Pure thought control and censorship. That's what it's resulted in now. Under the modern copyright system, I just read two days ago, the Harlequin romance writers, all these people with the advent of digital printing, they want to put their back catalogs up on Amazon for Kindle. They can make hundreds of thousands of dollars by selling their back catalog of books. Guess what? They're screwed. They can't do it because they entered into agreements signing their life work away from the publishing industry, because the publishing industry stepped into the place of the government after the Statute of Anne in 1710, which was just the modernization of copyright law. So copyright law censorship has resulted in censorship now. There was a sequel to Catcher and the Ride that was banned by a court. The court says you're not able to publish this. Some Harry Potter books, I think the fourth book, were accidentally sold by a store in Canada two or three days before the publication date. And the publisher went to a judge in Canada, and they got an injunction against the owners of these books not to read the book for four days. This is not a joke, and these things are getting worse. Okay? So, the problem with IP law is that it is a taking of property because it grants to people a control right over your property, a veto right, that you did not voluntarily agree to. And I think I can peter out now and be happy to take any questions. Yes? So, the question is, how would IP law play out in the case of a creative work, like a universe, a set of character scenes out there in the Harry Potter world? You have a complex interplay of IP law. You have the intersection of entertainment law, trademark law, and copyright law. Primarily it's copyright, but trademark can also be used. So, the Harry Potter character is very likely trademarked by now. But primarily it's copyright. In fact, there have been fairly detailed studies showing Mickey Mouse is behind the copyright. I mean copyright used to be 14 years. And do you know why? Because anyone know what the term of an apprentice used to be in the old days of apprenticeship? About seven years. So, the idea was, we're going to give this guy a monopoly to protect his little craft. And it needs to be about the term of two consecutive apprenticeships. That'll give him time to train these guys without them running off to compete with them. So, the initial 14 year term was totally arbitrary. That was at the turn at the beginning of the country. 1790, something like that. And then it kept going up and up and up and lately in the last 30, 40 years. Every time Mickey Mouse's copyright is about to expire, Disney lobbies the hell out of Congress and they add another 10, 20 years on to the term. So, now we're to the point where it's life of the author plus 70 years. I mean, that's well over 100 years in most cases. And there's talk about extending it further or at least adding on 20 years to most countries like Canada was life plus 50. You can't renew a copyright. Basically the term is fixed at whatever statute says it is. It used to be 14 years renewable one time for 28 total. But under the current regime it's just a very long time. The patents are roughly about 17 years. Once the copyright expires the work is what's called public domain. And so then anyone can use it unless they're violating the trademark. So, look, my view is that if you create something and you make it public then if you want your idea to yourself keep it to yourself. The price of making an idea public is that people might actually hear what you're saying. They might learn from you. And there's nothing whatsoever wrong with that. In fact, it's almost impossible to imagine a single invention or a single creative work that didn't build upon the works of others. We don't live in a vacuum. We live in society. Sorry, you have to go ahead. I think I heard most of that. And it's a complicated question. So you're saying, for example, would it be better to just have a direct... Well, first of all, you're saying could we import some of the features of the patents of the copyright and vice versa even to limit both? And yes, of course, if you limit them both we're better off, but it's still a penalty. What do you think? Would it work? Would it work? Would it work? Would it work? Would you say, is it worse if it were a subsidy? I don't know. Okay, okay, I got it. So the question is would it be worse off if we got rid of copyright because the government would have to step in with subsidies? Well, first of all, we already have subsidies. We have the national down for the arts. We have tons of federal funding for scientific research papers that we have to pay for twice. We have tons of governmental funding for the sciences in humanities, basic research. So they're already doing this, and in fact some advocates of IP, even some libertarians argue that they say we should replace it with a direct subsidy system by which they mean we should take $200 billion a year out of taxes and give it to some government panel of industry experts who decide which of the most creative innovators in the field of medical technology should get a reward. So libertarians, I know, have advocated this and they argue this is more efficient than the current system. It may be more honest. I don't know if it's more efficient and if you do the math they're talking about medical technology and if you understand how big the patent universe is and you scale this up to all the fields covered by patents you're talking about $7 or $8 trillion a year. I mean, I'm not joking. There's no limit to what these guys will come up with. But the point is I never advocate for replacing the income tax with the sales tax even if there's some arguments that one may be better than the other because they're never going to replace it. If you advocate the sales tax they'll say thank you very much, we'll do the sales tax and they'll keep the income tax. They're never ever going to get rid of the tax. So all you can ever advocate for safely is whatever the current tax system is. Lower the PAM rates. That's what they don't want to talk about. They want to keep shifting the government. They want to say we're going to have a marriage penalty relief in 10 years. We're going to simplify. Wouldn't that be nice? Wouldn't that be nice? Wouldn't that be nice? Wouldn't that be nice? Wouldn't that be nice? Wouldn't that be nice? Wouldn't that be nice? Go from 70 years plus life down to 14 years. Take patents down 3 years. That will be a big improvement. That's the change we should advocate for. Not replacing with a subsidy. Not calling for a subsidy. If they complain that we need patents on the pharmaceutical industry because the costs are so high. Why are the costs so high? Because the FDA process which the government puts on people in the first place. Cut off the FDA process. All together. Stop subsidizing it. Stop regulating it. Stop licensing it. Leave it alone. That'd be my answer. Any trivia questions? Let's begin. Okay, so I agree with my answer. When taking a copy of my executive paper it's not the situation to create. I've written it since my father was 5 years. And it used to be the way that a copy of my executive paper would be no incentives to create and integrate drugs because someone else would just steal the idea immediately. I would just rip it off. And store it in drugs. Okay, so a few things. The question is would removing IP protection from the pharmaceutical industry harm the pharmaceutical industry? Okay. Okay, so not to be pedantic. The pharmaceutical is a patent case. Not a copyright. So we're talking about patents for drugs. This is what this company relies on. Patents for pharmaceuticals. So we have let's put this in perspective. We have a government that does everything it can to destroy industry. It pampers immigration. It causes the business cycle. It causes inflation. It raises costs of both the customers and the employees and the owners of companies with taxes and regulations, tariffs, import duties. So you basically have this big out of control insane evil moron and beast doing everything it can to kill American business. We're lucky that we still have food to eat, given what the government's doing. They are trying to do whatever they can to control and kill it. We can't trust this guy to come in and say just kind of make it back up to us a little bit but it's up to the other side. Second of all, I would just say I would look at Chapter 9 of a very good book. It's online. It's called Against Intellectual Monopoly by Bolger and Levine. They've done a careful, empirical study of the pharmaceutical industry which is always held out as the obvious case. And they just show that a lot of these assumptions are just flat out wrong. There has been a thriving pharmaceutical industry in Italy and Europe many years, 50 years without a patent system. And finally, the more fundamental it's not the function of the government or the law or the state to come up with the right incentives for us to achieve whatever goals we think we need to have. The fundamental purpose of law is justice. To make sure that everyone has the right to live their own lives within their own spheres. And when you have a system like patent and copyright of course it's going to distort the economy and the environment. Which means sorry, the economy and the culture. Which means if you get rid of these laws things will change. Of course they'll change. If they didn't change, that means they wouldn't have an effect in the first place. We would have no reason to complain about them. But we cannot say that we know what the ideal amount of innovation should be. And furthermore all the empirical studies, if you just look at them this is almost like the minimum wage. You can't find an economist that thinks the minimum wage really increases employment. They all know that it causes unemployment. Even idiot liberals like Paul Krugman they know this. They just don't care. And if you look at the empirical studies that have been done for the last 150 years they either end up inconclusive and say this whole patent system is just a mess. We don't know what to make of it. Or they'll say it seems like it's costing us 80 billion a year because patent trolling are this and that. They're basically all pointing the other direction. The empirical evidence is that IP patent and copyright reduce innovation. You say what's the incentive? The incentive is to make a profit. The question is the question is what do you do about competition? Well that's the job of the entrepreneur, right? Everyone faces competition. If you make a new product or you come up with a new business that succeeds in getting customers that's popular, guess what that does? That sends a Hayekian signal to the market saying look at me, compete with me do what I'm doing, please the consumer. This is the process of competition. Profits get eroded over time and the original entrepreneur the original innovator and the competitors have to always be on their toes and keep trying to think of ways to cut their costs, come up with innovation satisfy the consumers. This is what we used to believe was a good thing in the free market. This is the free market process. So the incentive to innovate is to make a profit. It's very simple, but it doesn't mean that you can be protected from competition by these laws and I think you shouldn't be protected from competition by these laws. And if you remove the government burdens on pharmaceutical companies like the FDA process and taxes and regulations, pro-union laws then I think you wouldn't really need to subsidize them. Do you want to pick? Maybe you have a favorite choice. There was one fun one something about just some random question like brown or red or something like that and I just picked one. That was fun. Because this is asking me anything so he's talking about I did a Reddit AMA thread two days ago. I don't remember any horrible questions. I thought they were pretty intelligent so it's a good process. I'll be right. I've had a long conversation and some of you have talked about that but you know, what we mentioned earlier the principle of risk and the unanimity of the law was here we're all living here but we're getting a little less but also the anarchists but you know my personal view is just in case the government doesn't understand that the market is not provided service so the question obviously that we're all living there is just in the amount of time and that's not the exact but another argument of office one is the more states like to see that it would work better or any other option is to look at other studies from you're talking about IP reform or just as a general I don't see states rights as playing a big role here because there's a patent in the copyright clause in the Constitution which pretty clearly gives the federal government a pretty total authority over those two areas and they enacted the patent in the copyright statute immediately after the Constitution was before the ink was dried so I don't see them relinquishing their control of it for a while there used to be something called state common law copyright which is not what Murray Rothbard said it was by the way all that was was almost like the first manuscript in your drawer no one's seen it someone takes it from you without their permission you can get the law to help you keep them from publishing it it was almost like a trade secret or contract right so there really hasn't been no common law of contract the states still have their own trademark laws because trademark is not specifically authorized in the Constitution what the federal government did was that upon the interstate commerce clause they said oh we have the general ability to legislate on anything that touches interstate commerce but they had to make an exception for the state trademarks that stay within the state borders so trademark is sort of a hybrid system right now but a patented copywriter pretty much dominated by the feds they called PRAMP the field so I don't see federalism unless Texas were to secede which I'd be totally in favor of but I guarantee they would have a Texas patent law act well yeah the option is algorithm basically using 3D printing to just get around it and evade the law using bit torrenting to pirate things and just do it in secret use bitcoins and people are starting to do that so I'm hopeful that these laws are going to be harder and harder to practically force just like the drug war hopefully thank you very much