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Do Patent Rights allow Monopolies in Capitalism?

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Sebastian posted on Tue, Oct 2 2012 5:03 AM

 

I believe the market is very much like evolution - the best producers of goods and services strengthen while their competitors challenge them or die out. One of the main arguments against capitalism is the issue of monopolies and their power over their competitors. If there is a lack of competition then prices and quality can become unfair and unchallenged. Although this is rarely the case because there is almost always competition, there is an issue with market 'monopolies' that can prevent the evolution in the market - patents. Say a technological company supplies the best products in their line of industry, they then obtain patent rights to privatize the next innovative designs and ideas in their line of industry. Their competitors are now restricted to out perform them. In this way a monopoly can be established with the power of the law preventing competitors to out-perform them.

I can understand the value of patents for inventors, but the misuse of them in terms of market evolution is very uneconomical.

I wanted to get some opinions on patents in an ideal market. How do you think they would work best (if at all) in an ideal market?

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Your utilitarian argument is not going to help the industry either, they should embrace piracy and make money off it.

You know, I think they might be waking up to it slowly. Remember when iTunes had drm? It wasn't Apple's fault, as the only way it could sell the music was if the record companies agreed, and their requirements were to have drm.

Also, Hulu and Netflix and Amazon Prime are on the rise. Sure, you have to pay for Amazon and Netflix, but paying a little to just stream is worth it to most people. It can be a pain in the ass to find the right torrent or usenet file (which you have to pay for anyway) and then download the damn thing. And then you have to either buy enough storage or delete the file when you are done.

And I actually enjoyed watching The Booth at the End on Hulu. Okay, I hate commercials, but it's not a big deal. I don't have to wait for a specific time slot to watch it. It just has to be released and then I can watch it whenever I want. Of course that particular show is only 10 episodes, so I haven't watched it in a while, but the principle could apply to other shows. On Demand is a pain in the ass though. It's so similar to Hulu, but it's only recent episodes. I'd rather just download it or buy a season pass from Amazon.

So there is some hope. They are beginning to innovate. But just imagine if there were no IP...the innovation would be a gazillion times faster.

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Mike99 replied on Thu, Oct 4 2012 10:14 PM

But private property itself is just an idea, we're already in the realm of ideas, that's the default juridiction. Is it not? How then is the idea of the ownership of an idea not valid but private property is. I mean that specific size of land or house that you think you own, it's only yours because of the fact that society is civilised enough to agree on the idea of private property, using logic and reason. Why is it illogical and unreasonable to extend that to ideas? I'm not talking about abstractions, but tangible things such as; I can prove I invented x device or created y piece of art as an original work.

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Maybe you missed this post by Clayton from earlier in the thread.

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Mike99 replied on Thu, Oct 4 2012 10:17 PM

if there was no ip then hulu or whoever could procure the content however they wanted, and would not have to pay for it, then they could sell advertising, as people flocked to the best portal. Sounds like a race to the bottom to me.

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Mike99 replied on Thu, Oct 4 2012 10:21 PM

ok gotlucky, I didn't miss that. I'm going to caveat my arguments and admit that I am arguing specifically for copyright not patents on devices. I'm not arguing for patents on specific devices and I posted in another thread on this earlier, I can only make suggestions in regards to that and I don't defend IP as it applies everywhere else today - but I do defend the basic premise of it, just not how it's applied. For example, an engine maker should have his design protected so people can't just copy his innovations and profit from it without the creativity and genius that he put into it, but if they significantly improve or change the design, even if they admittedly used his design as a starting point, that would be another thing - and that removes the issue of IP's inhibiting improvements, but still protects the inventor / creator from abject exploitation in the sense that people profit from his labour - reducing his incentive to bother in the first place if he is aware of the conditions into which he is releasing his invention / ideas.

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Mike99 replied on Thu, Oct 4 2012 10:23 PM

You can't say you patent "RED" by the way, how can you prove that. You can't. You can't be the first one because everyone else can prove that Red already existing in a million different varieties. But you can say you wrote a book, or recorded a piece of music, or wrote a screenplay for a film, or developed a new type of engine, or process, or medicine. If you can prove what you did, then it's tangible.

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So what? If the movie and tv studios are that worried about that occuring, and I'm sure it would occur, then they can create or partner up with a streaming company, such as netflix. ABC can create it's own streaming service, and you can watch their shows with commercials like with Hulu or pay a premium like Netflix to watch without commercials. They can all compete to create the best delivery system.

And then they can create their own DRM that makes it a bitch and time consuming for other companies to copy well. Look at Steam. Each game has DRM. You even download the games (and now software) to your computer. Pirating it is a bitch, and most people just prefer to buy from Steam at this point. Steam is hardly the only downloadable game service, but it's certainly the best one right now.

And I don't know if you knew this, but Steam started as a content delivery system for Valve's own games, such as Counter-Strike 1.6. They eventually expanded and branched out to other game studios and publishers. Why would this not work in a free market? Hell, game developers and publishers would probably flock to it or similar services because of the DRM. Right now, many release games in stores, and those games are easily copied and pirated. But not Steam's, especially when they are multiplayer or if you want to keep up with the patches.

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Technically the contract can say if you tell anyone you goto jail for life/put to death

Wow, wow, wow - I just caught this. This is wildly incorrect. I mean, it can say whatever it wants, but it's not eforceable.

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If you can prove what you did, then it's tangible.

I have no idea what definition of tangible you are using.

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Mike99 replied on Thu, Oct 4 2012 10:56 PM

gotlucky: ok, this is what I was kind of getting at the whole time and wondering about. why can't industry and technology work together to protect IP, without government enforcing it, in the way you have just described. Competing for content.... and you have to use their software to play it back. But how would that work for music? You can easily bootleg music, just by plugging a recorder into the output of your computer. I don't have any problem with that, and even if it's not possible now, in principle it would be the responsibility of the industry to come up with a solution to protect artists from piracy. But is it even possible? I don't think so. You have to have some way to sue the distributors (but not the end users) who knowingly, intentionally steal music, books etc. And, there's *always* the issue of DRM being over come. You have to have recourse for that too. Otherwise the whole thing stands on shakey legs.

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Well, I don't see music pirating as a problem, financially or morally. Even now, there are no musicians who survive off of recording alone or even as their primary source of income. It sounds like you have an interest in only recording music, but even in an IP world you cannot survive on that. It's just not in demand. Most musicians use records as a means of promotion or as a very small supplement to their income. The only people who make real money off of recordings are the record labels.

One of the things you have also been overlooking is costs. Pirates aren't paying for what they download, but pirating isn't free. It costs time. It costs the people who rip the files time, and if they have to crack DRM it can cost them a lot of time. It costs the people who are downloading time and space on their harddrive (do people even bother burning pirated movies to DVD's anymore? and they would still have to pay for that equipment and the DVD's, and the shelf space, etc.). If I stream a movie or tv show from Netflix, I don't have to download anything but silverlight. No 5GB downloads. I can just stream it in HD, all for what, $8/month?

What pirate is going to go to Netflix and record the file? They would have to do that in real time unless they find the file that Netflix downloads to the computer, and I wouldn't be surprised if there were DRM on that file that gets downloaded. That's a lot of effort. It's not like hitting a button and ripping a DVD.

You might find some people who still torrent, but what would you rather do? Torrent a file and hope there are enough seeders to finish the download in less than one hour (or a day if it doesn't have many seeders), or just pay $8/month and stream the show or movie whenever you want so long as you have an internet connection. I mean, if you are some teenager without a job and your parents are too stingy to pay for Netflix, yeah you are going to torrent. But seriously, $8/month for the convience of Netflix is just too good to pass up.

Amazon Prime let's you download the movies and tv shows using their service. So you can stream or download the file. Of course the file has DRM in it. The industry is already coming up with useful alternatives to the status quo, but it would go so much faster if these damn IP laws weren't holding them back.

You might say, but NBC or HBO won't see as much profit if Amazon or Netflix scoop up the shows and redistribute them. Well, maybe HBO will make a deal with Netflix. They pay a massive fee for first dibs on the show. It's not easy to rip the show and make it worth viewing for customers. It's not like Amazon is going to have the shows that Netflix streams right away. Besides, it's always possible that HBO might say to Netflix, let's merge. We'll buy a 20% stake in your company and we'll give you first dibs.

Who knows? I'm not a central planner, and even if I were, I still wouldn't have the "right" answer. Leave it to the market where ideas can be tested against what people actually want.

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Mike99 replied on Thu, Oct 4 2012 11:29 PM

I had a contract come through several weeks ago for sale of a 1 minute piece of music, exclusive global usage, I keep the rights, for $30,000 after commission to an agent. What are you talking about?

Why don't you head over to tunecore.com and check out artists making money there, from reasonable $150k a year to millions in some cases - these are artists often without any record company support. They are making money off their recordings. Yes they are promoting them etc. These are just recording sales income TO THEM. Without IP, they couldn't do that because their saleable product would be a free for all.

I agree with you about the difficulties of pirating something. I'm pretty tech savvy and I can't manage to download anything illegal even if I try, without signing up to some dubious site, or giving my cc number to them, or generally opening up my machine to viruses / malware etc. I'm not saying I pirate stuff, but for arguments sake. That said, music is another catagory. To pirate a film in HD, it's a lot of data, a lot of space etc. It's not worth it for most people, but mp3's are small, quick to download, easy to store. etc. Specifically for music - what's your argument there?

As for your argument for industry not ripping each other, you're wrong there I think - when industry itself is devoted to piracy - that's some serious resources. I would give them 30 minutes for the first one, and then I bet they would be able to rip the latest show in minutes if not less with today's machines, and they'd only need one.

 

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I had a contract come through several weeks ago for sale of a 1 minute piece of music, exclusive global usage, I keep the rights, for $30,000 after commission to an agent. What are you talking about?

You survive on $30k/year? Perhaps now with the rise of the internet it is possible for some people to have recordings be their primary source. If you were really paid $30k for 1 minute of music and keeping the rights, then you are only supporting my case. Whatever company or person that paid you for that 1 minute of music, they wanted it badly enough that they would pay you $30k and leave you with the rights. In other words, you could go ahead and sell it to someone else too. Basically, that company paid you for first dibs. This is something that Phi est aurem and I have brought up many times.

Anyway, all those artists on tunecore that are making $150,000 or more (and I doubt that many, if any, make that, but whatever, I'll accept it arguendo), are they going to be able to produce $150,000 or more every year for the rest of their working life? Most of these popular artists go out of fashion after a few years. Sure, $150,000 is nice for a few years, but you can't save up with that to survive on that for the rest of your life.

I realize that I am shifting the goalposts, but the point is that artists do not survive on recordings as their primary income as their profession (maybe the Beetles or Michael Jackson could, but please, not everyone gets to be famous like that). Maybe some artists can get away with it for a couple of years, but this is just not a primary source of income.

The only thing I can think of is that you make recordings for commercials or tv shows or movies (or something similar). And I was not aware that is what we were talking about. I thought we were talking about recordings for the general public, as in albums. I have already talked about in previous posts how composers and recording orchestras will still be hired to perform for movies. If that's what you do (or something similar), then we have been talking about different things. Not only that, but I would have already brought up that point. So I don't really know what you are talking about and how it is any different from things I have already said.

 

Why don't you head over to tunecore.com and check out artists making money there, from reasonable $150k a year to millions in some cases - these are artists often without any record company support. They are making money off their recordings. Yes they are promoting them etc. These are just recording sales income TO THEM. Without IP, they couldn't do that because their saleable product would be a free for all.

I agree with you about the difficulties of pirating something. I'm pretty tech savvy and I can't manage to download anything illegal even if I try, without signing up to some dubious site, or giving my cc number to them, or generally opening up my machine to viruses / malware etc. I'm not saying I pirate stuff, but for arguments sake. That said, music is another catagory. To pirate a film in HD, it's a lot of data, a lot of space etc. It's not worth it for most people, but mp3's are small, quick to download, easy to store. etc. Specifically for music - what's your argument there?

I already talked about when iTunes had DRM. It was a bitch for people to rip it. They either had to burn it to a cd first and then burn it to their computer, or they had to buy music ripping software that would remove DRM. Of course they could always pirate it, but there really weren't any working copies back then. It was hard to pirate it, so you basically had to buy the software in order to rip out the DRM.

Now, I am so glad that the DRM is out of iTunes, but it's not like it can't be done for music. iTunes was annoying about it, but I wouldn't be surprised if there were a way to do it without being terribly annoying. After all, Steam does it.

As for your argument for industry not ripping each other, you're wrong there I think - when industry itself is devoted to piracy - that's some serious resources. I would give them 30 minutes for the first one, and then I bet they would be able to rip the latest show in minutes if not less with today's machines, and they'd only need one.

Yeah no. I already explained why it would be expensive to do this. You also did not address my comment about first dibs. If it takes Amazon a week to rip a season of a tv show from Netflix, that's a lot of time where Netflix get's first dibs and all the sales on that show.

Even if it were the case that filmmakers and writers and recording artists (as if these people were only recording artists) would make less money...how is this a bad thing? Why am I supposed to care about that? They are making their money off of something that I consider to be illegitimate in the first place.

Anyway, most artists would be unaffected by abolition of IP. That a few people would have to figure out a legitimate way to to keep their income up is really of no concern to me.

And you may think that recording artists ought to be making $150,000 from only recording...and I think that StarCraft and Dota 2 players should be making $150,000 from playing video games. I don't see how it's a bad thing that few people in the world make $150,000+ from video games, and I don't see how it's a bad thing if fewer people make their living from only recording...If the demand isn't there, so be it.

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And you really ought to read some Kinsella. He is far more knowledgeable in general about this subject than I am. I am only knowledgable in how it affects the classical music industry. He may have some ideas that might convince you. Maybe not. But you won't know unless you read him.

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But claiming ownership over an idea that nobody can trace ownership to - a sand castle - is rediculous. But claiming ownership of a musical recording that you have performed and engineered - that is actually tangible. It may be of the mind - but what is not? And it can be tangibly demonstrated. I came up with this song, nobody else wrote it, I can prove it, I can prove I recorded it, performed it, engineered it. So is it not tangible?

The point is not that the ownership of the sand castle can not be easily traced, the point is that it can be easily copied and thus ownership of the idea is difficult if not impossible to enforce without the state enforcement apparatus. Remove that apparatus and there is no enforcement available to prevent copyable objects from being copied, be it a book, an idea, a method or even an advanced microchip or a sports car. You can replace the sand castle with a book or any other object in that example. It does not change the point that i was making.

Most objects are a product of prior art anyway. To say that you wrote a book, I could easily point out that you picked up certain aspects of that book from other books and your ideas/stories from other people's ideas/stories. The fact that you define it as tangible is irrelevant. If it can be copied then it is not a violation of property rights when it is copied. To prevent copyable objects from being copied the producer is free to attempt to implement measures to prevent it from being copied, drm, binding contracts etc. But these could end working to the detriment of the seller, as the competition can use those measures against the producer.

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