James Leroy Wilson's blog

Tuesday, April 05, 2011

Intellectual Property, Contract, and Conscience

I recall chemical detergents and other products having on their back label something like: "It is a violation of federal law to use this product in ways that do not follow these directions."

Now imagine we live in a free-market society, where there are no laws against victimless behavior, and therefore, there are no laws against misusing products (unless they're used as a weapon or poison against others).

Would the producer of a product have the right to dictate the terms of use of the product on the purchaser? For instance, instead of of "It is a violation of federal law . . ." warning on the label, what if there's is, instead, something like this . . .
"It is a violation of the terms of sale of this product to use it in any way other than as directed. If you are unwilling to abide by the these directions, return this product, unopened and unused, for a full refund. Failure to abide by these terms absolves the manufacturer and seller of this product of any liability. It also gives the manufacturer or seller sufficient grounds to refuse any future sales to you. If your failure to use the product as directed reflects poorly on the manufacture or seller, they may demand that you return the the product, or the remaining contents thereof, without compensation."
Would this be enforceable? Probably not. But it would protect the manufacturer from liability. For instance, if the directions said to "Keep out of reach of children, and deny them access" but a child injures himself or others with the product, the parents couldn't sue the manufacturer. Or, if the directions say to spray the cleaning liquid two feet away from the surface, and you spray from six inches away and the the liquid splashes back into your eye, you can't claim the product was dangerous.

You may violate the directions all you want in your personal use of it, and maybe nobody will get hurt or find out. But if it means causing injury to yourself or others, then neither you nor others you injure have anyone but you to blame.

It seems to me that contractual law should allow the seller of the product to dictate any terms to the purchaser. After all, the purchaser isn't compelled to buy. If the terms of use and/or directions are plainly and prominently listed (such as, on the unopened package of the product on the store shelf, or in a terms of use agreement posted BEFORE sale on an e-product) then the seller should be free to dictate any terms she wants.

Perhaps in many cases the terms are not enforceable, in that it would be too easy for the buyer to violate the terms of sale and get away with it. But it is useful to lay out the terms anyway. The terms of sale may be:
  • Do not use this product except as directed
  • Do not reverse-engineer and replicate this new product/invention for resale
  • Do not copy and redistribute this book/recording/movie
And maybe they're not enforceable much of the time. But at least the manufacturer/creator can derive some psychical/spiritual value from dictating the terms of sale. They can enjoy the fact that honorable people use the product honorably.

And, buyers who misuse the product or otherwise violate the terms of sale will know they are acting dishonorably. Their very excuses for violating the terms of sale, attempting to discredit the sellers, actually prove their own dishonor.

They will say something like, "The terms of sale are unreasonable," and justify themselves by saying things like:
  • After I buy it, it should be entirely up to me how I use the product
  • The seller must be greedy for wanting to protect his "intellectual property," especially since "intellectual property" doesn't exist
  • The seller must be a moralistic busy-body for telling me what I can or can't do with the product
  • The seller must understand that these terms and conditions are virtually unenforceable, so I might as well ignore them
To summarize all these excuses: It's okay to violate a contract if I think I can get away with it.

We've seen that excuse since the beginning of time. People make a vow of fidelity with wedding vows, then break the vow when they think they can get away with it, then rationalize their behavior by saying it's unreasonable to expect a person to have sex with just one other person for the rest of life, and that besides, the spouse is a terrible person.

Perhaps it is unreasonable to have sex with just one person, and maybe the spouse is a terrible person, but you should have thought those things through before taking the wedding vows.

The mere violation of a contract, vow, or any other kind of promise, won't always lead to a legal judgment of financial compensation on behalf of the person who was "wronged" by the broken promise. Often, there aren't any tangible damages, only mere violations of trust and hurt feelings. And even when compensation might be expected, they are almost impossible to know: how do you calculate "lost earnings?"

In the case of "Intellectual Property" (IP) such as patents and copyrights, some libertarians say they don't exist, and others say they're essential. Sheldon Richman makes a strong case for the former side, and Stephan Kinsella and others have done a lot of work on behalf of that position, whereas J. Neil Schulman makes a moving case for the IP side - which is particularly strong since he eschews State-enforcement.

To me, "intellectual property" isn't really the issue at all. It is, rather, about contracts. Creators, inventors, manufacturers, and retail sellers all have the right to set their own terms of sale, including bans on replication or redistribution, and the buyers are then obliged to obey the terms of the contract. If they dislike the terms, they shouldn't buy.

The problem is that it seems almost impossible to police or prevent such contract violations, and no one would want to live in a society where they CAN be effectively policed, because that would mean giving up a lot of privacy and freedom.

I don't think there's a good answer in libertarian theory. I think the answer lies in being who you want to be:

1. Do you want to be the kind of person who keeps your promises, including obeying the terms of sale of the things you purchase -- or would you rather break your promises when you can get away with it, and pray that others don't do the same to you?

2. Do you want to be the kind of person who encourages the creators and inventors of society by respecting their wishes as to how their work is distributed, or would you rather take them for granted, have them go unrewarded, and pray that Atlas doesn't Shrug?

The issue of "Intellectual Property" is less a matter of libertarian theoretical concepts of "property" and "ownership," and more a matter of plain decency and conscience.

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