P2P Foundation

Researching, documenting and promoting peer to peer practices




Historical record shows how intellectual property systematically slowed down innovation

photo of Michel Bauwens

Michel Bauwens
27th March 2012

Excerpted from Rick Falkvinge:

“We all too frequently hear that the copyright monopoly is supposed to encourage creativity and that the patent monopoly is supposed to encourage innovation. Most lawyers whose jobs depend on the belief in these myths even claim that the monopolies fulfill these functions to the letter. But when we look at history, a different pattern emerges.

Let’s start around the beginning of the Industrial Revolution. In that day and age, copyright monopoly laws were in force in the United Kingdom, and pretty much the United Kingdom alone (where they were enacted in 1557). You know the “Made in Country X” that is printed or engraved on pretty much all our goods? That originated as a requirement from the British Customs against German-made goods, as a warning label that they were shoddy goods made in Germany at the time. It spread to pretty much global use.

But Germany didn’t have copyright monopoly laws at this point in time, and historians argue that was the direct cause of Germany’s engineering excellence overtaking that of the United Kingdom. In the UK, knowledge of handicrafts was expensive to come by. Books and the knowledge they carried were locked down in the copyright monopoly construct, after all. In Germany, however, the same knowledge was available at print cost – and thus, engineering skills proliferated. With every new person learning engineering, one more person started to improve the skill set for himself and for the country at large. The result is that Germany still, 200 years later, has an outstanding reputation for engineering skills – the rise of which are directly attributable to a lack of the copyright monopoly.

There are more examples. Pharmaceutical companies argue how they absolutely, positively need the knowledge monopolies we call patents in order to survive. The company Novartis is one of the worse offenders here. The claim that patent monopolies are needed is not only false in an objective light – as in the patent monopolies not being needed at all today for the pharma industry – but more interestingly, Novartis itself was founded in a time and place when no such knowledge monopolies existed – more specifically, in Switzerland in 1758 and 1859. If the patent monopolies are so vital for success, how come the pharmaceutical giants of today were successfully founded in their complete absence?

– Rather, the pattern here is that the people who have made it to the top push for monopolies that will lock in their positions as kings of the hill and prevent people who do something better from replacing them. It’s a power grab.

In Sweden, the telecoms infrastructure giant Ericsson was founded making a telephone handset that directly infringed on a German patent from Siemens – or at least, would have done so with today’s monopoly laws. A Norwegian company later copied Ericsson in turn. Nobody cared. With the patent monopolies we have today, Ericsson would not have survived the first phone call. And yet, Ericsson is one of the giants pushing for more restrictive monopoly laws. Of course they are; they have been successfully founded already. What innovative giants of tomorrow are we smothering stillborn through these monopoly constructs?

The United States itself celebrated breakers of the monopolies on ideas and knowledge as national heroes when the country was in its infancy and building its industries. When the US was still a British colony, the United Kingdom had this idea that all refinement of raw material into desirable products should happen on the soil of the United Kingdom, and only there. Industrial secrets were closely guarded, and the United States sought to break the stranglehold for its own benefit. When somebody brought the British industrial secret of the textile mills to the United States, for example, he was celebrated by getting an entire city named after him and named a father of industry as such. Today, the same person would have been indicted for industrial espionage.

Or why not take a look at Hollywood and the film industry? In the infancy of filmmaking, there was a patent monopoly blanket on the entire concept of moving pictures owned by Thomas Edison, who was adamant in claiming his legal monopoly rights. In order for innovation in the area to flourish, the entire industry moved from the then hotseat of moviemaking, New York. They moved as far away as they could, west across the entire country, and settled in a suburb outside of Los Angeles. That was outside of the reach of Edison’s patent monopoly lawyers at the time, and so, moviemaking took off big time. Today, the fledgling industry wouldn’t have been outside of the reach of those monopoly lawyers.

I could end with mentioning Internet and how monopolies try to tame it from every angle, but I am sure everybody can fill in the blanks here. Just for fun, we could mention Bill Gates’ famous quote that if people had taken out patent monopolies when the web was still in its infancy, the industry would be at a complete standstill today. It is consistent with the overall pattern.

The pattern here is clear: copyright monopolies and patent monopolies encourage neither creativity nor innovation. Quite the opposite. Throughout history, we observe that today’s giants were founded in their absence, and today, these giants push for the harshening and enforcement of these monopolies in order to remain kings of the hill, to prevent something new and better from replacing them. Pushing for copyright monopolies and patent monopolies was never a matter of helping others; it was a matter of kicking away the ladder once you had reached the top yourself.”


One Response to “Historical record shows how intellectual property systematically slowed down innovation”

  1. Poor Richard Says:

    “Historical record” in this case appears to mean a series of cherry-picked anecdotes. What seems like a good reality check is the number of societies that have established IP protection after debating the pros and cons.

Leave a Reply
