History shows that one man's pirate is another man's business innovator

Some argue that the 20-year monopoly privileges typically granted by patent laws are far too long

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The Independent Online

Throughout history nations have fought to protect what they regard as their rightful intellectual property.

In the 14th century the expert glassmakers of Murano were forbidden, on pain of death, from emigrating from the Venetian island. The Doges did not want the secret of their stunning craftwork falling into the hands of other Europeans, who would then buy less of it from them.

In the late 18th century our own Parliament imposed severe penalties on anyone caught smuggling designs for Arkwright’s water-powered spinning frame out of the country. MPs wanted to preserve Britain’s dominance of the industrial production of cotton.

Similarly, Brazil banned the export of the seeds of its Amazonian rubber trees in the late 19th century, lest anyone should break the South American country’s mind-boggling profitable monopoly on the production of rubber.

The pattern is always the same: those who have something economically special strive to keep the secret – and the profits – to themselves.

And now American has the Transpacific Partnership (TTP) trade deal with East Asia and the Transatlantic Trade and Investment Partnership (TTIP) with Europe. Much of the focus of opposition to deals has related to the extraterritorial courts these two mega free trade agreements will impose, which campaigners fear will enable multilateral corporations to trample over the will of national democracies. The examples cited tend to be tobacco firms suing governments who have the nerve to legislate to curb cigarette advertising, or American private healthcare firms using the deals as a battering ram to crack into the National Health Service.

Yet one of the biggest attractions for American firms actually lies in the opportunity the deals provide to impose the US’s own relatively strict intellectual property enforcement laws worldwide. The intellectual property protection provisions of the TTP were leaked last week. And critics are yelling foul, arguing the provisions will unduly privilege the interests of American corporations, particularly drug manufacturers, at the expense of populations the world over. Like previous empires through history America seems to be trying to lock up the source of its profits.

The question of whether it is economically beneficial to allow individuals, or companies, a monopoly over the profits of their inventions is not clear-cut. The great Enlightenment American statesman and scientist Benjamin Franklin never patented his inventions (which included bifocal glasses and the lightning rod) on principle. “As we enjoy great advantages from the inventions of others, we should be glad of an opportunity to serve others by any invention of ours; and this we should do freely and generously,” he explained in his biography.

It’s a nice idea. But is it tenable in a modern market economy? Some profit incentive ultimately needs to exist, especially when the testing and developing of new medicines or products can cost corporations considerable sums. There will always be altruists like Franklin who willingly hand over their work to the global commons for free. But unless they can see a profit in there, many won’t bother to invest their time or money. And that will make us all worse off.

Yet how much profit should they receive from an invention? That’s a much harder question to answer – especially when state-financed scientific research often contributes to the creation of a successful product. In her book The Entrepreneurial State the economist Mariana Mazzucato explains how many components of the iPhone, such as the touchscreen and the global positioning system, were developed in US government-funded laboratories. The genius of Steve Jobs was putting all this technology together in a beautiful and user-friendly package – and creating a market (smartphones) that didn’t exist before.

The iPhone is one of the most profitable inventions in history. No sensible person begrudges Apple’s shareholders a large share of the profits. But how large a share is morally and socially justified? More broadly, how tight should patent and copyright laws be? Some argue that the 20-year monopoly privileges they typically grant are far too long – generating enormous profits for beneficiaries while actually doing relatively little to encourage further innovation.

But maybe we don’t need to worry quite so much. Master glassmakers risked the wrath of the Doge and snuck out of Murano. Some set up workshops as far afield as England and the Netherlands. In 1810 a Boston merchant named Francis Cabot Lowell travelled to England and memorised the mechanics of the textile machines he saw in operation. A few years later he successfully brought the industrial revolution to America. They named a city in Massachusetts after him.

And American piracy wasn’t a private-sector phenomenon. No less a figure than Alexander Hamilton, the first Treasury Secretary, openly sponsored American theft of British intellectual property in the early years of the United States. Something to think about when US corporations and congressmen complain bitterly today about rampant Chinese state-sponsored intellectual property piracy.

And Britain? An explorer called Henry Wickham stole 70,000 rubber tree seeds from the Brazilian Amazon and brought them back home to Kew Gardens. Within thirty years giant rubber plantations had sprouted in Malaysia and the British Empire became the world’s biggest rubber producer, destroying the Brazilian economy in the process. Britain knighted Wickham and named him “the father of the rubber industry”. Brazilians cursed him as “the executioner of Amazonas”.

One nation’s intellectual property pirate is another nation’s entrepreneurial innovator.

Opponents of the intellectual property provisions of today’s treaties may be assuming that America and its corporations are more powerful than they truly are. History shows that ideas and technologies are immensely hard to protect. In a globalised and digitised world it’s probably harder than ever. In the long run (and often even the short-run) inventions do end up being for the benefit of all mankind — just as Benjamin Franklin wished.