Policy 14.1 - IP: Cage an idea or set it loose?

Policy:

No one is permitted to prohibit the buyer of a product from using it in a manner that the new owner sees fit – within the confines of what is permitted.  This applies to all things, including physical goods, such as books, CDs, medication, machinery, vehicles, etc., as well as digitized goods such as audiobooks, software, and the like. As a result, the owner is free to reverse engineer the product they purchased and use that knowledge for making improvements (e.g. be it cars or medicine) , fix or for other research purposes. Additionally, individuals that purchase digitized goods can copy and distribute those items without requiring to remunerate the individual or company they purchased the digital good from. However, if the purchaser is renting something from an individual or company, then they cannot harm the property of the owner because it does not belong to them. Also, no one can claim authorship of digital or physical works when it originated from someone else and they must attribute it to the actual author, scientist, researcher and the like.

Proofs: Why is intangible IP non-existent in Islam?

To understand the proofs related to this issue intellectual property (IP), such as patents, copyrights, trademarks,   we need to gain a deeper understanding of how private property works in Islam. With respect to IP, we need to distinguish between two categories:

  • That which is physically: Examples include trademarks, books, electronic storage devices and the like that are similar to “traditional” private property. In Islam, trademarks are permitted.  Trademarks have a material value since it is part of the trade allowed in Islam. The trademark is an invented sign placed by the trader or manufacturer on his products to distinguish them from the products of others, which assists the purchasers or consumers to recognize them. For example, the Apple trademark versus the Dell trademark – distinguish each of these companies in terms of the types of the computers they supply to the markets.  It is allowed for a person to sell his trademark. If he sells it to someone else its benefit and disposal transfer to the new owner.

  • That which is intangible: The second category is sensed but not tangible such as an idea of an invention stored in the brain of a scientist (i.e. unpublished works). An innovator, author and other producer of digital works owns the idea until he sells or transfers ownership to someone else. The other individual who purchased the digital work must recognize the author of the work or they would have made a lie and forgery both of which are prohibited. This is a good example of a moral right that is recognized in Islam, but is not recognized in Capitalism. In Capitalism, restricts issues to the materialistic aspects – who has the right to monetize the idea.

The first category is straight forward, but it’s the second category that is controversial.  The reason is that when an item is sold, the seller has given his or her rights to that which is intangible. In Islam, a sale has a specific definition. In the following narration, the seller attempts to restricts the use of what is being sold. After the sale – because such a condition contradicts the reality – it is deemed by the Prophet (saw) as null and void. In the narration, what is being sold is a slave who was seeking to be emancipated. The seller attempted to keep the wala’ (loyalty) with him, but the Prophet (saw) rejected this condition. As is explained, the wala’(loyalty) goes with the slave as part of the sale contract.

A'isha (ra) narrated: That Buraira came (to 'A'isha) and said, "I have made a contract of emancipation with my masters for nine ounces (of gold) to be paid in yearly instalments. Therefore, I seek your help." 'A'isha said, "If your masters agree, I will pay them the sum at once and free you on condition that your Wala' (loyalty) will be for me."

Buraira went to her masters, but they refused that offer. She (came back) and said, "I presented to them the offer but they refused, unless the wala' (loyalty) was for them." A'isha (ra) mentioned that to the Messenger of Allah (saw) so he said, "Do (it)" so she did. The Prophet (saw) then got up and gave a speech to people, where he glorified and praised Allah, and said, "What about some people who impose conditions which are not present in the Book of Allah? So, any condition which is not present in the Book of Allah is invalid. Allah's ordinance is more deserving, and Allah's condition is more firm. Verily, the Wala is for the liberator." [Bukhari]

To understand this hadith we need to understand the significance of wala'. (Note:  Translating wala’ as “loyalty” or “allegiance” is a rough translation of the term but it is not accurate. It implies an inequality that doesn’t exist between the manumitted slave and the liberator. As a result, I will keep it in its original Arabic). Wala' here is not general loyalty but rather in this concept it is a specific term used mainly in the laws of inheritance. It is a relationship, like blood relationships, which allows the one who freed the slave to inherit from them if they don't have relatives. There are specific rules that govern this, but the point here is the wala' is integral part of the contract that comes with the purchase of the slave. It is not something that can be separated because it is akin to a blood relationship. As such a condition which limits the “rewards” of owning the asset was deemed by Prophet Muhammad (saw) as null and void. Consequently, this is similar to the acquisition of physical property or digital works – the seller cannot impose a condition that limits the use of the asset – including the copying and sharing of the digital good acquired.

Capitalist Propaganda: How is IP justified?

Intellectual property are broadly defended as a way to reward the artist/inventor for their unique work or innovation. For example, this site defends patents as follows:

“Patents apply to newly developed technology as well as to improvements on products or processes. Patents provide a time-limited, legally protected, exclusive right to make, use and sell an invention. In this way, patents serve as a reward for ingenuity.”

In this post on Forbes, the author argues that “free market economics has been the most powerful, nonreligious force for good” and that one of the ten reasons why free markets are so great is: innovation, stating:

“Economic rewards to innovators encourage businesses to invent things consumers don’t even know we need. Nobody knew she needed an iPhone, Velcro, Post-It notes, blind-spot warning systems, or fitness trackers until somebody invented them. More innovations than we can recall proved to be things that we didn’t need and those innovators did not receive an economic reward. However, the rewards to those who correctly guess the mood of enough consumers are sufficient to make many of them rich. This encourages innovation and enriches consumers by much more than any financial rewards to the innovators themselves.”

The proponents of patents also suggest an element of “fairness” – if you or I invent something we should benefit from that invention.

How to refute the Capitalist Propaganda on IP?

Before tackling the issue of fairness, let’s look at the claim that free markets are a hotbed of innovation. Does it make sense for most companies to innovate?

It does not.

Capitalist companies that fail to remunerate shareholders adequately in the short run. Consequently, managers in companies who show quick profits (i.e. quarterly or annually) will be rewarded, while those that fail to do so will have their projects eventually cancelled.  Research & development (R&D) falls in the latter category and so it can be tough within companies to innovate. Capitalists themselves recognize this as a problem because “companies have a structural bias for investing in things today that cause it to starve out the new products and services that will generate growth in the next 2 -3 years”.

The reality is, however, that a good amount of innovation can be traced back to some form of governmental assistance. Jet planes, fibre optics and the Internet owe their existence to research within the military-industrial complex.  Take for example semi-conductors. American companies had their purchases guaranteed by the State:

“The industry' s development in the United States was also supported by demand conditions in the form of a reliable defense market. In its early years, up to 100 percent of the industry's output was purchased by the military, and even as late as 1968 the military claimed nearly 40 percent.”

In other words, it’s not as if these innovators went to an open market to sell their innovations. Instead, they went to a “closed-market-of-crony-capitalism” – aka the defense market – to get a guarantee that every item they made would be bought.

Looking at the iPhone, Mariana Mazzucato, in The Entrepreneurial State: Debunking Public vs. Private Sector Myths, does a brilliant job of illustration how much of the iPhone is a composite of multiple technologies that owed by government-sponsored innovation:

“There are 12 major technologies integrated within the iPod, iPhone and iPad that stand out as features that are either ‘enablers’ or that differentiate these products from their rivals in the market. These include semiconductor devices such as (1) microprocessors or central processing units (CPUs); (2) dynamic random-access memory (DRAM); as well as (3) micro hard drive storage or hard drive disks (HDD); (4) liquid-crystal displays (LCDs); (5) lithium-polymer (Li-pol) and lithium-ion (Li-ion) batteries; (6) digital signal processing (DSP), based on the advancement in fast Fourier transform (FFT) algorithms; (7) the Internet; (8) the Hypertext Transfer Protocol (HTTP) and Hypertext Markup Language (HTML); (9) and cellular technology and networks—all of which can be considered as the core enabler technologies for products such as the iPod, iPhone and iPad. On the other hand, (10) the Global Positioning System (GPS), (11) click-wheel navigation and multi-touch screens and (12) artificial intelligence with a voice-user interface program (a.k.a. Apple’s SIRI) are innovative features that have drastically impacted consumer expectations and user experiences, further enhancing the popularity and success of these products…. the fact that much of Apple’s success lies in [these] technologies that were developed through government support and -funded research is an often overlooked story…” [emphasis added]

With respect to the point on fairness, consider how RCA was able to drag Philo T. Farnsworth, the inventor of the television, through court. When they ramped up televisions after World War II, the patents had run their course and RCA didn’t have to pay Farnsworth.

 Need another example? How about FM Radio?

RCA (again) was able to use similar tactics to undermine Edwin Armstrong – inventor of FM radio –  and ensure their AM radio reigned supreme (See Tim Wu’s a Master’s Switch).

What about artists like Jerry Siegel and Joe Shuster who authored the original Superman comic book? How much did they pay to their employers (DC Comics) to sign over the rights of Superman? $130. Although the companies made oodles of money off Superman and the concept of superheroes, the inventors got nothing. The families of the inventors are still suing the company for their share of the fortune that DC made off of the invention.

Were they bad business people? According to Rolling Stone magazine, “U.S. musicians only take home one-tenth of national industry revenues”. [original emphasis and link maintained]

Why do comic book artists and musicians make so little?

Capitalism kills the ability for the common man to access the market because the market is dominated by the gigantic Capitalists who can essentially turn the open market into a closed – primarily due to IPOs (refer to how Tyson foods dominated the food industry in this post).

Also, consider how Silicon Valley used a similar strategy to keep the costs of wages down by having an illegal no-poaching policy. Although the courts forced them to pay, the point is that the Capitalists work to prevent competition by owning the market.

Points to Consider

Should we cage ideas or set them loose?

The main issue is that intangible things – outside of trademarks – is the reality of the intangible work-products, such as books, inventions and other innovations.  Thomas Jefferson, who is responsible for the modern-day patent system, said:

 “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.” [here and here]

 Jefferson realized that inherently ideas are like light and that they can be transferred from person to person without reducing what the originator has. Consequently, the reality of ideas is that they can’t be caged and are designed to be set loose. Once an idea gets out of the inventor’s mind and into the world, it’s done. There’s no way to put it back in the box. Capitalists try to do this through the whole patenting system, but it’s artificial.  It’s absurd to try to put walls around something that naturally doesn’t have such boundaries. Its not like a physical object that exists in a single place. Digital property on the other hand, can be “copied and pasted” infinitely with no effort. NYU Professor Clay Shirky in Cognitive Surplus notes how Napster – a service that allowed people to share music in the 1990s – was an illustration of how information is something that people intuitively share. CNET, commenting on a lecture he gave related to the topic, noted the following:

“But it was his point about Napster that was particularly interesting: Napster was what turned the sharing of music from sharing a physical good into sharing information, he said, and that's what was revolutionary about it…"Back in the old days we used to have something called a CD collection," Shirky said facetiously. "It was something like keeping the box that the Amazon books came in, but you kept the container the music was in all the time...”.

The article also goes on to say:

“In the Napster era, some attributed the ascent of pirated digital music to a supposedly criminal-minded nature among American youth. The argument didn't work. "It coincided with the largest fall in the rate of crime in recorded history," Shirky said, "with one exception, which was theft of digital property.”

The “illegal” sharing of music is a good illustration of how the concept of having copyrights is incompatible with the reality of digital or digitizable media. Copyrights interfere with our desire to share things with others – especially when it costs us nothing to replicate and share that item. It’s yet another good illustration of how Capitalism’s failure to recognize spiritual, moral and humanitarian values that we have.

Patent trolls: Costlier than domestic/foreign terrorist organization?

Drew Curtis, founder of Fark, thinks so. In a Ted Talk that he gave in 2012, he notes:

“Patent trolls have done more damage to the United States economy than any domestic or foreign terrorist organization in history every year.”

Curtis calculated the cost of patents troll to be $500 billion, while the 9/11 attacks cost $123 billion. The cost of patent trolls in 2011, according to a Boston University School of Law study, was $29 billion.

So how does the patent troll industry work? These are lawsuits launched by “non-practicing entities”; meaning they just buy patents and sue businesses for alleged infringements of the patent. Their target aren’t just small businesses, they are also big businesses as well.  

The “business strategy” is to take out companies by forcing them to settle out of court. Curtis notes that it costs $2 million over 18 months. So, its easier to for the defendant to settle out of court. Although this may be sensible strategy for one who finds them in such a bind, it speaks to how bankrupt such a system is. This insanity is facilitated by lawyers who line the politicians pockets with cash.

Doing the research for this post, I had the fortune of finding Austin Meyer. He’s a programmer who wrote the program X-Plane. He was sued for alleged patent infringement. Here’s his story:

 What impressed me about him is that he’s just a regular person – who got rubbed the wrong way – and became an activist who continues to fight patent trolls till this day.

Is it money that drives those engineering types?

Another important myth that needs to be broken it the idea is that people only care about money: do engineers need monetary incentives to solve problems?

When a trade publication, discussed the concept of planned obsolescence it attracted a negative reaction from the engineers. As Giles Slade, author of  Made to Break: Technology and Obsolescence in America:

“Much, but not all, of this reaction was strongly unfavorable and revealed deep antagonism between design engineers and their corporate managers.”

Slade cites a letter from an engineer at Remington-Rand corporation:

“I greatly doubt that any one of us would wish to apply this "principle" of planned short-term failure to his own purchase of home, auto, piano, and other durable goods involving considerable expense”

Consequently, engineers were forced by the capitalist system to engage in the planned obsolescence that contributes to the billions of pounds of e-waste.

Scientists, engineers and other technical specialists are more concerned about solving the problem at hand in the best possible way. Monetary considerations are second. It goes again to show human beings are driven by more than just materialistic values. We all, as humans also have moral, humanitarian or spiritual values. So, when it comes to an engineer refusing to sign off on a design that is purposefully flawed, he or she is driven by the moral value to have integrity and sees that as more important than materialistic values.

 Linking back to what I noted in the post on partnerships, 4 out of 5 of the founding partners are pushed out of their own company by investors. Now what’s interesting here is how the Islamic partnership model protects such founders - such as these engineering types. The engineers have as much right to the company as the investors in capital. So, they can’t be pushed out of their own company just because they don’t comply with making 10X returns desired by the investors. Furthermore, because there is no intellectual property, the founder can take their innovations to a new company. In such a scenario, they would have more weight in the market because the investor will have to hire a new engineer to “operate” the idea and so they won’t have as much clout since the new engineer is not the genius behind the innovation.

What about drug patents?

We will explore the issue about drug patents in the next post, in sha Allah.