P2P Foundation

In our P2P Research mailing list, local economy advocate and developer Sam Rose has argued that the use of patents are counter-productive for local efforts that rely on distributed manufacturing networks:

“It may seem dogmatic, but I think that usually for the problems we are focused on, patents and traditional capital (with it’s traditional
expectations of very rapid money ROI) tend to be non-appropriate for
localized economies/commons based business models.

Removing patent gives rapid ROI on many forms of wealth, including
money. A group of people on local scales may not invest in technology
development solely as a capital venture. Often, it is an investment to
gain the capacities the technology affords (food, energy, physical
object and rapid prototype produciton). Patents block the flow on this
scale, and the costs associated are a barrier to entry. The business
model on this scale is at the point of consumption (but one person may be producer, processor, distributor, and consumer. This is not a role-based economy, it’s an activity based economy.”

Kevin Carson agrees, and stresses that this model makes patents obsolete:

“Modular design, with stigmergic efforts to create modules for a common open-source platform, would greatly lower R&D cost per product: spreading out the R&D for a platform and for modules by making the basic designs reusable over a wide range of different configurations.”

Andy Robison replied with the following cautionary remarks referring to the real trends we can observe:

“First point: the switch from concentrated (MNC) to diffuse (garage) distribution of manufacturing is affected by the whole field of intellectual property (IP), not just patents. While patents may indeed be unaffordable for very small outfits, the same problems do not affect other forms of IP such as copyright and trademarks.

Second point: there is little empirical evidence of a move away from IP in fields most open to decentralised production. Open-source software specifically defends itself against IP by formal and deliberate means, but the wider field of diffuse software production gets pulled back into IP disputes constantly, with disputes over ideas still at the “garage” stage (c.f. the lawsuit over who invented Facebook). IP also seems not to be disappearing from production of books, music, games, etc.

Third point: the move towards decentralisation is relative. It is true that from a normative point of view, the creation of a non- or post-capitalist social system would most likely eliminate IP. However, from an empirical point of view, changes within capitalism towards decentralisation are not leading to the elimination of big businesses but rather, to flattened hierarchies and contracting-out. Small businesses plugged into the world economy usually produce goods trademarked, copyrighted and patented by large corporations. Large corporations see the need to continue and even tighten these IP regimes because their relevance to the whole process is centrally premised on the extraction of rent on IP - the IP regime prevents small companies undercutting large companies in local markets. Indeed, I would maintain given recent studies showing equal productivity in factories in North and South, that the central mechanism of core-periphery exploitation has moved from technological inequality (high vs low value added) to rent extraction on IP. Since the loss of IP would make large companies irrelevant, they fight tooth and nail to preserve it, even beyond strict competitiveness, and behave in otherwise quite “irrational” ways to prevent their own irrelevance (e.g. the MPAA and RIAA’s alienating of customers).

Fourth point: IP is a form of rent-extraction carried out by or through states, not strictly speaking a part of the process of capitalist markets. The persistence of the practice can be undermined by refusal to take advantage of legal privileges/rights which exist, but the laws will not disappear due to market processes, only due to state decisions. It is possible that states will decide that IP is retarding competitiveness and needs to go, but it seems unlikely given the latest trends towards more draconian enforcement. It may be more likely that states will expand IP coverage to address new problems. Hence, if small businesses are not getting patents because of cost, states might reduce or eliminate the cost of patents for small businesses.

Fifth point: it may be more productive to look at the continuing applicability or enforceability of IP, rather than whether businesses will continue to use it. While this is very visible in the virtual and informational sphere (”pirating” and free duplication of games, software, console systems, music, film, TV, news, books, etc), it is also increasingly the case in terms of technological hardware. Growing Southern economies - China being especially notorious - tend to have either limited IP regimes or lax enforcement, meaning that everything that a MNC produces there, will also be copied or counterfeited at the same quality for the local market, and in some cases traded internationally. I have my suspicions that Southern regimes are very aware of the centrality of IP to core-periphery exploitation and their laxity is quite deliberate. But, in part it also reflects the limits of the Southern state in terms of capacity to dominate society, and the growing sophistication of transnational networks (e.g. organised crime networks), which can evade, penetrate and fight the state very effectively.”