The Learning Curve Keith Hylton
[00:00:00] Albert Cheng: Well, welcome back to another episode of the Learning Curve podcast. I’m one of your co-hosts this week, Albert Cheng, running the show. With me this week is Justice Barry Anderson, Justice Anderson, good to have you back.
[00:00:37] Barry Anderson: Delighted to be here. Uh, we have another great book to talk about and a great guest, and we’ll be getting to that in a few minutes. I’m always delighted to have the opportunity to visit with you, Albert, and we’re ready to begin. I think.
[00:00:49] Albert Cheng: Great to have you back. We enjoyed, at least I did, and I’m sure you did. Enjoyed our conversation last week about the scopes trial, talking about issues of creationism evolution. But we’re back to talk about different kind of creation.
[00:01:00] We’re gonna have Professor Keith Hylton talk to us about his work and his expertise on intellectual property rights, Patton Law, and I don’t know, Justice Anderson. If you had the experience of presiding over tough cases on these matters, is that something that you had the pleasure of doing throughout your career?
[00:01:17] Barry Anderson: You know, my background with this actually comes more from private practice because as a state Supreme Court justice, we rarely would get patent issues or secrecy issues, which are largely, although not entirely federal and creation, but as a practicing lawyer in a small community in Minnesota here for many years, I had several clients who had experience with inventions and other things, some of which turned out to be very successful.
[00:01:40] And so. It had a little toe in the water, but as soon as it got complicated, I would send them to people like our guest today who really know a lot more about how to handle patents than your average small town lawyer. So yeah, it is an interesting process. And one of the issues that he’s gonna be talking a little bit about is the difference between patents and trade secrecy.
[00:02:00] Sometimes developers of ideas will specifically choose not. To file a patent instead relying on trade secrecy. Mm-hmm. And so perhaps we’ll have a chance to discuss that a little bit, but it’ll be interesting.
[00:02:13] Albert Cheng: Yeah, well, there’s lots to talk about and certainly what I enjoy thinking about or reflecting on when we talk about this topic is just the essence of human ingenuity.
[00:02:21] Seems to be a, a marker of our nature. And so we’re gonna jump to that after the break. But before that, we wanna talk about some news. And speaking of human ingenuity and, and human nature Justice Anderson, you found an article that continues the saga of the next installments, I guess, in the unfolding of the Tulsa Honors College. But I, I guess it’s a larger topic though, that this article
[00:02:43] Barry Anderson: Yeah, no, it’s, you’re onto something here. Uh, we are talking about Eric Adler’s article. They’re killing the humanities on purpose. Us The crisis is not one of resources, but of values. Adler is a professor of classics and chair of the department at the University of Maryland at College Park.
[00:02:59] Somebody who knows a great deal about what I would call sort of classical education, broadly defined, and he goes on at some length here about not only as you suggest the ongoing crisis at the University of Tulsa, where philosophy Professor Jennifer Fry announced. That the new provost there had fired her as the dean of the Honors College.
[00:03:18] That was apparently pretty successful. But as Professor Adler observes, there’s something going on more than just this. And he walks through some of the issues at other places, including the University of Chicago. And one of the things he points out is the inconsistency or. Perhaps the incongruity of these institutions citing as reasons for closing these classic education programs as being one of finance.
[00:03:42] Well, fact of the matter is, and he goes into this history, we have a long, long tradition of education consisting of classical education, which is typically not expensive. Don’t need expensive equipment. You don’t need huge faculties to teach these classes. And his point is that this is an excuse, and what’s happening is these institutions are choosing to close these programs or to reduce them programs rather than ramping them up, which is what they should probably be doing.
[00:04:11] And I’m very reminded of something that. President James Garfield said more than a hundred years ago in a speech, he said that education is really Mark Hopkins, who was one of the great educators of the 18 hundreds on one end of a log, and a student on the other end of the log. Hopkins was the president of Williams College in that era.
[00:04:31] And that is the reality of the education process and. Why are we moving in this direction? Adler’s got a horse in the race. I think we have to acknowledge that there may be responses from these other institutions, but this should be something that’s of great concern to us. And you know, there’s been some other publications about this, about reducing the number of majors in history and the philosophy and so forth, and what that might mean.
[00:04:55] Yeah. So there are market forces that work here as well. But it’s a very interesting article. I recommended it to people. It’s a great jumping off point for a very important question.
[00:05:05] Albert Cheng: That’s right. That’s right. So I’d encourage listeners to read that, get to speed and think about what that might mean for higher ed and what we might do to make this kind of education more widely accessible.
[00:05:17] Speaking of making education accessible, Justice Anderson, I, you know, I found a, a really fascinating article from Wall Street Journal reporter Sarah Zo. Apparently she has a kindergartner and has gone through this process of trying to find a school for him in la So the title is, I’m an Education Reporter.
[00:05:35] Finding a kindergarten for my son still overwhelmed me and why I really enjoyed getting her take and you know, her telling her story about all the things she did to find a school. And it’s not that in LA County that there’s a shortage of schools. I mean, there’s. Plenty of opportunities. I mean, they have a very robust public school choice programs charters, available magnet schools.
[00:05:56] So there are options, but there’s a dizzying array from which to choose. And so Sarah is recounting all that she went through. And my biggest takeaway from this is, look, I, this is something I’ve said on. Numerous occasions. It’s great that parents have a choice now, but you know, we, we need to build, you know, an ecosystem here where, where parents have the support and the social networks and folks they can lean on to help them find that school that would fit the best for their kids.
[00:06:22] So I like the invisible hand of the educational market working. But behind that invisible hand, there’s, there’s a lot of people doing a lot of good work to help parents navigate this whole system. So-
[00:06:31] Barry Anderson: You know, in many respects it’s gotten more complicated. Well, I, I think it’s not, in many respect, I think it flat out has gotten more complicated since my kids were in elementary school. In that era, you didn’t have a lot of options and basically you chose to live. You thought your kids were going to get the best education. Well, that’s become increasingly difficult, increasing costs of housing, those kinds of things. But fortunately, we now do have more choices, at least in many places. And the question is, do we have the framework, the structure, the access to information that’s necessary to make that call? And that’s what we need to build.
[00:07:08] Albert Cheng: That’s right. That’s right. I tell folks, you know, getting school choice policy is just the beginning. There’s a lot more work to do. So take a look at that article. But enough about education news. We’re gonna have Dr. Keith Hylton join us to talk about his expertise in intellectual property and patent laws.
[00:07:24] So stick around.
[00:07:37] Keith Hylton is the William Fairfield Warren Distinguished professor of Boston University and professor of Law at Boston University School of Law. He joined the BU Law faculty in 1995 after teaching for six years and receiving tenure at Northwestern University School of Law. Professor Hylton is a prolific scholar who is widely recognized for his work across a broad spectrum of topics in law and economics, including tort law, antitrusts labor law, intellectual property, civil procedure, and empirical legal analysis.
[00:08:09] He has published more than a hundred articles in numerous law and economics journals and six books, including the Economics of Labor Law, tort Law, a Modern Perspective, laws of Creation, property Rights in the World with Ronald a Cass, and Antitrust Law, economic Theory and Common Law Evolution. He earned his BA manic law from Harvard College and a JD from Harvard Law School and a PhD from the Massachusetts Institute of Technology.
[00:08:37] Professor Hylton. Great to have you on your show. Welcome. Thank you. Let’s let our listeners kind of get to know you a little bit. You’ve got a distinguished academic career in economics and law, and we’re here to talk about your book, laws of Creation, property Rights, and the World of Ideas. How did you get into this?
[00:08:52] Share with us some of your background. You know, any formative educational experiences that pushed you into econ and law and intellectual property rights and the like.
[00:09:00] Keith Hylton: That’s a long story, and we could be here for quite some time. I give you the full story. I’ll have to try to paint with broad strokes.
[00:09:08] Sure, yeah. Give us the synopsis. So I, you know, I went to college, I stumbled into economics. I became very serious about economics. As an undergraduate, I thought I would go to law school, but as time passed, I found that I was really interested in economics. So I decided to go to a PhD program in economics.
[00:09:31] Instead, though I was still thinking about law school all along. So I went to, after college, I went to MIT and economics department, and at that time, the field that I’m in, which has the name Law and Economics really was a fledgling field. There wasn’t much, it wasn’t a big area of scholarship in the economics field.
[00:09:55] So there weren’t, there weren’t people around and as graduate advisors that I could go to and ask about or get advice. So it was something that I was reading about on my own along the side, and I focused on labor, economics and macroeconomics and my PhD program. But I started drifting toward law and economics during that time, and in the end, I decided to go ahead and get a law degree.
[00:10:21] That’s when I got serious about law and economics. So I kept all of my options open. I thought, well, you know, even if I liked law so much, I wanted to just be a lawyer, I could do that too. And I went into academia. I thought I might be in an economics department, but I ended up at a law school. I started at Northwestern Law School and I was also joined with a place called the American Bar Foundation in Chicago, and that’s when I started my academic career.
[00:10:48] Again, I’m trying to paint broad strokes. I was there at Northwestern for a number of years before, in my fifth year at Northwestern Boston University reached out to me and to my wife with a tenure offer. My wife at the time, a tenure offer for both of us, and we decided to come to Boston University because it was, it was a really good deal.
[00:11:09] She didn’t wanna stay at the institution she was in in Chicago. I was happy in Northwestern. But anyway, we decided to compromise and came out to Boston University. I’ve been here since the fall of 1995. I’ve done a lot of work. I spent a lot of time writing things. I am right now one of, I think about 13 university professors at Boston University, that the label that they use as Warren Professor.
[00:11:34] In fact, it’s, the label is longer than, it’s a mouthful of a title. Yeah, yeah. But they’re about 13 right now, and I think, I’m actually one of the more senior of the Warren professors at, at this time. I’ve written a lot of, at this stage, I, I’m the most cited member of the law faculty right now, and I’ve published more articles than I can keep track of and has six books.
[00:11:55] I have seventh book that’s coming out that I’m going to finish pretty soon. One of the books, of course, that’s the subject of our conversation, is the one I wrote with Ron Cass on the Intellectual Property Laws. Actually, the book in Progress that I’m working on right now is a textbook on intellectual property.
[00:12:14] That’s a very brief, you know, description. Trying to keep it all within a few minutes.
[00:12:19] Albert Cheng: Yeah, yeah, sure. No, appreciate that. But hey, let’s get into some of your work and let’s talk about laws of creation. So you and your co-authors sketch out theories of property rights and the free market drawn from enlightenment thinkers like John Locke and Adam Smith.
[00:12:32] So what can we learn from English law and you know, the wider English tradition of intellectual property rights?
[00:12:39] Keith Hylton: Well, we can learn, learn a lot. So you mentioned two names, John Locke, Adam Smith. Both of those people are important thinkers in the area of property rights. And why should a society grant property rights to individuals?
[00:12:53] And Locke, I guess, is, is famous largely for taking the position that property is something that exists prior to the state, and therefore when the state develops, it has to respect property rights that have existed at a time prior to the development of the state. That’s a theory of property rights. That was highly influe.
[00:13:13] Winchell certainly impacted the thinking of the founders of this country. And then Adam Smith, I, I think, is one of the first utilitarian thinkers to take a close look at the legal system at right about the instrumental functions of property rights. Those two thinkers represent two different theories or approaches to property rights that had some influence.
[00:13:37] I think today. You know, most of us, certainly people like me, we’re in the school of Adam Smith, where we’re, we view property rights from an instrumental or functional perspective, and certainly both of those thinkers had a big impact on, on the founding of this country. Yeah. John Locke we we’re familiar with already.
[00:13:55] We know that Locke had some impact on the, you know, thinking at the time. Of the revolution and pre-revolutionary times, Adam Smith is back there that hasn’t really received the credit that he deserves. You know, Adam Smith’s book was published in 1776 and you know, if you read the Federalist Papers, for example, which sets out the detailed description of the purposes of the Constitution, there are many discussions of economics in the Federalist papers that appear quite similar.
[00:14:28] What to what you see in Adam Smith. So it’s clear that Adam, Adam Smith, you know, along with names that we’re familiar with already, like John Locke, Adam Fifth, was one of the people that had some impact. I very plausible, he had some impact on the founders of this country who were probably deeply affected by the arguments that he made about the.
[00:14:48] Proper economic system, the proper functioning of government. Hmm. Those are important people. Of course. They largely talked about property rights and now we’re moving to intellectual property rights. And what are the, well, those are property rights, but of a certain sort different from what we’re used to.
[00:15:05] You know, what we traditionally would think of as property rights, but there’s still nevertheless property rights. Property rights to the labor of the mind. Yeah.
[00:15:14] Albert Cheng: Yeah, well, let’s talk about that a bit and, and also you mentioned a point about the influence that the English tradition had on our country.
[00:15:21] And so I think about the, you know, delegates to the constitutional convention. I mean, they unanimously concurred with Madison’s proposal to add an authors and inventor’s clause essentially secured copyrights within the our Constitution. So tell us briefly about just the legal relationship between American intellectual property rights and our constitutionalism.
[00:15:42] Keith Hylton: Well, I guess what’s important about American, uh, intellectual property rights is that it’s in our constitution. You know, that provides a sturdy anchor, and it also means that these property rights, the intellectual property rights are federal property rights. In other words, property is something that, for the most part, exists within each state.
[00:16:02] Each state defines property rights, and what the Constitution does is it creates a federal property, right, the patent clause and the copyright clause. It’s one of the rare instances in the US Constitution, which creates a right that supersedes those rights in the state. That injects itself into every state.
[00:16:22] It says, you know, you have to respect this certain kind of property. Intellectual property rights have to be respected in every state and creates a uniform property. Right, because before the Constitution was developed, before the states had, you know. United United under the Constitution. Individual states had their own IP laws.
[00:16:43] There were pre-revolutionary patent systems, but they existed in individual states. And of course that would be a patchwork system. Mm-hmm. That would be a system in which you might have a patent in one state, but the same patent might not be respected in another state. And what the Constitution did with the IP laws was federalized this, right, was to make it uniform across the state, which of course is important for the purpose of interstate commerce.
[00:17:09] Now, of course, we can distinguish that with the European Union system, which recently developed an EU wide patent, but as I understand it, that’s still a work in progress because there are many inventors in the eu. For example, a French patent. Yeah. And it may not be enforceable in another European interesting nation.
[00:17:32] So that’s an important feature which we’ve had. That’s important. And that I don’t think existed at the time in any other continental system, a federal patent. Right. Which, as I think played a, a significant role in the economic development of this country.
[00:17:47] Albert Cheng: Let’s fast forward just a few years. Spring of 1790.
[00:17:50] Thomas Jefferson, who was Secretary of the State, the very first one at the time, establishes the US Patent Office. And so we know that protects inventors exclusive right to profit from their inventions. And so it’s been many years since then and many millions of patents later, Jefferson’s pet projects has really guarded America’s precious intellectual property.
[00:18:11] So tell us, yeah, what does the US Patent Office do? How does it function? What should we know about it’s,
[00:18:17] Keith Hylton: It’s, right. Well, okay, so it’s, it’s sort of interesting because we have a, you know, if you read the newspapers, there’s a lot of talk about getting rid of the administrative state that has developed.
[00:18:28] And the administrative state, you could say, really began with the patent office. Hmm. And I don’t think anyone wants to obliterate that part of the administrative state, though. We’d like to bring it though. Some of the same issues about overgrowth. Apply to the patent office as they apply to other administrative agencies.
[00:18:49] So yes, the US Patent Office developed, I think largely because Jefferson couldn’t deal with all, all of these patent applications. Yeah. Just pretty much. So they had to delegate this work to other people, and from, this was born the US Patent Office, and it exists to grant this federal property, right, this patent.
[00:19:09] And you know, obviously this had to be done. There was no way that. You could have an individual making these patentability decisions, and so you had to have an office to do something like this. The one important question there is what’s the relationship between the US PTO and the courts? Because traditionally the patent was viewed as a property, right?
[00:19:32] And then the boundaries of that right, would be determined by the courts through litigation. And over time what’s happened is the patent office has assumed. More of that role in determining the boundaries of a patent. That’s an important change. And we’ll have to see how that plays out over time. Because there’s much to be said, even though the former, the original system you could say is primitive because it involves a rather minimalist U-S-P-T-O and courts that are then doing most of the work in determining whether patent is valid or not.
[00:20:06] And now we’ve moved to a system with a very, you know, developed. US PTO, that’s making a lot of decisions about the boundaries of patents and taking away some of that work from courts. So one of the questions is whether that’s a good system, whether we’ve moved in the right direction. ’cause as much as we might criticize courts in a well-functioning government, courts will have relatively neutral judges, we hope.
[00:20:31] Whereas in the executive branch in which the U-S-P-T-O sits and has always said. There’s always the problem that in this executive branch, whoever runs the executive branch has enormous influence on the agencies within the executive branch. In fact, that’s one of the issues that’s playing out in the courts right now.
[00:20:51] Mm-hmm. And how much influence does Donald Trump have over these so-called independent agencies? And the courts at this moment are recognizing or agreeing with Trump’s arguments that he has enormous influence and can fire people and hold that. So if we take this to be true that the head of the executive branch has influence over these agencies, including the U-S-P-G-O, maybe we ought to be concerned about agency power in context in which we want the agency to be neutral.
[00:21:19] Yeah. Because the agency is increasingly under the sway of whoever is running the executive branch. It could be Biden one year, it could be Trump the other year. And maybe we’d want to have a lot of this boundary determination work for patents done in the courts instead, and the hope that that would be a more neutral branch for making these determinations, then having it within the executive branch.
[00:21:44] Albert Cheng: You know, speaking of patents, let’s talk about Thomas Edison, the American, with the most individual patents. So I’m looking at my notes with the statistics here. 1093 patents in the us Yes. And 1200 patents in 34 different foreign countries. I think listeners known for inventing the electric light bulb, filament phonograph motion picture camera.
[00:22:05] So he is called the Wizard of Menlo Park, that’s probably less known, named after his industrial research lab, Menlo Park. Tell us about Edison. How is he an exemplar of the American patent system? And, you know, what’s the connection to business and you know, economics here?
[00:22:22] Keith Hylton: Well, you could say that what Edison represents is the full development of the US patent system because what is a patent designed to by securing property rights in the hands of the inventor.
[00:22:37] Then it enables capital to go into these invention projects by securing these rights. And so the ES Edison’s business was to create a shop in which they devoted themselves to invention and financiers funded that work. So I think maybe for the first time in history, you had a large business in which people were just employed to invent things, which I don’t think ever existed before at that time.
[00:23:04] That’s enabled by the patent system. You know, without the patent system, you couldn’t have something like that work. So that’s what makes Edison unique. I mean, as, as an inventor, of course, there’s all the things that he did and I gather maybe he didn’t sleep at all for, but of course there are other Americans who, and I, maybe I shouldn’t exclude, shouldn’t limit the list to Americans, but certainly there are other Americans who were.
[00:23:27] Important inventors, you know, Samuel Morris of the Telegraphs. Mm. That’s an amazing story by itself. If you ever decide to, you know, read something on the history of, of inventors, that’s one of the more interesting ones because of the importance of the telegraph and the characteristics of the, of the inventor.
[00:23:45] Yeah. Who was, who was a painter, but so yes, I would say that that’s what Edison represents, this sort of full development of the patent system to a stage where you could have a business that’s funded to just engage in innovation. And of course, obviously he did a lot of that and made some really important inventions that we still enjoy today.
[00:24:13] Barry Anderson: Professor, let’s talk a little bit about the intersection of patents and trade secrecy, right? You write in your laws of creation, quote, some of the best known names among consumer products are based on intellectual property, protected by trade secrecy, and in some cases, that secret has been kept for a long time.
[00:24:30] I know as a practicing lawyer, I had a very limited exposure to patent and trademark issues, but. Secrecy. Trade secrecy is part of that, but it’s also separate from it. And maybe you could help our listeners understand, you know, Coca-Cola, you know, famously the formula for Coca-Cola is a trade secret. Auto manufacturing, jazz music, a bunch of different examples.
[00:24:53] Discuss how individual inventors and businesses use the law, our patent system and trade secrecy principles, okay. Which are both part of and outside of that law to protect their interests.
[00:25:05] Keith Hylton: Well, if you think of. Two ways you, let’s say you have an idea, you know, a recipe for some new kind of chocolate chip cookie that you know, no one can ever figure out.
[00:25:14] Maybe that example is too trivial, but maybe I’ll stick with it. In theory, you have the patent option, though it, it’s unlikely that you’ll get a patent for that. But let’s just go along with the example. Let assume you, you might be able to get a patent for a new type of chocolate chip cookie, but you also have the option to just keep it a secret.
[00:25:32] So for every one of these process inventions, you have a choice. You can go the patent route or you can go the trade secret route. And which route you go depends on the cost and benefits of these two paths. And so in a sense, these two systems, patent and trade secrecy work together. And you know, there’s a gray area where they’re both combined because.
[00:25:58] There are patents which are supported by trade secrets because the patent doesn’t reveal everything, and so you actually need to know something about, you know, the secrets to actually be able to, in some cases, to match what the originator is doing under the patent. But again, let’s take them as just two separate paths.
[00:26:17] You know, you might decide the patent gives you a limited period of protection. You know, very robust protection. Protection against anyone, protection against someone who independently discovers your secret process. Whereas the trade secret gives you, in theory, an infinite period of protection. As long as you can keep it a secret, you can, you know, you gave the Coca-Cola example, the KFC example.
[00:26:43] I get, I think these secrets have lasted for a long time. You could, that period would far outstrip the duration of a patent grant. But it’s also subject to the risk that anyone could discover it at some time, or anyone could happen upon it independently. And there goes the value of your trade secret. And you also, to the extent that you share your trade secret within the business, you have to be worried about the people that you share the trade secret with.
[00:27:15] You know, taking the secret and running off and forming a new company to compete against you. So again, these are some of the costs and benefits of these two paths. And anyone who’s in the innovation business has to consider both. So, you know, so if we make it more difficult for people to get patents or to enforce patents, then that means they’ll shift more toward trade secrets. If we make it more difficult to maintain trade secrets, then will cause people to shift toward patenting instead. And that’s a brief description of the relationship between these two.
[00:27:48] Barry Anderson: As a follow up question, professor, I’m sure our listeners would wanna know, is it correct that Coca-Cola keeps the formula under lock and key and nobody gets to see it?
[00:27:57] Keith Hylton: Is that, is that I, is that true? I don’t know. I don’t know. I really don’t know the answer to that. But KFC, it’s apparently, it’s well known that KFC splits the formula up so that no one has the full formula. Well, so there you go.
[00:28:13] Barry Anderson: I, I did have a client once where they made the decision, affirmative decision to not patent a product that was otherwise patentable and to build a business on a trade secret basis, which is exactly the point you were making, so, yes, yes.
[00:28:26] Alright, well let’s talk about another reference in your book, laws of Creation, where you tell us that quote, copyright law focuses on a different aspect of the world of ideas and information. And you talk about the particular qualities associated with the expression of ideas. We got British and American authors, Dickens Poe Twain, bitterly complain about the loss of income due to widespread literary piracy and copyright violations.
[00:28:52] Tell us a little bit about copyright laws duration, when they’re upheld, when not, my goodness. The challenges that are ahead of us. Globalization, digital piracy, AI chat, GPT, et cetera. The floor is yours, right?
[00:29:08] Keith Hylton: Well, okay. So the big difference between patents and copyrights is that patents protect useful ideas and copyright, it protects expression of ideas, you know, usually of a novel, sort, not functional.
[00:29:26] And that’s the difference between these two areas. And, you know, copyright, both of them have long histories. The patent system is largely developed through different statutes that we see over time. The statutes, it can be traced back as early as the 14 hundreds in Venice. Different patent systems have developed over time, over, you know, over those years.
[00:29:49] Copyright has a different history because copyright, we’re talking about protecting the work of authors. So that they can get a return on what they write so that they don’t write a novel, and then the novel is just copied by someone and disseminated without the author earning a penny from it. So copyright has a long history because you know before there’s an English statute, the statute of Anne, I think it’s 1711, that’s the first copyright statute.
[00:30:17] Before then, though we certainly had novels and books being published before then. And so you might ask what was going on before 1711? Well, it was largely how would, as a lawyer would put it, informal enforcement. Extra legal enforcement called that you had the Stationers’ Guild in England, which was largely a cartel that protected their own copyrights, and therefore it meant that books that they publish wouldn’t just be copied by anyone.
[00:30:51] You had sort of a system of honor among authors. So you know, one of the famous incidents is Cervantes, the author of Don Chiyote, published it in two volumes and between the first and the second volume. Another person writes volume two, writes a sequel, it’s to volume one, stepping in to take Ante’s place.
[00:31:15] So in the second volume, he criticizes that person and makes fun of him. I think that reflects kind of a norm that, hey, this is, you know, these are things you just don’t do. You don’t run in and write a sequel to some other author’s work, and this is all before the existence of any copyright statute. So, so copyright sort of existed through extra legal enforcement and through a system of norms, a notion of there’s certain things that you can do and that you just can’t do.
[00:31:45] Now we have the Stationers Guild, and then we have the copyright, first copyright statute in 1711 that locates that property, right? And authors. And that’s the beginning of what we see today. And of course, everything has gone forward from there. The biggest issue, of course, has been the enforcement of those copyrights, because authors, of course, you know, they have to rely on the publishers to force those copyrights for the most part.
[00:32:10] Barry Anderson: Maybe we could take that as a jumping off point to discuss the tensions around intellectual property rights among individual copyrighted or trademark protected performing artists and major corporations, right. Disney, for example, or the tech giants of Silicon Valley. Maybe you can talk a little bit about some of those tensions, and I know there’s been an extension of the copyright time, right? Uh, that has proven to be controversial. Talk a little bit about those issues.
[00:32:35] Keith Hylton: To be honest. In fact, Ron Kas and I make this argument in our book, you know, if it were up to me to write a copyright statute, you know, just on my own, I might allow for extensions or, you know, additional terms for quite some time, but on a very narrow sense.
[00:32:54] In other words, copyrights start off pretty broad, but I’m, I might allow for extensions on those copyrights as long as they’re pretty narrow, as long as they prevent. Just outright copying, but would give people more and more room over time to just, you know, work around and do works that’s derivative of a copyrighted work and expand that right over time because I, you know, I, I think there’s certain works of art that, you know, you’d like to see someone have an incentive to continue to fund for as long as possible.
[00:33:28] A narrow copyright would allow that to happen. So Ron Kas and I actually make that suggestion, we don’t push it, but we make that suggestion in our book. And once we start talking about this issue, we quickly get into controversial questions, you know, issues that people debate and you know, you take a position on this and, and someone’s going to attack you on some basis or another.
[00:33:52] I will offer this, that we see something sort of similar, both in the patent sphere and the copyright sphere. In the patent sphere, what we’ve seen is sort of a shift of those rights in the hands of larger corporations in the copyright sphere. What we’ve seen is new technologies that appear to have the effect of diminishing the rights of authors or diminishing the returns to those authors.
[00:34:19] And then it takes some time before things adjust to the authors are able to get a decent return even in the face of that new technology. So in other words, technology seems to always race ahead of the ability of authors to enforce their copyrights. And that seems to be a pattern that take the simple case of a file sharing platform like Napster, which you know, was obviously the big thing.
[00:34:46] Maybe 20 years ago or something or, but obviously it also had the effect of denying musicians any reward from their work because someone could just download these musical works free from Napster and share them with everyone around the world. And so, you know, how do we view that? Well, that’s a classic case of the technology racing ahead of the ability of these copyright holders who are the musicians and the composers to enforce their rights.
[00:35:14] Barry Anderson: Let’s take that example Napster, that you’ve given us because it’s right. It kinda leads into what I think is perhaps one of the biggest issues in the copyright and trademark and patent areas, and that’s counterfeited or pirated products, right? You. You summarized this in your book, noting that more than $600 billion a year, probably 7% of the world’s market, China and Russia are big users of pirated software. Talk to us a little bit about the international dimensions of intellectual property rights, cyber theft, security policing, and maybe a couple of the major decisions around that topic.
[00:35:52] Keith Hylton: Well, when you get to the international dimensions, you sort of get into a sort of lawless zone because everything depends on treaties and the enforcement of, of those treaties.
[00:36:03] Obviously there’s a lot of intellectual property theft. A lot of it happens internationally. It’s obviously very difficult thing for, for the copyright holders in the us. To enforce and especially technology is making this kind of theft of intellectual property rights easier to undertake. As time passes, I can think of little things that can make a difference.
[00:36:28] We can obviously enforce those intellectual property rights. We can do a better job of enforcing those IP rights here at home and of taking steps, doing the best we can to avoid undermining those rights with our own conduct. For example, if we have states or businesses that purchase items, you know, internationally that, that are made available through the violation of intellectual property rights here, you know that.
[00:36:57] That’s what I mean. To give you a classic example, again, every example that you give on this topic could be subjected to debate and lead to accusations that it was unfair in some way. But let’s take the example of Subway trains produced by. The company CCRC, which has obviously been embroiled in various patent disputes, claims that it has taken intellectual property from train manufacturers in Western countries.
[00:37:25] You know, CCRC offered its trains at roughly half the price. So the MVTA has CCR RC trains, which it, it’s acquired at roughly half the price of trains that are developed by Western train makers. And you know, what explains that discount? Perhaps it could be due to the fact that there are disputes about the taking of intellectual property rights from, so I’m just offering that as one example.
[00:37:52] I don’t wanna wade too far into this one because I don’t want to have anyone say, well, gee, you’ve been unfair in discussing this case. But I’m just offering it to make the point that we can do more on our end to make sure that we are not undermining, you know, through our own conduct. The intellectual property rights that are granted here in this country, and then beyond that, internationally, that’s a tougher thing because we’re talking really about the enforcement of treaties.
[00:38:17] We’re talking about issues that could get into the trade negotiations that we see right now going on, you know, between the US and other nations. Those are issues that are, you know, a bit beyond what typical American lawyers can do Anything about. It’s a big issue. That’s all I can say about it. And, and if there’s any particular example I’m, I’m willing to offer. You know, more opinionated statements on it.
[00:38:41] Barry Anderson: Well, I, I appreciate that and it is a big, complicated topic that we’re going to see more activity in. I have one more question for you, professor, and then we typically ask our guests at the end of the program to share with us a paragraph or a few sentences from their book, and Okay.
[00:38:58] Maybe you can be thinking about that a little bit as I lay out my last question. I just wanna say in passing, I’m gonna open with a quote from Abraham Lincoln. Okay. One of my favorite books about Lincoln is actually outside of copyright protection now, Lord Char’s biography of Abraham Lincoln from 1917.
[00:39:14] It’s, it’s really great and, uh, I can recommend it to you. You could find it as part of the Google or the patent. It’s off,
[00:39:21] Keith Hylton: it’s out of its copyright now, so I can look.
[00:39:22] Barry Anderson: It’s outta, it’s outta copyright. Yes, exactly. Alright, well let me move on to what Lincoln had to say about the patent system ’cause he does have something to say about it.
[00:39:30] He once said that the US patent system added the fuel of interest to the fire of genius. If there were three big picture lessons that you hope American High School students or college undergraduates would better understand about the legal aspects of the American patent system, intellectual property rights, what would those three big lessons you’d like to have them know?
[00:39:52] Keith Hylton: I guess the first statement I would make is I would like to view the patent system as a promise to individuals and not a promise to corporate entities. More of a promise to individuals that are promised to corporate entities. And so we would like to see the patent system work in such a way that the small time inventors, the people who make things in their garages, can actually take advantage.
[00:40:16] Of the US patent system. That’s the first thing that I’d say and we, we’d like to make sure we’re looking at the patent system and asking whether it continues to serve that purpose. And I, I raised this point only because, to give you one example, we had a reform in 2011 of the US patent system that switched us from a first to invent rule to a first to file rule.
[00:40:41] And the first to file rule has the effect of favoring. Large corporations, large over small inventors. So I think that’s one example that I would offer that I think what, in looking at our patent system, we would like to like it to be one that supports the inventive efforts of individuals who go to work in their garages.
[00:41:03] The second thing I would say is that patents should be viewed as property rights first and not as monopolies. One thing that has happened in our law is that in our discussions, in the legal discussions of patent rights, in our case law, increasingly courts refer to patents as monopolies rather than as property rights.
[00:41:26] So we have a famous Supreme Court case called FTC versus activists, A-C-T-A-V-I-S, in which the Supreme Court discusses patents, pharmaceutical patents, as if. They are equivalent to monopolies. Now, maybe that’s true for some blockbuster drugs, but I think that approach to patents is somewhat distorts the picture because the truth is patents are property first and not always monopolies.
[00:41:54] Some of those property rights provide rather thin protection in the market, and I think legal discussions of patents that describe them as monopolies distort the image of patents and lead to. An approach in the law that denigrates patent rights. The third thing I would say is that you can actually provide extra incentive beyond the patent itself.
[00:42:19] So I, I wrote a paper only, you know, a year two ago that argued that, you know, in, in this longstanding debate, whether it gives someone a patent or monetary prize that we consider giving both a patent and a monetary prize. And that would be. Actually, it would have some very beneficial properties in the patent system.
[00:42:42] What I’m arguing is that we should not view this as dichotomous choice, either patent or prize. We could do both. And if we do both, that would lead to, in a practical sense, suggestions such as trying to alleviate the taxation burden on patents, for example. To further encourage innovation, and there’s a technical argument behind that.
[00:43:05] I won’t get into the technical weeds about it, but I think there’s case to be made for using the tax system to provide further rewards to innovative activity.
[00:43:16] Barry Anderson: Professor, thank you for your time with these questions. Can you share us with us a few sentences, a paragraph or so from one of your publications?
[00:43:24] Keith Hylton: I have my book sitting in front of me. Oh, there, no, there you go. That’s exactly what we want to hear. And the truth is, well, maybe I’ll just go to the last line of it, which kind of summarizes in some sense, you know, a lot of the argument of the book, I’m reading the last two sentences of my book with broadcast, it says, our intellectual property laws have helped to create a society that is wealthier by virtually every conceivable measure than those of alternative legal regimes.
[00:43:53] To maintain the benefits of our laws for future generations, we should try to understand why they have worked. Freedom is a worthy goal, but making what others create and nurture quote unquote free can be the most expensive change.
[00:44:09] Barry Anderson: Professor, thank you for sharing your book with us today. We’ve very much enjoyed the conversation. We invite our viewers to pick up the Laws of Creation book. It would be well worth your time. Thank you again.
[00:44:21] Albert Cheng: I enjoyed the interview. Thank you, and, and what a fitting ending for your book. I was really inspired by that passage. Thank you. Justice Anderson. I, I don’t know how much of this was old hat or new to you. Certainly a lot of this was new to me and, and I always enjoy taking a crack at and hearing about a topic that I know very little about.
[00:44:52] Barry Anderson: As I indicated at the very beginning of our program today, I have just a little bit of exposure to this. Professor Hylton is really one of the experts in the fact that he was willing to take the time to spend it with you and I today is, it’s a real treat and a benefit to our listeners. So I’m, I was delighted to be part of the conversation.
[00:45:08] Albert Cheng: Well, that’s gonna bring us to the end of our show, but before we conclude and say goodbye first, lemme leave you with a tweet of the week.
[00:45:15] This one comes from our friend, Neil McCluskey. Cato Institute, US Universities can’t innovate in isolation, and so this is referencing a inside higher ed. Opinion piece that he recently got published there. New federal policies and proposals to restrict international students and cross-border research.
[00:45:34] Collaborations are highly intrusive and ill-conceived. So fascinating argument on a hot topic and so take a look at that, mull it over. In terms of next week, we’re gonna have Jane Levy again who joined us not too long ago to talk about Babe Ruth. Well, she’s got a new book, make me Commissioner. I know what’s wrong with baseball and how to fix it, so I’m looking forward to knowing how to fix baseball. I mean, I, I guess
[00:46:01] Barry Anderson: I didn’t know that there was a lot to fix, but i’m gonna tell you, Albert, that tonight as we’re preparing this program, my family and I are going to the twins game and they’re playing the athletics this evening. And unfortunately, I haven’t had a chance to read professor’s book, but when viewers have the opportunity next week to listen to her.
[00:46:18] Keep in mind what your last experience was with Major League Baseball and she’s gonna fix it for us. So I’m alright. I’m, I’m, I’m gonna, I’ll be a guest, I’ll be, I’ll be an interested listener next week to the program.
[00:46:30] Albert Cheng: Alright, well hope everyone else tunes in. But until then be well everybody. We’ll see you next time. Hey, it’s Albert Cheng here and I just wanna thank you for listening to the Learning Curve podcast. If you’d like to support the podcast further, we’d invite you to donate to the Pioneer Institute at pioneerinstitute.org/donations.
\n\n\n\n \n
