Dirty Little Secrets and Intellectual Property Solutions

My closest friends tell me that Napster sold out, but I may have a solution to the general problem. According to the AP, Kazaa is under fire down under:

Australian record companies on Tuesday accused owners of the popular Kazaa file-sharing software of ignoring a court order to install filters aimed at curbing music piracy by Kazaa users.

But Sharman Networks, which owns Kazaa, said they had complied with the order by preventing people in Australia downloading the latest version of the popular software.

“We have complied with the order,” said Sharman spokeswoman Julie Fenwick. “We have closed down access to getting the current version in Australia … if a user already has it on his computer, he will see warnings.”

Finally, we can start getting to the meat and potatoes of how to (for the time being) resolve this longstanding intellectual property dispute. The debate on the general issue is hot and heavy, with libertarian attorney Eugene Volokh on one side of the issue and libertarian attorney N. Stephan Kinsella at the other.

While the key philosophical argument to be determined is whether an idea is actually property and can be truly owned, Kazaa’s stance in Australia leads us toward a reasonable short-term legal solution while the philosopher kings battle over the long term arrangement.

Under most current legal systems one does not really own the music they purchased on a CD, but they do have a license from the corporation which owns the artist to play it once in a while. I’d like to throw an analogy into the mix.

What if I was at dinner with my favorite companion and asked her, “If I tell you a secret, would you promise to never tell it to anyone?”

Being a normal female (aside from the fact that she was sitting with me), she’d likely agree to my terms without a second thought. “See that redheaded woman at the bar,” I whisper in her ear, “She’s having an affair with the mayor.”

What happened is that I licensed an idea to her. Her agreement to not tell the secret was a verbal contract, and little different from our basic copyright laws. She is free to know and even use the tidbit of interesting information, so long as she doesn’t directly tell anyone about it. If she violated the trust between us, she could be liable for any damages I might suffer as a consequence of her loose lips.

I could have also asked if she would keep the secret and tell no one but her close friends, secretary, psychiatrist, lawyer or religious leader. This would have expanded the use of the license a bit, and I’d be on trickier grounds suing a third party if one of these additional people spilled the beans, as they would not have been involved in the original contract.

Suppose now that I didn’t whisper the rumor to my companion, but told her in normal conversational tones and was overheard by the waiter. Would he have any obligation to keep the information secret? Obviously not, as he was under no licensing contract to keep quiet on the topic.

OK, a few of you may argue that there is some sort of implied contract that cabbies, waiters and bartenders will keep their mouths shut about things they overhear. I’ll expand the concept a bit for the sake of argument. What would happen if I yelled the rumor to a friend at the far side of the bar and a number of people overheard me? Would I have any natural right to compel the patrons of the grill to not disclose this hypothetical dirty little secret about the mayor?

Right now, there is a hodge-podge of laws and rulings which make people not party to the contract in question liable for some big dispute in which they are not involved. While the powers-to-be work out the details on the major philosophical issues, we can at least protect the rights of people merely downloading songs who are not participants in the aforementioned licensing arrangement. Let’s give common sense a chance for once.

Update by Stephen VanDyke: The Mind Trap has a compelling counter-argument:

True, the person relaying the rumour (putting the content on the p2p network) is eagerly breaking the agreement not to pass it on, but the third party has to actively go to their metaphorical house specifically to get the rumour. They’re not really that innocent.

10 Comments
  1. Stephan,

    Lively and stimulating coversation over at the mises blog. I had missed that one somehow — thanks. Also, I think your answer is closer to the final resolution of the IP debate. Volokh just popped me an e-mail, so I’m gonna have to read that carefully before responding.

  2. Post his reply if you can. But I don’t expect anything from advocates of IP anymore than the same old, rehashed utilitarianism. By the way, you may also find of interest the following article of mine: There’s No Such Thing as a Free Patent, Mises.org, Mar. 7, 2004, and the blog discussion of it here–this article takes to task utilitarian advocates of patents for not actually making a serious effort to subtract the costs of the patent system from its alleged benefits.

  3. ? that post, what does it have to do w/ Volokh? BTW are you a lawyer? I assumed so, probably b/c of your pic, but don’t know if I’m right.

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