The Founders on Patents and Copyrights

The Hidden History of Monopolies: How Big Business Destroyed the American Dream

How Big Business conquered America. Over the next few months the entire book will be here, new chapters posted every Sunday, for subscribers to read at no cost. If you want to get a physical book to mark up or share with others, just click on the picture above, visit your local bookstore, or check your favorite online seller.

The Founders on Patents and Copyrights

There are two basic types of monopoly: those created by a business growing so large that it controls a marketplace, and those explicitly created by government. At the time of the writing of the Constitution, the term monopoly was generally used to describe either corporate monopolies like the British East India Company or government-created ones like patents and copyrights.

Much of this book is devoted to the East India Company types of monopoly, but the monopolies created by patent and copyright laws are important as well, particularly because these systems can either foster or stifle innovation and markets.

The US Constitution, in Article 1, Section 8, explicitly authorizes Congress to pass laws, “[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

In both cases, these government-granted monopolies were intended to “promote the progress of science and useful arts” by two mechanisms. The first incentivizes authors and inventors to produce useful works by giving them a financial reason, since their monopoly patent or copyright can be assigned or sold to others. The second, particularly with regard to patents, is to encourage inventors to publish (via the Patent Office) and share with the world the details of their inventions so they can be expanded on or inspire other inventions.

As Sir Isaac Newton wrote to his then-friend Robert Hooke in 1675, “If I have seen further, it is by standing on the shoulders of Giants.”11 Inventions don’t just spring wholly formed from the forehead of inventors the way Athena did from Zeus in Greek mythology; they’re almost always built on something preceding them.

And encouraging inventors to publish their inventions in detail—as the patent process requires—means that other inventors can metaphorically stand on the shoulders of their predecessors. The same is true of ideas presented in copyrighted books, songs, movies, and so on.

Although ancient Greece and Venice in the 1400s tried patent monopolies, at the time of the founding of our republic these were still considered novel ideas. As Thomas Jefferson noted in a letter to Isaac McPherson:

“[I]t is a fact, as far as I am informed, that England was, until we copied her, the only country on earth which ever, by a general law, gave a legal right to the exclusive use of an idea.”12

Nonetheless, following the Patent Act of 1790, Jefferson marveled at the result. He wrote to Benjamin Vaughn:

“An act of Congress authorizing the issuing of patents for new discoveries has given a spring to invention beyond my conception. Being an instrument in granting the patents [Jefferson worked on the panel that approved patents for a short time], I am acquainted with their discoveries. Many of them indeed are trifling, but there are some of great consequence, which have been proved by practice, and others which, if they stand the same proof, will produce great effect.”13

The following year, 1791, France followed the United States and created a patent law, and over the following decades the practice spread across Europe and, eventually, the entire industrialized world.

In the United States there are two kinds of patents, “design” and “utility.” Design patents, valid for 14 or 15 years, are basically protection for how things look, be they an iPhone or an ornamental filigree pattern. The far more common utility patents protect the actual function of a device: technically, they protect compositions, processes, and machines, and they last for 20 years from the filing date.

Patents and their terms have been relatively short since the founding of America and have thus encouraged innovation and invention; the same can’t be said for copyrights, which have a pretty amazing history, largely influenced, apparently, by Mickey Mouse.

The Copyright Act of 1790 set copyrights for writing and art at 14 years, with a 14-year renewal if the author or creator was still alive. In 1831, the initial period was doubled to 28 years, with a 14-year renewal if the author was still alive. The renewal period was equalized to the initial copyright in 1909—28 years initially with a 28-year renewal for living authors or creators.

A few years later, in 1928, Walt Disney created a cartoon character, Mickey Mouse, and his copyright under the law at the time could have lasted 56 years—the initial 28 plus the renewal—until 1984.

Eight years before Mickey would have expired, Congress acted, making the initial term of copyrights the lifetime of the creator or author (Walt was still alive) plus an additional 50 years after his or her death, and granting to corporations like Disney retroactive application of the new term with a 75-year renewal term. This pushed Mickey’s expiration out to 2003.

But the mouse maintained his popularity, and Disney wanted to prevent anybody else from getting in on the act. Thus, in 1998, one of Los Angeles’s congressmen decided to help Disney with the Sonny Bono Copyright Term Extension Act, extending the copyright on works owned by an individual to the life of the author plus 70 years, and corporate-owned works to 95 years from the first time published or 120 years from the time the work was created (but not published), whichever came first.

Thus, Mickey now expires in 2023, so any day now there will probably be another update to the law.14

Jefferson shared some thoughts on the topic of government-granted monopolies such as patents and copyrights in his previously mentioned letter to Isaac McPherson:

“He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper [candle] at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being , incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property.”

There’s no record of any of the Founders, however, ever weighing in on cartoon mice.