> In economic terms, intellectual property is non-rival, whereas tangible property is rival. As a result, the “piracy” of intellectual property is simply not the same sort of zero-sum game that car theft — or theft of any tangible property — is. And that means that when Hollywood or the U.S. government says that music or movie downloaders are “pirates” or “thieves,” they are indulging in a bit of loose rhetoric. There are, in general, good moral reasons not to take what doesn’t belong to you. But as this video by filmmaker Nina Paley so beautifully illustrates, copying is not theft.
This is a popular argument but I think it is wrong because it uses the wrong analogy. I'll illustrate.
If I buy a candy bar at the store for $0.99 and then you steal it, now you have it and I don't. I'm out $0.99 of value and you stole $0.99 of value.
But what if you steal the candy bar directly from the store? You got $0.99 of value, but the store didn't pay $0.99 for that candy bar; they may have only paid $0.40. What you actually stole from them was two things: $0.40 of inventory and $0.59 of foregone revenue.
Even if you drop $0.40 on the counter as you walk out the door, it would still be considered a theft because the store gets to decide what their retail prices are, not you. You're still stealing $0.59 of foregone revenue.
IP products essentially have an "inventory" cost near zero. Yet, if you take a song or a trade secret without paying for it, you're still taking their foregone revenue. Just like dropping $0.40 on the counter for a $0.99 candy bar, you're dropping $0.00 on the counter for a $0.99 song or $1 million trade secret. Reimbursing someone's inventory cost (even if it's $0.00) does not mean there is no theft occurring.
While the IP itself is non-rival, the revenue from each sale is rival; that is, if you acquire my IP via a pirated copy then I still have my IP, but I don't have the revenue from selling you my IP.
This analogy is also wrong, exactly for the reason that IP is not a physical thing that can be taken - it can only be copied.
Yes, by leaving $0.40, I would be stealing $0.59 of foregone revenue, but that is because the shop doesn't have that candy bar anymore and can't sell it. In case of IP, even if I pirate it, you can still sell it to other people.
Of course you probably can't sell it to me anymore and that may be lost revenue, but it depends if I would be actually willing and able to buy that IP otherwise. And of course it may cause more competition to appear, which will negatively affect your business.
Your candybar arguement is absurd because you can't sell ip direct to consumers. You could manufacture a product that uses it or sell access via some supply limiting portal, but that is much different than actually selling ip.
Additionally it's not inventory because it is not finite. There is a distinction made by GAAP regarding valuation of tangible vs intangible assets because it is much more complex process to valuate intangible assets such as ip.
Physical inventory and IP are analogous in that they are both types of property that their owner intends to use to generate revenue (and hopefully profit).
> it is much more complex process to valuate intangible assets such as ip.
Please note that my argument above assigns a value of $0.00 to the IP itself.
Even at that valuation, you can still commit theft by robbing me of the opportunity to use that IP to generate revenue. By analogy: when you steal a TV, you are charged on the retail price of the TV (the amount you should have paid for it), not the wholesale price (the amount the store paid for it).
Your intention is irrelevant, limiting your opportunity is not theft. You're using that analogy as an emotional appeal to present the ip holder as a victim.
Any competitor could limit your opportunity by releasing a functionally similar non infringing product. Would you choose the word 'robbing' in that circumstance?
One would have to use your ip to create a competing product before it would even be copyright infringement, and it still wouldn't be theft since you cannot steal somthing intangible since by definition it only exists as an abstraction which is not the same as zero valued tangible inventory.
I think you need to go back up and carefully read from my first post. I'm not talking about competitive markets in general, I'm talking about a specific transaction where you end up with a product I'm selling, but I don't end up with the revenue I was asking for that product.
As an exercise: walk into Best Buy and pick up a $1,000 TV. On the way out, hand the cashier a check for the wholesale price of that TV. Have you just committed theft? And if so, what specifically have you stolen? You haven't deprived them of the TV itself, since you reimbursed them fully for that.
Allow me to present an intangible analogy to illustrate... If I see a chair at ikea and they own a patent on it and I go home and make a chair based on their ip, but don't commercially manufacture and distribute it then did I steal a chair? If it is stolen what have I stolen exactly?
I guess my point is that my point is that ip is a liscense to manufacture and/or distribute rather than a total monopoly on the idea or demand for the product.
Industrial >Espionage<[1] does happen. (When IP is a Trade Secret) If one doesn't want to risk espionage they can patent something, disclosing every detail, in exchange for a state enforced exclusivity over the patent.
As far as taking externalities into account: If someone doesn't behave to be "carbon-neutral" are they stealing from everyone?
Furthermore, the position you are defending is presupposing the ontological position that IP is Property. (Which might not hold in other cultures/countries, specially a Socialist Country with Chinese Characteristics™)
Patent infringement isn't theft and winging it and saying otherwise without a good basis won't convince anyone.
Source: http://freakonomics.com/2012/04/02/copying-is-not-theft/