As has been widely reported, leaked draft language of the Trans-Pacific Partnership features expanded and more rigid protections for trademarks, copyrights, and patents, which raises the question of whether libertarians ought to support the trade agreement. While libertarianism includes a strong defense of free trade and trade liberalization generally, it is ambivalent on the issue of intellectual property, its adherents including both fierce proponents and full abolitionists. Arguably, libertarians’ opinions on the TPP, on whether the new trade rules are “net liberalizing” (to borrow a helpful phrase from the Cato Institute’s Dan Ikenson) ought to turn on their positions on intellectual property law. If we can square intellectual property law with libertarianism, with our defenses of private property and open market competition, then the TPP may seem quite libertarian. If, however, we can’t reconcile intellectual property law and basic libertarian principles, then it becomes rather difficult to see the TPP as a way to bring the global economy closer to what libertarians mean by free trade. While this is, of course, an oversimplification of the issues presented by an agreement as complex as the TPP, given the centrality of IP in the agreement and the strength of the provisions, much depends on whether we see IP provisions generally as protecting a legitimate right or as the kinds of harmful barriers to trade and competition that free trade agreements are supposed to erode.

The TPP will undoubtedly further consolidate market power in the most powerful Western companies, placing development in poorer Asian countries at the mercy of corporate rentiers. Far from protecting innovation and encouraging fair competition in the world of new ideas, the TPP’s intellectual property provisions would actually foreclose meaningful competition by placing control of the use and dissemination of the most important technologies in the hands of IP-hoarding companies in agriculture, pharmaceuticals and biotech, software, and other industries. Today’s largest companies understand how the patent game works, and they have the money and lawyers to monopolize productive technologies by patenting around an idea, preventing anyone else from developing any idea that bears even the slightest family resemblance. Among the most abused concepts in IP law are two of the basic requirements or elements of patentability, “nonobviousness” and “novelty.” Patent attorneys aren’t appealing to any ordinary or common sense use of these terms; indeed, non-experts in patent law may be surprised by just how marginal a tweak or design change can lead to a new patent. The fact is that most “new inventions” that are awarded patents not only don’t meet the “nonobvious” threshold, they are painfully obvious, hence the number of ongoing patent disputes. Indeed, most patented ideas are so obvious that patent law has become a race to file and a tempest of claims and counterclaims.

Major companies hold thousands of patents that they will never use and that have never really been “reduced to practice” in any common sense way. In patent law, “reduction to practice” just means that another person trained in the art at issue could look at the filed drawings, diagrams, and explanations and determine clearly how to build and use the new invention. Now no one else can build and market anything too similar, even if they discovered the idea independently, even if they in fact discovered the idea first. A company can’t simply think about making the best possible product, the one that works best and offers the greatest value for the consumer, but must research thousands of patents surrounding the idea and determine if they are allowed under the law to introduce their product. Even apart from patent protections themselves, this process erects a formidable barrier to market entry, requiring a huge commitment of time and resources for a company in any high tech field. Legal scholar Sean B. Seymore argues that “the current [patent] examination framework vitiates the presumption of novelty by placing proof burdens on the would-be inventor that can thwart innovation and frustrate important objectives of the patent system.” Much more than it is actually about safeguarding inventors and their new creations, intellectual property is about understanding the subtle contours of the law and having the resources to file and then protect patents — through litigation if need be.

Even libertarians who regard patents (and other forms of intellectual property) as a philosophically legitimate form of private property in a free market system ought to worry about existing patent law, a convoluted, nonsensical system that unfairly favors market incumbents and the largest, richest, and most fully integrated firms. Bleeding heart libertarians, broadly defined, should oppose such a legal regime for several reasons. The intellectual property system produces manifestly unfair results, hindering competition and genuine innovation, and consolidating wealth and power in firms with permanent legal and intellectual property departments. While, in theory, the flimsiness of the requirements for patentability could serve to aid newcomers and smaller competitors in obtaining patents, in practice, it allows larger, more legally sophisticated firms to patent every conceivable iteration of an invention, and thus to insulate themselves from competition, protecting a stream of monopoly rents and licensing fees. Strategically positioned with the legal environment created by intellectual property law, large multinational firms act as gatekeepers, squeezing competitors with the threat of litigation. As Vox’s Timothy B. Lee recently observed, “In effect, the patent system is acting as an innovation tax, transferring wealth from companies that are creating successful technologies today to companies that acquired a lot of patents a decade ago.” The extremely high costs of litigation naturally favor large companies that can afford to pay expensive IP law firms to beat the opposing party into submission and ultimately settlement.

Consider intellectual property through the lens of the oft-used analogy to real property (I won’t set forth my objections to that analogy here). Examining the acquisition and abandonment processes, the current rules make acquisition of protectable rights rather easy, at least for rich companies. The rules, by contrast, make abandonment nearly impossible during the twenty-year life of the patent (assuming relevant fees are paid). The result is a terrain of ideas that has been unfairly and coercively monopolized by a relatively small group of property-owning lords (see Peter Drahos and John Braithwaite’s Information Feudalism). Everyone else living and working within this terrain is compelled to pay obeisance and tribute to these lords, even when they find unoccupied and unused plots. Overgrown with weeds and scrub, these plots are left undeveloped and uncultivated, this uneconomical waste benefiting the owning class by driving up rents.

In the contemporary global economy, ideas are more important than ever, with software products, pharmaceuticals, and professional services — rather than traditional manufactured goods — being the most important export for rich countries like the United States. The concept of free trade must reflect this change, avoiding a new enclosure that allows rich, influential big business to cordon off the most important sources of wealth in the twentieth-century, the intangible world of ideas.