So, An IP Lawyer Walks into a Bar…

by Matt Schruers on September 6, 2013

It’s Friday, and IP could use a drink.

Some time back, I sat in P.J. Clarke’s sounding off to some colleagues over a Martinez on the question: why do people invent cocktails?  As an intellectual property lawyer, my first instinct is that we should have an under-supply of cocktail recipes, since U.S. law lacks any sort of “cocktail copyright.”  While media accounts might occasionally (and incorrectly) announce, as did The Atlantic a few years ago, that Gosling’s Ltd. has “trademarked the recipe” for a Dark ‘n Stormy cocktail, the rights extend only to the use of the name of the cocktail in commerce, not the recipe.  The N.Y. Times‘ claims notwithstanding, no one owns the idea of mixing rum and ginger beer, or any cocktail.

Ultimately, that’s all a cocktail is: an idea.  Ideas are what economists and tedious lawyer-types call “public goods.”  And public goods, any economist worth his salt will tell you, are things traditionally under-supplied by the free market, because there is insufficient incentive to devise them.  This is because public goods have two characteristics, “non-rivalrousness” and “non-excludability.”  Ideas, including intellectual property, share these characteristics.

As Thomas Jefferson explained in a letter penned almost exactly two centuries ago,

an individual may exclusively possess [an idea] as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.

In econo-speak, non-excludability means “the idea forces itself into the possession of everyone,” and non-rivalrousness means “he who receives light from my candle does so without darkening me.” fn1  In short, ideas generate value, but they are under-supplied because it is hard for a creator to appropriate the full value of his intangible creation since he can’t meter access to it.  This is why we have intellectual property rights.

So, back to cocktails: if it has been accepted for at least two centuries that – absent state intervention – the fruits of intellectual labor are non-rivalrous and non-excludable, who but “a blockhead” would invest effort in concocting a commendable cocktail?  Why, the free-riding barman next door is simply going to pilfer your tipple, put a foolish little umbrella in it and call it his own!

Hence, new cocktails ought to be in scarce supply.  But the problem is, they’re not. Even after we largely wiped out our collective wisdom of creative imbibing with 14 years of Prohibition, we’re knee-deep in cocktail recipes.  Why is this?

In The Knockoff Economy, Kal Raustiala and Chris Sprigman identify a number of industries which are largely devoid of intellectual property protection and in which we nevertheless see substantial investment in creative and innovative activity.  Fashion industries are famously lacking in IP protection, and yet new styles are designed – and appropriated – at a remarkable rate.  (There have been numerous unsuccessful legislative proposals to create sui generis IP protection for fashion. [1], [2])

Like fashion, the industries for both stand-up comedy and culinary art, including cocktails, see considerable development of new ideas.  In both cases, industry norms – not laws – govern copying.  The formal code of ethics of culinary professionals, Raustiala and Sprigman note, requires attribution.  (This has not forestalled the occasional demand for a sort of recipe copyright, designed to overturn the conventional rule that recipes do not qualify for copyright.)

There are numerous reasons why we see innovation behind the bar, notwithstanding the lack of IP protection.  Generally, whether it is comedy, fashion, food, or even football, creativity and innovation occur because competitive forces incentivize it.  Similarly, as Jon pointed out yesterday, the genius of Martin Luther King Jr.’s still-copyrighted “I Have a Dream” speech was motivated not by the prospect of a government-granted right to exclude but rather his desire to persuade millions of the fundamental justness of his cause.

What, then, explains Progress in the Mixological Arts?  There are a number of motives to innovate in cocktails.  First, as Raustiala and Sprigman point outcocktails aren’t a product, they’re a service.  “[C]ocktails, even more than cuisine, are a performance as much as a product.”  I can make a perfectly decent Martinez in my kitchen and yet I will also pay someone else to do so.  I pay a premium, but the drink is bundled with the comfort of being served by an expert (perhaps in bracers and a retro-cool handlebar mustache, if that’s your thing), and the pleasant experience of a well-appointed bar.  Again, there is an infinite supply of the recipe; marketing the experience of the establishment is a strategy that “sells the scarcity.”

A second cause for cocktail innovation is that recipes sell the product.  Here, the intellectual labor is undertaken at a loss to promote a spirit.  Today, many spirits manufacturers employ “brand ambassadors,” generally bartenders, to evangelize their product by devising and demonstrating new applications for it.  Interestingly, the same Atlantic article cited above reports a professional mixologist criticizing this model, saying “[b]rand ambassadors are ruining it…. In no other creative field do you find people who are so easily able to insert themselves into the scene.”

In short, brand ambassadors disrupt the model of cocktail-crafting by distributing free recipes designed to showcase the spirit they are trying to sell.  Of course, this business model has been around for a long time, at least since recipes appeared on the back of the soup can.  (Query whether James Beard ever complained that Campbell’s Soup was “ruining it.”)  In the case of both the soup and the spirit, the intangible is devised and given away, in order to promote the scarce tangible: the food product featured therein.

Third, cocktails may be developed for reputational gain.  A bartender may want his work to spread, because being known for his craft draws patrons to his establishment, and improves his job marketability.  Of course, this why in cocktail arts, as in cuisine, attribution norms receive greater emphasis.  Similarly, an establishment may cultivate recipes for the same reason – being “the place” to consume a particular product.  Indeed, patrons visit the Caribe Hilton in San Juan to sample the piña colada at its birthplace, just as foodie pilgrims may stop at the Anchor Bar in Buffalo, N.Y., to partake in hot buffalo wings from whence they came.

Finally, it’s also the case that cocktails are, on occasion, devised out of necessity, the mother of invention.  As Raustiala notes in another article for Slate just last week, the origins of the gin & tonic were partly out of necessity: British officers in the malaria-prone reaches of the Empire were required to take daily doses of very bitter quinine powder as a prophylactic against the debilitating mosquito-borne illness.  They soon took to mixing that into a “tonic” of soda, and then with a healthy dose of gin, which made the medicine far easier to ingest.

Given these various motivations for innovation behind the bar, would a more robust system of IP rights in cocktails produce greater, quicker advances in the mixological arts?  As I have discussed before, increasing protection does not necessarily produce greater innovation.  Ultimately, the question to be asked is the same one that confronts any proposal to expand intellectual property protection:  are the costs of administration and exclusion outweighed by the innovation that we expect to result from the promise of a broader government-backed right to exclude?   A question to ponder over the next gin & tonic.

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Footnotes

fn1 A similar quote, often (questionably) attributed to George Bernard Shaw is

If you have an apple and I have an apple and we exchange apples then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.

 

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