Category Archives: Intellectual Property Rights

Net Neutrality… Obama… Cruz… How About Oliver?

Today, Barack Obama(D) has announced that he will pretend to support net neutrality:

 

 

In response, Ted Cruz (RPDGC*), has announced that Net Neutrality is the work of the devil:

 

 

The idea that either Democrats OR Republicans actually support net neutrality is a joke.

The Democrats have (and still do) very strongly supported big media and big communications, who are largely anti neutrality. it’s only when net neutrality obviously became a big issue among young liberals (who were largely unmotivated to turn out this midterm election) that they have pretended to support it.

The Dems could have made it a campaign issue, except then they wouldn’t have had the huge media and communications industry money for the elections, that they needed to avoid getting spanked even worse than they did.

If Obama had actually supported net neutrality, he wouldn’t have appointed an anti neutrality industry stooge as FCC chair… but again, if he did that, the Dems would have lost that sweet sweet big media money.

On the other hand, the Republicans are largely anti “big media” and anti “big communications”, and only became anti-neutrality when the Democrats decided to take it as an issue.

What is Net Neutrality?

Frankly, any libertarian should support net neutrality as a principle (government regulation is another matter).

Net neutrality as a principle, is simple. All legitimate traffic should be treated equally, no matter the source or destination. No internet service provider should filter, censor, or slow down traffic from their competitors, their critics, or because of politics or national origin; or for any reason other than technical requirements for safe, efficient, and reliable network operation.

It’s how the internet has always been run, up until recently, without any government action necessary. There’s a famous quote: “The internet interprets censorship as damage and routes around it”. Any internet service provider that censored, filtered, or slowed down traffic from anyone (for anything other than technical reasons) was routed around, and cut out of the net, by its peers. It was a great example of independent action and peer enforcement working in the marketplace.

Unfortunately, this is no longer the case.

Why is it an issue now?

Large media and communications companies like Comcast and Verizon have been deliberately and artificially blocking or slowing down traffic to and from their critics and competitors.

Of course, getting government involved does generally make things worse. In fact, it already did in this case, since the government has been involved from the beginning, and it was largely government action that created the current problem.

In a rational and unbiased competitive environment, consumers would have a reasonable choice of internet service providers, and any ISP that chose to censor or limit access, would lose customers, and either correct themselves or go out of business.

Unfortunately, we don’t have anything like a free and competitive market in internet access. Government regulation and favoritism has created huge monopolies (or at best duopolies, and no, wireless access is not realistic and reasonable competition given the distorted market and cost structures there either) in internet access.

We’ve reached a point where the telecommunications monopolies that government created and support, are in fact deliberately applying anticompetitive, unfair (and in some cases already unlawful) restraint against their critics and competitors.

Since they are government supported monopolies, the market is not allowed to correct the undesirable private action.

This means that, unfortunately, government action IS required… and even if it were not required, it’s inevitable, because politics is politics, and this is now an “Issue”.

So what do we do about the problem?

Please note, I don’t trust either Democrats OR Republicans on the issue in general, and I don’t trust either, or the FCC to regulate neutrality at all. Cruz does have at least one valid concern, in that the history of government regulation of almost every industry, but particularly technology, is mainly a long record of suppressing innovation and other negative unintended consequences.

The ideal solution is to end the government created internet access monopolies that most Americans live under, and allow free and open market competition to correct the problem.

Without government limitations on competition in actual high speed, high quality internet access; competition will increase, prices will fall, and any provider that filters or slows legitimate traffic will lose all their customers and go out of business.

This isn’t just a prediction or libertarian idealism talking by the way. It’s been proved out in Korea, Japan… even in the UK. Everywhere that internet access competition has been allowed to flourish, everything has improved (conversely, in the U.S. where we have deliberately increased the power and scope of these monopolies, we have the worst internet access of any technologically advanced nation).

Unfortunately, that isn’t going to happen.

The next best thing, is to mandate net neutrality in the least intrusive, least stupid way possible, and to react intelligently (and rapidly) to changes in technology and its uses, to avoid regulatory distortion and suppression of innovation.

Unfortunately, that isn’t likely to happen either…

That said, it’s remotely possible for us get closer to that, quicker, than we can to disassembling the thousands of federal, state, and local regulations, which have created these monopolies, and made the barriers to entry for competition impossibly high.

Of course neither Democrats nor Republicans support or plan to do that.

The whole thing is a spiraling charlie fox of disingenuous cynical idiocy.

Personally, I say forget Obama, forget Cruz, and listen to Oliver (or if you don’t care for Oliver, or can’t watch a video, there The Oatmeal):

 

 

*Reactionary Populist Disingenuous Grandstanding Cynic… not the Republican party, just Cruz

Edited to add a few paragraphs clarifying what net neutrality was, and why it’s currently an issue

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

Atlas Shrugged Part II in Theaters This Weekend

Atlas Shrugged Part II is opening this weekend. Want to check it out? Follow this link to find a theater near you.

And now, the official Atlas Shrugged Part II trailer:

We don’t go black… We try to turn on lights

We’re not going black today, over SOPA or PIPA.

In case you by some miracle hadn’t noticed it yet, tens of thousands of web sites around the country and around the world, are “going black” or putting up banners explaining that they are not available or there is no content today etc… In protest against the “Stop Online Privacy Act” and the “ProtectIP act”, which are currently (or were recently), being promulgated in congress.

We don’t have a problem with anyone who does. It’s important that people understand what SOPA and PIPA are (or were), and most folks are sadly unaware of the kind of stupid and harmful things that our government does.

Google and Wikipedia are two of the most important and most used sites on the net; and by participating in this protest, they will very certainly make a lot more people aware of this issue.

But “going black” isn’t what we do here.

We talk about political and social issues here; in particular about liberty and freedom. We try to inform people about the important issues, events, and principles of liberty and freedom; and then talk about them in as free and open a way as we can.

I personally think that going black would be entirely against what we are about here; and while it might help to draw more attention to the problem, it wouldn’t help us inform you, or help us begin the conversation about the issue.

… and of course, you can’t go to wikipedia day to find out about it…

So, I personally, would like to do something that is in the spirit of protesting the idiotic and harmful nature of these pieces of industry lobbying masquerading as legislation…

…And share a few things:

That’s the best explanation of why the freedom to share (within fair use of course, copyrights ARE important) is important; and why legislation like PIPA and SOPA are not only stupid and harmful, but entirely antithetical to the American system of ordered liberty.

And then there’s this piece by my friend (and bestselling author, buy his excellent books please) Larry Correia:

“for all of the people out there on the internet having a massive freak out about the government potentially damaging something they love… WELCOME TO THE PARTY.

You think this is something new or unusual? Nope. This is just about a topic that you happen to be familiar with. If you fall into that camp, I want you to take a deep breath, step back, and examine all of the other issues in the past that you didn’t know jack squat about, but your knee jerk reaction was to say “there’s a problem, the governement has to do something!” Well guess what? The crap the federal government usually comes up with to fix these problems is similar to SOPA. In other words, the legislation addresses a perceived problem by instituting a bunch of stupid overregulation and taking away someone’s freedom.

You think people need access to affordable medical care and shouldn’t be denied coverage? Well, you got used and we got the bloated ridiculous mess that is Obamacare. You saw a news report about how big business defrauded people and said congress should do something? Well, everyone in the business world got screwed because of Enron by completely useless new arbitrary crap laws, and a few years later we got into an even bigger financial crisis which the arbitrary crap laws we spent billions conforming to did nothing to prevent. No, because that financial crisis was caused by people saying that there was this huge problem that needed to be fixed, so more people who couldn’t afford to pay mortgages could still buy houses, and the government simply had to do something to fix this problem!

Any crisis… Any problem… You ask the feds to fix it, you get this kind of answer. Almost never do the laws fix the actual problem. Instead the government gets bigger and gains a few more powers and it doesn’t fix the issue. When the problem gets bigger, then the government gets bigger and gains a few more powers that actually make the problem worse. Oh look! Despite all of these laws the problem has gotten even bigger? Whatever should we do? Why, I know! Let’s pass an even bigger law that takes away more individual freedom and gives the government more control!
Repeat, repeat, repeat.

Any topic, any situation, any problem.

They address it, you lose freedom and they gain more control. Some of you are only offended today because this particular law hurts something you enjoy. The rest of the time? Screw it. You can’t be bothered to pay attention. Or worse, people like me who are up in arms over an issue are just cranks or anti-government crackpots.”

I was going to write something roughly similar to this, but Larry beat me to it… and I’d rather share what he wrote, because it’s good, and because I can.

At least for now…

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

A New Approach To “Government Research”

Over at Cato, Jim Harper responds to proponents of gov’t research that point to the products of that research as justification — they never really consider that such products would still occur via private-sector investment. He takes a bit of a swipe at IP policy in the middle, and in his discussion of the history of AT&T I got an idea:

To take the Internet as proof that the government is a necessary producer of research and innovation, you have to reject the scientific method. Unfortunately, there are rarely controls in public policy. We can’t find out what would have happened if government policy had taken a different course, so we don’t know anything more about who should fund research from the fact that government-funded research has produced good things in the past.

But what would have happened if U.S. public policy had taken a different course? I’ve thought about the impossible-to-answer question of where we would have been without DARPA and other government influences on telecom. What most people don’t consider, I believe, is the restraining influence the government-granted AT&T monopoly had on telecommunications for most of the 20th century. AT&T developed a “Teletypewriter Exchange” system in 1931, for example, but had no need to develop it, there being little or no competitive pressure to do so. (Its patent on attaching devices to phone wires undoubtedly helped as well, preventing anyone using AT&T’s wires for modem service.)

Had there been competition, I suspect that someone would have come up with the idea of packet-switched networks—that’s what the Internet is—before Leonard Kleinrock did in 1962. Kleinrock was a student at MIT—he wasn’t at DARPA, which didn’t get into packet-switching until about 1966. (Then again, MIT was almost certainly awash in government money—specifically military money—so there you go. Maybe we owe all the good things we’ve got to war, but I doubt it.)

So back when AT&T was a monopoly, they developed technology that preceded the internet for delivering data over phone lines, as well as owning (and enforcing) a patent on attaching devices to phone wires, which undoubtedly allowed them to prevent anyone else from capitalizing on data-over-phone-line ideas.

Some would say that this is evidence that government should have been financing this sort of invention so that it would be in the public domain (as TCP/IP eventually was). But there’s another angle to look at here:

Why doesn’t the government buy patents that are valuable but underutilized, and release them to the public domain?

Think of it this way: if the US Patent Office had purchased AT&T’s patents back in the 1930’s and released them into the public domain, they could have been capitalized by a broad swath of companies and perhaps kickstarted development of the internet far before DARPA ever got a hand in it (of course mainstream personal commercial user acceptance probably would have relied on availability a low-cost PC’s just as we saw beginning in the late 90’s). AT&T’s monopoly over phone service gave them no profit incentive to utilize their own invention, but getting it into the public domain could have created a competitive market where none existed before.

I see a couple of potential advantages to this idea over that of government research:

  1. Less of a politicized “government picking winners and losers” model for government research. Instead of independent researchers seeking government grant money for things that have not been invented (and for which commercial development is outside their reach as pure scientists), they might need to seek private funding from investors who expect to reap benefits from selling those patents to the USG.
  2. Give an extra incentive for US companies to continue R&D investment in more “speculative” technologies. For technologies which may be valuable but for which the commercial viability is a more long-term play, or for technologies which might be valuable but prove not to be relevant to the business model of the company in question, they can still earn some return on that sunk R&D investment.
  3. Development of an individual technology-creation boom. Many individuals with good ideas who *could* patent their idea but have no desire or capability to create a company to monetize their idea forego the patent process because there is no return on their time. All of these ideas are lost to the world, at least for a time.
  4. Perhaps most importantly, this is the government paying for results rather than promises. As I suggested in this December 2006 post, I believe that incentivizing the private sector to invent might be a more efficient model in general than in purchasing research on the front end.

Now, there are undoubtedly issues with this proposal.

First and foremost, the fear would be that companies would merely use this as a vehicle to offload shitty patents onto the government — just another form of corporate welfare. And I do suspect they’d try. My answer to that is twofold. One, of all the departments of government, I think the Patent & Trademark Office is widely regarded as one of the less politicized. If procedures are put into place to present them with these patents “blindly”, i.e. so that they cannot know the identity of the inventor, I would suspect that we can at least get their fair assessment of an inventions value in an objective manner. Second, is that one man’s trash is another man’s treasure. For a company that is not capitalizing on a patent, they understandably think it’s worthless — that doesn’t mean that it’s so. There might be some legitimate diamonds in the rough here.

Second, the fear would be that this would merely be government picking winners and losers on a different stage. I.e. if businesses can’t reap value from their patents, and if government boards can’t reliably pick which research programs are of most benefit, how can they do so with patents? This is a pretty typical government problem. Again, I think putting this in the hands of the PTO might help, but efficiency and waste is always a concern.

Third, the fear is that companies simply won’t sell. Patents — even useless ones — are important legal tools. When Novell sold off a patent portfolio in late 2010, the value worked out to be roughly $510K per patent. When Google announced an intended deal to acquire Motorola Mobility last year, the value of the purchase conveniently was set at $12.5B — equal to Motorola’s 24,500 patents multiplied by $510K. When Nortel went bankrupt and auctioned off their patent portfolio last summer, the total value of their 6,000 patents averaged $750K apiece. There may be some positive value in owning some of those patents, but there’s incredible potential negative value in NOT owning enough patents to countersue your competitors if they decided to engage in an IP war. For big companies, a robust patent portfolio is the international diplomacy equivalent of a nation having nuclear capability — those without it won’t mess with you, and you make sure you play nicely with others who have it to avoid MAD. The key to this is not that there might be unused patents of inestimable value to the public that the companies aren’t even using, but rather that they may not be willing to sell *any* part of their IP portfolio. Unilateral disarmament has never been a popular strategy.

All that said, one of the questions we might be left with is simple: is it a better situation than we have now? Would the advantages gained be enough to justify a wholesale switch from our current strategy of paying for research, or perhaps even of diverting a portion of that budget to a program like this instead? I think it would — opening up the option to reward inventors (whether corporate or individual) for creating IP and then opening it up to the public domain seems like a great strategy for a continual boost to near-term growth. Pure scientific research has its place as a public good. Yet I think a case can be made that less “pure” inventions, being opened to the public domain, have a potential place at the table too, if not instead of, pure science.

Quote of the Day: Bill of Rights 220th Anniversary Edition

December 15, 2011 marks the 220th anniversary of the Bill of Rights – at least what is left of them. Anthony Gregory’s article at The Huffington Post runs through the list of violations of these precious rights from the Adams administration’s Alien and Sedition acts all the way to the present day violations of the Bush/Obama years via the war on terror. I encourage everyone to read the whole article and reflect on what these rights mean to you on this Bill of Rights Day. If you read nothing else from the article, at least read Gregory’s conclusion:

Clearly, we fall far short from having Bill of Rights that we adhere to and that was designed for our future posterity over 220 years ago. In the end, it is public opinion that most restrains political power — not words on paper, not judges, not politicians’ promises. A population that is not decidedly and passionately against violations of their liberties will see their rights stripped away. If we want to have a Bill of Rights Day worth celebrating, we must demand that officials at all levels respect our freedoms — and not let the government get away with abusing them.

Gregory is right: preserving the Bill of Rights ultimately rests with all of us.

Point: The ACLU Is A Friend of Liberty

It takes considerable skill to be able to write from both ends of a political issue, and I’m happy to say that that is the task I am going about with the ACLU. For my critique of the ACLU, click here.

The Left and Right political labels are pretty useless at a certain point, but for the sake of convenience, I’ll use the Left wing label in order to defend the ACLU.

The political Left has at its core both a democratic and an authoritarian side. George Orwell, Lionel Trilling and Christopher Hitchens are among some of the most prominent intellectuals to have split with the Left on occasion in order to speak out against tyranny. This dichotomy is one I like to call the “Napoleon-Snowball dichotomy,” after the characters from Orwell’s Animal Farm.

Napoleons don’t simply show up in third world countries like North Korea or Venezuela – they also have their place in the United States. Despite his coming to the mainstream fore speaking of the need to defend civil liberties, Barack Obama has accelerated the authority of the government to new heights. Obama has grabbed the authority to kill American citizens anywhere in the world. He has put closing Guantanamo on the back burner. Obama’s civil liberties problem was made clear as well by his firing of Shirley Sherrod on the grounds of a sloppy hit job by Andrew Breitbart. Any administration that would fire a public servant so quickly on such shaky grounds must have some sort of anxiety about its power.

For Obama’s Napoleonism, the ACLU has acted as a modern day Snowball, defending against the frightening precedent of a president being able to eliminate Americans by executive order.  In a suit filed against the government, the ACLU argued that the Obama administration had “asserted authority to use lethal force against US citizens located far from any battlefield without charge, trial, or judicial process of any kind.”

The ACLU is also victim to a lot of misinformation, including the urban legend that they had filed suit to have crosses removed from graveyards. In fact, in 1999, they did precisely the opposite:

WEST PALM BEACH, FL — In the first case to be filed under Florida’s new Religious Freedom Restoration Act, the American Civil Liberties Union of Florida goes to trial today on behalf of seven families seeking to prevent the removal and destruction of religious symbols placed at the gravesites of their loved ones.

At issue is the City of Boca Raton’s threat to remove various vertical memorials, including Christian crosses, Stars of David and other religious symbols, from cemetery plots at the Boca Raton Community Cemetery. The ACLU will argue that under the new law, passed in 1998, removal of religious items from grave sites would constitute a substantial burden on religion.

The brilliance of the American constitution is not anarcho-libertarianism – it’s a balance of power through checks and balances. The ACLU is a great bulwart against granted authority becoming too powerful.

Right To Contract vs. “Human Rights”

Eugene Volokh writes about a case in New Mexico that demonstrates the extent to which the right to decide who you do business with has been eroded in the name of so-called anti-discrimination laws:

Elaine Huguenin co-owns Elane Photography with her husband. The bulk of Elane’s work is done by Elaine, though she subcontracts some of the work some of the time. Elane refused to photograph Vanessa Willock’s same-sex commitment ceremonies, and just today the New Mexico Human Rights Commission held that this violated state antidiscrimination law. Elane has been ordered to pay over $6600 in attorney’s fees and costs.

I haven’t seen any written statement of reasons, but the order must implicitly rest on two interpretations of state law: (1) This sort of photography company constitutes a “public accommodation,” defined by state law “any establishment that provides or offers its services, facilities, accommodations or goods to the public, but does not include a bona fide private club or other place or establishment that is by its nature and use distinctly private.” (2) A refusal to photograph a same-sex commitment ceremony constitutes sexual orientation discrimination, which New Mexico law forbids. These may or may not be sensible interpretations of the statutory text. But the result seems to me to likely violate the First Amendment (though there’s no precedent precisely on point).

As Volokh points out, photography is an art form and the Human Rights Commission decision effectively says that the state can tell you what kind of art you can and cannot create. He goes on to point out, correctly I think, that several U.S. Supreme Court opinions make it clear that the state cannot compel you to endorse points of view that you disagee with and, arguably, by photographing a committment ceremony she finds personally offensive, this photographer would be endorsing something she does not choose to endorse.

More than that, though, this case points out the extent to which so-called “economic” rights, such as the right to decide who you do business with, have been eroded over the past 50 years. There is no reason that Ms. Huguenin should be forced to take on a job she doesn’t want to take. What if, instead of citing the same-sex nature of the ceremony, she has simply said she was too busy to take on the project ? Presumably, that would have been a legitimate reason to turn it down, and if that’s the case, then I see no reason why she should be forced to work for these people just because she doesn’t approve of their lifestyle.

Federal Appeals Court Rejects Absurd Intellectual Property Argument

It’s not often that America’s pastime and individual liberty cross paths, but it happened earlier this week when a Federal Appeals Court in Missouri rejected an argument by Major League Baseball and it’s players union that player names and statistics constitute intellectual property rights:

Oct. 16 (Bloomberg) — Companies that operate fantasy sports leagues have a First Amendment right to use players’ names and statistics for free, a court ruled in a case filed against Major League Baseball.

The federal appeals court in St. Louis ruled today in favor of C.B.C. Distribution and Marketing Inc., a closely held operator of fantasy sports leagues.

The ruling is a victory for the fantasy sports business, which started with statistics-rich baseball in 1980 and spread to other sports. Today it is a $1.5 billion industry, according to the Fantasy Sports Trade Association.

“It’s vindication,” said Greg Ambrosius, a former president of the association who is now editor of Fantasy Sports Magazine. “We were a bunch of Mom-and-Pop shops who grew the industry from nothing to where it is today, and then when we got big, people started saying, `Hey, we own this.”’

At issue in the litigation was the right to names and statistics of pro athletes when the information is used by a business rather than a news organization.

“It would be strange law that a person would not have a First Amendment right to use information that is available to everyone,” a three-judge panel said, ruling the Constitution trumps the players’ ability to control their publicity.

Strange indeed. It would sort of be like Microsoft saying that it has an intellectual property right in the price of it’s stock.

Venezuela & DC — Price Controls From The Barrel Of A Gun

I was checking in to see the latest news from Venezuela, and saw how Chavez is using the threat of nationalization to bring down steel prices:

Ternium SA, the only maker of flat- steel products in Venezuela, agreed to sell its goods at a discount in the South American country, warding off a threatened nationalization by President Hugo Chavez.

As part of the three-year agreement, Ternium’s Siderurgica del Orinoco SA unit will offer discounts ranging from 2 percent to 4 percent for certain programs and some businesses, Ternium said today in a statement. The company also agreed to transfer operations of a port on the Orinoco River to the government and invest $500 million in its Venezuelan facilities through 2012.

The deal comes three months after Chavez threatened to nationalize the unit, claiming that the company charged too much for steel while buying electricity and other resources at a discount. Luxembourg-based Ternium holds a 60 percent stake in Sidor, as the unit is known, while the government and workers at the steel mill each own 20 percent.

Now, I’m known for criticizing Chavez. And there should be no exception here. His threats of nationalization erode foreign investment, and will eventually destroy the country.

Yet I’m often criticized for focusing too much on Venezuela, and not enough here at home. So lest I be taken to task for considering the beam in Venezuela’s eye, I should bring up a mote in our own.

The District of Columbia was concerned about “excessive” drug prices… So they decided to threaten drug companies with arbitrary lawsuits based upon prices for drugs in other nations:

The controls, signed into law in October 2005, allow residents to sue a drug company if the wholesale price of a patented drug is 30 percent higher than the drug’s price in Canada, Germany, Australia or the United Kingdom.

“In the District’s judgment, patents enable pharmaceutical companies to wield too much market power, charging prices that are ‘excessive’ for patented drugs,” the panel wrote. “The Act is a clear attempt to restrain those excessive prices, in effect diminishing the reward to patentees in order to provide greater benefit to District drug consumers.”

Luckily for freedom’s sake, the law was just struck down in court. But that doesn’t make it’s biggest proponent, Council Member David Catania very happy. His comments suggest a quite different understanding of property than I might hold:

A three-judge appellate panel concluded that the D.C. Council and mayor might have had noble intentions with the pricing law but that it improperly usurps Congress’s power and interferes with the decisions it made in passing the federal patent law. That law allows drugmakers to maintain a monopoly — and a pricing advantage — for years after they patent a new drug.

“This may be a worthy undertaking on the part of the District government, but it is contrary to the goals established by Congress in the patent laws,” the judges continued. “The District has thus seen fit to change federal patent policy within its borders.”

Catania yesterday called the ruling “extreme in its scope” and said he will discuss appealing it with the D.C. attorney general.

“It implies that patents would ban any legislation that affects the ability of patent holders to charge whatever they please, which is absurd,” Catania said. “The Supreme Court has already upheld legislation that mandates price discounts to participate in Medicaid formularies. And no one has argued that states cannot enforce antitrust and other rules that limit monopoly prices of drugs indirectly — although the full logical thrust of the opinion would do just that.”

You see, to David Catania, drugs are not owned by pharmaceutical companies, and they have no right to decide what to charge. Drugs are owned by “the public”, and David Catania will set a “fair” price for those drugs.

Property rights are under assault from Caracas to DC. Those who believe property is communally owned, and who would rather give power to the government than the market to provide goods, are quick to reach for their sidearm in to force companies to bend to their will. They do this without an understanding of economics, or the incentives to produce, because the short-term incentive to gain power trumps the long-term goals of ensuring Venezuela has access to steel or that the world has access to newly-developed drugs.

I criticize Venezuela, because Chavez is a brash, unapologetic example of socialism in action. I often highlight Venezuela, because the changes we see in that country are a wonderful case study in what will happen if we allow socialism to further take hold here in the US. But the case in DC shows that we are facing the same pressures here, and never should our willingness to criticize Chavez allow us to forget that while we are using him as an example, the fight needs to be centered here at home.

Intellectual Property And Caesar Salad

Pete Wells of The New York Times writes today about what may well be one of the most inventive extensions of intellectual property law that I’ve ever seen:

Sometimes, Rebecca Charles wishes she were a little less influential.

She was, she asserts, the first chef in New York who took lobster rolls, fried clams and other sturdy utility players of New England seafood cookery and lifted them to all-star status on her menu. Since opening Pearl Oyster Bar in the West Village 10 years ago, she has ruefully watched the arrival of a string of restaurants she considers “knockoffs” of her own.

Yesterday she filed suit in Federal District Court in Manhattan against the latest and, she said, the most brazen of her imitators: Ed McFarland, chef and co-owner of Ed’s Lobster Bar in SoHo and her sous-chef at Pearl for six years.

The suit, which seeks unspecified financial damages from Mr. McFarland and the restaurant itself, charges that Ed’s Lobster Bar copies “each and every element” of Pearl Oyster Bar, including the white marble bar, the gray paint on the wainscoting, the chairs and bar stools with their wheat-straw backs, the packets of oyster crackers placed at each table setting and the dressing on the Caesar salad.

Mr. McFarland would not comment on the complaint, saying that he had not seen it yet. But he said that Ed’s Lobster Bar, which opened in March, was no imitator.

“I would say it’s a similar restaurant,” he said, “I would not say it’s a copy.”

Lawyers for Ms. Charles, 53, said that what Ed’s Lobster Bar had done amounted to theft of her intellectual property — the kind of claim more often seen in publishing and entertainment, or among giant restaurant chains protecting their brand.

That’s right. She’s asserting that someone who copied her ideas for a restaurant has violated her intellectual property rights.

As is typically the case with stories, like this, though, there is much more to the story. As it turns out, Ms. Charles’ ideas were not entirely original:

[Ms. Charles] acknowledged that Pearl was itself inspired by another narrow, unassuming place, Swan Oyster Depot in San Francisco.

Now, in the same spirit, couldn’t McFalrand argue that Ed’s Lobster Bar was “inspired” by Pearl ? After all, how many original ideas are there when it comes to restaurants. Doesn’t Ruth’s Chris take it’s inspiration from Morton’s ? And can anyone really tell me the difference between Chili’s and TGI Friday’s ? Or Romano’s Macaroni Grill and The Olive Garden ? It’s food people, there are only so many ways you can make it.

But the essence of the problem with Intellectual Property today comes in the story of a Caeser Salad:

[T]he detail that seems to gnaw at [Rebecca Charles] most is a $7 appetizer on Mr. McFarland’s menu: “Ed’s Caesar.”

She has never eaten it, but she and her lawyers claim it is made from her own Caesar salad recipe, which calls for a coddled egg and English muffin croutons.

She learned it from her mother, who extracted it decades ago from the chef at a long-gone Los Angeles restaurant. It became a kind of signature at Pearl. And although she taught Mr. McFarland how to make it, she said she had guarded the recipe more closely than some restaurateurs watch their wine cellars.

“When I taught him, I said, ‘You will never make this anywhere else,’ ” she insisted. According to lawyers for Ms. Charles, the Caesar salad recipe is a trade secret and Mr. McFarland had no more business taking it with him after he left than a Coca-Cola employee entrusted with the formula for Diet Coke.

Let’s just dissect this one for a second. Ms. Charles learns a Caeser Salad recipe from her mother, who in turn had “extracted” it from another chef decades ago. And now she claims that another chef has violated her intellectual property rights by duplicating it.

More to the point, though, is the fact that Caesar Salad (and, that, by the way, is the proper name, not Ceaser’s Salad),  is in itself an original idea that has been copied by, and modified by, countless chefs, professional and amateur, for the past 83 years. For Ms. Charles to claim that her “modifications” to an idea that has been around for almost a century constitute intellectual property worthy of protection is, quite honestly, absurd.

From a legal perspective, her IP claim is dubious at best. There is admittedly no originality in the recipe.

The only credible legal claim that Charles would have at this point is that McFarland, who was apparently a former employee of Ms. Charles, violated her trade secrets by copying the recipe.

But there are two problems here. First, the recipe itself was a copy from someone else. Second, there’s no evidence from the article that Charles took any steps to maintain the secrecy of the recipe. She shared it with McFarland and did not extract from him any explicit promise that he wouldn’t share it. And, quite frankly, she served the salad to the public on the daily basis. Anyone could’ve taken it home and figured out how she made it.

From a legal perspective, I can’t see how she has a case.

But that’s not purpose of this post.

The purpose of this post is to point out the absurdity of the current state of intellectual property laws. To say you can claim an enforceable right over a food recipe is, quite simply, absurd.

The Case Against Perpetual Copyrights

In today’s New York Times, Mark Helprin argues in favor of what effectively amounts to an extension of copyrights for an indefinite period. And does so by making what is, at best, an imperfect analogy:

WHAT if, after you had paid the taxes on earnings with which you built a house, sales taxes on the materials, real estate taxes during your life, and inheritance taxes at your death, the government would eventually commandeer it entirely? This does not happen in our society … to houses. Or to businesses. Were you to have ushered through the many gates of taxation a flour mill, travel agency or newspaper, they would not suffer total confiscation.

Once the state has dipped its enormous beak into the stream of your wealth and possessions they are allowed to flow from one generation to the next. Though they may be divided and diminished by inflation, imperfect investment, a proliferation of descendants and the government taking its share, they are not simply expropriated.

That is, unless you own a copyright. Were I tomorrow to write the great American novel (again?), 70 years after my death the rights to it, though taxed at inheritance, would be stripped from my children and grandchildren. To the claim that this provision strikes malefactors of great wealth, one might ask, first, where the heirs of Sylvia Plath berth their 200-foot yachts. And, second, why, when such a stiff penalty is not applied to the owners of Rockefeller Center or Wal-Mart, it is brought to bear against legions of harmless drudges who, other than a handful of literary plutocrats (manufacturers, really), are destined by the nature of things to be no more financially secure than a seal in the Central Park Zoo.

The most fundamental difference, of course, is that copyrights, unlike property rights in land, are purely a creation of the Constitution, which gives Congress the power to:

[P]romote 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;

Rather than recognizing that this provision constituted the Founders understanding that copyrights and patents, rather than merely being a recognizing of already existing property rights were, in reality, the granting of monopoly power by the state and, for that reason, their duration should be limited to a period of time deemed sufficient to reward the creators for the effort and innovation involved in their work.

Helprin ignores this however, and continues with yet another bizarre analogy:

It is, then, for the public good. But it might also be for the public good were Congress to allow the enslavement of foreign captives and their descendants (this was tried); the seizure of Bill Gates’s bankbook; or the ruthless suppression of Alec Baldwin. You can always make a case for the public interest if you are willing to exclude from common equity those whose rights you seek to abridge. But we don’t operate that way, mostly.

The problem with this analogy, of course, is that it ignores the distinction between individual rights (to life, liberty, property, and free speech in the case of the examples cited) and a government created monopoly grant. It is arguably the case, and certainly something that the Founders were concerned about, that grants of monopoly power such as copyrights and patents actually infringe on the liberties of others —- even if were to come up with an idea, or a song, or a poem, completely independently, I would be prevented from profiting from it by virtue of the fact that someone managed to beat me to the Patent and Trademark Office by a few hours.

More importantly, though, how can the government grant a perpetual monopoly over an idea ? Thomas Jefferson himself noted this about intellectual property:

[ideas are] “like fire, expansible over all space, without lessening their density at any point, and, like the air in which we breathe, move and have our physical being, incapable of confinement or exclusive appropriation.”

In other words, once it is in the public domain, whether protected by copyright or not, can anyone truly be said to “own” an idea ? Helprin tries to ignore this argument by making a distinction between ideas and “art”, but the point is the same.

Whether it’s the formula for Bayer Aspirin, though, or the text of To Kill A Mockingbird, there is no rational reason to extend copyright protection indefinitely.  And, more importantly, such a proposal would seem to violate the clear limitations placed on Congresses power to grant these monopolies by the Constitution.

I’m Suing The X Prize Foundation

Because they stole my idea:

The competition requires significant energy and emissions goals (most importantly, fuel economy) with at least 100 mpg or its equivalent. The guidelines are replacing the outdated MPG with this new standard, MPGe, which takes into account energy equivalents, no matter what the energy source.

Production capability is another important requirement: Vehicles will be judged on specific market production criteria detailed in key areas such as safety, cost, features and business plan. So this X Prize will only open to practicable cars capable of reaching the marketplace—no concept cars or science projects.

You may remember that I posted almost the exact same idea here in December 2006, but that was a cross-post of an August 2005 piece I wrote at The Unrepentant Individual.

Mine was structured slightly differently, but nonetheless it was an identical idea. And I didn’t even get mentioned in this news article. Jerks. Any lawyers want to represent me?

Thoughts On The Viacom-YouTube Lawsuit

Yesterday, Viacom filed a multi-billion dollar lawsuit against Google, the parent company of YouTube alleging massive violations of copyright law:

Viacom, the parent company of MTV, Nickelodeon and Comedy Central, filed a wide-ranging lawsuit against Google on Tuesday, accusing it of “massive copyright infringement.” Viacom said it was seeking more than $1 billion in damages and an injunction prohibiting Google and YouTube from committing further infringement.

Citing the $1.65 billion that Google paid for YouTube, the complaint said that “YouTube deliberately built up a library of infringing works to draw traffic to the YouTube site, enabling it to gain a commanding market share, earn significant revenues and increase its enterprise value.” The complaint was filed in United States District Court in New York.

Google said it was still reviewing the lawsuit but repeated past assertions that copyright law shields it from liability for clips posted by its users

I am not an intellectual property lawyer, but at a glance, but it seems pretty straightforward to me that if YouTube was knowingly allowing users to post clips from copyrighed material without the consent of the copyright owner, then there is clear liability on their part for the violation.

It is analagous to the Napster lawsuit from the early 90s; Napster was knowingly allowing its users to trade copyrighted music. Two Federal Courts found, correctly I think, that this violated the rights of the copyright holders in the music and ordered the service shut down. The YouTube situation is slightly differeent from Napster only that there is no evidence that YouTube has actively encouraged users to post copyrighted material. Nonetheless, the risks for Google seem pretty high:

Joseph M. Potenza, a partner at Banner & Witcoff in Washington, said Viacom had a case, judging from “the amount of material and the financial benefit that Google is getting.” Under copyright law, Google might have a defense if it was not told about the copyrighted material, or if it did not benefit financially from it. But neither defense applies in this case, Mr. Potenza said.

But the law is only half the equation here.

Viacom is mostly likely on the right side of the law, but much like the music companies that brought down Google Napster, they may end up being on the wrong side of public opinion. YouTube is immensely popular, and it seems clear that neither Viacom nor any other television network suffers any real financial harm if, say, a 3 minute clip from last week’s The Colbert Report is posted on YouTube. If anything, they get a promotional bonus from it.

Viacom and other media companies would be wise to look at the Napster case and the shattered reputation of the RIAA before they proceed with gusto against YouTube.

Patents Can Kill You

Michael Crichton has an Op-Ed piece in The New York Times today about the life-and-death cost that patients may pay thanks to the fact that the United States Government has issued patents for human genes

YOU, or someone you love, may die because of a gene patent that should never have been granted in the first place. Sound far-fetched? Unfortunately, it’s only too real.

Gene patents are now used to halt research, prevent medical testing and keep vital information from you and your doctor. Gene patents slow the pace of medical advance on deadly diseases. And they raise costs exorbitantly: a test for breast cancer that could be done for $1,000 now costs $3,000.

Why? Because the holder of the gene patent can charge whatever he wants, and does. Couldn’t somebody make a cheaper test? Sure, but the patent holder blocks any competitor’s test. He owns the gene. Nobody else can test for it. In fact, you can’t even donate your own breast cancer gene to another scientist without permission. The gene may exist in your body, but it’s now private property.

Patents exist solely as a creation of the state and are authorized by Article I, Section 8 of the Constitution, which authorizes Congress to:

To 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;

When you think about it for awhile, human genes really don’t seem to fall into the category of things that have traditionally been patentable. Yes, identifying the gene for, say, eye color, is a “discovery”, but so is finding the planet Neptune and nobody would seriously suggest that Neptune is patentable. It’s a fact, not an application of scientific fact. Nonetheless, the Patent and Trademark Office has issued patents for genes and, as Crichton argues, it just doesn’t make sense:

Humans share mostly the same genes. The same genes are found in other animals as well. Our genetic makeup represents the common heritage of all life on earth. You can’t patent snow, eagles or gravity, and you shouldn’t be able to patent genes, either. Yet by now one-fifth of the genes in your body are privately owned.

If this were merely an academic argument over the proper application of the patent power, it would be one thing. Unfortunately, by allowing people — mostly pharmaceutical companies — to hold patents in human genes, the PTO is putting lives at risk:

For example, Canavan disease is an inherited disorder that affects children starting at 3 months; they cannot crawl or walk, they suffer seizures and eventually become paralyzed and die by adolescence. Formerly there was no test to tell parents if they were at risk. Families enduring the heartbreak of caring for these children engaged a researcher to identify the gene and produce a test. Canavan families around the world donated tissue and money to help this cause.

When the gene was identified in 1993, the families got the commitment of a New York hospital to offer a free test to anyone who wanted it. But the researcher’s employer, Miami Children’s Hospital Research Institute, patented the gene and refused to allow any health care provider to offer the test without paying a royalty

Crichton asks precisely the right question:

[W]hy should people or companies own a disease in the first place? They didn’t invent it. Yet today, more than 20 human pathogens are privately owned, including haemophilus influenza and Hepatitis C. And we’ve already mentioned that tests for the BRCA genes for breast cancer cost $3,000. Oh, one more thing: if you undergo the test, the company that owns the patent on the gene can keep your tissue and do research on it without asking your permission. Don’t like it? Too bad.

Too bad for you, and too bad for freedom and innovation.

Congress: Bought And Paid For By Hollywood

With the Democrats back in power, their friends in Hollywood are among the first in line to influence the policy debate in Washington:

WASHINGTON, Feb. 6 — Hollywood has often been a whipping boy here, but with a new Congress in session, the heads of the major movie studios converged on the capital Tuesday to pitch their industry in the unaccustomed role of good guy: boon to the trade balance, engine of economic growth, polisher of the nation’s image and employer of a big, uncelebrated, middle-class work force.

Yes, that’s right. Right along side Youngstown, Ohio, the film-making capital of the world now considered itself a middle class community.

The conversation often turned to piracy, the existential issue that dominates the association’s agenda. [Taylor] Hackford [director of last year’s acclaimed Ray], who spent more than a decade developing “Ray,” told of finding a bootleg DVD of the movie on the day of its theatrical release, and said 42 million illicit copies were sold within five months.

That meant millions of dollars in lost revenue — “and DVDs is how people get their money back,” he said of movie financiers. “If they don’t, will I be able to sell a hard-to-sell picture like ‘Ray’? No.”

Hackford calls himself middle class, but, of course, Ray earned more than $ 75 million dollars.

More importantly, though, his comments are an example of the typical tactics of the movie and music industries. They point to extreme examples, such as the obviously illegal bootlegging of a major motion picture within a week of it’s release, to justify laws like the Digital Millenium Copyright Act, and extension of Copyright protection well beyond it’s original 75 year period, to justif their demand for nearly unlimited control over their so-called intellectual property.

As Nick Gillespie points out at Hit & Run, in the end, it’s the little guy who will end up getting screwed.

Copyright Law vs. Bad Dancing

The Digital Millenium Copyright Act has seen many absurd applications since it became law, but none, I think, are quite as absurd as this one:

The inventor of the “Electric Slide,” an iconic dance created in 1976, is fighting back against what he believes are copyright violations and, more importantly, examples of bad dancing.

Kyle Machulis, an engineer at San Francisco’s Linden Lab, said he received a Digital Millennium Copyright Act takedown notice about a video he had shot at a recent convention showing three people doing the Electric Slide.

“The creator of the Electric Slide claims to hold a copyright on the dance and is DMCAing every single video on YouTube” that references the dance, Machulis said. He’s also sent licensing demands to The Ellen DeGeneres Show, Machulis added.

Indeed, Richard Silver, who filed the copyright for the Electric Slide in 2004, said on one of his Web pages that the DeGeneres Show had been putting up a legal fight as he tried to get compensation for a segment that aired in February 2006 in which actress Teri Hatcher and other dancers performed the popular wedding shuffle.

Silver, it seems, is quite serious about protecting his supposed intellectual property right in the electric slide:

It appears Silver has for several years aggressively defended his copyright on the dance. In 2004, Silver apparently wrote an e-mail to Donna Woolard, an associate professor of exercise science at North Carolina’s Campbell University, demanding she remove a video of the dance from a Web site. He complained the dance wasn’t being done correctly on the video, and Woolard took down the video.

Silver wrote, according to e-mail correspondence posted by Woolard, that he had sued two Hollywood production companies for using the dance in several films and that he was now adding her as a co-defendant. It’s unclear what happened to the suit.

It’s stuff like this that makes me think that the entire idea of intellectual property is nonsense upon stilts.

H/T: Slashdot

Super Bowl Copyright Nonsense

As you may have noticed, the National Football League guards it’s copyright over the Super Bowl very jealously. That’ s why you never see any retailer who isn’t an official sponsor or advertiser mention the Super Bowl in their ads for, say, big screen televisions, soda, or beer. Instead, they call it “the Big Game.”

Considering the amount of money that the game brings in, it’s not surprising that the NFL would be protective of it’s product. This, however, strikes me as an immensely inappropriate extension of the copyright law:

Churches in Indiana and across the country are scrapping traditional Super Bowl viewing parties in wake of the NFL’s stance that mass viewings of the game on big screen TV’s would violate copyright law.

The issue came to light Thursday when the Star reported that the NFL had told Fall Creek Baptist Church in Indianapolis that its plans for a Super Bowl watch party in front a big screen TV would be illegal.

NFL spokesman Greg Aiello said Thursday the league stands by its interpretation of copyright law and would look into any violators that comes to the league’s attention. The main concern for the league, Aiello said, is groups that charge admission to watch games and those that use a TV screen larger than 55 inches to show the game.

A story about Fall Creek’s plan to cancel its game viewing plans prompted dozens of calls and more than 500 email comments to the Star’s website Thursday. Aiello said media from around the country have been inquiring with the league as well.

In Indianapolis, home of the AFC Champion Colts, Indian Creek Christian Church and Castleton United Methodist Church are among those who have cancelled plans to watch the game in their churches.

And it’s not just the issue that seems to annoy the NFL, because they even object to mass-viewing parties where no admission is charged:

Aiello said the league has a longstanding policy against “mass out-of-home viewings” of the Super Bowl, even if the hosts don’t charge admission. The NFL makes an exception to that, however, for sports bars that show televised sports on a regular basis.

Why the NFL should care if I invite 60 of my closest friends over to watch the Super Bowl, at no charge, on my bigger-than-55-inch television (if I had one, that is) is entirely beyond me. And it’s yet another example of how state-protected copyrights are used to restrict individual choice.

H/T: Vivian Paige

Copyright Law And The Assault On Innovation II

A Federal Judge in New York has ruled that a lawsuit by the music industy against XM Satellite Radio over a new XM radio that allows consumers to record songs played on XM onto an MP3 player can proceed forward:

A lawsuit in which record companies accuse XM Satellite Radio Holdings of cheating them by letting consumers store songs can proceed toward trial, a judge ruled yesterday after finding merit to the companies’ claims.

Judge Deborah A. Batts of United States District Court in New York made the finding in a case brought by the Atlantic Recording Corporation, BMG Music, Capitol Records and other music distribution companies against XM Satellite, the satellite radio broadcaster.

In a lawsuit last year, the companies said XM infringed on their exclusive distribution rights by letting consumers record songs onto special receivers marketed as “XM + MP3” players.

XM argued that it was protected from infringement lawsuits by the Audio Home Recording Act of 1992, which permits individuals to record music off the radio for private use. The judge said she did not believe that the company was protected in this instance by the act.

While this is an early stage of the proceedings, this doesn’t strike me as very good news, or anyone else who believes in freedom to innovate. Especially when you consider remarks like this:

The judge said XM operated like traditional radio broadcast providers who cannot offer an interactive service, publish programming schedules before broadcast and play songs from an artist more often than specified within a three-hour period. But by broadcasting and storing copyrighted music for later recording by the consumer, the judge said XM was both a broadcaster and a distributor, but was paying only to be a broadcaster.

“The record companies sufficiently allege that serving as a music distributor to XM + MP3 users gives XM added commercial benefit as a satellite radio broadcaster,” Judge Batts said.

And what’s so wrong with that ?

Related Posts:

Copyright Law And The Assault On Innovation

More restrictions on speech?

Are you a blogger? Then S. 1 may concern you.

From Of Arms and the Law:

S.1 has been introduced in the Senate as “lobbying reform” — which in this case means “First Amendment infringements.” An amendment has been attached, which requires registration of bloggers with more than 500 readers, and who comment on policy issues. Violation would be a criminal offense.

I looked it up on the Library of Congress webpage (which is essentially unlinkable) and have attached section 220 in extended remarks, below. As the bill is reported, it appears to cover any “paid” grassroots lobbying, that reaches more than 500 people. But a blogger who receives contributions might be classed as a “paid” grassroots type. It looks like Congress wants to keep an eye on annoying people like Porkbusters. It may be significant that S.1 was introduced by Harry Reid, one of the Kings of Pork.

[UPDATE] We won this round. The Senate passed the Bennett Amendment, which eliminated the questionable language. Here is the roll call vote.

However, the Gregg Amendment, which would have established a line-item veto was blocked by the Harry Reid and Robert Byrd.

[ANOTHER UPDATE] Welcome to all Instapundit readers!

Federal Judge Outlaws Hyperlinking

According to one U.S. District Court Judge in Texas, it’s against the law to hyperlink to copyrighted material if the copyright holder objects:

A federal judge in Texas has ruled that it is unlawful to provide a hyperlink to a Webcast if the copyright owner objects to it.

U.S. District Judge Sam Lindsay in the northern district of Texas granted a preliminary injunction against Robert Davis, who operated Supercrosslive.com and had been providing direct links to the live audiocasts of motorcycle racing events.

Lindsay ruled last week that “the link Davis provides on his Web site is not a ‘fair use’ of copyright material” and ordered him to cease linking directly to streaming audio files.

The audio Webcasts are copyrighted by SFX Motor Sports, a Texas company that is one of the largest producers of “Supercross” motorcycle racing events. SFX sued Davis in February, noting that fans who go to its own Web site will see the names and logos of sponsors including wireless company Amp’d Mobile. (Anyone who clicked on the link from Davis’ site, however, would not see the logos of companies that paid to be sponsors.)

Think for a second about what this means. You’re not posting copyright material yourself, you’re not even quoting from it. All you’re doing is linking to it. And yet, according to Judge Lindsey, this is a copyright violation. Of course, if he’s right, then the entire World Wide Web is nothing more than one big copyright violation, as John Dvorak points out:

A link is a link. Banning deep linking is a step towards banning all linking, and what does that do for the Google business model? Where are the Google attorneys helping out in this case? Are they helping out on the appeal? If not, then why not?

How do we even use the Internet if deep linking is illegal for some reason? We don’t, that’s how. Goodbye, Amazon. Hey Jeff, did you help out on this case?

Cases like this point out the problems I have with the entire concept of intellectual property law. How am I violating your rights if I post a link on my website to something you posted on yours ?

It’s not as if I took your content and appropriated it as my own. Heck, I haven’t even altered your content to make it appear original. Moreover, if you don’t want me deeplinking to your site, the you can take steps to make sure that won’t happen, but not doing so, you are implicitly saying it’s acceptable.

Of course, as the New York Times has discovered, hiding content behind a firewall seldom leads to success.

H/T: QandO

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