Category Archives: Intellectual Property Rights

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.

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