In today's New York Times' Economic Scene column, Hal R. Varian discusses the lack of intellectual property in the fashion industry, and cites the outstanding work of Kal Raustiala and Chris Sprigman. They have been a two-man intellectual demolition crew on IP in fashion goods. Their work on the piracy paradox is a must read.

He rightly notes that if lawyers called the fashion tune, fashion would become "boring, boring, boring." Not to mention more scarce and expensive.

Unfortunately, he goes off the rails a bit in claiming that the lack of copyright in America for foreign authors hurt the book trade. In fact it promoted the growth of literacy, and the development of the book industry and an American authorial class.

Here is a scathing summation of Microsoft's Vista OS.

One of the big culprits is Digital Rights Management. Microsoft is turning off its customers in droves and not listening to what they want.

Maybe it's slowly but surely making itself irrelevant.

Apple anyone? Linux?

Thanks for the pointer to the Kirk Report.

A long post at Volokh. Note the lottery ticket angle. Shades of Plant on copyright.

Then we have Libertarian lawyer Randy Barnett pointing out the contradictions of IP as property

In the Progress Clause, the Constitution refers to "exclusive right" for "limited times" not to IP, which has nothing to do with property.

Hunter McDaniel adds in the comments that IP was used to create a false metaphor, and that any government-granted monopoly has value for the grantee but that that does not make it property.

Thanks to Mark Brady for the link.

The Jan. 27th issue of The Economist has an interesting article, "Billion Dollar Pills," about the problems affecting the pharmaceutical industry. Industry profits are declining amid generic competition and pressure from large purchasers (including the government). New therapies are becoming more costly, and capital spending has been funnelled from R&D to sales and marketing. The bill for bringing a new drug to market is inexorably rising. Estimates run from $500 million to $2 billion, with one expert pegging it at $1 billion.

So what to do? Disaggregating the model is one suggestion, whereby pharma companies focus on a few areas they specialize in--discovery, developing, and marketing are mentioned. They could then contract out to specialist firms other parts of the business they need to add to their core strengths to have a viable product, or perhaps develop joint ventures.

The article mentions that Big Pharma has had profit margins of around 20%, double that of Big Oil. The oil and drug businesses are supposedly "self-liquidating," uniquely among big industries. An oil firm has to find new oil, and a drug company has to produce a new drug. The article says that Coca-Cola can just continue peddling sugar water (thank you, Steve Jobs). (Well, no, Coca-Cola has two problems, one called Pepsi, and another consisting of a bunch of newer and sprite-lier beverage firms that are rolling out new varieties of bottled waters and power drinks. Hansen Natural's stock went from $0.55 in 2003 to over $50 in 2006 while Coke's stock went from, well never mind. Let's face it: the company is being out-innovated by its smaller rivals.)

Big Pharma's lawyers continue to defend their patents, as if that will somehow make the industry more innovative.

A Wharton researcher, Patricia Danzon, thinks the industry is resting on its laurels from past successes. Joseph Fuller, head of consultancy Monitor, points out that drug labs are still the big and bureaucratic behemoths they were in the 1970s. Big Pharma has become Enormous Pharma. A better innovation killer can't be scripted.

Meanwhile, smaller pharmaceutical firms are discovering new methods of finding new drugs, such as the use of molecular imaging techiques being pioneered by the British drug company GSK. This will allow personalized drug therapies available for smaller and more segmented markets, which can still be profitable. The blockbuster approach is unable to fill an emptying pipeline. R&D spending is up, but "the number of new drugs has still to grow." Actually, today's Investor's Business Daily (no link available, but there is an online edition) carries an article, "Pharma Industry Lags on Research Efficiencies," citing a recent GAO report that points out that from 1993 to 2004, U.S. drug R&D investment increased 147% while drug approvals rose by 38%. Only one-third of FDA-approved drugs were new; the others were "me-too" drugs. The former president and chief operating officer of Abbott Laboratories says that the "top 100 drugs developed since 1950 targeted only 50 conditions."

Jeffrey Kindler, the new CEO of Pfizer, has slashed costs (including giving pink slips to 10,000 sales people) and wants the firm to become less secretive and to reach out to partners. Bravo, Mr. Kindler, and how about kicking the patent habit to jump start this initiative?

Pharma should reinvent itself by kicking its blockbuster habit and by looking for innovative methods and drugs that target new markets and smaller groups of patients. It should also zero in on treatments tied to the unfolding of the human genome.

The old blockbuster model based on the trial-and-error method is being replaced. Drug firms can either seize the opportunities or be swept into the dustbin of economic history.

Some investment advice: when a companies main business is filing lawsuits - sell short. Apparently the stitching on the pocket of your jeans is a trademark. Who knew.

From the NY Times:

As even digital music revenue growth falters because of rampant file-sharing by consumers, the major record labels are moving closer to releasing music on the Internet with no copying restrictions a step they once vowed never to take.

There is a NY Times article on the mixtape controversy. Apparently many label executives and officials at the Recording Industry Association of America, which represents the major music companies, say the mixtape is contributing to the problem. They argue that sales are ultimately undermined when the mixtape leaps from promotional giveaway item to replacement for an artist's official label-distributed album.

A NY Times Article describes a recent arrest for making a mixtape. The article notes that mixtapes boost artists' sales. Recently I heard a great song from a mix tape at Starbucks, "The Light," asked the barista what the name of it was, then bought a copy of Into the Blue by The Album Leaf. (If you like Moby and the Icelandic group Mum, you'll like The Album Leaf.) I lent it to my neighbor the lawyer, who loved it and then bought an earlier work by The Album Leaf.

But the cops go on protecting our "civil liberties." Maybe the Libertarian Party should use this as a recruiting device.

The article notes a store in the East Village of NY where five employees were busted in 2005. Hopefully they are now libertarians if they weren't before.

William Patry, a noted copyright lawyer, professor at the Benjamin Cardozo Law School, and senior counsel to Google, publishes an interesting blog covering current issues in copyright law, as well as material of historical interest. He frequently refers to the work of other scholars, such as two Israeli experts in copyright law, Oren Bracha and Dotan Oliar. A Nov. 14 post had some illuminating comments on 18th century English copyright history and recent UK scholarship, which might send you scurrying to the library.

The New York Times today reports on a Seattle glass artist, Dale Chihuly, who is suing two other artists, one a former colleague, for copyright infringement. He claims they are producing knockoffs of his sea-inspired shapes and colors; they say that the lip wraps and ripples he designs "have been around for centuries." Bryan Rubino, his former collaborator says he could be ruined by the lawsuit, which of course is the point of it. What better way to knock off the competition than by knocking it off through the courts? It's less messy than using guns, knives, and fisticuffs.

Karrin Klotz, a copyright lawyer and B-school lecturer at the University of Washington, says that Picasso copyrighted a few lines on a pad because of their distinctiveness, but a 2003 US Court of Appeals said, more sensibly, that ideas expressed in nature cannot be copyrighted.

Scott Wakefield, Mr. Rubino's lawyer, gives us the money quote:

"If the first guy who painted Madonna and Child had tried to copyright it, half of the Louvre would be empty."

Where is the libertarian William Kuntsler when we need him? Jim Ostrowski, call your office.