A copyright battle is opening over a poem, Footprints in the Sand, a piece of inspirational saccharine which has been widely believed until now to be in the public domain. According to Washington Post Staff Writer, Hank Stuever, the poem has at least six people claiming authorship link here. The copyright is pretty questionable, since it has been published for years under the authorship of anonymous. Copyright was not claimed until 1986 but there is money, apparently quite a bit, in licensing the poem for imprint on cups and shirts and such, so the fight will now commence and more claimants may emerge.

The lawyers are about to have a feast once again over what is the result of really vague and therefore bad law. But with so many vested interests in the present text, it is unlikely to be changed anytime soon so we all lose.

More and more journals adopt a policy of open access, i.e., they do not charge anything to readers. One recent adopter is "Economic Analysis and Policy," which is also publishing in 2009 a special issue on the topic. Consider sending a paper!

Details.

Robert Arnott, head of Research Affiliates Fundamental Indexes, says that rival index fund managers are stealing his idea, which he hopes to patent. He bases his stock index on firms' sales, cash flow, book value, and dividends, all staples of fundamental analysis, which are as old as the hills. Jeremy Siegel, a finance professor and adviser to WisdomTree Investments Inc., a fund company that bases its indexes more narrowly on earnings and dividends, claims, rightly, that Mr. Arnott's idea is not new and that his idea is too basic to be patented. It certainly fails the novelty test. Mr. Arnott's patent has been rejected once, but he's still trying to get his monopoly.

Here is the story.

Here is one patent bid that should not see the light of day.

In the meantime, if you want to buy an index fund, you know which family to buy and which one not to buy. And Wisdom Tree has outperformed Research Affiliates lately.

The quintessential stupidity of copyright law once again confronts us in the case of Barbie vs Bratz dolls (Mattel vs MGA Entertainment) link here. The fight is over who owns the Bratz doll design. It was designed by Carter Bryant. If he did the work on it while he worked for Mattel, it owns the copyright under the terms of his employment contract. If he did it while working for MGA between work stints with Mattel, MGA owns it. The lawyers have made it more complicated than that, which should keep the jurors scratching their heads.

The evidence the contending sides present is contradictory. But is it relevant? Where in this case, is the justification for intellectual property that it fosters innovation?

Why do we have this kind of case?

Another ridiculous bit of neglect of the prior art by the USPTO via Information Week.

Matt Yglesias link here calls our attention to a paper by Dan Hunter and John Quiggin link here, which Matt calls The Economics of Amateurism and the original study entitles Money Ruins Everything.

Quoting from the original paper, "In the economy of the 21st century, economic and technical innovation is increasingly based on developments that don't rely on economic incentive or public provision. Unlike 20th century innovation, the most important developments in innovation have been driven not by research funded by governments or developed by corporations but by the collaborative interactions of individuals. In most cases, this modality of innovation has not been motivated by economic concerns or the prospect of profit. This raises the possibility of a world in which some of the sectors of the economy particularly the ones dealing with innovation and creativity are driven by social interactions of various kinds, rather than by profit-oriented investment. This Article examines the development of this amateur modality of creative production, and explains how it came to exist. It then deals with why this modality is different from and potentially inconsistent with the typical modalities of production that are at the heart of modern views of innovation policy. It provides a number of policy prescriptions that should be used by governments to recognize the significance of amateur innovation, and to further the development of amateur productivity."

Yglesias comments, "Strong IP makes it more difficult for commercial and non-commercial actors alike to be able to innovate. It compensates for erecting this financial hurdle by creating unique financial incentives toward innovation -- incentives that only help a commercial actor. In a world with weaker IP, more and more work should come from hobbyists, amateurs, and non-profit organizations."

He concludes that the problem is in righting the balance.

But to me the more basic problem is that strong IP has made innovation less likely, not more. Weaker IP should lead to more innovation, contrary to what the public has been led to believe.

In an op-ed for the New York Times, Larry Lessig takes up the question of "orphan works" link here. He begins usefully, reminding us that copyright had to be applied for before 1978, rather than being automatic as ever since. His proposed solution is to provide automatic copyright for 14 years and then requiring registration to extend it. He opposes the current draft law which would put aspiring users of "orphan works" through a complicated and expensive process of trying to find the copyright owner. He also covers special provisions for foreign copyright holders and the transition from the old system to a new one.

He doesn't really address the issue of why it would not be better to go back to the old system and require registration. I suppose he reasons that it is unlikely to be enacted. But that doesn't mean it isn't the better way to go.

Robert D. Arnott, Chairman of Research Affiliates, wants to patent a method for a stock index fund based on certain fundamental measures such as revenue, etc. Here is the article.

The problem is that fundamentally-weighted index funds (such as Wisdom Tree's) have been around for some time. More importantly, there is tons of prior art that this method is founded on, such as the research of Fama and French.

Question: if he files a patent on this, can anyone file a brief with the USPTO opposing it? Inquiring minds want to know.

While IP may not stimulate true innovation and creativity, Hayek suggests that copyright might stimulate something more pernicious: the intellectual class. In The Intellectuals and Socialism, he writes:

In the sense in which we are using the term, the intellectuals are in fact a fairly new phenomenon of history. Though nobody will regret that education has ceased to be a privilege of the propertied classes, the fact that the propertied classes are no longer the best educated and the fact that the large number of people who owe their position solely to the their general education do not possess that experience of the working of the economic system which the administration of property gives, are important for understanding the role of the intellectual. Professor Schumpeter, who has devoted an illuminating chapter of his Capitalism, Socialism, and Democracy to some aspects of our problem, has not unfairly stressed that it is the absence of direct responsibility for practical affairs and the consequent absence of first hand knowledge of them which distinguishes the typical intellectual from other people who also wield the power of the spoken and written word. It would lead too far, however, to examine here further the development of this class and the curious claim which has recently been advanced by one of its theorists that it was the only one whose views were not decidedly influenced by its own economic interests. One of the important points that would have to be examined in such a discussion would be how far the growth of this class has been artificially stimulated by the law of copyright.

Yet another strike against copyright!

Excellent post by Mike Masnick on Techdirt:

It's an ongoing theme around here, but ideas are everywhere. The real trick to making something great often has extremely little to do with the idea, and much more to do with the execution. That's where the real innovation occurs -- in taking an idea and trying to figure out how to make it useful. It's that process that's important, much more than the original idea. As nearly anyone who has brought a product from conception to market will tell you, what eventually succeeds in the market is almost always radically different than the original "idea." That's part of the reason why patents are so often harmful to innovation. The patent is for that core idea, which is rarely the key in making something successful. But by limiting who can innovate off of the idea (or just by making it much more expensive) you're limiting that process of innovation. ... [A]s the founder of [failed company] Cambrian House admitted in explaining the company's changing plans, it wasn't difficult to get people to come up with all sorts of interesting and exciting ideas -- but where the company failed was in getting anyone to actually execute on any of those ideas. Ideas are a starting point -- but it's high time that we stopped worshipping the idea, and started recognizing how much more important execution is in driving innovation.

Jeff Tucker makes a similar point in his article Is Intellectual Property the Key to Success?:

A clue to the copyright fallacy should be obvious from wandering through a typical bookstore chain. You will see racks and racks of classic books, presented with beautiful covers, fancy bindings, and in a variety of sizes and shapes. The texts therein are "public domain," which isn't a legal category as such: it only means the absence of copyright protection. ... But they sell. They sell well. ... The much-predicted disaster of an anti-IP world is nowhere in evidence: there are still profits, gains from trade, and credit is given where credit is due. Why is this? Quite simply, the bookstore has gone to the trouble of bringing the book to market. It paid the producer for the book and made an entrepreneurial decision to take a risk that people will buy it. Sure, anyone could have done it, but the fact is that not everyone has....

As Tucker observed to me--this whole issue speaks directly to the Kirznerian vs. Hülsmannian view of entrepreneurship, and also the Hayekian vs. Salernoian view of calculation.

Or, as my "little buddy"* Gil Guillory wrote me,

This is a key point in VC partner, multiple entrepreneur, and author Rob Adam's A Good Hard Kick in the Ass: Basic Training for Entrepreneurs. The very first chapter is "good ideas are a dime a dozen", with lots of good anecdotes and rules of thumb. One of them: at his VC company, if someone asks them to sign an NDA, they see it as a red flag. What's most important, he says, is having a good execution team. A good execution team is what they fund, even if the idea is not that hot. They'll find a winning idea with a good team. And this is also what Napoleon Hill wrote. And Carnegie. And Martha Stewart. And Jim Collins."

*My 4 year old referred to him and Tom Woods that way after a Boston Legalesque sleepover.