We don't often write about trademarks, but here is a case of some modest interest. An online video joint-venture fiddled around for some time and finally came up with the name, Hulu link here and here. It is a strange choice, as it conveys nothing to me. Then an online custom book publishing company called Lulu sued for trademark infringement because the name was too similar. Does that strike you as confusing? Still, strange things happen with IP. One conjecture is the companies will pursue the case for all the media attention it draws. In any case, another lawyers' delight.

The House passed the bill amending patent law on Friday, but the Senate has not yet acted on similar legislation introduced simultaneously with the House version, OMB has expressed opposition, and the President may well veto it link here and here. Some of the House rhetoric for and against the law bordered on the extreme, while behind the scene were beneficiaries like Microsoft, Cisco, and Intel and opponents like Caterpillar, Eli Lilley, and Proctor and Gamble. Its not clear which will prevail.

The bill would make several sensible changes: switching from first-to-invent to first-to-file patent grants like other countries; allow post-grant patent challenges for up to a year; allow third parties to introduce evidence against a patent grant; limit where a patent suit can be filed to cut down on jurisdiction-shopping; limit damages to reflect how much the patent violation contributes; and allow immediate appeals of court rulings while a case proceeds. Similar past bills have been introduced only to fail, and no one knowledgeable seems to be predicting the outcome this time either way.

Maybe more innovative and with less work for the lawyers.

The Council of Fashion Designers of America is still lobbying Congress to extend the copyright monopoly to the fashion industry, as this story details .

I wonder who Anna Sui (she is quoted in the article) was copying when she was a young designer just starting out.

We have a new contender in the dispute over who originated the idea behind the website, Facebook. John Markoff reports in the NYTimes link here that Aaron Greenspan, while a student at Harvard, had the idea first, created a web service called houseSystem, and labeled a new feature of it as "the Face Book".

While he may have got the idea and/or put it into practice first, he seems to have no real claim to owning any intellectual property that would be recognized by a court. All of those claiming the idea knew each other and apparently worked together part of the time, but just as William's post of 08/12/2007 suggested, the legal claims remain vanishingly weak. Still, who knows what a smart lawyer can dig up.

It seems that 25% of the population of Los Angeles County consists of "thieves" (at least as some would describe it).

Sample money quotes from the article -

[O]ne in four people in Los Angeles County knowingly bought, copied or downloaded illegal goods in the last year, according to a Gallup Organization survey commissioned by the U.S. Chamber of Commerce and scheduled to be released today.

Although previous studies have documented piracy's toll on the Los Angeles economy, the U.S. Chamber report is the first to focus on the attitudes and behavior of consumers here who knowingly buy fake goods, including bootleg movies, illegally copied CDs, knockoff handbags and counterfeit auto parts.

"The study confirmed what we already knew: That the buying of these products is widespread and is viewed as a victimless crime," said Caroline Joiner, executive director of the chamber's global anti-counterfeiting and piracy initiative.

The 25% piracy rate of Los Angeles County residents surveyed in May and June was slightly higher than the 20% nationwide rate the chamber found last year.

…

Justin Hughes, a law professor and piracy expert at Cardozo School of Law in New York, said Los Angeles might have a higher rate of counterfeiting than other cities because of the high volume of goods flowing through the ports of Los Angeles and Long Beach. But, he added, the latest data reflect broad consumer behavior.

"Most Americans do understand copyright and trademark laws, but it's a bit like speeding laws," Hughes said. "We know they are there, and they're a good thing, but we usually find ourselves going five to 10 miles over the speed limit."

In terms of trying to objectively describe the way many currently perceive their relationship with intellectual property, Professor Hughes' "speed limit" analogy seems to be a fair one. However, it leaves out a crucial component - the direct relationship between the perceived fairness/appropriateness of the law and the incidence of those who will ignore it.

For instance, let us assume that a federally mandated speed limit was increased to 80 mph in the U.S. Would people still continue to go "five to 10 miles over the speed limit"? Surely many would, but it is fair to assume that the overall amount of speeding scofflaws would drastically increase decrease as the overall speed limit increases - and vice versa. If the federally mandated speed limit was instead capped at only 45 mph, then surely the incidence of speeding would increase (not just in terms of the overall number of drivers who would ignore the law, but also in terms of the level of contempt for it. Speeders would likely start averaging 10 to 15 miles over the speed limit, instead of the more casual 5 to 10). They may continue to speed more often and with more vigor, even though they might end up confessing to pollsters that on a purely abstract level, a stricter enforcement of speed limits would be a good thing for society.

There would be a simple reason for this dynamic - many people of perfectly good character would inherently perceive a 45-mile-an-hour speed limit as an abuse of federal authority that would hamper our quality of life well out of proportion to any potential social good such as safety/environmental concerns or energy conservation. Obviously, the definition of a fair and proper speed limit is partially dictated by the state of technology and infrastructure (i.e., the conditions of our road and highway systems, how advanced current automobile engineering and safety features are in any given era, etc.).

So let's bring the analogy back to intellectual property. If we were to analogize the strictness of current intellectual property laws to the speed limit, what would the federally enforced speed limit be today?

I'd argue that it is only about 35-miles-per-hour; a quite unreasonable restriction that hampers human progress to a level far out of proportion to any potential goods that IP legal schemes might have to offer. This too is partially dictated by the current state of our technology and infrastructure (i.e., the Internet, digital technology, how communication has evolved with new media, etc.). That is real the reason why more and more people are simply choosing to ignore the current state of the law and are rightfully guilt free about the situation.

But none of this is preventing the L.A. establishment from lining up to do the bidding of the IP lobby. As the Daily News reports -

The findings were expected to be discussed at the Westin Bonaventure hotel in downtown Los Angeles this morning at a U.S. Chamber of Commerce workshop expected to be attended by several legislators, city council members and local officials, including Mayor Antonio Villaraigosa and City Attorney Rocky Delgadillo.

You don't suppose that the "workshop" might convince local legislatures to help fight for sensible IP reform, do you? Nah. Didn't think so. We all know how these "workshops" play out and what the real goals are here: Creating an even harsher IP environment in order to hang on to the status quo business models for politically connected businesses. One that may very well turn an even higher percentage of the population into "thieves" and "pirates" in their eyes.

William Patry has a good blog post on the attempts by record labels to legally attack sellers of promotional CDs, as well as pawn shop owners. Stores in Florida have to apply for a resellers' permit, take a thumb print of CD sellers, and make a copy of their drivers' licenses. They also have to wait 30 days before selling CDs.

Apparently the record labels claim the first sale doctrine doesn't apply because resale is proscribed by the license terms.

The comments are interesting, including Crosbie Fitch's. In their comments, Prof. Patry and copyright lawyer LKB note the Pro-CD v. Zeidenberg case (1996), which enforced shrinkwrap licensing restriction for a telephone directory CD.

Here is a 1998 comment on shrinkwrap licensing by copyright lawyer Pamela Samuelson.

Note her discussion of Judge Easterbrook's decision why copyright shouldn't override a shrinkwrap licensing agreement in this case--and a bit further down Bill Gates' dismissal of a question about "fair use" by a Microsoft summer intern.

"Fair use"--isn't that what slaveowners consented to when they let their slaves visit town once in a while?

And regarding Easterbook's third reason for ruling for Pro-CD--that it wouldn't be able to recapture its investment in the telephone directory data if users could upload the date for free: what if on day one slavery were legal; on day two a slaveowner invested in new slaves; then on day three the legal authorities ruled slavery illegal, thus making his slave investment worthless? Would Judge Easterbrook rush to the defense of the slave owner, citing his concern about averting a "market failure," which would occur if the value of slaves plummeted to zero?

(Never mind that his idea of "market failure" is not what economists conventionally mean by that term.)

Three rent seekers are suing Mark Zuckerberg, the founder of Facebook, claiming he stole the idea from them. Here is the story .

From the article by Jason Pontin:

But in the absence of any formal contract, the twins are, in effect, arguing that they have rights to Mr. Zuckerberg's imagination and experiences. In my book, that would be a constraint on the free marketplace of ideas.

Bingo! And as John Perry Barlow pointed out, ideas (or imaginations) are experiences. They can no more be owned than someone's labor (an activity) can be. If they can't be owned, how can they be ripped off? (The labor angle is important in refuting so-called Lockean claims for IP.)

Just when you thought airline delays and dirty planes couldn't get any worse comes an article in today's Wall Street Journal that gives airline passengers hope: "Case of the Vanishing Airport Lines" .

Alaska Air created a check-in process eliminating lots of airline counters (see the graphic) that reduces waiting time. But sad to say it, they patented this 4-step business process.

Step 1: Bypass ticket counter and go to a self-service kiosk.

Step 2: Check in at the kiosk, get boarding pass printed at kiosk.

Step 3: Leave luggage at bag drop station where bags are tagged.

Step 4: Go to security screening.

What's novel and non-obvious about any of this?

Self-service kiosks? Nope.

Checking in at kiosk, getting a pass? Nada.

Leaving luggage with an attendant, who bags it? Nein.

Going to screening? Non.

Can you say "bogus patent"?

It turns out that the firm took out the patent not to keep competitors at bay, but to reward those employees who worked on this, supposedly.

Supposedly, since Delta Airlines has done something similar in Atlanta, after viewing AA's setup in Anchorage. Will AA sue? If not, what's the point of getting a patent to reward its employees? Where are the rents if other airlines aren't prevented from building similar systems? Are they saying they just want to waste their shareholders' money paying patent lawyers? Or maybe they are reluctant to sue because they think their patent would be challenged, causing further litigation and more hard-earned shareholders' money to wash down the drain. Especially since the legal climate seems to be shifting away from patent holders, at least a little bit.

In our book Michele and I point out how most modern IP law arose not from a problem that there was too little innovation and creation that needed to be solved, but rather that in a mature industry, aging firms no longer willing to compete in the market successfully lobbied government for protection from competition in the form of IP laws. Once again...the New York Times reports

Senator Charles E. Schumer, Democrat of New York, talked about a bill proposing to extend copyright protection to fashion that had been introduced in the Senate last week, mirroring one that has been under consideration in the House since April 2006.

As has been well documented - for example by Raustiala and Sprigman - there is both rampant piracy and rampant innovation in the fasion industry. There is no problem here for goverment to fix. There are firms that would like a monopoly so they can earn more money. Wouldn't we all like that?

You can find some further blog discussion by Sam Boyd and the invaluable Matt Yglesias.

The Tinseltown Identity: sixty per cent of movies (even with multiple platform distribution) and ninety per cent of TV series lose money.

So what's a studio to do?

Convert it to the Tinseltown Ultimatum:

Ditch the residual payment system .

Movie script writers are entitled only to their initial fee under copyright rules, which of course no one in Hollywood is proposing to touch.