My latest column in The Freeman, the magazine I edit, summarizes Michele Boldrin and David K. Levine's chapter on the world pharmaceutical industry in their book, Against Intellectual Monopoly. The column is here (pdf).

The Napster case is not over. The Electronic Frontier Foundation reports the latest chapter of the legal battle. The music industry is still pressing its case against Hummer Winblad and Bertelsman for investing in Napster. The defendants claim that the record labels forfeited their copyright claims when they illegally coordinated to monopolize digital music distribution. The DoJ found no evidence of wrongdoing, but new documents reveal that the labels might indeed have coordinated and shared information, and lied about it to the DoJ.

This is relevant because the penalty for copyright misuse (e.g. using copyright as a tool to validate antitrust) is unenforceability of the copyright in court until the misuse has been purged and its effects no longer exist -, which is tantamount to losing the copyright and releasing the intellectual property on the public domain. Free Madonna downloads coming soon to a computer near you!

From CNET News.com:

For the last few years, a coalition of technology companies, academics and computer programmers has been trying to persuade Congress to scale back the Digital Millennium Copyright Act.

Now Congress is preparing to do precisely the opposite. A proposed copyright law seen by CNET News.com would expand the DMCA's restrictions on software that can bypass copy protections and grant federal police more wiretapping and enforcement powers....

The 24-page bill is a far-reaching medley of different proposals cobbled together. One would, for instance, create a new federal crime of just trying to commit copyright infringement. Such willful attempts at piracy, even if they fail, could be punished by up to 10 years in prison.

It also represents a political setback for critics of expanding copyright law, who have been backing federal legislation that veers in the opposite direction and permits bypassing copy protection for "fair use" purposes....

But one of the more controversial sections may be the changes to the DMCA. Under current law, Section 1201 of the law generally prohibits distributing or trafficking in any software or hardware that can be used to bypass copy-protection devices....

Smith's measure would expand those civil and criminal restrictions. Instead of merely targeting distribution, the new language says nobody may "make, import, export, obtain control of, or possess" such anticircumvention tools if they may be redistributed to someone else.

The bill would permit wiretapping in investigations and civil forfeiture penalties. The full article is here.

I will be participating in a panel on copyright Wednesday, April 26, 2006 at the Cato Institute. Open to the public - if you are in D.C. come by. The address is
F. A. Hayek Auditorium
Cato Institute
1000 Massachusetts Ave., N.W.
Washington, D.C.

According to the Boston Herald, Royal Philips Electronics has filed a patent application for a device that would permit broadcasters to stop television viewers from channel surfing to avoid commericials. The channel would freeze up for the duration of the ads. Sounds pretty bad. But have no fear. According to the Herald, "The company also said it had no plans to use the technology in any of its products."

From CNET News.com:

In the past year or so, Intellectual Ventures has emerged as one of the more controversial companies in the tech industry. The company is filing patents, but also buying patents from defunct companies, independent inventors and others. It has amassed a portfolio of over 3,000 patents, according to some sources--an extremely large number for a company with only a handful of employees.

Many in the IT industry worry that the patent portfolio will become a vehicle for patent suits.

Not so, said Nathan Myhrvold, founder and CEO of Intellectual Ventures. Although lawsuits may result, the company primarily exists to devise inventions that can generate new markets.

Primarily? Shall we start a pool over when the first suit is filed?

The Philadelphia Inquirer reports that city plumbers are blocking new waterless urinals since they require less pipe and hence less work. In the story the reporter, Inga Saffron, contacted mayoral candidates to find out where they stood on the issue. Typical answer: no comment.

Geoff Goodfellow appears to be the inventor of wireless e-mail, which he did not patent, according to this story. He has a properly jaundiced view of patents, as does Mitch Kapor, who notes that NTP's patents should never have been issued.

Big Pharma Wants More Time Expect a new skirmish between Big Pharma and the generics. Some leading drugmakers are preparing a push for legal changes to extend their period of protection from generic rivals. Industry executives say that Bristol-Myers Squibb (BMY ) CEO Peter Dolan, who now heads the Pharmaceutical Research & Manufacturers of America, an industry association, is likely to make the effort a top priority. A drug's patent protection typically lasts about 20 years. But it runs from the time a compound is discovered rather than when a drug gets FDA approval and comes to market, usually 8 to 12 years later. Generics makers aggressively attack patents on blockbusters, challenges that, if successful, further shorten the patent protection. There's also five years of "data protection," another right to exclusivity based on clinical trial results. This kicks in at approval. Pharma's complaint? Robert Armitage, Eli Lilly's (LLY ) general counsel, says the resulting exclusive periods under this system aren't long enough, given multiyear clinical trials. He wants 15 years of data protection, along with a 15-year patent, also granted at FDA approval. Such a scheme would effectively lock out generics since they would need to produce their own data in costly clinical trials. With the feds paying for Medicare prescriptions, any change likely to raise the bill will be a tough sell. Says Ira Loss, executive vice-president at Washington Analysis: "They are going to be hard pressed to move this very far." By Amy Barrett

On Friday I attended a wonderful conference organized by my colleague in the law school Professor Neil Netanel on media and entertainment. I meant to post about it earlier, but life intervened. There were four talks, the first by Eli Noam of Columbia on media scholars I unfortunately missed, so I can't comment on.

The second talk by Christopher Yoo of Vanderbilt was on network neutrality. I was pleased to learn that I am not the only one who thinks that the market can probably sort out neutrality on its own without government intervention. Many scholars I admire, such as Lessig, and with whom I generally agree on copyright and patent issues, think that government enforcement of network neutrality is desirable. The main issue I see has to do with the monopoly over the last mile granted by local governments. There is not real problem with backbone competition - as Yoo says, entry is easy. Roger Noll, one of the later speakers pointed out that wireless is probably going to break the back of the last mile monopoly. So the most effective federal government policy on issues such as network neutrality is to open up a lot of spectrum for wireless.

The third talk was by Randal Picker of Chicago on mistrust based DRM. He argued in favor of a DRM system in which leaking your DRM encrypted files would reveal personal information you would prefer not to have revealed. This would give users an incentive not to leak. Ed Felten had a long reply to Randal on his blog. I am inclined to agree with Ed that this isn't a terribly good idea. It doesn't concern me a great deal - the market has dealt pretty effectively with DRM so far. My concern is only with government mandated DRM - which I think is a bad idea regardless of what form it might take.

I think the big gap here is between those who think they understand the technology - and think that DRM can't work - and those that admit they don't understand the technology - and think that it might. While I fall into the former camp, I should point out that the experts haven't alway been right about these things. In the later 1970s I argued to a friend who was far more expert about computers than I that small personal computers would take over the universe soon. My technical friend told me that would never happen - while electronics are getting smaller, mass storage like disk drives are mechanical devices, and simply could not drop rapidly in size and weight.

The final talk was by Roger Noll of Stanford. He gave a fascinating talk about the misuse of intellectual property. Apparently the legal penalties are draconian - you can effectively lose all of your rights to the property during the period of misuse. So, for example, if the recording industry was guilty of misusing their copyrights to violate the anti-trust laws (and it looks like they did) then anyone who downloaded any of their music during the period of misues (it ended in 2003) is off the hook. The movie industry faces a similar problem. Before we could all rush off and illegally download something in hopes of filing a class action lawsuit against the entertainment industry (apparently 14 such lawsuits are already pending) David Nimmer - a world expert in copyright law - shed some doubt on how draconian the punishment really is. Apparently the law is a little grey in this area: it may be that while anything the entertainment industry did during the period of misuse is invalid - that is lawsuits they won during that period might go out the door - they may be able to sue retroactively after they end the misuse.