I base my comments on copyright, by referring to Section 8 of Article 1 of the Constitution which states: "To promote the Progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."

Copyright has been repeatedly extended with doubtful justification. If the author sells the rights to future incomes, the present value of each year's future income from copyright declines rapidly, approaching zero. The buyer of those rights gets little inducement to increase his payment for them. Thus, beyond ten years, copyright is not an inducement to create.

Moreover, the existence of copyright makes the creation of newly inspired derivative works unattractive because of the risk of being sued, successfully or not, given the costs of litigation.

Finally, legal suits over copyright are a huge cost to the economy, as is the continual cost of lobbying for more favorable legislation by the large holders of copyrights. This has only gotten worse in recent years, as the potential gains from resort to law increases. This is particularly true in cases where the law is unsettled, as so often happens when courts or legislation make small changes in the law and its interpretation.

The lawsuits are made increasingly expensive by pressure to get courts to change the interpretation of the law and by seeking trial in districts where the courts have been found increasingly responsive to plaintiffs.

This brings me to the Anti-Counterfeiting Trade Agreement (ACTA). It is an anti-democratic outrage, not to have published the terms of the draft agreement and suggests to me that the USTR is engaged in a shady deal which will not stand the light of public disclosure and discussion. I expect better of the Obama administration, for which I voted, a choice I now question. I must assume that we are trying to browbeat our trading partners into accepting terms that they are resisting rather than examining the pluses and minuses of such an agreement.

The first problem was that no one bothered to look at the underlying securities. When prospectuses were sought long after the market crashed, they were hard to find. But why bother, as the derivatives were repriced and could be rolled over in monthly auctions. They came with high ratings from S & P or Moody's or Fitch and they were apparently completely liquid but paid better than other short term securities.

Other problems were, according the New York Times:

"¶They were based on the assumption, endorsed by the bond rating agencies, that insurance regulators were requiring life insurers to retain too much capital.

¶Therefore, investors could take on a large part of the risk of the insurance with complete safety. That would be only the "excess" part, as calculated by the insurance company

¶The securities were sold as virtually risk-free cash equivalents, enabling the investor to get out, at par, once a month. Supposedly sophisticated investors sank more than $30 billion into them.

¶The securities were explained in complex prospectuses that almost nobody even obtained, let alone read.

¶They were guaranteed by bond insurers, like Ambac, further persuading people there was nothing to worry about."

Read the article for all the ugly details on this colossal fraud, arising from no one paying attention and no one taking responsibility. It implicitly makes the case for tough regulation. But the news doesn't hold out great hope we will get it.

Search and advertising giant Google plans to build and test super fast fiber-optic broadband networks in a few communities around the U.S., promising up to a one gigabit per second service a hundred-fold increase over what most Americans currently can subscribe to.

Most are currently thinking about how it might affect the marketplace of ISP's in delivering on-line services. However, the obvious broader implications over the current IP wars are staggering.

A 1 Gbps service could let a user download a full 1080p High-Def movie in mere minutes and is more than 1000 times faster than AT&T's basic DSL offering.

If entertainment conglomerates are waging the current fight they are now, just try to imagine what will the landscape look like 10 years from now if Google's efforts materialize.

The most important feature of this is that we are invited to comment about the secret Anti-Counterfeiting Trade Agreement. That is the most important feature of this "opportunity" to comment--that we should comment on something whose content has been kept secret from the public.

That may not get us very far but there are substantial substantive objections that all readers of this blog should support and that belong on the public record.

Let's weigh in.

[Mises; SK]

[SK]

Read it. The story is too long to repeat here to get the flavor of what went on. There are lots of details that will emerge in the future, but this reporting tells us how bad it was and hints at what is to come.

I want to end with this Dilbert which is a kind of visual epitaph on where we are today.

I just wanted to weigh in on the budding IP debate to say that anyone who takes a firm stand on the specific meaning of IP law doesn't really understand IP law.

David: No clue what that means.

Copyright, patent, and trademark law all serve different purposes, and have different statutory regimes precisely because the issue is multifaceted, complex, and must meet various and sometimes opposing interests.

David: Wow, it is complicated? Who'd have thunk it?

Conflating three separate legal regimes as "IP law" can make arguing about it's purpose inherently impossible.

David: You mean the way that the U.S. Constitution conflates copyright and patent? I suppose this letter writer is merely dishonest. Few if any people conflate trademark with copyright and patent law, and in the United States the legal purpose of copyright and patent as established by the Constitution are indeed the same.

For instance, Yglesias points to the Constitutional requirement that the protection be for a "limited time." Well, over the last 200 years as IP laws have evolved, we've decided that "limited time" means something very different in patent law and copyright law. Patents generally last for 25 years, copyrights last for the life of the author plus 75 years (this is a gross simplification, but good enough for our purposes).

David: A very gross simplification unless they recently increase the length of patent protection from 20 to 25 years. I know they keep changing the length of copyright protection at a dizzying rate, but it appears to still be life of the author plus 70 years. I guess this stuff is multifaceted and complex.

Patents cover inventions that increase our standard of living and move society forward.

David: You mean like the swinging on a swing patent?

The inventors of those things should be protected, but only for a short time; after that society as a whole should be allowed to benefit from the increased utility of the technology's wide dissemination.

David: Why is it exactly that they "should" be protected?

More to the point, copyright law protects expression -- the words or notes an artist uses in creating his work.

David: I hear this repeatedly at seminars. How does protecting "expression" give the author the unique right to write a sequel? What does "expression" have to do with Suntrust v. Houghton Mifflin lawsuit over The Wind Done Gone? With the lawsuit over the Harry Potter lexicon? Copyright protects ideas not merely the expression of ideas. Where on earth did this myth that copyright only protects the expression of ideas start?

Though I agree with him on many things, Yglesias is wrong here. Copyright law is very much in the business of protecting the rights of the author. That's why a copyright term lasts so long (copyright terms have been increasing steadily over time, indicating that we are becoming more and more concerned with protecting authors as time goes forward). That's also why copyright protects such a wide range of expressions and has so few formal requirements for securing one. Our copyright scheme is actually quite expansive in its protection of producers' interests.

One could say, as Yglesias does, that copyright protects consumers, but only with very roundabout logic: copyright incents producers to produce copyrightable works, and that allows consumers to consume those works, thus protecting their interest in listening to music, etc. It's much more logically satisfying to accept the basic truth and say "copyright law protects an author's interest in his copyrightable works," and then derive whatever ancillary benefits you want from there.

David: There is a telling difference between what copyright does protect - the interests of the intermediaries involved in distributing copyrightable works - and what copyright is intended to protect - the rights of the public at large. As it happens it does not and is not meant to protect either authors or consumers.