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Lawrence Lessig's name appears on our blogrole which, however, has been hibernated since August 20 last year. I can't tell whether our readers or my colleagues are aware of what he is up to. Today I came across this article in The Nation link here and this video on the internet link here and then he appeared on Bill Moyer's Journal last night (the transcript is up, but the video will appear next week) link here.
The easiest way to parse Lessig's current thinking is the four-minute video. He picks up on his disappointment with Obama who vowed to change the way business is done in Washington--and then seemed to forget his promise. Larry thinks along with many of us that Congress is broken and that the only way to change that is to limit campaign contributions. He proposes that they be funded by individuals and that they be limited to less than $100.
The most complete and eloquent account of Lessig's views is The Nation piece. Here he picks up on the recent Supreme Court decision in Citizens United v. FEC, which would make any limit on campaign contributions unconstitutional. "... the clear signal of the Roberts Court is that any reform designed to muck about with whatever wealth wants is constitutionally suspect." He despairs of getting the Congress, (that he calls the Fundraising Congress) to do anything. He proposes instead a Convention to amend the Constitution as the only possible avenue.
Here are two paragraphs from The Nation piece:
"Here a second and completely damning response walks onto the field: if money really doesn't affect results in Washington, then what could possibly explain the fundamental policy failures--relative to every comparable democracy across the world, whether liberal or conservative--of our government over the past decades? The choice (made by Democrats and Republicans alike) to leave unchecked a huge and crucially vulnerable segment of our economy, which threw the economy over a cliff when it tanked (as independent analysts again and again predicted it would). Or the choice to leave unchecked the spread of greenhouse gases. Or to leave unregulated the exploding use of antibiotics in our food supply--producing deadly strains of E. coli. Or the inability of the twenty years of "small government" Republican presidents in the past twenty-nine to reduce the size of government at all. Or... you fill in the blank. From the perspective of what the People want, or even the perspective of what the political parties say they want, the Fundraising Congress is misfiring in every dimension. That is either because Congress is filled with idiots or because Congress has a dependency on something other than principle or public policy sense. In my view, Congress is not filled with idiots."
And:
"But it is this part of the current crisis that the dark soul in me admires most. There is a brilliance to how the current fraud is sustained. Everyone inside this game recognizes that if the public saw too clearly that the driving force in Washington is campaign cash, the public might actually do something to change that. So every issue gets reframed as if it were really a question touching some deep (or not so deep) ideological question. Drug companies fund members, for example, to stop reforms that might actually test whether "me too" drugs are worth the money they cost. But the reforms get stopped by being framed as debates about "death panels" or "denying doctor choice" rather than the simple argument of cost-effectiveness that motivates the original reform. A very effective campaign succeeds in obscuring the source of conflict over major issues of reform with the pretense that it is ideology rather than campaign cash that divides us."
For those of us who want to see intellectual property law changed or eliminated, here is the reality we face: nothing will change until something sharply limits campaign contributions.
Earlier this week, a federal court in Sydney ruled that Men at Work had plagiarised Kookaburra Sits in the Old Gum Tree in its 1983 hit, Down Under.
"It's all about money, make no mistake," said Down Under author Hay.
But Norm Lurie, owner of Larrikin Music who filed the case, said it highlighted "the importance of checking before using other people's copyrights."
This is beside the point, but I can't hear the similarity in the two patterns of notes. (One cannot actually own a pattern of notes. But one can get the government to stop others from using a pattern one claims to own.) You can listen to both at the BBC site.
As noted here, "Ayn Rand's newsletters used to end with a "Horror File" of monstrous but true quotations."
Along those lines, it's time to collect some choice trademark horror stories in one place. The main post will be here, on the Mises Blog, but I'll cross-post the initial post here too. But look there for updates (or to add suggestions in the comments). (Update: I have modified this post to also include outrageous examples from patent, copyright, and trade secret law. See below.)
Trademark
As noted in Trademark versus Copyright and Patent, or: Is All IP Evil?, it's not only patent and copyright that are unlibertarian and unjust. Modern trademark law is as well. I deal with tradmark rights on pp. 58-59 of Against Intellectual Property, and also in some detail in Reply to Van Dun: Non-Aggression and Title Transfer (esp. pp. 59-63). In my view, extensions of trademark law--rights against "trademark dilution" and cybersquatting, etc.--are obviously invalid. Further, federal trademark law is problematic since it is not authorized in the Constitution.
But even if federal trademark law were abolished, as well as modern extensions such as rights against trademark dilution, even common law trademark is problematic, for three primary reasons. First, it is enforced by the state, which gets everything wrong. Second (see First), the test of "consumer confusion" is usually applied ridiculously, treating consumers like indiscriminating idiots. Third, and worst of all, the right at issue is the right of the defrauded consumer, not the competitor. Trademark law ought to be reformed by abolishing the right of trademark "owners" to sue "infringers" (except perhaps as proxy for customers, when consent can be presumed or proved--as I discuss in this interview: Free Talk Live Interview on Reducing IP Costs (Jan. 20, 2010)), and treating this as a case of the customer's right to sue a vendor who defrauds him as to the nature of the good purchased. Some might argue that this is only a minor change, but it is not: such a change would make it clear that "knockoffs" are usually not a violation of anyone's rights: the buyer of a $10 "Rolex" is almost never defrauded--he knows what he's getting. Yet by giving an enforceable trademark right to the user of a mark, he can sue knockoff companies even though their customers are not defrauded and in fact are perfectly happy to buy the knockoff products.
The other fallacy is the view at work here that there is no such thing as reputation, or even identity, absent trademark law. But this is incorrect. Of course people and firms can have reputations even if trademark law is nonexistent. All that is required is that people be able to identify other people and firms, and communicate. Pro-trademark arguments often implicitly assume that this is not possible, absent state-enforced trademark law, which is ridiculous.
In any event, on to a collection of trademark outrages for the horror files (some of these are also listed in Reducing the Cost of IP Law):
Lou Carlozo, Teen's charity name draws the McIre of McDonald's, Wallet Pop (Jan. 17, 2010) (McDonadl's claims Lauren McClusky's use of "McFest" for the name of a series of charity concerts she puts on infringes its "McFamily" brand)
The attempt of Dustin Stamper, Bush's Top Economist, to secure a patent regarding an application for a System And Method For Multi-State Tax Analysis, which claims "a method, comprising: creating one or more alternate entity structures based on a base entity structure, the base entity structure comprising one or more entities; determining a tax liability for each alternate entity structure and the base entity structure; and generating a result based on comparing each of the determined tax liabilities";
Compton's (now Encyclopedia Britannica's) patent that "broadly cover[s] any multimedia database allowing users to simultaneously search for text, graphics, and sounds basic features found in virtually every multimedia product on the market";
Carfax's patent on a "method for perusing selected vehicles having a clean title history";
Acacia'spatent for putting a unique transaction number on a receipt;[26]
The Supreme Court, in the 1882 case Atlantic Works v. Brady, 107 US 192, itself lists examples of patents issued to "gadgets that obviously have had no place in the constitutional scheme of advancing scientific knowledge the simplest of devices." These included
a particular doorknob made of clay rather than metal or wood, where differently shaped doorknobs had previously been made of clay;
making collars of parchment paper where linen paper and linen had previously been used;
a method for preserving fish by freezing them in a container that operates in the same manner as an ice-cream freezer.
rubber caps put on wood pencils to serve as erasers;
inserting a piece of rubber in a slot in the end of a wood pencil to serve as an eraser;
a stamp for impressing initials in the side of a plug of tobacco;
a hose reel of large diameter so that water may flow through the hose while it is wound on the reel;
putting rollers on a machine to make it movable;
using flat cord instead of round cord for the loop at the end of suspenders;
placing rubber hand grips on bicycle handlebars;
an oval rather than cylindrical toilet paper roll, to facilitate tearing off strips.
Below are a few notable or recent examples of large, significant, troubling, or apparently outrageous injunctions, damages awards, and the like:
Texas-Sized Patent Win, Texas Lawyer (Feb. 21, 2008). A New Jersey doctor was awarded $432 Million as a "reasonable royalty" against Boston Scientific for infringing his "Method and Apparatus for Managing Macromolecular Distribution."
Farmer David Reaps What He Has Sown: A Patent Suit, Patent Baristas (Feb. 13, 2008) Even though "the practice of saving seeds after a harvest to plant the next season is as old as farming itself," patents prevent farmers from saving patented seeds.
Apple, Starbucks Sued over Custom Music Gift Cards, AppleInsider (Feb. 20, 2008) A Utah couple sue Apple and Starbucks over their "'Song of the Day' promotion, which offers Starbucks customers a iTunes gift card for a complimentary, pre-selected song download." The suit is based on a patent on a "retail point of sale for online merchandising" which allows customers to buy a gift card from a brick-and-mortar store and then go home and redeem the card online.
Apple Sued Over Caller ID on the iPhone, Techdirt (Feb. 27, 2008). The patent is on "matching up the phone number of an incoming call with a local contact database to display who is calling."
SanDisk Sues 25 Companies for Patent Infringement: "Suits have been filed against 25 companies by the SanDisk corporation this week, as the company looks to stop businesses from shipping products it alleges are infringing on its work. SanDisk has filed suits against everyone from MP3 player manufacturers to USB hard drive creators. The list of defendants is staggering, and MacWorld notes if Sandisk succeeds it could have repercussions outside of the courtroom. The court complaints could affect the prices and availability of products made by companies targeted in the suit if SanDisk wins and the companies are barred from importing products into the U.S."
The International Trade Commission (ITC) may ban imports of many popular hard drives that "are alleged to infringe on patents owned by California residents Steven and Mary Reiber related to a 'Dissipative ceramic bonding tool tip.'" Jacqui Cheng, Hard Times for Hard Drives: US May Ban Popular Imports, ars technica (Oct. 11, 2007).
The VoIP phone service Vonage may be put out of business by patents. Sprint recently won a patent case against Vonage in which $69.5 million was awarded in damages. Sprint had planned "to ask the court to permanently ban Vonage from using its patented technology," but the case was subsequently settled for $80 million. However, in a separate patent lawsuit between Verizon and Vonage, the jury found that Vonage had violated three Verizon patents, and awarded Verizon $58 million in damages plus ongoing royalties. Vonage claims it has developed workarounds for two of the patents. See Kim Hart, Sprint Wins Patent Case Against Vonage: Reston Firm Awarded $69.5 Million in Second Blow to Internet Phone Company, Washington Post (Sept. 26, 2007); Peter Svensson, Vonage Settles Patent Suit with Sprint,BusinessWeek (Oct. 8, 2007). Latest: Vonage Settles with Verizon, Owes Up to $117.5 Million; Vonage, Nortel Call a Truce No Cash Changing Hands, engadget (Dec. 31, 2007).
BlackBerry's manufacturer, RIM, was forced to cough up $612.5 million after NTP used patent law to threaten to shut RIM down.
Microsoft was on the receiving end of a $1.5 billion jury verdict for infringing an MP3 patent held by Alcatel-Lucent (which was recently overturned).
After Kodak sought more than $1 billion in damages from Sun Microsystems for patent infringement, Kodak finally settled for $92 million. (And according to one colleague, the verdict resulted "in the immediate shutdown of Kodak's entire instant photography division, with the immediate loss of 800 jobs. And, some say, the eventual failure of Polaroid due to lack of any real competition to keep them on their toes!")
In another recent case, Freedom Wireless obtained a $150 million damages award against Boston Communications Group, Inc., which at the time had revenues of only about $100 million. In this case, the judge also refused to stay the injunction issues against BCGI (and by extension, its customers) pending appeal.
Smith International was forced to pay Hughes Tool Company $204.8 million for infringement upon Hughes's patent for an "O-ring seal" rock bit, which led to Smith filing for chapter 11 bankruptcy protection (this was in 1986, when $200 million was considered a large patent verdict).
As of March 2003, the top 5 patent infringement damage awards ranged from $873 million (Polaroid v. Kodak, 1991) to $204.8 million (Hughes Tool v. Smith International, 1986). The top 5 patent settlements ranged from $1 billion to $300 million. Damage Awards and Settlements, IP Today (March 2003); see also Gregory Aharonian, Patent/Copyright Infringement Lawsuits/Licensing Awards. Sadly, a $200 million verdict seems normal nowadays. The recent $156 million patent-infringement verdict against AT&T, for example which could possibly be trebled by the judge now looks like small potatoes.
Internet pirates could be banned from web, Telegraph (Feb. 12, 2008) (British proposal to punish individuals who illegally download music by banning them from the Internet); John Tehranian, Infringement Nation: Copyright Reform and the Law/Norm Gap, Utah L. Rev. (forthcoming; SSRN);
What drives innovation? How does it contribute to the growth of firms, industries, and economies? And do intellectual property rights help or hurt innovation and growth? Uniquely combining microeconomics, macroeconomics, and theory with empirical analysis drawn from the United States and Europe, this book introduces graduate students and advanced undergraduates to the complex process of innovation. By addressing all the major dimensions of innovation in a single text, Christine Greenhalgh and Mark Rogers are able to show how outcomes at the microlevel feed through to the macro-outcomes that in turn determine personal incomes and job opportunities.
From a quick skim of ch. 1 (available here), it appears to adopt a mainstream approach--finding out whether there is market failure or a public goods problem (see Hans-Hermann Hoppe's "Fallacies of the Public Goods Theory and the
Production of Security," in The Economics and Ethics of Private Property for criticism of the concept of "public goods"), and then asking whether we can fix it with some kind of state invervention. The same old "the market is not perfect, so let's let the thugs with guns have more power" song and dance.
In addition, understanding whether these monopoly costs of IPRs [intellectual property rights] are less than the benefit to society emanating from the spur that IPRs give to innovation will provide a major theme for parts II and IV of this book.
My guess: they'll conclude that some IPRs can help address the market failure/public goods issues and give rise to some kind of net benefit, but not our current IP system; so then we'll have a laundry list of "reforms" that would tweak the current laws to reduce the cost enough so that there is a net benefit. Just a hunch. Unfortunately, at $45 even in e-book format, I don't think I'll read it until it comes out at a more reasonable price.
Price Waterhouse Cooper has compiled a study of the costs of non-performing entities in patents (otherwise known as trolls) link here
No surprises: the trolls make more from suing than performing entities (manufacturers) do from suing (shorter time to trial, higher success rate, higher damages).
More evidence of a sick system. And the trolls have learned how (jury trial) and where (Eastern Virginia and Eastern Texas federal district courts).
In 1956, Buddy Holly traveled to Nashville to record several songs. One of the songs he recorded was "That'll Be The Day", but the producer assigned to his sessions (Owen Bradley) hated rock n' roll, and did a terrible job on the song. After that, Buddy traveled to New Mexico and re-recorded "That'll Be The Day" (the version that became the monster hit) at a different studio with his own (superior) arrangement, but according to his contract with Decca, he couldn't release it, because Decca owned all rights to his music. He decided to call Decca, to try reason with them, and he secretly taped his conversation. They refused to give him the rights to his own song, but he went ahead and violated his contract. Here is the conversation he secretly taped.
Listening to Holly pleading with the masters he has alienated his rights to is heartbreaking. Decca had dropped him, apparently, but had the rights to sit on his recordings for 5 years. Although they had no intention of releasing the songs, they also would not give Holly permission to do so--the cigar-chomping executive kept saying "well, we got a lot of money tied up in them, Buddy!" But Holly offered to reimburse those costs; no dice.
Authors: do not let this happen to you. When you publish a book, consider publishing it yourself on Amazon/Kindle (or, soon, iBooks/iPad) or LuLu. Or persuade the publisher to let you post an online version for free. At least make sure the publisher will offer a kindle and ebook version. Negotiate, at the very least, the right to post the work online for free after, say, 3 or 4 years, when sales have petered out.
Free-market economist Professor William F. Shughart II attempts to defend the need for IP in "Ideas Need Protection," The Baltimore Sun (Dec. 21, 2009) (previously published in the Christian Science Monitor). Subtitled "Abolishing Intellectual-property, Patents Would Hurt Innovation: A Middle Ground Is Needed," the piece suffers from flaws found in others defenses of intellectual monopoly and pattern privilege. For example, Professor Shughart writes:
Article I, Section 8, of the Constitution explicitly delegates to Congress authority "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."
Developing and successfully commercializing new products and technologies typically requires large investments of time and treasure. Most research and development (R&D) investments end in failure.
Granting a temporary monopoly to the rare breakthrough is necessary, therefore, to provide its inventor with an opportunity to earn a return on the investment that led to the new idea--and to encourage additional such investments. Such protection is especially important in the pharmaceutical industry, where, in its absence, new drugs could be duplicated by competitors, and the incentive to invest would disappear, stifling the discovery process.
The word "therefor" is unwarranted; this is a non sequitur. Later on in the piece, he writes:
Incentives matter. Although there may be a passionate few who don't require payment for contributing to the common pool of knowledge, technological advancement will be much more rapid if an explicit economic payoff is available.
Much more rapid--? How much more? Who knows? The IP advocates don't. So how do they know it justifies the cost?
I found this to be an refreshing admission of the stifling effect mercantilist intellectual monopoly has on the spread of ideas:
To paraphrase the late economist Joan Robinson, patents and copyrights slow down the diffusion of new ideas for a reason: to ensure there will be more new ideas to diffuse ...
Unfortunately, he supports these laws anyway. Shughart also candidly and explicitly admits the monopoly character of of patent and copyright:
Granting a temporary monopoly to the rare breakthrough is necessary...
(Some IP advocates get very irked when patents are called monopolies. For example (as noted in Are Patents "Monopolies"?), patent attorney Dale Halling, in a piece entitled "The Myth that Patents are a Monopoly," writes, "People who suggest a patent is a monopoly are not being intellectually honest and perpetuating a myth to advance a political agenda." But it is common for IP advocates to acknowledge this. For example, Richard Epstein writes "Patented goods are subject to a lawful monopoly created by the state in order to induce their creation ... The legal monopoly granted by the patent is the only mechanism that allows the producer to recover those fixed costs...." And Objectivist IP attorney Murray Franck has argued that "if the creator's rights are not protected, his survival is jeopardized. If another can market his creation, the creator is deprived of the money he would otherwise earn." See also my comments here, noting that even the Supreme Court and other federal courts slip up and admit the monopoly character of IP on on a regular basis.)
Consider this argument our author makes:
It is true that other means exist for creative people to profit from their effort. In the case of copyright, authors can charge fees for reading their works to paying audiences. Charles Dickens did this, but his heavy schedule of public performances in the United States, where his works were not protected by copyright, arguably contributed to his untimely death.
Can Shughart really be arguing that we need copyright, for otherwise another potential Charles Dickens might drop dead early? (This reminded me of a bizarre argument made by patent attorney Gene Quin, noted in this post. In an online discussion, IP opponent David Koepsell had mentioned "that in the 19th and early 20th centuries, two of the most innovative countries on earth (The Netherlands and Switzerland) had no patent systems at all." In response, Quinn says: "Thank goodness the Swiss did have a Patent Office. That is where Albert Einstein worked and during his time as a patent examiner came up with his theory of relativity." So ... we need a state-granted monopoly system ... so that Albert Einstein could have had a job in Switzerland. What does one even say in response to such an "argument"?)
Professor Shughart continues:
The hard questions are: What kinds of ideas should be eligible for patent and copyright protection, and how long should that protection last?"
What's needed is a middle ground. Even if we can all agree that intellectual property is an important social commodity, one size doesn't fit all in the modern Digital Age.
While a 20-year monopoly may be appropriate for new drugs, it may not be appropriate for software, a new electronic game or, as Justice Sonia Sotomayor seemed to suggest during questioning in the Bilski case, a new "speed-dating service."
A 20-year patent monopoly on a method for speed-dating may not be appropriate?! How would Justice Sotomayor know, really?
As for there being "hard questions"--who can answer them? And if "we need a middle ground"--even though we have no evidence to know where the "optimum" is--how can we achieve this? Who can do it? Shughart's answer: Congress and the courts:
Rather than abolishing patent and copyright protection for some categories of intellectual property, Congress and the courts should consider varying the length for which exclusive monopoly privileges are granted, depending on the expected commercial vitality of the creative work. [emphasis added]
The state is neither benevolent nor competent (well, they are good at two things: destruction, and propaganda). There is no reason to believe Congress or the courts want, or are equipped, to find the "right" answers to such questions. (As J.H. Huebert observes about government courts: "In general, judges and those who appoint them have no reason to want to limit government. Have not judges been responsible for some of the most outrageous expansions of government power? And, after all, are judges not a product of the same political system that gives us legislators and presidents? What president would appoint judges who would tell him he cannot do anything he wants? What Senators would confirm a judicial candidate who tells them that everything they have ever done in office is unconstitutional? The whole enterprise of libertarian constitutional theory ignores all we have learned from public choice economics about the incentives of government actors.") There is no reason to trust state employees to determine the optimum length of patent and copyright monopolies for various types of inventions and artistic works, much less by using "the expected commercial vitality of the creative work" as a test.
***
Appendix:
N.B: My original draft was done in very sarcastic style. At the urging of some friends, I ultimately decided to rewrite it in more standard, serious, respectful, straight style. But for those who like a bit of humor, here's the original sarcastic post:
Shughart's IP Parody
In "Ideas Need Protection," subtitled "Abolishing Intellectual-property, Patents Would Hurt Innovation: A Middle Ground Is Needed," free-market economist William F. Shughart II has penned a wickedly funny parody of typical arguments in favor of IP. Brilliantly, he somehow managed to slip it by the editors of The Baltimore Sun as well the Christian Science Monitor, where it was first published, without either publication realizing it was a parody.
Shughart mocks the arguments typically given in defense of intellectual monopoly and pattern privilege, such as appeals to authority and positive law, when he writes:
Article I, Section 8, of the Constitution explicitly delegates to Congress authority "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."
He goes on, mercilessly lampooning the intellectual monopolists:
Developing and successfully commercializing new products and technologies typically requires large investments of time and treasure. Most research and development (R&D) investments end in failure.
Granting a temporary monopoly to the rare breakthrough is necessary, therefore, to provide its inventor with an opportunity to earn a return on the investment that led to the new idea--and to encourage additional such investments. Such protection is especially important in the pharmaceutical industry, where, in its absence, new drugs could be duplicated by competitors, and the incentive to invest would disappear, stifling the discovery process.
I like this. First, he demonstrates how pro-patent law arguments rest on the assumption that the patent system generates overall wealth--that its benefits are greater than its costs--without ever making this case. Instead, they point to ways that the patent system benefits some people, and never bother to even try to tally up the costs to make sure it's a net positive. In other words, they don't even take their own justifications seriously. The point is reinforced by the totally unwarranted word "therefore" inserted above, in a blatant example of non sequitur. Revisiting this theme later on in the piece, our author writes:
Incentives matter. Although there may be a passionate few who don't require payment for contributing to the common pool of knowledge, technological advancement will be much more rapid if an explicit economic payoff is available.
Much more rapid--? How much more? Who knows! The IP advocates don't! "What are they jabbering about? How do they know?", Shughart seems to be saying, if you read between the lines.
Professor Shughart has no doubt noted that although it gives IP advocates a case of the vapors if you call IP a "monopoly," too many hapless IP advocates just seem unable resist admitting this. Thus, he writes:
To paraphrase the late economist Joan Robinson, patents and copyrights slow down the diffusion of new ideas for a reason: to ensure there will be more new ideas to diffuse ... Granting a temporary monopoly to the rare breakthrough is necessary...
This is just a perfect impression of the typical blunder made by patent and copyright proponents when they inadvertently acknowledge the stifling effect mercantilist intellectual monopoly has on the spread of ideas. This is a very common faux pas of the monopolists, who forget to hide the fact that IP is, in fact, a monopoly. When IP'ers stray from the reservation like this, it really irks the organized pro-patent forces. For example (as noted in Are Patents "Monopolies"?), patent attorney Dale Halling, in a piece entitled "The Myth that Patents are a Monopoly," writes,
People who suggest a patent is a monopoly are not being intellectually honest and perpetuating a myth to advance a political agenda.
But, as Shughart demonstrates, all too often the pro-monopoly forces can't help themselves and inadvertently let the truth tumble out of their mouths. For example, we have pro-patent Richard Epstein (see Epstein and Patents), noting that
Patented goods are subject to a lawful monopoly created by the state in order to induce their creation ... The legal monopoly granted by the patent is the only mechanism that allows the producer to recover those fixed costs....
And here we have Objectivist IP attorney Murray Franck arguing that "if the creator's rights are not protected, his survival is jeopardized. If another can market his creation, the creator is deprived of the money he would otherwise earn."
And see my comments here, noting that even the Supreme Court and other federal courts slip up and admit the monopoly character of IP on on a regular basis:
"Section 154 and related provisions [e.g. Sec. 271] obviously are intended to grant a patentee a monopoly only over the United States market...."; "Congress made the policy choice that the "carrot" of an exclusive market for the patented goods would encourage patentees to commercialize the protected inventions so that the public would enjoy the benefits of the new technology during the patent term in exchange for granting a limited patent monopoly. In other words, the public expected benefits during 'the embarrassment of an exclusive patent as Jefferson put it.'"; "We hold that the disputed royalties provisions do not inappropriately extend the patent monopoly to unpatented parts of the patented system"; "A patentee, in demanding and receiving full compensation for the wrongful use of his invention in devices made and sold by a manufacturer adopts the sales as though made by himself, and therefore, necessarily licenses the use of the devices, and frees them from the monopoly of the patent."; "The Florida statute is aimed directly at the promotion of intellectual creation by substantially restricting the public's ability to exploit ideas that the patent system mandates shall be free for all to use. Like the interpretation of Illinois unfair competition law in Sears and Compco, the Florida statute represents a break with the tradition of peaceful coexistence between state market regulation and federal patent policy. The Florida law substantially restricts the public's ability to exploit an unpatented design in general circulation, raising the specter of state-created monopolies in a host of useful shapes and processes for which patent protection has been denied or is otherwise unobtainable. It thus enters a field of regulation which the patent laws have reserved to Congress. The patent statute's careful balance between public right and private monopoly to promote certain creative activity is a "scheme of federal regulation . . . so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it."; "Whatever weight is attached to the value of encouraging disclosure and of inhibiting secrecy, we believe a more compelling consideration is that a process patent in the chemical field, which has not been developed and pointed to the degree of specific utility, creates a monopoly of knowledge which should be granted only if clearly commanded by the statute. Until the process claim has been reduced to production of a product shown to be useful, the metes and bounds of that monopoly are not capable of precise delineation. It may engross a vast, unknown, and perhaps unknowable area. Such a patent may confer power to block off whole areas of scientific development, without compensating benefit to the public. The basic quid pro quo contemplated by the Constitution and the Congress for granting a patent monopoly is the benefit derived by the public from an invention with substantial utility. Unless and until a process is refined and developed to this point -- where specific benefit exists in currently available form - there is insufficient justification for permitting an applicant to engross what may prove to be a broad field."; "I agree with the Court that the question before us is a narrow one. Neither the future of scientific research, nor even the ability of respondent Chakrabarty to reap some monopoly profits from his pioneering work, is at stake. Patents on the processes by which he has produced and employed the new living organism are not contested. The only question we need decide is whether Congress, exercising its authority under Art. I, 8, of the Constitution, intended that he be able to secure a monopoly on the living organism itself, no matter how produced or how used."
Anyway, Shughart must have noticed this habit of inadvertently admitting the true nature of the patent grant--a habit that makes fellow IP advocates grimace and exclaim, "Damn! He admitted it too!"--and imitated it here to perfection. "Those crazy patent guys," Shughart seems to be saying, with a sly smile and a twinkle in his eye, "can't get their story straight."
Here's another patentism Professor Shughart tackles. Sometimes IP advocates trot out the most ridiculous arguments when they have no other response available, such as this bizarre argument by patent attorney Gene Quinn (noted in this post). In an online discussion, IP opponent David Koepsell had mentioned "that in the 19th and early 20th centuries, two of the most innovative countries on earth (The Netherlands and Switzerland) had no patent systems at all." In response, Quinn says:
Thank goodness the Swiss did have a Patent Office. That is where Albert Einstein worked and during his time as a patent examiner came up with his theory of relativity.
You got that? We need a state-granted monopoly system ... so that Albert Einstein could have had a job in Switzerland. I mean, what does one even say in response to this, which is not even a pretense at serious argument? Our observant author must have noticed this and other such arguments, which he is clearly mocking here:
It is true that other means exist for creative people to profit from their effort. In the case of copyright, authors can charge fees for reading their works to paying audiences. Charles Dickens did this, but his heavy schedule of public performances in the United States, where his works were not protected by copyright, arguably contributed to his untimely death.
See? We better have copyright--you don't want another potential Charles Dickens to drop dead early, do you?
Professor Shughart continues:
The hard questions are: What kinds of ideas should be eligible for patent and copyright protection, and how long should that protection last?"
What's needed is a middle ground. Even if we can all agree that intellectual property is an important social commodity, one size doesn't fit all in the modern Digital Age.
While a 20-year monopoly may be appropriate for new drugs, it may not be appropriate for software, a new electronic game or, as Justice Sonia Sotomayor seemed to suggest during questioning in the Bilski case, a new "speed-dating service."
The IP advocate is here portrayed as unable to even definitively object to a 20-year patent monopoly on a method for speed-dating--"it may not be appropriate"! And the part about "these are hard questions" ... who can answer them, oh who?-- and "we need a middle ground"--even though we have no evidence to know where the "optimum" is. But wait for it--Congress might know! --
Rather than abolishing patent and copyright protection for some categories of intellectual property, Congress and the courts should consider varying the length for which exclusive monopoly privileges are granted, depending on the expected commercial vitality of the creative work. [emphasis added]
Shughart is so right here: the proponents of intellectual monopoly, like all interventionists, do indeed have an utterly misplaced, naive faith in the state's benevolence and competence. Why, let's have Congress should figure this out! Oh, I'm in stitches. And the courts--yeahhhhh, they'll do a great job--the same courts witheringly described here by J.H. Huebert:
In general, judges and those who appoint them have no reason to want to limit government. Have not judges been responsible for some of the most outrageous expansions of government power? And, after all, are judges not a product of the same political system that gives us legislators and presidents? What president would appoint judges who would tell him he cannot do anything he wants? What Senators would confirm a judicial candidate who tells them that everything they have ever done in office is unconstitutional? The whole enterprise of libertarian constitutional theory ignores all we have learned from public choice economics about the incentives of government actors.
I will close by noting my favorite line of this sparklingly humorous essay: to determine the right length of patent and copyright monopolies for various types of inventions and artistic works, Congress should be not only trusted to want to do this, but should use "the expected commercial vitality of the creative work" as the test! Oh, man. I'm crying.
by Invention Submission Corporation (dba Invent Help) in the United States Federal District Court for the Northern District of New York. The complaint ... alleges that I have engaged in false and misleading advertising that has cost Invent Help business. They apparently do not like the fact that I have written about invention submission scams and have recounted the many stories that I have heard from inventors who feel they have been taken advantage of by Invent Help.
Quinn is a notorious (but inarticulate and inept) defender of the patent system; see Gene Quinn: Patent Twit of the Week; Koepsell - Quinn "Debate" on Gene Patents; Gene Quinn the Patent Watchdog; Patent Lawyers Who Don't Toe the Line Should Be Punished!. Still, it's sad to see him victimized by someone using an unjust law--these laws are basically types of IP laws, in that they are in effect based on rights in reputations. Reputation rights are not usually classified as IP rights, but they are similarly unjust, and similarly based on the idea that if you "create" "something" "of value," then you should own it--patents cover created inventions, copyright covers created works of art, and a variety of laws (trademark, defamation, misleading advertising) protect rights in one's reputation, which one is said to have "created" as well. Quinn favors people having the right to use the state courts to sue and damage people based on artificial intellectual "rights." And that's what's being done to him now.
