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Against Monopoly

defending the right to innovate

IP as a Joke

Monopoly corrupts. Absolute monopoly corrupts absolutely.





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South Butt David versus North Face Goliath

As Huebert notes in his post Fighting IP Absurdity: The South Butt Strikes Back, the saga of The North Face Apparel corp. vs. The South Butt continues. As noted on his attorneys' website,
The South Butt is the local case of a Missouri teeanager, Jimmy Winkelmann, frustrated with his classmates' sheep-like following of a popular clothing line. Jimmy came up with his own parody apparel and now faces a lawsuit for trademark infringement.
The North Face filed the lawsuit, claiming that The South Butt is confusingly similar to The North Face, in violation of North Face's trademark rights.

Now Jimmy has filed a biting and hilarious response. In the response, he mocks The North Face, its products and customers (para. 23, II.5-7), its hypocrisy (North Face's owner, VF corporation, "formerly known as Vanity Fair Corporation, not to be confused with the Conde Naste publication of the same name), and its contentions that the public can't tell a butt from a face, calls them "socialist" (para. 37) and bully-like (para. III.2), trumpets "freedom of speech," "the American Way," and the "pursuit of the American Dream" (para. III.2), thanks The North Face for the free publicity (para. 50), and he mentions that he "has initiated an Internet challenge through Facebook designed to hone the skills of the general purchasing public to discern the difference between a face and a butt" (see North Face Lawsuit Against South Butt Going Viral With Facebook App).

Good for Jimmy, and here's hoping he triumphs--though, unfortunately, the trademark cause of action known as "dilution" does not require a showing of consumer confusion, as noted on the Patently-O blog. This is yet another reason why not only patent and copyright law have to go: trademark law is flawed too. As I discuss in Against Intellectual Property (pp. 58-59), the only sound basis for trademark law is fraud. But this would mean that it is the defrauded consumer who has the cause of action, not the trademark holder. Even if you say that the trademark holder has implicit consent of the class of defrauded consumers to sue on their behalf, (a) this would cover only cases of true consumer fraud, not knockoffs where the consumer knows full well she is buying a fake rolex or purse; and (b) it would not include antidilution rights. If Jimmy loses here, it will probably be because of the antidilution cause of action; this is one reason I recommend abolishing it in my list of IP reforms in Reducing the Cost of IP Law.

(For further discussion of problems with trademark law, see n. 46 to Reducing the Cost of IP Law; and Trademark versus Copyright and Patent, or: Is All IP Evil?. For further criticism or discussion of the North Face case, see Peter Klein, IP as a Joke: South Butt Edition; South Butt Creator Fires Back at North Face, law.com; Mike Masnick, North Face Didn't Get The Message; Sues South Butt, Techdirt.)

[Mises; SK]

Clean Films and Government Permission

In a previous post, I noted the arbitrariness of copyright law in prohibiting editing a DVD to take out objectionable scenes, when presumably it would be legal to accomplish the same thing by other means-e.g., as I pointed out in a legal forum, by providing instructions to users to use to program a special DVD player that edits out the bad scenes "on the fly" in the user's home.

Turns out there is such a service: Clear Play (thanks to Tom Woods for the link). You buy one of their DVD players, and load into it "filters" which you can download from the web with a subscription to their service. Amazingly, there was apparently some doubt about the right of consumers to do this, even for private use, so the Family Entertainment and Copyright Act of 2005 was passed last year to amend the Copyright Act to make it clear that it is not a copyright infringement to use technological means (such as ClearPlay's DVD player and filter service) to skip objectionable material, such as profanity, violence, or other adult material, in the audio/video works that they legally purchased.

Gee, Congress, we're so grateful, so very grateful, that you are permitting us to fast forward and skip nudity, gore, and profanity, or other scenes we don't want to show, in our own homes, using our own DVD players. How generous of you. Is it okay if I skip commercials too, please? (Apparently, an earlier version of this bill contained "language that might make users and manufacturers of ad-skipping technology automatically liable for copyright infringement".)

[From LRC 2006]

See also:

Re: These People Must Be Stopped!

Posted by Stephan Kinsella on July 14, 2006 03:28 PM

Tom, I too (as an IP attorney) find the copyright decision to be somewhat bizarre. In Clean Flicks v. Steven Soderbergh, a "federal district court in Utah held that companies that "sanitize" motion pictures by removing sex, profanity, and violence, violate the motion picture studios' copyright."

The court thought it was an easy case, apparently. So does this law professor, who said "This case was about as straightforward a copyright case as there can be, and the court's determination is plainly correct".

As the court wrote:

CleanFlicks first obtains an original copy of the movie from its customer or by its own purchase from an authorized retailer. It then makes a digital copy of the entire movie onto the hard drive of a computer, overcoming such technology as a digital content scrambling protection system in the acquired DVD, that is designed to prevent copying. After using software to make the edits, the company downloads from the computer an edited master copy which is then used to create a new recordable DVDR to be sold to the public, directly or indirectly through a retailer. Thus, the content of the authorized DVD has been changed and the encryption removed. The DVDR bears the CleanFlicks trademark. CleanFlicks makes direct sales and rentals to consumers online through its website requiring the purchaser to buy both the authorized and edited copies. CleanFlicks purchases an authorized copy of each edited copy it rents. CleanFlicks stops selling to any retailer that makes unauthorized copies of an edited movie. CleanFilms maintains an inventory of the unedited versions of the copies it rents or sells to its members in a one-to-one ratio. [italics added]
Note that CleanFilms buys one copy for every edited (sanitized) copy they rent. It seems to me, therefore, that this is just the digital version of physically removing parts of an analog movie on videotape. For example, suppose CleanFilms bought 1000 VHS tape versions of a movie, and physically removed lengths of tape that had nudity, then spliced it back together. Or, what if they just put white tape over the nudity-section of the film, or "erased" those lenghts of tape, then re-sold the VHS tape. Or what if technology were developed that let them shoot a laser into the DVD and basically just blot out the sections of video that contained nudity? Could it be argued that any of this is is copying or reproducing the movie? If not, why is the digital version of this any different? The fact that copyright law treats them differently shows how arbitrary and unjust it is.

IP: The Objectivists Strike Back!

It is clear to anyone who pays attention that IP is under assault--both institutionally, as digital copying, encryption, distributed information, the Internet, and the inherent impotence of IP policing make attempts to monopolize information patterns increasingly futile; and intellectually, as more and more people, especially libertarians--and especially younger libertarians--see the injustice of IP made manifest and obvious. There is a growing body of work that explodes the myths--moral and utilitarian, principled and empirical--of the IP proponents (see the works listed at the final section of "The Case Against IP: A Concise Guide"). There has been a noticeable and growing migration of libertarians toward the anti-IP position. I have lost count of the number of people who have personally told me they have seen the light on the IP cause in recent years. Among the radical and principled libertarians I know, there is a lot of debate about a lot of things--abortion, federalism, activism, "thickism," left- vs. right-, etc.--but on two issues there is a striking degree of agreement: these are anarchy, and intellectual property. That the state, and IP, are unjust, seem obvious to them after a little reflection. More and more libertarians are realizing that the case for IP being part of legitimate property rights is a hollow one that never needed to be accepted (see Have You Changed Your Mind About Intellectual Property?).

So it is no surprise that Objectivists would be distressed by this phenomenon. Not only are they among the most ardent modern advocates of intellectual property (in addition to Andrew J. Galambos [see Against Intellectual Property], and perhaps J. Neil Schulman), but Rand in a sense built her entire philosophical edifice on IP: to-wit, Rand incredibly said that "patents are the heart and core of property rights" and Objectivist law professor Adam Mossoff explicitly claims that "All Property is Intellectual Property" (see Objectivists: "All Property is Intellectual Property"). And so, realizing Rand's arguments for IP are deeply flawed, and that fewer and fewer people are buying it, they are starting to fight back.

Let's survey a few. I've already mentioned neo-Objectivist (?) J. Neil Schulman's logorights; I have pointed out problems I see in his view in On J. Neil Schulman's Logorights and Reply to Schulman on the State, IP, and Carson. I think some of the mistakes Schulman makes are echoed in the tentative IP views of Machan; a problem with both is that they seem to think that any conceptually identifiable "thing" is ownable. For more on this, see Rand on IP, Owning "Values", and "Rearrangement Rights"; my comments in the thread of the post Intellectual Products and the Right to Private Property; New Working Paper: Machan on IP; Owning Thoughts and Labor; this comment to "Trademark and Fraud"; Libertarian Creationism; also Elaborations on Randian IP and Objectivists on IP.

Another one was Objectivist IP attorney Murray Franck's defense of IP and his reply to my response in the IOS Journal, back in 1995 (I also discuss Franck's views in Inventors are Like Unto ...GODS... and Regret: The Glory of State Law). Here we can see glimmers of the idea that "all property is intellectual property"--or, at least, that IP is the most important type of right (just as Galambos held).

There is Greg Perkins's piece, Don't Steal This Article!", from 2006. I've noted deficiencies in his or similar arguments in various publications, such as Perkins on Pursuing Insufficiently Abundant Intangible "Values"; Against Intellectual Property; Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors; Elaborations on Randian IP; An Objectivist Recants on IP; "Intellectual Property and Libertarianism" (in particular see here and the section on Libertarian Creationism); Rand on IP, Owning "Values", and "Rearrangement Rights"; Libertarian Creationism; Inventors are Like Unto ...GODS...; Intellectual Products and the Right to Private Property; New Working Paper: Machan on IP; Owning Thoughts and Labor; and Objectivists on IP; and in media, I discuss problems with Rand's view at length on the Peter Mac show and at the Mises University this year; also The Intellectual Property Quagmire, or, The Perils of Libertarian Creationism.

Then there's Objectivist law professor Adam Mossoff who is writing a defense of IP, as mentioned in the Objectivist "Noodlefood" blog post An Objectivist Recants on IP??. Roderick Long informs us that "the Ayn Rand Society session at the APA is also devoted to intellectual property"--indeed it is, with the topic "The Normative Foundations of Intellectual Property: Two Perspectives," having as speakers Adam Mossoff and Eric R. Claeys, both of George Mason University Law School, and chaired by Allan Gotthelf (University of Pittsburgh), on Dec. 28, 2009 (sadly, I'll miss it, since I'm here skiing in Steamboat, Colorado. Wait, not so sadly). I'm eager to see Mossoff's paper (and curious to see what Claeys has to say), but suspect it will be built on the fallacies and errors noted in posts above such as this Objectivist blog post and Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors.

Also noted in Roderick Long's post is his upcoming Molinari Society IP symposium at the APA later this month (Dec. 29 , 2009), including Bob Schaefer's "Response to Kinsella: A Praxeological Look at Intellectual Property Rights." I've taken a look at Schaefer's piece, and it's not pretty. It's just a mess. Roderick Long ably dissects just a few of its glaring flaws here.

(Aside: Long's comments are really superb and insightful. A few comments. Discussing the IP comments of another author, Long writes, "a strong case can be made for thinking that Lockean principles must be substantially distorted in order to press them into service on behalf of IP". Long backs this up very ably. In the same article he makes an illuminating distinction between three conceptions of "capitalism" that helps to dispel the confusion among both right and left in addressing this issue.)

The Objectivist approach is mired in a number of problems. It anchors property rights to the idea of "creation"; it requires legislation, and the state; it believes in some intrinsic value and some property right in value; it advocates utterly arbitrary and/or unprincipled, utilitarian finite lengths for IP; it rests on an arbitrary distinction between discovery and innovation. In a world where we took the ideas of the IP advocates seriously patent and copyright would have to have infinite duration. And the gaps in coverage would be fixed, and the state's arbitrary exceptions fixed, such as the "fair use defense" to copyright. At present patent and copyright cover a statutory class of "inventions" and artistic works, respectively. Many logos, idea-patterns, "creations," values are not protected at present. These include: perfume smells, the fashion industry, food recipes, certain business methods, databases (unoriginal but useful collections of information), abstract ideas such as mathematical algorithms, proofs, and techniques and physical laws. Under the ideas of the IP fanatics, there is no reason not to grant state-monopolies to these patterns too. And the term should not expire in 20 or 100 years--does your property to your house expire after some time limit? And why the utilitarian fair use exception? No principled case for IP could tolerate it.

I would love to see libertarian IP advocates have to live in a world that truly implemented their IP views fully, consistently--it would be like a communist USSR stripped of its power to ape Western price structures, to ameliorate the effects of communism. They would either die out, as the material world was strangled by an impossible nettle of ghostly IP-rights tendrils, or they would cry uncle. Even today, one imagines the cognitive dissonance of Objectivists living in our digital age--cutting and pasting, linking, learning and reworking ideas of others--all the while maintaining that all the things they themselves cannot but help engage in are "immoral" or some such tedious nonsense. I think of modern do-gooder environmentalists--they must feel pangs of guilt while flying on a jumbo jet to a friend's wedding 2000 miles away, or to attend UN conference or job posting on another continent. They must wring their hangs in agonized guilt and indecision about whether to use styrofoam, paper, or a washable coffee cup. They must feel tremendous guilt whenever they discard a scrap of soiled napkin instead of recycling it. Environmentalist parents must feel terrible pangs of guilt at using disposable diapers (or they suffer by using cloth ones: either way, I am pleased by the thought of their discomfort). Likewise, when an Objectivist emails a vandalized picture of an apostate like Alan Greenspan to a friend they must be conflicted--wait, no, there's a fair use exception! Thank Rand for the State and its wise laws!

Addendum:

Book Essay: The strange world of Ayn Rand

Control freak

One striking feature of Objectivism is it outspoken support of intellectual property. A key scene in Atlas Shrugged is where metallurgist genius Hank Rearden is compelled by the government to hand over his intellectual rights to his innovative metal alloy, and Ayn Rand acted in kind. She passionately used the copyright on her works to bar people from forming "John Galt Societies", citing that the name John Galt is her creation and her intellectual property.

For a person bent on propagating her ideas to the maximum extent possible, this would seem eerily counterproductive. Stealing an object from someone is obviously depriving the original owner of his property, but copying it isn't. It may or may not be harmful to potential income, but that income remains potential, in the realm of the unprovable. This is a debate that incites extreme passion.

While Objectivists, libertarians and conservatives strongly agree on the principle of physical property rights, the picture is much more divided when it comes to 'intellectual property', a catch-all phrase for several different items, including patents, copyright and trademarks. In a landmark essay by Stephan Kinsella, Against Intellectual Property, argues that 'Intellectual property' is not only meaningless and harmful, it is in direct violation of the general principle of private property, and primarily constitutes a state-sanctioned creation of artificial scarcity, leading ultimately to poverty, not job creation and wealth.

The wider libertarian movement accepted the argument, put it into action (see www.mises.org/books) and moved on. Objectivists, on the other hand, maintain that what Ayn Rand spoke and practiced on the subject remains the unalterable truth.

(See also on this Jeff Tucker, If You Believe in IP, How Do You Teach Others?.

[Mises; SK]

Supreme Skepticism Toward Method Patents

As I mentioned in Radical Patent Reform Is Not on the Way, in in In re Bilski, the Court of Appeals for the Federal Circuit (CAFC) modified previous holdings regarding the patentability of software or business-method patents in upholding the rejection of patent claims involving a method of hedging risks in commodities trading. The case was appealed to the Supreme Court and oral arguments were heard earlier this month. This entire area of patent law is very arcane, but the main issues and the oral arguments are explained very well by the heroic IP-abuse reporter Joe Mullin in Bilski v. Kappos Oral Arguments: Supreme Skepticism Toward Method Patents.

Take a look at Mullins' discussion of the oral arguments--it's fascinating seeing the Justices grapple with the absurdity of patent law. A few choice excerpts below.

I suspect the Court will choke back a bit on software and business method patents--but not too much, as I argued in Radical Patent Reform Is Not on the Way. One reason is that although the law is, as the Justices seem to be realizing, completely unjust and absurd, it is the law. Or, as Bilski's lawyer said, "That's our system ... We do grant exclusive rights in exchange for disclosure." Yes, we do. And when you implement such an abomination, that's what you get: absurd, unjust results, such as granting monopolies on "fundamental ways of conducting business or organizing human behavior" (and yes, patents are monopolies, despite the shrill denials by patent shills and other pro-monopolists).

Excerpts from oral arguments:

Across the board, the justices indicated a deep skepticism toward the invention described in the patent application at issue, which was rejected by the U.S. Patent and Trademark Office and describes a method for trading commodities. Some of the justices went even further expressing both a fair amount of disdain for the idea of granting broad "method" patents and a concern that ruling in favor of the petitioners would lead to patent grants on fundamental ways of conducting business or organizing human behavior. ...

Based on the justices' attitude during the arguments, it not only seems extremely unlikely that Bernard Bilski will ever get the patent at issue, it also seems clear that the court is poised to establish a new, and most likely stricter, test of what is patent eligible.

One after another, the justices prodded Bilski's lawyer, Michael Jakes of Finnegan Henderson, Farabow, Garrett & Dunner, in search of some idea about where to draw the line. The thrust of the questions: Does absolutely everything fall within the domain of the U.S. patent system?

"So, an estate plan?" asked Justice Ruth Bader Ginsburg. "A tax avoidance method? How to resist a corporate takeover? All of these are patentable?"

"They are eligible for patenting under section 101," replied Jakes, referring to the section of the 1952 patent statute that governs what is patent-eligible subject matter.

... "Your argument is that anything that helps business succeed is patentable," Breyer said. Would the framers of the Constitution, he asked, really have wanted everyone with a new idea to run to Washington to get a patent, in the process enabling them to "stop the wheels of progress" unless competitors got permission?

"Why not patent a method of speed dating?" Justice Sonia Sotomayor asked.

There are a few, limited areas, Jakes said, where patent protection isn't available; he pointed to the fine arts as one example. Otherwise, he argued, patents encourage people to innovate, and it is via the patent system that they disclose their new creations to the public.

... Justice Sotomayor took issue with Jakes's suggestion that patents are always a manifestation of innovation.

"A patent limits the free flow of information," she said. "It requires licensing. You can't argue your position is enhancing the free flow of information."

Jakes replied: "It does, because of the disclosure requirement."

"Even though the public can't use [the patented invention]," noted Scalia.

"That's our system," said Jakes. "We do grant exclusive rights in exchange for disclosure."

Time and again, Jakes refused to draw a line that ruled anything off-limits to the patent regime. His position left the justices questioning whether he was advocating the "ownership" of basic human activities.

"Let's take training horses," said Justice Antonin Scalia. "Don't you think that some people, horse whisperers or others, had some ... insights into the best way to train horses? Why didn't anybody patent those things?"

"I think our economy was based on industrial processes," responded Jakes.

"It was based on horses, for Pete's sake!" said Scalia. "I would really have thought somebody would have patented that."

... Chief Justice Roberts pushed back on an inconsistency in Stewart's briefing of the case. On the one hand, he said, the government claims Bilski's method just describes a way of doing business, and therefore isn't patentable but then posits that a computer with an "interactive website" doing the same thing might be. "That's like saying if you use a typewriter to type out the process, then it's patentable," said Roberts.

If the website scheme was part of a computer program, Stewart said, "the computer would be at the heart of the innovation."

"No, no," said Roberts. "That's just saying instead of looking in the Yellow Pages, you look on a computer."

[Mises blog cross-post; SK.com cross-post]

Google Patents Its Home Page Layout

You can't make this stuff up.

As reported on Patently-O,

Earlier this week, the USPTO issued a design patent to Google that covers the "ornamental design for a graphical user interface [GUI] as shown and described." Pat. No. D. 599,372. Design patent coverage is essentially defined by the images include in the issued patent. Here, the image looks roughly the same as the company's ubiquitous Google.com homepage. (See image below.)

To be clear, many patent professionals would argue that it is misleading to ever simply call this "a patent." Rather, it is a design patent. Design patents have severely limited scope, only cover ornamental designs rather than technological advances, and are very frequently found invalid when challenged in court. The USPTO has been granting design patent protection for screen shots and icons for many years. However, to my (limited) knowledge, none of those design patents have ever been enforced in court. ...

Dashed or "ghost" lines in the drawing indicate features that are not claimed. Thus, patent would be infringed by someone using an identical layout even if they replaced the "Google" mark with their own mark. You can note at the bottom that the design patent drawing is marked with a circle-c . That indicates that Google is also claiming copyright protection for this layout. In addition, in the design patent, Google indicates that it is also claiming trademark protection for portions of the layout and - perhaps - for the layout as a whole.

[SK cross-post]

"Naked Cowboy" sues Mars M&Ms for trademark violation

You have probably never heard of the Naked Cowboy who parades around the streets of New York in his underpants, cowboy boots and hat, playing a guitar and singing. You should because it once again demonstrates the absurdity of IP law. The Mars candy people and its ad agency created billboards featuring a naked cowboy link here and here. He sued for invasion of privacy and breach of his trademark. A New York court has thrown out the privacy charge, which seems almost logical, since the cowboy's strutting is clearly not private. Some such "street artists" might even pay for the publicity.

But the trademark invasion remains to be adjudicated. Trial is set for high noon on July 11. I'll bet you can't wait to hear how it turns out. You can read the 23 page opinion link here.link here

That Word Doesn't Mean What You Think It Means

For your amusement, a 45 page legal treatise by Andrew Beckerman Rodau entitled "The Supreme Court Engages in Judicial Activism in Interpreting the Patent Law in eBay ,Inc. v. MercExchange, L.L.C." The treatise opens with a long, cursory, and misinformed discussion about the economics of patents - misinformed not in the sense that Michele and I disagree with the economics, but that all economists would disagree with the economics. But the amusing part is the criticism of the Supreme Court for judicial activism. Their activism? Not respecting a long tradition of allowing permanent injunctive relief. The humor: the patents in question are business practice patents - for conducting auctions, no less - the real activism was of course the activism of the United States Court of Appeals for the Federal Circuit which created business practice patents whole cloth against an equally long tradition of not allowing them. Not surprisingly I didn't see any mention of this by Rodau in his article.

If you are looking for more IP humor, you might try this. Here is a bit from the abstract:

Origin stories serve both ontological and epistemological functions. They in- fuse everyday life and relations with significance by explaining why things are as they are and by providing guidance for how things should evolve based on what we already understand about our world. Origin stories also literally give a culture life by designating a beginning and a history. Finally, most origin sto- ries are political, legitimating or justifying certain relations of power in society. This Article is a comparative analysis of the "origin stories" that structure several branches of United States intellectual property protection: copyright, trademark and patent law.

Sadly this paper by Silbey is probably closer to the mark than Rodau's.

Illegal Art

I just ran across the website of an old exhibition (which is still ready for new exhibits) that stretches then limits of copyrights and trademarks. illegal-art.org may not necessarily be pleasing to the eye, but it is full of courageous, and even brazen attempts to use or abuse copyrighted and trademarked material, with plenty of lawyer stories. Enjoy the three eared Mickey Mouse, the Iowa prof who trademarked "Freedom of Expression" and sent a cease-and-desist letter to himself, and much more.

Trademark Pwnage

Trademork.com is an excellent source of silly trademarks, as shown by this recent example: A Finnish computer game company is applying for a trademark for the term "pwnage," a recently coined word signifying that someone has been had. The company cannot lay any claims that it created the word, and the word is now commonly used in the gaming and online communities.

I want to trademark "trademark"...

It takes a lawyer or more to catch one

Jeffrey H. Birnbaum at the Washington Post begins, "Trial lawyers sue each other all the time. Now they are suing each other over what to call themselves." The story goes on link here; the Association of Trial Lawyers of America (ATLA) decided that it was poor PR to keep the distrusted term, trial lawyer, in the title and rechristened themselves as the American Association for Justice (AAJ). Another group of lawyers formed a competing group, the American Trial Lawyers Association (ATLA). AAJ then went to court, arguing the new group's name confused people and violated its trademark on the ATLA acronym. How can you trademark an acronym?

Then a third group, the American College of Trial Lawyers, sued, arguing that the name would confuse people with it. If you are confused as to who has the best case, hire a trial lawyer. It is nice to see them taking each other's money. And making current IP law look ridiculous.

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French firm has patents on using computers to choose medical treatment 1

French firm has patents on using computers to choose medical treatment 1

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French firm has patents on using computers to choose medical treatment 1

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