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Against Monopoly

defending the right to innovate

IP in the News

Monopoly corrupts. Absolute monopoly corrupts absolutely.





Copyright Notice: We don't think much of copyright, so you can do what you want with the content on this blog. Of course we are hungry for publicity, so we would be pleased if you avoided plagiarism and gave us credit for what we have written. We encourage you not to impose copyright restrictions on your "derivative" works, but we won't try to stop you. For the legally or statist minded, you can consider yourself subject to a Creative Commons Attribution License.


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Common Sense

The mainstream blogs occasionally cover intellectual property. Andrew Sullivan, for example reproduced a few letters from his readers criticizing commentary on Yglesias's blog. I suppose he picked these letters because he thought they were the most sensible? I thought just for fun I would fisk one of them, mostly because it is the kind of nonsense I hear at seminars all the time:

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.

Celebrate World Intellectual Property Day...

by using The Pirate Bay. Just kidding.

It's bad enough they want us to celebate "World IP Day". But now they are focused on "promoting green innovation." Groan. Gotta love this state-sponsored propaganda-fest.

Celebrate World Intellectual Property Day

Today [April 26, 2009] is World Intellectual Property Day and this year WIPO's focus is on promoting green innovation as the key to a secure future.

According to WIPO, most people are aware of intellectual property (IP) but many still view patents, copyrights and trademarks as business or legal concepts with little to no relevance to their own lives. To address this gap, WIPO's Member States decided in 2000 to designate an annual World Intellectual Property Day. They chose April 26, the date on which the Convention establishing WIPO originally entered into force in 1970.

Each year, WIPO and its Member States celebrate World Intellectual Property Day with activities, events and campaigns. These are an attempt to increase public understanding of what IP really means, and to demonstrate how the IP system fosters not only music, arts and entertainments, but also all the products and technological innovations that help to shape our world.

WIPO issues a message from the Director General each year, broadcasts a short publicity spot on international television channels, and dispatches posters and other promotional materials to IP offices and organizations.

The death of software patents??

Something seems to be cooking in software patents, hopefully important news. However, it is a bit early to cheer, as big interests are engaged.

The source of the excitement is that the Patent and Trademark Office seems likely to declare software patents invalid if the expressed PTO view prevails. You can start reading the bare bones of the story here. Then go to the referenced post for a more detailed legal view link here .

The logic is that software patents ought to go. But remember as you cheer that there is a legal and a political process to be worked through and that ain't bean bag.

Unik insurance court decision

I may be wrong on this, but I believe you cannot insure yourself against acting illegally. In that light, I interpret the following court decision as determining that software piracy is legal.

UNIK Associates was in the business of reselling software to businesses. Symantec sued and won a case against UNIK, alleging that it pirated its software products. UNIK then sued its insurance company to make it pay the fine, and has just won. The court argues that the policy covered copyright and trademark infringements.

Apple's Rotten Trademark Gambit

Today's Wall Street Journal has a special "Business Insight" report, which includes an article on innovation, "Shape of Things to Come", highlighting Apple's recent bid for trademarks related to its iPod and iPhone, and for all we know several other consumer products.

The story about how Apple leveraged its design patents to win these trademarks is a fascinating study in rent-seeking at its finest. They used them as a bridge to "nontraditional trademarks."

What's really interesting is how the Patent examiner suggested changes to Apple's trademark applications so that they could get in under the wire. Sounds like a bit of corruption to me.

Apple has had nothing if not a gigantic first mover advantage over its competitors thanks to rapid and repeated innovation in product design, as well as great execution and saavy marketing. Add it all up and you get a company with a long-term market beating stock, propelled by net operating margins consistently over 20% and a weighted average cost of capital under 10%. Valuepro.net pegs the latter at about 8.6%. Apple long ago earned back its cost of capital on its iPod.

The idea that Apple's recently won trademarks are necessary for the company to earn its shareholders an above average return on capital (or equity) is plainly contradicted by the facts of the case. Too bad the Patent Office examiner doesn't have some economics in his toolkit.

Btw, Apple patented its transparent stairways in its stores, so don't think you can copy their cool design at home.

19-0

19-0. There, I said it. The NFL Patriots are apparently pursuing steps to trademark "19-0" and thus hinder any team that would actually have a perfect season from using its actual win-loss result.

The trademark application would not prevent newspapers from using 19-0 in their columns, as the application is visibly only for silly knick knacks with a 19-0 mark. But the principle is vexing, like trademarking three-peat.

China--Land of the Rising Patent Regime

China's patent regime (and I"P" system generally) is growing like a weed. Trademark applications there have increased 60% in five years. The number of patents issued has almost doubled to 850,000.

China has added 50 courts that handle I"P" cases. The lawyers are getting rich and, of course, are preventing non-Chinese firms from filing patents or representing clients in court. In fact, the lawyers are the main beneficiaries of the monopoly formerly known as intellectual property. Isn't monopoly great?

The Economist notes that under Mao private property was considered to be theft of the masses. However, it gets it wrong when it implies that the patent laws enacted in China starting in 1985 (and enforced starting in 2001) were consistent with private property.

Patents are a kind of theft of the masses. As Prodhoun should have said, "intellectual property is theft."

Preventing Champagne from selling Champagne

Trademarking a name to prevent others from selling similar goods under a similar name makes only sense if indeed you were the first one to do so since the law was in place. In a fight that has now lasted a decade, the village of Champagne (Switzerland), which happens to be producing wine since at least the 17th century, has been told that it could not use its own name. That name is reserved for wine coming from the French region of Champagne.

Now, the French are big on "appellation d'origine contrôlée", that is, the origin of wines needs to be certified. Given the wide variety of wines, and the fact that some wine growing locations have a bigger reputation, one may want to pretend to be from a region. In your are not from the region, that is fraud that should be covered by usual commercial law (false advertising). Where it gets iffy is when the wine maker is located in the fringes of the region. Does he really belong? This is the core of the French regulation, trying to prevent the dilution of a name.

What the Champagne region (France) is enforcing is preventing the (non-sparkling) wine of Champagne (Switzerland) from diluting the reputation of the Champagne name. Demand for the sparkling Champagne is high, so this did not prevent the Champagne region from expanding its name definition, thus acting exactly against the principle of "appellation d'origine contrôlée" it says it is defending. Sad.

An interesting twist to this is that there is a bakery in the Swiss village selling sticks it calls "flûtes de Champagne", an obvious pun on the situation. They are wildly popular in Switzerland.

T-mobile hearts magenta (ugh)

Stephen Spear's post yesterday link here reminded me that I had started saving up ridiculous patent, copyright, and trademark stories. I'm not sure repeating these stories changes opinion since the basic rationale for IP protection, that it promotes innovation, is firmly embedded in popular thinking and assiduously promoted by the IP lawyers and owners. But it should, particularly when the legal process can't distinguish what is significant from the absurd.

Anyway, here is the story: T-mobile is demanding that gadget blog site Engadget Mobile stop using magenta in its logo on the grounds that it will confuse customers link here. This is a repeat of a suit that T-mobile brought last year against my-favorite-book.com, a book-on-demand-publisher launched in Germany last May link here. That was a particularly outrageous suit because my-favorite-book varies the color from one ad to another. Neither defendant appears to have stopped using the color.

How do we account for this loss of sense among the plaintiffs? Are they underemployed lawyers who need the fees? Or do they expect the defendant to back down out of fear of the publicity or unwillingness to risk the costs of a court battle? Assuming the case gets to court, why don't judges fine the plantiffs for bringing niggling charges?

Maybe we should have a contest for the worst example.

Trademark Rent Seeker Will Have to Get a Real Job

A federal appeals court upheld a lower court's 2006 ruling that a corporate consultant, who thought up American Express's "My Life, My Card" slogan, has no trademark rights in it. His claim is akin to an ad agency's marketing concept. Ad agencies get paid for their marketing and advertising work. So can this guy.

Here is the story.

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

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