Against Monopoly

defending the right to innovate

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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Copyrights and expanding monopolies

Copyright provides a (somewhat temporary) monopoly that allows the holder to extract rents by limiting access to the copyrighted work. This paper by Giovanni Ramello writes about some literature that has been interesting in how some industries have been trying to expand their market shares by exploiting these monopolies to the point of excluding new entrants. He documents this with the example of the publishing industry whether the major players keep increasing the stranglehold on the industry.

We have certainly seen this happening in the scientific publishing industry, where the number of players keeps decreasing through mergers and acquisitions. But this is a good opportunity to remind ourselves that there is a movement trying to counter this: Open Access. And it so happens that this week is Open Access Week. So spread the good word about the free dissemination of research!

Hat tip: Economic Logic

How the lack of copyright transformed Germany into an industrial power

I hope this is not a repeat on this blog. Der Spiegel published two months ago a discussion of the work of Historian Eckhard Höffner. He argues that the fragmentation of Germany in the 19th century made it impossible to enforce copyright laws, if there were any. This lead to the massive availability of books, and to the publication of ten times as many titles as in the UK, where copyright was strictly enforced. This transformed Germany into a country of readers.

Michele Boldrin and David Levine have made the same argument in their book when comparing the copyright enforcement in the UK and the lack thereof in the United States, which lead to a boom of readership and then literacy in the US. Höffner makes the same point for Germany. He goes as far as claiming that this boost in readership and thus knowledge is the origin of the great expansion of German industry, much stronger than in the neighboring countries or Britain. Indeed, plenty of manuals and handbooks were published that made knowledge much more widely available, In Britain, this was limited to the elite, and the common people had to learn from hearsay.

There is no lack of outrageous patent trolls

The most glaring negative aspect of patents nowadays are patent trolls, and nowhere is this more obvious than with software patents. here is another one for your enjoyment, or not.

Ars Technica reports about a firm threatening to sue large corporations for the use of roll-over images on their website. What makes this one different is that instead of intimidating small players, it is going after big fish who have legal teams, and those are willing to fight back. Even stranger, the patent expired a few days ago. But I wonder how many still fell for it.

Pushing the limits of imitations in Switzerland

Anybody who has spent some time in Switzerland must have noticed the big orange "M" of the largest retailer, Migros. This is not your usual retailer, as it is produces the goods in its own facilities, thus cutting a middleman or two, and is owned by its customers. Interestingly, it produces only for the domestic market, and very rarely you will find its brands abroad. While Migros carries only store brands, they are of good quality and often designed to compete with "well-known" brands from competing retailers.

And Migros has for decades been pushing the limits of how closely it can imitate brand products, often openly making puns on brand names and besting the quality of the imitated product. And while the imitated brand holders were upset, there is little they could do and Swiss courts have been largely sympathetic to Migros. The judges are probably shopping there.

Now it seems that Migros may have overstepped some boundary. As the Tagesanzeiger reports (in German), the new line of ice cream "Jane & Mary", a clear imitation of "Ben & Jerry", will be modified once the current stock is sold. Brand holder Unilever must have made some legal threat that had some impact, but how is unclear. Migros does not need Unilever, being quite self-reliant, and there have been more blatant imitations in the past.

In any case, the next time you are in Switzerland, check out Migros and try to recognize all the imitations. And sample its goods, especially in the chocolate and dairy section.

Is file sharing now safe in Switzerland?

When people get sued for online piracy, it is usually thanks to firms who troll on file sharing sites and analyze who is there, collecting IP addresses to build a case. The Swiss Federal Court has recently ruled that IP addresses are private and thus fall under strict privacy laws. This means they can only be used for criminal cases, whereas online piracy falls under civil law. This puts the incriminated firm, Logistep, out of business.

Note that the Swiss Federal Court is not a constitutional court in the US sense, as it only interprets federal law. Thus the Swiss Parliament could reverse this decision by adopting a law.

Hat tip: ars technica

Microsoft gets patent for Windows shutdown

Via Conceivably Tech, we learn that Microsoft was granted a patent for the shutdown procedure in Windows. If I understand it right, Microsoft is now the sole owner of the procedure asking whether you really want to close an application with unsaved data.

Note that the patent does not seem to cover the most annoying aspect of a Windows shutdown, the never ending Windows updates. I have not used Windows on my dual-boot laptop for months for precisely that reason... I am waiting anxiously to see that patented as well.

Goofy software patents taken too seriously

Over at ZDNet, Ed Burnette discusses a blog post by James Gosling, who created Java while at Sun. He relates how Sun lost big on a court decision regarding a trivial IBM patent. Sun employees were soon after encouraged to flood the patent office with applications, and there seems to have been a competition on who gets the silliest patent.

Burnette conjectures that one of those goofy patents is in fact among those that Oracle, who recently acquired Sun, is suing Google over. Does this qualify as irony?

IIPA thinks open source equals piracy

The International Intellectual Property Alliance, the copyright lobby group that includes the MPAA and RIAA among others, is petitioning the US Trade Representative to put Indonesia, Brazil and India on the "301 Special" list. This list defines the countries that are havens for piracy and that should be subject to retaliation for failing to defend copyrights.

The reason they should be put on the list? Their governments encourage (but do not mandate) their administrations to use open source software. Obviously, this reduces the revenue of cost software vendors and publishers, but it is a real stretch to call this piracy. The governments are simply making business decisions, weighing costs and benefits. And given the quality of open source software and operating systems, that decision is rather easy.

Instead of finding new definition for piracy, the IIPA should make sure its members are offering good products at competitive prices, the basic requirement for a firm to survive in a free market. Or is the IIPA also against capitalism?

Hat tip: TechnoLlama via The Guardian.

Authors have rights, too

I forgot a few days ago to put up here a link to my latest post on the RePEc blog, so here is a belated mention.

Academic authors are too often so glad that their paper has been accepted for publication in a journal that they readily give up all their rights to the publisher. This need not be, and authors can retain their rights with a few easy steps. Unfortunately, most authors do not realize they have such rights. So, spread the word and empower authors!

File-sharing is worse than murder and child abduction

Jammie Thomas downloaded 24 songs from Kazaa and was sentenced to a fine of US$2,000,000. Joel Tenenbaum downloaded 30 songs and was fined $675,000. These amounts sound improbable, but could have a justification à la Becker: If the fine is high enough, then it should deter everyone from this activity. In fact, if the fine is infinity, then their would be no crime at all. That only works if there is no risk of error in the determination of guilt, in which case, the fine need to be reduced to account for type I errors. The level of a fine then reflects the gravity of an action and the likelihood of errors.

How do the above fines compare to other crimes? Gapers Block uses the Illinois Criminal code to find that file-sharing is worse than arson, child abduction and second-degree murder, among others. This just shows how ill-conceived laws are sometimes, and copyright and patent law unfortunately provides too many examples.

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