Copyright Notice: We don't think much of copyright, so you can do what you want with the content on this blog. Of
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.
Mike Konczal examines whether the burden of government regulation has gotten worse, sees that in aggregate it has, and then digs down to find that it is due almost entirely to the activities of Homeland Security link here. Irrelevant for a blog on IP you will say. But wait.
In the end he notes that "One of the biggest winners over the past 9 years was the Patent and Trademark Office, which went from 6,128 employees to 10,098 employees." His comment on that: "Given how much patents are used to shut down competition and let the largest companies rent-seek, this is probably the anti-growth part I would flag. For those who know it better, is it a symptom of court decisions? Are they playing catch-up to industry demands?"
David Post over at Volokh.com has a must read concerning the latest attempt by Congress to restrict the way the Internet operates in order to protect Big-IP.
As he explains:
It's awful on many fronts. It would allow a court to effectively shut down a site operated out of Brazil, or France, without any adversary hearing (unless, I suppose, "the domain name" itself comes into court to argue the case) or any reasoned determination that the site actually is engaged in unlawful activity. There is a name for that in our law: "prior restraint," and we don't like them even in cases where truly compelling governmental interests are at stake, let alone where the purpose is merely to protect the rights of copyright and trademark owners.
[Update] Popular Instapundit blogger Glenn Reynolds writes: "If I have to choose between getting rid of copyright and getting rid of free speech, I'll say goodbye to copyright. The folks at Big Content, and their shills like Leahy, seem to want to make me choose."
Ron Coleman writes an essay well worth reading on how trademark law has morphed into perverse measures at the hands of IP attorneys and big businesses looking to protect their turf in response to overall changes in the IP landscape.
A small sample:
Many "IP enforcement" attorneys believe that while there
is no shortage of bona fide infringement to occupy at least a
large number of them, trademark law practice has, to a very
large extent, descended to an anti-competitive methodology
utilized by dominant market players not to prevent consumer
confusion, as was its original rationale, but to reduce consumer
choice and overall welfare by preventing competition. For
them, the signal development enabling this "evolution" must be
widespread acceptance, on extremely dubious authority, of the
doctrine of "initial interest confusion" ("IIC") in trademark as a
substitute for the traditional standard requiring that a finding of
infringement be based on evidence of a "likelihood of confusion"
between the plaintiff's trademark and the device, words, or other
branding mechanism utilized by the defendant.
Access the entire article through Mr. Coleman's blog here:
Fortune's Don't ice me, bro! When memes meet the marketplace relates the battle by Vodka peddler Smirnoff against fans of its Smirnoff Ice beverage. Apparently it had become popular with "Bros"--"a college-age person ... They like to hang out. A lot of them drink beer and wear backwards baseball caps. A lot of them drive SUVs and listen to Dave Matthews Band"--well, until Smirnoff sued them, I guess. Some frat-boy antics arose where these kids of privilege and no rhythm would "ice" each other--basically daring or challenging or pranking each other to drink a Smirnoff Ice. Then someone set up fan site brosicingbros.com, with pictures etc. of people "Icing" each other.
Good PR for Smirnoff, right? Well apparently Smirnoff didn't think so, so they threatened the site with a copyright and trademark lawsuit, so it was taken down. The case by Smirnoff is taken apart in Bros Icing Bros - A Case for Copyright Bullying by Overreacting Smirnoff Lawyers by legal non-profit called NewMediaRights, which heroically provides "free legal assistance to bloggers, journalists, and filmmakers getting bullied by companies into taking down their websites."
Justice Stevens proves to be the go-to Justice once again when it comes to IP issues on the Supreme Court.
It just released a unanimous decision that he authored, holding that the NFL can be sued for anti-trust violations for trying to give exclusive manufacturing licenses for producing trademarked clothing with NFL logos on them.
(It doesn't rule on whether the lawsuit will be ultimately successful or not, only that the NFL isn't immune from such lawsuits.)
Over the last 20 years, the United States Patent and Trademark Office has been issuing patents to universities and private companies on raw human genes. One company or university is given a legal monopoly over a molecule that is inside every human being and many other animals. This documentary explores the legal, ethical, and clinical ramifications of human gene patenting.
And, in the words of Groundhog Day's Ned Ryerson, "It's a doosy".
As noted previously (see Stop the ACTA (Anti-Counterfeiting Trade Agreement)), this treaty was being negotiated in secret and is an attempt to extend the reach of the west's horrible and draconian IP (patent and copyright) regimes to other countries. As I noted, the
ACTA is also similar to another arcane law, the Digital Millennium Copyright Act (DMCA), which, under the guise of protecting "property rights," snuck in provisions that criminalize even the mere possession of technology that can be used to circumvent digital protection systems (see, e.g., my post TI Uses Copyright Law to Attack TI Calculator Enthusiasts). Likewise, under the guise or protecting property rights in inventions and artistic works (patent and copyright), it "seeks to provide legal authority for the surveillance of Internet file transfers and searches of personal property". As one group notes, "ACTA goes way, way beyond the TRIPS (the copyright/patent/trademark stuff in the World Trade Organization agreement), creating an entirely new realm of liability for people who provide services on the net". More invasion of personal liberty and property rights in the name of false, artificial property rights.
The draft text has now been released, under pressure from the European Parliament (see Declan McCullagh's post, ACTA treaty aims to deputize ISPs on copyrights; see aslo Michael Geist's analysis of the draft text). As I suspected, the text (available here) reveals, as McCullagh notes, that ACTA "seek[s] to export controversial chunks of U.S. copyright law to the rest of the world," such as the DMCA's "'anti-circumvention' section, which makes it illegal to bypass copy protection even to back up a Blu-Ray disc" (see, e.g., my post TI Uses Copyright Law to Attack TI Calculator Enthusiasts). This is a horrible US law that was snuck in the DMCA that may now become part of other countries' laws. It prohibits not only copyright infringement but also makes it illegal to sell devices that could be used to circumvent encryption of DRM'd information.
Now, the DMCA also contained a "safe harbor" for ISPs that probably would not pass now (since it gave ISPs an exemption for liability that turned out to be broader than initially realized when the DMCA was enacted in the 1990s). I was concerned that ACTA would contain the anti-circumvention provisions but not the ISP safe-harbor rules--but some version of this does, at least, seem to be contemplated in the ACTA text (see pp. 20-21).
In any case, this horrible treaty needs to be stopped.
This is an amazing animation by Nina Paley, "America's Best-Loved Unknown Cartoonist" (and creator of the amazing animated (and free online) film Sita Sings the Blues, given rave reviews including 4 stars by Roger Ebert). Entitled "All Creative Work Is Derivative" (and blogged here on her blog), and concluding "All creative work builds on what came before," the video is built from images of of statues and paintings at the Metropolitan Museum of Art in New York. As she explains on All Creative Work Is Derivative (Minute Meme #2),
The whole history of human culture evolves through copying, making tiny transformations (sometimes called "errors") with each replication. Copying is the engine of cultural progress. It is not "stealing." It is, in fact, quite beautiful, and leads to a cultural diversity that inspires awe.
I learned of Nina's work when she sent me a nice email, an edited version of which follows:
I especially enjoyed your unique twist on Trademark, that trademark suits should be brought by consumers against frauds, rather than by trademark "owners." I haven't thought it all through to form my own solid opinion yet, but I like the novel approach.
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.
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.)
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):
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";
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."
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.
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);