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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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Generic drug makers can't be sued if they have FDA approval

The Supreme Court ruled last Monday that Generic drug makers can't be sued for defective designs when their previously FDA-approved products cause injuries link here. That might appear to be a questionable decision. But it is also a victory for competition and lower prices in a product line that raises already high medical care costs.

The choice here is between having reasonable consumer safeguards and a steady flow of improved treatments for tough and often rare health problems. There is of course a presumption that the approval process has been thorough. But then the plaintiff's recourse is the FDA which is generally very careful. Indeed it is often criticized for taking excessive time to approve new treatments.

One should note as well, that this is not a criticism of drug patents, which are constitutional but questionable, given the games that new product-owners pursue to extend their patent-created monopoly with no public benefit. Note rather that the need for safety approval will exist whether or not there is a patent.

A monopoly over numbers?

Are you familiar with the ISBN? A unique identifier issued by the U.S. Government to identify books? Did you know that the U.S. Government has granted a private company Bowker a monopoly over issuing them? They are very proud of it...as if it is a good thing!

Mark Cuban and small business

Do we want to innovate our way out of crisis? How about government getting out of the way of innovators? Real innovators and small businesses are obstructed not helped by patents. Don't listen to me. Listen to someone in business.

3D Printing

If you read this blog you must have an internet connection, so presumably have heard of 3D printing. It is a very disruptive technology with potential to change manufacturing in a variety of ways - and indeed even things such as medicine. I recently had some correspondence with Joshua Pearce whose engineering group is working on materials for use in 3D printing. He is concerned about a patent arms race in this area being drag on innovation. He is looking at creative ways to preempt some of the patent nonsense.

Joshua has also been active in nanotechnology, another important areas of innovation. His article in Nature highlights how patents are helping to obstruct rather than help progress - again with innovative ideas for an open source model for key building blocks that will enhance rather than hinder innovation.

It is not a tribute to our system that genuine innovators have to spend their time trying to figure out how to avoid the hindrance of patents rather than devoting their effort to innovation.

Do we need a law?

In the dimension of copyright, the issue of plagiarism often comes up. There is a common misunderstanding that there is a connection between copyright or plagiarism. Plagiarism is not generally a violation of copyright law - although in some cases where extensive copying takes place it may be. Rather it is a failure of attribution. Basically plagiarism is not illegal - but it is heavily punished through contract law. It is a good example of "why we don't need a law for that" contrary the oft expressed opinion if something is bad we need a law against it.

The key point is that if we got rid of copyright the existing penalties for plagiarism would continue unchanged. The recent story of the economist Brian Swart is a case in point. It involves Theoretical Economics a journal which I helped to found, and my friend and colleague Martin Osborne who is editor of the journal. The key point is that Swart while violating no law, lost his job and had his PhD rescinded as a consequence of his plagiarism. So be warned: the punishment for plagiarism is severe.

The Libertarian

I wanted to draw attention to a Libertarian Blog. It covers a lot of ground, but also IP issues from a libertarian perspective, including a recent interview with Stephan Kinsella.

Catching Up

Been very busy with other things, so this is a "catching up" post.

1. I was offered the opportunity to syndicate an article. Usually these things are scams, but in this case it seems to be legitimate. The article in question seems to have some interesting stuff about non-practicing entities (i.e. patent trolls).

2. Ruth Lewis has a nice post pointing to yet more example of innovation that thrives without effective IP.

3. Riccardo DiCecio points to a long and detailed article about the original of patent trolling in Wired...

4. and Sylvain Ribault directs us to an article in Nature that the Chinese are headed down our same bad path - but luckily for both us and them, haven't arrived yet.

Canada - A Copyright Year in Review

2012 was surprisingly good for Canada. The decade long revision of the Copyright Act was completed; most parties agree that it was a good compromise. Amendments included: expanding fair dealing to include parody, satire, and education; protecting consumer behavior that reflects the conduct of consumers in a digital age; maintaining the independence of ISPs and the privacy of subscribers; implementing a cap on damages for non-commercial infringement ($5,000 is the maximum but a judge can award as little as $100; this is intended to discourage file-sharing lawsuits); and, creating an exception for non-commercial user-generated content. To be sure, all the exceptions come with the expected provisos, and all are subject to the overarching ban on any circumvention of technological protection measures. It still strains credulity as to why Canada in 2012 adopted a prohibition first conceived in 1996; but, given the fierce opposition by rights-holders, the fact that the user allowances were not rolled back in committee speaks well. Michael Geist gives a good synopsis of the new Act here.

And then came the Day of Five. In December 2011, the Supreme Court of Canada heard five copyright cases; all five decisions were released on July 12, 2012. The combination carries a strong message from the Court: copyright is a limited right and those limits must be robust if copyright is to serve its presumptive purpose of enhancing creativity. Of particular note is this Court's continued support of fair dealing. In one case, a performing rights collective society sought compensation for the use of music previews (30-90 seconds long) as they are used in cultivating sales of complete music files. The Court denied that request, stipulating that the use of previews is consumer research. Moreover, the Court took the opportunity to probe into the nature of research, to the advantage of all Canadians:

Limiting research to creative purposes would also run counter to the ordinary meaning of "research", which can include many activities that do not demand the establishment of new facts or conclusions. It can be piecemeal, informal, exploratory, or confirmatory. It can in fact be undertaken for no purpose except personal interest (SOCAN v. Bell Canada, para. 22).

In a second case, an educational licensing collective objected to the practice of teachers taking copies of small excerpts of works to be used in conjunction with paid-for textbooks. To the claim that such copying was detrimental to markets, the Court responded with:

[T]here was no evidence that this decline was linked to photocopying done by teachers. Moreover, it noted that there were several other factors that were likely to have contributed to the decline in sales, such as the adoption of semester teaching, a decrease in registrations, the longer lifespan of textbooks, increased use of the Internet and other electronic tools, and more resource-based learning (Access v. Education, para 33).

The Supreme Court of Canada began the quest for better balance in the system of copyright in 2002; a brief summary of pertinent decisions is available here. Through the five recent cases, the Court continued its commitment to technological neutrality, emphasized that advancements in technology do not immediately confer added control to copyright holders, and, made it plain that when considering fair dealing, focus must go to the end-user (not any intermediary involved in the reproduction or distribution of a work.)

An immediate effect of both the new Act and the Court's guidance is a shift in policy by educational institutions. These institutions were a captive market for educational licensing collectives, with instances of fair dealing effectively wrapped into blanket fees. Michael Geist writes that such monopoly is being rethought. Canadian institutions have paid, and will continue to pay, fees where copyright requires it; but fair dealing is now seen as an active practice instead of an exception that only exists on paper.

With a more flexible Copyright Act and a Supreme Court that champions balance between copyright holders and copyright users, Canada looks good going into 2013.

The golden age of beer innovation

The NEP-HIS blog has a nice discussion of a nice paper by Alessandro Nuvolari and James Sumner on innovations in the beer industry before 1750. There was rapid innovation without recourse to patents, even though patenting was an option to innovators.

250000 Patents for Smartphone Technology

John Bennett says this needs to be shouted from the rooftop.

There Are 250,000 Active Patents That Impact Smartphones; Representing One In Six Active Patents Today

I agree.

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Most Recent Comments

The right to rub smooth using a hardened steel tool with ridges Finally got around to looking at the comments, sorry for delay... Replying to Stephan: I'm sorry

Let's See: Pallas, Pan, Patents, Persephone, Perses, Poseidon, Prometheus... Seems like a kinda bizarre proposal to me. We just need to abolish the patent system, not replace

The right to rub smooth using a hardened steel tool with ridges I'm a bit confused by this--even if "hired to invent" went away, that would just change the default

Do we need a law? @ Alexander Baker: So basically, if I copy parts of 'Titus Andronicus' to a webpage without

Do we need a law? The issue is whether the crime is punished not who punishes it. If somebody robs our house we do

Do we need a law? 1. Plagiarism most certainly is illegal, it is called "copyright infringement". One very famous

Yet another proof of the inutility of copyright. The 9/11 Commission report cost $15,000,000 to produce, not counting the salaries of the authors.

WKRP In Cincinnati - Requiem For A Masterpiece P.S. The link to Amazon's WKRP product page:

WKRP In Cincinnati - Requiem For A Masterpiece Hopefully some very good news. Shout! Factory is releasing the entire series of WKRP in Cincinnati,

What's copywritable? Go fish in court. @ Anonymous: You misunderstood my intent. I was actually trying to point out a huge but basic

Rights Violations Aren't the Only Bads I hear that nonsense from pro-IP people all the

Intellectual Property Fosters Corporate Concentration Yeah, I see the discouragement of working on a patented device all the time. Great examples

Music without copyright Hundreds of businessmen are looking for premium quality article distribution services that can be

Les patent trolls ne sont pas toujours des officines

Les patent trolls ne sont pas toujours des officines

Patent Lawyers Who Don't Toe the Line Should Be Punished! Moreover "the single most destructive force to innovation is patents". We'd like to unite with you

Bonfire of the Missalettes!

Does the decline in total factor productivity explain the drop in innovation? So, if our patent system was "broken," TFP of durable goods should have dropped. Conversely, since

Does the decline in total factor productivity explain the drop in innovation? I wondered about TFP, because I had heard that TFP was increasing. Apparently, it depends on who

Music without copyright I do agree with all the ideas you have presented in your post. They are very convincing and will