Category: Intellectual Property

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Santa’s Brand

Quietbook has a mock re-branding Santa guide up. It is a “refresh.” Refresh. The word triggered a flashback to corpspeak where irony goes to die. I scanned the rest of the page. “*Santa* is a Concept, not an idea. It’s an Emotion, not a feeling. It’s both Yesterday and Today. And it’s Tomorrow as well.” Ah yes. They get it. The Santa Brand book is a great example of the way branders operate. I dove into those ideas in my paper From Trademarks to Brands. These folks take you on a similar but funnier journey. Good times and a belated but truly meant Merry Christmas and Happy Holidays to all.

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On Lust, Dust, and Books

Bow down. Bow down to the queen of books. As a kid, if a foot touched a book, we employed a hand gesture, akin to genuflection, to make up for our disrespect. It’s an Indian thing. Doris Lessing’s Nobel speech captures why that gesture makes sense to me. It makes her my queen of books. We have the luxury of arguing over whether books are findable, searchable. We should pay attention to what Lessing said. In 2007 Lessing spoke of Africa, dust filled and hungry for books:

“Please send us books when you get back to London,” one man says. “They taught us to read but we have no books.” Everybody I met, everyone, begged for books.

And I do mean hungry:

Not long ago a friend who had been in Zimbabwe told me about a village where people had not eaten for three days, but they were still talking about books and how to get them, about education.

Lessing captures the faith that education will raise someone from poverty. Perhaps it is ironic that she attacks the Internet and blogging while wondering from where and the publishing of ideas will emerge in Africa. But her criticism seems to me more about the thin nature and “inanities” of much online than the technology itself. Her real concern is that reading begets reading and writing. She focuses on the simple fact that people want to read and write. Some learn from labels on jars or torn sections of novels left behind by those fortunate to have read the whole novel and who tore it for travel ease. In contrast, “We have a treasure-house of literature, going back to the Egyptians, the Greeks, the Romans. It is all there, this wealth of literature, to be discovered again and again by whoever is lucky enough to come upon it. A treasure. Suppose it did not exist. How impoverished, how empty we would be.”

For all the debate on scanning books and incentives to create, I have to stop and say rot and rubbish. Get the books, the texts to everyone. Now. Don’t tell me someone does not want to read or learn math or engage. Build and reinforce the culture that wanted to feed the body and the mind. As Lessing concluded:

That poor girl trudging through the dust, dreaming of an education for her children, do we think that we are better than she is – we, stuffed full of food, our cupboards full of clothes, stifling in our superfluities? I think it is that girl, and the women who were talking about books and an education when they had not eaten for three days, that may yet define us.

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Google Books and the Social (Justice) Contract

In channeling Judge Baer, Judge Chin at long last dropped the other shoe in the judicial effort to bring new information technology uses for copyrighted works fully in to the copyright regime. Congress has been slow to address the challenge of tapping the full copyright social utility/justice potential of these advances and it’s been left to the courts to sort it all out in the context of individual adversarial conflicts. Poignantly, when Jonathan Band asks “What [was] the Authors Guild fighting for?”, he also illustrates the tree-myopic/forest blind nature of the Guild’s position. What the Guild failed to see is that property rights fit into a larger socio-legal system: Yes your neighbor is precluded from trespassing on to your land but your ability to engage in whatever “private” activity strikes your fancy while thereon is limited by the legal system as a whole. Your land is individual private property, not an independent sovereign state.

 

Judge Baer reminded rights holders of this aspect of the social contract and now Judge Chin has made it clear to the Guild that this is not some narrow, eccentric application of copyright social utility. Property rights, including copyrights, exist to advance society, and to state the obvious, information technology has evolved our society. Like all other rights, customs, and expectations, however, whereas some aspects of copyright as previously envisioned fit comfortably into our new configuration others don’t fit at all. And when that ill-fit impedes important social progress modifications must be made, and if necessary, expectations altered.

 

The courts’ reasoning in both Hathitrust and Google Books moves fair use jurisprudence further toward the express consideration of copyright social justice in the application of the doctrine. As Kevin Smith notes, the judges in both cases have seized this opportunity to retrofit fair use, and it seems to me that these decisions push beyond questions of aesthetic and even functional transformation and pave the way for weighing social transformation in assessing the first fair use factor. I have also applied some of the legal conclusions drawn from Bill Graham Archives and other Grateful Dead archive projects to specific copyright social justice needs, for example, that of socially beneficent access to the literature of the Harlem Renaissance. Like some other historically and culturally important works, many of these books enjoy only marginal commercial market value and similar to the information harvested through data mining, “digital fair use” may be the only means by which to return these works to the general public. The social resuscitation of significant works through mass-digitization, and other uses that serve important and otherwise unattainable copyright social objectives, should be considered a purpose that satisfies the first fair use factor.

 

Authors and other copyrights holders would do well to finally get ahead of the information technology curve. The Authors Guild’s mistake was not so much in the effort to preserve what they considered to be their property rights or even in the effort to extract every conceivable drop of revenue out those rights, but rather, in failing to accept that in order for these rights to retain any value they must function as part of a thriving societal system or eventually forfeit the basis for legal recognition. In the analog world, the public’s access to most books remains largely dependent upon the vagaries of the commercial marketplace. Digital information technology has presented the opportunity to compile the world’s books toward the creation of global libraries accessible to every human being on a socially equitable basis. To believe that analog social inequity will be permitted to endure indefinitely in the face of digital information possibilities is simply unrealistic. Keeping in mind that the stimulation, perpetuation, and re-ignition of the cultural expression/dissemination/inspiration combustive cycle is the raison d’etre of copyright will enable authors to embrace digital change and as Gil Scott Heron sang, possibly even direct the change rather than simply be put through it.

 

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Google Books and Author’s Rights

I agree with James Grimmelmann that the Google Books decision is a bit anticlimactic (although the appeal has the potential to add suspense by bringing the case back from the dead). After last October’s decision in Authors Guild v. Hathitrust, the only question really was whether Judge Chin would distinguish HathiTrust on the grounds that the defendants there were nonprofit institutions of higher education, while the defendant here was a commercial entity. To be sure, Judge Chin was not bound by Judge Baer’s analysis that HathiTrust’s use was transformative and did not in any way harm the market for the works at issue,  but these holdings were so consistent with precedent in the Second and Ninth Circuit that it was hard to imagine that Judge Chin would disagree with them. That left the commercial/non-commercial distinction, which has become far less significant in recent years in cases involving transformative uses.

Both judges’ recognition of the enormous social utility of creating a searchable index of books, and the absence of harm to authors caused by such an index (to the contrary, the index benefits authors by making their works more discoverable), highlights the mystery at the heart of these cases: What is the Authors Guild fighting for? Why did it not settle last year, when the publishers dropped their suit against Google? Why did it continue to pursue its litigation against HathiTrust after HathiTrust abandoned its orphan works project?

For some Authors Guild members, it might be about the money. They may believe that there is a pot of gold at the end of the Google rainbow. If the Internet could make instant millionaires (if not billionaires) out of all these kids who express themselves through Internet acronyms, emoticons, and 140 character tweets, then surely authors who spend years writing finely crafted books deserve a share of that fortune.

For others, it seems to be a matter of principle. But exactly what principle? Apparently, that no one should use their works without their permission. While they may agree with fair use in the abstract, they oppose it as applied to their works. The fact that the use is socially beneficial and does not harm them economically is irrelevant. I would amend James’s “three c” formulation with a fourth c: creators should have complete control over copies.

The Authors Guild’s belief in complete control is based more on the Continental “author’s rights” (droit d’auteur) tradition than on the Anglo-American utilitarian tradition. In the author’s rights approach, copyright springs not from statutes but from natural law. The relationship between the author and his work is intimate and indivisible. By contrast, in the Anglo-American system, copyright is not a response to natural law, but rather is a matter of legislative choice directed at incentivizing the creation of works for the benefit of society.  The Anglo-American utilitarian approach in theory provides only as much protection as is necessary to encourage creative activity, while the author’s rights approach provides more robust protections of both economic rights and moral rights such as the right of attribution and integrity.  Historically, the difference between the two approaches translated into longer copyright terms and narrower exceptions in author’s rights jurisdictions.

However, in response to lobbying by rights-holders, Congress has enacted certain features of author’s rights systems — for example, the ever-increasing copyright term. The first U.S. copyright act provided a term of 14 years, renewable for another 14 years, for a total of 28 years. Now, the copyright term matches the European Union’s term of life of the author plus 70 years.

Efforts are underway to import other author’s rights features. The U.S. Copyright Office just released a report recommending that Congress consider adoption of a resale royalty (droit de suite) for visual artists. Under this framework, a visual artist would receive a percentage of the amount paid for a work each time it was resold by a third party.  A resale royalty is in effect a tax on the sale of copyright products and is directly contrary to the long-established first sale doctrine.

The complete control over copyrighted works sought by the Authors Guild and reflected by proposals such a resale royalty are inconsistent with the public interest purpose of our copyright system. Fortunately, Judge Chin, and Judge Baer before him, recognized that the objective of copyright is not to enrich rights-holders, but “to advance the progress of the arts and sciences.”

 

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Software Patents

On Friday the Supreme Court granted certiorari in CLS Bank v. Alice Corp, an en banc decision of the Federal Circuit that addressed the subject-matter eligibility of software patents.  I’ll have more to say about this in the coming months.  My initial impression, though, is that watching the Supreme Court handle patent cases is like watching one of those old Mr. Magoo cartoons.  The Justices stumble around and come close to disaster after disaster, but they somehow manage to avoid trouble.  We’ll see if that holds this time.

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More Patent Fun, New York Times and another DC event

My paper with Gerard Magliocca made the New York Times in a piece called “Beyond 3-D Printers’ Magic, Possible Legal Wrangling,” and the fun continues. With patent reform on the table (pdf to the bill), the New America Foundation is holding a conference called Just How Broken Is the Patent System?. I will be on the kick-off panel with my friend Adam Mossoff. After some jousting over patents, property, and more with the help of Annie Lowery, the day will turn to industry folks, policy wonks, and more professors, to get into health and patents, green innovation, patent assertion, fixes to the patent system, and a keynote by Maureen K. Ohlhausen, Commissioner, Federal Trade Commission.

It promises to be a fun day. Hope to see folks there.

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Plant Patents

Here’s something sort or random that I wonder about from time to time.  Why do we have a separate category of plant patents?  In other words, is there any good explanation for why a separate statute governing plant patents was enacted, and is there any valid reason for treating plants differently from other utility patents?  It is a curiosity in that we use the same patent requirements for all other functional inventions.  (Design patents are distinct and have their own issues, but leave that aside).  Plant patents are probably an inadequately theorized subject, for anyone who is looking for a topic.

 

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The Dualities of Freedom and Innovation

What a rollercoaster week of incredibly thoughtful reviews of Talent Wants to Be Free! I am deeply grateful to all the participants of the symposium.  In The Age of Mass Mobility: Freedom and Insecurity, Anupam Chander, continuing Frank Pasquale’s and Matt Bodie’s questions about worker freedom and market power, asks whether Talent Wants to Be Free overly celebrates individualism, perhaps at the expense of a shared commitment to collective production, innovation, and equality. Deven Desai in What Sort of Innovation? asks about the kinds of investments and knowledge that are likely to be encouraged through private markets versus. And in Free Labor, Free Organizations,Competition and a Sports Analogy Shubha Ghosh reminds us that to create true freedom in markets we need to look closely at competition policy and antitrust law. These question about freedom/controls; individualism/collectivity; private/public are coming from left and right. And rightly so. These are fundamental tensions in the greater project of human progress and Talent Wants to Be Free strives to shows how certain dualities are pervasive and unresolvable. As Brett suggested, that’s where we need to be in the real world. From an innovation perspective, I describe in the book how “each of us holds competing ideas about the essence of innovation and conflicting views about the drive behind artistic and inventive work. The classic (no doubt romantic) image of invention is that of exogenous shocks, radical breakthroughs, and sweeping discoveries that revolutionize all that was before. The lone inventor is understood to be driven by a thirst for knowledge and a unique capacity to find what no one has seen before. But the solitude in the romantic image of the lone inventor or artist also leads to an image of the insignificance of place, environment, and ties…”.  Chapter 6 ends with the following visual:

 

Dualities of Innovation:

Individual / Collaborative

Radical/Incremental

Accidental /Deliberate

Global /Local

Passion / Profit

Art/Science

Exclusive/Shared

Inscribed/Tacit

 

And yet, the book takes on the contrarian title Talent Wants to Be Free! We are at a moment in history in which the pendulum has shifted too far. We have too much, not too little, controls over information, mobility and knowledge. We uncover this imbalance through the combination of a broad range of methodologies: historical, empirical, experimental, comparitive, theoretical, and normative. These are exciting times for innovation research and as I hope to convince the readers of Talent, insights from all disciplines are contributing to these debates.

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Individuals & Teams, Carrots & Sticks

I promised Victor Fleisher to return to his reflections on team production. Vic raised the issue of team production and the challenge of monitoring individual performance. In Talent Wants to Be Free I discuss some of these challenges in the connection to my argument that much of what firms try to achieve through restrictive covenants could be achieved through positive incentives:

“Stock options, bonuses, and profit-sharing programs induce loyalty and identification with the company without the negative effects of over-surveillance or over-restriction. Performance-based rewards increase employees’ stake in the company and increase their commitment to the success of the firm. These rewards (and the employee’s personal investment in the firm that is generated by them) can also motivate workers to monitor their co-workers. We now have evidence that companies that use such bonus structures and pay employees stock options outperform comparable companies .”

 But I also warn:

 “[W]hile stock options and bonuses reward hard work, these pay structures also present challenges. Measuring employee performance in innovative settings is a difficult task. One of the risks is that compensation schemes may inadvertently emphasize observable over unobservable outputs. Another risk is that when collaborative efforts are crucial, differential pay based on individual contribution will be counterproductive and impede teamwork, as workers will want to shine individually. Individual compensation incentives might lead employees to hoard information, divert their efforts from the team, and reduce team output. In other words, performance-based pay in some settings risks creating perverse incentives, driving individuals to spend too much time on solo inventions and not enough time collaborating. Even more worrisome is the fear that employees competing for bonus awards will have incentives to actively sabotage one another’s efforts.

A related potential pitfall of providing bonuses for performance and innovative activities is the creation of jealousy and a perception of unfairness among employees. Employees, as all of us do in most aspects of our lives, tend to overestimate their own abilities and efforts. When a select few employees are rewarded unevenly in a large workplace setting, employers risk demoralizing others. Such unintended consequences will vary in corporate and industry cultures across time and place, but they may explain why many companies decide to operate under wage compression structures with relatively narrow variance between their employees’ paychecks. For all of these concerns, the highly innovative software company Atlassian recently replaced individual performance bonuses with higher salaries, an organizational bonus, and stock options, believing that too much of a focus on immediate individual rewards depleted team effort.

Still, despite these risks, for many businesses the carrots of performance-based pay and profit sharing schemes have effectively replaced the sticks of controls. But there is a catch! Cleverly, sticks can be disguised as carrots. The infamous “golden handcuffs”- stock options and deferred compensation with punitive early exit trigger – can operate as de facto restrictive contracts….”

 All this is in line with what Vic is saying about the advantages of organizational forms that encourage longer term attachment. But the fundamental point is that stickiness (or what Vic refers to as soft control) is already quite strong through the firm form itself, along with status quo biases, risk aversion, and search lags. The stickiness has benefits but it also has heavy costs when it is compounded and infused with legal threats.

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The TPP and Copyright

This is my second post about the leaked draft of the Trans-Pacific Partnership Agreement.  Here, I address some of the copyright provisions. This is not an exhaustive analysis, and I’ve tried to make it complimentary to what’s already out there. For analysis of additional provisions, see KEI, Public Citizen, Ars Technica, Kimberlee Weatherall for an Australian perspective, and EFF. [Note: I have updated this post .]

First, there are major splits between countries. The United States consistently takes the position of pushing for stronger IP, while others—especially Canada and New Zealand— advocate a more balanced approach.  The divisions are particularly prominent when it comes to preliminary statements about the public domain and public health, none of which the U.S. supports.  These analyses are on one subset of proposed language, not finalized language, and a lot of the agreement could change. I focus my analysis primarily on the U.S. proposed language.

Second, the U.S. proposals look very similar to our past Free Trade Agreements, including the earlier texts of ACTA.  Whatever message was sent when the EU refused to ratify ACTA, the U.S. Trade Representative did not receive it.  Many of the provisions that appeared in ACTA are also areas of proposed reform in the United States—the U.S. proposed text for the TPP would internationally bind this country and prevent many proposed reforms to our copyright law.

Third, and this is an important point: U.S. proposals are less balanced than U.S. domestic law. As I noted in my previous post, this is because a subset of IP industries provide the USTR advice, leaving out important balancing viewpoints and sometimes misrepresenting U.S. law.

Similarities to ACTA:

Intermediary liability (Article QQ.I.1): As in ACTA, the central copyright argument in TPP is over what kind of intermediary liability regime will be internationally required.  Currently, online intermediary liability is not governed at an international level.  Michael Geist has done a great job of outlining the basic differences in the TPP proposals for intermediary liability. The United States is pushing for notice-and-takedown, with a coalition of countries, including Canada and New Zealand, pushing instead for a notice-only provision.  These regimes offer different levels of due process for Internet users.

Statutory damages (ARTICLE QQ.H.4.Y(15)): As in ACTA, countries are fighting over statutory (or “pre-established”) damages: damages awarded to copyright owners without a showing of actual harm.  Australia opposes this provision because it does not have statutory damages. Statutory damages are an often-criticized part of the U.S. regime, enabling disproportionately large awards in copyright cases.

Criminal liability (Article QQ.H.7(2)): As in ACTA, countries have split over the definition of criminal copyright infringement.  The U.S. proposal, like U.S. law, pushes to criminalize very low level infringement, to go after even low level filesharing.  Other countries want to keep it at the international requirement, which requires a motive of financial gain or commercial advantage.  The United States lost a recent WTO case on criminal copyright, and has since been trying to ratchet up international criminal copyright law through free trade agreements.

Criminal Intermediary liability (Article QQ.H.7(6)): As in ACTA, the TPP criminalizes aiding and abetting infringement. This allows authorities to go after websites under criminal law, rerouting around protections from civil liability. Coupled with a low underlying threshold for criminal infringement, this could sweep in a lot of activity. Thanks to Kimberlee Weatherall for catching this.

Asset Forfeiture (Article QQ.H.7(c) p. 79): As in ACTA, the TPP allows the seizure of “any related materials and implements used in the commission of the alleged offense”. In the United States, asset forfeiture has been used to seize websites before trial.

DRM/Technological Protection Measures (Article QQ.G.10): As in ACTA, the United States is trying to export the DRM provisions of the DMCA, as its version of implementation of the WIPO Copyright Treaty. As I note below, however, what’s proposed is a worse version of what we have at home. The recent conflict over cell-phone unlocking shows that this is likely to be the focus of domestic policy reform. Some suggest that the DRM provisions here criminalize unlocking even when the underlying purpose is fair use.

De minimis border measures (the “Ipod search”)( Article QQ.H.6(8)): As in ACTA, the United States is pushing to shrink the “personal use” border exception that currently exists in international law, in TRIPS Article 60.  For now, however, it looks as though the de minimis provision is functionally the same as TRIPS, due to a strategic footnote (235).  This is something to watch.

Account termination (Article QQ.I.1(p. 88)): In U.S. copyright law, there’s a provision requiring online intermediaries to have a termination policy in place for repeat copyright infringers. Similar language has been proposed in the draft TPP. As Annemarie Bridy has pointed out, this language may have different implications in different countries.  It probably does not require graduated response.  However, its inclusion can also be read as endorsing recently developed private-ordering graduated response in the United States: agreements between private companies to kick infringing users offline. And transplanting this language into other countries might lead them to push for similar or more draconian policies.

Things that differ from US law:

Fair Use/Exceptions and Limitations language (Article QQ.G.Y): There‘s no fair use. The broadened copyright exceptions language that the USTR bragged about earlier this year is not very broad. And it’s not fair use.  This may harm our exporting businesses.  Google just won the Google Books case, where Google books was found to be fair use; TPP shows no evidence of extending that kind of exception abroad.

International First Sale Doctrine (Article QQ.G.3,  Article QQ.G.17):  Despite the fact that the Supreme Court held in Kirtsaeng in March that first sale doctrine applies abroad—and trumps the importation right—the USTR is exporting the opposite. The USTR also opposes saying that countries are encouraged to establish international exhaustion of rights. All other countries (except Canada, which is neutral) want international first sale doctrine. It’s not clear to me why the USTR thinks it can bind the US to law contrary to Kirtsaeng—and this draft is from months after the Kirtsaeng opinion came down. I’m happy to be convinced otherwise, but I can’t see how the two are reconcilable.

Temporary reproductions (Article QQ.G.1): Despite the fact that there is a circuit split over whether temporary reproductions are considered “fixed” enough to be copyrightable, the USTR proposes exporting a requirement that temporary reproductions are covered by copyright.

Standard technical measures (Article QQ.I.1(p. 88)):  In the DMCA, there is a requirement that intermediaries accommodate “standard technical measures.”  However, those measures must be arrived at through a multi-industry process that is open and fair. In practice, this means that there are no standard technical measures in the United States. The words “multi-industry” and “fair” get left out of the TPP, which means that standard technical measures may get developed  abroad, and online intermediaries will have to accommodate them there, where they don’t have to at home.

Criminal liability ((Article QQ.H.7(2)):  U.S. criminal copyright law contains a numerical threshold for criminal copyright infringement that is done without commercial motivation- $1000 of infringement in 180 days. The TPP proposal substitutes the word “significant” for an actual number. This difference could go either way.

Notice-and-takedown misuse & attorneys’ fees (Article QQ.I.1 (p.89)): In the DMCA, people who misuse notice-and-takedown can be sued, and are subject to attorneys’ fees.  Even though the US proposal clearly asks for attorneys’ fees in other places, it does not include attorneys’ fees in the material misrepresentation provision.

Reverse engineering exemption to TPM/DRM (Article QQ.G.10): Thanks to Jonathan Band for pointing this one out to me originally. The reverse engineering exception to DRM exported by the US is not as broad as the one available domestically.

Privacy (Article QQ.I.1): TPP barely mentions privacy.  There are some discussions of a no-duty-to-monitor provision, but no broader assertion of privacy principles that I can find.  We don’t normally think of U.S. law as containing a nod to balancing copyright enforcement with privacy, but it turns out that 512(m)(2), which says providers shall not access content contrary to law, was intended to bolster the “no monitoring necessary” requirement to mean “no monitoring necessary, AND don’t violate wiretap law.” This didn’t make it in.