From the Insurance Journal, more depressing evidence about the baleful effects of the anti-competitive, anti-property rights fascist patent system:

Patent Claims Causing Firms to Exit Business Lines: Study

May 6, 2013

Patent demands are taking a big toll on technology companies, with results that range from forcing companies to tweak their products to exiting their business altogether, according to a study from the Santa Clara University School of Law.

The study underscores the increasing difficulty of dealing with patent claims. Patents have become a major part of business strategy, with companies like Apple and Samsung battling each other in courts around the world in cases that could result in hundreds of millions of dollars in damages.

The SCU report, “Best Practices in Patent Litigation Survey,” focuses on patent demands from companies that do not themselves make anything. The report calls them “patent assertion entities.”

Many detractors call them “patent trolls.”

While PAEs have a bad reputation among technology firms, many patent litigants who do not make products or develop technology think of themselves in a better light. Many of them represent inventors, sometimes university researchers, who cannot afford to defend patents on their own.

Colleen Chien, an assistant professor of law at SCU, surveyed 116 in-house counsels, largely representing technology companies with more than $100 million in annual revenue.

More than 90 percent reported that patent claims from PAEs had affected them financially or distracted from their core businesses.

More than 80 percent said their customers had received PAE demands because the customers used or implemented products that were accused of violating a patent, and almost 40 percent said the claim had resulted in a change to the product.

About one-quarter of the companies surveyed said claims from PAEs lost them revenue or customers, or caused a delay reaching an operational milestone. About 12 percent said they had to tweak their business strategy as a result of a claim.

Around 8 percent said claims had caused them to delay hiring, or to exit a business line or business altogether.

From MacRumours:

EU Antitrust Ruling Says Google Abusing Patent Position in German Lawsuit Against Apple

Monday May 6, 2013 7:01 am PDT by Eric Slivka

The New York Times reports that Google and its Motorola Mobility unit have been found to be abusing their patent dominance in 3G wireless networking technology by the European Commission. The ruling, which comes in the form of a preliminary finding that could lead to formal antitrust charges but has yet to do so, addresses Motorola’s efforts to bar European sales of Apple’s 3G mobile devices over infringement of “standards essential” patents that Motorola is required to license under reasonable terms. Apple did briefly pull a number of devices from its German online store in February 2012, but they quickly returned after an injunction was lifted and Apple later won long-term protection from sales bans while its appeal in the case is heard. The European Commission’s report today calls Motorola’s efforts to enforce a sales ban based on these standards essential patents “an abuse of a dominant position prohibited by E.U. antitrust rules.”

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As I’ve noted in previous threads, this is an example of the insane, mutually conflicting policies of national governments. On the one hand, they enact antitrust statutes to penalize private “monopolies,” even though the only real monopolies that are possible are those created by the state. Then, they create these monopolies by way of patent grants. They thus set up a “tension” between competing government “policies,” and this has to be “balanced.” Hey, I’ve got an idea—get rid of both patent law and antitrust law.

For more, see:

• Government Gives Samsung and Motorola Monopoly Patent Grants; then Probes them for “Patent Abuse”
•  Pro-IP Libertarians Upset about FTC Poaching Patent Turf
• When Antitrust and Patents Collide (Rambus v. FTC)
• The Schizo Feds: Patent Monopolies and the FTC
• IP vs. Antitrust

This type of schizophrenic behavior by the state is not limited to patents vs. antitrust law. It manifests itself in myriad was, e.g. the “tension” between copyright (and patent) and the first amendment (Blackmail, Copyright, Libel and Free Speech; Copyright Censorship versus Free Speech and Human Rights; Excessive Fines and the Eighth Amendment; Copyright is Unconstitutional), and other cases, e.g. Patents and Pot: Feds’ patents say medical marijuana is good, drug war disagrees.

Great find by David Koepsell: A book published in 1869, Recent Discussions on the Abolition of Patents for Inventions in the United Kingdom, France, Germany, and the Netherlands: Evidence, Speeches, and Papers in Its Favour: With Suggestions as to International Arrangements Regarding Inventions and Copyright, ed. by Robert Andrew Macfie (London: Longmans, Green, Reader and Dwyer, 1869; free epub and pdf download).

Too bad they didn’t win the day. And too bad none of the modern statesmen or mainstream scholars will even consider patent abolition, as opposed to tepid reform.

Interesting post from NPR about CERN’s decision in 1993 not to patent the basic protocol of the world-wide web. If they had not done this who knows what would have happened. (It is odd that they contacted law professor Mark Lemley to ask him whether the web could have been patented, as Lemley was never a practicing patent attorney. It’s like asking a podiatrist a detailed question about brain surgery. But what-evs.) CERN might have had a patent, but on what—on a moribund, unused protocol.

This is illustrative of the fact that many current technologies and practices would have been  retarded, more severely distorted, or even obliterated altogether, had IP been enforced as it is “supposed to be.” For a case in point, consider Microsoft’s OS (see Bill Gates’ 1991 Comments on Patents) and other technologies like laser printers and fashion (see Leveraging IP). And future technologies like 3D printing are of course imperiled even now by IP (see The IP War on 3D Printing Begins; Masnick, Don’t Let Patents Kill 3D Printing).

Pro-IP “libertarians” should consider this. The Internet (and the www) is possibly the single greatest tool for freedom in human history, and it has only been around for about 17 years; its existence was for a while tenuous, and could have been retarded, severely distorted, or even extinguished, by a fluke of IP law. This is yet another demonstration that  IP is a blight on humanity, progress, technology, and liberty. (h/t Shayne Wissler)

‘The Single Most Valuable Document In The History Of The World Wide Web’

by JACOB GOLDSTEIN

May 01, 2013 1:00 PM

Twenty years ago this week, researchers renounced the right to patent the World Wide Web. Officials at CERN, the European research center where the Web was invented, wrote:

CERN relinquishes all intellectual property to this code, both source and binary form and permission is granted for anyone to use, duplicate, modify and redistribute it.

It’s a dull sentence from a dull document. But that document marks the moment when the World Wide Web entered the public domain — a moment that was central to creating the Web as we know it today.

I emailed Mark Lemley, an intellectual property expert at Stanford, to ask him about the counterfactual. Could the Web have been patented? And how would the world have been different if it had?

Here’s an excerpt from his reply:

It is entirely possible that the Web could have been patented. A strong patent right would have driven innovation along a different path.

Even in 1993, as the Web was being introduced, scholars and the government interested in data communications were talking about the “information superhighway,” a proposed centralized, government-sponsored broadband network that would have delivered video from TV stations and other approved content. [It is this, and not the Internet, that Al Gore “invented”].

The Web is what happened from the bottom up while government and the telecommunications companies were still figuring out how to build something from the top down. But a patent right could have changed the course of innovation from the decentralized Internet model to a centralized information superhighway model. And we would all have been the poorer for it.

This week, a CERN spokesman called the document “the single most valuable document in the history of the World Wide Web.” There might be a bit of hyperbole in that statement. (It came from a guy sometimes called the half-spin doctor.)

Still, at a moment when the technology world is swamped in patent lawsuits, it does seem worth pausing to appreciate the moment when a group of researchers renounced their intellectual property rights to patent and gave the World Wide Web to the world.

As reported by ars technica, Fox is using federal copyright law and the DMCA process to bully author Cory Doctorow. His novel Homeland has the same title as the Fox television series, but otherwise has nothing to do with it. Having the same title is not a copyright violation as titles are too short to receive copyright protection:

Not that Homeland: Fox sends bogus takedowns for copyright reformer’s book

DMCA takedowns hit a surprising target: writer and activist Cory Doctorow.

by Timothy B. Lee – Apr 22 2013, 5:50pm CDT

Homeland is a television show produced by Fox that debuted in 2011. It’s also the title of an unrelated novel written by author and copyright reform activist Cory Doctorow. And evidently, the system Fox uses to send takedown notices under the Digital Millennium Copyright Act can’t tell the difference between the two.

TorrentFreak first broke the news that Fox has been sending Google takedown notices for URLs like “http://tpb.piraten.lu/tag/Homeland-Doctorow” and “http://torrentreactor.net/torrents/6214335/Homeland-by-Cory-Doctorow.” Not only does Fox not own the copyright for these works, but because Doctorow published his novel under a Creative Commons license, distributing his work on BitTorrent is completely legal. This means that Fox’s carelessness may be causing legitimate content to be removed from search engine results.

“I have made inquiries about the possible legal avenues for addressing this with Fox, but I’m not optimistic,” Doctorow wrote on his blog. “The DMCA makes it easy to carelessly censor the Internet, and it makes it hard to get redress for this kind of perjurious, depraved indifference.”

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See also Doctorow’s post Fox sends fraudulent takedown notices for my novel Homeland, and the discussion of this topic on the latest episode of This Week in Law around the 40-45 minute or so mark.

Fox probably did this automatically without reviewing the claim closely, but this just goes to show how federal IP law turns companies into legal bullies who can harm individuals without liability: Doctorow probably has little  redress for any damage caused by the DMCA takedown here, since the statute doesn’t provide one. Fox can just say “oops” and move on. (Though I suppose it is possible Doctorow-as-author may, in the end, benefit from the increased exposure and attention.)

Some people say examples like this just show that the DMCA should be “tweaked” or copyright “reformed.” But given that the pro-copyright movie and music pressure groups despise the DMCA safe harbor that somehow snuck past their radar when it was inserted in 1998, it would be positively scary if Congress were to consider amendments to it, since, if anything, the DMCA safe harbor (which has permitted companies like YouTube to flourish)¹ would be scaled back or eliminated. So: almost nothing positive can be done. We are stuck with an ossified copyright system and its DMCA take down system that permits censorship and legal bullying.

(If we are to have any “improvement” to copyright, it would be: radically reduce the term; get rid of statutory damages and criminal penalties; make the losing copyright plaintiff pay.) ²

Copyright is an abomination and should, of course, be completely abolished. It’s frustrating to have fellow libertarians and civil libertarians who say they are all in favor of patent and copyright “reform” (which never comes—or always comes as a copyright term extension or addition of a DMCA, always making it worse), while saying they are against abolition of copyright because they don’t want to throw the baby out with the bathwater. I saw we do want to throw the baby out with the bathwater, if it’s Rosemary’s Baby.

Case in point is the author of this very ars technica piece, Tim Lee, who poses as a copyright reformer but is not opposed to copyright.³ And the same is true even of the victim in this case: Doctorow. See, e.g., copyright abolitionist Nina Paley‘s post Paley & Doctorow argue over Non-Commercial licenses, where Doctorow makes it clear is not in favor of abolishing the state’s power to grant copyright (which he calls “exclusive rights”). As he writes:

I support regulating the entertainment industry’s supply chain. Copyright as presently or traditionally construed might be a suboptimal rule-set for that industry (I think it’s historically tilted to the favor of capital against the interests of labor), but that’s not to say that there shouldn’t or can’t be a set of rules that govern that industry to ensure fair dealing and to redress inherent power and negotiation differences.

…  lots of policy questions are hard to get right; that shouldn’t disqualify them from consideration for regulation (other rules that are hard to get right include finance, building codes, zoning laws, child protection, etc — I’m OK with the state having a go at them, though, because I’ve seen that in the absence of rules, many of the outcomes are very bad indeed).⁴

Copyright permits bullying, distorts culture, leads to literal censorship of books and movies, imposes hideous costs on artists like documentary filmmakers, and is being used by the state to slowly strangle internet freedom in a web of anti-piracy polices and laws. There is not a single good thing about copyright law; it is rotten to the core and totally incompatible with private property rights, freedom, and the free market.⁵

Pro-freedom, pro-technology copyright reformers should come out with guns blaring against the injustice of copyright itself. It’s time to end it, not mend it.

1. See Veoh Wins Important Case Against Universal Music Over DMCA Safe Harbors Again; But Is Still Dead Due To Legal Fees.  [↩]
2. See, e.g.,  How to Improve Patent, Copyright, and Trademark Law; The SHIELD Act doesn’t go far enough: protect victims of all patent aggressors, not just “trolls”; Proposed bill to make losing patent trolls to pay legal fees of victims does not go far enough. [↩]
3.  Tim Lee and Lawrence Lessig: “some punishment” of Swartz was “appropriate”;  Reason‘s Tim Lee on Two Decades of Attempts to Enforce Copyright. [↩]
4. See also Doctorow: What do we want copyright to do?; Libertarian Sci-Fi Authors and Copyright versus Libertarian IP Abolitionists. [↩]
5. See my posts Death by Copyright-IP Fascist Police State Acronym; SOPA is the Symptom, Copyright is the Disease: The SOPA Wakeup Call to Abolish Copyright; Where does IP Rank Among the Worst State Laws?; Should Copyright Be Allowed to Override Speech Rights?; Copyright is Unconstitutional.  [↩]

From QuestionCopyright.org, a great interview with Nina Paley. For some background on problems Paley alludes to re CC0, see my post Copyright is very sticky!.

Make Art, Not Law.

Submitted by admin on Fri, 2013-04-19 15:56

QCO Artist-in-Residence Nina Paley’s interview with at Baixa Cultura, conducted by email with journalist and photographer André Solnik. The English below is the original; Baixa Cultura translated Nina’s answers.

1. When your interest on free culture has begun?

For a long time I thought copyright terms were too long and the law could use reform, but I didn’t really understand Free Culture until October 2008, after months on the film festival circuit with my then-illegal feature Sita Sings the Blues. Free Culture was too audacious a concept for me to think about clearly until then. One morning I finally got it — freeing my work would be better for the work — and I spent the next half-year preparing for a Free, legal release of SSTB. That finally happened in March 2009, when I finally cleared all the necessary (and bullshit) licenses at a cost of about $70,000 to myself.

2. Tell me in short why artists should free their work. Is it a good choice for both renowned and new artists?

From my article How To Free Your Work:

Why should you Free your work? To make it as easy as possible for people to share your work — as easy as possible for your work to reach eyeballs and ears and minds — to reach an audience. And to make it as easy as possible for audience support — including money — to reach you…. Copy restrictionsplace a barrier between you, the artist, and most forms of support. By removing the barriers of copyright, you make it possible to receive money and other kinds of support from your audience, both directly and through distributors, thereby increasing your chances of success.

3. Creative Commons has recently released the final draft of the version 4.0 of its licenses. What changes would you like to see? Do you think CC should keep on supporting the nonfree licenses?

Yes, CC should stop supporting the non-free licenses. What kind of “commons” is that?

4. Although they are probably the most known alternatives to more restrictive ones, they still remain unpopular compared to the “all rights reserved“. Why is that? Do you reckon people get confused by the many possibilities given by the CC licenses?

Most people who use CC licenses don’t understand what the different licenses mean; they just call all of them “Creative Commons” as if that means anything. CC’s modular system was a good idea, I see it as an experiment that was worth doing. But the results are in: it didn’t work. What we have now are a mess of incompatible licenses, most of which fail to contribute to any real “commons,” and an increase of confusion and misinformation.

You can’t really blame Creative Commons though — the problem is copyright law. Nothing can fix it at this point. Even CC-0, a valorous attempt to opt out of copyright, doesn’t work in practice, as my experience with the Film Board of Canada showed — even after placing SSTB under CC-0, their lawyers refused to accept it was really Public Domain, and made me sign a release anyway, just to allow one of their filmmakers to refer to it. I will be saddled forever with permissions paperwork even with CC-0. I’ll probably keep using CC-0, of course, but I have no expectation it will work as it’s supposed to.

5. The BY-NC-SA license, although nonfree, it’s pretty popular. Why do you think so? What are the main issues about licensing a work using it?

People are high-minded when they choose the -NC restriction, but it accomplishes exactly the opposite of their ideals. They want to “protect” their works from abusive exploitation from big corporate players. They don’t realize those big corporate players LOVE the -NC clause, because it’s a commercial monopoly. Big corporate players are all set up to deal with commercial monopolies: they have licensing departments and lawyers. It’s the big corporate players who can afford to license your -NC works. It’s your peers, small players with no legal departments and limited resources, who can’t. The -NC clause screws over your fellow artists and small players, while favoring big corporations.

The way to avoid abusive exploitation is to use CC-BY-SA, a Share-Alike license without the -NC restriction. This allows your peers to use the work without fear, as long as they keep it Free-as-in-Freedom. Big corporate monopoly players, however, are unwilling to release anything Freely: if they want to use your work, they’ll have to negotiate a waiver of the -SA clause. For this they will pay money. It works like a regular licensing deal: for $X you waive the -SA restriction and allow them to re-use the work without contributing to the community. I have had many corporate licensors offer me such contracts, although I didn’t sign any because I was such a Free license booster.

The only reason BY-NC-SA is popular is because people really haven’t thought it through. [continue reading…]

Good news, but of course, it misses the fundamental problem which is the patent itself. The problem is not low quality patents or software patents or “abuse” of patents. Even if you get rid of these problems, the fundamental problem remains: the state is granting anti-competitive monopoly privileges that entrenched market players can use to stop competition and enhance their oligopolies.

German Parliament says: Stop Granting Software Patents

on: 2013-04-22

The German Parliament, the Bundestag, has voted on a joint motion against software patents. The resolution urges the German government to take steps to limit the granting of patents on computer programs.

In the resolution, the Parliament says that patents on software restrict developers from exercising their copyright privileges, including the right to distribute their programs as Free Software. They promote the creation of monopolies in the software market, and hurt innovation and job creation. [Correction 2013-04-24: Parliament did not yet adopt the motion, but rather decided to pass it to the parliament committees for further consideration.]

“Software patents are harmful in every way, and are useless at promoting innovation”, says Karsten Gerloff, President of the Free Software Foundation Europe. “We urge the German government to act on this resolution as soon as possible, and relieve software developers from the needless patent-related costs and risks under which they are currently suffering.”

Software patents are illegal under the European Patent Convention. Nevertheless, the European Patent Office has granted tens of thousands of patents covering software. As a result, software developers constantly risk being accused of patent infringement. This causes legal uncertainty which is costly for large companies, and potentially deadly for small ones.

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From Freedom to Tinker, on the “liberal” IP fascist Scott Turow:

Copyrights, Fundamental Rights, and the Constitution

APRIL 22, 2013 BY ANNEMARIE BRIDY 9 COMMENTS

There was a lot to take issue with in Scott Turow’s recent op-ed in The New York Times. Turow, who is currently President of the Authors Guild, took to The Times to criticize the Supreme Court’s decision inKirtsaeng v. John Wiley & Sons, which brought physical books manufactured and sold abroad within the protective scope of copyright’s first sale doctrine. Turow cast the Court’s decision as another blow to authors’ rights, which, by his account, are being pitilessly washed away by the digital tides. He blames the usual suspects: e-books, Amazon.com, pirates, Google, and—this last one may surprise you—libraries. The coup de grace, he asserted, will be the extension of first sale rights to digital copies of books. (It may comfort him to know that the possibility of that happening is more remote following Redigi’s recent defeat in federal district court.)
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My monograph Against Intellectual Property is now available in a French translation, as Contre la propriété intellectuelle Écrit (PDF – bad link; local file; Amazon kindle). It was translated by Xavier Gillard.

Sad, especially given that Asia was traditionally better on copyright than the West has been (well, at least in China: “To Steal a Book is an Elegant Offense” —Chinese saying).

From Crunchyroll.com:

Tokyo Man Arrested for Uploading “Accel World” Anime Episode

The battle between the Japanese police and illegal uploaders continues

Mikikazu Komatsu

April 18, 2013 12:07am CDT (13 hours ago)

As we have reported, the Japanese police have no mercy for illegal anime uploaders. On April 15th, Kanagawa Prefectural Police’s Cyber Crime Control Office and Minami Station arrested a 34-year-old male temporary dispatch worker who lived in Toshima-ward, Tokyo, on suspicion of using the file-sharing software Share to upload three anime programs including the 8th episode of Accel World to the internet without copyright holders’ permission between June to December in 2012.

My comment on Thoughts on the Great IP Debate:

“The argument against IP does not rest on being anarchist or even anti-legislation. It simply rests on the assumption that property rights in scarce resources are a good thing. Once you accept this, IP becomes impossible to justify. You cannot have both: property rights in scarce resources and IP. Rather, you can have property rights in scarce resources, but not allocated according to Lockean-libertarian principles (first-appropriation and contract). You have to introduce a new ownership rule to implement any form of IP, one that takes property rights in already-owned scarce resources from the libertarian owner and transfers it to a third party, just like any other socialistic welfare redistribution scheme.

This issue is clear. There is a reason libertarians have flocked to it; once they turned their attention to it, the answer is obvious–to those who are honest and have libertarian principles. And it was seen, very very clearly, long ago: by Benjamin Tucker over a century ago, and then in revived form by Sam Konkin, and Wendy McElroy, and then (partially) by Rothbard, and then by Tom Palmer, and, then, starting in the internet age, 1995-, when the issue gained renewed importance, by the bulk of libertarians: Austrians, anarchists, left-libertarians. Even honest utilitarians should oppose IP but… they don’t, making you wonder if they are really utilitarian (reminds of Sowell’s Vision of the Anointed: Self-Congratulation as a Basis for Social Policy: the liberals pretend to favor the poor but ignore evidence that their policies are counter productive; same with utilitarians who pretend to favor IP “because” it stimulates net innovation, and who turn their eyes aside when all the evidence points the other way).”

This is a transcription of my speech KOL037 | Locke’s Big Mistake: How the Labor Theory of Property Ruined Political Theory. I have cleaned up a few things and added a few links and notes.

This is discussed in Stephan Kinsella, Legal Foundations of a Free Society (Houston, Texas: Papinian Press, 2023), ch. 14, Part III.B; ch. 15, Part IV.C, et pass.

Update:

• The Superiority of the Roman Law: Scarcity, Property, Locke and Libertarianism (Mises, Aug. 17, 2010) (archived version with comments)
• Locke, Smith, Marx; the Labor Theory of Property and the Labor Theory of Value; and Rothbard, Gordon, and Intellectual Property

[continue reading…]

From the site for the C4SIF’s journal Libertarian Papers:

Libertarian Papers Ranked “A” by Excellence in Research for Australia (ERA)/Australian Research Council (ARC)

I was informed recently by that Libertarian Papers has received a quite good ranking from the Australian Research Council’s (ARC) Excellence in Research for Australia (ERA), an Australian Government body that deals with academic matters,  provides systematic evaluation of a large number of scholarly journals in different disciplines and generates a database and a variety of reports ranking the journals.  These ratings are often used by Australian universities to evaluate the contribution of their academics to various fields.

The ERA Journal Ranking List for all law and legal studies journals is appended below. The order of the rankings is A*, A, B, C and then not ranked.  Libertarian Papers  is highlighted in the list.  It is ranked at level A, which is the second best ranking on the list, which is considered quite good.

Needless to say, we are very pleased with this recognition of the excellence the journal strives for.

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