C4SIF.org

Falkvinge: There Is Never A Need To Justify Sharing Culture And Knowledge

by Stephan Kinsella on December 19, 2012

Yet another great post by Rick Falkvinge. See also my “Intellectual Freedom and Learning Versus Patent and Copyright.”

There Is Never A Need To Justify Sharing Culture And Knowledge

COPYRIGHT MONOPOLY

Just as some misguided people react with hostility to the fact that the copyright monopoly is not a birthright, they can react with hostility and demand a response to how sharing is “justified”. This, too, is misguided.

One example could be seen in the Reddit thread about The Pirate Bay being the world’s most efficient public library. For a while, the top comment was “whatever helps you justify it” (as in, the sharing of culture). This is a misguided expression based on the false premise that sharing knowledge and culture needs to be justified.

It is completely the other way around.

Humankind and civilization has advanced due to and because of people sharing knowledge and culture, and has never advanced when it has been locked up and contained. Sharing knowledge, information, and culture is also a good deed on an individual-to-individual basis. Whenever the ability to share and partake in knowledge and culture has been prevented, such as the burning of the library at Alexandria, it has always been regarded as a disaster for humanity in the history books.

And yet, some people believe that sharing – whether over The Pirate Bay, direct handover, or whatever other mechanism – needs to be justified.

It is true that the copyright monopoly has come at odds with the natural behavior of sharing and the right to share. But to enforce this monopoly, much more vital ideas in society – such as the postal secret – must be sacrificed, not to mention our cultural heritage. That is neither just nor reasonable, so that is what needs justification. It’s not just the copyright monopoly law itself that needs to be justified, but also individual compliance with the unjust monopoly law, on a case-by-case basis.

When somebody angrily asks you how you can share this and that knowledge “without permission”, state it as it is, that they are misguided, and ask how they could possibly justifyrequiring permission to share knowledge and culture. That goes counter to all of humanity’s history. Also, make sure to make a point that sharing never requires any kind of justification. (The current copyright monopoly laws are not enough of a justification, obviously, as they are unjust and completely out of touch with people’s actual and natural behavior.)

Sharing knowledge and culture is the natural state.

Therefore, any restrictions on sharing require very careful and strict justification.

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Falkvinge: The Copyright Monopoly Is A Market Distortion, Not A Birthright

by Stephan Kinsella on December 18, 2012

Excellent article on copyright by Falkvinge:

The Copyright Monopoly Is A Market Distortion, Not A Birthright

COPYRIGHT MONOPOLY

When you start questioning the copyright monopoly, many middlemen and other has-beens start acting offended – as if you have somehow questioned a natural right that they have by birthright. Nothing is farther from the truth.

The copyright monopoly is not a natural right. It is a government-sanctioned private monopoly, granted under the assumption that no culture would get created if there’s not a profit motive behind it, and that this profit motive can only be realized in a monopolized setting. Yet, when you question this assumption and this monopoly, some people react with unmitigated angry and fury – as though you have questioned their very right to life. This is puzzling, and indicates a lack of understanding of what the monopoly is and why it exists.

(People who like liberal capitalism should balk at “goverment-sanctioned monopoly”. People who lean towards labor values should balk at “private monopoly”. Still, it’s factually true.)

If property rights and normal competition were applied in the fields of culture and knowledge, there would be no such thing as the copyright monopoly whatsoever. It would be like any other field of entreprenurship – compare, for example, with how a professional chef needs to create new recipes and then can monetize them either by performing, by educating others, or by selling cookbooks, just to name a few methods. I use chefs as example on purpose here, as food recipes are explicitly not covered by the copyright monopoly – and yet, there are many cooks, chefs, and famous star chefs.

Some time in history (in 1709, specifically), publishers managed to convince legislators that no culture would get printed and distributed if the publishing guild couldn’t get the copyright monopoly reinstated, the lucrative monopoly that had previously been a censorship regime. Importantly, they didn’t argue that nothing would get created without a monopoly; they argued it wouldn’t get duplicated and distributed. Thus, fearing that no culture would be available for the population, legislators agreed to the monopoly on purely utilitarian grounds.

Later, this mutated into a purely utilitarian justification for this monopoly that limits normal property rights, competition, and trade mechanisms: “without the monopoly, little or no new culture would get created”. We see that all the time: “if you allow this monopoly to last for only 110 years instead of 120, how would the million-euro blockbuster movies get funded?”. Putting aside the argument that no movies have a return-on-investment horizon of 100 years in the first place (and many actually make their investment back opening weekend, making the copyright monopoly completely unnecessary), this argument keeps coming back: “if there’s no monopoly, no culture will be created”. [continue reading…]

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Scientific American on “The Meteoric Ascent of the Patent Troll and the Devastating Consequences for Innovation”

by Stephan Kinsella on December 15, 2012

h/t Wendy McElroy. For related posts, see:

The Meteoric Ascent of the Patent Troll and the Devastating Consequences for Innovation

By Neuro Bonkers | December 5, 2012 | 13
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Today it is perfectly legal for companies to buy and sell the rights to unlimited numbers of ideas, a company is not required to have any interest in making these ideas a reality. It is perfectly legal for companies to sit on patents and wait for others to create before either suing the creator or charging licensing fees. The following pair of quotes is pulled directly from the promotional material on the website of just one prolific patent troll:

“$2 Billion+ cumulative licensing revenue”

“70,000 IP assets acquired and nearly 40,000 in active monetisation programmes”

In fact it is not just legal, patent trolling is an industry on a colossal scale. According to research recently published by Boston University School of Law, last year patent trolls won a cool $29 Billion. One of the most worrying findings of research in to patent trolls is that the mere threat of a suit is enough to put the frighteners on and make creators pay up:

“The average legal cost to defend a patent case is $420,000 for small and medium sized companies and $1.52 million for large companies. The average settlement costs are $1.33 million for small and medium companies and $7.27 million for large companies.”

It appears that a vast majority of the money acquired by “non practicing entities” is creamed off, according to the research by the Boston researchers:

“no more than a quarter (of the direct spending by defendants ) could possibly represent a flow to fund innovative activity”

Despite this, the Boston University School of Law researchers demonstrate that money flowing in to the coffers of patent trolls is rising at a colossal rate. The following figures do not include indirect costs such as loss or delay of revenue or abandonment of new inventions:

Patent trolls however are by no means the only people in the bulk patent buying business; last August Google spent $12,500,000 on 17,000 patents. Perhaps most worrying of all is the catastrophic state of affairs with regard to the utterly overwhelming volume of software patents that continue to be filed year on year. According to a study published by Yale Law School last year:

Intellectual Property as a cause of American Prosperity?

by Stephan Kinsella on December 15, 2012

Arguments for IP are notoriously confused, hypocritical, inconsistent, incoherent, vapid, and all over the map.¹ A recurring error is the correlation-equals-causation fallacy. Fore example: postwar Japan prospered because it had a patent system;² countries with the most IP are the most prosperous;³ America’s prosperity and growth since its inception is due to its patent and copyright systems.⁴ As I noted previously:

This proves absolutely nothing, in fact, except that there can still be growth despite state intervention such as intellectual monopoly grants. Correlation is not causation. I hope Obama doesn’t see this–I’m sure he could whip up a similar chart correlating growth over the last two centuries with, say, increasing taxes, increasing federal spending, increasing federal size/employment, increasing military size, increasing efficiency at mass murder, and so on.⁵

The latest entry is in an article in City Journal by Guy Sorman (h/t Redmond Weissenberger), A Brief History of American Prosperity. Sorman writes:

Worry over America’s recent economic stagnation, however justified, shouldn’t obscure the fact that the American economy remains Number One in the world. The United States holds 4.5 percent of the world’s population but produces a staggering 22 percent of the world’s output—a fraction that has remained fairly stable for two decades, despite growing competition from emerging countries. Not only is the American economy the biggest in absolute terms, with a GDP twice the size of China’s; it’s also near the top in per-capita income, currently a bit over $48,000 per year. Only a few small countries blessed with abundant natural resources or a concentration of financial services, such as Norway and Luxembourg, can claim higher averages.

America’s predominance isn’t new; indeed, it has existed since the early nineteenth century. But where did it come from? And is it in danger of disappearing?

By the 1830s, the late British economist Angus Maddison showed, American per-capita income was already the highest in the world. One might suppose that the nation could thank its geographical size and abundance of natural resources for its remarkable wealth. Yet other countries in the nineteenth century—Brazil is a good example—had profuse resources and vast territories but failed to turn them to comparable economic advantage.

A major reason that they failed to compete was their lack of strong intellectual property rights. The U.S. Constitution, by contrast, was the first in history to protect intellectual property rights: it empowered Congress “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” As Thomas Jefferson, who became the first commissioner of the patent office, observed, the absence of accumulated wealth in the new nation meant that its most important economic resource was innovation—and America’s laws encouraged that innovation from the outset. Over two centuries later, the United States has more patents in force—1.8 million—than any other nation (Japan, with 1.2 million, holds second place). America is also the leader in “triadic patents” (that is, those filed in the United States, Europe, and Asia) registered every year—with 13,715 in 2009, the most recent year for which statistics are available, ahead of Japan’s 13,322 and Germany’s 5,764.

Notice that there is no argument whatsoever here to justify the assertion being made. The argument here assumes that innovation is critical to prosperity and economic development—true enough—and then correlates patents with innovation. But not only is this correlation problematic—not all patents are innovative and not all innovation is patented⁶ —but even if patents are correlated with innovation, correlation does not prove causation. It is equally as plausible, in fact more plausible, that innovation persists despite, not because of, a patent system.

As economist Fritz Machlup concluded in an exhaustive 1958 study prepared for the U.S. Senate Subcommittee On Patents, Trademarks & Copyrights:

No economist, on the basis of present knowledge, could possibly state with certainty that the patent system, as it now operates, confers a net benefit or a net loss upon society. The best he can do is to state assumptions and make guesses about the extent to which reality corresponds to these assumptions. … If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting one.

(For more on this issue, see The Overwhelming Empirical Case Against Patent and Copyright.) The US is trying to export to the rest of the world its fascist, protectionist, mercantilist IP laws, along with its approach to antitrust, terrorism, taxation, monetary policy and the like. Libertarians should not fall for the groundless assertion that unlibertarian policies of the US state are the reason for its economic prosperity.

See Absurd Arguments for IP; There are No Good Arguments for Intellectual Property; Intellectual Nonsense: Fallacious Arguments for IP (Libertopia 2012). [↩]
Dispatch from the Open Science Summit: Citizen Science, Microfinanced Research, Patent Trolls, and Pharma Prizes [↩]
See The “Productivity” of Patent Brainstorming [↩]
See Interactive Graphic Pretends to Illustrate How U.S. Patent System Has Driven American Economy; see also Americans for Tax Reform Uses Correlation Between Physical Property Rights and GDP to Argue for IP, USPTO/Commerce Dept. Distortions: “IP Contributes $5 Trillion and 40 Million Jobs to Economy”, Patent Lawyers Who Don’t Toe the Line Should Be Punished!. [↩]
See Interactive Graphic Pretends to Illustrate How U.S. Patent System Has Driven American Economy. [↩]
See Masnick: New Study Shows Patents And Innovation Are Not Related; Pierre Desrochers, On the Abuse of Patents as Economic Indicators, Quarterly Journal of Austrian Economics (Winter 1998); also Andrew Torrance: Patents and the Regress of Useful Arts, and the 2003 National Academies report on intellectual property; the full citation and quotation is in the introduction Torrance’s paper Patents and the Regress of Useful Arts, which characterize evidence linking IP and innovation as “emergent”—this is from the National Academies. [↩]

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Patents and Pot: Feds’ patents say medical marijuana is good, drug war disagrees

by Stephan Kinsella on December 13, 2012

The WSJ Blog, in On Intellectual Property and Pot, reveals the federal government’s schizophrenic approach to marijuana. On the one hand, in its zeal to prevent the nose-under-the-camel’s-tent of medical marijuana, it has to deny the medical benefits of marijuana (okay, well, granted, the medical benefit claims of inhaling smoke bearing a psychoactive drug into one’s lungs may seem a bit … counterintuitive); on the other, “the U.S. government’s own patents and research claim otherwise. … One 2009 patent application, for instance, extols the pain-relieving and “healing properties” of marijuana. The government’s own 2003 patent discusses the usefulness of “cannabinoids” in treating “ischemic, age-related, inflammatory and autoimmune diseases” as well as “Alzheimer’s disease, Parkinson’s disease and HIV dementia. In July, the National Institutes of Health licensed the rights of the latter patent to the pharmaceutical company KannaLife….”

As a legal brief notes, “How can the government credibly deny the benefits of medical cannabis when the government itself is funding cutting-edge research proving the medical benefits of cannabis and seeking patents based on such research?”

Well, it’s not surprising that the state is schizo on something related to patents. It’s not the first time:

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Students for Liberty: Internet Freedom in Jeopardy in Germany because of Copyright

by Stephan Kinsella on December 13, 2012

Nice post on the Students for Liberty blog about the danger copyright censorship poses to internet freedom. For more, see:

See more posts on Internet freedom.
“Where does IP Rank Among the Worst State Laws?” (Jan. 20, 2012)
“Should Copyright Be Allowed to Override Speech Rights?” (Dec. 20, 2011)
“Copyright is Unconstitutional” (Nov. 27, 2011)
“Patent vs. Copyright: Which is Worse?” (Nov. 5, 2011)
“Masnick on the Horrible PROTECT IP Act: The Coming IPolice State” (June 2, 2011)
“Copyright and the End of Internet Freedom” (May 10, 2011)
“Let’s Make Copyright Opt-OUT” (April 12, 2011)

Internet Freedom in Jeopardy in Germany

by Fred Roeder

While Students For Liberty grows to a really international student movement, we also experience a lot of tough regulations, which hinder our internationalization. For a couple of years for instance Turkey totally blocked YouTube and our partners from the 3H Movement fought heroic battles against Internet censorship in Turkey. Surprisingly one of the toughest countries in terms of Internet regulation is my home country Germany. One example are for instance the great clips Gabrielle Shiner (http://www.youtube.com/watch?v=ZIJxFAecA-M&feature=related) made in order to advertise the first European Students For Liberty Conference in 2011. Some of those clips aren’t available on the German YouTube page due to the fact that we don’t own the copyrights for the background music.

Blocked ESFLC-YouTube Clips in Germany

A new area of even tougher Internet regulation is about to arrive in Germany: Just recently two major newspapers had to close due to financial problems and the lack of innovation in order to use the Internet as a new source for revenues (Financial Times Germany and Frankfurter Rundschau). Most German print-media outlets have so far failed to understand how to utilize the Internet as the new nexus for information and revenue generation. Due to the lack of innovation and good services they have to try to win market shares in the Internet by hiring lobbyists and applying good old cronyism. [continue reading…]

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The Declared Value System: Managing Monopolies for the Public Good

by Karl Fogel on December 11, 2012

This proposal is cross-posted at Falkvinge on Infopolicy and QuestionCopyright.org. Regular readers of C4SIF will find it, if anything, more preserving of the status quo than necessary. But in the current legislative climate, simply doing away with the copyright and patent monopolies altogether is, unfortunately, still unlikely. The purpose of this proposal is to show at least that there are ways to reduce their harm, by giving the rest of us an option on freedom. Monopoly is bad, but tempered monopoly — monopoly that can be forced to respond to market pressures — is an improvement on untempered monopoly. The onus should be on those who defend the current system to explain why certain kinds of non-private information should nevertheless be exempt from the normal traffic of human commerce and communication, and one function of proposals like this is to improve the debate by forcing such defenses to be made explicit.

What would a truly free-market approach to copyrights and patents look like?

The problem we have right now is this:

Declared Value point: monopoly value vs de-monopolization value, over time.

The flat green line represents the value to the public of de-monopolizing the work — think of it as “what the public would be willing to pay for unrestricted access”. The point where the curved blue slope crosses the green line is the point where there is no longer any public or private purpose to having a monopoly. From that moment on, the value of the monopoly to the rights-owner is equal to or less than the value of de-monopolization. Yet today, the monopoly continues beyond that point. The green line is simply ignored in the current system: we pretend it does not exist.

(The graph is a simplification, but not in ways that matter to this proposal.)

You might think there’s already a market solution. After all, in the current system, anyone could in theory be offered a fixed sum to liberate their work into the public domain.¹ But markets don’t quite work the way we’d hope. This is is why we have eminent domain in real property, for example. As soon as someone starts talking about building an airport in some farm fields, all of a sudden every farmer decides their field is worth ten times as much as it was the day before, such that no airports could ever be built if we did not use the pre-rumor valuations. It is the same with copyrights and patents: the mere expression of interest in re-use drives up the price instantly, and the perpetual optimism of rights-holders ends up stretching their monopoly past its natural market end — hurting everyone else and preventing further re-use, yet frequently without realizing the benefit the rights-holder hoped for. We all lose.

But unlike with land, there’s a way out, because there’s a third thing we can do besides sell or not sell: we can liberate. That makes all the difference. [continue reading…]

I’m using terms like “public domain” loosely here. That term is usually used in copyright law, not patent law, but it’s easy to intuitively understand what it means for patents: that no one has a monopoly, that is, there is no one with the power to restrict usage. [↩]

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William Leggett on Intellectual Property

by Stephan Kinsella on December 6, 2012

In previous posts I’ve noted the historical origins of the opposition to intellectual property¹ and in particular key libertarian and proto-libertarian thinking on this matter.² Probably the earliest and most consistent libertarian opposition to IP came from Benjamin Tucker;³ and, in modern times, Konkin, McElroy, and Palmer. Then, the Internet happened, and the IP issue eventually rose from the background to the fore, and Austrian, anarchist, and left-libertarians started examining—and opposing—IP with a renewed interest.

It seems clear that the father of libertarian IP opposition is Benjamin Tucker. He was incredibly good on this topic at a time when even radicals like Lysander Spooner were bad on it.⁴ Not that Tucker was perfect on IP: aspects of his argument against IP were muddled. As I explained in Molinari on IP:

even Tucker’s case against IP seems to have ultimately been somewhat confused. For example, he thought that Spooner’s mistakes on IP⁵ were connected with what Tucker saw as Spooner’s mistakes on land. That is, Tucker is good on IP, but almost by accident. He believes the argument for IP is based on the idea that you own the products of labor (“he who first takes possession of any material production of nature”), but this argument must be rejected, because this would imply you can own land too. And because he had problems with the ownership of land,⁶ therefore the principle behind IP must be flawed too.

Other influential libertarians who were bad or weak on IP include Ayn Rand and Andrew Galambos, and proto-libertarians like Paine and Jefferson. But there were other thinkers around Tucker’s time who were also good on the IP issue, including Tak Kak (James Walker)⁷ and the nineteenth-century Jacksonian editorialist William Leggett. [Update: see: Classical Liberals and Anarchists on Intellectual Property.]

Leggett’s views on this issue can be found in the final Part of his book Democratick Editorials: Essays in Jacksonian Political Economy, which contains three short essays (repixeled below) on copyright.⁸ As noted by Tom Palmer in his article Are Patents and Copyrights Morally Justified? The Philosophy of Property Rights and Ideal Objects:

Arguments such as Spooner’s and Rand’s encounter a fundamental problem. While they pay homage to the right of self-ownership, they restrict others’ uses of their own bodies in conjunction with resources to which they have full moral and legal rights. Enforcement of a property right in a dance, for example, means that force can be used against another to stop him from taking certain steps with his body; enforcement of a property right in an invention means that force can be used against another to stop him from using his hands in certain ways. In each case, an intellectual property right is a claim of a right over how another person uses her body.

As the pro-liberty journalist William Leggett, a leader of the Jacksonian Loco-Foco party and editor of the New York Evening Post, wrote,

We do not wish to deny to British authors a right; but we do desire that a legal privilege, which we contend has no foundation in natural right, and is prejudicial to “the greatest good of the greatest number,” should be wholly annulled, in relation to all authors, of every name and country. Our position is, that authors have no natural right of property in their published works, and that laws to create and guard such a right are adverse to the true interests of society.

Leggett opposed copyright and patent rights for two reasons: First, he argued that intellectual property rights stifled the free spread of ideas and damaged the public interest. [“If the principle of copyright were wholly done away, the business of authorship, we are inclined to think, would readily accommodate itself to the change of circumstances, and would be more extensively pursued, and with more advantage to all concerned than is the case at present.”] Second, he argued that such rights were in reality statutory monopolies that infringed upon the rights of others to the ownership of their own bodies:

Our position that an author has an exclusive natural right of property in his manuscript, was meant to be understood only in the same sense that a mechanic has an exclusive natural right of property in the results of his labour. The mental process by which he contrived those results are not, and cannot properly be rendered, exclusive property; since the right of a free exercise of our thinking faculties is given by nature to all mankind, and the mere fact that a given mode of doing a thing has been thought of by one, does not prevent the same ideas presenting themselves to the mind of another and should not prevent him from a perfect liberty of acting upon them.

Leggett’s argument, while containing strong consequentialist elements, rests on the intimate relationship between liberty and property:

The rights of corporeal property may be asserted, without the possibility of infringing any other individual’s rights. Those of incorporeal property may obviously give rise to conflicting claims, all equally well founded…. [I]f you assert an exclusive right to a particular idea, you cannot be sure that the very same idea did not at the same moment enter some other mind.

Here are the final three chapters from Leggett’s book:

[continue reading…]

The Four Historical Phases of IP Abolitionism. [↩]
The Origins of Libertarian IP Abolitionism. [↩]
Wendy McElroy, Copyright and Patent in Benjamin Tucker’s periodical Liberty. [↩]
Tucker on Spooner’s One Flaw. [↩]
Tucker on Spooner’s One Flaw [↩]
see Statist “Private Property” Is Theft [↩]
See Wendy McElroy, For Liberty, Life and Property….But Not The Ownership of Ideas. [↩]
Note: Liberty Fund’s 1984 volume states this book was published originally in 1834; this must be a mistake since the chapters included below bear an 1837 date. [↩]

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Google’s Schmidt on the Patent-Caused Smartphone Oligopoly

by Stephan Kinsella on December 5, 2012

I’ve written before on how patents repress competition and benefit the larger players in a given industry by forming oligopolies with a limited number of competitors.¹ This is supported by the comments of Googld’s Eric Schmidt in a recent interview:

WSJ: Are Apple and Google discussing a patent-related settlement?

Mr. Schmidt: Apple and Google are well aware of the legal strategies of each other. Part of the conversations that are going on all the time is to talk about them.

It’s extremely curious that Apple has chosen to sue Google’s partners and not Google itself.

WSJ: What’s the endgame of all of this patent litigation?

Mr. Schmidt: It’ll continue for a while. Google is doing fine. Apple is doing fine. Let me tell you the loser here.

There’s a young [Android co-founder] Andy Rubin trying to form a new version of Danger [the smartphone company Mr. Rubin co-founded before Android]. How is he or she going to be able to get the patent coverage necessary to offer version one of their product? That’s the real consequence of this.

See The Microsoft-Apple Gesture Oligopoly; Controls breed controls, Monopolies breed monopolies; Nortel Patents Sold for $4.5 Billion to Consortium Which Includes Apple; Apple vs. Microsoft: Which Benefits more from Intellectual Property?; Patent Cross-Licensing Creates Barriers to Entry. [↩]

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Republicans More Radical Than Libertarian Copyright Moderates

by Stephan Kinsella on December 3, 2012

The alleged case for copyright is that some temporary monopoly is “needed” to incentivize artistic creation. Yet given that there is no evidence that this is so,¹ and how copyright is used to censor and chill speech and expression and to justify expansions of the police state and regulations of Internet freedom,² one would think that libertarians and free marketeers would be calling for the complete abolition of copyright.

Unfortunately, this is not the case. While most Austrian-influenced libertarians, left-libertarians, and anarchist libertarians are now against IP,³ pragmatic and utilitarian-type “moderate” libertarians tend to avoid taking a radical, principled stance on IP. Most of them think the patent and copyright systems are “broken” and need to be reformed, but not abolished. They accept the basic idea that patent and copyright are necessary to stimulate innovation but that these laws have now “gone too far.” For example, libertarians Timothy Lee⁴ and Alexander Tabarrok⁵ pose as radical IP mavericks but are not in favor of abolishing patent and copyright.

In a recent Bloomberg article, A Free-Market Fix for the Copyright Racket, libertarian writer Virginia Postrel discusses growing criticism “of today’s copyright regime from intellectuals and activists on the right.” As she writes:

Making the intellectual case, the Mercatus Center at George Mason University, a hub of free-market scholarship, has just released “Copyright Unbalanced: From Incentive to Excess,” a collection of libertarian and conservative critiques. The book doesn’t oppose copyright per se, but it excoriates the current system’s lengthy terms and expansive enforcement powers.

“Whatever your philosophical position, if you are skeptical of government power, you should likewise be skeptical of the copyright system that has developed over the last century,” writes Jerry Brito, the volume’s editor, in the introduction.

Brito, who directs the center’s technology policy program and teaches law at George Mason, argues that copyright is more akin to the tradable emissions permits used to regulate air pollution than it is to traditional property in goods or real estate. Copyright is a “created order,” in which congressional action deliberately generates scarcity to produce a public benefit.

Just as an effective emissions-trading system depends on getting right the exact number of permits and total amount of emissions, so a good copyright system depends on setting the right terms, limits on fair use and enforcement mechanisms.

“If copyright is weak, then it will provide little incentive to create,” Brito writes. “But if it is too strong, then it will limit the public’s ability to enjoy and build on creative works, which after all is the reason why we have copyright in the first place.”

Striking that balance is tricky, even without political pressure. And lawmakers have shown little interest in trying to reason out the optimal solution. Instead of balancing the interests of consumers and future producers with financial incentives to create new works today, copyright has become an expanding monopoly privilege for well-connected industries.

Note the bolded text. The book from George Mason University, “a hub of free-market scholarship,” doesn’t oppose copyright “per se.” The editor, Jerry Brito, buys into the argument that “If copyright is weak, then it will provide little incentive to create”—even though there is no evidence for this contention—and even though this is not a principled way to determine which laws and property rights are justified and which are not, in the first place. Thus, he agrees that we need to “strike the right balance” and “set the right copyright term.” Apparently these free market IP reformers know that 100+ years of copyright term is “too long,” but that zero is “too short,” so we have to—somehow—find the “right term” so that we “strike the right balance.” (See also Tabarrok’s groundless “Laffer curve” type model of copyright term optimization, discussed in Patent Policy on the Back of a Napkin.)

I suppose if gasoline rises to, say, $10/gallon, the state ought to impose Nixonian price controls—after all, it’s obvious, isn’t it, that $10 is “too high.” Yet you don’t want it to be only a penny a gallon—that’s “too low” since it would not stimulate enough gasoline or oil production. We need to strike the right balance and find the right gasoline price somewhere between $0.01 and $10 per gallon. After all, what’s the point of having a government if you’re not gonna use it?

It’s pretty sad when Republicans are more radical on IP reform than libertarians are.⁶

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Copyright Shill’s Defense of the Status Quo

by Stephan Kinsella on November 20, 2012

In my post Heroic and Radical Republican Study Committee Copyright Reform Proposal Retracted under Pressure from MPAA and RIAA, I noted that a recent radical proposal for copyright reform released by the Republican Study Committee was almost instantly pulled under pressure by Big Content. In an update, I noted that Cato’s Timothy Lee, who poses as an IP-reform maverick but, as noted here (also here), is not against IP on principle, wrote on Facebook: that the report “was retracted because it was intellectually indefensible” (which I guess is something different than merely “indefensible”), citing IP shill Scott Cleland’s post The Copyright Education of Mr. Khanna — Part 2 Defending First Principles Series. Let’s look a bit more closely at Mr. Cleland’s alleged demonstration that the RSC’s copyright report was “intellectually indefensible”.

Mr. Derek Khanna, a new Republican Study Committee (RSC) staffer, distributed apolicy brief on copyright “myths” last Friday that the Committee very quickly disavowed and pulled down because it had not been vetted to ensure that it fairly represented the Republican Study Committee’s views. Don’t expect this policy brief to ever get the official support of RSC because Mr. Khanna has obviously and grossly mischaracterized Constitutional first principles, property rights, and free markets beyond recognition.

There are at least five fundamental flaws in Mr. Khanna’s characterizations.

At least! Well, you would think five would be enough. Let’s see…

1. Congresses and Supreme Courts have not totally misread the Constitution for over 200 years.

Mr. Khanna’s effective assertion that two centuries of Congressional and Supreme Court interpretation of the U.S. Constitution’s treatment of property rights, and copyrights in particular, are really “myths” that misinterpret what he posits the Founding Fathers really meant to do in promoting “progress of science and the useful arts,” puts his opinion squarely at odds with America’s two centuries of experience with Constitutional rule of law.

How can an opinion be “at odds” with positive law rulings of state employees? These are the same kinds of observations made by legal positivists and statists who say that the Civil War “settled” the issue of secession. But let’s go on.

While there is a perfectly legitimate copyright debate that can be had on the appropriate definition of how long “limited times” for exclusive right to “writings and discoveries” should be,

Well how long, exactly, should they be? Zero? 14 years? 150 years? Forever?

Mr. Khanna’s “myths” brief is fundamentally not about that, but about a frontal assault on two centuries of Congressional and Supreme Court interpretation of Article I, Section 8, Clause 8.

Why…. why… how dare he disagree with two centuries of state interpretation of the document that grants them power to regulate the economy! Heavens to Betsy! Someone grab the fainting couch! Anyway, what is the argument? Cleland simply has a bare assertion here: that Khanna has assaulted two centuries of official interpration of the copyright clause. Well so what? Why does that make it wrong? And even if the official interpretation of the copyright clause is correct, that doesn’t mean it’s morally justified.

2. Mr. Khanna’s copyright views are not conservative.

Mr. Khanna’s hostile views towards copyright are at war with those of the Founding Fathers because property is strongly protected in the Constitution and the Bill of Rights.

So many confusions in so few words. First, there is the implication that being for property rights has something to do with being “conservative.” Not so. Second, there is the identification of the Founding Fathers with all that is good and right and property; this is just legal positivism mixed with an appeal to authority. The Constitution does not strongly protect property; it enables the central state to ride roughshod over property rights and in fact empowers the Congress to enact legal monopolies (patent and copyright) that in fact do derogate from and violate property rights. The Founding Fathers were not some genius statesment who gifted us with the sacred right of limited government and private property; rather, they were racist, power-seeking white males of privilege who knew what words they had to say to the people to delude them into thinking the new state being foisted on them was legitimate. The Constitution is not some genius system of checks and balances “bestowed” on us; it is the plan of evil geniuses who succeeded in seizing and centralizing power by using the right words and incantations to speak to enable them to get away with it. It is as if they knew some elaborate scheme to figure out how to rob a bank, and everyone praises them for the cleverness of the scheme.

James Madison understood protection of private property rights was a first principle in stating in Federalist #10 that the protection of property rights “is the first object of Government.” That comports with John Locke, whose social contract philosophy undergirds the American Constitution; he said: “The reason why men enter into society is the preservation of their property.”

Mr. Khanna’s copyright views actually closely parrot the collectivist views of the famous Professor Larry Lessig who founded Free Culture and Creative Commons, championedFree Software and CopyLeft, and called for convening a new Constitutional Convention because “Democracy in America is stalled” by the “corruption” of money in politics.

It is also important to note that Marx and Engels said their theory could be summed up in one sentence: “Abolition of property.”

Calling state-granted monopoly privileges “property” does not make it so.¹ In fact, such monopoly privileges undercut and invade private property rights.² It is not collectivist to oppose state monopoly privileges. In fact a strong belief in private property rights is the primary reason to oppose such anti-competitive monopoly grants.

In any case, notice that, as with point 1, there is simply no argument whatsoever here. Cleland may be right that Khanna’s views are not “conservative”. so what? When has conservativism ever been for honest interpretation of the Constitution? (Hint: how many “conservatives” will now disavow Lincoln’s war against southern states’ constitutional right to secede?) When has conservatism ever been for justice and individual rights and a consistent, strong defense of Lockean-style property rights? Answer: never. The reason is: only libertarians are for this, and conservatives are not libertarians. They are just statists of one stripe.³

3. Copyright is property not monopoly.

Mr. Khanna’s gross mischaracterization of the “exclusive rights” of copyright as a monopoly is classic Lessig-ian buzzword blackmail to demonize ownership of private property by mischaracterizing property exclusive rights with a word he knows people don’t like — monopoly.

Well there is a reason people don’t like monopoly: but the only true monopoply is that of the state, which conservatives do not oppose. Instead, they favor, like other types of socialists, the monopoly state enacting anti-monopoly laws that persecute private businesses who cannot and do not achieve real monopolies, all the while the same state hands out monopoly grants of privilege called patent and copyright and disguised as intellectual “property” rights.⁴ But there is no question that patent and copyright are monopolies, as is admitted (gleefully) by even their ardent defenders.⁵

A copyright is not a business or market that can be monopolized, copyright is a Constitutional property right for a product that can be bought and sold, or protected from use by others.

Is this supposed to be an argument? It is just some bizarre legal positivistic appeal to authority.

To show how silly this mischaracterization is, do we believe we have a monopoly over use of our car or home? No it is our property and because it is our property we have the right to decide who can use our car or enter our house. The only purpose in mischaracterizing property as a monopoly is to promote hostility to property and individual ownership of property separate from the state.

The purpose in mischaracterizing state monopoly privilege grants as “property” is to bamboozle people.⁶ Not the other way around. The property rights in a scarce resource like a car or house are grounded in a Lockean theory of original appropriation and contractual title transfer. Copyright is just a negative servitude granted by the state that takes property from previous owners and transfers it to state-favored recipients.²

4. Mr. Khanna is flat wrong asserting “Copyright violates every tenet of laissez faire capitalism.”

No genuine conservative or free market proponent would imagine positing that property, or a whole category of Constitutionally-protected property like copyrights, patents or one’s home property, violate the entire concept of capitalism. At its most basic level, capitalism is about capital which is private property. Capitalism is property and property is capitalism. Capitalism simply cannot exist without common law enforcement of property rights and contracts.

Well, patent and copyright do not emerge from either common law of property or contract; it requires legislation. Khanna’s obvious point is that IP is anti-competitive and anti-property, and thus anti-capitalism—and this is recognized by those who support patent and copyright. For example, they say:

Governments adopt intellectual property laws in the belief that a privileged, monopolistic domain operating on the margins of the free-market economy promotes long-term cultural and technological progress better than a regime of unbridled competition.⁷

Is this “conservative”? Yes, it is; and it has nothing to do with competition, private property rights, and free markets. Or, here is another supposed defender of capitalism:

To paraphrase the late economist Joan Robinson, patents and copyrights slow down the diffusion of new ideas for a reason: to ensure there will be more new ideas to diffuse …⁸

Cleland is (unfortunately) free to favor and help foster this fascist protectionism on the remnant of the free market we have remaining, but he is not free to have his cake and eat it too: he cannot coherently claim to be for property rights and free markets while supporting anti-competitive, protectionist monopoly privilege grants by the criminal state.

Even capitalism’s biggest opponents, Marx and Engels, knew the opposite of capitalism was “Abolition of property.”

More question-begging. It is IP proponents who are socialistic, since the legislated state grants of monopoly that they favor undermine private property rights just as socialist expropriations, regulations, and taxes do.

5. Copyright is law not regulation.

Once again, Mr. Khanna uses deceptive language to mischaracterize and de-legitmize copyright in buzzword blackmailing it as government regulation and subsidies. Property is a Constitutional right.

Yeah, well slavery was constitutional for a while, and today, income tax and tariffs and war and the draft and the drug war and welfare and government schooling and social security and Obamacare and regulation of the right to bear arms are also “constitutional.” So who gives a damn whether a given law is “constitutional” or not? It means nothing.

Copyright is enforced via the courts as law enforcement not regulation. It’s absurd for Mr. Khanna to characterize Government law enforcement to protect all citizens’ life, liberty and property as a “subsidy” rather than a purpose and core function of the Government.

In sum, Mr. Khanna is promoting Lessigian anti-property thinking (that more American innovation and progress will emanate from the utopian altruism of a property-less system, where taking what others produce without permission is called “sharing),” as superior to America’s Constitutional political and economic system of property and economic incentives.

What do Mr. Khanna and Professor Lessig think the Founding Fathers meant when they said in the preamble of the Constitution “… secure the blessings of Liberty to ourselves and to our Posterity…”?

Our Founding Fathers understood two centuries ago, as most Americans still understand today, that “free,” meaning no property, will not “promote the progress of Science and the useful Arts,” (innovation) and that “free,” as in no-cost, is not best for the people or for America because it is not economically sustainable for today or for “our posterity.”

The inane mutterings of this inept copyright shill show vividly how intellectually bankrupt is the case for IP. One can only hope that this presages a collapse of the modern IP-protectionist edifice.

See Intellectual Properganda. [↩]
See Intellectual Property Rights as Negative Servitudes. [↩] [↩]
See Hoppe, “The Socialism of Conservatism,” in A Theory of Socialism and Capitalism. [↩]
See Abolish antitrust law and the real monopoly: the state; The Schizo Feds: Patent Monopolies and the FTC; EU newsflash: patents are anticompetitive!; Pro-IP Libertarians Upset about FTC Poaching Patent Turf; State Antitrust (anti-monopoly) law versus state IP (pro-monopoly) law; see also When Antitrust and Patents Collide (Rambus v. FTC); Antitrust vs. Trademark Law; Price Controls, Antitrust, and Patents; IP vs. Antitrust; The Schizophrenic State; Intel v. AMD: More patent and antitrust waste. [↩]
See Are Patents ‘Monopolies’? [↩]
See Intellectual Properganda. [↩]
See Intellectual Property Advocates Hate Competition. [↩]
See Shughart’s Defense of IP. [↩]

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Heroic and Radical Republican Study Committee Copyright Reform Proposal Retracted under Pressure from MPAA and RIAA

by Stephan Kinsella on November 18, 2012

Just the other day, the Republican Study Committee (the conservative caucus of House Republicans), chaired by Ohio Representative Jim Jordan released a brief two days ago entitled Three Myths about Copyright Law and Where to Start to Fix it. The brief attacks current copyright law and proposes sweeping, significant changes—reducing statutory damages, expanding fair use, punishing false copyright claims, and significantly limiting copyright terms. But then it was pulled, no doubt under pressure from Big Content (a copy of the report is available here).

More below from Mike Masnick at Techdirt; see also Peter Brantley, The magically disappearing copyright report.

See also Copyhype, Republican Study Committee Policy Brief on Copyright: Part 1, citing Derek Khanna, “Reflection on the House Republican Study Committee Copyright Report,” Cardozo Arts & Entertainment Law Journal vol. 32, no. 1 (2011); see in particular Part V, “Addressing the Natural Rights Counter Argument”; and Derek Khanna, “Republican Study Committee Policy Brief: Three Myths About Copyright Law and Where to Start to Fix It” (same issue). See also KOL030 | Interview with Derek Khanna.

Update: On Facebook, Timothy Lee, who poses as an IP-reform maverick but, as noted here (also here), is not against state granted IP monopolies, writes: that the report “was retracted because it was intellectually indefensible,” citing IP shill Scott Cleland’s post The Copyright Education of Mr. Khanna — Part 2 Defending First Principles Series (which I dissect here).

That Was Fast: Hollywood Already Browbeat The Republicans Into Retracting Report On Copyright Reform

from the so-that’s-how-that-works dept

So, late Friday, we reported on how the Republican Study Committee (the conservative caucus of House Republicans) had put out a surprisingly awesome report about copyright reform. You can read that post to see the details. The report had been fully vetted and reviewed by the RSC before it was released. However, as soon as it was published, the MPAA and RIAA apparently went ballistic and hit the phones hard, demanding that the RSC take down the report. They succeeded. Even though the report had been fully vetted and approved by the RSC, executive director Paul S. Teller has now retracted it, sending out the following email to a wide list of folks this afternoon:

From: Teller, Paul
Sent: Saturday, November 17, 2012 04:11 PM
Subject: RSC Copyright PB

We at the RSC take pride in providing informative analysis of major policy issues and pending legislation that accounts for the range of perspectives held by RSC Members and within the conservative community. Yesterday you received a Policy Brief on copyright law that was published without adequate review within the RSC and failed to meet that standard. Copyright reform would have far-reaching impacts, so it is incredibly important that it be approached with all facts and viewpoints in hand. As the RSC’s Executive Director, I apologize and take full responsibility for this oversight. Enjoy the rest of your weekend and a meaningful Thanksgiving holiday….

Paul S. Teller
Executive Director
U.S. House Republican Study Committee
[email protected]
http://republicanstudycommittee.com

The idea that this was published “without adequate review” is silly. Stuff doesn’t just randomly appear on the RSC website. Anything being posted there has gone through the same full review process. What happened, instead, was that the entertainment industry’s lobbyists went crazy, and some in the GOP folded. [continue reading…]

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Chicago options market goes nuclear, files $525 million patent suit

by Stephan Kinsella on November 15, 2012

From ars technica. Another day, another insane patent lawsuit:

Chicago options market goes nuclear, files $525 million patent suit

In a long war between two options exchanges, patents are the most dangerous weapon.

by Joe Mullin – Nov 14 2012, 7:00pm CST

There was a time, not long ago, when the titans of the US financial world ran away from patents. During the Bilski case, big banks filed an amicus brief (PDF) on the same side as Google, asking the Supreme Court to disallow so-called “business method” patents to no avail.

However, a few key financial institutions have embraced patents enthusiastically. This week, the Chicago Board Options Exchange has taken finance-patent wars to a new level. CBOE filed a lawsuit against a competing options exchange, International Securities Exchange (ISE), demanding $525 million for the infringement of three patents: US Patent Nos. 7,356,498, 7,980,457and 8,266,044. The board asked for the first patent in 1999, at the height of the patent-everything craze, and the patents were issued between 2008 and 2011.

In its complaint, the Chicago board says the patents cover its Quote Risk Monitor system. That lets traders “actively control their risk exposure” by telling CBOE the “risk threshold” they want to take on.

The bad blood and litigation between these two exchanges goes back years. The European-owned ISE was the first US all-electronic exchange when it opened in 2000. The Chicago Board Options Exchange was the first options exchange, period, when it was founded in 1973.

ISE first sued the Chicago board back in 2006, claiming infringement on its own patent—filed in 1999, just two months before CBOE’s first patent filing. CBOE beat that lawsuit at the district court level, but this May, it was revived (PDF) by the nation’s top patent appeals court. Now it looks like the lawsuit against Chicago is going to go forward, whether the exchange likes it or not—and filing their own “defensive” patent suit is the best way to get leverage.

The high-stakes suit-and-countersuit between two major options exchanges raises the question: will patent disputes infect the world of corporate finance like they have the tech world?

Copyright and Planned Obsolescence: The Shady World of Repair Manuals: More copyright censorship

by Stephan Kinsella on November 13, 2012

From Wired: another story of copyright used for censorship and protectionism. No offense, Silas Barta.

Copyright and Planned Obsolescence: The Shady World of Repair Manuals

BY KYLE WIENS

Tim Hicks is a 25-year-old Australian with an interesting hobby: He trawls the nooks and crannies of the internet looking for manufacturer service manuals and posts the PDFs online for free. Hicks was frustrated that there wasn’t a single website out there with every laptop service manual. He started the site – aptly named “Tim’s Laptop Service Manuals“ – because he fixes laptops himself.

Tim’s site now streams over 50 gigabytes of manuals every day. Or rather … it used to. In a recent strongly worded cease-and-desist letter, Toshiba’s lawyers forced Tim to remove manuals for over 300 Toshiba laptops.

Tim’s many fans have expressed surprise at Toshiba’s onslaught – check out some of the Redditcommentary — and I’m outraged, too. Not just because of this specific case, but because of what it means for the lifetime of our devices, the future of repair and e-waste, and the abuse of copyright law as a weapon for planned obsolescence.

Keeping manuals off the internet ensures the only path for beleaguered customers is sending broken devices back to high-priced, only-manufacturer-authorized service centers. By making it so expensive and inconvenient to repair broken electronics, this policy amounts to planned obsolescence: many people simply throw the devices away.

Toshiba has discovered a new way to enforce such planned obsolescence by cutting the repair market off from critical service information. But the cost to society is significant: The e-waste problem is growing; we’re losing thousands of domestic jobs as independent repair shops shut down; and consumers are being forced to replace their hardware much frequently than they should have to.

Read more>>

sdfs

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There Is Never A Need To Justify Sharing Culture And Knowledge

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The Copyright Monopoly Is A Market Distortion, Not A Birthright

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from the so-that’s-how-that-works dept

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Copyright and Planned Obsolescence: The Shady World of Repair Manuals

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