Schulman: “If you copy my novel, I’ll kill you”

by Stephan Kinsella on June 6, 2012

From a facebook discussion, IP libertarian and novelist J. Neil Schulman says to me:

You and your ilk have a problem with me and L Neil Smith that won’t disappear with the death of the State copyright laws. Make copies of our creative works without our permission and we’ll kill you. “Seno Akta Gamat!” [from The Fifth Element: “Never without my permission!”]

This is even more explicit than his previous, more subtle suggestion along these lines, in his logorights article:

anyone who attempts to violate my property rights in this logos should expect to hear from the legal firm of Smith & Wesson.

As I wrote in The Great IP Debate of 1983:

while Schulman, as an anarchist, to his credit admits that if it could be shown that his version of IP could be enforced only by state law, he would abandon it, he ends his speech with a very unlibertarian threat of murder: to sic the firm of “Smith and Wesson” on those who use the ideas they have learned from him.

And now he is saying he would just murder people who copied his novel without his permission. Ho-kayyyy. Need anything else be said about the lunacy to which the IP mentality leads?

Update: To his credit, Schulman has retracted his comment, after a long facebook discussion:

Stephan Kinsella: I didn’t mean it. It was wrong for me to say it. Of course I wouldn’t kill someone for a copy violation. I’ve never killed anyone and I pray to God that I’m never put into an actual situation where I have to use deadly force against an attacker.

I apologize.

This said, you make me seething mad and that’s why I wrote such emotional rot. The way you toss around the word fascist at lights in the world such as Ayn Rand and Brad Linaweaver is awful.

I think your principles are truly fucked up and I will continue to argue against them. Just more civilly.

Neil

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China “Steals” An Entire Austrian Village

by Stephan Kinsella on June 6, 2012

China elevates the art of KIRF, copies Austrian village of Hallstatt

In Against Intellectual Property, I described some of the absurd results that could flow from a consistent application of IP:

imagine the time when men lived in caves. One bright guy—let’s call him Galt-Magnon—decides to build a log cabin on an open field, near his crops. To be sure, this is a good idea, and others notice it. They naturally imitate Galt-Magnon, and they start building their own cabins. But the first man to invent a house, according to IP advocates, would have a right to prevent others from building houses on their own land, with their own logs, or to charge them a fee if they do build houses.

Imagine how much worse it would be to copy an entire village! China in fact has done this, constructing “a full size replica of the Austrian village of Hallstatt, a small enclave in the Alps known for its tourism and salt production. The Unesco-recognized World Heritage Site was painstakingly recreated, down to the historic clock tower. All in all, it’s a stunning achievement ….” (China elevates the art of KIRF, copies Austrian village of Hallstatt, Engadget)

But of course, a consistent IP advocate would have to regard this as a massive act of theft. And this is why IP is also threatening the emerging technology of 3D printing, which permits people to fabricate duplicates of objects.¹ Copying, emulation, and “unbridled competition” are the bane of the IP advocates. In fact, some of the Austrian villagers were initially “angry and shocked” at the news that China would copy their village (from this BBC report), or “upset” (from this BBC report), though it’s never made quite clear what exactly they are upset about. But now the prevailing attitude seems to be one of bemusement or pride that their little village was “important enough to get a copy.” The town already hosts thousands of Chinese tourists every year. This publicity will likely only increase the tourism.

Marcin Jakubowski: Open-sourced blueprints for civilization; Pharmaceutical “Printers” and Patents; The IP War on 3D Printing Begins. [↩]

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Quaker “Oaks” Trademark “Thieves”

by Stephan Kinsella on June 5, 2012

Roderick Long followed links in this post and ended up on this post revealing a humorous exchange between a lawyer for Quaker Oats and some actual Quakers who dared sell Christmas trees under the name “Quaker Oaks.” Just another example of IP law gone amok.

Orange County Friends Meeting
Religious Society of Friends (Quakers)

Santa Ana, California

Quaker Oats threatens to sue us

Dear Mr. William Lovett:

I am the attorney at the Quaker Oats Company responsible for trademark matters. As you probably know, our company manufactures numerous food products, the most famous of which is oatmeal. In addition to having used the Quaker Oats name as our company name for close to 100 years, we have registered the Quaker name as a trademark.

It was therefore quite a surprise to discover that you are operating a business under the name “Quaker Oats Christmas Tree Farm.” Your use of our trademark is likely to mislead consumers into believing that your business is associated with the Quaker Oats Company. It is also likely to weaken our very strong trademark. In light of the foregoing, we hereby demand that you immediately stop all use of the “Quaker Oats” name…. While we would like to settle this matter amicably, we will take all steps which are necessary and appropriate to protect our name.

Sincerely
Janet L. Silverberg, counsel

Dear Janet Silverberg:

My breakfast this morning—rolled oats by the way—was interrupted by the arrival of your letter via FedEx, which was delivered to us despite the fact that you have misspelled our company name which is Quaker OAKS Christmas Tree Farm. Our farm was so named because religious services were held outdoors on this farm under a great oak tree until about ten years ago when we were able to move into our new Meetinghouse on another corner of our farm.

Our business is 100% owned and operated by Quakers. I suspect that your firm employs considerably fewer, if any, Quakers. We trace our Quaker ancestors back 320 years and they were mostly farmers, but I don’t know how many of them grew oats for your company. My guess is that you may be selling far more Lutheran oats, Methodist oats, or maybe atheist oats. Could your company be guilty of product source misrepresentation?

We don’t know why you choose to associate your commercial products with our faith, but we supposed you feel there is some marketing value from it. If you were selling machine guns, roulette wheels or some other product offensive to our Quaker faith, we would be upset by the association, but since we find your products wholesome and enjoyable, we consider your use of our name a compliment. We invite you to visit our farm to verify that we are indeed Quaker Oaks Christmas Tree Farm. If you come in December, we’d be happy to sell you a tree!

Sincerely,
William Lovett,
Visalia, California

Trademark law should be abolished. The only part of it that is justifiable is already covered by fraud law. Other examples of trademark insanity are listed here and in The Patent, Copyright, Trademark, and Trade Secret Horror Files.

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Economist: Pretty profitable parrots

by Stephan Kinsella on June 3, 2012

Good article at The Economist:

Pretty profitable parrots

For businesses, being good at copying is at least as important as being innovative

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Cost to Google to Pre-Screen YouTube Videos to Prevent Copyright: $37 Billion Per Year

by Stephan Kinsella on June 1, 2012

As I noted in Software Industry Needs 2 Million Patent Attorneys and $2.7 trillion per year to avoid infringing software patents, for the software industry to monitor and be sure US software patents are not infringed, it would cost literally trillions of dollars–far more than the entire industry is even worth. And now it appears similar absurd results apply in the case of copyright. As noted by Glyn Moody at Techdirt, it would Google about $37 billion per year to pre-screen YouTube videos to ensure no copyright infringement, about equal to Google’s annual revenue. In other words, for many key industries (I would argue for all) it is literally impossible to comply with these “property rights” and survive. Some property rights.

How Much Would It Cost To Pre-Screen YouTube Videos? About $37 Billion Per Year…

from the copyright-does-not-scale dept

Last week we reported that videos were currently being uploaded to YouTube at the rate of 72 hours every minute, and asked how anybody could expect Google to pre-screen such a deluge. Techdirt Insider xenomancer has gone a little further by working out how much it would cost to screen that material for potential copyright infringement, doubtless something the media industries would love to see imposed.

Most of the calculation is straightforward, but there’s one key variable: the kind of person who will do the screening. You can’t just use random people off the street, or starving artists, or bored software engineers, because the crucial question they must answer is: does too much of this video infringe on somebody’s copyright? Only one class of person is qualified to answer that, and hence to take on this job: judges. Or, more specifically:

horribly underpaid judges who happen to be extremely efficient at determining the copyright status of each video they watch and choose, of the little free will they have, to consider all video uploaded.

Using the fact that the average pay for a judge in Silicon Valley is apparently $177,454, and that based on the volume of uploads and number of hours in a working day, a mere 199,584 judges would be required as screeners, this gives us the final figure for the cost of checking properly those 72 hours per minute:

$36,829,468,840 per year.

Interestingly, Google’s revenue for 2011 was $37,905,000,000.

Absurd as this calculation may be, it does reveal the key problem with unthinking calls for YouTube videos to be pre-screened for possible infringement: only suitably-qualified individuals can do that, and eventually you run out of them. In other words, attempts to police rigorously online materials are doomed to fail by the nature of the copyright system itself. Basically, copyright does not scale.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

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How Copyright Extension Undermined Copyright: The Copyright Of Parking (Part I)

by Stephan Kinsella on May 21, 2012

Great Techdirt post by Larry Downes:

How Copyright Extension Undermined Copyright: The Copyright Of Parking (Part I)

from the parallel-parking dept

What do copyright and parking laws have in common?

The short answer: no one takes either very seriously.

According to a recent article in L.A. Magazine, only 10% of parking citations ever get written.Which is to say that 90% of the times that people park illegally, there are no consequences. Those who violate the increasingly strict parking rules in most U.S. cities are more likely to associate a ticket with bad luck or personal hostility against them than with the fact that they broke the law.

In other words, when you get a ticket, you don’t feel guilty. You feel victimized. As John Van Horn, the editor of Parking Today, explains, low levels of enforcement undermine the deterrent intent of parking laws. “We break the law often and get away with it. Deep down inside we know that. What makes us mad is getting caught the few times we do. ‘Ninety percent of drivers on this street got away scot-free today, but I get the ticket?’ That makes us crazy.”

Part of what drives us to rage at getting a ticket is that we don’t actually believe parking should be illegal in the first place. The freedom to park wherever there’s space is deeply ingrained in the American psyche if not the law. The invention of the parking meter in the late 1930’s was greeted with near-riots across the country. Editorials railed against the new devices as “illegal,” “immoral” and a “perversion.” The Alabama state Supreme Court declared meters unconstitutional in 1937, and ordered them removed from Birmingham streets.

“I truly believe that when men and women think about parking, their mental capacity reverts to the reptilian cortex of the brain,” says UCLA’s Donald Shoup, perhaps the nation’s only academic devoted to the study of parking.

A law that is rarely enforced—indeed, which is not cost-effective to enforce except sporadically—is no law at all. Which brings us to copyright.

Overprotective and largely unenforced rules, combined with a deep-rooted sense of entitlement, create an explosive combination. The problem is the same with parking and copyright. As copyright law becomes more strict, and its penalties more byzantine, Americans are less likely to make the effort to follow the rules, or to believe that new forms of technology-enabled copying are immoral in the first place.

We refuse to see our behavior as illegal, even when we know it is. Recent surveys by the Pew Research Center, for example, report that 72 percent of Americans between ages 18 and 29 “do not care whether the music they download onto their computers is copyrighted or not.” Rightly or wrongly (if those terms even mean anything anymore in this context), the added penalties, extensions, and limits on copying, along with decreasing rates of successful enforcement, are making it less, not more, likely that Americans will obey the rules.

We are collectively living in a state of cognitive dissonance, uncomfortably embracing two conflicting beliefs at the same time. Copying is illegal. Copying is not wrong.

Where did we get the idea of a right to free content? In large part, from the content producers themselves. An older generation grew up with music, movies and television programs beamed directly to their televisions and transistor radios at no charge. Those consumers can’t understand why saving content onto some medium and enjoying it again or later should suddenly transform a strongly-encouraged behavior into a felony.

A younger generation, raised on cheap Internet access, was likewise encouraged to enjoy all manner of copyrighted materials freely and frequently by content providers who wisely chose to rely, as their predecessors did, on advertising and other indirect revenue to pay their costs and generate profits. That’s the message of newspapers, magazines, and broadcast networks who offer some or even all of their content without a paywall. And the movie industry teases consumers mercilessly with trailers, interviews, and production blogs that show just enough of upcoming movies to make us feel entitled to see the rest, one way or the other, the sooner the better.

Yet when fans enthusiastically encourage others to embrace their preferences by posting clips or copies of popular content to YouTube or by ripping CDs and DVDs to repeat their enjoyment on other devices, they instantly cross the legal line from well-trained consumers to dangerous criminals—even terrorists.

Copyright may be the law, in other words, but it no longer holds any moral authority with most consumers. There’s no longer an ethical imperative to obey it or even understand it. Self-enforcement is fading, and the rules are so severe and so frequently violated that effective legal enforcement has become nearly impossible.

It’s a meter, and we all know that the meter is rarely checked. Copyright is a law in name only—as obsolete and irrelevant as rules still on the books in some jurisdictions that regulate who can or must wear what kind of clothing.

Next: How making the law stronger makes the law weaker

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My reply to: “4 Ways Intellectual Property Drives our Economy”

by Stephan Kinsella on May 16, 2012

My reply to this (ridiculous) post, 4 Ways Intellectual Property Drives our Economy:

I am a patent attorney. The patent system (and copyright system) are abominations. They are antithetical to the free market. They should be abolished.

This study is utter nonsense. The study does not prove IP generates any innovation or wealth. It just says that industries that are subject to IP generate wealth. So what? Every industry that generate wealth is subject to regulations, taxes, etc. Might as well say that taxes cause production, which is obvious nonsense. There is innovation and wealth production despite taxes and patent law, not because of it.

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The Economist: Copyright Is An Antiquated Relic That Has No Place In The Digital Ages

by Stephan Kinsella on May 16, 2012

As noted in a recent Techdirt post by Mike Masnick, economist Dean Baker, in his latest column about how The Pirate Party has got it right on copyright, argues:

Near the top of the list of the Pirate Party’s demons is copyright protection, and rightly so. Copyright protection is an antiquated relic of the late Middle Ages that has no place in the digital era. It is debatable whether such government-granted monopolies were ever the best way to finance the production of creative and artistic work, but now that the internet will allow this material to be instantly transferred at zero cost anywhere in the world, copyrights are clearly a counter-productive restraint on technology.

Problem is, Baker “goes on to suggest some alternative means to fund such creative works in a world without copyright, including ideas like ‘artistic freedom vouchers’ that would give people a refundable tax credit on supporting creativity, on the condition that any of the creativity funded by such money would not be able to protect it with copyright for a period of time.” So despite Baker’s pose that he is some radical supporter of pirate party ideas or an opponent of statist copyright grants—he is not. He supports these statist, ridiculous “artistic freedom vouchers.” This is pure theft: from taxpayer to state-favored “artist”. And he is not even against copyright. In my post Economist: Copyright Is An Antiquated Relic That Has No Place In The Digital Age, I noted that Baker, like Alex Tabarrok in the field of inventions, recommends taxpayer funded multibillion-dollar “artistic freedom vouchers” to promote artistic creation. See also William Patry on How to Fix Copyright and The “Artistic Freedom Voucher” [sic], where I note that Roderick Long here quotes Timothy Lee: “I can’t agree with Baker that all copyright and patent monopolies are illegitimate.” Baker poses as some maverick radical IP reformer, even though he does not oppose getting rid of these monopolies, and indeed favors adding to this abominable program tens or hundreds of billions of dollars of taxpayer funded state-directed subsidies to the arts and innovation. With radical reformers like these, who needs socialists?

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C4SS: The IP Wars as “Competition”

by Stephan Kinsella on May 15, 2012

From C4SS:

The IP Wars as “Competition”

Posted by David S. D’Amato on May 15, 2012

On Monday (May 14, 2012), the Wall Street Journal published two stories on some of the major players in corporate patent wrangling.

The first story, featuring tech firms Nvidia and Intellectual Ventures, highlights the defensive role of patents as a strategic investment. Nvidia’s general counsel, David Shannon, remarks in the article that “[t]he acquisition of IP is a strategy every company is using right now.”

Elsewhere, in the litigation theater of the intellectual property wars Shannon cites, Apple and Samsung skirmished in a federal appellate court over whether Samsung could market its Galaxy tablet in the U.S. The case is just one in the constant and frenzied volley of IP-related lawsuits within the technology industries, whose most important assets are no longer physical goods, but special legal protections.

These stories and many more just like them hint at something at the core of the way that the economic ruling class employs the power of the modern state.

The role of the state in the economy is and always has been to allow a small elite to create gates and tolls around wealth and natural resources, to monopolize them and the products of labor. As a particular medium for this operating principle, the modern state is somewhat unique, built upon quite specific thinking as to roles and capabilities of bureaucrats working within centralized, hierarchical organizations.

It is in that way very similar, in both its philosophical assumptions and in its functioning, to the modern corporation. Narratives that position business and government as rivals ignore not only the similarities of the two, but their mutual interdependence. Indeed it would be practically impossible to neatly separate the two from one another in the history of the modern, total state.

Technology represents the proverbial double-edged sword within such a paradigm. On the one hand, in its relation to the do-it-yourself realm, technology has thrown wide potentialities of self-sufficiency and independence that few could have imagined, new ways to live and to thrive in a world outside of the state-corporate economic and social structure.

At the same time, the emergence of new industries and new technologies must be regarded as central in the evolution of the kind of state we know today, the reach and scope of authority seeming to lengthen and expand daily.

Discussing the international law framework around “intellectual property,” specifically the TRIPS agreement, economist Donald G. Richards notes the ways that international IP rules “reflect the real and perceived interests of cross-national classes.” Richards argues, as do market anarchists, that worldwide protection of patents and copyrights “facilitates the expansion of global capitalism while reinforcing the currently prevailing hierarchy of production and power relations.”

On a fundamental level, patents and copyrights dictate the ways in which people are allowed to use their own tangible property, from pens and paper to scrap metal and computer chips. They thus represent the kinds of coercive, monopoly privileges that genuine free markets stand against in principle. Using the restrictive power of the state to limit competition raises the prices of our computers, automobiles, food and clothing — virtually all of the good and services we buy.

“Competition” today is no more than a clash between rich, monolithic global corporate titans who would rather use the legal system to ban competitors than actually compete. Competition between Samsung and Apple may be fierce enough in the courtroom, but what would happen in a real free market, one where no one was entitled to special privileges through IP?

Then the consumer might not be merely a consumer; she might just be an autonomous individual with more capacity for self-sufficiency than we can imagine in a today shackled to millions of pieces of paper housing corporate patents.

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Judge.me, Private Arbitration and Intellectual Property

by Stephan Kinsella on May 14, 2012

Tom Woods blogs about an intriguing new service, in I Love People Who Actually Do Things I Only Talk About:

Check out Judge.me, a new Internet-based dispute resolution website, being touted as an equitable and affordable alternative to government courts. The creator sent me a note alerting me to it, and I’m very interested. He also did an AMA (“Ask Me Anything”) at Reddit. Here’s how it works.

Jeff Tucker also wrote about it in Small Claims for the Digital Age:

Judge.me seems like an amazing idea. It’s a arbitration system for the digital age. It is especially useful for international disputes, resolved in days. The site owner answers detailed questions on Reddit. It raises an intriguing possibility that the real long-term results of the Ron Paul campaign won’t be political in the way people think of it but rather entrepreneurial. Many people have been inspired to start new businesses based on the idea of a pure voluntary order.

See the video below. This kind of simple, technology-based private arbitration should be of especial interest to anarcho-libertarians, who have long argued that private arbitration would play a significant role in justice in a stateless society.¹ In fact, its founder is a self-proclaimed anarcho-capitalist, as noted in his Reddit AMA.

One interesting thing is their choice of law, which matters given that many of the disputes might involve parties from different countries:

For court litigation, which law to apply (called “choice of law”) becomes an issue as soon as the dispute crosses jurisdictional borders. Even when the parties specified their choice of law in the contract, good lawyers find ways to challenge this which leads to choice of law becoming a trial on its own. To avoid this issue, smart arbitration service providers such as judge.me specify that rather than applying a certain local law, the arbitration will be resolved based on common law and [equity principles]. The concept of basing dispute resolution on “fairness and equity” is known under its latin name [“ex aequo et bono”].

I.e., disputes are resolved by common sense principles of justice—the general rules developed over time in common law and equity courts. (This is similar in a way to international law’s appeal to “the general principles of law recognized by civilized nations”. See my post, The UN, International Law, and Nuclear Weapons.)

But if you stick to justice, common sense, and basic property and libertarian rights, then statutory law is out. You don’t appeal to it when making a determination—unless both parties have agreed to this artificial legal standard. (See my Legislation and Law in a Free Society.) Now this brings to mind the case of so-called “intellectual property”—primarily patent and copyright. Both are the explicit results of massive state legislative schemes–the Copyright Act and the Patent Act. Some anarcho-libertarians who are nonetheless pro-IP, such as J. Neil Schulman and L. Neil Smith, are clear that they do not favor state-enforced IP. As I wrote elsewhere, Schulman, “as an anarchist, to his credit admits that if it could be shown that his version of IP could be enforced only by state law, he would abandon it…” In fact, if they are anarchists, they cannot support any legislation since legislation is a creature of the state. But then they turn around and say that they think private arbitration in a free society would be resorted to, to resolve IP and “plagiarism” disputes. Let’s forget for a second that plagiarism has nothing to do with copyright, patent, or market competition. Let’s forget that if you could sue someone for “copying” you unfairly, then this would open up a whole new realm of anti-competitive protectionism—anyone who competes with you, especially “unfairly”, is “stealing” your customers and unfairly “harming” you.

Let’s just assume we have a private legal system largely based on arbitration, which itself relies on general principles of justice, not on legislation. To sue someone you need to allege they have harmed you—invaded your property rights. Some contract breach, tort, trespass, or even crime. Now if you make the text of a novel or the digital file of a song or movie public (for whatever reason), and someone else copies and uses it and redistributes it (for free; or for monetary consideration); or if someone imitates your product and sells a competing ones—what possible common law claim could you have? None. You could make a copyright or patent claim, but only relying on the legistatist quo. You could not appeal to any organic legal principle developed in a decentralized free market legal order. It is not wrong to learn. To compete. To emulate. To copy. To steal customers. To “deprive” a competitor of profit. To do “something similar.” To use information that is publicly available.

My point? If we had a free society with a decentralized, non-legislated legal order, it is impossible to imagine there being patent or copyright law or claims, any more than someone could make a minimum wage or Americans with Disabilities Act claim absent those federal statutory schemes.

[TLS]

See, e.g., Linda & Morris Tannehill, The Market for Liberty; David Friedman’s The Machinery of Freedom: Guide to a Radical Capitalism; and “Imagining a Polycentric Constitutional Order: A Short Fable,” chapter 14 of Randy Barnett‘s The Structure of Liberty. [↩]

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Hacking’s a snap in Legoland

by Stephan Kinsella on May 12, 2012

Hacking’s a snap in Legoland

By Daniel Terdiman
Staff Writer, CNET News

When Lego executives recently discovered that adult fans of the iconic plastic bricks had hacked one of the company’s new development tools for digital designers, they did a surprising thing: They cheered.

Unlike executives at so many corporations, who would be loath to let their customers anywhere near the inner workings of their software tools, the Lego honchos saw an opportunity to lean on the collective thinking of an Internet community to improve their own product while bolstering relations with committed customers.

All it took was being open-minded enough to see that their biggest fans weren’t trying to rip them off; they were trying to improve Lego’s products in a way that, just maybe, the company’s own designers hadn’t thought of.

“I was a little concerned at the beginning because I know there are companies that don’t respond favorably to this kind of thing,” said Dan Malec, a software engineer from Stow, Mass. Malec is an active member of the adult Lego community, a group of passionate Lego aficionados who build models far more elaborate and sophisticated than the kids’ versions most people are used to seeing.

To one toy-industry observer, Lego’s positive reaction to the hack is more than unusual.

“I can’t think of another instance in toys where it’s been basically ‘Do whatever you want,'” said Anita Frazier, an entertainment industry analyst at The NPD Group. “If it doesn’t ultimately hurt the intellectual property, and (the users) aren’t modifying the trademark or the core property at all, (Lego is) looking at it as it doesn’t hurt.”

Last month, Lego launched Lego Factory, a service through which users can create their own unique and customized Lego models–a cat, the Statue of Liberty, a tree or whatever else users choose.

Once the designs are created and uploaded through Lego Factory, the company manufactures the bricks necessary for the model and ships them to users so they can assemble their models. Customers can also buy the bricks necessary to build from other people’s designs, which are posted on the site.

Washington Post on Patent Trolls, Software Patents, and Patent Reform

by Stephan Kinsella on May 8, 2012

From the Washington Post:

Where are the jobs? Ask the patent trolls.

By Vivek Wadhwa, Published: May 7

President Obama has been touting patents as a way to create jobs and increase U.S. competitiveness. “These are jobs and businesses of the future just waiting to be created,” he said of patent applications last September, “somewhere in that stack of applications could be the next technological breakthrough, the next miracle drug, the next idea that will launch the next Fortune 500 company.”The President is mistaken—at least when it comes to the patent system as it relates to software patents. These patents—and the patent system—aren’t creating innovation, they are inhibiting it and, by extension, job creation. Why? Because the breakthroughs aren’t in the patents, they are in the way ideas are commercialized and marketed. Because of flaws in the patent system and government leaders’ misunderstandings, there is an arms race of sorts happening in the tech industry that is sapping billions out of the economy and crushing technology startups. This system is enriching patent trolls—companies that buy patents in order to extort money from innovators. These trolls are like a modern day mafia. Given this, I argue software patents need to be eliminated or curtailed.

Kinsella Austrian AV Club Interview—Mises Institute Canada

by Stephan Kinsella on May 4, 2012

I was interviewed yesterday by Redmond Weissenberger, Director of the Ludwig von Mises Institute of Canada. We had a long-ranging discussion of intellectual property and libertarian theory, including a discussion about exactly how Ayn Rand and other libertarians got off track on this issue, in part because of flaws regarding “labor” and “creationism” in Locke’s original homesteading argument; inconsistencies between Rand’s support for IP and her recognition that production means rearranging existing property; and also the different roles of scarce means and knowledge in the praxeological structure of human action. (For more on these issues, see my blog posts Locke on IP; Mises, Rothbard, and Rand on Creation, Production, and ‘Rearranging’, Hume on Intellectual Property and the Problematic “Labor” Metaphor, Rand on IP, Owning “Values”, and ‘Rearrangement Rights’, and The Patent Defense League and Defensive Patent Pooling, and my article “Intellectual Freedom and Learning Versus Patent and Copyright.”)

The video is below; audio file is here (69MB). (Trivia: I used my iPad, running the Skype app, for this interview. More stable and better camera than a MacBook.)

[TLS]
[now podcast at KOL165]

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Patent Trolls Are Preferable to “Practicing Entities”

by Stephan Kinsella on May 2, 2012

I don’t know anyone who says we don’t need patent reform. We need to address various problems, they say–junk or low-quality patents, patent trolls, and the like. But as I noted in Gigaom: Can big data fix a broken system for software patents?,

The problem is not trolls, overbroad patents, junk patents, inept patent examiners, software patents, etc. The problem is the very idea of patents.

Or as I observe in Slate’s Farhad Manjoo: Use Crowdsourcing to Improve Patents and Kill Patent Trolls:

bad patents versus good patents has nothing to do with the patent troll “problem”. This alleged “problem” is a result of the fact that there is no requirement to use the invention your patent covers, or even to produce a working model of it. There is no working, use, or reduction to practice requirement. The patent statute requires that the claimed invention be novel, and non-obvious, and also have “utility”–i.e., that it function. But the latter is just assumed, except in rare cases where it appears to the Examiner that something impossible like a perpetual motion machine is being claimed. Filing a written description of an invention substitutes for the requirement to reduce the invention to practice–it’s called a “constructive reduction to practice.” Given this: improving patent quality has nothing whatsoever to do with the “troll” problem. Even if you get rid of the 58% crap patents, the remaining 42% “high quality” patents will still be granted to patentees, some of which are not using the claimed invention. There is no reason a patent troll cannot own and use a “high quality” patent! So what is Manjoo talking about?

Or in The Patent Defense League and Defensive Patent Pooling:

patent trolls usually just want money. So they just serve as a kind of tax. But competitors often want to get an injunction to shut down the product lines of their competitors. Having to pay a “tax” to a troll is usually less of an existential threat to a company than is the patent injunction threat from a competitor.

In other words, the problem is not low-quality patents, or “bad” patents, or patents enforced by trolls–so-called non-practicing entities (NPEs). The real problem is good patents enforced by practicing entities.¹ Even if you get rid of all “bad” patents, all software patents, all trolls, all business method patents–the fundamental problem remains: companies can acquire patents that they can use to squelch competition.

Yes, patent trolls (NPEs) are in several respects better than “practicing entities.” As noted in CE-Oh no he didn’t!: Tony Fadell calls Honeywell out on patent claims:

Smart thermostats might not be the cut-throat world of litigation like, say, mobile phones, but that doesn’t mean the odd feather doesn’t get ruffled from time to time. Nest CEO, Tony Fadell, is understandably protective of his company’s product, so when competitor Honeywell laid a stack of patent infringement claims at his door, unsurprisingly he was none too pleased. How displeased? Well, enough for him to drop this clanger: “Honeywell is worse than a patent troll.” Then going on to quantify with “They’re trying to strangle us, and we’re not going to allow that to happen.” We think that makes his feelings on the matter pretty clear. Well, when you’ve been SVP of Apple’s iPod division, it’s easy to see how patience with such things might wear thin.

A patent troll would merely ask Nest for a fee–like a polite mafia extorter, or Lysander Spooner’s highwayman, who does not pretend he is helping you and, after taking his cut, largely leaves you alone. But Honeywell, a Nest competitor, will do what they can to obliterate the competition posed by Nest. We see examples of this kind of patent-extortion every day. (And copyright too: Stupidity Of Licensing Demands Means The Wrecking Crew Can’t Help Sell More Music With Documentary.) So: Trolls are not the problem.² Complaints about trolls³ are confused. The problem is the patent system itself.

I was reminded of this when Domenic Scarcella in an episode of Haman Nature mentioned that it was the “good cops” not the “bad cops” who murdered Jesus. See HN 65. Of course, the analogy only goes so far because Christians presumably think it’s a good think Jesus was murdered, as I tweeted here. For more Scarcella, see Hn 113. [↩]
See my Patent Trolls and Empirical Thinking; Patent Law, State Courts, and Free Speech: The Case of Troll Tracker. [↩]
Andy Kessler, WSJ, Patent Trolls vs. Progress. [↩]

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C4SIF.org

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Patent Trolls Are Preferable to “Practicing Entities”

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Dear Mr. William Lovett:

Dear Janet Silverberg:

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For businesses, being good at copying is at least as important as being innovative

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from the copyright-does-not-scale dept

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from the parallel-parking dept

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Hacking’s a snap in Legoland

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Where are the jobs? Ask the patent trolls.

By Vivek Wadhwa, Published: May 7

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