From MacRumors (h/t Manuel Lora). The post notes: “The reports note that Apple’s efforts have been led by vice president for global security John Theriault, a former FBI special agent and Pfizer vice president who was hired by Apple after he led a campaign against production of counterfeit prescription drugs.”

So, Apple has hired a former Big Pharma exec and state police thug to enforce its monopoly privileges around the world. Shades of mercantalism!

Apple’s Anti-Counterfeiting Efforts in Asia Hampered by Uncooperative Authorities

CNN reportson details of Apple’s anti-counterfeiting efforts centered in China, noting that the company has had difficulty winning the cooperation of Chinese authorities to investigate and shut down those responsible for the fake Apple products. The details were revealed in documents from U.S. diplomatic cables published by WikiLeaks last week.

The technology giant eventually organized a team in March 2008 to curtail the explosion of knockoff iPods and iPhones, according to an electronic memo from the Beijing embassy dated September 2008.

Yet, three years after Apple moved to crack down on widespread counterfeiting and put pressure on China, progress has been slow. Gadget piracy isn’t a high priority for the Chinese government, the U.S. reports and experts say.

The reports note that Apple’s efforts have been led by vice president for global security John Theriault, a former FBI special agent and Pfizer vice president who was hired by Apple after he led a campaign against production of counterfeit prescription drugs. Theriault was joined at Apple by his Pfizer associate Don Shruhan, who now serves as a director with Apple’s security team in Hong Kong.

Despite putting the anti-counterfeiting task force together, Apple has had only limited success as Chinese authorities have been reluctant to respond to Apple’s requests for assistance. Apple has tried to convince authorities to take a more active role by citing the potential dangers of exploding batteries in counterfeit products and the loss of tax revenue associated with the knockoff products, but Chinese authorities have cited their own reasons for not pursuing the claims.

Read more>>

From her “Money Speech” in Atlas Shrugged:

When you see that trading is done, not by consent, but by compulsion—when you see that in order to produce, you need to obtain permission from men who produce nothing—… you may know that your society is doomed.

(h/t Chris Rhodes)

Some great excerpts from Rothbard regarding mercantilist grants of monopoly privilege. Sounds familiar—this is basically what today’s patent system does, too. Love the bit about a playing card monopoly in England (below). Also this part:

The creation of monopolies reached its climax in the reign of Queen Elizabeth (1558–1603), in the latter half of the 16th century. In the words of historian Professor S.T. Bindoff, “… the restrictive principle had, like some giant squid, fastened its embracing tentacles round many branches of domestic trade and manufacture,” and “in the last decade of Elizabeth’s reign scarcely an article in common use – coal, soap, starch, iron, leather, books, wine, fruit – was unaffected by patents of monopoly.”

In sparkling prose, Bindoff writes how lobbyists, using the lure of monetary gain, obtained royal courtiers to sponsor their petitions for grants of monopoly: “their sponsorship was usually a mere episode in the great game of place-and-fortune-hunting which swayed and swirled incessantly around the steps of the throne.” Once granted their privileges, the monopolists got themselves armed by the state with powers of search-and-seizure to root out all instances of now-illegal competition.

Of course, this is just what patent aggressors and the RIAA do now: they obtain monopoly privileges from the state, and use state law enforcement, subpoenas, warrants, etc. to search competitors or consumers for evasion of their privileges which could help undercut their monopoly prices.

Here are the more extended passages these are drawn from. First, from Rothbard’s Mercantilism as the Economic Aspect of Absolutism:

As the economic aspect of state absolutism, mercantilism was of necessity a system of state-building, of big government, of heavy royal expenditure, of high taxes, of (especially after the late 17th century) inflation and deficit finance, of war, imperialism, and the aggrandizing of the nation-state. In short, a politicoeconomic system very like that of the present day, with the unimportant exception that now large-scale industry rather than mercantile commerce is the main focus of the economy. But state absolutism means that the state must purchase and maintain allies among powerful groups in the economy, and it also provides a cockpit for lobbying for special privilege among such groups.

Jacob Viner put the case well:

The laws and proclamations were not all, as some modern admirers of the virtues of mercantilism would have us believe, the outcome of a noble zeal for a strong and glorious nation, directed against the selfishness of the profit-seeking merchant, but were the product of conflicting interests of varying degrees of respectability. Each group, economic, social, or religious, pressed constantly for legislation in conformity with its special interest. The fiscal needs of the crown were always an important and generally a determining influence on the course of trade legislation. Diplomatic considerations also played their part in influencing legislation, as did the desire of the crown to award special privileges, con amore, to its favorites, or to sell them, or to be bribed into giving them, to the highest bidders.[1]

In the area of state absolutism, grants of special privilege included the creation by grant or sale of privileged “monopolies,” i.e., the exclusive right granted by the crown to produce or sell a given product or trade in a certain area. These “patents of monopoly” were either sold or granted to allies of the crown, or to those groups of merchants who would assist the king in the collection of taxes. The grants were either for trade in a certain region, such as the various East India companies, which acquired the monopoly right in each country to trade with the Far East, or were internal — such as the grant of a monopoly to one person to manufacture playing cards in England. The result was to privilege one set of businessmen at the expense of their potential competitors and of the mass of English consumers. Or the state would cartelize craft production and industry and cement alliances by compelling all producers to join and obey the orders of privileged urban guilds.

It should be noted that the most prominent aspects of mercantilist policy — taxing or prohibiting imports or subsidizing exports — were part and parcel of this system of state monopoly privilege. Imports were subject to prohibition or protective tariff in order to confer privilege on domestic merchants or craftsmen; exports were subsidized for similar reasons.

See also Rothbard’s Mercantilism in England:

The principal fiscal weapon to build the nation-state in England was the “poundage,” a tax on the export of wool and a tariff on the import of woolen cloth. The poundage kept increasing to pay for continuing wars. In the 1340s, King Edward III granted the monopoly of wool exporting to small groups of merchants, in return for their agreeing to collect the wool taxes on the king’s behalf. This monopoly grant served to put out of business Italian and other foreign merchants who had predominated in the wool export trade. [continue reading…]

This is great:

For more, see:

• Open science: a future shaped by shared experience, The Guardian
• Dispatch from the Open Science Summit: Citizen Science, Microfinanced Research, Patent Trolls, and Pharma Prizes, Reason
• The Open Science Shift, Xconomy

Good post from Reason magazine a year ago, which had a nice yeasty IP argument between me and Koepsell, on one side, and patent shill Dale Halling, on the other.

Citizen Science, Microfinanced Research, Patent Trolls, and Pharma Prizes

A final dispatch from the Open Science Summit.

Ronald Bailey | August 3, 2010

(Page 2 of 2)

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My 2006 Mises blog post, Galambos and Other Nuts, has had a fresh spate of comments and argument between libertarians, and pro-IP Galambosian nutjubs. It’s quite eye-opening to see how insane and cult-like and incoherent their reasoning is.

See also Shades of Galambos: Man tries to copyright his name.

an old 2002 post:

From a post on my personal site in 2007:

NSK Interview on Patents, by Taylor Conant

Update: link above is now dead; here is the post from the Waybackmachine:

April 6, 2007

“Big Dig #3” – Patent Law

The following was an assignment, “Big Dig #3,” for a business journalism class. I researched the patent process and interviewed a patent attorney from Houston, Texas, Stephan Kinsella (his personal website is available here).

—

On November 28, 2006, the Supreme Court heard oral arguments in the KSR v. Teleflex patent case, a trial which could produce the most important ruling for patent law in forty years.

The case involves a dispute between KSR, a company which manufactures gas pedals that use an electronic signal rather than a mechanical cable to signal the engine, and Teleflex, a company which claims KSR has infringed a patent it was issued in 2001 for a similar technology. The dispute revolves around whether or not KSR’s system was an “obvious” integration of known technologies or not.

“The implications of this case to the patent system are huge. It could impact millions of U.S. patents currently in force and over 700,000 patent applications currently being examined by the PTO,” according to an interview conducted by PRNewswire.com of Robert Greene Sterne, a member of the counsel for KSR.

Patents, like trade secrets, trademarks and copyright, seek to protect “intellectual property,” or “IP.” Of the general IP category, only patents and trade secrets protect inventions.

According to Stephan Kinsella, a patent attorney from Houston, Texas, there are four criteria the United States Patent and Trademark Office (or PTO), use when judging whether or not an invention is patentable—statutory subject matter, utility, novelty and non-obviousness.

“Basically you can patent machines and processes that produce a useful result, so that’s the first one, and utility means it just has to do something useful,” says Kinsella.

So, based on the first two criteria, drugs are in (potentially make you healthier), while nuclear bombs and perpetual motion machines are out (nukes can only do harm or disutility, while perpetual motion machines are impossible according to the laws of thermodynamics).

“Novelty means it has to be new, and that’s usually pretty easy to overcome,” Kinsella continues. “But then you have to ask yourself if it’s an obvious difference or a non-obvious difference, and in most other parts of the world this is called the ‘inventive step.’”

So, by way of example, Kinsella says patenting the use of an LCD panel with a computer would not be a possibility because it is already obvious that you would use a display device with a computer, even though and LCD is new in comparison to a standard CRT monitor.

As the Supreme Court case shows, and as Mr. Kinsella emphasizes, obviousness – or lack thereof – is the central issue of patent law being debated these days. And the spread of the Internet and electronic goods will serve only to further complicate the patent system in that regard.

“About five years ago, Amazon got an injunction against Barnes and Noble to stop their one-click—they had a patent on clicking once on the basket to buy something as opposed to clicking twice,” says Kinsella, recounting a key moment in the growth of e-commerce. “It’s ridiculous, utterly ridiculous… Barnes and Noble is lagging behind now and I don’t know if that’s why, but it’s possible.”

According to Kinsella, there may even be a kind of populist revolt against the concept of IP by consumers who are increasingly frustrated by restrictions on the way they use their electronic media and information technologies.

“I believe there is a growing hostility towards IP in general, at least among Gen-X and the tech people,” Kinsella says, citing the examples of the RIAA, Disney and the recent Blackberry patent suit in which the company was forced to pay hundreds of millions of dollars to another company which claimed Blackberry had violated one of its patents. “There is an increasing fear a lot of small companies are in of patent infringement when they’re just trying to do business.”

That’s a concern worth taking seriously—after all, the patent system is predicated on the belief that the limited-monopolies granted by it incentivize creativity and create a net benefit for the economy. But if the arbitrariness of the patent system leads to exponentially-increasing costs, the economic usefulness of the system might need to be reexamined.

“If you really take seriously the idea that anyone who comes up with an idea has some property right in it, it either has to be definite or infinite. If it’s infinite, the human race probably would’ve died out a long time ago, because no one would be able to use the wheel, or fire or build a house without getting permission,” says Kinsella. “Therefore, the only way to make them work is to define their duration, but then you run into the problem of arbitrariness—twenty years for a patent, seventy-five years for a copyright, ten year renewable terms for trademarks.”

Until the time comes for Mr. Kinsella’s ideal system which only respects trade secrets and trademarks, he and others concerned with the patent system will just have to cheer on the right outcome in court cases such as KBR v. Teleflex. Depending on the way the ruling goes, that case could result in a striking down of current notions regarding “secondary conditions of non-obviousness,” which Kinsella views as currently helping to promote the arbitrariness of the patent system which is responsible for situations like the Amazon one-click patent.

According to the industry blog PatentlyO.com, Justice Scalia has already hinted that a conclusion in the case has been reached, saying, “I know how that one comes out, but I’m not going to tell you.”

Stephan Kinsella has his fingers crossed.

Posted by The Owner at 2:43 PM

1 comments:

cowbot said…

Well written. Thanks.I’ve written a refutation of ‘intellectual property’ based on austrian praxeological method here:

http://phreadom.blogspot.com/2008/05/intellectual-property-is-fiction.html

The very nature of reality indicates that the idea opens a path towards harm.

May 14, 2008 1:19:00 AM EST

Good post by Mike Masnick from a couple years ago on Techdirt:

National Portrait Gallery Threatens Wikimedia Developer For Downloading Public Domain Images

from the what-public-domain? dept

Derrick Coetzee, a software developer and an administrator of Wikimedia Commons, the media repository for Wikipedia is being threatened by the National Portrait Gallery in London. Coetzee admits that he downloaded about 3,000 high-resolution images from the site, but notes that they are all of paintings that are in the public domain (nearly all are over 100 years old). Coetzee is in the US, where he notes Bridgeman v. Corel suggests that photographs of public domain paintings do not carry any copyright, since the photograph does not add any new expression. However, such issues are not settled in the UK, and the National Portrait Gallery is insisting that the photos are covered by copyright.

On top of that, the Gallery is claiming a violation of its database right. Database rights are an unfortunate mistake in European law, that allows a copyright-like right to be held on a database, even if the entries in that database are uncopyrightable — such as a collection of facts or a collection of public domain works. Finally, the Gallery is also claiming that Coetzee unlawfully circumvented protection methods designed to keep folks like himself from downloading the content — and thanks to the UK’s own anti-circumvention law, that too could make him guilty of infringement. Of course, that last one shouldn’t apply if the content isn’t actually covered by copyright, as Coetzee argues.

The whole thing, frankly, seems rather ridiculous, and a huge black mark on the National Portrait Gallery in the UK. Here was a chance to help educate the public and give people more reasons to go to the Gallery to see the actual photos, and they’re trying to stomp out that kind of education through abuse of copyright law. The people who run the Gallery should be ashamed of themselves. They ought to go back and read their own mission statement:

Founded in 1856, the aim of the National Portrait Gallery, London is ‘to promote through the medium of portraits the appreciation and understanding of the men and women who have made and are making British history and culture, and … to promote the appreciation and understanding of portraiture in all media’. How, exactly, does suing someone for getting those portraits more attention achieve that goal?

I wrote to John Dvorak around this time, in response to one of his Cranky Geeks appearances where he discussed this issue:

I’m a huge fan of yours. Love your Cranky Geeks, and just listened to the recent episode. I think you and Curry botched the discussion of the National Portrait Gallery paintings, copyright, and Wikipedia issue.

I am, by the way, an intellectual property attorney, and also a libertrian, and an ardent *opponent* of copyright and patent on libertarian, property rights grounds. (My legal site is www.KinsellaLaw.com; my libertarian site and anti-IP writings may be found at www.stephankinsella.com/publications/#IP.)

Curry’s comments were incoherent–I’m an IP lawyer but I don’t know what he was talking about with this creative commons and copyright comments. I think he’s confused–understandable, and the law is a mess, but still.

Your comments were confused primarily because you misunderstand the facts–you seemed to assume the dispute was about some Wikipedia user who posted his own photographs of public domain paintings. I believe it’s a different issue: he downloaded the high-quality photographs on the NPG site and put them up on Wikpedia. True, the underlying painting is public domain, but the question is whether the photograph itself qualifies as an original work subject to its own copyright (not a derivative work, as you seemed to think).  It seems the law in the US leans away from copyright–the amount of originality in taking a photograph meant to be merely a reproduction of a 2D painting seems trivial–but in the UK maybe different.

(A good discussion of the National Portrait Gallery/Wikipedia issue can be found on Mike Masnick’s Techdirt post here
http://techdirt.com/articles/20090713/0203135526.shtml)

Personally I think it’s ridiculous, of course, for the guy who photographs a public domain painting to have a copyright in the photograph, but there you have it.

Another issue is the argument that in order to obtain the photographs from their site he circumvented copyright protection schemes, in violation of the DMCA — another ridiculous law, in my view–but there you have it.

From my blog, a couple years ago:

From Scribd:
mpaa-infographic

Others charts and graphics at Intellectual Property Charts, Graphs, Graphics, Diagrams.

As reported on Deadspin, Boise State has long used a unique blue turf, and apparently even has a trademark on the term “Blue Turf.” When Oxford High recently installed a $300,000 blue turf field, Boise State’s general counsel warned them not to use the term “Blue Turf” “in promoting the field and events on it.” So… Oxford can have a blue turf. But they better not say that they do!

Trademark insanity.

(H/t Skip Oliva)

Well, the money to buy that many–by taking $500 million of Google’s money for running ads that helped American consumers evade the FDA’s protectionist restrictions on their freedom to buy Canadian pharmaceuticals. That amoung of money could have been used to purchase about 1760 patents, at $284,000 each, approximately the price Google paid recently in the Motorola Mobility acquisition (or about 23 patents, depending on how you figure it — see Google pays $22 million per patent to defend itself).

I’m inclined to view the FDA’s limits on drug freedom as another type of intellectual property right, even though FDA regulations are not usually classified this way. But then, neither are reputation rights (defamation and libel), even though reputation rights are types of IP too, along with patent, copyright, trademark, trade secret, and miscellaneous special-purpose (read: special-interest) legislation like boat-hull designs and semiconductor maskwork rights. Like patent and copyright, FDA regulations drive up costs; restrict innovation; limit property rights; hamper free trade, competition, and emulation on the market; and set up oligolized cartels immunized from competition.

Viewed this way, the state’s stealing $500 million from Google based on FDA regulations is just additional injury done to Google in the name of IP or IP-like state regulations–other injury includes the billions Google is now spending on patents to defend itself, plus the current patent attacks on the Android platform by its competitors. Compared to those other costs, half a billion is chump change. Sure, it could be used to do real innovation, to hire thousands of people, or given to shareholders to use as they see fit–but it’s obvious the state doesn’t give a damn about consumers or citizens except to keep them stupid and compliant and paying taxes to keep the ruling class in the lifestyle to which they are accustomed (as Lew Rockwell put it in a recent interview).