Breaking on the wheel for violating King-granted monopoly privileges of his cronies

Jeff Tucker has a Mises blog post up (see below) about how the death penalty was imposed in pre-revolution France a few centuries ago. As Tucker explains, “Some [fabric] patterns were more popular than others, and to get some additional revenue to the crown’s tax coffers, the King sold a monopoly on these patterns to selected members of the nobility, who in turn could charge an arm and a leg for them (and did so).”

As noted here, the penalty for unauthorized copying was literally torture and death–e.g., breaking on the wheel.

In today’s world, the failure and injustice of modern IP law has led to more and more piracy, and, like the failed drug war, in escalating penalties — bans from the Internet, draconian damage awards, even jail terms, and so on (see, e.g., The Ominous PROTECT IP Act and the End of Internet Freedom). How long before the death penalty is imposed in a futile attempt to stop people from freely using knowledge, learning, emulating, and competing?

And, ominously, the fashion industry is urging the re-imposition of a type of copyright in fashion design. I guess this is all a disproof of the Whig theory of history…

Here’s Tucker’s post:

Most people assume that tougher penalties deter crime, but there is reason to doubt it.

Here is a case from before the French Revolution.

The copy monopoly in those days concerned fabric patterns. It was in France, prior to the revolution. Some patterns were more popular than others, and to get some additional revenue to the crown’s tax coffers, the King sold a monopoly on these patterns to selected members of the nobility, who in turn could charge an arm and a leg for them (and did so).

But the peasants and commoners could produce these patterns themselves. They could produce pirated copies of the fabrics, outside of the nobility’s monopoly. So the nobility went to the King and demanded that the monopoly they had bought with good money should be upheld by the King’s force.

The King responded by introducing penalties for pirating these fabrics. Light punishments at first, then gradually tougher. Towards the end, the penalty was death by public torture, drawn out over several days. And it wasn’t just a few poor sods who were made into public examples: sixteen thousand people, almost entirely common folk, died by execution or in the violent clashes that surrounded the monopoly. In practice, everybody knew somebody who had been horribly executed for pirating.

Here’s the fascinating part:

Capital punishment didn’t even make a dent in the pirating of the fabrics. Despite the fact that some villages had been so ravaged that everybody knew somebody personally who had been executed by public torture, the copying continued unabated at the same level.

I have doubts about these numbers. In any case, A.R.J. Turgot wrote the following in praise Gournay: “He could not see why this piece of cloth, for failing to conform to certain regulations, should be cut up into fragments of three ells in length, and why the unfortunate man who had made it should be ordered to pay a penalty, enough to reduce him and his family to poverty. He could not conceive why a workman, when making a piece of cloth, should be exposed to risks and expenses from which an idle man was exempt. He could not see of what use it might be that a manufactured piece of cloth should involve legal procedures and tedious discussions in order to establish whether it conformed to an extensive system of regulation, often difficult to understand, nor did he think that such discussions ought to be held between a manufacturer who cannot read and an inspector who cannot manufacture, nor that that inspector should yet be the final judge of the fortune of the unlucky man, etc.”

Next month I’ll be teaching a new Mises Academy course,”Libertarian Controversies.” This is my fourth Mises Academy course (the previous three are Libertarian Legal Theory, Rethinking Intellectual Property: History, Theory, and Economics, and The Social Theory of Hoppe), and my fifth time teaching there (I have reprised the IP course once).

From the course page:

Modern libertarianism is a young, developing and vibrant science. Variants includes classical liberalism, minarchism, and, in its most rigorous form, anarcho-Austrian libertarianism. Libertarians of various stripes are influenced by utilitarian, pragmatic and natural law theories, and by thinkers including Ayn Rand, Hayek, Rothbard, Mises, and others. For decades there has been vigorous debate among different camps of libertarians about a host of controversial issues, from the foundation of rights to the nature of government, and about concrete issues such as abortion, strategy and activism, living in an unfree world, anarchy v. minarchy, punishment and restitution, and so on. In this course, libertarian legal theorist Stephan Kinsella will explore a variety of libertarian misconceptions and controversies, from an Austro-libertarian perspective.

In the discussion about misconceptions, Kinsella will identify a number of common libertarian mistakes, confusions, fallacies or flawed reasoning and propose a solution or more consistent approach. Issues to be discussed include: creation as a source of property rights; labor as being owned; unintentional equivocation (harm, authority, hierarchy, etc.); alienability and voluntary slavery; [continue reading…]

More copyright outrage, from The Hollywood Reporter:

The Oscar-nominated documentary Exit from the Gift Shop detailed the incredible rise of Thierry Guetta from an amateur documentarian to an art world sensation known as “Mr. Brainwash.” But now Guetta, whose work has set off a number of debates about the nature of originality in art, is in serious legal jeopardy thanks to a California federal judge who has determined that Guetta’s work on one of his showcase pieces — a manipulated image of the iconic rap group, Run DMC — was outside the bounds of copyright law.

…

Last year, Friedman sued Guetta for using his Run DMC photograph — which has been called the most famous photo of Run DMC that exists — without permission.

…

Guetta argued that the Run DMC photograph wasn’t original enough to deserve copyright protection. Although it’s widely hailed by photography buffs as being influential, Guetta’s lawyers argued that Run-DMC’s pose in the picture — the “B-Boy Stance” — was already in the public domain. Additionally, Guetta argued there were many photographs of Run-DMC from the 1980’s that were similar, including the style of clothing, pose, demeanor and background.

But California federal judge Dean Pregerson doesn’t buy that argument, saying that Friedman’s decisions about light and shadow, image clarity, depth of field, spatial relationships and graininess were “artistic decisions cummutatively” resulting in a photograph with copyright protectable elements. Further, the judge finds enough substantial similarity between Friedman’s photograph and Guetta’s art for a copyright infringement claim.

Read more>>

As the article concludes, “One has to wonder whether Andy Warhol would have survived litigation and whether documentary and music “re-mixers” have any safe ground from liability today.”

From a post on The Libertarian Standard, about Nina Paley’s latest “Minute Meme” for QuestionCopyright.org (others include the excellent Copying Is Not Theft and All Creative Work is Derivative).

***

[“But without copyright what’s to stop people from copying my work and passing it off as their own!” whines the unthinking copyright supporter. Well, here’s one answer. — GAP]

Read more about this cartoon!

~*~

This is a syndicated post, which originally appeared at Mimi and Eunice » IP. View original post.

Nice collection of IP-related Mimi and Eunice cartoons from Nina Paley:

MISINFORMATION WANTS TO BE FREE: 200+ Mimi & Eunice Cartoons by Nina Paley

If you want to see more jobs created – change patent laws

Aug 6th 2011 8:24PM

Sometimes it’s not the obvious things that create the biggest problems.  In this case one of the hidden job killers in our economy today is the explosion of patent litigation.

Every technology company I have is getting hit by patent lawsuits that are the biggest bunch of bullshit ever.  Every week it seems like a new one comes up. Between having to pay our lawyers a lot of money  to review each, to increasing insurance rates and settlement costs because we can’t afford to pay to fight the nonsense, it’s an enormous expense. So much so that money that would have gone to new hires to improve and sell the product has to be saved to pay to deal with this bullshit.

I’m not talking about a new company that had an idea that someone beat us to. No sir. I’m talking about companies that have been doing business the same way for years that are getting hit by patent trolls . These aren’t operating companies that are trying to protect their business. These are companies that aggregate patents and raise capital for the sole purpose of suing companies and extorting money from them.

It’s bad for my little companies. It’s horrific for bigger companies. It’s so bad that  major tech companies are  buying big collections of patents not because they want to own the intellectual property but rather because they want the ability to respond to patent lawsuits with a lawsuit of their own. It’s like playing a game of thermo nuclear war. If all sides have “nuclear patents” they can respond to patent litigation with equal force . Another words, if you have enough “nucleur patents” no one will sue you for patent infringement because you have enough power to respond in kind. Its crazy and costing this country jobs.

Google just spent $900mm buying a patent collection. Other big companies are spending the same way.  That is money that for many companies would have  gone to job creation.

We need to face the facts, patent law is killing job creation. If the current administration wants to improve job creation, change patent law and watch jobs among small technology companies  develop instantly. I know I have at least 1 company that would hire instantly.

From Nielsio on the V is for Voluntary blog:

Innovation in the gaming business model: Humble Indie Bundle

Intellectual property advocates say that the use of information needs to be protected by law. But even in today’s world, where this protection exists, there are commercial developers who are trying business models that are relying less and less on that protection.

The latest example is the Humble Indie Bundle 3. For short periods, they offer a bundle of games with no copy protection, and the customer decides how much to pay. You can pay as little as 1 cent to get the bundle. So actually, these aren’t purchases but instead donations for games that can be gotten for free and shared with friends and family without any problems. The average amount per downloader that is actually given is over $5 (Linux users average more than double that). They’ve raised 1.6 million dollars as of writing and there are still 4 days left in the promotion.

So why are people giving more than a penny? People appreciate what is being offered, and they like to reward that. And when you reward a developer of an enjoyable game, that is offered under favorable terms, then this serves as a signal for that developer to keep doing this work in the future, so that the consumers will have new games to enjoy when they’re done playing the current ones. Essentially, when you donate to a developer, you’re saying: “Please keep doing what you’re doing”.

Music: Pomplamoose

You can see something close to this model occurring in music. The musical duo Pomplamoose release all of their songs in high quality on Youtube. One of their innovations is the VideoSong, which means that even though their songs are often highly mixed, when you hear a sound you will also see them performing it (as it was done live). This makes it more intimate and open.

But because all of their songs can be listened to without limit and downloaded with simple tools, when you purchase their songs (as with the Humble Bundle), it’s practically a donation. So here too, when you donate to them, you’re asking them to keep doing what they’re doing, and giving them the means to do it.
Software: Ardour

The next step up in a business model that doesn’t rely on intellectual property protection is showcased by the free and open source ‘digital audio workstation’ software Ardour (for Linux and Mac). They currently have 252 people with a donation subscription. And they have ‘bug bounties‘ where people can pledge money to have specified problems fixed.

Let’s hope that instead of the old ways, these business models will be copied and improved upon, because it clearly works.

From Jeff Tucker on the Mises blog:

A reader sends this from Tennessean (August 5, 2011 – Cindy Watts; no link I can find):

In the spirit of his Get Closer 2011 World Tour… Keith Urban says that fans’ using their cellphones to photograph and record his shows is just another way for everyone to – as his tour title and latest album proclaim – get closer.

“When you look at what the hand-held phone has become in our lifestyle, it’s so much more than a phone now,” he says. It’s almost a portal in our hands. It’s almost a portal in our hands. It’s how we access and communicate and find out about things in the world. It makes perfect sense for someone who has a camera phone in the audience to be filming it and putting it up online.”

But how far technology – and the touring music industry – has progressed in the past several years isn’t lost on the singer, either.

“When you think about it, it wasn’t that many years ago when it was absolutely no cameras allowed, and now you can film away,” he says with a chuckle. “I look at it and think the Grateful Dead were way ahead of their time allowing people to do bootleg recordings of their concerts. They understood back then that the more you can bring people into the concert experience, even it if is online, the more it’s attracting people to come see the real thing.”

In a previous post (Live by the Sword), I noted this story: Man files antitrust lawsuit over printer ink, and the irony of companies who “actively pursue, support, and employ government monopolies (patents) and use them to squelch competition” getting hammered by anti-trust law.¹

Now comes this report: Toy giant Mattel weighing options after $309 million judgment(h/t Michael Barnett). Turns out Mattel “sued MGA Entertainment Inc. over ownership of the hugely popular Bratz fashion doll line.” In this 2004 lawsuit, Mattel alleged “that Bratz designer Carter Bryant was employed at Mattel when he created the Bratz dolls.” Initially Mattel won a $100M verdict. However, it was overturned on appeal and the case was retried. In the retrial, MGA counterclaimed for trade secrets misappropriation. In the end, “The turbulent legal chapter has now ended with a federal judge ordering Mattel to pay its rival more than $309 million.”

Of course, Mattel is spitting mad that their attempt to wrangle $100M out of MGA ended up with them losing to the tune of $309M–on top of their $400M in legal fees: “‘We are disappointed with the recent rulings on the post-trial motions. Mattel strongly believes that the outcome at the trial level is not supported by the evidence or the law,’ Mattel said in a statement.” Oh well. At least the $309M won by MGA will make up for the $170M they spent on attorneys defending themselves.

Mattel also amusingly said: “we remain committed to finding a reasonable resolution to the litigation, and are focused on our primary goal — to make and sell great toys.” Well if you want to find a reasonable resolution to litigation, don’t institute it. And if your mission is to make and sell great toys, do it, and stop trying to use state monopoly privileges to stop your competitors. Beat your competitors fairly, with better products, rather than using state law to squelch them.

Good for MGA. As for Mattel: live by the IP sword, die by the IP sword.

[Mises]

1. See also my previous post Live by the centralism, die by the centralism. [↩]

I appeared tonight on Adam vs. The Man, talking about drug patents. Our segment runs from about 22:38 to 28:35.

When Peter Detkin was assistant general counsel for Intel, in charge of patents, he used the term “patent extortionist” to refer to companies suing Intel for patent infringement and who were trying to “make a lot of money off a patent that they are not practicing and have no intention of practicing and in most cases never practiced.” This “extortion” accusation got Intel sued for libel (a type of defamation), since it can be defamation to falsely accuse someone of a “crime”: extortion is a crime, but the law does not regard use of lawsuits as extortion, since it’s legal. So while using the threat of lawsuits to “shakedown” your victims for money is similar to extortion, the difference is that it’s legal, while extortion is criminal. Similarly, taxation is similar to theft except that the state makes taxation legal, so that it is not officially included in the state’s definition of “theft.”

So Detkin came up with the term “patent troll” instead of “patent extortionist,” to avoid libel claims, and the term stuck.

Later, Detkin co-founded Intellectual Ventures, which some characterize as patent troll (as revealed in this NPR report, When Patents Attack, IV is apparently closely connected with Lodsys, the patent troll suing iOS developers for patent infringement). This interesting comment in the NPR piece indicates Detkin’s attempt to avoid his own patent troll label being applied to his new company:

As it happens, Detkin is the man who coined the term “patent troll.” He came up with it back in in 1999, when he was working for Intel.

We asked him how it feels to make money from an entity that’s behaving much like the patent trolls he once condemned [note: this refers to Oasis Research, a patent troll suing others using a former IV patent, which IV has a “back-end” deal with: as Detkin said “We sell [our patent to Oasis] for some amount of money up front, and we get some percentage of the royalty stream down the road that is generated from these assets.”]. He said:

These are patents we used to hold, we no longer hold. And we ensure that we have no control over the actions of these third parties. They are independent actors. They are not Intellectual Ventures. They may be monetizing in ways we disagree with, but it’s not our call.

…we believe in our heart that litigation is a highly inefficient way to do licensing. But let’s not lose sight that litigation is just licensing by other means.

In other words, we try to license these patents in a friendly way. But sometimes, you have to sue.

In other words, in response to the threat of the libel (itself a type of IP–a property right in “reputation”), patent attorney Detkin coined the term patent troll as a safer way to criticize people harming his company via IP. And then co-founded Intellectual Ventures.

[Mises]

I’ve argued before¹ that most patent and copyright reform efforts are tepid and don’t propose any radical or even significant improvements; in fact most suggested changes only make things worse.

Finally, some apparently changes coming that, while not extremely radical, could make some non-trivial improvement to copyright law–at least in the UK. See this report from arstechnica:

Shock, awe: British government agrees that copyright has gone too far

By Timothy B. Lee | Published a day ago

The British government today pledged (PDF) to enact significant changes to copyright law, including orphan works reforms and the introduction of new copyright exceptions. And the tone of the comments was surprising: the government agrees that “copyright currently over-regulates to the detriment of the UK.” CD (and perhaps DVD) ripping for personal use should become legal at last—and the government is even keen to see that the consumer rights granted by law can’t simply be taken away by contract (such as a “EULA” sticker on a CD demanding that a disk not be ripped).

Responding to an independent study done earlier this year, the government has also endorsed the creation of a digital copyright exchange to facilitate licensing. Within limits, the government endorses the view that “the widest possible exceptions to copyright within the existing EU framework are likely to be beneficial to the UK.”

The government’s report is also significant for what it pledges not to do. The government says it will not bring forward the “site blocking” provisions of last year’s Digital Economy Act. This is evidently not referring to the power of copyright holders to compel individual ISPs to block infringing sites after a lawsuit, but to a more comprehensive system whereby the government maintains a list of sites that all ISPs in the country would be required to block.

Probably the most important announcement is the expansion of copyright exceptions. Unlike the US, the UK does not have a broad, judge-made “fair use” doctrine that allows transformative uses of copyrighted works. Today’s report doesn’t use the phrase “fair use,” but it endorses legalizing many of the same ideas. The government proposes to create “a limited private copying exception,” to “widen the exception for non-commercial research,” to “widen the exception for library archiving,” and “to introduce an exception for parody.”

Orphan works are out-of-print works that cannot be used by anyone because their copyright holders cannot be found. Legislation to address the problem has languished in the US Congress for years. The British government has now pledged to enact orphan works reform that would allow “both commercial and cultural uses of orphan works,” once a prospective user has conducted a diligent search for the copyright holder and paid standard licensing fees.

The report devotes significant attention to the creation of a Digital Copyright Exchange, a centralized clearinghouse to improve the efficiency of copyright licensing efforts. The project is still in the planning phase and participation in the scheme would be voluntary. But the government vows to study ways to encourage and facilitate the creation of an exchange. One way it will do that is by ensuring that the government’s own “Crown copyright” works will be available for licensing.

Patents receive only a brief mention in the report. The government pledges to “resist extensions of patents into sectors which are currently excluded unless there is clear evidence of a benefit to innovation and growth.” It also promises to investigate the problems created by patent thickets, although it doesn’t endorse any specific proposal for addressing the problem.

Read more>>

See also: Kroes wants copyright as a building block, not a stumbling block; Doctorow: Handicapping the horse-race for Canada’s new copyright bill;UK copyright laws to be reviewed, announces Cameron.

1. “Reducing the Cost of IP Law” [↩]