Why Compulsory Licenses Are Bad: A Look At The Sausage Making Process

from the get-rid-of-'em dept

When discussing things like patents and copyright, oftentimes someone suggests that "compulsory licensing" is a solution that solves all the problems. I tend to have serious problems with compulsory licensing plans (even those pushed by the EFF), because they don't seem necessary. There's no actual evidence of a market failure given that would require a compulsory license -- so any such license is effectively an unnecessary tax to prop up a failed business model. However, it's even worse than that.

William Patry has a guest blog post by Josh Wattles, a lawyer in the copyright and entertainment law world that goes into just how awful compulsory licensing systems really are. Basically, rather than coming up with a reasonable solution, it simply becomes a political battle where those with the stronger position craft the language in a ridiculously favorable manner:
The compulsory licenses from the recent past were drafted by skilled lobbyists and lawyers and the result suffers from a lack of simplicity and economy. Finding out what the license covers or how it can be triggered is like tracing a tan-colored line through the Pismo dunes.
The end result is a whole series of byzantine rules that no one can reasonable follow:
Compulsory licenses are apparently haphazard: there is a compulsory license you can use to carry some broadcast signals on cable, but not all; or there is a compulsory license to use the underlying music in a recording but not to use another recording; or there is a statutory license for non-interactive webcasting if the service doesn't repeat songs too often or play albums in sequence; and so forth. This happens because compulsory licenses are designed not as market solutions but as small nips and tucks that ease other commercial uses of copyrighted content without anyone losing out on important parallel interests.
Why does this happen? Well, if you're basically guaranteeing a particular business model with a particular market rate, of course commercial interests are going to step in and lawyer them into a way in which they're most profitable, with no interest at all towards the actual market:
There is no mystery in how the process became so over-wrought. It is a result of serial manipulations by well funded commercial interests seeking wholly appropriate advantages over competitors, suppliers or customers.
Unfortunately, rather than advocating just getting rid of them altogether, Wattles tries to craft a compromise, which is to basically get the government involved in any compulsory license agreement, having the Justice Department step in and deal with the fact that any compulsory license, by its nature, is anti-competitive. Of course, in reality this would just lead to more political pressure on the Justice Department. It still seems like an easier, and more effective, solution, is to forget compulsory licensing altogether, and recognize that the supposed "market failures" that required them in the first place don't really exist.


Reader Comments (rss)

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  1.  
    icon
    Crosbie Fitch (profile), Jun 27th, 2008 @ 2:18am

    See also

    See Voluntary Collective Licensing and Extortion and CITP Symposium: Voluntary Collective Licensing of Music.

    If there's one thing worse than a state enforced monopoly to reward publishers it's a tax to replace it.

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    DCX2, Jun 27th, 2008 @ 8:10am

    Commercial interests

    I always tell everyone...

    It's not Republican vs. Democrat

    It's not Conservative vs. Liberal

    It's Lobbyists vs. People

    And we're the opposition party.

     

    reply to this | link to this | view in thread ]

  3.  
    icon
    Crosbie Fitch (profile), Jun 27th, 2008 @ 8:40am

    Re: Commercial interests

    Don't you think it's Corporations vs People?

    After all, if half of the lobbyists were represented by mortal people instead of immortal corporations it might not be so bad.

    It's very difficult to prevent money entering into the system.

    However, the reason the corporations are in the ascendant is because it's easy for their money to enter the system to fund lobbyists. If it was also easy for people to fund lobbyists (en masse rather than just the odd plutocrat) then things would be slightly more balanced.

    Perhaps someone will find a way to make it easy for ordinary punters to pledge a dollar to their favoured lobbies?

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    DCX2, Jun 27th, 2008 @ 9:08am

    Re: Re: Commercial interests

    Corporations vs. People works, too. Generally, lobbyists are one and the same with a Corporation.

    I think before people can pledge a dollar or two to their favored lobby, they need to know of one. Most people are too busy consuming McDonald's or American Idol to care.

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Anonymous Coward, Jun 27th, 2008 @ 10:10am

    MM

    Would it not be more accurate for you to say that coyright is an anachronism that should be eliminated altogether?

    If not, whe not?

     

    reply to this | link to this | view in thread ]

  6.  
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    Mike (profile), Jun 27th, 2008 @ 11:52am

    Re:

    Would it not be more accurate for you to say that coyright is an anachronism that should be eliminated altogether?

    I think copyright is *unnecessary* and often does more harm than good. I think that it's politically ridiculous to think that it will be eliminated -- but that as more and more creators recognize the benefits of ignoring copyright, it will increasingly just fade away as a useful tool.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    Anonymous Coward, Jun 27th, 2008 @ 3:08pm

    Re: Re: Commercial interests

    Corporations are made up of people. If theyre the opposition, then its actually just their evil overlords and/or the shareholders which permit such activities that are the opposition.

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    Michael F. Martin, Jun 29th, 2008 @ 4:56pm

    Mike,

    Your biggest problem is that you have no theory at all behind your attack on the patent system.

    If you don't like litigation, then why are patent pools bad? Aren't they a step in the right direction? If not, then what would be better?

    So far I haven't seen you come right out and say that all IP rights should be completely abolished. Is that what you want? If so, can you please say that and explain in as simple a way as possible to people like me why you think the world would be a better place without any legal protection of ideas?

    You know what a world in which people are discouraged from independent thinking looks like? Aren't patents the ultimate way to encourage people to think creatively about how to compete rather than fighting over the market for an existing product or service? Do you want people to fight over things?

     

    reply to this | link to this | view in thread ]

  9.  
    icon
    Mike (profile), Jun 29th, 2008 @ 10:46pm

    Re:

    Your biggest problem is that you have no theory at all behind your attack on the patent system.

    WHAT? Then you clearly have not been paying attention. Not only is there a rather complete theory, but it's backed up by tons of research.

    If you don't like litigation, then why are patent pools bad? Aren't they a step in the right direction? If not, then what would be better?

    Not locking up ideas.


    So far I haven't seen you come right out and say that all IP rights should be completely abolished. Is that what you want?


    The fact that you choose not to actually understand my position, doesn't mean I don't have one.

    I have said, quite clearly, that if you are going to grant a government monopoly, there should first need to be evidence of market failure. Without that, then there is no need for a monopoly. Thus, if someone can show a specific scenario under which a gov't monopoly is required, and prove the market failure, then I could be in favor of a patent in that situation. However, I have yet to see such a situation -- so, barring that, I believe that getting rid of patents altogether is probably the most effective.

    If so, can you please say that and explain in as simple a way as possible to people like me why you think the world would be a better place without any legal protection of ideas?

    Sure, the history of free markets, where competition drives innovation, builds bigger markets, and makes everyone better off.

    You know what a world in which people are discouraged from independent thinking looks like?

    You're making a huge incorrect leap here, that people are somehow discouraged from independent thinking without patents. Nothing could be further from the truth. In fact, you're encouraged to do even more independent thinking to continue to push the bleeding edge beyond what others have done.

    Aren't patents the ultimate way to encourage people to think creatively about how to compete rather than fighting over the market for an existing product or service?

    Um. I don't know how to answer this other than to say you are 100% wrong. Patents do not encourage people to think creatively. They lock down ideas, under the false belief that ideas can be owned and that only one person can come up with an idea. They also, falsely, assume that the real value is in invention, rather than the ongoing process of innovation.

    Do you want people to fight over things?

    I want people to compete, as that drives innovation. Granting monopolies is the opposite of that.

     

    reply to this | link to this | view in thread ]


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