Today may be World Intellectual Property Day, but this past Friday was also apparently World Book and Copyright Day (quite a bookended weekend for government monopolies on knowledge!). Bas Grasmayer points out that UNESCO, the United Nations Educational, Scientific and Cultural Organization, which is supposed to be focused on “promoting international collaboration through education, science, and culture” oddly chose Friday’s “World Book and Copyright Day” to launch an “anti-piracy observatory.”
This is bizarre for all sorts of reasons. An organization focused on encouraging education and international collaboration seems like the last place that would be supporting locking up information through government-granted monopolies. This “observatory” appears to have little interest in determining whether or not stronger copyright actually promotes international collaboration through education, science and culture — and simply assumes it must. Given that the actual evidence on this particular topic — especially in developing nations where you would think UNESCO would be most concerned — suggests exactly the opposite, it’s quite troubling that UNESCO would take this particular position. It’s a position that harms developing nations solely to benefit a few corporations. That doesn’t seem like a position UNESCO would support.
We already have systems that work like this. The X Prize is a bounty for achieving a desired technological goal. That can provide a one-time payment. But often the value of a new discovery is not realized until some time later. So we might make a slight change to the intellectual property laws.
Instead of the government granting the person that discovers an idea a temporary monopoly, the people as a whole through the government own the right and license it to everyone. Of course the government collects taxes so good ideas would increase tax revenue. The government would pay the inventor a small percentage, maybe 5 – 10% of the taxes collected on income from the idea.
This would eliminate wasteful intellectual property disputes. If you use the idea, you owe the tax and the government has the ability to collect it. And the tax is only collected if the idea is being vigorously promoted. The business and government share the same goal of promoting the idea. Society benefits because new ideas are discovered and brought to market. The inventor benefits because the government is collecting the royalties for them.
This system would drastically reduce the cost of medicine because every medical discovery would be generic from the first day. Companies would compete based on their ability to provide the highest quality products and service at the best price. Researchers could operate independently from manufacturers. This could become a great revenue source for universities.
There’s more to the idea than that, but that’s the basic summary of the concept. I’ve seen similar suggestions in the past as well, but I’m not convinced that it makes much sense. Would it be better than the existing system? Perhaps, but even that would require a lot more analysis and modeling. The problem with it, in general, is that you’re adding a tax where one probably isn’t needed, and the tax is too early in the system — taxing the use, rather than the income. We already have an income tax and taxing on top of that just seems problematic, taking away the incentive to actually innovate. On top of this, such a tax sounds like a bureaucratic nightmare. How would it be tracked? Who would know when to pay the tax and how it would be distributed? The traditional tax system doesn’t involve the government figuring out who to pay as well, and this would add a lot of overhead that makes this whole thing quite inefficient. I guess I just don’t see the need for such a system at all, if we can let competition in the marketplace itself focus on rewarding innovators.
While there was a recent argument being made (weakly) that all property is intellectual property, reader Kerry Kaye recently pointed out a discussion of the opposite point of view, saying that intellectual property is actually a violation of the concept of real property. I have to admit that, while I had hoped to find the article compelling, I actually found it to be lacking in substance. At points it seems to go around in circles without clearly making a point. You could, potentially, make a case that intellectual property tries to limit what you can do directly with the output of your own mind, and that is antithetical to the concept that you have the right to make use of the output of your own brain — which could violated basic property rights, depending on your definition of property rights. In fact, this is the part that I find most troubling about intellectual property laws (especially patents): that it effectively tells you that even if you come up with something entirely on your own, others can stop you from making use of those ideas.
Perhaps a much more compelling (though, I’m sure not to strong believers in intellectual property) discussion on a similar topic is a recent piece by Vedad Krehic, (pointed out by Michael Scott) that discusses how intellectual property laws turn IP holders against their own customers. In it, he makes a similar, but much clearer argument like the one above:
If a friend, however, lends me a music CD and if I then make a copy, so that I can listen to the music without having to borrow the disc again in the future, nobody is harmed. It is possible that I could, for example, have made an agreement or contract with him when I borrowed the disc stating that I cannot copy it. If I were to do it anyway, I’d be in violation of a private agreement. If not, who is harmed by my act of duplication? I used my own tangible property (CD drive, computer, and hard drive or blank CD) to fashion a duplicate of the data on the CD. The original CD is still my friend’s property. I return it to him, and while he is no better or worse off than he was before, I am now better off. The imprint of the music on my tangible property makes that property marginally worth more to me, as I can enjoy its use to a greater extent than previously.
Was anyone harmed at any point here?
Yes — if you choose to believe the consumer entertainment industry. They claim there was a third party here that was being harmed. Can you see the third party? There was me, and there was my friend. There was my property and that of my friend. I don’t see the third party anywhere in that process. I suppose my friend could have been in a contract with the person or organization he purchased the CD from not to copy it, but I wouldn’t have been bound by that contract. Either way, I did nothing wrong.
And this is where the trouble comes in for intellectual property versus real property:
Can anyone please explain to me how someone can be a just owner of something, yet not be allowed to exercise his or her ownership rights over it? He can throw rancid tomatoes at the painting, but not duplicate the pattern that makes the painting a painting, rather than just canvas and paint? Or, to use a different type of copyrightable pattern, how can someone own their own brain yet not own the part of it containing a song they memorized?
The logical conclusion is that the natural right of property and the idea of copyright, and of intellectual property in general, are fundamentally incompatible and conflict sharply. You cannot own something and have someone else dictate to you what you can and cannot do with it, without that being an element voluntarily arrived at through contract. In absence of a contract, the dictating party is initiating aggression against the just owner of an item. Intellectual property is an assault on tangible property.
And that’s the problem that we keep pointing out around here that troubles us so much. There are many — especially in copyright debates — who insist that those who don’t agree with copyright law should just avoid supporting those who do. But they ignore how copyright law is used, regularly, to limit what should be fundamental property rights of individuals to do as they please to products they legally purchased.
In fact, Krehic then takes this further, and notes that much of the entertainment industry’s troubles today may be traced back to the fact that it has aggressively tried to use copyright law to stop people from doing what they want with their own property, and it’s that mistake (which they keep compounding) that has resulted in customers defecting, rather than any issue of “piracy.” Again, it’s easy to predict that intellectual property supporters will scoff at this and dismiss it as ridiculous, but there is growing evidence to support this position. As we’ve seen over and over again, content creators who learn to embrace file sharing and the power of new technologies, while connecting with fans, and providing a smarter business model, have been thriving. It’s not piracy that’s causing harm, it’s bad business model choices, and many of those bad business model choices are driven by an over-reliance on the “crutch” that intellectual property provides, which gives firms the ability to take away property rights from individuals.
Supporters of stronger intellectual property laws in other countries ought to be careful what they ask for… they just might get it, and then discover they didn’t really want it after all. For example, for many, many years, US companies have been screaming loudly about how the US should pressure China to be more respectful of intellectual property. China, for example, regularly makes the “priority watch list” of the USTR’s “Special 301” report, which is effectively a catalog of what countries US companies are complaining most about. However, China has suddenly taken an interest in intellectual property in the last few years, and it doesn’t seem to be turning out quite like US companies expected.
First, a few years back, we wrote about a high profile counterfeit DVD bust in China, where the “culprit” was actually a rich American. Then, we noticed in 2008 that China was starting to talk about China cracking down on video game piracy, but only when it concerned others copying China’s video games. Finally, late last year, we noted that a French company had lost a patent lawsuit in China.
Of course, this isn’t a surprise at all. Various studies have shown that greater copyright, patent and trademark protections tend to follow a period of great innovation, when the companies that did that innovation look to protect their position from upstarts elsewhere. In other words, it acts in the exact opposite manner as it’s supposed to. It’s not an incentive to innovate, but a tool used to stop competition and innovation from others. The situation in China is playing out exactly according to that formula. The country is growing into a bigger believer in intellectual property laws — but only for the sake of using it to protect against foreigners — which, we assume, is not what US companies wanted, but which they should have expected if they ever bothered to look at the actual history of stronger intellectual property laws.
Erik Heels, an intellectual property lawyer and a regular Techdirt reader, has put up a nice blog post, explaining why patents rarely make sense for startups (especially if the patents are for software). He notes that, in most cases, filing for a patent is “a waste of time and energy,” not to mention money — not that “your money and time would be better spent hiring programmers, marketers, and a sales force.” Indeed. Unfortunately, lots of startups think they need patents — often erroneously claiming that VCs won’t invest without patents. But as many smart VCs point out, having patents for a startup is usually pretty useless. Startups live or die in the marketplace with a product — and that product is rarely going to wait around for a patent. Focus on building a business, not wasting time and energy on useless patents.
A few days ago, I posted the letter I submitted to the White House IP Czar, Victoria Espinel, concerning her request for comments on the strategic plan for IP enforcement. It was a bit troubling that the questions asked in the RFC focused solely on increased enforcement and the amount of harm done by infringement — as if it never even occurred to folks that increased enforcement might not be best for culture or the economy, and that there may also be mitigating benefits to infringement. I tried to make that clear in my filing, and it was great to see folks like Public Knowledge and the EFF submit comments as well — but the really wonderful filing came from the NetCoalition and CCIA, which we discuss below. First, though, it’s worth noting that the entertainment industry also made its demands…
The RIAA, MPAA and the Screen Actors Guild teamed up to submit their own filing, and as the LA Times noted “it’s a doozy.” Consider it a wishlist of protectionist, anti-consumer, anti-innovation policies, basically demanding that the White House prop up their own businesses, because of their unwillingness to adapt:
Among other things, the “creative community organizations” urged that:
The federal government encourage ISPs to use, and companies to develop, monitoring, filtering, blocking, scanning and throttling technologies to combat the flow of unauthorized material online;
Copyright holders be able to combat infringement by making a database of their works available to service providers, rather than submitting individual takedown notices. And once a work is taken down, service providers should be expected to employ “reasonable efforts” to prohibit users from uploading or even linking to them again;
Copyright owners be able to block unauthorized streams of live broadcasts without going through the formal notice-and-takedown process;
The federal government press search engines, social networks, hosting companies, domain name registrars and online advertising and payment networks to cooperate with copyright holders on efforts to combat piracy (“Encouraging these intermediaries to work with content owners on a voluntary basis to reduce infringements, and assuring these intermediaries that such cooperation will not be second-guessed, should be top priories that call for the personal intervention of senior government officials if necessary.”);
A federal interagency task force work with industry to interdict prerelease bootlegs of Hollywood blockbusters and crack down on U.S. services that assist foreign piracy hotbeds;
States adopt “labeling laws” that “defined unauthorized online file sharing and streaming as a felony,” giving state and local law enforcement jurisdiction to go after unauthorized copying online;
States use consumer protection laws to go after file-sharing sites that “expose consumers to intrusion, viruses and revelation of personal data.”
You can read the entire entertainment industry filing below, but be ready to laugh at the highly questionable claims:
However, if you want read something enjoyable you should check out the incredibly long, but ridiculously thorough and brilliant filing from the NetCoalition and CCIA. It’s over 100 pages long, but every last page is worth reading. It says everything I wish I could have said in my letter, but does so in excruciating detail, with tremendous sources to back up each point. It kicks off by going through a detailed list of “fallacies” found in the request for comment itself, as well as in the typical complaints from the entertainment industry, including:
The objectivity fallacy: highlighting how the studies from the entertainment industry that pretend to be objective are anything but — and tend to greatly, if not ridiculously exaggerate the problem.
The lost sale fallacy: of course, demolishing the industry’s desire to pretend that each act of infringement represents a “lost” sale.
The causation fallacy: showing how the entertainment industry always places the blame for its problems on infringement, even if there’s little evidence to support that any troubles in the industry were due to infringement. Instead, the filing points out that there are many, many reasons why some companies in the industry have run into trouble that have nothing to do with infringement.
The innovation fallacy: dismantling the industry’s claim that infringement destroys jobs and discourages innovation, noting that it is historically evident that competition breeds greater innovation than gov’t-backed monopolies, which can be shown to create economic rents and dead-weight loss.
The industry size fallacy: a favorite of the entertainment industry, which bundles in all sorts of unrelated industries that just sorta barely are touched by intellectual property (furniture!) to make the industry seem huge, in an effort to imply the importance of extra protectionism. But the filing points out how flawed the methodology is, pointing to the CCIA’s own (awesome) use of the same methodology to show that exceptions to copyright contribute more to the economy than the “copyright industries.” This part also points out that if the industry really is so big, then it should be well positioned to withstand any challenges…
The equivalence fallacy: picking apart how the entertainment industry likes to lump all forms of infringement into one “evil” bucket, without ever acknowledging that there are very, very different types of infringement, and understanding the differences is key in determining actual harm and any “enforcement” strategies.
The theft fallacy: once again reinforcing that infringement is a different beast than theft, and even the Supreme Court recognizes this… though the entertainment industry seems unwilling to admit it.
The silo fallacy: elegantly highlighting how the industry loves to talk up losses in CD sales, while totally ignoring how other parts of the business, such as live performances, continue to grow. It also highlights how, despite CD and DVD sales dropping, the number of albums and movies being made has vastly increased.
The relevance fallacy: laying out the argument that, even if you accept the industry’s claims of losses, they’re often submitting aggregate data that includes a variety of different factors and information that may be distorting the direct impact on specific areas, and setting policy based on such aggregate data could be quite damaging.
Seriously, the entire document is wonderful. It feels like it should be published as a book, and should become required reading for anyone ever writing about, litigating or setting intellectual property policy. You can read the whole thing below:
Of course, after going through the fallacies, the filing gets to specific policy recommendations, wisely going back to the ProIP bill’s language, highlighting how the purpose of the IP Czar is really supposed to be about true criminal infringement and counterfeiting, and arguing that any enforcement should be focused on those issues, rather than stepping in on civil disputes in what is, effectively, a business model problem. The filing also points out that diplomats enforcing US IP policy around the world are often uneducated in the balance of interests that IP law is supposed to hold, and frequently just push for greater laws and restrictions, without understanding the harm it causes. Along those lines, the CCIA takes the time to express its grave concerns over ACTA — noting its broad scope and potential harm both in the US and abroad.
The conclusion of the document sums up everything nicely:
The spread of the global Internet has facilitated the unauthorized and at times infringing
distribution of certain forms of intellectual property, especially copyright-protected content. The
ease and minimal cost of copying makes meaningful enforcement costly and difficult. This
widely recognized problem has stirred passionate debate about how the problem should be
handled by copyright owners, the government, and third parties. This problem is amplified and
complicated by the importance of both the content and Internet industries in the U.S. export
market, as well as and demands for the U.S. to assert leadership at the international level. This
creates a danger of rigid, oversimplified policies toward infringement that (a) make little sense in
other intellectual property domains, and (b) undermine the perceived legitimacy of the global
intellectual property system.
The solutions to the real and perceived problems the disruptive technology of the Internet
has caused for certain entertainment and luxury goods companies cannot be solved by greater
government intervention or by shifting more costs to Internet companies. Rather, the solution
lies in the evolution of business models to adapt to the new realities of the marketplace.
Seriously. This is an absolute must read, start to finish.
The folks who created ACTA were already sneaky enough in describing it as an “anti-counterfeiting” agreement, when they knew all along it went way beyond issues related to counterfeiting. For a while, it’s been obvious that it was also very much (perhaps more than counterfeiting) about copyright, but it’s actually about much more than that. We already mentioned that it is designed to cover patents as well. Now, KEI has looked at another leaked draft document, and notes that the draft sneaks in the fact that it’s designed to cover seven different areas of intellectual property. In typical sneaky fashion, it doesn’t come out and list them directly, but in the definitions section, defines “intellectual property” as “refers to all categories of intellectual property that are the subject of section 1 through part 7 of Part II of the Agreement on Trade Related Aspects of Intellectual Property Rights.” Basically, it’s saying that it’s accepting the definition in a totally different document, from TRIPs. So, what’s in that document?
Copyright and Related Rights
Trademarks
Geographical Indications
Industrial Designs
Patents
Layout-Designs (Topographies) of Integrated Circuits
Protection of Undisclosed Information
Note how little of that has anything to do with counterfeiting — which is mostly just a trademark issue.
For years, we’ve written about how Indonesia has been hoarding bird flu samples and refusing to share them with researchers, because they’re afraid that someone will come in and patent the cure, based on the samples they provide, and that will make it much costlier to Indonesia to get the vaccine. Of course, the end result instead might be no vaccine at all… It looks like we may be facing a similar issue with Ug99, a fungus that is aggressively killing wheat crops in Africa and the Middle East — potentially having a massive impact on global food supplies. FormerAC alerts us to an article about the fight against Ug99, where it’s noted that Pakistan won’t share some important samples with the rest of the world, again out of fear that some big company will patent what they find:
As the breeders keep tinkering, South Asia is bracing for impact. The CDL recently tried to get its hands on a suspicious P. graminis sample from Pakistan that is said to knock out Sr31. But the country is reluctant to share: “Some countries regard isolates of their pathogens as part of their genetic heritage,” CDL director Marty Carson says. “I guess there’s a fear that we’ll patent something off of it.”
Well, given Monsanto’s history of patenting disease resistant crops — and then over-aggressively attacking anyone who uses such crops (even accidentally), it would seem like a rather legitimate fear. Perhaps, rather than brushing this fear off, the USDA’s Cereal Disease Laboratory (CDL) should work to do something to fix things?
Despite the best efforts by certain participants in ACTA negotiations to keep everything a secret, that’s not really working. We’ve already seen leaks of the documents in progress, but now comes a leak of a document highlighting the actual wordsmithing of some sections, including the specific positions taken by different countries. You can download the pdf directly or see the embedded version here (most of the document should be read in landscape mode, and I don’t see any easy way to make that possible in Scribd, so downloading may be preferred):
A lot of what is happening in the document is inside baseball negotiations, but it does highlight which countries are questioning which elements of ACTA. It’s interesting (and a bit troubling) that some countries (including the US) seem to want to make sure that certain parts of ACTA don’t just cover copyright/trademark but all “intellectual property” (meaning patents as well — something that had been rumored, but not confirmed). Not surprisingly, the US is using ACTA not as just a counterfeiting enforcement tool, but to wedge in a variety of intellectual property issues into other countries. As you dig into the document, though, you see how much little changes to the wording can impact huge differences. For example, in discussing damages, the US keeps wanting to insert the word “shall” while the EU, Canada and New Zealand want “may” with regards to whether or not there should be statutory damages on infringement, or if it can be limited to actual damages. Basically, it looks like the US is looking to force other countries to set up an equivalent of (much higher than actual) statutory damages, rather than having courts ask rights holders to show actual damages.
Michael Geist has a list of some other interesting tidbits, and Jamie Love has worries about how the damages section 2.2 is much stricter than existing laws, and seems to conflict with existing US laws (but ACTA can’t change US law, right? Right?). Love also notes the oddity of the EU crossing out language (inserted by the US, mind you) that would protect “fair use, fair, dealing, or their equivalents.”
All in all, documents like these show why these discussions need to be public. Very very minor word choices can have a major impact. And hiding all of that behind closed doors is a huge problem.
As part of the mis-named ProIP act, the newly created IP Enforcement Coordinator (generally called the IP Czar) is supposed to help figure out what an effective “intellectual property enforcement strategy” would be. While we have questions about why this position or this plan is really needed in the first place, here’s a bit of good news: rather than just doing the typical consult with industry lobbyists, the administration is, again, asking for public comment (pdf):
This request for comments and for
recommendations for an improved
enforcement strategy is divided into two
parts. In the first, the IPEC seeks written
submissions from the public regarding
the costs to the U.S. economy resulting
from intellectual property violations,
and the threats to public health and
safety created by infringement. In the
second part, the IPEC requests detailed
recommendations from the public
regarding the objectives and content of
the Joint Strategic Plan and other
specific recommendations for improving
the Government’s intellectual property
enforcement efforts. Responses to this
request for comments may be directed to
either of these two parts, or both, and
may include a response to one or more
requests for information found in either
part.
The link above has more details, and the comments are due by Wednesday, March 24, 2010.
Now, I know when I posted my comments submitted to the USTR about the Special 301 process, a number of commenters wondered if the USTR would care, or even bother to look at, let alone consider, comments from the public beyond industry lobbyists. It is a valid concern. And while I do still wonder how much public comments will play a role in the actual strategy (compared to industry responses), in this case, the IPEC specifically reached out to Techdirt to let us know about this request for comment, to see if we would be interested in alerting our readers of their opportunity to take part. Now, the cynical response is that this is just window dressing — and it’s a lot easier to ask for comments from the public than to listen to them, but the fact that they are specifically reaching out to this community (among others) at least suggests an interest in what folks here might have to say. With that in mind, I’m hopeful that some of you will take the time to submit thoughtful comments on the subject.
