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As I note in my article "Radical Patent Reform Is Not on the Way," Mises Daily (Oct. 1, 2009), there is a growing clamor for reform of patent (and copyright) law, due to the increasingly obvious injustices resulting from these intellectual property (IP) laws. However, the various recent proposals for reform merely tinker with details and leave the essential features of the patent system intact. Patent scope, terms, and penalties would still be essentially the same. In the second article of this two-part series, "Reducing the Cost of IP Law," Mises Daily (Jan. 20, 2010), I propose various reforms to the existing patent system--short of abolition--that would significantly reduce the costs and harm imposed by the patent system while not appreciably, or as significantly, reducing the innovation incentives and other purported benefits of the patent system. I list these changes below in generally descending order of importance, without elaboration, as they are discussed further in "Reducing the Cost of IP Law":
Provide for Prior-Use and Independent-Inventor Defenses
Instantly Publish All Patent Applications
Eliminate Enhanced Damages
Add a Working/Reduction to Practice Requirement
Provide for Advisory Opinion Panels
Losing Patentee Pays
Expand Right to Seek Declaratory Judgments
Exclude IP from Trade Negotiations
Other Changes
Increase the threshold for obtaining a patent
Increase patent filing fees to make it more difficult to obtain a patent
Make it easier to challenge a patent's validity at all stages
Require patent applicants to specify exactly what part of their claimed invention is new and what part is "old" (e.g., by the use of European-style "characterized in that "claims)
Require patent applicants to do a search and provide an analysis showing why their claimed invention is new and nonobvious (patent attorneys really hate this one)
Limit the number of claims
Limit the number of continuation applications
Remove the presumption of validity that issued patents enjoy
Apportion damages to be proportional to the value of the patent
Copyright
Radically reduce the term, from life plus 70 years to, say, 10 years
Remove software from copyright coverage (it's functional, not expressive)
Require active registration and periodic re-registration (for a modest fee) and copyright notice to maintain copyright (today it is automatic, and it is often impossible to determine, much less locate, the owner), or otherwise make it easier to use "orphaned works"
Provide an easy way to dedicate works to the public domain to abandon the copyright the state grants authors
Eliminate manifestly unjust provisions of the Digital Millennium Copyright Act (DMCA), such as its criminalization of technology that can be used to circumvent digital protection systems
Expand the "fair use" defense and clarify it to remove ambiguity
Provide that incidental use (e.g., buildings or sculptures appearing in the background of films) is fair use
Reduce statutory damages
Trademark
Raise the bar for proving "consumer confusion"
Abolish "antidilution" protection
In fact, abolish the entire federal trademark law, as it is unconstitutional (the Constitution authorizes Congress to enact copyright and patent laws, but not trademark law)
The upcoming documentary, Copyright Criminals, shows how copyright has outrageously criminalized the use of sampling, which has been disproportionately popular in hip hop music. In this, it calls to mind the racially disproportionate impact of drug laws on minorities...
If composers could set still-unmatched records of productivity without copyrights while managing to earn a living, imagine what writers could do in an environment that did not give them the hope of forever subsisting off past accomplishments. FULL ARTICLE by Gennady Stolyarov II
This is a wonderful article announcing the opening of the Mises Institute's iTunes U:
The Mises Institute is pleased to announce that the multimedia content on Mises.org — many thousands of hours of audio and video — is now available through iTunes U, a dedicated area within the iTunes Store (www.itunes.com).
iTunes U carries lectures from top academic minds on every topic, freely available, elegantly organized, and beautifully presented. Users enjoy easy access to material ranging from ancient-language studies to particle physics.
This shows what can be done with the open-information vision and mentality. A few great quotes excerpted below. Not only that, the Mises Institute multimedia files on its iTunes U page include lectures criticizing intellectual property, and free-market material criticizing monopoly in general.
Also appearing on Mises Daily today is my article "Fifteen Minutes that Changed Libertarian Publishing," about the genesis of Libertarian Papers, another open-information project of the heroic Mises Institute.
Here are some choice quotes from the iTunes U article:
"We are seeing the future of education: straight from great minds to individual users around the world."
"With iTunes U, the entire body of scholarship accumulated in the minicivilization of Mises.org can enjoy the widest possible distribution."
"We are on the cutting edge of user-friendly educational technology."
"As more and more colleges experience digital media, many prestigious institutions have come to realize that universal distribution of their content is not a threat to their mission; it is the very fulfillment of the educational ideal. This is certainly the case with the Mises Institute, which is why the site has been made completely open source and completely free."
"Over the years, hundreds of appreciative emails and blog comments from fellow Mises.org listeners have let me know that I am among a vast multitude of Austrolibertarian audiophiles."
"Economists like Carl Menger, F.A. Hayek, and Ludwig von Mises were devoted to getting their ideas out. They accepted as many travel invitations as possible in the hope of reaching new audiences. Mises himself was particularly aware of the need to teach outside the academy. Rothbard's own desire to reach the multitudes by writing for every possible venue left us with an immense literary legacy."
"with digital media they now make the globe their lecture hall and anyone can be their student."
"Murray Rothbard died in 1995, just as web browsers were hitting the mainstream. He might not have imagined this possibility of global, instant distribution. But anyone who has listened to the hundreds of hours of audio on Mises.org can know for sure that Rothbard would be shouting for joy."
"including Doug French, president of the Mises Institute, who has encouraged and supported this venture, considering it essential to the future of liberty; under his leadership, we have joined the highest ideals with the most advanced technology."
A Swedish libertarian buddy, Johan Ridenfeldt, pointed me to this article (in Swedish), which describes libertarian (liberal) arguments against intellectual property, and also includes a review of the debate in Nyliberalen (The Neoliberal). He wrote, "I find this very positive. I'm involved (somewhat) in politics, and I have noticed that most of the libertarian young ones agree with us on IP [i.e., that it is problematic and unlibertarian]. This was not the case when I first started quoting you back when your Against IP article was in draft [in 2000 or so]. I used to post and recommend your working paper draft, and back then I was pretty alone in my views."
I have noticed a similar trend. The younger, Internet generation seems to be much more receptive to the notion that there are no property rights in information and ideas. Whether this is because they are more open minded, more libertarian, or anti-big-business, I am not sure. I have noticed that most of the older types are much more resistant to challenges to IP.Coda: Jim Newland writes:
Sheesh, Stephan. I'm an old fogey and even I know the answer to this one. It's because they've grown up in the digital era, with its easily traded and downloaded electronic files. The impossibility of actually owning an idea or anything else nonmaterial is brought into sharp focus with the ubiquity of the internet. For instance, in the case of videogame pirates, they ask how they can be accused of stealing something when the original product remains with its original owner. This starts them thinking about the whole idea of intellectual property and the notion that one can somehow own something as ephemeral as a thought.
And a college student writes,
The reason is actually pretty simple. The RIAA just sued my roommate and about 10 other kids here at [my college]. The younger generation is anti-IP because we love free file sharing and hate getting sued.
In a previous post, I noted the arbitrariness of copyright law in prohibiting editing a DVD to take out objectionable scenes, when presumably it would be legal to accomplish the same thing by other means-e.g., as I pointed out in a legal forum, by providing instructions to users to use to program a special DVD player that edits out the bad scenes "on the fly" in the user's home.
Turns out there is such a service: Clear Play (thanks to Tom Woods for the link). You buy one of their DVD players, and load into it "filters" which you can download from the web with a subscription to their service. Amazingly, there was apparently some doubt about the right of consumers to do this, even for private use, so the Family Entertainment and Copyright Act of 2005 was passed last year to amend the Copyright Act to make it clear that it is not a copyright infringement to use technological means (such as ClearPlay's DVD player and filter service) to skip objectionable material, such as profanity, violence, or other adult material, in the audio/video works that they legally purchased.
Gee, Congress, we're so grateful, so very grateful, that you are permitting us to fast forward and skip nudity, gore, and profanity, or other scenes we don't want to show, in our own homes, using our own DVD players. How generous of you. Is it okay if I skip commercials too, please? (Apparently, an earlier version of this bill contained "language that might make users and manufacturers of ad-skipping technology automatically liable for copyright infringement".)
Tom, I too (as an IP attorney) find the copyright decision to be somewhat bizarre. In Clean Flicks v. Steven Soderbergh, a "federal district court in Utah held that companies that "sanitize" … motion pictures by removing sex, profanity, and violence, violate the motion picture studios' copyright."
The court thought it was an easy case, apparently. So does this law professor, who said "This case was about as straightforward a copyright case as there can be, and the court's determination is plainly correct".
As the court wrote:
CleanFlicks first obtains an original copy of the movie from its customer or by its own purchase from an authorized retailer. It then makes a digital copy of the entire movie onto the hard drive of a computer, overcoming such technology as a digital content scrambling protection system in the acquired DVD, that is designed to prevent copying. After using software to make the edits, the company downloads from the computer an edited master copy which is then used to create a new recordable DVDR to be sold to the public, directly or indirectly through a retailer. Thus, the content of the authorized DVD has been changed and the encryption removed. The DVDR bears the CleanFlicks trademark. CleanFlicks makes direct sales and rentals to consumers online through its website requiring the purchaser to buy both the authorized and edited copies. CleanFlicks purchases an authorized copy of each edited copy it rents. CleanFlicks stops selling to any retailer that makes unauthorized copies of an edited movie. … CleanFilms maintains an inventory of the unedited versions of the copies it rents or sells to its members in a one-to-one ratio. [italics added]
Note that CleanFilms buys one copy for every edited (sanitized) copy they rent. It seems to me, therefore, that this is just the digital version of physically removing parts of an analog movie on videotape. For example, suppose CleanFilms bought 1000 VHS tape versions of a movie, and physically removed lengths of tape that had nudity, then spliced it back together. Or, what if they just put white tape over the nudity-section of the film, or "erased" those lenghts of tape, then re-sold the VHS tape. Or what if technology were developed that let them shoot a laser into the DVD and basically just blot out the sections of video that contained nudity? Could it be argued that any of this is is copying or reproducing the movie? If not, why is the digital version of this any different? The fact that copyright law treats them differently shows how arbitrary and unjust it is.
From my comment on Jeff Tucker's post, A Theory of Open:
Jeff: "Mainly, I think, this comes from an exaggerated reliance on IP and a belief that it is the key to success."
MIchael: "Do IP advocates understand that the system may very well make it a better bet to produce patents than products? Why go through the hassle of producing products for finicky customers when you can wait for someone to go through the trouble of making a successful product and threaten to sue them?"
I am not sure if non-practitioners realize exactly what goes on in patenting. Quite often medium to large sized companies hold "patent mining" sessions. They are usually not trying to come up with ideas that they might use in their business. What you do is you get 5-10 engineers to sit around a coffee table, and they are led by a "facilitor" (often a patent attorney). They talk about what they've been working on, and try to find little twists or aspects of a design that they can file a patent on. Or, they'll sift thru a bunch of patents in an area that competitors are practicing in, and just brainstorm, thinking of things they can file patents on. Not because they intend to use these ideas. But just to build up a thicket of patents that they can use against another company, either defensively (i.e., a countersuit if the competitor sues them); or to extract royalties or to squelch competition.
For example, the attorney shows a powerpoint with diagrams from a bunch of patents or product designs. The engineers throw ideas out there. Most of them are ridiculous. Someone is taking notes. One of them might say, "How about if we had two channels of information there, in parallel, instead of one? Do you think competitor B might some day do that? After all, dual-channels are becoming popular right now; they'll probably have to do this some day." The patent attorney says, "Say that sounds alright. What's your name? Bob? Okay, you're 'an inventor'. Anyone else contribute to this? Jim, didn't I hear you say something like, 'yeah, that might work?' Okay, you're the second inventor. Let's file a patent on this puppy. You each get a $3,000 bonus."
So, for about 3 minutes of brainstorming, a patent emerges. Maybe a dozen patent applications are filed from that meeting. These are not flashes of genius. They are not sweat of the brow. It's just a bunch of engineers torn away from their actual design work to brainstorm ways to hamper their competition. So maybe half the patents are abandoned half-way through "prosecution," a couple years later, after it's clear even to the bumbling patent office that they are sh*t. Of course about $20-30k was spent on each of the now-abandoned applications, or about $150k. No matter. PTO employees and patent lawyers have to put food on the table.
The other half might finally issue as patents. Most or all of them are probably sh*t too, but now they are issued, and have a "presumption of validity." Now we're up to $30-40k or so per issued patent. Got to recoup those expenses and justify the patent budget, eh? And say, it sure looks like company B's products are ... kinda close to the claims in 2 or 3 of the patents. Let's send them a friendly cease and desist letter.
Company B's patent attorney is then called into action. He's hired to draft 3 or 4 "non-infringement opinions" for, say, $30k each. Why? Just in case B is sued, and loses... so that they can at least plead that the infringement was not "wilful". They still have to pay damages (or stop selling the accused product), but it won't be trebled... if the judge believes the opinions were "sincere" and "relied on" by the defendant so that, although they were infringing, it was not "wilful" since they were after all following a lawyer's advice.. .the lawyer they paid $120k to tell them that ... they are not infringing ... even though it later turned out that they were. No matter, The $6 million B has to pay in damages is at least not trebled $18 million, so that the measly $120k spent on the patent opinions, plus the $1 million spent on patent litigators, was well worth the $12 million saved! B is better off (well, except for the $6 million verdict), its patent attorneys are better off. As for the patentee company, well, their few hundred grand in patent acquisition fees yielded them $6 million, and reduced competition! A win for everyone... right?
This abomination is what pro-patent libertarians thing is just? They think this is compatible with rights and liberty? They think this is productive, innovative behavior? Give me a break.
A friend of mine is going to be a panelist at this event, World's Fair Use Day, which
is a free, all-day celebration of the doctrine of fair use: the legal right that allows innovators and creators to make particular uses of copyrighted materials. WFUD will take place at the Newseum in Washington D.C. on Tuesday January 12, 2010, and will be organized by Public Knowledge (PK), a Washington D.C.-based non-profit, consumer-advocacy group. PK works to ensure that communications and intellectual property policies encourage creativity, further free expression and discourse and provide universal access to knowledge. As part of its campaign to return balance to copyright law, PK hopes to use WFUD to educate the public about the importance of fair use in an information society.
Enhancing the fair use exception is all to the good, but it does not go far enough. Fair use is a vague, ad hoc, utilitarian legislative exception designed to blunt some of the edges of copyright law so as to help masque its manifest injustice. An analog would be a slavery law that permitted a judge to allow the slave a month of temporary freedom if he can demonstrate to the judge that his master has been mistreating him according to a balance test in which the judge weighs four "factors" to make this determination. Or an exception to tax law that says a judge can reduce your tax rate by 1% for one year, if you can persuade him of a "hardship" as proved by weighing four legislatively enshrined "factors." If the law is unjust and needs its edges blunted by ad hoc, unprincipled exceptions--the law itself is the problem and should be abolished.
This event is produced by the group Public Knowledge, which appears to be generally IP-skeptical ("Our first priority is promote innovation and the rights of consumers, while working to stop any bad legislation from passing that would slow technology innovation, shrink the public domain, or prevent fair use"; and they seem to be appropriately skeptical of the horrible DMCA), although their approach is somewhat ad hoc and unprincipled, and intermixed with the standard pro-democracy (and pro-Democrat), pro-"consumer," pro-network neutrality (see my A Libertarian Take on Net Neutrality) sentiments, and so on. Still, another ally in the fight against pattern privilege and intellectual monopoly.
As I note in my article "Radical Patent Reform Is Not on the Way," Mises Daily (Oct. 1, 2009), there is a growing clamor for reform of patent (and copyright) law, due to the increasingly obvious injustices resulting from these intellectual property (IP) laws. However, the various recent proposals for reform merely tinker with details and leave the essential features of the patent system intact. Patent scope, terms, and penalties would still be essentially the same. In the second article of this two-part series, "Reducing the Cost of IP Law," Mises Daily (Jan. 20, 2010), I propose various reforms to the existing patent system--short of abolition--that would significantly reduce the costs and harm imposed by the patent system while not appreciably, or as significantly, reducing the innovation incentives and other purported benefits of the patent system. I list these changes below in generally descending order of importance, without elaboration, as they are discussed further in "Reducing the Cost of IP Law":
If composers could set still-unmatched records of productivity without copyrights while managing to earn a living, imagine what writers could do in an environment that did not give them the hope of forever subsisting off past accomplishments. 
