Rob Pegoraro writes, "Over the past two days, two different commercial DVD-copying programs have gotten shot down by court rulings link here. " The judge found that copying DVDs for backup was perfectly legal, but Congress in its wisdom and under the spell of Hollywood, forbade making machines to do so.

After explaining the ins-and-outs, Pegararo notes that this is a pyrrhic vistory since anyone wishing to copy DVDs can use two free downloadable programs, Hand Brake (http://handbrake.fr/) and DVD43 (http://dvd43.com/) for a Mac and 32-bit Windows. He offers another free way for 64-bit Windows.

A victory for freedom.

Simon Johnson has an important post up at the Baseline Scenario suggesting that Too Big To Fail financial institutions are not only too big, but counter-productive to the American economy. He supports this view by pointing to the amount of unproductive rent-seeking behavior these institutions engage in to ensure their own continued profitability. (This, of course, is precisely the problem that David and Michele have pointed up in their book.)

From Johnson's post:

Finance is rent-seeking. The sector has devoted great resources to tilting all playing fields in its direction. Consumers are taken advantage of; consumer protection is vehemently opposed. And great risks are taken, with the downside handed off to the government (and the consumers again, as taxpayers). This downside protection allows an overexpansion of debt-financed finance - reaching the preposterous levels seen in mid-2008 and now re-emerging.

Finance in its modern American form is not productive. It is not conducive to further sustained economic growth. The GDP accruing from these activities is illusory - most of finance is simply a tax on what is done by more productive members of society and a diversion of talent away from genuinely productivity-enhancing activities.

The rise of China does not necessarily imply slowdown or demise for the United States. But if they specialize in making things and we specialize in finance, they will eat our lunch.

As noted on Patently-O, the Supreme Court is set to address a question about the patentability of certain "processes"--whether the process has to be "tied" to a particular machine or apparatus, or transform a particular article into a different state or thing ("machine-or-transformation" test), to be eligible for patenting.

Now, I append below a summary of the various positions taken by various briefs filed in this case. The recommendations are all over the place. Examples like this should be considered by those libertarians who advocate IP and who think that "the courts" could just figure out the gray areas easily. They do not seem to realize this is purely artificial law, giving rise to insoluble questions--when the goal of the court is not to do justice, but to construe a decree of a legislature, you cannot expect just, or predictable, results. (For more on this, see my Legislation and the Discovery of Law in a Free Society, pp. 151 et seq.) As Kafka wrote, "Justice must stand quite still, or else the scales will waver and a just verdict will become impossible."

• Yahoo (Bilski - Yahoo! Amicus Brief (S.Ct) (as filed) (8-6-09).pdf) The focus on physicality does not make sense in today's technology.
• IBM (08-964 IBM.pdf) The proper test looks for a "technological contribution."
• Regulatory Data Corp ( 08-964 Regulatory Datacorp et al..pdf) Brief by John Duffy focuses directly on the historical importance of the statutory test. "The government is now asking this Court to impose a formalistic restriction on definition of "process" that would create an unprecedented and uncertain judicial limitation on patentable subject matter. This Court should reject that invitation just as it did more than a third of a century ago, when the government unsuccessfully advanced the very same argument. See Gottschalk v. Benson, 409 U.S. 63, 71 (1972)."

• Accenture (08-964 tsac Accenture and Pitney Bowes, Inc.pdf) Machine or transformation test is not a reliable indicator of anything relevant.
• Austin IP Law Ass'n ( 08-964 Austin Intellectual Property Law Association.pdf) The patent statute explicitly defines process quite broadly in Section 100(b). The Federal Circuit's version of "process" in 35 U.S.C. § 101 is far narrower than the broad definition of "process" in 35 U.S.C. § 100(b) (2008).
• Double Rock and other IP entities (08-964tsacdoublerockcorporation.pdf) The Federal Circuit test conflicts with Supreme Court precedent and Congressional intent.
• Law Professors [Lemley et al.] (08-964ac20lawandbusinessprofessors.pdf) The distinction on patentable subject matter should be based on the distinction between applied and abstract inventions. Bilski's claims fail this test.
• Chakrabarty (08-964 Chakrabarty.pdf) Brief by Scott Kieff and Richard Epstein argue that patent rights operate "like a beacon in the dark" to start conversations between innovative entities and potential users.
• Franklin Pierce Law Center (Bilski.pdf) Court should adopt the "useful, concrete, and tangible result" test.
• TeleCommunication Systems (08-964nsactelecommunicationsystemsinc.pdf) Subject matter eligibility should be predictably broad.
• BIO, AdvaMed, WARF and U of Calif (08-964 tsac Biotechnology Industry Organization et al..pdf) Any decision should be clear that biotechnology is patentable.
• Conejo Valley Bar Ass'n (08-964.ac.Conejo Valley Bar Association.pdf) The substantive elements of the patent act (102, 103, and 112) do all the necessary work.
• Novartis (08-964tsacNovartisCorporation.pdf) A process of diagnosis should be patentable.
• Dr. McDonough (08-964_PetitionerAmCuTMcDounough.pdf) "American innovation is not confined to Industrial Age mousetraps and other cleverly contrived gadgets. The modern economic agent is more likely to encounter innovation today in the services they consume than in the contraptions they use. The present amicus curiae suggests that the decision of the Federal Circuit in this case is an attempt to apply an Industrial Age standard to address a perceived Services Age problem, a problem that the present amicus curiae suggests does not exist."
• State of Oregon (08-964_NeutralAmCuOregon.pdf) (The Patent Hawk filed this brief on behalf of all Oregonians - although apparently without any official state approval) The brief makes an important point: Although Section 101 comes first in the statute, it does not make sense to use it as a screening tool at the PTO. Rather, the PTO's skills are in comparisons of prior art and ensuring that the elements of Section 112 have been satisfied.
• Chicago IP Law Ass'n (08-964 ac Intellectual Property Association of Chicago.pdf) There are strong parallels here with KSR; CAFC rule is too rigid.
• Borland (Amicus Curiae Brief (Borland Software Corporation).pdf) The CAFC test does not properly follow Supreme Court precedent.
• Time Systems (08-964 ac On Time Systems.pdf) Some abstract ideas should be patentable.
• Monogram BioSciences and Genomic Health (08-964 ac Monogram Biosciences Inc.pdf) Patentable processes can be non-physical.
• Sachs and Brownstone (08-964 ac Robert R. Sachs.pdf) The CAFC test is limits the patenting of software, and a bad result.
• Boston Patent Law Association (08-964tsacbostonpatentlaw.pdf) A broad scope of patentable subject matter better preserves the health of an innovative culture; many landmark inventions fail the Federal Circuit's Bilski test.
• Georgia Biomedical Partnership, Inc. (08-964 Georgia Biomedical Partnership Inc.pdf) The Supreme Court has consistently refused to offer a "rigid" test.
• Dolby Labs (08-964 Dolby Laboratories et al..pdf) The important thing is to settle expectations.
• Teles AG ( 08-964 Teles AG.pdf) Subject matter eligibility should be "dynamic." "Further, the global nature of today's economy strongly recommends that the United States patent system be harmonized with robust patent systems of other nations wherever possible."
• Medtronic (08-964 Medtronic.pdf) Provides specific examples of medical innovations that may be unpatentable under the Federal Circuit test
• Houston IPLA (08-964 Houston IP Law Assoc..pdf) The test negatively impacts Dell's "build-to-order" patent (5,963,743) ; AT&T's linear programming patent (4,744,028); and Sperry Corporation's LZW compression patent (4,558,302).
• Intellectual Property Owners (08-964acintellectualproperty.pdf) Machine or transformation test is not the only test; In its transformation test for signals, the CAFC "unduly focuses on the contents of the data . . . rather than the manner in which those signals are generated;" a general purpose computer should be considered a "particular machine."
• AIPLA ( 08-964 American Intellectual Property Law Association.pdf) A new exclusionary test is not needed.
• Houston IPLA (08-964 Houston IP Law Assoc..pdf) The test negatively impacts Dell's "build-to-order" patent (5,963,743) ; AT&T's linear programming patent (4,744,028); and Sperry Corporation's LZW compression patent (4,558,302).
• Armanta, Asentinel, Cybersource, and Hooked Wireless (08-964 Entrepreneurial Software Companies.pdf) Questions of patentability are causing software companies to lose value.
• Mr. Meiers ( 08-964 Raymond C. Meiers.pdf) A patentable invention "applies manifestations of nature and achieves a useful result." This is the tripartite system.
• Univ. South Florida ( 08-964 University of South Florida.pdf)
• Awaken IP ( 08-964 AwakenIP.pdf) The CAFC test is unworkable and is as bad as the vague idea/expression dichotomy of copyright.
• BSA ( 08-964 Business Software Alliance.pdf) Section 101 has been consistently and correctly interpreted to cover software innovations.
• PhRMA, etc. ( 08-964 PhRMA et al..pdf) Medical processes should be patentable."
• Caris Diagnostics ( 08-964 Caris Diagnostics, Inc.pdf) Diagnostic method patents are important and have been called into question by Bilski.
• AIPPI (TooBig) A flexible test is better, and TRIPS requires a flexible standard.
• FICPI ( 08-964 FICPI.pdf) "The § 101 analysis should focus on the section's substantive utilitarian requirement, rather than retrospectively attempting to rigidly define the categories of patentable subject matter without the foresight of the particular form technological innovations may take in the future.

[SK crosspost]

Moral Panics and the Copyright Wars, by copyright lawyer William Patry (see his related blog), is forthcoming next month. Currently Senior Copyright Counsel at Google, Inc., Patry had a well-known copyright law blog, which he terminated last year, because he found the current state of copyright law too depressing to blog abou (as I posted about previously). So one might hope for a decent take on the copyright issue, especially given this comment on Amazon by the heroic IP foe Mike Masnick of TechDirt:

Patry's insight into copyright law itself has long been established, but with this book he takes us deep into how the debate surrounding copyright law has been twisted and distorted. This is a must-read for anyone looking to understand the real issues in the copyright debate, both from the business-model and policy perspectives.

Alas, from the summary alone one can tell it will be a disappointment:

A centrist and believer in appropriately balanced copyright laws, Patry concludes that calls for strong copyright laws, just like calls for weak copyright laws, miss the point entirely: the only laws we need are effective laws, laws that further the purpose of encouraging the creation of new works and learning. Our current regime, unfortunately, creates too many bad incentives, leading to bad conduct. Just as President Obama has called for re-tooling and re-imagining the auto industry, Patry calls for a remaking of our copyright laws so that they may once again be respected.

Terrible. Sure, he's right that, as the Amazon description indicates, "copyright is a utilitarian government program--not a property or moral right." But why does he think that copyright is not a natural or moral right? Because the Supreme Court has said so! As he wrote here, "In the United States, copyright is not a natural right, since the Supreme Court has said so twice, first in 1834 in Wheaton v. Peters, and then in 1932 in Fox Film Corp. v. Doyal"; see criticism here. Just another legal positivist. So he of course would think that, "As a government program, copyright must be regulated and held accountable to ensure it is serving its public purpose." Whatever.

Update: I got the book (the book's publisher, Oxford, is also mine and so sent me a copy gratis). It looks like a carefully done and well written work. It looks like it provides lots of ammo for our side--pointing out problems, excesses, abuses, fallacious pro-copyright arguments, and showing how it does not accomplish the goals set.

But it is a bit meandering, not grounded in any coherent or fundamental principles; it accepts too many positivist and statist bromides; and worst, it accepts the basic legitimacy of the state's encouraging innovation by such tricks. On the other hand, it at least argues that the test should be whether it does create the extra wealth it claims to, and that the burden is on those who advocate copyright; so in a way it leaves the door open to total abolition (I think; haven't read the whole thing).

[SK cross-post]

Update: see my comment on Mises Blog here:

William Patry:

Stephan, I had tried to post on your previous review of the book on the other blog you post on, but you rejected it; so much for intelligent and civil comments I guess. I hope you will post this.

Bill, as discussed privately with you, I didn't block you (and indeed don't have such authority on the Against Monopoly blog which had the post you refer to. I do not think David Levine, proprietor of that site, would block your comment either. There must be a technical problem; my apologies for the impression this apparently made on you regarding my posture toward you and your book.

Let me make some preliminary comments before replying to some of your particular points. First, as I noted, your book looks to be a "carefully done and well written work. It looks like it provides lots of ammo for our side--pointing out problems, excesses, abuses, fallacious pro-copyright arguments, and showing how it does not accomplish the goals set."

For this I am grateful and hopeful, and this is the reason it is on my reading shelf right now. I hope to extract useful arguments from it.

(By the way, I can understand your having no use for my own IP work which is based on libertarian principles you probably don't share, but I am a bit surprised you did not so much as cite any of Levine and Boldrin's work which is the seminal work in this field on utilitarian and practical aspects of IP; the online version was online as of Jan. 2008 and preliminary versions years before that.)

Second, I was clear that I had not read your book yet, and indeed was initially hopeful based on the endorsement of Mike Masnick who is himself heroic and very principled, clear-headed, and even radical on the IP issue. But, as I noted, it appeared from quotes from the book that your case is weaker than it could be due to acceptance of too many flawed mainstream assumptions. Again, I have not completed your book and hope to be proven wrong.

The main problem with copyright is a principled one. Copyright violates property rights. It is really that simple. Further, it is nothing but a grant of privilege from a criminal state--the handing out of favors by the mafia in charge to preferred recipients at the expense of others. Third, the utilitarian, wealth-maximizing case made for copyright is flawed ethically and economically; it is impossible to justify copyright on utilitarian grounds, no matter what the evidence. Finally, as a decidedly secondary or maybe even tertiary mark against copyright, one can note that--even if we turn a blind eye to the violation of property rights, the criminality of the state and all state legislation, to the moral and other problems with the wealth-maximization basis for copyright--the advocates of copyright have not shown that the benefit outweights the cost.

Now, I am all in favor of incrementalism. I don't mind even focusing on a tertiary issue like this (I do this in my There's No Such Thing as a Free Patent). I wouldn't even mind simply using this focus to argue that at the very least the copyright term should be reduced, as I do in a forthcoming article on how to improve the IP system. But in doing so one does not need to grant the validity of their utilitarian case; and one does not need to admit that some copyright term, some copyright law, is obviously needed--even if it's radically reduced from what we have now. It concedes too much. In fact, if you concede that any copyright law or term at all is legitimate and "needed," you have lost your case, in my view: because it throws the principled approach out the window; and it grants the validity of the wealth-maximization approach. Once you do this, all bets are off, because there really are methodological problems with utilitarianism. (See Rothbard's Toward a Reconstruction of Utility and Welfare Economics.) Only a clear, principled approach with awareness of the ethical issues involved and the key fallacies used repeatedly by those pushing IP propaganda can avoid their traps. The only solution is to make it clear that the burden of proof is on them. Now the truth is they can never satisfy it--they can never show that there is some net benefit to society. All methods of estimating this are systematically flawed (value is not cardinal, it is ordinal; and it cannot be interpersonally compared much less measured and summed up in cardinal terms). (And even if they could somehow "show" this, it's still irrelevant, as it's still immoral.) But as long as the burden of proof is on them, it doesn't matter if they can't prove their case because all the studies happen to be against them, or because any study has inherent flaws.

But back to incrementalism: if someone just avoided the whole issue and said, "look, let's approach the state's law on its own terms: even assuming its goals are valid, does it achieve them?", etc., this is fine. I do the same in my writing. But I never admit their assumptions are correct. I'm just saying even if you accept their utilitarian rationale, where's the proof? And note that this means that even accepting the wealth-maximization rationale for copyright, the default presumption is no copyright, zero years--unless and until the advocates of copyright can show decisively that a given proposed system would clearly produce a signficant "net gain". Until they have done so, the default position even for the incrementalist has to be no copyright. If, instead, you say, "well, let's have a more reasonable system--say, 10 years--one that works; of course we need some copyright system"--if you grant this, even when there is no evidence even for this truncated copyright system, then you have lost because you are admitting that "copyright system X" is justifiable based on intuitions, hunches, and feelings of "reasonableness." And if you grant this, you have no ground to challenge their view that a 100 year term is "reasonable."

Further, given that I'm a libertarian--and I'm a libertarian for a reason--of course I cannot help but see any approach to this issue as helpless confused or unprincipled if it is not based on libertarian principles... unless it is very narrow and does not concede ground to the enemy.

So, when you say:

I reject your conclusion that the book "is a bit meandering, not grounded in any coherent or fundamental principles; it accepts too many positivist and statist bromides; and worst, it accepts the basic legitimacy of the state's encouraging innovation by such tricks."

What you really mean is that I don't have the same view of copyright as you do. My views are clear and coherent, you just don't like them.

Well, true--I don't like them because they are based on the wrong principles (in my view). Despite your protestations I do not see that your thesis is grounded in fundamental principles--and by this of course I mean normative principles, since you are in fact making a normative criticism, not merely engaging in positive law discourse.

You write,

My view is that copyright in common law countries is entirely positive law and was created in order to further socially useful goals. My view is in fact correct, as a matter of law. There is zero doubt about this.

Actually I disagree with you. It was not created to further "socially useful goals." In fact, no state law is. Now sure, there is a stated purpose of copyright law. That does not mean it is its real purpose. Likewise, the stated purpose of the "Protect America Act" is, well, to protect America. But of course that is not its real purpose. We must be careful not to conflate the window-dressing the state puts on its laws to obtain the silent acquiescence of the sheeple with the truth. That said, I agree that we can use the stated objectives of legislation rhetorically against the state to try to hold them to the lip service they give to the law.

You don't like that the law is as it is.

This is correct; and neither do you, apparently--and good for you. You appear to be better than 99% of our IP attorney colleagues. I am very glad you are arguing from an informed position to radically reduce copyright term.

I am perfectly fine with that; dissent and loyal opposition are noble callings, and I am a dissenter and opposition on a number of issues. But you have to be honest and accept that your view is contrary to what the law is.

Of course. I have always accepted the idea that positive law and justified or libertarian law are not the same thing.

Don't criticize me for accurately stating the current state of affairs.

I am not, in the slightest. My understanding is that you are in favor of having a copyright system. This is a normative position. It goes beyond merely recognizing that we have copyright law. As the blurb for your book states, "Patry concludes that calls for strong copyright laws, just like calls for weak copyright laws, miss the point entirely: the only laws we need are effective laws, laws that further the purpose of encouraging the creation of new works and learning. ... Patry calls for a remaking of our copyright laws so that they may once again be respected."

Now, if this is inaccurate--fine. But if it's not, you oppose calls to weaken copyright law. Why? It is not justified, even on utilitarian grounds. No one has shown that even a 10 year copyright term generates net wealth. Do you disagree? If not, can you produce the proof or study? And if you can't, why wouldn't you agree that the default position is then that we should have no copyright law (and one way to get there is to make it weaker), at least until someone can show that a truncated or minimalist copyright system is justified? Why would you oppose weakening it?

Further, I disagree with your wanting copyright law to "be respected." Why would anyone want this unless he admitted the basic normative legitimacy of the criminal state and its edicts including copyright legislation? If copyright law in its current form is unjust, as you seem to think it is, one way to reduce this unjustness is to persuade the evil congresscritters who enacted it in the first place to "do the right thing" and adopt a good law--a pipe dream, of course. They are not interested in justice. Anyway, this is one approach--a futile one, in some ways, but I'm glad some of us are obstinate enough to keep fighting anyway. But a second approach would be to urge disrespect for the law and the state. The more people see that the emperor is naked, the less able is the state to trample our rights--yes, in the name of the abomination that is copyright law.

We share a view that copyright should be means tested, and only differ in my view that copyright can in some cases meet such a test.

To my knowledge there is no study demonstrating this (see Yet Another Study Finds Patents Do Not Encourage Innovation). Maybe you do one in your book, but I haven't found it yet, if so. Maybe you cite one in your book that I'm unaware of. If so, maybe you can point it out here.

Let me reiterate that no disrespect is intended by my (admittedly blunt--but honest and sincere) comments. I do respect your work and your pushing in the right (as I see it) direction, even if I do disagree with you on some aspects of this issue and think your argument could be strengthened by taking into account some of the concerns such as I have pointed out above and in other writing. I look forward to seeing what you produce and what effects your book has, and welcome any further dialogue with you. In particular, I have tried as best I can to concisely set out the essence of the libertarian perspective on IP in The Case Against IP: A Concise Guide. If you are interested in what we think about his and how our very principled, pro-individualism, pro-freedom, pro-property rights, informed-by-sound-economics and informed-by-sober-assessment-of-politics bears on this issue, I urge you to take a look at this, and again, would welcome your feedback and discussion.

***

Addendum: In case you missed it, I had an extended comment about this on my blog, which I reproduce below:

Someone wrote me that my comments on Patry's book are premature, that the description is misleading and that I will like and agree with most of it. My edited comments:

***

You are right, I haven't read it. But I saw enough red flags for grave concern.

You say that I might not agree with all of Patry's book--I don't have a problem with not agreeing. It's that the approach most people take is bankrupt. Unless you have clear property rights principles--i.e. are basically a libertarian--there is no way to be very good on this. Only a few utilitarians are good--like Boldrin and Levine. Any honest, intelligent, informed utilitarian would be against copyright, not want to "improve" it.

I realize his book focuses on how copyright holders have twisted the law in their own interest. But look: I am an anarchist. I think the whole system is corrupt. I am not surprised that people "twist" it. That's part of the system. People who expect it not to be twisted are naive. In fact it's twisted by virtue of being state law. It's impossible not to be twisted; it's impossible for people to ignore incentives to twist it even further. As Mises wrote in Human Action, "No socialist author ever gave a thought to the possibility that the abstract entity which he wants to vest with unlimited power whether it is called humanity, society, nation, state, or government could act in a way of which he himself disapproves."

In my view talk about how the system has been "abused" only serves to reinforce the state propaganda that the state is basically legitimate, that the basic system is "good" but has been corrupted. This is all nonsense. It just serves to keep the state in power and to perpetuate the myth that the system is basically legitimate and fair. It's not. The state is quite literally just a mafia gang--the only difference being that it is largely perceived (falsely) as legitimate, partly because the people are so stupid and have been bamboozled by state propaganda--so the state cloaks its criminal actions with just enough of a veneer of legitimacy to keep up the pretense, to go on deluding the stupid populace that it's really "their agent" and there for "their good." It's all just a big scheme.

The problem is not that copyright holders have twisted the law. The basic system, even without "ridiculous" twisting, violates individual rights.

You claim that the description on Amazon is misleading, that the book is all about how copyright law is consistently and repeatedly abused. Well, I hope so. I agree that pointing out abuses and excesses of the system is worthwhile. And if he calls for a shorter copyright term (say), that is an improvement, though in doing so he undercuts the principled case against it.

But the blurb does say he's a centrist. That he is a "believer in appropriately balanced copyright laws". Unless this is flat out mistaken, I believe it's impossible for him to have a sound critique--given such a confused, unprincipled view (though yes, he could be good enough to point out bad consequences of the current system, as a reporter).

The blurb says: "Patry concludes that calls for strong copyright laws, just like calls for weak copyright laws, miss the point entirely"

If this is true, he's against weak copyright law. This is terrible. The copyright law should be weaker. Even someone merely chronicling its abuses should see that this is an obvious response to that abuse.

"the only laws we need are effective laws, laws that further the purpose of encouraging the creation of new works and learning"

This seems to buy into the false notion that utilitarian concerns are what should drive law. It buys into the Constitution as legitimate and sensible. It's neither.

"Our current regime, unfortunately, creates too many bad incentives, leading to bad conduct."

If he is, as appears, just a mainstream statist (supporter of the state and our democratic-welfarist-socialist system), such critiques sound hollow. It's like Bush or Obama talking about saving a million dollars in a pork bill, in the midst of trillion dollar boondoggles. It avoids making a radical critique of the regime per se.

"Patry calls for a remaking of our copyright laws so that they may once again be respected"

I do not want our copyright laws to be respected. I want them to be ridiculed and seen as what they are: illegitimate, arbitrary decrees by a criminal gang, issued at the behest of special interest lobbying groups. I realize that the criminal state survives on the false perception of legitimacy: I want this illusion to be burst. I don't want the state or its laws to be respected. The only way civilization will advance is to throw off the shackles of its pathetic allegiance to the state--the entity that harms them most. We have a societal case of Stockholm syndrome.

Anyway--I'll read the book and gladly print a retraction in the happy event that I'm wrong.

The issue of private property rights in the EM spectrum (airwaves) arises occasionally. To my knowledge there is not much systematic work on this topic; the David Kelley & Roger Donway's 1985 monograph Laissez Parler: Freedom in the Electronic Media remains the best work on this, to my knowledge; and see also the Rothbard quotes appended below. (And, depressingly, almost every new libertarian discussion about this seems ignorant of this work; young libertarians seem ever-determined to re-invent the wheel and/or weigh in before they've done their homework.)

One Silas Barta keeps claiming that those who support property rights in airwaves cannot object to property rights in IP (see here, here, here, here, and here). My response to this argument, in brief, is: (a) so what? If this were so, then that just means we cannot support property rights in airwaves; (b) and I disagree with this since the airwaves are scarce resources; (c) the libertarian case for property in airwaves is not settled or very developed yet.

As to (c), again, I refer to Kelley and Donway's monograph. As I have maintained for years, I lean in the direction indicated by Kelley and Donway--that individuals could on the free market homestead EM spectra. Let me briefly outline how I think this could work in a free market. First, let me note the argument of those who object on the grounds that EM frequencies are mere numbers. But a given "airwave" is basically a bandwidth of radio frequencies over a given limited volume of the earth's surface. Radio waves are electromagnetic waves that propagate at the speed of light (they are light; visible light is just one portion of the EM spectrum) through space. A signal can be transmitted by sending a modulated signal at a given wavelength (wavelength is inverse to frequency). For example AM means amplitude modulation: a given signal is modulated by varying its amplitude (magnitude). In FM, the frequency is modulated. It is impossible to have a perfectly precise (narrow) wavelength; when you emit a signal it is at a "center" wavelenght but extends to the "sides" to some degree, called the bandwidth. So a given broadcaster might send a radio signal over a certain bandwidth (set of wavelengths) surrounding a center wavelength or frequency such as 87.5MHz.

Now the case for property in airwaves is basically this, as I see it. It is based on the basic idea of homesteading (see my What Libertarianism Is). Under this approach, every scarce resource--things that can be contested; rivalrous things; resources that have exclusive use, so that use by me excludes use by you, and so on--is assigned an owner; that owner is the person who first appropriated or used the property in an embordering way--that is as an owner. It's the first person to erect publicly visible boundaries that others can respect and see; he has a better claim to the resource than any latecomer.

Note that this approach implies that the type of use made of and the type of borders established for a given resource determine the scope and nature of property rights. Property rights in bodies are different than property rights in land and in cows and in an apple. One type of property right is an easement (servitude, in the civil law). Say people routinely walk over a path from point A (their village) to point B (watering hole). You can say they have homesteaded at least that use of the propety. If someone else builds a home there, they have to let the easement continue. A similar case can be made for airways ("tunnels" in the sky that airplanes pass thru) and shipping lanes.

Now, why does it have to be an easement over walking-space on land on the earth's surface, established by the passage of human bodies? Why can't it be an easement over the airwaves (viewed as a type of volume of space with respect to a given bandwidth), established by the passages of EM waves? After all, EM waves are physical, and the airwave/spectrum used is a scarce resource like a path on land is. It's scarce because broadcaster 1 can't use the spectrum if broadcaster 2 sends a transmission over the same carrier channel in the same physical region; there is interference. So: the idea is that the first broadcaster to use a given bandwidth in a given region would be regarded as having homesteaded this airwave or EM spectrum. Others who broadcast on it would be viewed as trespassers. [Incidentally, the reason transmission of an EM wave for information-signalling purposes is not normally trespass even though the waves pass through others' bodies is that it does not interfere with their use of their bodies; for more on this approach to "invasion" see Rothbard's classic air pollution article; by contrast, aiming high-intensity, coherent, power-carrying EM radiation--a laser beam--at someone could be aggression, since it could affect the physical integrity of their body or other property.]

I tentatively lean in favor of this argument. I suspect this is the type of argument, and practical use, that would tend to win out in a decentralized, property-respecting, dispute-settling society. But I am not 100% sure.

A final note. This type of situation is not analogous to IP because there is no "idea space" that is scarce and homesteadable. Instead the IP advocates want to install property rights in "the right to make a greater profit by virtue of artificial imposed scarcity," something like this.

A few other discussions of this can be found here: B.K. Marcus, The Spectrum Should Be Private Property: The Economics, History, and Future of Wireless Technology; and comments here: http://blog.mises.org/archives/005577.asp#comment-101581; http://blog.mises.org/archives/006930.asp#comment-123893; and http://blog.mises.org/archives/007561.asp#comment-133579; http://blog.mises.org/archives/007561.asp.

Update: Rothbard was also, as usual, far ahead on this issue. Some of his comments on this are below:

From Man, Economy, and State:

Furthermore, if we understand by "air" the medium for the transmission of such things as radio waves and television images, there is only a limited quantity of wave lengths available for radio and for television purposes. This scarce factor is appropriable and ownable by man. In a free society, ownership of these channels would accrue to individuals just like that of land or animals: the first users obtain the property. The first user, Jones, of the wave length of 1,000 kilocycles, would be the absolute owner of this length for his wave area, and it will be his right to continue us­ing it, to abandon it, to sell it, etc. Anyone else who set up a transmitter on the owner's wave length would be as guilty of in­vasion of another's property right as a trespasser on someone else's land or a thief of someone else's livestock.[39][40]

... [39]If a channel has to be a certain number of wave lengths in width in order to permit clear transmission, then the property would accrue to the first user, in terms of such width.

[40]Professor Coase has demonstrated that Federal ownership of airwaves was arrogated, in the 1920's, not so much to alleviate a preceding "chaos," as to forestall this very acquisition of private property rights in air waves, which the courts were in the process of establishing according to common law principles. Ronald H. Coase, "The Federal Communications Com­mission," Journal of Law and Economics, October, 1959, pp. 5, 30-32.

[41]It is rapidly becoming evident that air lanes for planes are becoming scarce and, in a free society, would be owned by first users--thus obviating a great many plane crashes.

From Law, Property Rights, and Air Pollution:

The theory of homestead easements discussed earlier would require no restriction upon radio transmissions or on people's low-level radiation. In the case of radio transmissions, Smith's ownership of land and all of its appurtenances does not entitle him to own all radio waves passing over and across his land, for Smith has not homesteaded or transmitted on radio frequencies here. Hence, Jones, who transmits a wave on, say, 1200 kilohertz, homesteads the ownership of that wave as far as it travels, even if it travels across Smith's property. If Smith tries to interfere with or otherwise disrupt Jones's transmissions, he is guilty of interfering with Jones's just property.[61]

Only if the radio transmissions are proven to be harmful to Smith's person beyond a reasonable doubt should Jones's activities be subject to injunction. The same type of argument, of course, applies to radiation transmissions.

... [61] During the 1920s, the courts were working out precisely such a system of homesteaded private property rights in airwave frequencies. It is because such a private property structure was evolving that Secretary of Commerce Hoover pushed through the Radio Act of 1927, nationalizing ownership of the airwaves. See Ronald H. Coase, "The Federal Communications Commission," Journal of Law and Economics 2 (October 1959): 1-40. For a modern study of how such frequencies could be allocated, see A. De Vany, et al., A Property System Approach to the Electromagnetic Spectrum (San Francisco: Cato Institute, 1980).

And here:

in the courts' determination of radio frequency ownership in the 1920s, the extent of ownership depended on the technological unit of the radio wave -- its width on the electromagnetic spectrum so that another wave would not interfere with the signal, and its length over space. The ownership of the frequency then was determined by width, length, and location. ... American land settlement is a history of grappling, often unsuccessfully, with the size of the homestead unit.

See also Toward Property Rights in Spectrum: The Difficult Policy Choices Ahead, by Dale Hatfield and Phil Weiser (Cato 2006); and Milton Mueller, Property Rights In Radio Communication: The Key to the Reform of Telecommunications Regulation (Cato 1982).

[Mises and StephanKinsella.com cross-posts]

Arlene Weintraub writes that the drug companies are lobbying to get expanded protection for new generic biologic drugs link here.

First a definition. According to the Sino-American Biomedical and Pharmaceutical Professionals Association (SABPA) in a 2006 pdf, biologics are protein or carbohydrate based, extracted from a living entity, posessing a complex physicochemical structure, and are defined by the manufacturing process link here. In 2005, it reports the five leading drugs sold under Part B of Medicare were biologics, valued at more than $4 billion.

In what follows, I am uncertain that I have matters right, but here goes. According to SABPA, biologics cannot be regulated as generics since they can't be shown to be chemically identical to previous approved drugs--the chemicals may be the same, but their structure differs. They must therefore have efficacy and safety data submitted separately, an expensive and time-consuming process. This is the Pharmas justification for asking that a patent's life be extended.

The SABPA definition is notable in that it seems to open the way for defining and patenting such a drug according to one or more of these terms, an almost infinite set of possible patents. The big Pharmas mouths must be watering.

The issue according to Weintraub is whether TEVA and other generic makers, can limit the patent extension beyond the initial monopoly or whether the extension is granted for 10 or more years as the big Pharmas would like. "Right now, the U.S. Food & Drug Administration has no mechanism for reviewing or approving these complex medicines. But several bills introduced this year seek to clear the way and Teva Pharmaceuticals, the world's largest generic-drug manufacturer, is working like mad to make it happen."

Mike Masnick fails to see any justification for a longer patent. He has written on the subject several times, most recently here link here.

Given the amounts of money and the importance of controlling health care costs, we are sure to hear more on this.

As reported by Roderick Long:

The Molinari Society will be holding its sixth annual Symposium in conjunction with the Eastern Division of the American Philosophical Association in New York City, December 27-30, 2009. Here's the latest schedule info:

GVIII-5. Tuesday, 29 December 2009, 11:15 a.m.-1:15 p.m. Molinari Society Symposium: "Intellectual Property: Is it Legitimate?" New York Marriott Marquis, 1535 Broadway, Room TBA chair: TBA

presenters: Bob Schaefer (independent scholar): "Response to Kinsella: A Praxeological Look at Intellectual Property Rights" G. Nazan Bedirhanoğlu (SUNY Binghamton): "History of the Reification of the Intellect"

commentators: Charles Johnson (Molinari Institute) Roderick T. Long (Auburn University) Jennifer McKitrick (University of Nebraska-Lincoln)

***

Interesting--I wonder if that the same Robert Schaeffer, skeptic, UFO-debunker, Randian (?), and author of Resentment Against Achievement? We shall have to await Roderick's report!

[Cross-posted at StephanKinsella.com]

A recent email from Brian Helfrich at Boliven LLC got me thinking about resources for patent searches. The two best known sources are the USPTO and Google. Boliven seems to offer some advantages including the ability to search foreign as well as domestic patents, some data analysis, and the ability to download patent data on to your own computer for analysis.

(via Andrew Sullivan)

NPR chief executive Vivian Schiller

It's almost like there's mass delusion going on in the industry They're saying we really really need it, that we didn't put up a pay wall 15 years ago, so let's do it now. In other words, they think that wanting it so badly will automatically actually change the behavior of the audience. The world doesn't work that way. Frankly, if all the news organizations locked pinkies, and said we're all going to put up a big fat pay wall, you know what, more traffic for us. News is a commodity; I'm sorry to say.

Chris Ahearn, President, Media at Thomson Reuters

Blaming the new leaders or aggregators for disrupting the business of the old leaders, or saber-rattling and threatening to sue are not business strategies - they are personal therapy sessions. Go ask a music executive how well it works.

See here, and here, he says:

I'll tell you something interesting about Priceline. Because Priceline was invented in a room, it was an invention. One of the things we did is applied and got U.S. patents on the invention. How do you like that? Then, along comes this little company and you might have heard of it. It's called Microsoft. Microsoft owned this other company called Expedia, at the time. They said, This Priceline thing looks like it is going pretty well. We ought to do that too. We'll just download some of the code right from the website, right from the HTML. Just take that HTML. So, somebody came into the office and said, Well, Jay, just like you said, Microsoft's in our business. I said, Oh, that's not good. But the fact is, in the United States, the intellectual property laws are reasonably strong and although most people didn't understand what Priceline had patented, they thought we had patented some auction, stupid people, we have nothing to do with auctions at all. Some New York Times reporter called it a reverse auction and nobody every got over it. I never forgave the reporter for it. We were branded as an auction, but we weren't. We were a demand collection system and because of that we sued Microsoft and Microsoft decided maybe it wasn't the best idea to copy us. They turned off that functionality on Expedia. Since then, nobody has copied Priceline. It has been ten years. For as long as our present patents last, I don't expect anybody to copy Priceline. Since Microsoft isn't going to copy, that is probably a good sign that others probably shouldn't either, but it proves a very important point. It proves the power of intellectual property, at some level, to provide space for a startup that is truly novel, that is warranting a patent, or we had several patents in this case, to give it the breathing room to invent something new, create value. Eventually, Priceline will have to compete on its invention when the patents expire. However, there are plenty of people competing with Priceline. They're just not copying it. Somebody is offering LastMinuteFares.com and somebody else is offering JoinMyClub.com. In other words, there is a million people competing with Priceline. They just can't copy Priceline's essential idea which is name your own price, put up a credit card for a flexible set of terms and conditions where, if those terms and conditions are accepted, you basically own the product. That's the core Priceline patent. So, there's how Priceline, again, anticipated copying. Let's just say there was no intellectual property. What would that mean? That would mean Priceline would have to go quickly, right? They would have to keep innovating.

Yeah--we're from the government, and we're here to help you--to "give you space," to "give you breathing room"--while we tax and regulate the living crap out of you!

[StephanKinsella.com cross-post]