Kevin Carson has just released his Intellectual Property--A Libertarian Critique. I haven't had a chance to read all of it yet, but from a quick skim it looks good, and with a title like this--and given that IP is turning out to be an insidious tool wielded by the state to destroy and re-route wealth--it's worth looking into.

Thompson & Knight lays off lawyers, staff firmwide notes something we're hearing more and more about nowadays--law firms laying off attorneys, due to Great Depression II. As the piece notes, the Dallas-based firm recently "laid off for economic reasons 17 lawyers and 25 support staff in all of its U.S. offices, including Dallas, Houston, New York, Fort Worth and Austin. ... All of the lawyers are associates -- only two of them are first years -- who practiced in real estate or other business-related areas that require bank money to operate."

But not all is lost: "not all of the firm's practices are doing badly by a long shot, [the managing partner] says. 'There are areas of our firm like IP litigation that are going crazy.'"

As reported on Patently-O, two "inventors" have files patent applications on two "inventions". The first is for SoberTeen(TM) driving insurance. The application claims

a new auto insurance product where a driver receives a 10 to 30 percent discount in premium in exchange for allowing the insurance company to monitor his or her car to determine if anyone drives it while under the influence of alcohol.

I wonder what MADD would say about the patentee trying to use the courts to stop an insurance company from offering this product without paying a ransom?

The other attempts to claim a monopoly on

A method wherein the life or health risk of a person is evaluated based on information maintained in a Risk Profile Data Base (RPDB) and the result of said evaluation is used for one or both of the following purposes: to offer an insurance policy in an underwriting class determined by the said evaluation; to provide said person with a life or health expectancy report containing suggestions on how said person can improve said life or health expectancy.

Is any comment really needed?

Will Proposed New Post-Grant Review Procedures Invite Abuse? that "The Innovation [sic] Alliance" is opposed to reforming the patent system to allow "post-grant review mechanisms"--that is, ways for potential victims of patent extortion to challenge the validity of issued patents. The group is worried this might permit "repeated frivolous patent challenges"! Got that--not frivolous patents, but frivolous patent challenges! This is like a plaintiffs' lawyer who files frivolous lawsuits complaining about people defending themselves from it--they ought to just cough up the demanded money and quit finding "frivolous" defenses!

Here, people who use the power of the state to unjustly acquire a monopoly that gives them the right to legally extort victims are complaining about "frivolous patent challenges". Wow, some chutzpah.

The post also notes:

The fear is that such service provides will offer to "creat[e] uncertainty about a problem patent by tying it up in a long reexamination process and effectively nullify the problem patent" to get lower rates during license negotiations "until the uncertainty ends."

So.... to avoid reducing the amount of extortion holders of "problem patents" can demand, we should just presume patents are valid--even if they might not be--and don't allow any kind of challenge that could just "cause uncertainty." Wow.

I don't know. I prefer justice to certainty. Call me crazy.

My comments to the debate...

Professors Fischer and Hughes each identify the rationale for the system of copyright as its capacity to encourage creative effort, as well as promote respect for creative people. Both are laudable goals, but a dispassionate analysis should note the oddity of the situation we find ourselves in - copyright laws focus more upon the distribution of creative works, and less upon the creation of those works.

Guest speaker John Kennedy made perhaps the most trenchant observation, "Copyright influences behaviour." This has manifested in two equally undesirable ways. The speakers and various individuals have spoken of the challenges caused by those who engage in unauthorized distribution of copyrighted content. At the other end of the spectrum is the self-censoring of creative effort that occurs when individuals believe that copyright is a grant of absolute property.

Copyright is not, and has never been, a measure of complete control. Since its emergence into Western law, it has remained a limited right; limited not only in time, but also in its reach. Eighteenth century English courts recognized fair dealing (rooted in the doctrine of fair abridgement); likewise, early American courts recognized the practice of fair use to varying degrees. While there are differences between the two exceptions, each allows for the unauthorized reproduction of copyrighted material for certain uses (i.e. private study, research, criticism, review and news reporting). Conditions apply to any exercise of fair dealing or fair use; neither exception is an invitation to copy without restriction.

Fair use has made a brief appearance in this debate. Professor Fischer describes the doctrine as helpful, but ambiguous and unpredictable. Professor Hughes states, "... to historians, novelists, archivists and documentary filmmakers... the fair use doctrine provides substantial protection against infringement claims." Fair use and fair dealing apply to all individuals engaged in creative effort. Yet, individuals who exercise these rights risk a charge of infringement, a litigation few people can afford. However, financial expense is not the worst of the difficulty; the real problem is that many people do not understand the limits of copyright and shape their behaviour accordingly. They are unaware that, in lay-man's terms, a good-faith productive use of copyrighted material is very likely to be legitimate. Granted, my position is shaped by a very progressive Canadian Supreme Court.

Guest speaker Ms. Dale Cendali writes, "Yet despite the overwhelming evidence of the success of the current incentive system, there have been calls to revise dramatically copyright law, including drastically shortening the current copyright term and greatly expanding fair use." From this, it appears that she finds expanding fair use a threat to the success of copyright, a threat to the promotion of creativity. If we believe that copyright is all about creativity, both encouraging it and respecting creators, then it would be prudent to pay more attention to the only measure within the law that directly addresses creativity.

Read the whole debate here

I don't mean the James Bond movie, or Ron Paul, Congress's "Dr. No." This wonderful, eye-opening piece by the heroic IP-abuse reporter Joe Mullin, The Fight of His Life (Mullin's blog, The Prior Art) highlights the appalling ordeal of Dr. Bob Shafer, a bioinformatics expert. Yet another case of patent law victimizing innovation and innocent people.

As such stories tend to be, this one is complicated, but it's crucially important, so bear with my attempt at a concise summary. Dr. Shaffer, an associate professor of medicine and pathology at Stanford University, established the HIV Drug Resistance Database (HIVdb) (wikipedia link) in 1998. As the article reports,

Since then, the database has built a following among HIV researchers and practitioners around the world, attracting some 50,000 unique visitors a month. Those who use it generally fall into three categories: academic researchers, commercial and noncommercial laboratories, and doctors. ... The database allows users to enter genetic information for viruses from individual patients or groups of patients, and to retrieve drug resistance information, which can then be used to help devise treatment regimens. Such information is critical to HIV research and drug development, as well as to treating individual patients. HIVdb is especially popular in the developing world not least because it's freely available to anyone with an Internet connection. In some developing countries, medical practitioners have heard of Stanford University mainly through their interactions with HIVdb.

This is quite obviously a heroic, important, noble and benevolent effort. As the article notes, it's "a highly regarded free resource that he developed, Stanford hosts, and doctors and scientists around the world rely on."

However, in January 2007, ABL, a medical software company based in Luxembourg, claimed that the database infringed its patents. Read the article for more details, but in short: Stanford first moved to invalidate ABL's patents by filing a declaratory judgment suit in California in October 2007; but then later settled with ABL, where ABL agreed not to sue Stanford for patent infringement and Stanford agreed to put a prominent disclaimer on the HIVdb, informing those who used it that, depending on the nature of their work, they might need a patent license from ABL. However, Shafer wasn't required to sign the agreement with ABL and was not told him about the settlement's terms until after it was reached.

Shafer at first refused to post the notice, and bully for him. He was afraid it would lead doctors to think they owe money to ABL, "and that the database built mostly with taxpayer-funded National Institutes of Health grants is no longer free." Finally, under pressure, he did post a notice but he appended his own language arguing the patents are overbroad and invalid. See about halfway down on this page, where Dr. Shafer bravely challenges the validity of these patents. He also launched the site Harmful Patents, where he defiantly and courageously challenges the use of these patents to claim "a monopoly on the very concept of developing software to help physicians make treatment decisions"--absurdly, the patent gives ABL a monopoly on "the science of using computers to enhance medical treatment and decision making." As one of Shafer's colleagues notes, "If you read [ABL's patents] literally, anyone who is providing therapeutic options based on the sequence of a pathogen violates their patent, and that goes on in hundreds of contexts. It's truly a dangerous precedent."

Although ABL already settled with Stanford, its suit against Sahfer for breach of contract and defamation is ongoing. According to Mullin's report, Shafer has racked up more than $100,000 in legal bills and his career is in jeopardy, since he's fighting ABL and refused to cravenly give in, as his employer, Stanford University, arguably did.

I do not know if Shafer seeks or needs or welcomes help, or how it might be done. But I am all in favor of helping this man fight these people, and fight for the principle of "free access to published data" as "an intrinsic part of science and medicine." Good for Shafer, and for Mullin for bringing this to light.

The Techdirt post Court Rejects Online Terms Of Service That Reserve The Right To Change At Any Time spurred me to post a comment about this, collecting some of the thoughts I've had about such matters for a long time.

As I note there, my own theory of contract is presented in my article A Theory of Contracts: Binding Promises, Title Transfer, and Inalienability. And while I of course as a libertarian favor freedom of contract, I am leery of too formulaic or formalistic libertarian positions. Partly this stems from my growing aversion to "armchair" theorizing (see my post The Limits of Armchair Theorizing: The case of Threats). But as an example, and as I noted in the contract article, I disagree with putting so much stock in whether a communication is a "promise" or not (Rothbard, e.g., puts a bit too much emphasis on this, in my view). The question is what the parties meant by their communication--even if the word "promise" is used, this could be intended to effectuate a transfer of title. Another is, say, the over-emphasis on the notion of "incitement" by Rothbard and Block (as discussed in Causation and Aggression). They want to rule out "incitement" as a type of aggression in all cases; to my mind, it's a more context-dependent determination. Maybe it is, maybe it isn't.

A similar issue arises in the case of contracts. Many libertarians, often with only a crude understanding of the nature of contracts, just assume, Rand-like, some kind of mystical "power" to "bind" oneself by "a contract". They tend also to equate contracts with a written agreement. They thus tend to think that "if it's written in ink, it's binding, no matter what". To my mind, this is too formalistic. A writing is neither necessary nor sufficient to form a contract. Most contracts are not written. They may be oral. They do not even need to be verbal--I hand you a dollar, pointing to the newspaper; you take my dollar and give me the paper. A sale happens, nonverbally (no oral or written communication). And "what is written" is not necessarily dispositive. To my mind, a written agreement is only evidence of what the parties actually agreed to. But it is rebuttable. The written agreement may be very sparse: in which case in the case of disputes, there is no choice but to resort to "gap-fillers," default rules, and the like. Or the agreement may contain ambiguities or even inconsistencies--this may require similar construction methods, or even invalidation of the agreement.

The agreement may not even be intended to be binding, such as in the case of a so-called "simulation" (a contract which, by mutual agreement, does not express the true intent of the parties; see my Civil Law to Common Law Dictionary, entry for "Simulation"; Louisiana Civil Code, arts. 2025-27).

Or there may be fraud or deception which nullifies the whole writing or requires certain provisions not to be enforced.

Given all this, in my view we should not just assume that "whatever is in writing" is part of a binding obligation or enforceable agreement. This bears on the issue of fine print, and so-called shrink-wrap and clickwrap agreements (incidentally the law of various countries on this issue is discussed in my book Online Contract Formation--which is not bedside reading, n.b.). Libertarians seem to just assume, too quickly in my view, that all such fine print should be enforceable. These assumptions seem to be made in the absence of the awareness of the nuances noted above.

So one problem with click-wrap agreements, for example, is that there is (arguably) often no "meeting of the minds" on the fine print--and the vendor is fully aware of this. If the customers routinely just click the "I have read and agree to these terms" box but never do read it, and the vendor knows this, then it's a sort of fiction to assume both sides have actually agreed on these terms. For example supposed buried in fine print for a contract for sale of a $20 software program is the provision, "Buyer agrees to give 50% of his income to Vendor for life." Is this enforceable? Of course not. Why not? Because there was no agreement to this. So the "hidden" terms have to be in some sense reasonable, at the least. (Here, too, "inalienability" concerns may kick in--even if the party is fully aware he is signing away his life income, or his kidney, or life, say, this may not be enforceable for inalienability concerns--see, on this, the contract article noted above, plus my article Inalienability and Punishment.)

I am not saying that clickwrap and fine print is not enforceable--I'm just saying that the libertarian view on property rights and contracts does not require that we formalistically equate "the contract" with "the writing," and it does not require we figure all this out from our armchairs. The libertarian view can recognize that contracts about consensual, intentional transfers of title; that manifesting such consent is a matter of communication; that making determinations about the nature of a contract, or title transfer, is necessarily a fact-specific, context-bound inquiry.

The Economist is running a formal debate entitled "Copyright and wrongs; This house believes that existing copyright laws do more harm than good" link here.

Most of us writing here accept the proposition and are opposed to copyright. One part of my mind argues to stick with principle. Another concludes we are slowly seeing the IP rights of the owners expanded. They have the money, the lawyers, and the political allies. We are losing. One way is through the steady accretion of legal complexity. Another is the spread of IP to other countries, with pressure growing on all to conform to some international minimum legal standard. In the meantime, so many consumers have been brainwashed that IP rights are virtues sanctified by the constitution.

Having cried in my beer, I urge you all to view the debate, which is about half over. You can still participate, as well as weighing in here when it suggests ideas worth arguing or passing on.

I don't mean to be linking exclusively to Volokh.com these days, but there has been a number of great IP posts over there recently worth checking out.

The latest comes from David Post who does a great job in defending the idea behind Google's book scanning project.

Some choice words from Post -

The Google Books project has the potential to become one of the great information-gathering activities in human history -- every book (just about), at everyone's fingertips, searchable and instantly accessible from any corner of the globe. And we want to deter that?? Because that will decrease "respect for IP laws"? Talk about putting the cart before the horse!! Because it will inflict some sort of terrible "harm" on copyright holders? I'm not terribly sympathetic. Copyright, as Jefferson stressed so long ago, is a "social right" -- given by society because we feel it serves useful ends (incentivizing authors to produce new creative works). When it ceases to serve those ends, it should be eliminated. The Google Books project is another example of how copyright interests, these days, do little more than obstruct useful innovations. There are 7 million (or more) out of print books that Google would like to place on-line where they can actually be accessed and read. I'm sorry if that infringes someone's copyright, but really -- in what way is society better off, exactly, from recognizing the copyright holder's rights in this circumstance?

Read the whole thing - along with the comments it generated.