The New York Times now carries a lot of stories that are of interest to anyone concerned about the high cost of intellectual property protection. The first story today is a debate over who is right AARP or the industry. AARP says the cost of branded drugs rose 8.3% in 2009 link here. Last year the industry complained that the figure was based on wholesale prices, not the retail prices consumers actually paid. Responding to that criticism, AARP switched to retail and still got a big increase. The industry countered that they should use the consumer price index figure which includes generic drug prices--which showed a much lower price increase and argues that the US has the lowest prices for generics in the world.

Of course, all of this back and forth is irrelevant; the high prices for the branded drugs reflect the monopoly that drug patents give the companies a fact never mentioned in the Times story. That monopoly power allows the companies to raise prices at a time when the economy is in recession and other prices are barely rising. It is also a time when many are unemployed and have a harder time making ends meet; particularly if they are ill and require those drugs.

The other story relates to e-books and a quarrel between Random House, the publisher and the Wylie literary agency link here. The quarrel began because Wylie started publishing e-book versions of 13 classics, previously published in hard copy by Random House. Because e-books are newer than the publisher's contracts with the authors and not always covered by its terms, Wylie felt free to enter the e-book business in them. Random countered by refusing to deal with Wylie in future. The two sides have now agreed, with Wylie ceasing to distribute the 13 e-books. No other terms were published.

Send not to know who pays. Clearly it is we consumers and copyright once again loses its reason for being as an inducement to innovate. These books have long been in existence and can have little to do with the incentive to write more for aging, moribund, or dead authors, given that copyright extends for the life of the author plus 70 years.

Details here:

http://www.wired.com/threatlevel/2010/07/copyrightfiltering-scribd/

The fact that the lawsuit was dropped does not diminish the illustration of how insane the copyright lawsuit industry has become. Its own logic begins to fold in on itself.

Tom Goldstein, publisher of the much respected and authoritative Supreme Court blog, is making his predictions on Monday's Bilski patent ruling:

http://www.scotusblog.com/2010/06/the-final-four-decisions/#more-22266

The longest-outstanding case is Bilski v. Kappos, which involves the patentability of "business methods." Bilski was argued in November. The only Justice who has not issued a majority opinion from that sitting is Justice Stevens, which makes him the very likely author. Justice Stevens tends to take a narrow view of patent rights. He notably joined Justice Breyer's opinion in Laboratory Corp. v. Metabolite in 2006 arguing for a narrow interpretation of process patent rights, which is a similar issue.

At oral argument in Bilski, Justice Stevens was very engaged. He asked counsel for the patentee the following telling question: "But is it correct that there's none - none of our cases has ever approved a rule such as you advocate?" Justice Stevens also was seemingly doubtful that the involvement of a machine could render a process patentable, and furthermore that software could be patentable, which suggests a very narrow interpretation of business method patents and that the ruling could spell significant trouble for software patents.

I ultimately predict that the Bilski majority opinion will be authored by Justice Stevens and that the decision will be very significant in its narrowing of the scope of method patents. I expect that the delay in resolving the case will have arisen not from disagreement over whether this particular invention is patentable - I think the Court will unanimously hold that it isn't - but over the scope of the rule.

Because copyrights allow for monopolies over "derivative works", a single producing entity often ties up the rights to copyrighted books at any given time. No direct competition is allowed to see who can produce the best adaptation (unless the underlying work is in the public domain).

With that in mind, I had to chuckle to myself when I read the news that the producer of Ayn Rand's "Atlas Shrugged" has started shooting the project with a mere $5-million budget and a crew that likely ensures a quiet direct-to-video release (if that).

http://www.comingsoon.net/news/movienews.php?id=67024

http://www.slashfilm.com/2010/06/14/atlas-shrugged-is-filming-one-tree-hills-paul-johansson-starring-and-directing/

The producer was forced to rush this thing into production now - otherwise he would lose the rights altogether after tying them up for nearly 20 years.

After reading this article, I am left with the thought, "A pox on all of their houses!".

Current copyright law not only fails in its basic function in maximizing the creation and distribution of new works, but it also happens to be disastrously constructed. With more and more creations now being considered 'derivative works', the law now prevents any clear certainty as to who owns what without going through a lengthy and expensive litigation process.

When it comes to our tools of culture and speech, the one area of law that should be easily accessible to all should be IP laws. Sadly, that is not the case. It has become little more than a self-justified business to employ IP attorneys - the 21st Century's breed of ambulance chasers.

Read the sorry tale here:

http://www.nytimes.com/2010/03/21/business/21marvel.html?pagewanted=1

The mainstream blogs occasionally cover intellectual property. Andrew Sullivan, for example reproduced a few letters from his readers criticizing commentary on Yglesias's blog. I suppose he picked these letters because he thought they were the most sensible? I thought just for fun I would fisk one of them, mostly because it is the kind of nonsense I hear at seminars all the time:

I just wanted to weigh in on the budding IP debate to say that anyone who takes a firm stand on the specific meaning of IP law doesn't really understand IP law.

David: No clue what that means.

Copyright, patent, and trademark law all serve different purposes, and have different statutory regimes precisely because the issue is multifaceted, complex, and must meet various and sometimes opposing interests.

David: Wow, it is complicated? Who'd have thunk it?

Conflating three separate legal regimes as "IP law" can make arguing about it's purpose inherently impossible.

David: You mean the way that the U.S. Constitution conflates copyright and patent? I suppose this letter writer is merely dishonest. Few if any people conflate trademark with copyright and patent law, and in the United States the legal purpose of copyright and patent as established by the Constitution are indeed the same.

For instance, Yglesias points to the Constitutional requirement that the protection be for a "limited time." Well, over the last 200 years as IP laws have evolved, we've decided that "limited time" means something very different in patent law and copyright law. Patents generally last for 25 years, copyrights last for the life of the author plus 75 years (this is a gross simplification, but good enough for our purposes).

David: A very gross simplification unless they recently increase the length of patent protection from 20 to 25 years. I know they keep changing the length of copyright protection at a dizzying rate, but it appears to still be life of the author plus 70 years. I guess this stuff is multifaceted and complex.

Patents cover inventions that increase our standard of living and move society forward.

David: You mean like the swinging on a swing patent?

The inventors of those things should be protected, but only for a short time; after that society as a whole should be allowed to benefit from the increased utility of the technology's wide dissemination.

David: Why is it exactly that they "should" be protected?

More to the point, copyright law protects expression -- the words or notes an artist uses in creating his work.

David: I hear this repeatedly at seminars. How does protecting "expression" give the author the unique right to write a sequel? What does "expression" have to do with Suntrust v. Houghton Mifflin lawsuit over The Wind Done Gone? With the lawsuit over the Harry Potter lexicon? Copyright protects ideas not merely the expression of ideas. Where on earth did this myth that copyright only protects the expression of ideas start?

Though I agree with him on many things, Yglesias is wrong here. Copyright law is very much in the business of protecting the rights of the author. That's why a copyright term lasts so long (copyright terms have been increasing steadily over time, indicating that we are becoming more and more concerned with protecting authors as time goes forward). That's also why copyright protects such a wide range of expressions and has so few formal requirements for securing one. Our copyright scheme is actually quite expansive in its protection of producers' interests.

One could say, as Yglesias does, that copyright protects consumers, but only with very roundabout logic: copyright incents producers to produce copyrightable works, and that allows consumers to consume those works, thus protecting their interest in listening to music, etc. It's much more logically satisfying to accept the basic truth and say "copyright law protects an author's interest in his copyrightable works," and then derive whatever ancillary benefits you want from there.

David: There is a telling difference between what copyright does protect - the interests of the intermediaries involved in distributing copyrightable works - and what copyright is intended to protect - the rights of the public at large. As it happens it does not and is not meant to protect either authors or consumers.

In the Christian Science Monitor

Actually, it was a farce from the beginning. But what do you call it when an inherent farce devolves into a an even bigger farce?

Details here and here.

This is an increasingly familiar pattern. Otherwise truthful people seem to have no problems lying in legal proceedings when they perceive the underlying laws and system is inherently unfair and stacked against them. That is why you see examples such as this and others such as music downloaders claiming that somebody else must have used their computer without their knowledge. In the end, more and more individuals are likely to conclude that it is easier to commit perjury as a potential shortcut remedy when faced with a lengthy and expensive legal entanglement with media conglomerates.

I sympathize with these people. If you want people to have respect for the law and the legal system, you must first make sure that you have laws and a legal system that is worthy of respect. Can you honestly say that this is the case when it comes to the current state of copyright law?

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.

The Economist has a startling article this week on China's drive to develop patents as part of its development policy and to put it ahead among the world's leading economic powers link here. " The country's patent office leads the world in patent applications, more than 800,000 of which were filed in 2008. ...Most are for "petty" patents: middling technology that undergoes minimal review and receives only a 10-year term....[But] Chinese firms are increasingly filing "invention" patents that are rigorously scrutinized and receive 20 years of protection, as in the West." "Since 2006 more patent lawsuits have been filed in China than anywhere else, even litigious America. Most pit domestic firms against each other, but in recent years foreigners have found themselves on the receiving end too."

For those of us who regard patents as anti-competitive, leading to monopoly, this can only be seen as unwelcome. When intellectual property becomes an arm of the state in international competition, the world's consumers will lose and fights over IP will become sources of international conflict. Such conflicts need a lot more attention than they have been given to date. But attenuating them, much less resolving them, does not seem likely. What goes around comes around.