Tuesday, October 25, 2005

IP - Is "Intellectual Property" a Misnomer?

At Slate's "Jurisprudence: The law, lawyers, and the court", Tim Wu, Professor of Law at Columbia and a teacher of copyright law, has a nice October 17, 2005 article titled Leggo My Ego - GooglePrint and the other culture war, in which he makes the following comparison between the planned GooglePrint "book searches" and ordinary "maps":

"Consider what it would mean, by analogy, if map-makers needed the permission of landowners to create maps. As a property owner, your point would be clear: How can you put my property on your map without my permission? Map-makers, we might say, are clearly exploiting property owners, for profit, when they publish an atlas. And as an individual property owner, you might want more control over how your property appears on a map, and whether it appears at all, as well as the right to demand payment."

This idea by Wu mirrors the argumentation made by Larry Lessig at Lessig Blog:

"Property law since time immemorial had held that your land reached from the ground to the heavens. Then airplanes were invented — a technology oblivious to this ancient law. A couple of farmers sued to enforce their ancient rights — insisting airplanes can’t fly over land without their permission. And thus the Supreme Court had to decide whether this ancient law — much older than the law of copyright — should prevail over this new technology.

The Supreme Court’s answer was perfectly clear: Absolutely not. “Common sense revolts at the idea,” Justice Douglas wrote. And with that sentence, hundreds of years of property law was gone, and the world was a much wealthier place."

The concept of "property by law" is as unnatural as it is thought to be natural. There was a day when nothing on the Earth was owned by anyone, prior to the emergence of Mankind. In the beginning, property was anything that could be defended as such. Indeed, most land property rights are rooted in the exercise of sheer force, the force by which a piece of property, at some distant point in history, was taken and occupied either from other men or from nature.

Let us take America as an example. Did Native Americans "own" all of the Americas just because they were there? And what about their own legends of having driven out other - former - groups from this property?

"As Europeans settled Michigan they crowded out the native Indian populations, destroying ancient burial sites and raiding them for treasures and artifacts. They were particularly fascinated by the burial mounds scattered throughout the state.

Even the native Indians claimed not to know who the mound builders were. Some recalled old legends that their ancestors had conquered and ousted an ancient evil civilization which had dug for copper and built mounds. "

So. Even in this traditional sphere of "real property claims", there are no absolutes.

What about intellectual property?

If we look historically at copyrights, trademarks and patents, we find that in the good old days, there were no intellectual property rights at all. Rather, all of these rights are modern legal inventions which have dynamically expanded in the modern age.

Mark A. Lemley (William H. Neukom Professor of Law and Director of the Stanford Program in Law, Science and Technology) has an abridged article on Property, Intellectual Property, and Free Riding in the Fall, 2005 Issue of the Stanford Lawyer (Vol. 40, No. 1, pp. 34-39) which was originally published in the Texas Law Review, March, 2005.

Lemley writes that intellectual property law (IP Law) has nothing to do with common-law based property law as taught in the law books. Rather, IP Law is pure "statutory law", created by legislation.

Lemley writes that "the basic economic justification for intellectual property law comes from what was only an occasional problem with tangible property - the risk that creators will not make enough money in a market economy to cover their costs".

This original compensatory view, which was adopted to give holders of intellectual property rights a proper incentive to be creative, has recently mushroomed into a view "that creators will not have sufficient incentive to invent unless they are legally entitled to capture the full social value of their inventions".

But that of course is a horse of a different color, which, in our own view, involves countervailing economic costs to society which are - thus far - not compensated for by the copyright holder (whereas e.g. real property holders have to pay property taxes).

According to Lemley, there are five such significant economic costs which attach to the granting of "overbroad intellectual property rights". These are:

1. Market distortion, creating static inefficiencies (deadweight losses)
2. Dynamic inefficiencies, created by interfering with the ability of other creators to work
3. Socially wasteful rent-seeking behavior
4. Administrative costs
5. Distortionary overinvestment in research and development

In other words, or so we interpret Lemley's view, if an intellectual property right holder wanted to capture the full social value of their inventions or writings, then that same holder should also be prepared to pay for the costs to society of granting that holder that full social value, costs which someone has to pay. Regretably, many intellectual property right holders do not see this aspect of the issue.

Of course, no one can capture the full social value of the works that they produce any more than they can pay for the costs to society which the protection of their work engenders. As a result, intellectual property rights are not absolute and permit a "fair amount" of "free riding", of which something like "fair use in copyrights" would be a good example.

As Lemley writes:

"Granting intellectual property rights imposes a complex set of economic costs, and it can be justified only to the extent those rights are necessary to provide incentives to create. The economics of intellectual property simply do not justify the elimination of free riding."

Lemley concludes that:

"Intellectual property law is in need of reform. Many of the problems stem from the association that lawyers and judges often make between intellectual property and real property. In fact, there are very few similarities between the two fields of law...."

"If people think of intellectual property as a form of property because of its name, then the name should probably go...let's start talking about "IP."

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Regulation of Political Speech on the Internet - Blogs and Blogging

VoteLaw has a posting about a one-page order just issued by the U.S. Court of Appeals for the D.C. Circuit which has "declined to reconsider a decision requiring the FEC to write new rules to carry out a 2002 campaign finance law". Reference is made to a Boston Globe AP article of October 24, 2005 titled "Appeals court declines to review decision on campaign finance rules".

This is a development of utmost importance to blogging. What is the background?

The Bloglines Blog (see also WingedPig) has a posting about the fact that the FEC (Federal Election Commission) has been reviewing regulations concerning political speech on the Internet, including blogging.

The Committee on House Administration held a hearing on the topic on September 22, 2005.

The issues involved are found in this statement by Committee Chairman Robert W. Ney which we have excerpted:

"The Committee is meeting today to hear testimony on the subject of regulation of political speech and activity on the Internet....

The Bi-Partisan Campaign Reform Act (McCain-Feingold or BCRA) required the Federal Election Commission (FEC) to develop regulations to implement the Act. The Commission determined that Congress did not intend for BCRA to cover Internet communications and, therefore, adopted regulations that exempted them.

Congressman Shays and Meehan, believing the FEC regulations did not follow the intent of BCRA, sued the Commission. The Court [see material below] agreed with the Congressmen, and ordered the FEC to rewrite the rules.

As a result of this lawsuit and Court decision, the FEC was forced to rewrite the rules that cover communications on the Internet. That new rulemaking began in March 2005.

While this new rulemaking was going on, some Members of Congress were making clear that they did not intend for BCRA to cover the Internet, and that they did not want the FEC regulating these communications. In March, Congressman Conyers and 13 of his colleagues wrote to the FEC seeking an exemption for web logs or blogs....

Identical bills were also introduced in both bodies to preserve the exemption – in the Senate by Minority Leader Harry Reid and in the House by Jeb Hensarling (R-TX). Their bill language was adopted by this committee, and included in H.R. 1316, the Pence-Wynn bill, reported by the committee on June 8, 2005.

These bi-partisan congressional endorsements of the exemption show there still some issues on which both sides of the aisle can agree. We’ll later hear from two witnesses who operate blogs, one conservative and one liberal, who probably do not agree on anything except that they do not want the FEC to be regulating what they say or do on their websites.

The debate here then is not between Republicans and Democrats or liberals and conservatives. Instead, the debate here is between those who favor regulation and those who do not...."

The court decision in question was described at the hearing by Scott E. Thomas, Chairman, Federal Election Commission as follows [we quote footnote 1 at the linked source]:

"The U.S. District Court for the District of Columbia concluded that the Commission’s broad Internet exemption would “severely undermine [the Federal Election Campaign Act’s] purposes,” and would permit “rampant circumvention of the campaign finance laws and foster corruption or the appearance of corruption.” Shays v. FEC, 337 F. Supp. 2d 28, 70 (D.D.C. 2004), aff’d, 414 F.3d 76 (D.C. Cir. 2005), petition for rehearing en banc filed (Aug. 29, 2005). Though the district court held some 15 regulations invalid, it nonetheless indicated that pending resolution of the litigation and adoption of needed revisions by the FEC, the challenged regulations remain in effect. Shays v. FEC, 340 F. Supp. 2d 39, 54 (D.D.C. 2004)."

This is the court decision which the D.C. Appeals Court declined to reconsider.

Here are the issues:

Thomas points out in his testimony that the Internet should be regulated by the BCRA because the Internet is becoming a major player on the political scene.

Vice Chairman Michael E. Toner of the FEC testified that political speech on the internet should not be regulated and that the BCRA was never intended to apply to the internet.

Commissioner Ellen L. Weintraub of the FEC emphasized that "the focus of the FEC is campaign finance. We are not the speech police." Hence, Weintraub indicates that the proposed rules will in fact regulate the internet, but that substantial exemptions will be made.

Bradley A. Smith, Professor of Law at Capital University Law School, and former Chairman of the FEC, testified that the "the on-line community has reason to be concerned" and that "there is a sizeable and powerful lobby both in and out of Congress that clearly wants to regulate the internet....A regulated internet will strengthen those who already have political power and influence; a deregulated internet will boost the influence of ordinary Americans who just want to play by the rules...." Smith particularly points to the inherent conflicts created between internet regulation and press freedom, the resolution of which is a controversial matter. For the position of blogs, see The Volokh Conspiracy.

Lawrence Noble, Executive Director and General Counsel of the Center for Responsive Politics, testified that: "There is little doubt that the Internet can be used in much the same way television, radio and the print media have been before; as an avenue for the spending of large amounts of undisclosed soft money to finance various forms of political ads aimed at electing or defeating Federal candidates. "

Michael J. Krempasky of RedState.org provided testimony from one side of the political spectrum of blogging and Duncan Black of Eschaton provided testimony from the other side. Both stated that blogs should be exempted from the BCRA.

Some links to the history of this topic are:
CNet News.com
Volokh Conspiracy

In the Agora
Michelle Malkin
Democracy Project
Ask Jeeves Blog
Captain's Quarters

Given this court decision and barring Congressional action, there will now be much, much more about this matter on the blogosphere, you can be sure.

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Crossposted to Punditmania.

Stanford Law Grads as Technology Company General Counsels

As a Stanford Law School alum, I just received the Fall, 2005 Issue of the Stanford Lawyer (Issue 73, Vol. 40, No. 1) which I always read from cover to cover. This issue is powerpacked with technology.

The feature article by Josh McHugh (photography by Peter Stember) is entitled "Technology's Field Generals" and profiles the general counsels at "Microsoft, Google, Cisco, eBay, Yahoo!, Qualcomm, Autodesk, and Oracle - Stanford Law School alums, all...."

Although Stanford is known for its political liberalism, these general counsels show the other side of the law school equation, i.e. the indisputable fact that top faculty and top students also produce top legal people for business and technology.

It is not a question of politics - but rather one of competence.

As Stanford Law School Dean Larry Kramer writes in his introductory "Leading the Way in Law and Technology":

"[T]his issue of Stanford Lawyer touches on just a few of the myriad ways in which Stanford Law School has become the world's premier place for teaching and scholarship about the legal dimensions of new technology and the astonishing, often perplexing, society it is creating.... Though ranked as one of the top universities in the world, this is not a place where people sit on their laurels or tradition. Amazing things are going to happen here in the next decade, especially in law and technology."

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