Techdirt: Is That The Best Cato Can Do In Defense Of Copyright?. By the heroic Michael Masnick. 'Nuff said.

Here is a quote from an AP article suggesting that sites such as this one shouldn't be quoting from AP articles:

NEW YORK (AP) -- The Associated Press, following criticism from bloggers over an AP assertion of copyright, plans to meet this week with a bloggers' group to help form guidelines under which AP news stories could be quoted online.

Jim Kennedy, the AP's director of strategic planning, said Monday that he planned to meet Thursday with Robert Cox, president of the Media Bloggers Association, as part of an effort to create standards for online use of AP stories by bloggers that would protect AP content without discouraging bloggers from legitimately quoting from it.

People are right to be upset in this instance.

There are already 'guidelines' for quoting news stories online (and elsewhere) - the guidelines are called FAIR USE LAW (starting with section 107 of the Copyright Act). Many would justifiably argue that even the current fair use guidelines are too limiting with today's technology. But AP's efforts here are a clear attempt to roll back such rights and privileges even further - and should be forcefully rebuffed without compromise.

UPDATE: AP irony alert as the organization 'steals' content from a blog - using its content more extensively than many blogs use AP materials from single articles. Check out the details here.

As a follow-up to my previous post, an illuminating letter can be found here.

The letter suggests that Kozinski and his staff were big NAPSTER fans.

I continue to maintain that trying to deflect this issue in the name of 'privacy' not only misses the mark, but is actually counterproductive for the ideas that this site stands for. Legal notions of 'privacy' can be twisted into another pernicious form of monopoly that is just as destructive as any overbearing IP law.

Assuming these allegations are true (and I hope that they are), it is far better to simply stand up and applaud a great judge for doing what we should all be encouraging: a re-shaping of fair use culture in the digital age.

Far from tarnishing his reputation, this should actually enhance Kozinski's reputation among defenders of informational freedom.

As I noted in The Schizo Feds: Patent Monopolies and the FTC, the state grants patent monopolies and then uses antitrust law to attack the beneficiaries of those monopolies. As one commentator noted in a related thread, "It is amusing, watching one agency of government applying a system whose entire purpose is the creation of monopolies, and then another agency tasked with preventing monopolies turning up and trying to do something about it." A case in point is the flack about the Cipro drug where the state whines about the prices charged for Cipro during the anthrax scare a few years back and threatened to choke back on the patent monopoly it had granted for it. The state is schizo in many other ways too, of course--it foisted MTBE (a gasoline additive) on the country and then, years later, after fears of groundwater contamination, mandated that MTBE be phased out (I'm sure that the lobbying of ADM for ethanol to be used instead had nothing to do with that).

I previously noted the Rambus v. FTC case. Rambus was part of a standards-setting organization "working on standardization of DRAM chips." As a court later summarized this,

After lengthy proceedings, the Federal Trade Commission determined that Rambus, while participating in the standard-setting process, deceptively failed to disclose to the [standards-setting organization] SSO the patent interests it held in four technologies that were standardized. Those interests ranged from issued patents, to pending patent applications, to plans to amend those patent applications to add new claims.... Finding this conduct monopolistic and in violation of § 2 of the Sherman Act, ... the Commission went on to hold that Rambus had engaged in an unfair method of competition and unfair or deceptive acts or practices prohibited by § 5(a) of the Federal Trade Commission Act.

The FTC then sought to compel Rambus to license its patents at "reasonable royalty rates." Rambus appealed to the U.S. Court of Appeals for the DC Circuit and, in April, won its appeal, clearing the way for Rambus to try to extract maximum royalties from its former partners.

The FTC has filed a petition for rehearing. Skip Oliva has filed an amicus brief opposing the FTC's petition. Now I agree with Oliva that it's troubling when the state formulates new theories of antitrust liability. But from the libertarian view, the patent system and the FTC are all just internal parts of the state. So under the result favored by the FTC, what we really have is the state granting a slightly more limited patent monopoly to Rambus (that is, a patent for which only state-approved "reasonable royalty" rates may be charged) than is normally granted. I don't see what all the hubbub is about. What the state giveth, the state taketh away.

My view is that anything that chokes back the state-granted patent monopoly is, ceteris paribus, to be favored. And I agree with the general idea that it is detestable for a company to secretly seek patents on the technology of the SSO the company is part of, and that these patents should not be enforceable. The default contractual rule should be that if you work with others to adopt a technological standard, you implicitly agree not to use state-granted patent monopolies on that technology to block or extract royalties from use of that standard. I would say that derogation from this default rule should be explicitly spelled out. Imagine what response you would get from other SSO members if you try to add a clause saying that you may secretly apply for patents and enforce them against other members or companies using the standard.

[cross-posted at Mises blog]

From Bob Hunt:

Just wanted to make you aware I have finished a new draft of my paper on business method patenting and US financial services.

This is a very substantially revised version of my paper from last year. I have added a section on the problems official R&D measurements and then I construct my own R&D measurements based on the occupational composition of financial industries. I have documented about two dozen business method patent suits that involve financial institutions, payment networks, and important vendors to the industry. And I wrote up an economist's perspective on about a dozen cases decided in the last two years that are relevant to business method patents.

The paper is here. To whet your appetite, an excerpt from the abstract:

BUSINESS METHOD PATENTS AND U.S. FINANCIAL SERVICES

A decade after the State Street decision, more than 1,000 business method patents are granted each year. Yet only one in ten are obtained by a financial institution. Most business method patents are also software patents.

Have these patents increased innovation in financial services? To address this question we construct new indicators of R&D intensity based on the occupational composition of financial industries. The financial sector appears more research intensive than official statistics would suggest, but less than the private economy taken as a whole. There is considerable variation across industries but little apparent trend. There does not appear to be an obvious effect from business method patents on sector's research intensity.

Looking ahead, three factors suggest the patent system may affect financial services as it has electronics: (1) the sector's heavy reliance on information technology; (2) the importance of standard setting; and (3) the strong network effects exhibited in many areas of finance. Even today litigation is not uncommon; we sketch a number of significant examples affecting financial exchanges and consumer payments.

Rasmus Fleischer, a Swedish anti-copyright activist, has the lead essay in Cato Unbound on "The Future of Copyright".

Money quote:

Believers in copyright keep dreaming about building a digital simulation of a 20th-century copyright economy, based on scarcity and with distinct limits between broadcasting and unit sales. I don't believe such a stabilization will ever occur, but I fear that this vision of copyright utopia is triggering an escalation of technology regulations running out of control and ruining civil liberties. Accepting a laissez-faire attitude regarding software development and communication infrastructure can prevent such an escalation.

I think Alex Kozinski is one of the best judges this nation has.

He is getting a lot of attention for storing humorous porn on his computer while presiding over an obscenity trial - but it turns out he may have had a nice stash of ripped MP3's on his site as well.

As the L.A. Times notes:

The judge emphasized that he never used appeals court computers to maintain his site.

The presence of copyrighted music files on Kozinski's site raises other issues.

More than a dozen MP3 tracks were listed, and they were neither excerpts nor used to illustrate legal opinions, which experts said might have qualified their copying as "fair use." The artists included Johnny Cash, Bob Dylan and Weird Al Yankovic.

Uploading such files could violate civil copyright laws if friends or members of the public visited the site and downloaded the songs, according to attorneys who have litigated file-sharing cases for both copyright holders and accused infringers.

Even if no one downloaded the songs, just making them available might run afoul of the law, said Corynne McSherry, staff attorney at the nonprofit Electronic Frontier Foundation, which often argues the other side of such issues.

Late last year, three of Kozinski's Circuit Court colleagues noted in a ruling that "the owner of a collection of works who makes them available to the public may be deemed to have distributed copies of the works," a violation of copyright law if done without permission.

"For him to actually be held liable would take some further investigation, but I think it's possible," McSherry said. "It's a strange story. It's surprising to me."

Kozinski was not asked in the Tuesday interview about the music files, and he could not be reached for comment Wednesday afternoon.

An attorney who has had a long running dispute with Kozinski maintains over at Patterico.com that Kozinski didn't just have MP3 files, but was actively sharing them through file sharing software. [Disclosure: I am also a guest blogger at Patterico.com]

Warning: The allegation of music file sharing at this post at Patterico.com also contains some adult humor related to the porn allegations.

I have mixed feelings on a number of levels:

1. If it turns out to be true that Kozinski knowingly shared music through peer-2-peer networks, that will make him even more endearing to me. More power to ya Judge!

2. As I have indicated before, Kozinski has always had a much more balanced view of intellectual property law compared to many others in legal circles. He has warned about how IP and 'publicity rights' can encroach on free speech when they are interpreted too broadly. He also has a healthy respect for fair use (unlike some of his contemporaries on the bench). Perhaps this episode will inspire him to start aggressively challenging conventional IP jurisprudence and enforcing fair use rights even more? [A long shot admittedly - but dare to dream....]

[Update: As Patterico notes here, Kozinski doesn't always come down on the side I would like him to as a matter of public policy. But I maintain that he is still better than most in this field.]

3. Despite my adoration here, part of me would like to see him aggressively prosecuted - and then have the Feds and the RIAA conduct a wide witch hunt against every judge and government official that might have 'unauthorized' MP3 files stored on their computer. Once the Washington establishment is finally confronted with their hypocrisy and are shown just how widespread this phenomenon is, it might force their hand to actually change the law in a positive direction. It has been said that if every Congressman were vigorously prosecuted for solicitation each time they engaged in it, prostitution would be legalized overnight. The same principle applies to file sharing.

Perhaps these last few speculations are just wistful daydreams on my part. I'd hate to see Kozinski be the one martyred for the cause in any event. But this whole episode still only gets me more upset with the copyright/RIAA status quo - not with America's greatest appellate judge.

As if we need further proof that RIAA actions are unscrupulous, a team at the University of Washington managed to elicit take down notices accusing them of downloading movies through laser printers. It thus demonstrates that the technology RIAA relies on to press charges is bogus.

Hat tip: Electronic Frontier Foundation

Susan Decker of Bloomberg reports "Alberto Gonzales to Help `Special Master' on Check Patent Case" link here. Her lead is, "Former U.S. Attorney General Alberto Gonzales, who was forced from his job amid a controversy over the firings of federal prosecutors, has been hired to provide assistance to a special master on a patent case." Need one say more?