I've often had the experience after presenting a paper arguing that copyright doesn't work, that someone asks "So you don't mind if I take your name off this paper, and put my name on it and redistribute it, right?" Although intended as a joke, it isn't really funny, because it demonstrates a lack of understanding of what the paper is about. Suppose I download a piece of music that I didn't previously have. Ignoring the future consequences regarding music production - it is certain that from a social point of view what I did made society better off. It made me better off - I have access to music I didn't have before - and nobody is worse off. They copyright holder might not be able to sell me music in the future - but that is just a transfer payment from me to him - it has no social consequence.

Contrast this to identity theft. I make a copy of your identity - that is, I masquerade as you. This equally certainly makes society worse off. The essence of identity is that it must be unique. If multiple people hold the same identity, then the identity loses its social value. This is why trademark is different than copyright. Copyright prevents the socially desirable use of creations; trademark prevents the socially undesirable theft of identities - it preserves the right to know who you are doing business with.

How does plagiarism fit into this? Plagiarism is the theft of identity. When you take my name off the paper and claim you wrote it, this is identity theft - you are claiming to be me. It serves no socially useful purpose, and indeed has bad social consequences. So while I am against copyright, I am for trademark, against identity theft, and against plagiarism.

Don't worry, eventually I will get tired of it. Cato has the video posted so you can see for yourself what transpired. The best part was this though: the pro-DMCA group during the final panel made a number of outrageous assertions - not least of which was that the story of Ed Felten and the DMCA had a happy ending. So you can read what Felten thinks about that.

A member of the audience - if I remember correctly someone from NBC - raised the question during my panel of whether there was any business model that would support the production of $200 million dollar movies without copyright. As Tim Lee points out, I didn't give a very good very good response to this question. The question was raised in a later panel, and someone, I think it was Mike Masnick, gave a much better response. Regardless, the question is a significant one. The short response is pretty simple: until they lost the VHS tape case, the only source of revenue for movies was for theatrical releases. Even if DVDs can be freely copied and given away for free, the revenue from theatrical releases can still sustain large scale productions.

The key point is that it is wrong to focus on the copies to which copyright applies as the sole source of revenue to pay for creative efforts. Open source software works because the complementary good produced - "expertise" - in the process of producing software, is scarce and so commands a premium in the market. So even if copies generate little revenue, as long as something else complementary is scarce, there is still a revenue source to pay for creation. In the case of movies the obvious candidate is theatrical sales. In the case of music, live performances.

A secondary issue is competition between "free" DVDs and "expensive" theatrical tickets. But no one is proposing that movie producers be required to release DVDs when movies hit the theaters. It is true that stuff gets on the internet quickly - for example, because people steal master copies and post them. But even without copyright this is illegal, nor does advocating the elimination of copyright mean that when you give someone a sealed envelope containing a master copy to deliver to a theater, they are entitled to rip it open and make copies along the way. Or that if you transmit an encrypted movie stream to a theater than anyone can hack into a router and crack your stream. Or, for that matter, that if you transmit encrypted data to your bank that anyone can hack into a router and crack that transaction. In short, the transmission between producer and theater owner should be protected - but that protection has nothing to do with copyright.

Another issue that is important lies on the cost side. Much of the cost of a $200 million dollar movie is the money paid to big name actors and directors. When the government grants a monopoly through copyright, some of that monopoly profit goes to owners of other scarce factors - actors and directors. Reduce the revenue by eliminating the government monopoly, and those people get paid less. But big name actors in particular are paid far more than their opportunity cost - the amount that is needed to get them to act rather than take another job. Harrison Ford was a carpenter before becoming a big name actor - presumably a modest premium over a carpenter's wage is what was needed to get him to take the acting job. So if half the revenue is lost by eliminating copyright - half the costs may disappear as well.

Finally, you may wonder - what happens when we all have big screen movie theaters in our homes, and none of us go out to watch movies anymore? Simple answer - the same technological change that is lowering the price of big screen TVs is also lowering the cost of making movies. While the home video is scarcely a good substitute for a $200 million movie production, the quality gap has narrowed enormously in the last 20 years, and it isn't unreasonable to think that in another 20 years, home production of "professional" quality movies will become cheap and practical.

Since the subject of Tim Lee came up in the comments to an earlier post, it is perhaps opportune for me to mention his talk given during the panel on the DMCA. I should emphasize that Tim and I scarcely agree on everything: it is clear from his comments on the conference that I didn't persuade him that abolishing copyright is a good idea. Be that as it may - I thought he gave one of the most coherent criticisms of the DMCA I have heard. Since I don't think copyright achieves the intended purpose of increases the production or quality of books, movies, music or other copyrightable creations, I obviously don't have much use for the DMCA. But it is possible to be in favor of copyright and also against the DMCA. I think the EFF falls into this category - and while I think they make valid criticisms of the DMCA, I think if I agreed that copyright was a good idea, I wouldn't be persuaded by their arguments. I thought Tim made a much stronger case: basically that the DMCA isn't being used for the intended purpose, but rather to create monopolies unrelated to copyright at all. His example of the ipod using the DMCA to lock out competition seemed like a strong one.

Without patents, innovations will be imitated, and hence not developed. So goes the logic underlying most economic models of innovation. The case of the development of containerized shipping (a major transportation innovation) offers valuable lessons regarding this logic. If an innovation was to be easily imitated, the innovation of putting cargo in a box would seem to be a good candidate. Someone would load the first box on a ship, and then everyone would start doing it. Yet as Marc Levinson discusses in the 25 April, 2006 edition of the Financial Times, "Unforeseen consequence: how a box transformed the world," it took the industry a long time to understand how important the box would be, and how to use it. In fact, "the most remarkable aspect of its [the box] history is that no one foresaw how the box would change everything it touched, from ships and ports to patterns of global trade."

Mike Masnick spoke at the conference and has some good posts about it and related IP issues on Techdirt. Scroll down a bit.

I attended a conference on copyright yesterday at the CATO Institute. I'll try to provide some more detailed reports later, but first a general impression. There was a great deal of polarization among the panelists: basically rabidly for or against copyright. (You can guess which group I am in.) Jim Harper, the organizer, took a fairly middle of the road position, as did the moderators, who for the most part didn't express opinions, but they were the exceptions.

You may attribute this to bias if you wish: but my overall impression was that only the anti-copyright group tried to present evidence. "Our" group pointed to numerous facts and examples in support of our view that copyright law as it is written is a failure. The "procopyright" group seemed to rely fairly exclusively on theoretical arguments. For example, I presented evidence that copyrights do not achieve the desired goal of increasing the amount of creation. The rebuttal by Jim DeLong was along the lines of "it is inconcievable that anyone would spend the time and effort to create under these circumstances." This of course is a purely theoretical argument, and it is frustrating to have people try to rebut facts with theories about why the facts can't exist.

Another striking fact about the "procopyright" group: they seem to all be paid lobbyists. (Don't take that wrong - Gary Shapiro is also a paid lobbyist and spoke extremely eloquently against the DMCA.) Emery Simon, the general counsel of the Business Software Alliance certainly is, and the remaining panelists in the "procopyright" group were all from the Progress & Freedom Foundation, which was alleged to be funded in part by money from copyright lobbying groups. I have no idea if that is true or not, but in the case of intellectual property there is a simple test for whether pro-IP arguments are principled or not. If you argue that we have to have/strengthen IP protection to satisfy our international treaty obligations, then you are unprincipled. There are several reasons why this argument is not principled:

* The U.S. lobbied to put in the strong IP provision in the WIPO. We can certainly lobby to take them out - and we would have lots of support if we did. So if we think that something like the DMCA is too strong, but weakening it is going to violate the WIPO, then you should argue that we need to amend the WIPO first - but not that our hands are tied.

* For the most part these arguments are an outright lie. For example, it was argued that we needed the to retroactively extend copyright terms by 20 years to coordinate our law with the international standard. That was not true - and now for example, in the U.K. they are arguing (correctly) that they need to extend their term by 20 years to match what we have done.

* The whipsawing of countries - sneaking provisions into international treaties, or getting a law passed in one country then going around arguing that everyone else needs to match it - is not principled. If you think that something like the DMCA is good make your argument and stand up and count the votes. Don't sneak it into international treaties in the dark of night, then turn around and argue that this is "the rule of law."

Needless to say several of the speakers from the Progress & Freedom Foundation made the "satisfy our international treaty obligations" argument - which leads me to believe that they are acting as paid lobbyists not as intellectual observers.

Keith Olbermann reported last night on MSNBC's "Countdown" that the new owner of 85 percent of Elvis Presley Enterprises intends to start licensing Elvis impersonators. No license, no impersonation. (Read about it here.) If this stands, it means that no one will be free, without permission, to dress in a particular way, grow one's hair and sideburns in a particular way, wear a particular kind of sunglasses, and sing particular songs in a particular style in public. "If we were going to do a show that was based on Elvis impersonators, then obviously it wouldn't make sense to have unauthorised Elvis impersonators," Robert Sillerman said.

Does someone want to argue that IP doesn't entail the violation of individiual liberty?

My latest column in The Freeman, the magazine I edit, summarizes Michele Boldrin and David K. Levine's chapter on the world pharmaceutical industry in their book, Against Intellectual Monopoly. The column is here (pdf).

The Napster case is not over. The Electronic Frontier Foundation reports the latest chapter of the legal battle. The music industry is still pressing its case against Hummer Winblad and Bertelsman for investing in Napster. The defendants claim that the record labels forfeited their copyright claims when they illegally coordinated to monopolize digital music distribution. The DoJ found no evidence of wrongdoing, but new documents reveal that the labels might indeed have coordinated and shared information, and lied about it to the DoJ.

This is relevant because the penalty for copyright misuse (e.g. using copyright as a tool to validate antitrust) is unenforceability of the copyright in court until the misuse has been purged and its effects no longer exist -, which is tantamount to losing the copyright and releasing the intellectual property on the public domain. Free Madonna downloads coming soon to a computer near you!