Against Monopoly

defending the right to innovate

Against Monopoly

Monopoly corrupts. Absolute monopoly corrupts absolutely.

Copyright Notice: We don't think much of copyright, so you can do what you want with the content on this blog. Of course we are hungry for publicity, so we would be pleased if you avoided plagiarism and gave us credit for what we have written. We encourage you not to impose copyright restrictions on your "derivative" works, but we won't try to stop you. For the legally or statist minded, you can consider yourself subject to a Creative Commons Attribution License.

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Sign up to support net neutrality NOW

Public Knowledge, the IP blogging site, is once again organizing to get people to weigh in on current policy debates over patents, copyright, net neutrality and other issues of concern to us users. It is currently organizing a call-in-your-Congressperson effort to support net neutrality link here. You can sign up at their website for the big call-in day tomorrow.

If you want to beat the big business lobbyists, you need to act.

California Appeals Court Declares That Free Internet Porn Isn't 'Unfair Competition' To Pay Sites

Just like the headline says. You can read about the background here:


This obviously has beneficial implications for many genres of Internet-based media.

You can read the actual court opinion here:


Though interestingly enough, the Appeals Court ordered that this opinion NOT be published in its official reports, meaning that lawyers won't be able to cite it as legal precedent in future cases. Why this is the case remains unclear. Perhaps they were simply embarrassed by the subject matter and didn't want to be tagged as being the judges who helped guarantee the continued flow of free porn for all?

Obama's prideful reference to our many patents gets a comeuppance

Matt Yglesias does a neat skewering of Obama's State of the Union self-congratulatory allusion to our patents: "No country has more successful companies, or grants more patents to inventors and entrepreneurs."link here

He then does a riff on what would have happened if Newton had got a software patent on calculus. He would have sat on the patent "until Leibniz published his superior method and then sued the pants off anyone who tried to take a derivative without coughing up a hefty license fee."

Yglesias manages to get in other digs over what is currently patentable and the likely lower quality of today's patents. He concludes by noting patents do not create "property' but rather are a regulation which creates a monopoly.

Read it. It is nice to have such a good writer on our side.

Google dumps the hard drive so its machines notch a big advantage

PAUL BOUTIN writes in the New York Times online about Google's latest move in its evolving corporate strategy link here. It uses the Chrome OS and the cloud to strip users of the need to have a hard drive, allowing the computer to be simpler and perhaps a third or more cheaper than comparable machines that require a hard drive and an expensive proprietary operating system like Windows OS. Since the Chrome OS is free, buyers will not have to pay for it either, if they are able to give up the proprietary programs.

A lot of this still needs to be worked out, like a printer and the software for other activities that is so widely available for Windows or Apple. But if the OS becomes popular, I suspect this will be the greatest challenge Windows or Apple has yet faced. Their choice is to keep innovating ahead of Google to keep their OS's and other apps competitive or create their own hard-drive-less machines.

Interesting times are ahead. But I would put my money on Google whose speed of software innovation has been well ahead of its competitors.

Quote of the Week

"Criticism will survive even if no one's paying for it. Obviously it's better if people are paying for it. But the fact that artists weren't able to make a living from their work hasn't detracted from the quality of that work. Charles Ives was the second greatest composer in American history and he worked in insurance his whole life." - Ignatiy Vishnevetsky

"Who is Ignatiy Vishnevetsky and why should I care?" you ask?

Read about his background here:


[Lest anyone be confused, I'm generally in favor of paying artists for work and creating rational incentives. I'm just against the current irrational copyright regime and intellectual monopolies.]

China joins the patent trolls; wake up America

STEVE LOHR claims to examine China's new push on innovation, but it is really about the policy to promote issuing more patents link here. The government is actually providing incentives to increase the annual patent harvest, including bonuses, better housing, and tax breaks. Finally, it has set yearly targets, currently rising to 1,000,000 by 2015.

As I thought about this, I realized that patents have become a tool of international competition policy. If you are behind in the patent race, file like mad and be prepared to litigate. You may win or you can make it so expensive for others that they will agree to cross license at modest or no cost. Pretty smart, those guys. They have learned the lesson of Microsoft, Intel, Hewlett-Packard, etc. The road to monopoly riches lies through the kingdom of patents.

Sooner or later, this competitive challenge will force the US, as well as other rich developed countries to make a choice. But first we will have to recognize what is happening, Then we can face the need to decide either to abandon patents or see our lead in new technology disappear and with it much of the gains we derive from such monopolies.

I would expect that the existing patent giants will resist abandoning the patent system. They have a huge stake in its continued existence as it protects them from competition for decades and with clever follow-on invention, permanently. And they may finally decide to work with the Chinese patent holders as they feel better off with an oligopoly than with free competitive markets.

It is difficult to feel confident that our government will make the right choice, given the huge political power of the patent giants. If so, so much the worse for the average consumer. One must be particularly pessimistic because of the hold that the concepts of patents as property (even if it is only intellectual property) deserving of the same respect as physical property and of violations as robbery or piracy, to use the current word of choice in the political battle. It is really hard to convince the average consumer of the huge magnitude of the dead-weight loss they all suffer, most especially from the fees of the patent lawyers.

What not to do about China's IP violations

The New York Times lead editorial today is entitled China and Intellectual Property link here. It is a familiar litany of complaints about their theft of U S "property" with no suggestion that there might be another side to the question.

If we were in China's position, still poor and backward in so many areas, we too would try our hardest to skate around the obstacles to using the latest innovations. Innovation is the key to rapid development and national material progress. We ourselves have violated the IP of other countries when we were behind and trying to develop. Of course, that was before we had fully developed the mythology of IP as "property" and that copying without paying was robbery.

The day is coming when the China will have developed to the point where its own domestic enterprises will decide they want their IP protected and will press their government to try to compel other countries to do the same. In the meantime, China will try to get away with as much as it can, recognizing that it can trade other actions in return for giving it a pass.

It is too bad that the China probably will not recognize that its interest is in either no IP protections or a vastly limited set which narrowly defines new IP and restricts its term to only a few years. But this rationale depends on the notion that IP is beneficial only as an inducement to innovate. And that the motivation is limited to the present value of the future stream of income, which approaches zero in no more than ten years.

The present IP system in the US is marred by its harmful and excessively long term, by its grossly ambiguous and generous definition of what constitutes innovation, by the capture of the system by big business which dearly loves its monopolies, and by a legal system that grows fat on litigation.

Unfortunately, there is little reason for one to expect China to define its interest in IP protection in terms of the public's welfare. Given its nationalist roots, the authorities there are more likely to define their national interest as in extracting rents from other countries in order to enhance their relative national power. The world-wide cost is the rents it can extract from consumers around the world.

The Times closes its editorial with this, "The United States has made some progress at the World Trade Organization against the theft of intellectual property in China. But it must be much more vigilant and aggressive."

We should all mourn the deep ignorance and sophistry that lies behind that conclusion.

Patents and copyrights worsen natural monopolies

David Leonhardt reviews a new book, titled THE MASTER SWITCH The Rise and Fall of Information Empires by Tim Wu link here. The theme of the book is that "History shows a typical progression of information  technologies from somebody's hobby to somebody's industry;  from jury-rigged contraption to slick production marvel; from a freely  accessible channel to one strictly controlled by a single corporation or  cartel from open to closed system."

When we criticize the copyright and patent laws, the criticisms are right but we are missing the point and fighting a losing battle against the latest new thing. We are up against a world where innovation creates natural monopolies, aided and abetted by patents and copyrights.

Steve Pearlstein takes a look at the same subject and lays out a view that challenges Wu's seeming acceptance of these monopolies link here. Wu would defend his view, I suppose, by arguing that during their formative periods, these natural monopolies succeed only if they provide consumer value.

Pearlstein argues, "In theory, antitrust laws were meant to restrict such acquisitions by a monopolist. In practice, however, it hasn't worked out that way. Decades of cramped judicial opinions have so limited application of antitrust laws that each transaction can be considered only in terms of how it affects the narrowly defined niche market that an acquiring company hopes to enter."

Nevertheless, Pearlstein argues for strong antitrust action, "aggressive enforcement of the antitrust laws has been a crucial part of the history of technological innovation in this country, enforcement that allowed AT&T to be supplanted by IBM, IBM by Microsoft and Microsoft by Google. It's easy to see why Google would want to use well-chosen acquisitions to try to delay or prevent that next round of creative destruction. What's harder to understand is why we would let them do it.' An artful aid in preventing that would be to cut back on the granting of patents and copyrights.

IP in the comics

In honor of election day

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Killing people with patents

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The right to rub smooth using a hardened steel tool with ridges Finally got around to looking at the comments, sorry for delay... Replying to Stephan: I'm sorry

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Do we need a law? @ Alexander Baker: So basically, if I copy parts of 'Titus Andronicus' to a webpage without

Do we need a law? The issue is whether the crime is punished not who punishes it. If somebody robs our house we do

Do we need a law? 1. Plagiarism most certainly is illegal, it is called "copyright infringement". One very famous

Yet another proof of the inutility of copyright. The 9/11 Commission report cost $15,000,000 to produce, not counting the salaries of the authors.

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What's copywritable? Go fish in court. @ Anonymous: You misunderstood my intent. I was actually trying to point out a huge but basic

Rights Violations Aren't the Only Bads I hear that nonsense from pro-IP people all the

Intellectual Property Fosters Corporate Concentration Yeah, I see the discouragement of working on a patented device all the time. Great examples