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Against Monopoly

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IP Law

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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E-book Price-Fixing Probe

The attorney general of Connecticut is investigating whether e-book makers Apple and Amazon have engaged in pricing fixing with book publishers. In this article on the investigation, I am quoted saying:

Alleged price-fixing agreements in cases like this have but one source: the government's monopolistic grants to e-book makers and publishers through so-called intellectual property laws. In a fully free economy, where ideas cannot be locked up and competitors are free to enter the market, such agreements would have no force whatsoever.

Rethinking the legal test for Fair Use?

Mike Masnick over at Techdirt highlights some interesting musings from the Copyright Office which suggests a slowly shifting emphasis on how to determine Fair Use (a legal test which is notoriously slippery and can be bent in many cases to suit any preconceived result a judge wants to reach ahead of time):

http://techdirt.com/articles/20100804/04102010491.shtml

Hopefully, this will signal a (too slow and small, but still valuable) move away from the very disingenuous "market" test, or the effect of copying on the work's "value". This factor is almost always applied in a fraudulent manner since many courts don't only consider the markets which currently exist, but also potential future markets that the original author could potentially exploit. This becomes a tautological argument since the author can ALWAYS say that he/she intended to exploit a new product market in the future, even though they made no steps to do so in the past. Under this scenario, any copying of a work in any context becomes a per se harm to some hypothetical market which might exist in the future.

Bilski and the Future of Patents

The (pro-patent) Patently-O blog does a good job in an objective analysis of what the Bilski decisions means in its practical application.

Two important posts to read from there:

http://www.patentlyo.com/patent/2010/06/bilski-v-kappos-business-methods-out-software-still-patentable.html

http://www.patentlyo.com/patent/2010/06/bilski-v-kappos-and-the-anti-state-street-majority.html

Naturally, I'm disappointed. Although Bilski got his specific patent application rejected, and there is some hopeful wording in the opinion on the narrowing of patent eligibility, the decision for how it will practically shape future patent applications is far narrower than I had hoped for.

Like many others, I was wrong in my prediction that Justice Stevens would be writing the majority decision. He writes a lengthy and noteworthy concurring opinion, but the main decision went to Justice Kennedy, the one Justice who consistently muddies the law, rather than clarifies it with his opaque and hair-splitting opinions.

The Court punted on a once-in-a-generation opportunity. The Patent Bar must be breathing a sigh of relief.

Time for me to eat crow regarding my specific predictions on this case and think about the best way to carry the fight for meaningful reform forward.

ADDENDUM: The Christian Science Monitor provides one of the best easy-to-read quick summaries of what went down with the Bilski decision here:

http://www.csmonitor.com/USA/Justice/2010/0628/Which-innovations-deserve-patents-Supreme-Court-gives-scant-direction

Judge Rules Google/YouTube Not Liable For Posting Viacom Videos

Google Inc.'s YouTube video-sharing website didn't infringe copyrights owned by movie and television producer Viacom Inc., a judge ruled.

U.S. District Judge Louis Stanton in New York today said YouTube wasn't liable for infringement.

Details here:

http://www.businessweek.com/news/2010-06-23/google-s-youtube-didn-t-infringe-viacom-judge-says.html

More here (along with the actual ruling itself):

http://news.cnet.com/8301-31001_3-20008636-261.html

This still preserves the very flawed "safe harbor / take down notice" regime which has proven to be subject to abuse and various end runs around fair use principles, so this hardly a game changing development. But it still would have been far more disastrous had the decision come down in Viacom's favor. In that aspect, its a small step in the right direction.

Appeals Court: Public Domain Only Exists At The Whim Of Congress Which Can Take It Away Anytime It Wishes

A disappointing decision today from a Federal Appeals Court which held that Congress has the power to take works out of the public domain in order to satisfy international treaties.

The case is Golan v. Holder.

What is truly outrageous is that this infringes on the rights of creators who have relied on these public domain works in order to create new "derivative" works. They will now be obligated to pay money to those who hold the copyright in the (previously public domain) underlying work in order to distribute their new "derivative" work.

As the court says: "If the parties are unable to agree on reasonable compensation, a federal court will determine the amount of compensation."

Great.

This is a shameful disgrace to the free flow of information, art and expression.

Read it here:

http://www.lawweekonline.com/2010/06/10th-circuit-decides-major-copyright-case/

Updated thoughts: The ruling focuses on a First Amendment Constitutional challenge to what Congress has done. It rejects the First Amendment challenge, but I wonder if it might also be vulnerable to a (long-shot) challenge under either the Contracts or Takings clauses of the Constitution.

It theoretically might. But the problem with this theory is that it might inadvertently invite the courts to accept the flawed analogy between IP and real property. Plus, such an argument might inadvertently end up locking in the current (and outrageously long) copyright terms - effectively holding that Congress would also not be able to shorten them without financially compensating authors who had already created works with the understanding that they would be protected under the longer terms.

These are just my current random thoughts on the matter. I'd be curious to read the thoughts of other Constitutional theorists on this (amateur and otherwise).

Bilski Decision Watch

The Supreme Court issued a number of decisions today - but still no Bilski patent decision.

The patent lawyer community is getting nervous:

http://www.patentlyo.com/patent/2010/06/bilski-watch-timing-of-supreme-court-decisions.html

They are probably right to be. A delay this long in the decision most likely means that the Court is waiting until the end of the term to release it - which they traditionally do for what the Justices consider to be their most important and/or far reaching decisions of the year.

It may also be the case that there are either important dissents or concurring opinions on the case, thus prompting a delay with back and forth rewrites and revisions to the final decisions. (Though one should recall that at oral arguments, the Justices seemed universally critical to the idea of broad-based business method patents.)

The decision has to come down by July 28th at the latest, when the court has its final decision release day of the current term.

Three weeks and counting...

Supreme Court: NFL Not Immune From Anti-Trust Lawsuits

Justice Stevens proves to be the go-to Justice once again when it comes to IP issues on the Supreme Court.

It just released a unanimous decision that he authored, holding that the NFL can be sued for anti-trust violations for trying to give exclusive manufacturing licenses for producing trademarked clothing with NFL logos on them.

(It doesn't rule on whether the lawsuit will be ultimately successful or not, only that the NFL isn't immune from such lawsuits.)

Read the decision here:

http://www.scribd.com/doc/31867867/No-08-661-American-Needle-v-NFL

(A harbinger of the forthcoming Bilksi patent decison? We shall see...)

A Parting Gift From A Retiring Justice Stevens? [Bilski Predictions]

Supreme Court Justice John Paul Stevens is set to retire at the end of this Court's current term.

There are growing predictions from many authorities that Stevens might be the primary author of the Bilski patent case which has yet to be handed down.

Nobody ever got rich by successfully predicting what the Court will do, but overall, this seems to be very good news.

Stevens has been the one Justice who has consistently argued in favor of rational limitations on IP laws based on Constitutional principles.

He was the primary dissenter in the Eldred case which expanded copyright terms.

In his Eldred dissent, he specifically argued for limitations in the scope of both copyright AND patent law.

He was also a dissenter in the Diamond v. Diehr case - arguing that there should be further limits on software patents.

If Stevens is indeed the author of the Bilski opinion, that will likely be a good sign that the decision will offer something of good substance in terms of getting back on the road towards a sane patent regime.

First Amendment Based Copyright Misuse

David S. Olson of the Boston College Law School has an important new law article that should be must-reading for every federal judge out there:

First Amendment Based Copyright Misuse

Abstract:

We are at a crossroads with respect to the under-developed equitable defense of copyright misuse. The defense may go the way of its sibling, antitrust-based patent misuse, which seems to be in a state of inevitable decline. Or - if judges accept the proposal of this Article - courts could reinvigorate the copyright misuse defense to better protect First Amendment speech that is guaranteed by statute, but that is often chilled by copyright holders misusing their copyrights to control other's speech.

The Copyright Act serves First Amendment interests by encouraging authors to create works. But copyright law can also discourage the creation of new works by preventing subsequent creators from using copyrighted work to make their own, new speech. Courts have long recognized this inherent tension, and have also recognized that the conflict should sometimes be decided in favor of allowing a subsequent speaker the right to make unauthorized use of others' copyrighted works. Accordingly, courts created, and Congress codified, the fair use defense to copyright infringement, which allows unauthorized use of copyrighted works under certain circumstances that encourage speech and creation of transformative works. The problem with fair use, however, is that the informational uncertainties and transaction costs of litigating the defense make the fair use right unavailable to many as a practical matter. Subsequent creators are left open to intimidation by copyright holders threatening infringement suits. By decoupling the copyright misuse defense from its basis in antitrust principles and basing it in First Amendment speech principles, the legal protections for fair use shift from theoretical rights to practical rights for many. Copyright misuse has two deterrent features that will allow fair use as a practical right. First, a copyright holder's misuse of its copyrights against anyone can be used to prove the defense of misuse. Second, once misuse is found, the copyright owner loses its ability to enforce its copyright against everyone, at least until the misuse is cured. Thus, by defining as copyright misuse the unjustified chilling of speech that some copyright holders perpetrate, the misuse defense will encourage important speech rights that are currently under-protected.

Download the whole thing here:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1574385

[H/T: Larry Solum]

Dissent of the day

The U.S. Federal Circuit, which usually goes out of its way to unjustly expand the contours of patent law, has issued a typically outrageous decision holding that a U.S. stamp which depicts a view of a public Korean War memorial violates the copyright of the sculptor who designed it.

The decision brought a strong dissent from Judge Pauline Newman who wrote:

The Korean War Veterans Memorial is a work of public art and a national monument. It was authorized by Congress, installed on the National Mall, and paid for by appropriated funds. My colleagues on this panel now hold that the persons who produced this public monument for the United States, under a contract which requires that copyright is in the United States, can nonetheless require the United States to pay damages for copyright infringement based on use of a photograph of the Memorial in snow on a postage stamp. This holding is contrary to the contract provisions, contrary to statute for works done in the service of the United States, contrary to copyright law, and contrary to national policy governing access to public monuments. I respectfully dissent from the court's holding that the United States is liable for infringement of an improperly obtained and unlawfully enforced copyright.

Read the full PDF decision (and dissent) here.

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