August 2007

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I’m heading to Poland this weekend to speak at the Krynica Economic Forum, the most prominent public policy conference for Central and Eastern  Europe. My organization, ACT, is sponsoring a daylong session on public policy and innovation, on which I’ve organized four panels:

  • Localizing the Lisbon Strategy – How to Cultivate Innovation Ecosystems
  • Open, Closed or Somewhere In-Between? The Future of ICT and Software Innovation
  • Copyrights and Patents – Incentives for (or Barriers to) Innovation Creation?
  • Distributing Your Innovation: Avoiding Trade Barriers in a Flat World

We’re fortunate to have some top-notch speakers, including the Vice-President of the European Commission Gunter Verheugen, the Assistant Director of the World Intellectual Property Organization Francis Gurry, prominent open source advocate Larry Rosen, and Federico Etro, a professor at the University of Milan and President of Intertic (an International Think-tank on Innovation and Competition).

"Do Napisania" w Polsce (I’ll be writing from Poland)

You’ll have to listen to the latest Tech Liberation Front podcast to get the full
thought-provoking discussion on copyright law and the first sale doctrine, but
let me tease out a portion of the discussion on extending the first sale to apply
to use in addition to transfer.

The main focus of the podcast is a case Fred von Lohmann and EFF are defending concerning the "first sale" doctrine of copyright law. Fred describes first sale on the EFF website:

The idea, set out in Section 109 of the Copyright Act, is simple: once you’ve acquired a lawfully-made CD or book or DVD, you can lend, sell, or give it away without having to get permission from the copyright owner. In simpler terms, "you bought it, you own it" (and because first sale also applies to gifts,
"they gave it to you, you own it" is also true).

While Fred’s right when he says "you bought it, you own it" that doesn’t mean you can do anything you want with a copyrighted work. First sale
currently only applies to transfers of the copyrighted good. Fred said in the podcast that he would like to see the first sale doctrine expanded into the area of "use."  Extending it to use means content owners
couldn’t use a copyright license to enforce certain use restrictions, such as the sharing and presentation of copyrighted material. Although this wasn’t mentioned on the podcast, I think this would have the effect of expanding "fair use." 

Fred surely thinks this liberal copyright world would benefit consumers and society writ large – but it would come at some costs, too. The reality is that content creators would impose use
restrictions in other ways, especially for legitimate price and market segmentation (ie. for software, discounted OEM copies are often labeled "not for resale" to avoid competing with the normal retail channel). This would have to be done by using contract, not copyright law.

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I’ve written much about the potential “chilling effect” associated with over-zealous FCC regulation of speech. Some people doubt that the FCC’s regulatory wrath is really so severe that media operators will censor important programs for fear of being fined afterward. But we know that that is exactly what happened with a 9/11 documentary last year when CBS decided to censor the remarks of firefighters under duress. Imagine that, firefighters were swearing as the disaster unfolded! But apparently we need to have history whitewashed for our benefit. Absurd.

And now it’s happening again.

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We’ve talked about muni wi-fi problems here before. (Here, here, here, and here). Here’s another one to add to the list. The Chicago Tribune reports today that:

Chicago is curtailing its digital dreams, deciding to back away from municipal Wi-Fi service after failing to reach agreement with either of two companies that sought to build a wireless Internet network in the city. The move comes as municipal broadband wireless projects around the country face difficulties, and EarthLink Inc., a major player in the field, is re-evaluating its future in municipal Wi-Fi.

And here’s the key line from the piece:

[T]echnology is advancing and the cost of online access for consumers is declining so dramatically that Chicago has other avenues to promote more use of the Internet. As a result, the Wi-Fi deal lost luster when negotiations bogged down, according to sources close to the matter.

In other words, markets are working.

I thought I’d continue the conversation Tim started a few days ago about utility trenching and libertarian property rights theory by starting a new post since this issue is quite interesting to me and I’d like to keep the conversation going.

In response to Tim’s essay I argued that: “Property rights are flexible at the margins… They have to be to ensure a well-functioning society,” and that… “Similar flexibility is necessary to ensure that various types of networks get built (sewage lines, sidewalks, gas and power lines, and even communications systems).” Thus, we allow occasional trenching in people’s yards to ensure that that happens.

In response, Tim says:

I’m having trouble seeing a principled difference between that and the “open access” regimes we libertarians criticized in the 1990s. The only difference I can see is that the open access regulations of the 1990s infringed on the property rights of the ILECs rather than the property rights of millions of homeowners. It’s not clear to me why one would be less objectionable than the other.

My response: There is a world of difference between a utility (or a city) digging up one’s yard, sidewalk, or street corner every once and awhile and the open access regimes of the 1990s and the present, which demand the full-time surrender / confiscation of private property to achieve the hubristic goals of economic central planners. The former (trenching) is a short-term inconvenience with significant long-term benefit. That latter (forced access regulation) gives rise to a massive regulatory regime that requires ongoing policy interventions and price controls. Forced access destroys the incentives to innovate and invest in new networks or network expansion. Trenching–and the momentary inconvenience is causes–does not. It allows for network expansion. Forced access regulation discourages it.

When we were both at Cato, Wayne Crews and I wrote an entire book about these issues entitled “What’s Yours Is Mine: Open Access and the Rise of Infrastructure Socialism.” We go into these issues in greater detail in that book.


Lately I’ve been writing about the Electronic Frontier Foundation’s new First Sale Doctrine case, which will consider whether it’s copyright infringement to resell those “promo CDs” that record labels send to DJs, journalists, and others in the hopes of drumming up publicity. Universal Music says that such sales amount to copyright infringement, but EFF’s Fred Von Lohmann charges that UMG’s lawsuit runs afoul of the First Sale Doctrine.

Fred joins us for this week’s podcast along with Prof. Randy Picker of the University of Chicago to discuss the legal and policy implications of the case. In a wide-ranging discussion, they covered the differences between contract and copyright law, the implications for the software industry, and whether the GPL runs afoul of the First Sale Doctrine. TLFer Braden Cox also weighed in, and Adam Thierer hosted.

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I agree with Jack Shafer about this:

Upon waking, I’m delighted to desack the morning papers, discard the never-read sections—classified, food, home, travel, real estate, health—and arrange the buffet before me. But even if all I’ve pre-read from the Web are the Page One headlines, the print stories don’t really pop out at me unless they’re packaged with a terrific photo I haven’t seen before. Horrible as it may sound, on many days the newsprint front page tastes of already chewed gum.

I’m not the average reader, but anecdotes convince me that the average reader is becoming more like me every day—reading tomorrow’s news today. This time-shift is as historically significant as the great migration of newspaper readers from afternoon to morning dailies, or the adoption of AM news radio by sequestered commuters. Where the newspaper was once considered the day’s complete news, it’s now just all-the-news-that-fits. The genuine news enthusiast trolls the AP wire, foreign news sites, and the usual aggregators for the biggest picture.

I think, however, that Shafer gives newspapers too much credit later in the piece:

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Responding to Skube

by on August 30, 2007 · 2 comments

An excellent counterpoint to that godawful piece on the alleged deficiencies of the blogosphere. NYU professor Jay Rosen provides a long list of examples in which the blogosphere did high-quality reporting on subjects ahead of the mainstream media.

Hat tip: Radley, who correctly notes that he’s done some amazing investigative reporting of his own.

Ars reports on an especially egregious case of patent trolling:

The patent, titled “Automatic message interpretation and routing system,” is unsurprisingly general. It was filed in 1998 and awarded to a company called Brightware, Inc. in 2002, and it basically describes an autoresponder. “The method for automatically interpreting an electronic message may also include the step of retrieving one or more predetermined responses corresponding to the interpretation of the electronic message from a repository for automatic delivery to the source,” reads the patent.

Polaris accuses Google of “actively inducing infringement” on the patent and contributing to the infringement of others by implementing its own automatic e-mail responder within the company. Amazon, Borders, AOL, and all of the other named defendants are accused of the same. “As a result of these Defendants’ infringement of the ’947 Patent, Polaris has suffered monetary damages in an amount not yet determined, and will continue to suffer damages in the future unless Defendants’ infringing activities are enjoined by this Court,” reads the complaint seen by Ars Technica.

This is ridiculous. Auto-responders have been a common feature of email systems for decades. Here is a Usenet message from 1985 that mentions Sendmail’s “vacation” feature, which provided that functionality. Here is anther guy in 1985 who didn’t have access to sendmail so he wrote his own auto-responder. Both of those programs perform the “step” of “retrieving one or more predetermined responses corresponding to the interpretation of the electronic message from a repository for automatic delivery to the source.”

Those took me 5 minutes to find. It looks like prior art to me (presumably you could find documentation from the relevant version of sendmail detailing its features if the descriptions in these postings are sufficient). So why isn’t there a quick and easy way for Google to get this patent invalidated (or at least the lawsuit dismissed) before thousands of dollars are wasted on lawyering?

I earlier promised some graphs to illustrate a parable about copyright’s future. I’d like to start, here, by offering a picture of the standard economic model of IP. (Attentive readers may recall that whereas other use “IP” for “intellectual property,” I use it to stand for “intellectual privilege“). See figure 1, below:

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