Supporters of stronger intellectual property laws in other countries ought to be careful what they ask for... they just might get it, and then discover they didn't really want it after all. For example, for many, many years, US companies have been screaming loudly about how the US should pressure China to be more respectful of intellectual property. China, for example, regularly makes the "priority watch list" of the USTR's "Special 301" report, which is effectively a catalog of what countries US companies are complaining most about. However, China has suddenly taken an interest in intellectual property in the last few years, and it doesn't seem to be turning out quite like US companies expected.
First, a few years back, we wrote about a high profile counterfeit DVD bust in China, where the "culprit" was actually a rich American. Then, we noticed in 2008 that China was starting to talk about China cracking down on video game piracy, but only when it concerned others copying China's video games. Finally, late last year, we noted that a French company had lost a patent lawsuit in China.
Of course, this isn't a surprise at all. Various studies have shown that greater copyright, patent and trademark protections tend to follow a period of great innovation, when the companies that did that innovation look to protect their position from upstarts elsewhere. In other words, it acts in the exact opposite manner as it's supposed to. It's not an incentive to innovate, but a tool used to stop competition and innovation from others. The situation in China is playing out exactly according to that formula. The country is growing into a bigger believer in intellectual property laws -- but only for the sake of using it to protect against foreigners -- which, we assume, is not what US companies wanted, but which they should have expected if they ever bothered to look at the actual history of stronger intellectual property laws.
Erik Heels, an intellectual property lawyer and a regular Techdirt reader, has put up a nice blog post, explaining why patents rarely make sense for startups (especially if the patents are for software). He notes that, in most cases, filing for a patent is "a waste of time and energy," not to mention money -- not that "your money and time would be better spent hiring programmers, marketers, and a sales force." Indeed. Unfortunately, lots of startups think they need patents -- often erroneously claiming that VCs won't invest without patents. But as many smart VCs point out, having patents for a startup is usually pretty useless. Startups live or die in the marketplace with a product -- and that product is rarely going to wait around for a patent. Focus on building a business, not wasting time and energy on useless patents.
A few days ago, I posted the letter I submitted to the White House IP Czar, Victoria Espinel, concerning her request for comments on the strategic plan for IP enforcement. It was a bit troubling that the questions asked in the RFC focused solely on increased enforcement and the amount of harm done by infringement -- as if it never even occurred to folks that increased enforcement might not be best for culture or the economy, and that there may also be mitigating benefits to infringement. I tried to make that clear in my filing, and it was great to see folks like Public Knowledge and the EFF submit comments as well -- but the really wonderful filing came from the NetCoalition and CCIA, which we discuss below. First, though, it's worth noting that the entertainment industry also made its demands...
The RIAA, MPAA and the Screen Actors Guild teamed up to submit their own filing, and as the LA Times noted "it's a doozy." Consider it a wishlist of protectionist, anti-consumer, anti-innovation policies, basically demanding that the White House prop up their own businesses, because of their unwillingness to adapt:
Among other things, the "creative community organizations" urged that:
The federal government encourage ISPs to use, and companies to develop, monitoring, filtering, blocking, scanning and throttling technologies to combat the flow of unauthorized material online;
Copyright holders be able to combat infringement by making a database of their works available to service providers, rather than submitting individual takedown notices. And once a work is taken down, service providers should be expected to employ "reasonable efforts" to prohibit users from uploading or even linking to them again;
Copyright owners be able to block unauthorized streams of live broadcasts without going through the formal notice-and-takedown process;
The federal government press search engines, social networks, hosting companies, domain name registrars and online advertising and payment networks to cooperate with copyright holders on efforts to combat piracy ("Encouraging these intermediaries to work with content owners on a voluntary basis to reduce infringements, and assuring these intermediaries that such cooperation will not be second-guessed, should be top priories that call for the personal intervention of senior government officials if necessary.");
A federal interagency task force work with industry to interdict prerelease bootlegs of Hollywood blockbusters and crack down on U.S. services that assist foreign piracy hotbeds;
States adopt "labeling laws" that "defined unauthorized online file sharing and streaming as a felony," giving state and local law enforcement jurisdiction to go after unauthorized copying online;
States use consumer protection laws to go after file-sharing sites that "expose consumers to intrusion, viruses and revelation of personal data."
You can read the entire entertainment industry filing below, but be ready to laugh at the highly questionable claims:
However, if you want read something enjoyable you should check out the incredibly long, but ridiculously thorough and brilliant filing from the NetCoalition and CCIA. It's over 100 pages long, but every last page is worth reading. It says everything I wish I could have said in my letter, but does so in excruciating detail, with tremendous sources to back up each point. It kicks off by going through a detailed list of "fallacies" found in the request for comment itself, as well as in the typical complaints from the entertainment industry, including:
The objectivity fallacy: highlighting how the studies from the entertainment industry that pretend to be objective are anything but -- and tend to greatly, if not ridiculously exaggerate the problem.
The lost sale fallacy: of course, demolishing the industry's desire to pretend that each act of infringement represents a "lost" sale.
The causation fallacy: showing how the entertainment industry always places the blame for its problems on infringement, even if there's little evidence to support that any troubles in the industry were due to infringement. Instead, the filing points out that there are many, many reasons why some companies in the industry have run into trouble that have nothing to do with infringement.
The innovation fallacy: dismantling the industry's claim that infringement destroys jobs and discourages innovation, noting that it is historically evident that competition breeds greater innovation than gov't-backed monopolies, which can be shown to create economic rents and dead-weight loss.
The industry size fallacy: a favorite of the entertainment industry, which bundles in all sorts of unrelated industries that just sorta barely are touched by intellectual property (furniture!) to make the industry seem huge, in an effort to imply the importance of extra protectionism. But the filing points out how flawed the methodology is, pointing to the CCIA's own (awesome) use of the same methodology to show that exceptions to copyright contribute more to the economy than the "copyright industries." This part also points out that if the industry really is so big, then it should be well positioned to withstand any challenges...
The equivalence fallacy: picking apart how the entertainment industry likes to lump all forms of infringement into one "evil" bucket, without ever acknowledging that there are very, very different types of infringement, and understanding the differences is key in determining actual harm and any "enforcement" strategies.
The theft fallacy: once again reinforcing that infringement is a different beast than theft, and even the Supreme Court recognizes this... though the entertainment industry seems unwilling to admit it.
The silo fallacy: elegantly highlighting how the industry loves to talk up losses in CD sales, while totally ignoring how other parts of the business, such as live performances, continue to grow. It also highlights how, despite CD and DVD sales dropping, the number of albums and movies being made has vastly increased.
The relevance fallacy: laying out the argument that, even if you accept the industry's claims of losses, they're often submitting aggregate data that includes a variety of different factors and information that may be distorting the direct impact on specific areas, and setting policy based on such aggregate data could be quite damaging.
Seriously, the entire document is wonderful. It feels like it should be published as a book, and should become required reading for anyone ever writing about, litigating or setting intellectual property policy. You can read the whole thing below:
Of course, after going through the fallacies, the filing gets to specific policy recommendations, wisely going back to the ProIP bill's language, highlighting how the purpose of the IP Czar is really supposed to be about true criminal infringement and counterfeiting, and arguing that any enforcement should be focused on those issues, rather than stepping in on civil disputes in what is, effectively, a business model problem. The filing also points out that diplomats enforcing US IP policy around the world are often uneducated in the balance of interests that IP law is supposed to hold, and frequently just push for greater laws and restrictions, without understanding the harm it causes. Along those lines, the CCIA takes the time to express its grave concerns over ACTA -- noting its broad scope and potential harm both in the US and abroad.
The conclusion of the document sums up everything nicely:
The spread of the global Internet has facilitated the unauthorized and at times infringing
distribution of certain forms of intellectual property, especially copyright-protected content. The
ease and minimal cost of copying makes meaningful enforcement costly and difficult. This
widely recognized problem has stirred passionate debate about how the problem should be
handled by copyright owners, the government, and third parties. This problem is amplified and
complicated by the importance of both the content and Internet industries in the U.S. export
market, as well as and demands for the U.S. to assert leadership at the international level. This
creates a danger of rigid, oversimplified policies toward infringement that (a) make little sense in
other intellectual property domains, and (b) undermine the perceived legitimacy of the global
intellectual property system.
The solutions to the real and perceived problems the disruptive technology of the Internet
has caused for certain entertainment and luxury goods companies cannot be solved by greater
government intervention or by shifting more costs to Internet companies. Rather, the solution
lies in the evolution of business models to adapt to the new realities of the marketplace.
Seriously. This is an absolute must read, start to finish.
The folks who created ACTA were already sneaky enough in describing it as an "anti-counterfeiting" agreement, when they knew all along it went way beyond issues related to counterfeiting. For a while, it's been obvious that it was also very much (perhaps more than counterfeiting) about copyright, but it's actually about much more than that. We already mentioned that it is designed to cover patents as well. Now, KEI has looked at another leaked draft document, and notes that the draft sneaks in the fact that it's designed to cover seven different areas of intellectual property. In typical sneaky fashion, it doesn't come out and list them directly, but in the definitions section, defines "intellectual property" as "refers to all categories of intellectual property that are the subject of section 1 through part 7 of Part II of the Agreement on Trade Related Aspects of Intellectual Property Rights." Basically, it's saying that it's accepting the definition in a totally different document, from TRIPs. So, what's in that document?
Copyright and Related Rights
Trademarks
Geographical Indications
Industrial Designs
Patents
Layout-Designs (Topographies) of Integrated Circuits
Protection of Undisclosed Information
Note how little of that has anything to do with counterfeiting -- which is mostly just a trademark issue.
For years, we've written about how Indonesia has been hoarding bird flu samples and refusing to share them with researchers, because they're afraid that someone will come in and patent the cure, based on the samples they provide, and that will make it much costlier to Indonesia to get the vaccine. Of course, the end result instead might be no vaccine at all... It looks like we may be facing a similar issue with Ug99, a fungus that is aggressively killing wheat crops in Africa and the Middle East -- potentially having a massive impact on global food supplies. FormerAC alerts us to an article about the fight against Ug99, where it's noted that Pakistan won't share some important samples with the rest of the world, again out of fear that some big company will patent what they find:
As the breeders keep tinkering, South Asia is bracing for impact. The CDL recently tried to get its hands on a suspicious P. graminis sample from Pakistan that is said to knock out Sr31. But the country is reluctant to share: "Some countries regard isolates of their pathogens as part of their genetic heritage," CDL director Marty Carson says. "I guess there's a fear that we'll patent something off of it."
Well, given Monsanto's history of patenting disease resistant crops -- and then over-aggressively attacking anyone who uses such crops (even accidentally), it would seem like a rather legitimate fear. Perhaps, rather than brushing this fear off, the USDA's Cereal Disease Laboratory (CDL) should work to do something to fix things?
Despite the best efforts by certain participants in ACTA negotiations to keep everything a secret, that's not really working. We've already seen leaks of the documents in progress, but now comes a leak of a document highlighting the actual wordsmithing of some sections, including the specific positions taken by different countries. You can download the pdf directly or see the embedded version here (most of the document should be read in landscape mode, and I don't see any easy way to make that possible in Scribd, so downloading may be preferred):
A lot of what is happening in the document is inside baseball negotiations, but it does highlight which countries are questioning which elements of ACTA. It's interesting (and a bit troubling) that some countries (including the US) seem to want to make sure that certain parts of ACTA don't just cover copyright/trademark but all "intellectual property" (meaning patents as well -- something that had been rumored, but not confirmed). Not surprisingly, the US is using ACTA not as just a counterfeiting enforcement tool, but to wedge in a variety of intellectual property issues into other countries. As you dig into the document, though, you see how much little changes to the wording can impact huge differences. For example, in discussing damages, the US keeps wanting to insert the word "shall" while the EU, Canada and New Zealand want "may" with regards to whether or not there should be statutory damages on infringement, or if it can be limited to actual damages. Basically, it looks like the US is looking to force other countries to set up an equivalent of (much higher than actual) statutory damages, rather than having courts ask rights holders to show actual damages.
Michael Geist has a list of some other interesting tidbits, and Jamie Love has worries about how the damages section 2.2 is much stricter than existing laws, and seems to conflict with existing US laws (but ACTA can't change US law, right? Right?). Love also notes the oddity of the EU crossing out language (inserted by the US, mind you) that would protect "fair use, fair, dealing, or their equivalents."
All in all, documents like these show why these discussions need to be public. Very very minor word choices can have a major impact. And hiding all of that behind closed doors is a huge problem.
As part of the mis-named ProIP act, the newly created IP Enforcement Coordinator (generally called the IP Czar) is supposed to help figure out what an effective "intellectual property enforcement strategy" would be. While we have questions about why this position or this plan is really needed in the first place, here's a bit of good news: rather than just doing the typical consult with industry lobbyists, the administration is, again, asking for public comment (pdf):
This request for comments and for
recommendations for an improved
enforcement strategy is divided into two
parts. In the first, the IPEC seeks written
submissions from the public regarding
the costs to the U.S. economy resulting
from intellectual property violations,
and the threats to public health and
safety created by infringement. In the
second part, the IPEC requests detailed
recommendations from the public
regarding the objectives and content of
the Joint Strategic Plan and other
specific recommendations for improving
the Government's intellectual property
enforcement efforts. Responses to this
request for comments may be directed to
either of these two parts, or both, and
may include a response to one or more
requests for information found in either
part.
The link above has more details, and the comments are due by Wednesday, March 24, 2010.
Now, I know when I posted my comments submitted to the USTR about the Special 301 process, a number of commenters wondered if the USTR would care, or even bother to look at, let alone consider, comments from the public beyond industry lobbyists. It is a valid concern. And while I do still wonder how much public comments will play a role in the actual strategy (compared to industry responses), in this case, the IPEC specifically reached out to Techdirt to let us know about this request for comment, to see if we would be interested in alerting our readers of their opportunity to take part. Now, the cynical response is that this is just window dressing -- and it's a lot easier to ask for comments from the public than to listen to them, but the fact that they are specifically reaching out to this community (among others) at least suggests an interest in what folks here might have to say. With that in mind, I'm hopeful that some of you will take the time to submit thoughtful comments on the subject.
Bas Grasmayer points us to a blog post by Christian Engstrom, an EU Parliament member (yes, from the Pirate Party) who notes that while he was in a committee trying to address whether or not an "IP Observatory" should be created, he discovered it already existed. The Observatory appears to have been set up not to promote progress or even to make sure that intellectual property was a net benefit, but instead it appears to just start from the unproven premise that of course it's a net benefit, and thus it's only focus should be on stomping out infringement. And, of course, it appears that most participants are actually from industry, with a few "nominated representatives from Member States" along for the ride to give the Observatory a sheen of legitimacy as a quasi-gov't organization, even though it appears like just another industry association. Engstrom finds the whole thing baffling:
So much for the involvement of the European Parliament on this issue. We have been invited to hold an exchange of views in the JURI committee, and we are currently spending time on drafting a resolution on if and how the IP Observatory should be set up.
But before we (the parliament) were invited to join the discussion, the decision had already been taken, and the IP Observatory had already been set up and started working. It's just that the representative of the Commission forgot to mention this detail when she was presenting the initiative to the JURI committee.
You may remember last year that the Conference Board of Canada (who, until then, was pretty well respected) released a report on "intellectual property policy" that was blatantly plagiarized from US copyright industry lobbyists. While the Conference Board at first insisted that it stood by the report, eventually it recalled three reports and admitted that they "did not follow the high quality research standards" of the organization. Many months later, it appears that the replacement report has been released, and it's much more balanced. I still think there's plenty in the report that doesn't make much sense to me, but it's significantly better than the totally one-sided, blatantly plagiarized piece from last year.
In the past, we've seen various attempts by people to claim they had some sort of intellectual property right over a TV show or movie about them, but those claims rarely get very far. We've also seen people in prison with too much time on their hands suddenly claim IP rights over their name or likeness. Now, it appears that convicted terrorist Carlos the Jackal (Ilich Ramírez Sanchez) has decided that his life is his own and no one else can report on it without his approval. CitMediaLaw alerts us to the news that Carlos' wife/attorney has sued the production company of a documentary about Carlos' life. She is demanding that the master copy be given to them as soon as it is done, and that she and her husband get to review all the content and demand changes. It seems unlikely that this gets very far, but it's yet another symptom of our age when people begin to think that pretty much everything can be "owned" via intellectual property.
