The Free Market Case For Patent Reform

from the let's-start-with-it's-not-property dept

A modest attempt at patent reform (mainly targeting egregious patent trolling practices) is making its way through Congress these days at the usual glacial pace. However, even if it does eventually make it through, there is still a tremendous amount left to do on patent reform. Derek Khanna, who famously wrote the wonderful House Republican Study Committee report urging major copyright reform -- which so upset Hollywood that favors were called in to get the entire report retracted and cost Khanna his job, has now tried to write a similar report on patent reform. This one is for Lincoln Labs -- a think tank trying to present more free market/libertarian ideas into the technology policy arena.

As Khanna notes in this new paper, it's unfortunate to see many conservative groups have come out against patent reform, often based on a misuse of the word "property."

Recently, several conservative organizations— many of whom receive funding from industries with vested interests—have tried to preempt any form of patent reform by arguing how patent reform would violate their “property rights.”

Nothing could be further from the truth: janitors do not have “property” in how to clean a building; Apple does not have “property” in rounded rectangles and “slide to unlock”; Amazon does not have “property” in one-click checkout; Priceline does not have “property” in the concept of reverse auctions; Microsoft does not have “property” in squiggly lines when you mistype a word; Smuckers doesn’t have “property” in peanut butter and jelly sandwiches, anymore than a known patent troll has a “property” in the entire practice of podcasting; certainly no one ought to have “property” in the concept of the hyperlink; and we should probably all agree that no one ought to have “property” in the idea of exercising a cat by using a laser pointer.

Instead, as we've noted for years, patents are a form of a monopoly right, and for those who claim to support the free market, you'd think they'd be very concerned about a slew of government granted monopolies (being granted at an ever increasing rate these days -- to the tune of hundreds of thousands a year).

Khanna also points out, rightly, that this massive rise in patent monopolies is a form of crony capitalism, used to keep out competition and to hold back free markets. He compares it to other highly regulated markets where it's quite obvious the regulations have little to do with the stated purpose, but now are designed mainly to protect those who already are in power.

As Khanna points out in the report, "more patents" does not equal "more innovation." If there are too many patents, it will only serve to clog the field and limit a vast amount of innovation. Thus he suggests there'a "curve" of patent optimality, and it's important to consider that in designing a patent system. While the chart is a bit of a broad generalization (especially since different areas of innovation appear to react differently to different levels of patenting), the point is rather important, because too many people simply assuming that more patents automatically means more innovation.

So how do we reform all of this to make the system work better? He has a bunch of suggestions (some of which are already being considered):

1. Increase patent quality requirements: There's a lot of detail in the report about how this can be done, and it's incredibly important. The incentive structure of the current patent system today encourages allowing crappy patents, which is why a huge number of patent applications are eventually approved. One important sub-suggestion in this arena is in fixing the "prior art" setup. Right now, patent examiners are not allowed to do crazy things like search the internet for prior art. Instead, they focus on older patents and journal articles. But in lots of areas, such as programming, that misses tons of prior art.
2. Make patent applications accessible and require them to actually teach: Patent system supporters will often tell you that the true purpose of the patent system is to "disclose" the invention so that others can use it (either by license during the patent term or by anyone after). But, for many (especially in the software field) that's a joke. The patents almost never reveal anything useful at all in those fields. Khanna suggests a higher standard such that the patents actually do need to be useful to others in the field. That would be tremendously helpful.
3. Reduce or eliminate business method and design patents: A large number of the worst patents are "business method" patents that are often just patenting common sense. There is no reason for this. Design patents are so similar to trademark law that most of the reasons for design patents can and should be covered by trademark law instead.
4. Create an independent invention defense: This is my own personal favorite and the most important fix in my own list of recommendations. The idea that someone who came up with an idea entirely on their own isn't allowed to make use of their own invention seems like a much bigger "property rights" violation than invalidating bad patents. This would solve many of the worst problems of the patent system today, since so many shakedown efforts have absolutely nothing to do with copying, but just multiple people coming up with similar concepts.
5. Loser pays: Also known as fee-shifting, this is a key component to patent reform that is currently on the table today to scare off frivolous patent suits that are just designed to shake people down.
6. Speed up the patent approval and rejection process: Unfortunately, the report doesn't have much in the way of details as to how this would be done -- but I would argue that if most of the other recommendations were put in place, this wouldn't be much of a problem, because there would be a lot fewer bogus patent applications to deal with.
7. Couple the US patent system with other systems to encourage innovation: The key idea here: look for things like the famous "x prizes" to incentive big bang innovations, rather than patents. This is an idea that's been out there for a while, and has support from a number of Nobel Prize winning economists. The UK just recently endorsed this idea as well. It's also pretty non-partisan, seeing as the biggest supporter of such an idea in Congress is Senator Bernie Sanders.

It's a really good report and well worth reading. It is lacking a couple of my own favorite suggestions, though. I still think we need to go beyond just an "independent inventor's defense" to the point that independent invention is seen as a sign of obviousness. Patents are only supposed to be granted if the invention is considered "non-obvious" to a person who is "skilled in the art." If we're seeing multiple people "skilled in the art" coming along and inventing the same damn thing, that certainly seems to suggest obviousness to me. Thus, if there is widespread independent invention within a short time frame, without any evidence of knowledge or copying, it should stand to reason that any such patents are invalid. This would clear out a ton of the problem patents.

It's unfortunate that some free market supporters have hijacked the story of patents to pretend that they're about the free market, when they're really about the opposite. Papers like Derek's hopefully move things back in the other direction.

Filed Under: derek khanna, independent invention, patent reform, patents

New Paper Says It's Time To Reasonably Decrease Copyright Term And Rethink Putting Copyright In Treaties

from the good-stuff dept

A couple years ago, a Congressional staffer named Derek Khanna wrote a fantastic policy brief on copyright, arguing for a variety of sensible reforms, including bringing copyright term downward to a much more reasonable level. You know what happened next. Hollywood went ballistic and called on its favorite politicians, who attacked the report and Khanna, leading to the report being yanked -- despite having gone through a full review process -- and Khanna not being retained in his job.

Since then, Khanna has been working on a number of policy and advocacy campaigns and, working as an R Street Associate Fellow, he's put together a fantastic paper that delves much deeper into the copyright term issue and argues convincingly for greatly reducing copyright term length and also revisiting whether or not copyright should even be included in international treaties. The full paper is well worth reading, detailing just how distorted copyright has become from its original purpose.

The paper does a great job talking about how a return to more original copyright principles makes sense. Furthermore, it notes that there is no credible economic evidence that longer copyright terms are good for the economy or the public, and in fact, nearly all of the actual evidence says quite the opposite. It discusses the increasing clout and power of the Hollywood lobbying industry which has made copyright term extension a regular feature, based on FUD and fears about how terrible the world would be if there were a thriving public domain. And, of course, on the flip side, he details the many, many problems created by copyright that is way too expansive, including orphan works, culture disappearing and basic censorship.

The disparity between the founders’ copyright of 14 years and modern copyright terms that last longer than anyone could ever be alive, is particularly glaring to modern audiences. This is because there has been more research on the cost of these ridiculously long terms, but also because today everyone is a content creator in a way that average people were not in the early 20th century. Justifying why our personal e-mails, Facebook posts and tweets should be protected under copyright for our lifetimes plus 70 years doesn’t seem to meaningfully fulfill the constitutional mandate of promoting the progress of the sciences.

Further, social norms on those forms of creation differ extremely far from what the law is. Of course, this does not justify large-scale piracy, but social norms are such today that forwarding an e-mail from a friend is not perceived as a potential legal problem. However, under many readings of the copyright statutes, your e-mails are copyrighted and forwarding an e-mail without permission, especially if the e-mail says not to forward it, could be copyright infringement, making one liable for a $150,000 fine.

The paper also takes on the current negotiations on the Trans Pacific Partnership (TPP) agreement, in which some have looked to extend copyright even further, while others (including the US) appear to want to lock-in the current life+70 as a minimum, even as many (including the head of the Copyright Office) have suggested that we may want to think about cutting back copyright term length. The report shows how things like the TPP can interfere with legitimate copyright reform:

If the White House signs a treaty that makes such reforms impossible, that would have significant deleterious effects on the reform effort. By removing any prospect of reform from the table, it would be a nearly unprecedented policy coup for the content lobby in their attempt to effectively repeal the Constitution’s Copyright Clause.

The TPP, as leaked, is a clear illustration of policy laundering. Special interests can’t defend life+70 copyright terms in the United States, so instead they use an international treaty-making process to tie Congress’s hand. The content lobby has done this effectively with numerous other treaties; this has been their modus operandi for decades. But unlike other treaties involving copyright and patents, this treaty process has been subject to unprecedented secrecy: even members of Congress initially were unable to access the treaty

Of course, this doesn't even get into the fact that part of the reason copyright terms are so long is an international agreement from over 100 years ago: the Berne Convention Treaty, which is a massive impediment to necessary copyright reform. And yet, rather than fix that, it appears that the US government is seeking to extend it even further through other agreements.

Either way, the paper is a great read and well worth your time.

Filed Under: copyright, copyright term, copyright term extension, derek khanna, tpp, treaties

Techdirt Interview With Derek Khanna, Author Of The RSC 'Fix Copyright' Policy Briefing

from the now-that-he-can-talk... dept

By now you're probably familiar with the name Derek Khanna. The young Congressional staffer who, as a part of the Republican Study Committee, authored one of the most forward-looking policy briefs on how the copyright system is broken, and suggesting some ways to fix it. While it took less than 24-hours for outrage from certain corners to lead the report to be pulled, it has generated a ton of discussion. Khanna himself has only been able to participate on the periphery of the discussion given his job -- but thanks to some of the legacy entertainment industry's favorite politicians, Khanna was not retained. Of course, there's been significant interest in what he's had to say, and since he's officially out of a job as of late last week, he's now free to speak out.

What made you write the now-pulled policy brief on copyright?

I have always believed that being a public servant means that I have an obligation to the citizens to be an agent of change within the system by reforming it on a daily basis. Simply being part of a dysfunctional system without advocating for new, innovative, common-sense solutions makes you part of the problem. And as a professional staff member with the House Republican Study Committee (RSC), I was told to push the envelope developing new conservative policy solutions. Specifically we were told to look to ideas that may have been discussed or written about by conservative organizations – copyright reform was one such idea.

I've always been interested in technology issues, having built my own computers and dabbled in web programming. So I was particularly interested in how the internet and technology in general has changed the way that we view copyright law. Technology has enabled a large amount of piracy, but also a large amount of new technologies that have forced us to revise how we interpret copyright. Buffering or temporary copies of works could technically be copyright violations but courts have interpreted them not to be. A good example of this is with Google's image search function where it provides small version of images across the web – some of which are copyrighted – precedent has had to adjust to largely allow that as fair use (Perfect 10 v. Google). As conservatives, we are generally disposed against court intervention which is commonly critiqued as judicial activism, but to avoid that sometimes the best solution is for the law to keep up with the technology.

So being familiar with technology I found this a fascinating area of law where our current regulatory structure was ineffective and counter-productive. I've always been interested in fighting for disruptive innovation which I believe is critical for economic growth, and I think in copyright in particular we have codified a system that makes a lot of innovative market models impossible or prohibitively difficult. To me this was a clear example of favoring free markets over a government imposed regulatory structure designed to support one particular industry.

I believe that we need creative destruction of failed ideas and a thriving competition of promising new ideas. So I believe that copyright is a perfect place to start this creative destructive by reforming a defunct and counter-productive legal structure with a sensible policy that fosters innovation.

For many who are outside the government, it's rare to see any indication that those within the government recognize that these are big issues that impact so many of us. Do you believe these ideas are finally reaching decision makers in Congress after so many years of being on the outside?

Yes I think SOPA was a watershed moment. Now, whether reaching them will manifest itself in substantive action is a different question. Also I worry that some may think that SOPA meant merely that that law was bad, rather than this law is really bad and there are technology issues/regulatory schemes such as copyright law or patent law that should be fixed.

Copyright has often struck me as a "non-partisan" issue -- though that's often meant that it's really been bi-partisan in favor of strengthening the system, rather than fixing its problems. Do you think there's a partisan angle to copyright reform?

The brief was written for a conservative audience. I'm familiar with other arguments on the left, but that wasn't the focus of the memo, and I think the arguments are stronger on the right.

Conservatives are big believers in Constitutional fidelity, support a limited federal government in size and scope, and are generally skeptical of regulatory structures, particularly when they are written by a particular industry or interest group.

So I think the issue is well suited for conservatives to take on – and many conservative organizations and conservative legal scholars have come out in favor of copyright reform as a result. The support that the brief on copyright reform generated within the conservative movement indicates that copyright reform is an issue waiting to be brought to the surface.

There is a conservative consensus that our copyright law is ineffective. We can quibble on how to fix it, and that's important, but some of the parameters of the problem are very apparent to almost all conservatives with familiarity on the subject.

How important do you think copyright issues are for the economy?

I think you can argue that other technology issues are even more important, such as patent reform. But copyright issues have a significant impact upon our economy. We may never know the innovation that our current system is stifling, but in the example given on the DJ/Remix industry, that presents one, albeit relatively small, industry where significant commerce opportunities exists as well as export opportunities.

Copyright law is a very blunt instrument, it's effectively granting a government-imposed and subsidized monopoly over creation of content and most derivative works for over 100 years, so we have to be very careful in how these laws are crafted. Because it is currently crafted so poorly, it can create large negative consequences to the economy and for free speech.

What do you think needs to happen for real copyright reform to become reality?

From President Obama to the Tea Party, we have seen that an energized and engaged citizenry can elect candidates in grassroots movements. And we have seen that they can stop legislation in its tracks. As the one year anniversary of the SOPA legislation approaches, I have optimism that there is potential for major change on copyright. Members' sudden, vocal opposition of legislation that they were co-sponsoring was nothing short of a watershed moment.

That show of force during SOPA was impressive. But actually getting legislation on the table for consideration requires another level of activism.

A similar coalition can develop and mobilize in favor of a sound copyright structure that provides large incentives to content producers while allowing new and innovative industries to thrive and allowing all content to eventually enter the public domain (upon the expiration of the copyright term) – thereby allowing anyone to learn from great works of literature or build upon scientific inquiry while still preserving large incentives to content producers.

A digital generation is ready to change politics and policies, and they will succeed. It may take some time, but they will do this by rallying behind new ideas, coalescing around legislation, and leading a campaign for passage. Alternatively, there are several battles where this coalition can stop bad intellectual property bills already in the pipeline.

It is up to us, the public, to be engaged. If we are not satisfied with our policy makers and the policies that they enact . . . we can actually change the policies by challenging our policy-makers.

In talking to many elected officials, it's always seemed that many of them really do want to "do the right thing" on these kinds of issues, but the old story is so pervasive that it's hard to get past that, or to convince them that things aren't quite as they seem. How do we get past the myths?

Good question. SOPA is a perfect example of an answer. A concerted movement by a large number of people can have a significant effect. But also the conventional processes of Washington should have more players in the room and at the table arguing in favor of sensible policies on technology issues.

Personally, what can you say about the reaction both inside and outside Congress to your paper?

I was surprised to see how many conservative organization supported copyright reform, and I was gladdened to see a substantive discussion on some of the issues. The memo was not meant to be the final answer, but rather to put a series of ideas on the table.

At the RSC we weren't allowed to peer review our work, so I was hoping to receive substantive feedback from outside groups after the report went out before we could try to get it into legislation. And then once written in legislative text, we would then work with a Member of Congress to introduce it – which may involve further refinement to the text. Then there is the committee and hearing process. So it was really intended to be the opening legislative salvo on this topic for internal discussion within Congress rather than a final professional report for the general public. But that being said, I'm very happy that average people have been able to read, debate and discuss these issues nonetheless.

Inside Congress, I received comments from a number of staffers whose bosses were interested in this idea, and a few who even reached out asking for ideas on patent reform.

Do you think the RSC pulling the paper actually helped gain it more traction and publicity? Both inside and outside of Congress?

No comment.

One of the critiques of the paper focused on the claim that your suggestion to shorten copyright term length with a series of (increasing) renewal fees might violate the Berne Convention. This is an issue that comes up quite a lot in talk about copyright reform. What are your thoughts on that? Should reform efforts look at dumping Berne, or look at ways to do it within the Berne limits?

I was obviously very aware of the Berne Convention aspects. This doesn't bother me one bit. The paper was supposed to be short, simple and accessible (no footnotes). There were many technical details and sourcing that were purposefully not put in because the point was to discuss the issues within Congress – and of course in conversations after the report (as to discussing actual legislation) we would discuss the Berne Convention aspect. I fully planned upon a long term process involving Berne including an entire hearing dedicated to the Berne Convention elements.

The Constitution says that Congress can establish copyright terms for a limited period of time. Codifying the definition of "limited" within an international treaty was extremely controversial at the time. If we agree that the best system for incentivizing content creation is different than the Berne Convention, then we have three choices: 1) we can reform the Berne Convention, 2) stay within the minimal requirements of the Berne Convention, or 3) leave the Berne Convention. Under the Constitution, copyright law is a domestic policy that should be decided in this manner.

Another issue that has been debated back and forth (for years, but renewed after your paper) is the question of whether or not "copyright" is "property" in the traditional sense. Your paper took a strong position that this was a myth. Have you followed any of the ensuing debates? Has that impacted your opinion? Do you think this is just a "religious" issue, or that people can come around to realizing that copyright is very different than property?

The paper specifically said that intellectual property's purpose, under the Constitution, is different from that of other property rights. I've closely followed the debate on this issue, but the evidence is quite convincing that copyright is different from traditional property, and that's the dominant conservative position – but even if it's not – the Constitution provides one specific purpose for this right.

There are different types of property and property rights. They are not all the same. Tom W. Bell, Professor at Chapman University School of Law, would remove the entire word "intellectual property" and use the term "intellectual privilege." It's an interesting idea, not that I am fully endorsing it, and you can read about it in Jerry Brito's compilation Copyright Unbalanced.

But traditional understandings of property were very different from that of including copyright. Copyright may have some or even many of the same features of conventional property – but that doesn't mean that the purpose is the same.

Copyright is different from property in the traditional sense. John Locke is sometimes sourced and used to justify copyright being property. But in his Second Treatise Locke declines to give anything of that nature among his illustrations. And he described the copyright of his time (the Licensing Act maintained by the Stationers' Company) as a "manifest . . . invasion of the trade, liberty, and property of the subject."

As Tom W. Bell explains, "Copyright has property-like features, granted; copyrighted works can be registered, bought and sold, licensed, donated, mortgaged or abandoned." But unlike other property it exists through statute which can change with lawmakers' decisions, and unlike other forms of property it must expire after a specified time.

Jerry Brito, Senior Research Fellow at the Mercatus Center at George Mason University, also takes a crack at this:

“In contrast to traditional property, copyright was created by the Constitution; it did not exist in the common law. Without the Constitution's copyright clause, there would be no preexisting right in creative works. What's more, the copyright clause does not recognize an inalienable right to copyright, but instead merely grants to Congress the power to establish copyrights. Copyright therefore stands in contrast to traditional property in that the legislature has complete discretion whether to grant the right or not. . . [Further the] copyright clause allows Congress to establish copyrights for 'limited times' only. This means that unlike traditional property, copyrights must cease to belong to their owners at a certain point.”

This is a position that Congress has even weighed in on previously:

“The enactment of copyright legislation by Congress under the terms of the Constitution is not based upon any natural right that the author has in his writings . . . but upon the ground that the welfare of the public will be served. . . . Not primarily for the benefit of the author, but primarily for the benefit of the public, such rights are given. . . .” (H.R. Rep. No. 60- 2222, at 7 (1909))

There are a lot of weeds to get through on this, but the important point under the paper is that copyright is constitutionally limited and constitutionally for a specific purpose.

What other tech policy issues do you think are important these days?

Patent law is absolutely critical. Today's patent law is an invasive regulatory scheme that appears almost designed to stop many forms of innovation. American growth has been fueled by innovation, and until we get this right, we are going to be at a major disadvantage. To be clear, I completely support patents and they are absolutely critical to many industries, but we have a large number of patents on non-novel ideas such as a patent on rounded rectangle devices. Patent law may need to be adjusted differently for different industries. The point is to create sufficient incentive to create new content, rather than to patent non-innovative discoveries to limit your potential market rivals. The recent New York Times article The Patent. Used as a Sword, though it has its critics, provides an interesting perspective of some of the vast problems.

As I wrote in my piece in the National Review, I think we can do a much better job in allocating visas to high-skilled workers – and I think there is an actual way to accomplish that goal as outlined in the article or other ideas along a similar thought process (perhaps by providing greater help for small businesses acquiring H-1Bs).

Spectrum is discussed and obviously important. We are witnessing an explosion in use of our mobile devices which will be a major market opportunity for app developers but also a major challenge to fulfill the spectrum needs.

Cybersecurity will continue to be a massive issue taking up a lot of political oxygen on technology issues. Since I've been on Capitol Hill there has been an attempt at solid cybersecurity legislation and last year the House passed Chairman Roger's CISPA legislation (which I provided a lengthy analysis on for the RSC -- it is mainly information sharing) and also a few other cyber-related bills, but the Senate didn't pass that legislation and had its own approaches. So that will be one of the first issues up for discussion in the 113th Congress – particularly with the expected Executive Order from the administration. I have done a lot of work in the cyber arena, and have a paper on how cyber-war affects the War Powers Resolution, which I'm trying to publish now, so this is an area that I'm closely following.

I think there are many privacy issues as well. A large portion of people's lives are shifting to the cloud, yet our laws don't seem to reflect that yet – Sen. Paul's amendment to FISA was one such attempt to try to deal with the problem of third party records.

In the recent US v. Jones case, where a warrantless GPS device was used for a number of weeks, it presented a stunning example of the privacy implications of current technology (as was discussed primarily in the concurring opinion). Luckily, the prospect of the FBI tracking all of our cars by GPS devices under our car is highly improbable – if nothing else from a resources perspective – but it's not difficult to imagine a near future world where traffic cameras, aerial vehicles, or even satellites with sophisticated software could analyze and database where our cars have been every single day at every minute – all without a warrant. This may or may not be a Fourth Amendment search/seizure, but it certainly can be addressed through legislative action as was done with ECPA in an earlier time.

Another case, Florida v. Jardines, presents a situation where an officer used a sniffing dog outside their door without a warrant and whether or not that is a search. The court has previously held that you have no privacy expectation to contraband, and held that the dog sniff is not a search for this reason (as it only reveals contraband, even though the evidence is more murky). If a dog sniff is not a search when performed at the house because it only reveals contraband, why would not a device that takes air samples and only reveals the existence of contraband (eg., drugs)? Kyllo deals with some of the issues of new technology, but doesn't seem to come to a good explanation of why one would be prohibited and in that case part of the holding appeared to hinge on the fact that other non-contraband information was revealed that we have a privacy interest in. Under the government's argument in Jardines, police could use dogs to sniff each and every person's house to look for contraband, and by implication they may be able to use a technological device to do the same thing, assuming it doesn't run afoul of Kyllo.

So new technology will create a large number of new privacy issues and it's incumbent upon Congress to stay on top of these trends and ensure that our laws are up to date and protect our privacy interests while not creating onerous requirements upon the private sector.

But there are many other technology issues that people don't normally think of as technology issues. I'm interested in government transparency because the internet should make government information accessible to everyone. As a simple example, all FOIA'd documents should be available online. Eventually all government documents (with perhaps a few narrow exceptions) should automatically go online without requiring the FOIA process. Cato did an analysis on government transparency and the federal government basically failed across the board – Congress in particular. Congressional Committees generally do a poor job of providing accessible information on their hearings, navigating the world of law-making is often difficult for people outside of Capitol Hill because it's still not fully accessible online. Jim Harper of Cato has done good work on trying to make legislation "machine-readable" so that it can be searched and cross-referenced – these are positive developments. But most government websites can do a better job as well.

In addition, technology has created new market models and disruptive innovation that sometimes rubs against current regulatory structures designed to protect current market players. Uber is a particularly stunning example of this situation, and I think it's critically important that new market models like theirs are allowed to thrive. James Allworth wrote an interesting article on some of these types of issues for the Harvard Business Review. So I think that even these examples are "technology issues" in some sense.

What's next for Derek Khanna?

I am doing a lot of writing for January. My piece for Cato Unbound should be out by now on copyright issues that will have a number of interesting voices on the topic. I have a chapter in an upcoming book, and will be a regular online contributor in several major outlets such as the National Review, Forbes and Bloomberg View.

I have also formed a 501c4 organization to continue to work on many issues of reform, particularly in the technology arena, that I'm interested in.

And I hope to help with Fixcopyright.com and some of the activism on the #fixcopyright movement. I hope others will join us and continue to debate and discuss these major issues.

My goal is to work within the system and outside the system to help reform the system – and I have every intention of working even harder towards accomplishing this goal.

If people want to get involved or have other ideas feel free to reach out to me at @Dkhanna11.

Filed Under: copyright, copyright reform, derek khanna

Let Congress Know That Now Is The Time To Fix Copyright, Not To Put Their Head In The Sand

from the mpaa-provides-such-nice-sand,-though dept

Perhaps the most amazing thing about the Republican Study Committee report on copyright reform by Derek Khanna isn't so much that it was one of the sanest pieces about copyright written from within a government, or that it was withdrawn so quickly after being published, but that Congress' response to the whole matter has been to stick its collective head in the sand and try to pretend the whole thing never happened. At the very least, you would expect people in Congress to admit that there are different views on copyright that go beyond the RIAA/MPAA view of the world. But, apparently, that's considered a "radical" thought and not allowed. The folks at EFF and Fight for the Future are now asking people to reach out to Congress and let them know that now is the time to fix copyright, rather than ignore it. Telling Derek Khanna to go find another job doesn't make the issue go away. Quite the opposite. It just highlights how corrupt Congress is concerning these issues, in that it doesn't even want to acknowledge the uncomfortable truth that it's been simply rubberstamping the entertainment industry's wishes for decades -- and that's created a huge mess today. The time to fix it is now, but it appears that most in Congress prefer the comfort of the sand around their heads.

Filed Under: congress, copyright, derek khanna, republican study committee

Rep. Marsha Blackburn's Staffer Lashes Out At Derek Khanna And RSC Report

from the can't-deal-with-reality dept

Ah, Representative Marsha Blackburn. This is the self-styled "limited government" Member of the House of Representatives who famously posted a nearly 100% factually misleading attack on "net neutrality" just shortly before sponsoring SOPA, despite the fact that almost everything she complained about in her mythical version of net neutrality was true of SOPA. For example, she talked about the wonders of the internet (yay!) and sites like Facebook, YouTube and Twitter, and talked about how they've been built up entirely without government intervention (ignoring, of course, the government's rather large role in the creation of the internet, but let's leave that aside). And then she states: "There has never been a time that a consumer has needed a federal bureaucrat to intervene (in the world wide web)." And she worries how under the net neutrality she fears "the next Facebook innovator" may "have to go apply with the government to get approval to develop a new application."

Yet, of course, when it comes to SOPA and copyright, she ignores these very same arguments. SOPA itself was very much about federal bureaucrats, including Rep. Marsha Blackburn, intervening in how the internet was to work. And, of course, the very nature of copyright these days is that it means that innovators often do have to effectively get "approval" from the government to develop a new product. In fact, the former director of the US Copyright Office, Ralph Oman, recently stated specifically, in the Aereo case, that he believed the intention of copyright law was that new technologies must first get Congressional approval before they can be considered legal -- and this appears to be Blackburn's position as well.

Of course, this blatant contradiction is explained away easily enough, since her district is up against Nashville, Tennessee, a major outpost of the recording industry. Given that, it was no surprise to see it confirmed that she was one of the leading voices among Republican members who led the Republican Study Committee to first retract Derek Khanna's "copyright myths" policy brief, and then to push to make sure that he was not retained as an RSC staffer.

The latest, is that when asked about Blackburn's role in Khanna's employment situation, a Blackburn staffer, Mike Reynard, went off on an ill-informed rant against the policy brief:

"She does not believe the radical positions espoused in a recent so-called policy paper regarding copyright," Reynard said. "Conservatives aren't going to tolerate the ideology that copyright violates nearly every tenant of laissez-faire capitalism, that copyright is a government monopoly, and that property rights don't matter anymore."

"We were concerned that the RSC's Executive Director, Paul Teller, and Congressman Jim Jordan associated themselves with these bizarre ideas and were happy to see them denounce the process and the ideas in the paper after it was published," he added.

So much lies and distortions in two short paragraphs. First of all, the ideas in the paper were hardly "radical." They've been widely discussed for quite some time outside the halls of Congress, but they rarely make it inside, because Blackburns' close friends at the RIAA and MPAA do a bang up job keeping them out. Second, the idea that "conservatives aren't going to tolerate the ideology that copyright violates nearly every tenant of laisez-faire capitalism" is kinda laughable, since an awful lot of conservatives not only "tolerate" the idea, they believe it to be true. In fact, as we've noted, there's an entire new book making the "conservative" case for massive copyright reform (even going beyond Khanna's so-called "radical" suggestions). Furthermore, an awful lot of prominent conservative thinkers have come out in favor of the report. So whether or not Blackburn "tolerates" it, doesn't have much bearing on whether or not "conservatives" tolerate it. It just seems to show that Blackburn may be completely out of touch and out of step with those she claims to represent.

As for the idea that copyright is not a government monopoly -- well, that's just wrong. I mean, there's nothing to argue here. It's a simple fact: a copyright is a monopoly. In the earlier days of the US, the founders even directly referred to them as monopolies. So I'm not even sure how this point is debatable, unless you're entirely ignorant.

Then there's the idea that "property rights don't matter anymore." That's just weird, because no one suggested that at all. In fact, if you actually read Khanna's paper, he argues quite the opposite. Property rights matter a great deal. The problem with copyright is that it's a restriction on people's private property rights.

Finally, while the RSC did retract the report, after heavy pressure from various lobbyists, at no time did they "denounce the process and the ideas in the paper." They simply argued that it did not properly represent the views of all of their members. One assumes this includes Marsha Blackburn, but judging from the comments from her staffer, I would think that the RSC would not wish to associate itself with the pure and blatant ignorance coming out of her office. We can argue the merits of the paper (and, in fact, we've been trying to do that in a series of posts). But to pretend the paper says stuff that it doesn't... and to argue things that are clearly factually 100% false is no way to go about making policy.

Filed Under: copyright, derek khanna, free market, market, marsha blackburn, mike reynard, rsc

Republican Study Committee Dumps Derek Khanna, Author Of Copyright Reform Brief, After Members Complain

from the not-how-to-attract-the-next-generation dept

We'd heard this last week, but it's now been confirmed that, due to significant lobbying pressure by the entertainment industry and (even more so) the US Chamber of Commerce, Derek Khanna, the Republican Study Committee staffer who penned the first thoughtful policy brief on copyright reform to come out of US government offices in a long time, has been let go from his job. There was expected to be some staff turnover in January, as the new RSC leadership took place, but several Republican members of Congress explicitly asked incoming RSC boss Steve Scalise not to retain Khanna in response to the copyright brief.

If this is how the "new" GOP expects to interest young people, it seems to be going about it exactly backwards. Khanna wrote a thought-provoking paper that expressed views that many people believe to be true -- in a voice that is rarely heard in Congress. And, for that, he got fired. While the RSC and various copyright maximalists have been insisting that the paper was not properly vetted, we've had it confirmed that this is simply not true. The paper went through the standard procedure of any RSC brief, and was properly reviewed and vetted. It's just that once lobbyists hit the phones to various members of Congress (friends of Hollywood, mainly), pressure was put on the RSC to retract the document, and to jettison Khanna.

This is not going to interest very many young people, when a thoughtful critique of policy that finally raises issues that concern many leads to the staffer in question getting the axe. Khanna, for his part, has been valiantly continuing the conversation via his Twitter feed, but various lobbyists are now ensuring that elected officials can safely stick their fingers back in their ears.

Filed Under: derek khanna, gop, hollywood, rsc, steve scalise

Fixing Copyright: Is Copyright A Part Of Free Market Capitalism?

from the not-even-close dept

Continuing our series of posts concerning the Republican Study Committee report on the problems of the copyright system and how to fix them (which it quickly retracted under industry pressure), today we're going to explore the second "myth" that author Derek Khanna helped debunk: that "copyright is free market capitalism at work." We've already covered the first myth, about the purpose of copyright, as well as responded to various responses to the report by copyright maximalists.

That response feeds nicely into this post, because the whole argument that copyright is "free market capitalism" depends almost entirely on the key claim of maximalists: that copyright is property, full stop. However, as we noted in our response, copyright has both property-like attributes and many non-property-like attributes. And it's when you look at the actual market that you have to recognize that those non-property-like attributes start to stand out. The only way you can argue that copyright is free market capitalism at work is to flat out ignore the ways in which copyright is unlike property.

To hopefully demonstrate this clearly, we'll start out with two examples of other "markets" that show that just because you set up a property right and create a market, that doesn't mean it's a free market. First up: air. Yes, that stuff we all breathe. It's clearly a valuable good. Extremely valuable. But... if we're to believe the maximalist view, because we don't directly pay for the air we breathe (even if we pay for it indirectly) it must be "valueless" or "worthless." So, clearly, the best way to deal with this is to set up a monopoly privilege in air -- such that you need to buy a "license" to breathe air that isn't yours.

Think of the massive industry that would be built up around this. It would really be a tremendously large industry, because people would be willing to pay every last penny to make sure that they had air to breathe. Talk about having inelastic demand! But, of course, the "problem" is that we have (mostly) abundant supply. Yet, putting monopoly rights on it would solve that problem right away, restricting supply through artificial monopolies, and allowing owners to charge. Boy, would that create a market! Of course, it would be complex, so perhaps we could "ease" things along by creating an Airrights Royalty Board to set some compulsory rates to make the whole market function "better." Think of how we could juice the economy there! Every single person needs air, so they would pay. Clearly, overnight, it would boost the economy.

Of course, this is silly. Everyone knows that it's silly, but as you listen to the arguments for copyright as being a free market, recognize that it's no different than the scenario above. The problem is basically a restating of Bastiat's broken window parable. The government can introduce artificial inefficiencies into the market, but that doesn't mean that it's part of a free market. A free market is one in which resources are being allocated more efficiently. But a market in which you have entities choosing to introduce inefficiencies on purpose to create new markets isn't a "free market" at all. It just creates an inefficient market that draws money to that market and away from more efficient purposes and allocation. You can, if you want, argue that this government / market interference is good for society or a particular group -- but you cannot argue that it's "free market capitalism" because it's not.

The second example is similar. It's the idea that Ed Felten came up with a few years back, known as the Pizzaright Principle, which stated simply is:

Pizzaright – the exclusive right to sell pizza – is a new kind of intellectual property right. Pizzaright law, if adopted, would make it illegal to make or serve a pizza without a license from the pizzaright owner.

Creating a pizzaright would be terrible policy, of course. We’re much better off letting the market decide who can make and sell pizza.

The Pizzaright Principle says that if you make an argument for expanding copyright or creating new kinds of intellectual property rights, and if your argument serves equally well as an argument for pizzaright, then your argument is defective. It proves too much. Whatever your argument is, it had better rest on some difference between pizzaright and the exclusive right you want to create.

This is the same basic concept again. You can create new artificial markets by inserting property-like rights anywhere you want. But most people in other situations recognize that's not free market capitalism at all, but market distorting interference. So, as you listen to those who argue that copyright is free market capitalism, apply these tests. Does it apply equally to airrights and pizzarights? If so, the argument is defective. To date, I have yet to hear an argument for copyright being free market capitalism that doesn't equally apply to airrights or pizzarights.

Of course, there are other important ways in which copyrights are actually against the free market -- and, again, it's here where recognizing the key differences between copyright and scarce property come into play. As Rick Falkvinge recently reminded us, copyright is something that actually limits property rights rather than creates new ones:

Which brings us to the third notable item: “the exclusive right”. This is what we would refer to colloquially as a “monopoly”. The copyright industry has been tenacious in trying to portray the copyright monopoly as “property”, when in reality, the exclusive rights created are limitations of property rights (it prohibits me from storing the bitpatterns of my choosing on my own hardware).

This is a key point that often gets lost in all of this. The only thing that copyright does is limit others' actual property rights. Now, again, this doesn't mean you can't make an argument that this limitation is valuable and important. But it's a simple fact that all the "exclusive right" copyright provides to someone is a way to try to stop people from actually exercising their own property rights over products they own.

In the end, it's fine to argue that copyright has important benefits and value -- but that's not the same thing as arguing that it's a part of free market capitalism. Because it's not.

Filed Under: copyright, derek khanna, economics, efficiency, free market, rsc

Copyright Maximalists Attempt To Downplay Significance Of RSC Report By Chanting Their Mantra: Copyright Is Property

from the you-can-say-it-as-many-times-as-you-want-and-it's-still-not-true dept

As promised, we're going to continue working on our series of posts analyzing the Republican Study Committee's (RSC) report on copyright myths and how to fix the broken system. We already explored the first myth the paper discusses, that the purpose of copyright is to compensate the creator. That has simply never been true. The purpose is laid out plainly: "to promote the progress of science and the useful arts." And if you really want to go back to the original meanings of all of this, the "science" part is what copyright was talking about, and they really meant for it to cover learning. It was not originally intended for all creative content at all. That's a later bastardization. Even so, it's pretty clear that the purpose of copyright was to "promote the progress." The mechanism was to create an artificial scarcity, via exclusion, that helped support one possible business model for content creators: selling copies of their works for a limited time. That's it. The purpose: promote the progress. The mechanism: artificial scarcity. The problem is when people confuse those two and assume the "mechanism" is the purpose. Tragically, that's what happens all too often.

After we published the initial post on this, some complained that we weren't giving "the other side" fair hearing. So with this post, I wanted to highlight three responses from copyright maximalists, who claim that the arguments made in the RSC paper are faulty. It's important to understand what is being said and where these arguments come from. Let's start with Tom Giovanetti, the man who once called me a "bolshevik" for suggesting that copyright reform was necessary. Amusingly, Giovanetti appears to take credit for getting the RSC to pull the document, though we know that those with much more significance made the calls that actually had an impact. However, Giovanetti's dismissal of the RSC paper is based on one adamant statement: that copyright is property. Period. End stop. No questions.

Rather, it's because, as a property right, copyright is a critical element within the GOP's market-orientation. Markets simply don't work without property rights. You can't have contracts, or licensing, if you don't have clear and enforceable property rights. ALL business models, not just "new" business models, rest on property rights.

This is one of those "nice in theory, totally not true in practice" claims. Here's the thing: copyright has some elements that are "property-like." It allows legal exclusion, like property. It can be sold and transferred, like property. But it has many facets that are not at all like property. The content in question is non-rivalrous and non-excludable for the most part. That's not at all like property. Anyone who defines it as property, without acknowledging the "non-property-like" attributes, is either ill-informed or being purposely misleading. I'll leave it to the reader to determine which is the case here.

As for the idea that all business models "rest on property rights," that's an interesting argument, but again one not supported by reality. Many business models are built on real property rights -- that is, property rights around scarce goods, which are excludable and rivalrous -- but when it comes to non-scarce or infinite goods, there are lots of new business models generated, often by increasing the value of different scarcities. To prove Giovanetti wrong is easy. You just point to any one of the the many content creators who give away their works for free, and profit elsewhere. Hell, point to us. You're reading this for free, and we're making money -- without relying on the "property right" of copyright. Are we relying on some other property rights? Sure. Property rights for real, scarce, property.

And that's the real problem with those who just default to the "copyright = property" argument. It's silly and it's meaningless, because the fact that you can't necessarily rely on copyright for all your profits does not mean there aren't other property rights by which you can make money. In fact, history has shown time and time again that when something is subject to unfettered copying, new business models appear elsewhere.

Further, because the GOP believes in innovation, copyright is a natural fit, because copyright incentivizes and encourages the creation, distribution and promotion of new information. The alternative to copyright isn't free information, but less creation, less widely distributed and marketed.

This is also empirically untrue. Giovanetti seems to want to tell fairy tales by ignoring the actual evidence. Over the last decade, at a time when copyright infringement has been widespread, the amount of content created has skyrocketed at unprecedented rates, and that content has been much more widely distributed and marketed, thanks in part to new technologies.

Furthermore, if we're going to go hardcore "property rights," then it would seem that Giovanetti should really be supporting the copyright reformers, since current copyright reform tramples on property rights all the time. My DVR can't automatically skip commercials. But I paid for it. Why can't I have it do what I want it to do? I bought this DVD, why can't I legally move the content to my computer to watch it? I bought this book in Thailand, why can't I now sell it in the US? These are all issues where copyright is currently invading my property rights. Now, you can make an argument that these are reasonable restrictions on my rights, but if you're going to just scream "property rights" like Giovanetti does, you would think that it's only fair to highlight the ways copyright intrudes on property rights as well. But he doesn't. So, it's difficult to take Giovanetti seriously on this point at all. And since his entire argument is based on this fallacy, let's just move on.

Next up, we've got the Copyright Alliance, a lobbying organization that was set up to protect large studios and record labels' interests while pretending to support creators' interests. They brought along a law professor named Mark Schultz, who you would hope would understand the law, but in fact has a rather simplistic argument that not only falls into the same Giovanetti trap of "but, but, but copyright is property," but goes further in arguing that copyright reformers are really just a bunch of evil "collectivists" seeking to redistribute property from those who rightfully own it to anyone else.

The people who create expressive works deserve to own them and benefit from them. So do the companies that finance and purchase these works for commercial exploitation.

Note that we're already starting off on a bad foot, where the entire basis of the argument is a purely moral one -- that people "deserve" to "own" expressive works. But this statement, beyond pulling at the moral question rather than anything factual, suffers from significant problems. First, what is the "them" that people "deserve" to own? The original work? Sure. But, just as a candlemaker owns that candle, once he sells it to someone else, he no longer "owns" that candle. So, this is a pretty weak starting point. All copies of the work down the line? Well, that's a problem too. Because if I buy that candle, I can make a copy, and I'm not violating anyone's rights in the tangible world. So, already we seem to be stepping beyond the normal bounds of how these things work. But we're just beginning down a weird rabbit hole stuffed to the brim with strawmen that Schultz wants so badly to knock down:

Many modern copyright scholars and commentators have embraced a severe utilitarian view of copyright. In this view, the sole justification for copyright is the benefit that creators provide to society. Society would benefit most if creators worked for free, but, alas, we cannot always convince them to do so. Copyright is thus an unfortunate necessity, given to creators to induce them to provide society what it needs. The labor or welfare of creators has no importance under this view—they and their works exist to serve the good of the greatest number.

I know of no person, on any side of this debate, who has argued that "society would benefit most if creators worked for free." What many of us have argued is that there are more compelling and useful business models from which they can benefit, while also providing greater societal benefit. In economics, it's called increasing the pie. But people like Schultz, who perhaps have little background in economics, seem to think that this is a zero sum game -- and if anyone else benefits, it means the content creator must be losing. Reality says something quite different. You can expand the pie such that the creator can benefit, and profit, and so can society. That's what many of us are aiming towards.

Furthermore, the claim that "copyright is a necessity" to incentivize creation once again ignores the fact that there are other, significant business models that don't rely on copyright at all. It's difficult to take someone seriously when they set up a strawman that reflects an argument no one is actually making... and then knock it over with an even sillier argument that ignores the reality of the market.

As between creators (along with those who finance and/or purchase the rights to their work) and others, who has a better claim to control and exploit a work of authorship? Of course, to a dedicated IP utilitarian, this question is irrelevant. Nobody deserves anything; society takes what it needs, subject to the need to persuade the producer to keep producing what the takers want. While such a churlish and ungenerous view of creators is apparently acceptable to some, many would find the implications chilling.

Again, this is a pure strawman, made up in the fantasy world that lives in Schultz's mind. I've never seen anyone argue that "society takes what it needs." But he's right that the question he's asking is irrelevant. He's asking who is best to "control and exploit" something that does not need to be controlled or exploited in the manner he suggests. As an analogy, it is like he is saying "who better to control and exploit the road in front of your house, than the house owner?" You could legitimately make that argument. But, of course, we don't think of the road in front of your house as being something that someone needs to "exploit." Why? Because it is a piece of infrastructure that creates much greater benefit for everyone, such that they can profit. This is not a case of taking away rights from someone to make them worse off. It is about using core infrastructure to increase the pie and make greater opportunities for everyone. When viewed that way, you can see where focusing on the direct exploitation of each work is pretty silly. What if, instead, the system that works is one in which the music enables many other business models that allow for greater profits?

So, Schultz's argument is based on the same basic fallacy as Giovanetti's, just at a slightly higher intellectual level. Rather than just focusing on "copyright is property," Schultz is arguing both that copyright is property, and that we live in a zero sum world. Since neither point is true, his argument falls apart entirely. Moving on.

The final stop on our tour of rationalization comes from Terry Hart's Copyhype blog, where he kicks it off with a bizarre, and entirely false statement about me, claiming that I stated I will "no longer be able to enjoy future papers, for they will only pale in comparison." I said no such thing, nor do I believe any such thing. Hart is usually quite careful in his statements, and the fact that he needs to resort to an outright lie to kick off his post should give you a sense of where he's going to come from with his attack on Derek Khanna's paper.

Most of Hart's arguments are based on taking snippets of quotes from people in the past to argue "nuh-uh" to things in Khanna's paper. That is, rather than argue reality, let's focus on what someone said years ago if it disagrees with the paper. That's not particularly convincing. It is not difficult to come up with just as many quotes from people arguing the opposite viewpoint at the same time. So, for example, he quotes some people arguing that copyright is property -- both among the Founders and more recently at the Supreme Court. But, it is equally true that there were Founders who believed copyrights to be evil monopolies, and there are Supreme Court rulings that state that copyright is not like property. So, I'm not sure what good random quotes (sometimes out of context) do for this argument.

But then we get to the crux of Hart's argument, which presents a rather troubling and misguided understanding of innovation in capitalist societies:

One of the favorite claims of copyright skeptics is that creators routinely oppose new technology because it “disrupts their business model.” On the contrary, it is often the case that the businesses utilizing the new technology are the ones who feel entitled — entitled to profit off the exploitation of established rights without compensating creators merely because they are using new technology. In this case, creators do “deserve” compensation. This isn’t a prize at the bottom of the box, it’s one of the foundations of a just capitalist society.

Note that we're taking a step up the intelligence scale here from Schultz, but basically making a more advanced version of the same argument: that someone "deserves" something. Again, this is a moral argument that distracts from the point and is hard to support in reality. Second, there is a major assumption in that paragraph that is simply untrue: the idea that companies "feel entitled to profit... merely because they are using new technology." Nothing could be further from the truth, especially in a "just capitalist society." In such worlds, there is no "entitlement" to profit. There is merely what you can get in the market. What many new companies are doing is not feeling entitled to profits because of new technologies, but using new technologies to create economic growth and then using that economic growth to put in place a business model in which people or companies transact with them willingly, such that they can profit.

That is how capitalism works.

What many maximalists seem to fail to understand is that these new technology providers increase the pie. They create economic growth through new technologies and services, and they profit from some of that, but also leave open much of that expanded market for others to profit. This is true throughout history. I know that Hart, in particular, tends to break out in hives (a joke) whenever anyone brings up the "VCR," but it's an instructive example. The movie industry insisted that it was allowing consumer electronics companies to "profit off the exploitation of established rights without compensating creators merely because they are using new technology." And, yes, while Hart would like to scrub this point from history, Jack Valenti did say that the VCR was to the American filmmaker what the Boston Strangler was to the woman at home. It was, as Valenti was making clear, supposedly going to kill the industry.

But it didn't. It was merely five years after Valenti said those words during a Congressional hearing that revenue to the Hollywood studios from home movies surpassed the box office. Five years. And it didn't require a new law. Or forcing these "tech companies" to pay the rights holders what they "deserved." No, instead all it took was the entertainment industry adapting to the new technology and realizing that the pie grew. Massively.

Amusingly, in his let's forget Jack Valenti post from last year, Hart had the following to say about the "myth" that copyright reformers build around Valenti's testimony:

the myth that “content industries hate technology” fails for several reasons. It requires fabricating a group (“the content industry”), ascribing a broad characteristic to it (“hates technology”), and then pulling together disparate quotes from anyone who has stated a concern over some new technology as proof of the theory.

Yet, of course, that's the exact same thing that Hart does in his post trying to debunk Khanna's paper. He fabricates a group ("the tech industry") ascribes a broad characteristic to it ("feels entitled to profits that others deserve because of new technology") and then pulls together disparate quotes as proof of that theory.

So, while I find Hart's critique of Khanna's work informative in surfacing a few interesting historical quotes, it too fails for the same basic reasons as the other two responses cited above.

That said, I appreciate that they are willing to jump in to the debate, and find it sad that members of Congress, whether Republican, Democrat or anything else, have decided that it's not even worth having this debate at all.

Filed Under: copyright, derek khanna, economics, mark schultz, property, rsc, terry hart, tom giovanetti

Fixing Copyright: The Purpose Of Copyright

from the holding-the-debate dept

Since the GOP decided to chicken out on holding the very necessary debate on copyright reform, let's keep the debate going without them, and hope they join in. As we've discussed, the Republican Study Committee released a fantastic report from staffer Derek Khanna, and then retracted it under lobbyist pressure. The RSC wants to claim that the paper didn't go through its full review process, but we've heard from multiple sources that this is simply not true, and that the RSC is pushing this story to appease angry lobbyists (apparently the US Chamber of Commerce has taken over as the leader of the cause on this one, following the initial complaints from the MPAA and RIAA). Either way, all this has done is draw much more attention to the report, which you can still read here.

But, clearly, some in Congress realize this is a debate worth having. So if they're too afraid of some industry lobbyists, we might as well kick off that debate for them. We're going to do a series of posts digging into Khanna's paper. The paper, of course, starts off by debunking three commonly believed myths concerning copyright law, which are often used by policy makers to justify bad policies.

The purpose of copyright is to compensate the creator of the content: It's a common misperception that the Constitution enables our current legal regime of copyright protection -- in fact, it does not. The Constitution's clause on Copyright and patents states:

"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries" (Article I, Section 8, Clause 8)

Thus, according to the Constitution, the overriding purpose of the copyright system is to "promote the progress of science and useful arts." In today's terminology we may say that the purpose is to lead to maximum productivity and innovation.

This is exactly correct, as we've discussed numerous times before. This is not to say that one of the results of copyright law is to compensate the creator. That's clearly a large part of how the law is supposed to function. The thinking behind this is not too complicated: if we can ensure greater compensation through limiting competition and supply via artificial monopolies, it drives up the price of those goods, leading to greater income.

But that theory includes several assumptions which may not be true. Let me present a hypothetical to make the point. I am not saying this is absolutely the case, but let's say we have scenario A and scenario B:

Scenario A
Artist's works are locked up under copyright, but he sells them for $1 per song downloaded.
Fans pay for and download 100 songs.

Scenario B
Artist frees up his work to the public domain, and encourages them to be spread freely. Thousands of copies of the song are downloaded. Artist sets up a Kickstarter to fund next batch of songs, and quickly raises $10,000

Again, I'm not saying that this is what happens in all cases. I'm just making this point: I don't believe that a single, sane person would argue that scenario A is better than scenario B. In scenario B the artist has more fans, more ability to make new music and more money. It's a much better position. But that income does not rely on copyright.

And that's the simple point that seems to get lost in this debate. Because copyright exists and is so prominent in the business model of artists, many incorrectly believe that it is the business model for content creators, and there can be no other. But, what we've really done is set up a crutch. Because the government has "picked winners and losers" by backing copyright as the core piece of a business model, most content creators have focused almost exclusively on monetizing via copyright. And thus, they argue, any attempt to change copyright is an attack on their incomes.

But, if we all agree that scenario B is a better scenario for the artist and for the consumer, then we've already shown that copyright, itself, may not be the best tool for artists seeking to make a living. I'm not saying that it absolutely isn't -- but that we have little evidence that copyright is actually the best such tool, and plenty of evidence that it can stifle and limit speech and creativity along the way.

There are many ways to make revenue as an artist. The Future of Music Coalition's Artist Revenue Streams worked out 42 different revenue streams for artists. Certainly, many of them rely on copyright, but a significant number do not. But content creators rarely get the chance to fully explore those other methods, because they're so wed to the idea that copyright is it.

Either way, if the idea is to maximize artist revenue, then we should be looking at what actually does that -- what actually results in greater artist revenue? Because there is no evidence that expanding copyright law seems to have that impact.

So all Khanna and the Republican Study Committee (briefly) were saying, was that the purpose of copyright law is to benefit "the progress of science and the useful arts." Part of that certainly may be to help artists make money, but that is not the ultimate goal, nor would it be reasonable as the ultimate goal. If we want to maximize artist revenue, let's explore that issue, but just assuming that's the goal of copyright is clearly faulty, leading to a very distorted market.

Filed Under: benefit, constitution, copyright, derek khanna, purpose, rsc