Law Professor Mark Lemley: Hollywood Is Simply Wrong About FCC's Set Top Box Plan

from the not-a-copyright-issue dept

We've been discussing for a while now about how the MPAA, with the help of the Copyright Office, has been propping up the complete myth that the FCC's plan to create more competition in the cable set top box space involves violating the copyrights of studios. It's a complete myth. The cable industry has been leading the charge here, mainly because it makes billions of dollars by charging people to "rent" its crappy boxes. But it found a strong ally in copyright maximalists who have repeatedly misrepresented the proposal. As we noted, the Copyright Office put out a report that flat out lied about what the FCC's proposal entailed and about how copyright itself works (arguing that contracts between two third parties could somehow eliminate the fair use rights of private citizens). And, incredibly, the basic argument being put forth by copyright maximalists, if taken to its logical conclusion, would mean that VCRs and DVRs are illegal too.

That's not how copyright law actually works -- but the message has caught on, and the FCC has already been forced to weaken its proposal -- and the industry is still bitching about it.

Thankfully, we're finally starting to see some copyright experts speak up about just how wrong Hollywood and the Copyright Office are on this. Mark Lemley, by far the most cited intellectual property professor (who is also a practicing lawyer), has written up a piece for the Hill that rips to shreds the idea that the FCC's plan somehow would implicate Hollywood's copyrights. As he notes, they're totally overstating what copyright allows:

The MPAA’s argument that studios have the right to control the device on which you view your content reflects a fundamental misunderstanding of copyright law. Copyright gives its owner the right to control the making of copies and public performances of a work. But it does not give them control over any use of a work. That’s no accident. Once the copyright owner has been paid once for a particular copy, its control over that copy ends. That’s why I can lend a book to friends, or sell my used record collection outright.

True, there are some things I can ‘t do even with a copy of a movie or song I own. I can’t upload it on a file-sharing site, for instance, and I can’t play it on the radio. But that’s because doing those things either makes a new copy or makes a new, public performance of the work.

The studios have already been paid for the movies shown on a cable or satellite service. Indeed, they’ve been paid specifically for the right to publicly perform the work by transmitting it to my (and everyone else’s) home.

And here, copyright law says something very important to copyright owners: that’s all you get. Once the cable companies have paid the MPAA for the right to deliver their movie into my home, the MPAA loses control over how I choose to watch their movie in the privacy of my own home. I can record it on a DVR and watch it whenever I want. I can watch it on a big-screen TV or a small one, with the sound on or off, in one sitting or many, while fast-forwarding through parts I don’t like or rewinding to rewatch parts I do. I can watch it again and again. Most important, I can watch it on any device I want, including my computer, my iPad, or my phone.

And, while the MPAA and its supporters keep calling the FCC proposal a "compulsory license," Lemley points out that it's not a compulsory license that lets you record a TV program to your VCR or DVR, and neither is this:

That isn’t a “compulsory license” of copyrights; it’s a limit on the scope of those rights. That limit exists even if copyright owners try to declare that it doesn’t. This is the law. It has always been the law. Every effort by copyright owners to control how I watch a show in my own home has ended in failure.

Unfortunately, this blatantly false attack by Hollywood and the Copyright Office on the FCC's plan has been effective. It seems unlikely that the plan will go through, and what's troubling about it is that it's all based on flat-out falsehoods by Hollywood, the Copyright Office and its supporters.

Filed Under: competition, copyright, copyright office, fcc, mark lemley, set top box, set top boxes
Companies: mpaa

Copyrights & Patents Have Become A Religion; All Data Will Be Ignored

from the I-WANT-TO-BELIEVE dept

If you've read Techdirt for any length of time, you'll have noticed that intellectual property laws have been decoupled from logic for several years now. Because the entities heavily-reliant on IP protections (and who mostly serve as gatekeepers and middlemen, rather than perform any creative work of their own) have trouble producing evidence that extended copyright terms or increased enforcement efforts are actually instrumental to the creation of future artistic works, they have tended to fall back on assertions that various governments have a "duty" to protect their interests.

It's not an assertion borne of data or extensive research. It's a statement of faith. Record labels and movie studios spend millions every year issuing takedowns and lobbying for favorable laws. And every year, they fail to point out where these efforts have added to the bottom line. When confronted with this lack of evidence, they'll often declare this is only because we're not doing the things that aren't working hard enough or often enough or with enough severity.

Mark Lemley, whose work -- especially that focused on the broken patent system -- has been featured here before, has just published a paper examining this thought process: Faith-based Intellectual Property.

Lemley opens by noting that we supposedly live in an "age of reason," with a wealth of information and powerful data tools at our fingertips. But when the data fails to produce the desired evidence for increased IP protections, reason is swiftly abandoned and replaced with nothing more than unfounded beliefs.

This isn't just a post-file sharing phenomenon. This dates back more than a half-century.

Fritz Machlup, commissioned by Congress in the 1950s to evaluate the patent system, came to the strikingly wishy-washy conclusion that if we didn’t have a patent system, the evidence wouldn’t justify creating one, but since we had one the evidence didn’t justify abolishing it.

There's more evidence available now than there was 60 years ago, but nothing's improved.

The upshot of all this evidence is something rather less than a complete vindication of the theory of IP regulation... This doesn’t mean that we are no better off than we were in Fritz Machlup’s day. The problem isn’t that we don’t have enough evidence, or the right kind of evidence. The problem is that the picture the evidence paints is a complicated one. The relationship between patents and innovation seems to depend greatly on industry; some evidence suggests that the patent system is worth the cost in the biomedical industries but not elsewhere. Copyright industries seem to vary widely in how well they are responding to the challenge of the Internet, and their profitability doesn’t seem obviously related to the ease or frequency of piracy... Money doesn’t seem to be the prime motivator for most creators, and sometimes it can even suppress creativity. And an amazing number of people seem perfectly happy to create and share their work for free now that the Internet has given them the means to do so.

Despite the lack of clear indicators that strengthened IP laws result in more creativity, or at least, more profitability for industries which rely heavily on IP protections, the push for expanded terms and more draconian IP-enforcement penalties hasn't let up. When the available data doesn't support held beliefs, there are options.

Shoot the messenger:

A lesson I learned early in my academic career is that while people will dispute, ignore, or shrug off policy arguments they disagree with, they get really incensed when the data disagrees with them. And one way they can justify ignoring that data is to persuade themselves that the source of that data must be biased in some way and so their numbers cannot be trusted. The most vitriolic attacks I have experienced in more than twenty years as a law professor were directed at the most innocuous-seeming papers—papers that presented data that revealed some uncomfortable facts about the status quo.

Someone can be paid to produce data that agrees with held views.

A second reaction to data you don’t like is to try to go out and buy some of your own. Companies with a vested interest in a system that empirical evidence calls into question have been spending a great deal of money to fund studies written (sometimes preposterously) to lead to the conclusion they support.

Or, you know, 'find God," as it were...

Participants on both sides of the IP debates are increasingly staking out positions that simply do not depend on evidence at all. That is, their response to evidence that doesn’t accord with their beliefs is not to question their beliefs, or even to question the evidence, but to retreat to a belief system that doesn’t require evidence at all.

Lemley quotes Berkely's Rob Merges, a leading patent scholar -- one who turned to faith when the data didn't support his predispositions.

After decades at the forefront of economic analysis of the patent system, Merges threw up his hands: “Try as I might, I simply cannot justify our current IP system on the basis of verifiable data showing that people are better off with IP law than they would be without it.” While one might think that the logical thing to do if the evidence doesn’t support one’s theory is to question the theory, Merges instead observes that “through all the doubts over empirical proof, my faith in the necessity and importance of IP law has only grown.”

With adherents like these, who needs evidence? What were once a limited rights, granted for the betterment of all, are now an expansive rights, benefitting only a select few. Any lack of supporting evidence is no longer germane to the argument. IP rights are now being controlled by those who "feel" or "believe" in the fundamental "rightness" of their arguments. Data need not apply.

The adherents of this new religion believe in IP. They don’t believe it is better for the world than other systems, or that it encourages more innovation. Rather, they believe in IP as an end in itself—that IP is some kind of prepolitical right to which inventors and creators are entitled.

There's a reason why religions and governments shouldn't be allowed to intermingle. This adherence to the "moral" rights of creators plays hell with the system.

It intervenes in the market to interfere with the freedom of others to do what they want in hopes of achieving the end of encouraging creativity. If we take that purpose out of the equation, we are left with a belief system that says the government should restrict your speech and freedom of action in favor of mine, not because doing so will improve the world, but simply because I spoke first.

When the faithful guide the creation of legislation, bad things happen -- things that undermine the societal benefits of limited rights for a limited amount of time. Those limits are no longer in place, and supposed protections like "fair use" give more value to intellectual property than freedom of expression. The system is broken and those exploiting it the most don't want it fixed.

Trademark rights extend to prevent uses that would happily have coexisted fifty years ago. We have added a slew of new copyright statutes, expanding the term as well as the scope of protection, increasing penalties, and reaching conduct further and further removed from actual infringers. We issued six times as many patents in 2014 as we did three decades before, and most of the patent suits filed are brought by patent trolls, a category of plaintiffs that didn’t even exist forty years ago and that one might think has a weaker moral claim on IP than people who actually make products.

Unfortunately, Lemley realizes the ultimate futility of his research. While small factual misconceptions can often be corrected, adherents to any form of faith-based system (whether they be pro- or anti-IP) are almost impervious to arguments that run contrary to their beliefs -- no matter how much data is provided.

If you are a true believer, we have nothing to say to each other. I don’t mean by that that I am giving up on you, deciding that you’re not worth my time to persuade. Rather, I mean that we simply cannot speak the same language. There is no principled way to compare one person’s claim to lost freedom to another’s claim to a right to ownership. Nor is there a way to weigh your claim of moral entitlement against evidence that the exercise of that right actually reduces creativity by others. Faith-based IP is at its base a religion and not a science because it does not admit the prospect of being proven wrong.

This where we are today: subject to laws written to accommodate true believers. The faithful that have been indulged in their expansion efforts even while a whole host of supposed "industry killers" have risen and fallen with little to no discernible damage done to entrenched IP-reliant industries.

Filed Under: belief, copyrights, evidence, faith-based, mark lemley, patents, religion, research, trademark

Appeals Court Gets Yet Another Shot At Fixing The Software Patent Problem

from the pay-attention dept

The next big case to pay attention to concerning software patents appears to be the CLS Bank v. Alice Corp. case, which is being reheard "en banc" (by the full slate of judges) at the federal circuit court of appeals (CAFC). The short version of the case is that it involves a patent over the idea of software that conducts a "shadow transaction" to make sure that there are enough funds to complete a real transaction, before allowing the real transaction to go through, thus minimizing "settlement risk" (the risk of the deal not actually being completed). Should that be patentable? Well, that's part of the argument. The district court tossed out the patent as being simply about an "abstract idea," which is not patentable, as abstract ideas are excluded from section 101 of the patent act, which lists out patentable subject matter. On appeal, a divided three judge panel overturned the lower court, and said that when you looked at the invention as a whole, it was patentable subject matter under section 101. The full CAFC has agreed to rehear the case, and the amicus briefs are flowing in, as people realize that this case is the next key battleground over software patents.

Of course, as often happens in these kinds of cases, you get amicus briefs with wildly divergent claims. For example, here we'll show and discuss the briefs from both the EFF and the Business Software Alliance (BSA). Somewhat surprisingly, both of those briefs agree on one thing: that the actual patent in question should be ruled invalid, as in the district court ruling. But that's about the extent of the similarities between the two -- who paint extremely different versions of the world of software patents today. The EFF brief explains how damaging software patents are to innovation and the wider economy while the BSA brief talks about how software patents are the greatest thing ever for innovation. One of these three-letter-acronymed organizations is wrong, and it's not the EFF.

The EFF brief is quite detailed in how, where and how much software patents are doing harm to innovation and the economy. It explains how there's been an explosion in the number of patents applied for, granted... and being used in litigation. They also detail how the costs associated with patent trolling have gone out of control, and how large companies like Google and Apple both spent more last year on patents than they did on actual research and development. If you read Techdirt regularly, you've seen many of the arguments and data they present, but it's a great overview whether or not you're familiar with the situation.

Meanwhile, the BSA takes a rather... different view of the world. And, by "different" we mean the view that Microsoft (the BSA's largest supporter) would take, whereby software patents are just freaking awesome. It does this by first rewriting history. It claims that the patentability of software is a long-settled matter without any disruption at all. It does this by completely ignoring the reality -- often espoused by companies who are BSA members, including Microsoft -- that software was not realized to be patentable subject matter until after the State Street case in 1998. As we've noted many times, even Bill Gates used to claim that if everyone was patenting software in Microsoft's early days, the industry would have stagnated rather than grown. Of course, now that basically every tech company out there is more nimble and innovative than Microsoft, it seems to want to stagnate the world.

It then talks up the importance of software to the economy and innovation -- which is true -- but falsely argues that this massive growth in innovation exists because of patents, rather than in spite of them. It keeps insisting that software companies rely on patents to have the incentive to innovate. This is laughable. Seriously. Whoever wrote it should be ashamed. I deal with software companies all the time -- including many very, very successful ones. And the people there all tend to hate patents with a passion. The idea that these patents have been any form of incentive is simply ridiculous. But they claim that without patents, innovation might grind to a halt:

Simple economics makes clear that, if patent protection for software were curtailed, the adverse consequences would be swift and severe. With less profit to capture from the commercialization of the fruits of research and development, businesses would divert their resources into other ventures, and software development would suffer. That would have a ripple effect on productivity across the entire economy. Advanced software allows factory workers to be more precise, cars more fuel efficient, and healthcare more effective. Any new obstacles to software development would carry a penalizing multiplier effect that could threaten the continued technological advantage of the United States. For these reasons, “[d]iscrimination against a form of innovation that is increasingly critical to technological advancement, indeed that in many areas dominates technological advancement, makes no sense.”

Once again, there is no evidence to support this. None, zero, zilch. Because it's simply not true. The "simple economics" the BSA describes is wrong both in theory and in practice. The software industry was built up and became super successful in a time before most software companies -- including most BSA members -- got any software patents at all. Ignoring that is simply historical revisionism being used for the sake of blatant protectionism.

They then go on to argue that, basically, CAFC had better not change a damn thing, because any change to such "settled" law, would be a disaster. Somewhat amusingly, they quote a decade old paper from Mark Lemley to support the argument that software patents are here and never going away and everyone should stop complaining. Why is that amusing? Because much of the EFF brief also relies on Lemley -- but a much more modern Lemley. That is, the key to the EFF's brief is suggesting that the judges at CAFC use this case as a chance to put into practice exactly what Lemley suggested earlier this year as an "easy" solution to the issue of software patents. Rather than worry about Section 101 and what's patentable, focus on Section 112(f), which (effectively) says that you can't claim a broader function (such as the idea of easing settlement risk with shadow transactions), only the specific implementation of the proposed solution or invention.

As Lemley noted when he first published his paper on the subject, all this really needs is for judges to enforce the law as written -- and the EFF is suggesting that now would be a good time for CAFC to start actually doing that. While the BSA filing gives lip service to Section 112, arguing that it is a good reason why the courts shouldn't redefine Section 101 to not allow software patents, I do wonder if BSA folks would really be that happy if the courts suddenly started tossing out tons of software patents for violating section 112(f) by describing a general idea, rather than a specific implementation.

Either way, whether the court deals with these specific issues or somehow dances around them (again), it's clear that the CLS Bank v. Alice case is one worth following if you care about software patents.

Filed Under: cafc, functional claiming, mark lemley, patentable subject matter, patents, software patents
Companies: alice, bsa, cls bank, eff

Some Thoughts On Fixing Problems In The Patent System

from the lots-of-ideas,-but-the-will-to-implement? dept

I've been procrastinating for the last week and a half or so (admittedly with a Thanksgiving holiday thrown in the middle) writing up my impressions of the recent conference at Santa Clara University called Solutions to the Software Patent Problem. If you want something of a play-by-play on what happened, Groklaw has a pretty good tick-tock on the specifics. Unfortunately, I'm not sure that really covered some of the larger important themes that the conference brought out.

First off, I know that some patent system defenders took great offense to the idea that the event wasn't "balanced" with system supporters. Nearly every speaker presented an aspect of how the system was broken with suggestions to fix it. But I see this complaint as being misleading. There's this random belief out there that conference panels need to be "balanced" with "pro & con" and then let the panelists argue things out. I've argued against this in the past when setting up panels for other events, and with the events that we run, we've tried to avoid that concept as well. While just setting up pro vs. con can make for an entertaining session, it rarely leads to productive discussions that move the conversation forward. They just lead to people arguing past each other. A productive event is one in which people agree on a basic premise or problem and are then working towards possible responses. That's what this was. It was a conference for those who believe the system is broken. Given that assumption, the point of the event was to suggest possible solutions. There are plenty of events where patent system defenders and skeptics can argue against each other, but I can't think of another where people were able to dig in deep on possible fixes.

Given all that, there were a lot of different ideas proposed -- some broad, some specific. Many of them required people to have pretty deep knowledge of how the system works. For patent system geeks, it was really fascinating -- but for those less aware of the inner workings of the system I could see how the basic play-by-play seems confusing or uninteresting. However, in reality, there were a number of interesting ideas presented on ways to fix various problems, from getting Congress involved to having the courts better adhere to the law to getting the Patent Office to better adhere to rules to increasing maintenance fees to carving out software entirely... and many more. The conference schedule has links to more detailed versions of various proposals, sometimes both the "academic" versions and more "mainstream" versions at Wired Opinion. I'll point to a few of the suggestions I found to be more compelling in a bit.

However, what I found really useful about the event was twofold:

1. There are a lot of smart people thinking about the very obvious problems of the system, and they are trying to come up with solutions. That's a good thing, even if there are many (powerful) interests who don't want the system to change at all. You can only deny reality for so long.
2. There are also many ideas for solutions, some of which are quite clever, others of which seem like blunt force attempts to deal with symptoms rather than actual problems. Also, as was raised by some people in the comments, many of the suggestions could have significant unintended consequences that weren't readily considered. This is important -- for as much as I believe that the system needs fixing (and I have my own suggestions for solutions), thinking through the consequences of any change is an important exercise (though always keeping in mind that defenders of the status quo seem to argue any change will destroy the American economy and probably take apple pie and motherhood with it).

We already explored the suggestions from Richard Stallman and Mark Lemley in earlier posts, so we'll look at a few other interesting suggestions.

• There was some interest in using patent fees as a way that the patent office might be able to fix some of the worst problems without requiring a change in the law. James Bessen pointed out that bad patents are a form of pollution and, as such should be taxed as polluters. Christina Mulligan pushed back against attempts at doing the opposite, as urged by some patent system defenders, noting that "Cheaper patent applications mean more – and lower-quality! – patents. Lowering filing fees will make more people more likely to file patents. But if the marginal difference in patent fees is holding inventors back from filing applications, the patent is probably covering a low-value invention."
  
• Related to this, Brian Love presented some research and a proposal for using higher fees to decimate trolls. Part of his argument is that the data shows that trolls quite frequently become much more active as a patent is close to expiring: "Of all patent suits litigated within the final three years of the asserted patents' term of protection, trolls file more than 70%. Of all companies accused of infringing a patent within three years of its expiration, trolls accuse more than 83%." His suggestion is that shortening the term length of patents would deal with this problem, and would likely hurt only trolls or failing companies that are lashing out at more innovative competitors (he highlights Kodak and Encyclopaedia Britannica). But rather than actually go through the process of shortening patents, he argues just increasing the maintenance fees to keep a patent for the full term. He notes that many other countries already do something like this. The data here was compelling, though the risk is that it would just mean that patent trolls would become more active in earlier years...
  
• Peter Menell picked up on the point that many have raised that patents aren't at all clear in what they cover. So he thinks that we should force patents to be much clearer in what the claims cover. Specifically, he argues for a form-based system where you have a series of check boxes and pull downs in defining a claim to make it clear what you're actually trying to cover. I like the idea that patents should be much more precise over what they claim, but I'm not sure it's realistic to think that a form would (a) do this well or (b) be properly used.
  
• Arti Rai pointed out that the software crowd probably screwed up years ago, by not doing what the bioinformatics world did in claiming that you can't get a patent unless you provide the actual working algorithm. This seems like something of a no-brainer. The USPTO has regularly rejected bioinformatics claims on the basis of a lack of "definiteness" for not supplying the algorithm. There's no reason that the same couldn't be done in software. Of course, that would require the USPTO to actually notice this point...
  
• I thought John Duffy's proposal was one of the most interesting (and, in the past, I've found myself disagreeing with Duffy more often than agreeing with him) in which he argued the most "elegant" solution to the software patent problem that isn't all that far off from my own suggestion: fix the "non-obviousness" standard by noting that multiple parties simultaneously, independently inventing the same thing is a sign of obviousness and should lead to no patents being allowed. Duffy's presentation was the one that set Richard Stallman off for arguing that Stallman's solution was "kludgey" rather than a full solution. On this one, I side with Duffy. Duffy's solution here would likely be a lot more effective that Stallman's because patent lawyers could easily write around Stallman's solution of not allowing patents on "general purpose" computing.
  
• Samson Vermont highlighted that we should take into account social harm (Word doc). That is, he suggests courts should base remedies on the amount of harm on the public rather than on the harm on the patentee. "More specifically, in cases in which the defendant's infringement clearly makes the world better off, the court should deny the patentee both money damages and injunctive relief." More specifically, he argues that if the patent isn't actually being used to put a product on the market (either by the inventor or a licensee), the accused infringer is an independent inventor and is actually putting a product out there and the "costs to find the patentee's version of the invention beforehand were greater than the defendant's costs to invent it on his own" then courts should reject any awards. As he notes, when all three conditions are met, "it is very hard to come up with plausible reasons to believe that the defendant's infringement is a bad thing."

There were plenty of other presentations, but those were the ones that seemed most interesting and worth thinking about more deeply. As for the biggest waste of time? That award goes to Dan Ravicher, of PubPat, who plays both sides of the patent troll fence. He started off his presentation by haranguing everyone for not showing enough "respect" for the existing system and various people, and then proceeded to yell at everyone in attendance that they "failed" because they didn't raise their hands fast enough when he mentioned various patent troll lawsuits that he didn't think were that problematic. One of his larger points was sound -- that if you want to convince anyone in the government that the patent system is broken you have to focus entirely on "jobs, jobs, jobs." But there's no reason he had to be completely obnoxious in getting that point across. Many of his other points were specious, at best. However, it has set for me a new "Ravicher Rule": if someone starts off a talk by arguing that everyone needs to be more respectful of everyone else, the probability that they will disrespect pretty much everyone quickly approaches one.

Overall, it was a really great and thought-provoking event. I'm happy that there's a lot of detailed thought going into ways to solve the patent trolling problem, though I'd argue we need to be careful not to just think that this is a "software patent" issue. I think the problems of the system apply equally elsewhere -- which is why I like system-wide fixes, such as those suggested by Duffy and Vermont.

And, just to address this one point before one of our regular patent lawyer commenters tries to make it in the comments: there is an argument among patent system supporters that there is no such thing as a "software patent" and thus any argument that uses that term is meaningless. This is both slightly true and (more importantly) a distortion of the larger issue. As was discussed at the conference, there is a difference between software and hardware that can't be denied. One involves moving around bits. One doesn't. So it's not difficult to define software differently from hardware. The real problem is that if we did carve out software from patentability, it's likely that crafty patent lawyers would quickly figure out how to rewrite patent claims to make them broadly cover the same concepts in a way that could be seen as not being "software." Given all that, I think it's quite legitimate to discuss "patents that cover software" as "software patents," even while I agree that merely targeting "software patents" misses the larger problem.

Filed Under: artia rai, brian love, christina mulligan, dan ravicher, fixes, james bessen, john duffy, mark lemley, patents, peter menell, problems, richard stallman, samson vermont, software patents

Planet Money Explores 'How To Fix The Patent Mess'

from the in-case-of-emergency,-call-mark-lemley dept

In something of a follow up to This American Life's famous episode about the horrors of software patents, the Planet Money team brought on Mark Lemley to talk about how to fix the patent system. If you're aware of Lemley (or read Techdirt) what he talks about isn't all that surprising. He does note that, even if software patents are particularly silly, he doesn't agree with trying to carve them out specifically. Instead, he's still mostly focused on fixing the patent system by properly enforcing the laws already on the books. That means having the USPTO and the courts actually recognize that too many software patents are on general ideas ("functional claiming") when that's not allowed.

Next, the courts and the USPTO need to get much better at rejecting patents for obviousness. He doesn't quite get into how to do this, though I'm still a big fan of using independent invention as a sign of obviousness. He does note that the KSR case (which isn't named in the story) helped move the needle just slightly in the right direction. In that case, the court noted that merely combining two existing inventions is obvious. From there, he suggests recognizing how many patents stack up into an existing innovation -- and what that means. So, using the 250,000 patents in a smartphone as an example, he notes that it's ridiculous for any one patent to hold up innovation in such a scenario, pointing to the MercExchange ruling (again, not named) that said the courts shouldn't issue automatic injunctions for infringement. In other words, when you have 250,000 patents in a smartphone, infringing on one shouldn't hold up the entire device.

The last bit, which still needs work, is fixing damages. Again, using the smartphone example, he points out that when you have 250,000 patents, you can't claim that each patent deserves 5% of the revenue. Otherwise, you don't have smartphones anymore. Of course, fixing damages is still a work in progress. Congress tried to do it with the patent reform bill that was debated for about seven years -- and patent system supporters hit back hard on damages reform, such that the real fixes didn't make it into the final bill. The hope is that the courts will take care of it, but that still seems like a crapshoot.

Filed Under: damages, fixes, functional claiming, injunctions, mark lemley, patents, software patents

The Very Basis Of Our Patent System... Is A Myth

from the time-to-rethink dept

DWG pointed us to what appears to be Mark Lemley's latest (and I'll caveat that with the point that Lemley is crazy prolific, so he may have written something else more recently) paper on the patent system, in which he explores "the myth of the sole inventor," and worries about the fact that our entire patent system appears to be based on this very myth:

The theory of patent law is based on the idea that a lone genius can solve problems that stump the experts, and that the lone genius will do so only if properly incented. But the canonical story of the lone genius inventor is largely a myth. Surveys of hundreds of significant new technologies show that almost all of them are invented simultaneously or nearly simultaneously by two or more teams working independently of each other. Invention appears in significant part to be a social, not an individual, phenomenon. The result is a real problem for classic theories of patent law. Our dominant theory of patent law doesn�t seem to explain the way we actually implement that law.

He notes that if it's true that most inventions are being simultaneously discovered by multiple parties, and we still believe in the basis for the patent system as put forth today, we should be rejecting nearly all patents filed today:

The result is a real problem for classic theories of patent law. If we are supposed to be encouraging only inventions that others in the field couldn�t have made, we should be paying a lot more attention than we currently do to simultaneous invention. We should be issuing very few patents�surely not the 200,000 per year we do today. And we should be denying patents on the vast majority of the most important inventions, since most seem to involve near-simultaneous invention. Put simply, our dominant theory of patent law doesn�t seem to explain the way we actually implement that law.

The paper has an extensive discussion on simultaneous invention, and just how prevalent it is -- something we've discussed before. The point raised is that nearly every major innovation has involved simultaneous invention, and appears to be the sort of "natural" progress that would happen no matter what -- contradicting the idea that patents are needed to act as incentive for the invention.

Multiple, independent studies show that what Merton calls -- singletons are extraordinarily rare sorts of inventions. Indeed, Lamb and Easton call multiple, simultaneous invention -- the pattern of scientific progress. Merton's classic work suggests that inventions occur not merely because an individual did something particularly creative or surprising, but because the time and conditions were right. There are two components to this idea. First, invention is not a discontinuity, but an incremental step in an ongoing process. Inventors are working with the tools they are given and trying to improve those tools or use them to make something new. Schoenmakers and Duysters study 157 different inventions and conclude that they are largely based on extensions of existing knowledge.

Second, invention by one and only one person or group is exceedingly rare. Far more common are different groups struggling with the same incremental problem, and achieving the same solution at roughly the same time. Ogburn and Thomas conducted the classic study here. They document 148 instances of simultaneous invention. Only rarely, they find, does an inventor come up with an idea that is not developed in similar form by others working independently. Data on litigation tells a similar story; empirical evidence suggests that between 90 and 98% of modern patent lawsuits are against independent inventors, not copiers.

It's not difficult to figure out why this is true. While patent system supporters continue to insist that patents are "necessary" as the incentive to innovate (we hear all the time in our comments how without patents, no one would bother inventing), the truth is that there are much more effective and useful drivers of invention and innovation: need and consumer demand. Other studies have shown that the major driver for invention is one's own need. That same study found that a second big driver of innovation was to get past a certain hurdle that would make an overall market bigger. In such scenarios patents don't make sense, because lots of players in the market are willing to collaborate to get past the initial hurdle. Giving a patent to a single player would hinder much of the innovation (as we've seen).

Lemley goes on to point out that this issue of simultaneous invention isn't just the aggregate of "regular patents" obscuring the big genius breakthroughs. In fact, he finds that the big breakthroughs weren't really big breakthroughs at all:

In fact, however, the evidence does not simply show that most inventions result from simultaneous independent invention. It also shows that the vast majority of the most important inventions of the past two centuries�the pioneering inventions that seem with the passage of history such radical departures from the prior art�were themselves the result of gradual social processes in which multiple inventors developed the idea at about the same time.

From there he goes through the history of a variety of such "breakthrough" inventions, and dispels the "myth of the lone genius" in each case. One by one, he goes through the steam engine, steamboats, the cotton gin, the telegraph, the sewing machine, the telephone, the light bulb, the movie projector, the automobile, the airplane, radio, television, the computer, the laser and polymer chemistry -- and in every case shows how lots of people basically came up with the same basic inventions at about the same time, often independently. In fact, sometimes the names most associated with the "invention" were stragglers, who were well aware of the work of others in the field. Lemley does admit to a few true independent inventions... but, in almost every one of those cases, the invention was more of an accident, such as with penicillin, vulcanized rubber, the pacemaker and film -- all of which resulted from accidents or mistakes, rather than any sort of "individual genius" that needed to be rewarded.

From there, Lemley shows how this basically destroys the very basis on which patent theory rests. It's supposed to be about creating the incentive for what wouldn't be created otherwise. And he notes that patents are "costly" to society, but that we as society agree to bear those costs under the (false) belief that we get these unique inventions because of it. As Lemley notes: "If we are patenting things we would have obtained without the cost of a patent, on this theory, we�re wasting our money and probably harming rather than helping innovation downstream."

He also debunks the "ex post" theory for the patent system, which argues that even if patents aren't needed to create the incentives for the initial invention, they are then needed afterwards to incentivize the development of the invention into a product for the market. This theory falls apart quickly for anyone who understands basic free market economics: you don't need a monopoly to bring something to market. In fact, monopolies tend to hinder needed innovations. As Lemley points out, existing incentives such as brand reputation and first-mover advantage seem to suffice. And limiting a market to just a single provider, such as the one who invented it, often seems to lead to the invention being mistargeted, away from the most useful application:

Marconi thought the use of wireless radio technology would be to permit ships at sea to communicate with each other; while that is in fact a use, it is hardly the most important one. Armstrong, the inventor of FM radio, thought he had invented a way of extending the reach of AM radio and broadening its bandwidth; he missed the things (like the absence of static) that actually made FM a success. Bell described his telephone as an improvement in telegraphy, and Western Union turned down an opportunity to buy the patent for $100,000, rejecting the telephone as inherently of no value to us. IBM didn�t foresee the market for personal computers. The transistor was originally conceived primarily as useful in hearing aids. The steam engine was developed to pump water out of flooded mines. Railroads were originally envisioned as a way of getting goods to canals, which would be the dominant form of overland transportation. The VCR was initially marketed to TV stations as a means of airing reruns. And so on.

Next up, Lemley debunks the "disclosure theory" as a basis for patents. We've gone through a variety of reasons why disclosure theory is a myth. Lemley's critique is more direct: patents don't disclose anything useful, for the most part. This was highlighted in the recent This American Life episode on patents, in which a software developer with a patent admitted that he didn't even understand what his own patent said. Lemley puts it simply:

The problem is in part one of law; the Federal Circuit has permitted a number of vague general disclosures that don�t in fact communicate very much to anyone, and patent lawyers often have incentives to write those vague disclosures. So even those who read patents hoping to learn the state of the art would often be disappointed today.

He also discusses a few other reasons why disclosure doesn't work, such as the fact that patent applications are kept secret for 18 months, meaning any disclosure is already quite out of date, and the sheer impossibility of finding relevant patents thanks to the terrible classification system and vague wording. Instead of disclosure, reading patents is almost only done for lawsuit avoidance. As Lemley says: "If they read patents at all, it is to know what is owned, not what is known."

The final section of the paper is where Lemley suggests an alternate theory. That is, he isn't convinced that all of this means we should dump the patent system, but that we might need to rethink what patents are for and how to set them up... though even he concludes that his theory isn't entirely convincing and probably needs additional thought. His idea is that "patent races," whereby the opportunity to gain such a monopoly makes inventors rush their work to get the patent, may be a better way of viewing the patent system, with people often "racing" to beat others to the patent. He admits that this setup likely has negative consequences (many of which we see in the market today -- such as blocking out those who independently invent, but come in second or later). However, as an explanation for how the patent system works, it probably presents a much better theory than the standard theories, which he showed didn't work, earlier in the paper.

As always with Lemley, the paper is a great read. While it runs 104 pages, it's quite easy to get through. It's thorough, well-argued and well-documented. I'd be curious, though. to hear any critiques from patent system supporters. Too often when we write about these kinds of papers, we just get angry insults in the comments from patent holders, who insist that it's all just an "excuse to steal." This paper goes to great lengths to back up its arguments, and it would be nice if those who disagree with the position at least were able to do the same.

Filed Under: mark lemley, patents, sole inventor

Rep. Anna Eshoo (From Silicon Valley!) Thinks PROTECT IP Is About Immigration?

from the well,-it-does-involve-ICE... dept

Last week, we noted that a bunch of law professors (at final count, 108) signed on to a letter to every member of Congress highlighting problems with PROTECT IP. One of the key authors of the letter was Mark Lemley, the respected lawyer and Stanford law professor, who is one of the leading voices on this and related issues. He, of course, sent the letter directly to his own elected official, Rep. Anna Eshoo, who represents a large part of Silicon Valley, and thus should be one of the Congressional Reps leading the charge against this horrific bill -- especially since a bunch of VCs (many of whom live and work in her district) have pointed out that if this goes through, they'll fund less innovation in her district.

In other words, this is an issue that Eshoo should be front and center on. Unfortunately, the only Silicon Valley Rep. who has actually bothered to pay attention and speak out against this has been Rep. Zoe Lofgren, from a nearby district. I've really been quite disappointed that none of the other Silicon Valley Reps, including Eshoo, Jackie Speier and Mike Honda, have spoken up about this awful legislation. But, it's even worse than that when it comes to Eshoo. In response to Lemley's letter, Eshoo appears to have responded to a totally unrelated issue: immigration:

"I do share your concerns about illegal immigration and have consistently supported legislation to strengthen our Border Patrol. Our immigration system is in dire need of reforms. This is a national security issue and an economic one as well. We have porous borders and illegal crossings which make us vulnerable on the security front. We have heavy backlogs to process those waiting to become citizens (years-worth) in a system that is highly strained, lengthy and inefficient. There are, as you know, 10 to12 million people in our country without legal status. Each of these issues represents a critical problem which must be addressed and I think they need to be taken up comprehensively to overhaul the system.

While I agree that more needs to be done to curb the flow of illegal immigrants into our country, I shall continue to vote against legislation that in large part places unnecessary burdens on individuals who have legally immigrated to the U.S."

Oops. Now, in our discussions about Homeland Security's Immigration and Customs Enforcement (ICE) group's Operation In Our Sites effort to seize domain names without due process and under very questionable legal theories, many people have asked: what does immigration have to do with copyright? The ICE folks and their supporters note that one of ICE's mandates is to keep counterfeit products out of the country, and the group has stretched and twisted that mandate into believing it now can run roughshod over any intellectual property issue, no matter how little it grasps the legal details. So perhaps in some twisted way, folks in Eshoo's office think that PROTECT IP is an immigration issue? Or we can go with Occam and his razor and assume that Eshoo's people sent back the wrong form letter. Either way, it's not particularly comforting to think that this is the level of concern they put in when a leading voice on a particular issue contacts them about a bill under discussion.

Filed Under: anna eshoo, immigration, mark lemley, protect ip

Rojadirecta Sues US Government, Homeland Security & ICE Over Domain Seizure

from the with-top-notch-legal-support dept

This morning, we wrote about the list of sites that ICE knew was challenging its domain seizures, and some people complained that there still were no details. There's been a lot happening behind the scenes, but the first bit of public information is now available, as the company behind Rojadirecta, Puerto80 has officially filed suit against the US government, demanding the return of its domains. Not only that, but it's brought on some top notch legal talent to help them. The company is represented by Ragesh Tangri and Mark Lemley from Durie Tangri. If you're at all familiar with intellectual property law, you know who Lemley is, and know the level of respect he gets within intellectual property circles. In fact, it's interesting to note that one of Lemley's papers is one that we've seen frequently cited by those who believe the domain seizures are legal. The fact that he's arguing on the other side seems pretty telling.

As for the filing itself, it details the stalling by the US government that we pointed out last month:

Contrary to the grounds on which the domain names were seized, the Rojadirecta site is not violating copyright law, let alone criminal copyright law. Rojadirecta explained this to the government when, on February 3, 2011, it sent ICE and the Department of Justice a letter requesting immediate return of the subject domain names pursuant to 18 U.S.C. � 983(f). Following that letter, counsel for Puerto 80 Projects, S.L.U. (�Puerto 80� or �Petitioner�), the company which owns the sites, repeatedly tried to discuss the seizure with the government, but was unable to engage with the government until it notified the U.S. Attorney�s Office of its intent to seek a temporary restraining order and file a petition for immediate return of the seized domain names. It was not until then that Puerto 80 was able to have a substantive conversation with the appropriate officials. Hoping to avoid burdening the court, Puerto 80 held off filing the instant petition pending the outcome of those negotiations. On May 26, 2011, the government informed counsel for Puerto 80 that the only acceptable �compromise� would entail Puerto 80 prohibiting its users from linking to any U.S. content anywhere on its sites. Because this �solution� would prohibit Puerto 80 from engaging in lawful acts not prohibited by copyright law, Puerto 80 chose instead to challenge the seizure in court.

The filing notes that it is asking the court to speed up the process, as it tried to be patient, but the delays in reclaiming the domain are harming Puerto 80's business. It also notes that "in hopes of avoiding having its property tied up in lengthy forfeiture proceedings, Puerto 80 decided to engage in good faith negotiations with the government and held off filing the instant petition pending the outcome of those discussions." It then lists out all of the detailed attempts to get the domains back. It involves multiple attempts by Puerto 80's lawyers to discuss this with the Justice Department, and as we heard from pretty much all the sites in this process, talking to anyone substantial proved to be quite difficult. It also notes that "the government attempted to dissuade Puerto 80 from filing anything in district court." That supports our contention that the government really wanted to avoid a legal challenge...

As for the specific legal arguments, it starts out by pointing out that under the rules for seized property, there are certain conditions under which the seized property should be returned -- with a key one being that "the property will be available at the time of the trial." As we've discussed at length, the key official reason for seizures is to preserve evidence. That's why this is a key element here: if the evidence will be there, there is no reason for the seizure.

Then out come the big guns, starting with the claim (as we've suggested in the past) that the seizure represents unlawful prior restraint (i.e., a violation of the First Amendment). Here's a big chunk of the filing, included in its entirety (minus footnotes), because it's quite interesting:

The seizure imposes another hardship on Puerto 80, in that it constitutes an invalid prior restraint and suppresses its users� and readers� protected First Amendment activities. See Fort Wayne Books, Inc. v. Indiana, 489 U.S. 46, 63 (1989) (�[W]hile the general rule under the Fourth Amendment is that any and all contraband, instrumentalities, and evidence of crimes may be seized on probable cause . . . ., it is otherwise when materials presumptively protected by the First Amendment are involved.�). See also Maryland v. Macon, 472 U.S. 463, 468 (1985) (�The First Amendment imposes special constraints on searches for and seizures of presumptively protected material, and requires that the Fourth Amendment be applied with �scrupulous exactitude� in such circumstances.�) (internal citation omitted); Lo-Ji Sales, Inc. v. New York, 442 U.S. 319, 326, n.5 (1979) (noting that the First Amendment imposes special constraints on searches for, and seizures of, presumptively protected materials). In Fort Wayne, state and local officials (respondents) filed a civil action pursuant to Indiana�s RICO laws, alleging that the defendant bookstores had engaged in a pattern of racketeering activity by repeatedly violating Indiana�s obscenity laws. 489 U.S. at 50-51. Prior to trial, respondents petitioned for, and the trial court granted, immediate seizure of the bookstores pursuant to a state law that permitted courts to issue seizure orders �upon a showing of probable cause to believe that a violation of [the State�s RICO law] involving the property in question has occurred.� Id. at 51. On appeal, the Supreme Court held that the pretrial seizure order was unconstitutional, stating that �mere probable cause to believe a legal violation has transpired is not adequate to remove books or films from circulation.� Id. at 66. As in Fort Wayne, the government here has seized an entire business and effectively suppressed all of the expressive content hosted on it, including political discussions, commentary, and criticism by the site�s users�without it being determined whether the seizure was �actually warranted� under the relevant statutes. Id. at 67.

In Center for Democracy & Technology v. Pappert, 337 F. Supp. 2d 606, 619 (E.D. Pa. 2004), the Eastern District of Pennsylvania struck down, on First Amendment grounds, a Pennsylvania statute that permitted the state�s Attorney General or a district attorney to seek a court order requiring an Internet Service Provider (�ISP�) to �remove or disable items residing on or accessible through� the ISP�s service upon a showing of probable cause that the item constituted child pornography. The district court found that the statute imposed an unconstitutional prior restraint on speech. It concluded that under Fort Wayne Books and Bantam Books v. Sullivan, 372 U.S. 58 (1963), a court must �make a final determination that material is child pornography after an adversary hearing before the material is completely removed from circulation.� Pappert, 337 F. Supp. 2d at 657 (emphasis added). The court further noted that the state statute �allow[ed] for an unconstitutional prior restraint because it prevents future content from being displayed at a URL based on the fact that the URL contained illegal content in the past.� Id.

In the instant case, the government effectively shut down an entire website, suppressing all of the speech hosted on it, based on an assertion that there was probable cause to believe that some of the material linked to by the website (though not found on the website itself) might be infringing. The site�s owner was not provided any advance notice, nor was he provided the opportunity to contest the seizure before (or, for that matter, shortly after) the government shut down the site. Nor were the site�s users afforded any notice or opportunity to contest the seizure. Because case law is clear that �mere probable cause to believe a legal violation has transpired is not adequate to remove [protected material] from circulation,� Fort Wayne, 489 U.S. at 66, the seizure of the expressive materials in this case violates the First Amendment. See also Pappert, 337 F. Supp. 2d at 657 (finding that a procedure that permits a judge to make an ex parte finding of probable cause that material is child pornography, with no opportunity for the content publisher to receive notice or be heard, violates the First Amendment). This First Amendment deprivation extends not just to registered users of Rojadirecta, but also to anyone wishing to visit the website. See, e.g., Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S. 748, 756 (1976) (�[T]he protection afforded is to the communication, to its source and to its recipients both.�); Red Lion Broad. Co. v. FCC, 395 U.S. 367, 390 (1969) (�It is the right of the public to receive suitable access to social, political, esthetic, moral, and other ideas and experiences . . . . That right may not constitutionally be abridged . . . .�).

If you want the key bit, it's from that third paragraph above. One of the footnotes also points out (as we've noted elsewhere) that the government appears to have made up, whole cloth, the idea that linking to infringing content can be seen as criminal infringement:

Indeed, several courts have held that the act of indexing and linking to copyrighted material� which was the government�s basis for seizing the domain names�is not direct or indirect copyright infringement. See Field v. Google Inc., 412 F. Supp. 2d 1106 (D. Nev. 2006); see also Ticketmaster Corp. v. Tickets.com, Inc., No. CV 99-7654 HLH(BQRX), 2000 WL 525390, at *2 (C.D.Cal. Mar. 27, 2000) (finding that hyperlinking to other sites does not constitute direct infringement); Arista Records, Inc. v. MP3Board, Inc., No. 00 CIV. 4660, (SHS) 2002 WL 1997918, at *4 (S.D.N.Y. Aug. 29, 2002) (unreported) (linking to content does not implicate distribution right and thus, does not give rise to liability for direct copyright infringement); Online Policy Group v. Diebold, Inc., 337 F.Supp.2d 1195, 1202 n.12 (N.D. Cal. 2004) (�Hyperlinking per se does not constitute direct copyright infringement because there is no copying.�).

Finally, the filing points out that the domain names did not meet the conditions set out under US law to qualify for seizure in the first place, saying that it is not contraband, evidence, "particularly suited for illegal activities" or "likely to be used to commit additional criminal acts." That last one, I assume, is the one that most supporters of the seizures will take issue with, but, the argument is again laid out in tremendous detail:

Puerto 80 does not host any infringing material on the websites which operate under the subject domain names... In the same way a search engine or other site which aggregates links to existing material on the Internet, Rojadirecta provides an index of links to streams of sporting events that can already be found on the Internet through a search for those sites or simply by typing the URL for the site directly. Id. Such activity does not constitute direct copyright infringement, much less criminal infringement. See supra, at note 8. Indeed, United States Senator Ron Wyden (D-Or) made this point in a letter he wrote to ICE Director John Morton and Attorney General Holder expressing concern over the government�s seizure of the subject domain names....

Puerto 80�s operation of the Rojadirecta site does not constitute contributory infringement because the subject domain names are capable of�and are, in fact, used for� substantial non-infringing uses. Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, reh�g denied, 465 U.S. 1112 (1984); Arista Records LLC v. Lime Group LLC, 715 F. Supp. 2d 481, 517-18 (S.D.N.Y. 2010) (summary judgment inappropriate where material fact existed as to whether file-sharing program, which was �used overwhelmingly for infringement,� is �capable of substantial non-infringing uses.�).

Nor is Rojadirecta a site devoted simply to linking to such streams. In addition to providing a forum for discussion on sports, politics, and a variety of other topics, the Rojadirecta site enables users to post links to authorized sports broadcasts. For example, on Saturday, February 12, 2011, the Rojadirecta site (hosted on the rojadirecta.es domain name) provided a link to �9:30am Hockey (NHL): Los Angeles � Washington.�... Clicking on this link opened a new window for the Yahoo! sports website for the National Hockey League, and provided a live stream of the match between the Los Angeles Kings and Washington Capitals. Id.

Nor does Puerto 80�s operation of the Rojadirecta site constitute vicarious liability because it does not have �a right and ability to supervise that coalesce[s] with an obvious and direct financial interest in the exploitation of copyrighted materials.� Softel, Inc. v. Dragon Med. & Sci. Commc�ns Inc., 118 F.3d 955, 971 (2d Cir. 1997) (quoting Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304, 307 (2d Cir. 1963) (emphasis added)). Puerto 80 does not receive any revenue that is derived from specific content hosted on, or streamed by, the sites to which it links.... In other words, Puerto 80 does not receive any revenue from any site to which a user can link from the subject domain names based upon the content of that site. Id. To the extent there is any site to which Rojadirecta links that contains infringing material, Puerto 80 receives no specific financial benefit from a user clicking through to that site and viewing such content.... Because Puerto 80�s revenues are not tied to whether or not infringing material is linked to or accessed, the government cannot show that Puerto 80 has a �direct financial interest in the exploitation of copyrighted materials� which �coalesce[s] with� any right or ability to supervise what is linked to on the site. See Artists Music, Inc. v. Reed Publ�g (USA), Inc., Nos. 93 civ. 3428(JFK), 73163, 1994 WL 191643, at *6 (S.D.N.Y. May 17, 1994) (direct financial benefit not established where defendant leased space at a trade show for a fixed fee to exhibitors who played infringing music, but defendant�s revenues were not dependant on whether exhibitors actually played music or what they played); Viacom Int�l Inc. v. YouTube, Inc., 718 F. Supp. 2d 514, 521 (S.D.N.Y. 2010) (in DMCA safe-harbor context, �financial benefit directly attributable to the infringing activity� not established �where the infringer makes the same kind of payment as non-infringing users of the provider�s service�) (quoting Senate Judiciary Committee Report and the House Committee on Commerce Report, H.R. Rep. No. 105-551, pt. 2 (1998)).

Furthermore, the filing points out that the government totally failed to meet the requirements to show criminal copyright infringement, and notes that the government cannot show that Rojadirecta meets those requirements.

The full filing is embedded below, but I've pulled out most of the key points above... Earlier this morning we had supporters of the domain seizures insist that no one was actually filing lawsuits in the US over this. It will be interesting to see how they respond to this particular filing.

Filed Under: copyright, criminal copyright infringement, dhs, doj, domain seizures, ice, mark lemley, rojadirecta, seizures
Companies: puerto 80

How Many Times Will Content Industries Claim The Sky Is Falling Before People Stop Believing Them?

from the crying-wolf dept

Michael Scott points us to a fantastic draft paper by respected intellectual property lawyer/scholar Mark Lemley recapping the long history of content industries declaring that the sky is falling every time a new technology hits the scene. From photographs (going to destroy painting) to musical recordings (going to destroy live music) to radio (going to destroy recorded music) to cable TV (going to destroy regular TV) to the photocopier (going to destroy books) to the VCR (going to destroy the movie industry) to audio cassettes (home taping is killing music) to the MP3 player (ditto) to file sharing (ditto) to the DVR (killing TV) and onwards -- the content industries seem to have a problem in immediately declaring that the sky is falling... when it turns out it's never actually falling at all. The paper is a quick read and quite enjoyable. Now, I should admit that I had no idea that the paper gives me an all-too-kind and surprising name check at the end, which I didn't know about until I reached that part of the paper, but I had actually already started writing up this post, so hopefully no one thinks that influenced my decision to write about it.

There isn't necessarily anything new in the paper. Many of you probably know all of these stories, and they've been discussed at length over the years in posts and comments here on Techdirt. However, it's nice to put a bunch of them together in a single document just to highlight the same pattern over and over again:

1. New technology
2. Legacy industry freaks out saying the world is ending
3. Industry flocks to DC & the courts to demand fixing
4. Turns out that the new technology actually increases the market

Given how many times this has happened, isn't it about time that politicians, judges and the press stopped just believing the industry every time they make this claim? Shouldn't the burden of proof really be on these industries to prove that they're actually being destroyed?

And, yes, many of these technologies did require changes to business models -- which may have meant that some legacy players went out of business. But failing companies and failing industries are two totally different things. It's important to remember that. As Lemley notes in the paper:

The content industry, it seems, has a Chicken Little problem.

It may, in fact, be the case that the sky is falling. But, if you claim that the sky is falling whenever a new technology threatens an existing business model, the rest of the world can be forgiven for not believing you when you claim that this time around it's going to be different than all of the other times. Now, let's be clear, each one of these technologies changed the business model of the industry. They caused certain revenue streams to decline. But they also opened up new ones.

Filed Under: business models, chicken little, content, innovation, mark lemley, predictions, technology