House Votes For COMPETES Act, Even With Its Problems, Almost Entirely On Party Lines

from the that's-too-bad dept

Congress is trying to overload anyone who supports an open internet with terrible bill after terrible bill. Last week, they brought out the "COMPETES Act" (renamed from Endless Frontiers which had already been renamed as "USICA" and then became COMPETES). The underlying concept of the bill actually is important -- reviving American innovation. The Senate version of the bill was mostly good and had broad bipartisan support. However, for reasons I don't understand, Nancy Pelosi allowed the bill to be loaded up with a bunch of items on the Democrats' wish list, including the ridiculously dangerous SHOP SAFE Act.

This week, of course, we've been stuck dealing with the reintroduction of the also terrible EARN IT Act in the Senate, and while all of the open internet activists were gearing up to fight that, the House went ahead and voted to approve the COMPETES Act with no changes. It was an almost strict party-line vote, ending up at 222 for and 210 against. One Democrat -- Rep. Stephanie Murphy -- voted against it, and one Republican -- Rep. Adam Kinzinger (who technically is still a Republican) voted for it.

This all seems so incredibly counterproductive by Pelosi and the Democrats. I know they want a "win" and when there's a bill that will move they feel they need to hang all sorts of gifts on it, but following the Senate's lead and coming up with a more reasonable bill that wasn't stuff full of bad ideas would have presented this as an actually interesting and useful bill, rather than turning it into a partisan thing. Politics is where policy goes to die. And, unfortunately, it may take parts of the open internet with it.

That said, the Senate version does not have the nonsense and dangerous SHOP SAFE bill attached, and the hope is that during the conference process where the House and Senate try to square up the different bills, SHOP SAFE will get left on the cutting room floor, where it belongs.

Filed Under: competes act, competition, innovation, jerry nadler, liability, nancy pelosi, shop safe, trademarks

Craft Brewing Trade Mag Argues Beer Is The Most IP Product Ever, Ignores History Of The Industry

from the calling-all-lawyers dept

And now, we shall talk about one of life's great pleasures: beer. This nectar of the gods has been something of a focus of mine, particularly given the explosion of the craft brewing industry and how that explosion has created an ever-increasing trademark apocalypse over the past decade. It is important context for the purposes of this post that you understand that the craft brewing industry, before it exploded but was steadily growing, had for years operated under a congenial and fraternal practice when it came to all things intellectual property. Everything from relaxed attitudes on trademarks, to an artistic bent when it came to beer labels, up to and including the regular willingness of industry rivals to regularly collaborate on specific concoctions: this was the basic theme of the industry up until the past decade or so. It was, frankly, one of the things that made craft beer so popular and fun.

With big business, however, came corporatized mentalities. Suddenly, once small craft breweries doubled in size or more. Legal teams were hired and there was a rush to trademark all kinds of creative names. The label art, once the fun hallmark of the industry, became a wing of the marketing department. This is how, now in 2020, you get trade publications like Craft Brewing Business arguing that beer is one of the most all-encompassing products when it comes to intellectual property.

To be fair, given the current climate, you can see some of the logic in the following:

Beer aficionados worldwide can easily describe the nuances of pilsners, IPAs, milkstouts, and lagers. More hazy is the fact that beer is a product that touches upon nearly every type of intellectual property. Indeed, the names of breweries and beers are subject to trademark; label art and packaging are works of authorship covered by copyright law; and hops—that critical component of a beer’s aroma and flavor—can be patented.

It's a fair point, certainly. Though, left entirely unsaid in the entire post is whether any of this is a good thing. Instead, the post goes on to explore in some detail just how all things IP can be applied to brewers' products. Even when it gets absurd, the post hand-waives away any concerns. We'll start with the patenting of hop varieties.

The short answer to this seemingly straightforward query is the plant patent. By statute in the United States, whoever:

” invents or discovers and asexually reproduces any distinct and new variety of plant, including cultivated sports, mutants, hybrids, and newly found seedlings, . . . may obtain a patent therefor. . . .”

Hops can be among these new plant varietals, and as part of the bargain for inventing a novel strain, brewing innovators release their work into the public domain after 20 years. But until that two-decade window closes, the creator and owner of a plant patent gets to cash in exclusively on the agricultural brainchild.

A couple of things here. First, the idea that mild differences in varieties of particular plants should get patents doesn't strike me as a great thing. And, given the longstanding practice of patent-extending by making minor tweaks to the biology of the plants and then re-patenting them, I can't imagine why the craft beer industry, once rife with creative brews, would want any of this protectionism.

Second, as the post mentions, though barely, patent holders for even some of the most well-known hop varieties regularly fail to hold up their end of the patent deal with the public.

Of note, if a patent owner does not adequately teach the world (translation: the public domain) about the plant at issue and how to make it upon the patent’s expiration, the patent’s owner—by effectively keeping the invention secret and taking advantage of the 20-year monopoly bestowed by patent law—has not kept up its side of the bargain. This unfortunately seems to be the case with respect to the Citra hops patent, which does not offer much in the way of substantive direction for replication of this varietal, meaning it may not be enabled and, therefore, subject to challenge.

Great.

When it comes to trademarks, the post does a decent job of articulating how trademarks are chiefly meant to avoid customer confusion. While true, the industry survived for decades without putting any real emphasis on trademarks. That seems worth mentioning. Instead, the post goes on to use an absolutely awful example of trademarks being used to protect an industry brand.

To be clear, marketplace confusion is what trademarks are meant to prevent. That being said, if a shopper strolls down a grocery aisle, peruses the beer selection, and confuses a bottle of Stone IPA with and a Keystone Light by virtue of packaging—and advertisement—encouraging drinkers to “grab a Stone,” Molson Coors Beverage Company (owner of the Keystone brand) may be infringing upon Stone IPA’s trademark. If this scenario sounds familiar, that is because this very dispute between Stone Brewing and Molson Coors is scheduled for an October trial in federal court.

Here again we have errors of omission. While Stone is indeed in a fight with Molson Coors as described above, the article fails to point out that Stone Brewing, in service of getting a huge judgement in this court case, has turned on a ton of other craft breweries with which they used to coexist peacefully, and has started bullying them with its trademarks as well. And, what's more, Stone went on to piss and moan when the wider public thought it was behaving like bullying dickheads in all of this. This seems like exactly the sort of thing craft breweries could learn from, yet it's all totally absent from the post.

And, while the post goes on to ignore the question of copyright in label art, the most glaring absence of information has to do with the history of the industry. Again, this is an industry that exploded before everyone decided to have corporatized legal firms challenging every trademark application that's even close to infringement. If there is a lesson in the last decade for the craft beer industry, it's that it should have striven really hard to retain its roots when it became big business.

And the real shame of it is that new brewers reading trade magazines like Craft Brewing Business may not know, and now won't learn, of those far better times.

Filed Under: beer, craft beer, trademarks

California Man Gets Sued After Trying To Trademark Bully A Theme Park

from the oops dept

We've seen a great many examples of trademark lawsuits here at Techdirt. In most cases, those lawsuits are levied by individuals and companies that are the trademark bully, but that's not always the case. We also see plenty of suits that are raised in defense of such bullying, in which the entity suing asks the court to simply affirm that its use is not infringing. Trademark bullies, of course, don't like when that sort of thing happens.

Meet Scott D'Avanzo of California. Scott did a pretty cool thing and created a haunted house attraction in his garage, naming it the "Mystic Motel." Then he came across the plans of the Silver Dollar City theme park near Branson for its new "Mystic River Falls" water rafting ride. At that point, he did the very un-cool thing of contacting Mystic River over the trademark he had on his haunted house and demanding to speak about the name of the new ride.

Scott D'Avanzo said he sent Silver Dollar City a letter earlier this year asking the theme park to contact him about the name, which he claims is similar to the "Mystic Motel" name he used for a haunted house attraction he started out of his garage.

"You have to police your trademarks," D'Avanzo said. "That's all we were doing is protecting what was ours."

D'Avanzo said he has sent many letters to other businesses that are similar to the one he sent Silver Dollar City. He said his letters are usually followed by a phone call where the two parties can work out some parameters for use of the name.

Silver Dollar City, however, didn't bend the knee to D'Avanzo. Instead, the theme park filed a lawsuit, seeking to have the court declare that the name of its ride at a large-ish theme park doesn't somehow violate the trademark rights for a garage-based haunted house. The reported arguments Silver Dollar City makes are the ones you would expect; namely, that its use of the word "Mystic" isn't going to cause confusion among the public for a "family project and neighborhood attraction." That's all the theme park wants: the reasonable use of the name of its ride.

But Silver Dollar City doesn't stop there. The theme park also points out that D'Avanzo didn't oppose its trademark application, didn't say a word about it until it came time for a money-grab, and, oh, D'Avanzo destroyed his Mystic Motel setup entirely some time ago.

Upon information and belief, both the “Mystic Motel” “dark house” and the Christmas-themed “Journey to Polar Point” family projects were destroyed or deconstructed at some time. Upon information and belief, the “Mystic Motel” and “Journey to Polar Point” marks were not in continuous use with those projects during certain years. Upon information and belief, the “Mystic Motel” and “Journey to Polar Point” marks were not used at all or in interstate commerce with those projects during certain years. Upon information and belief, the “MYSTIC MOTEL” mark does not appear to be in use at this time. Upon information and belief, Mr. D’Avanzo and his family are not currently living in the Ladera Ranch house and they appear to have no ability to offer the “dark house” attraction under the “MYSTIC MOTEL” mark for Halloween this year.

In fact, the filing goes so far as to claim that D'Avanzo's trademark application itself may have been built on lies, where he claims to be using the "Mystic Motel" mark in interstate commerce, but never did. On top of that, D'Avanzo created a separate company, Adrenaline Attractions, to which he assigned the trademark. Adrenaline Attractions doesn't provide amusement attractions, but instead consults with parks to design rides, which isn't the market designation for which D'Avanzo has his trademark. Also, Adrenaline Attractions appears to have exactly one customer. Again, this is not a story about confusion in commerce, but about a money-grab.

This, somehow, rates with D'Avanzo as bullying.

"That's what they are is a big bully," D'Avanzo said of Silver Dollar City.  "I'm not a stranger to the court," D'Avanzo said. "And if I have to fight, I will."

Any reasonable assessment of the situation would result in Silver Dollar City's request for declaratory judgement to be granted. I'd only like to add that it takes chops to bully a company over a trademark, have that company ask the court to defend it from the bullying, and then call the company the trademark bully.

Maybe D'Avanzo can add an IP wing to his haunted house, except he doesn't appear to actually have one any longer.

Filed Under: amusement parks, haunted house, mystic, mystic motel, mystic river, scott d'avanzo, theme parks, trademark bully, trademarks
Companies: adrenaline attractions, silver dollar city

USPTO Drops Its Demands For Applicants' Green Cards

from the begrudgingly-slides-back-into-its-own-lane dept

The US Patent and Trademark Office's side venture into immigration enforcement has come to an abrupt end. It recently instituted a US attorney requirement for foreigners filing trademark applications with the Office. This was apparently done to limit the flow of bogus trademark applications, a large number of which originated in China.

This wasn't the problem. The problem was that the USPTO started requiring examiners to verify the immigration status of non-US citizens applying for trademarks. It was no longer enough to provide some form of address verification, like a utility bill. The USPTO was now demanding proof of permanent residence, which would limit applications by non-US citizens living in this country to green card holders.

Notably, the USPTO does not require applicants to be legal residents of the United States. And only recently did it even require applicants from foreign countries to retain a US attorney for filing.

After receiving a bit of backlash for branching out into immigration enforcement, the USPTO is backing down on its demands for green cards. Paul Singer of WGBH (who broke the original story) has more details on the rollback.

Friday morning, the trademark office scrapped the guidance and issued new instructions that dropped any reference to immigration status. The new guidelines to staff say only that an applicant may be asked to provide proof of residence at the U.S. address, such as a lease or a utility bill.

The new instructions also remove provisions that would have required foreign applicants declaring U.S. addresses to provide proof of legal status even if they had obtained a U.S. trademark attorney. The change makes it clear that proof of address is only needed in cases where the applicant does not have a U.S. attorney.

This walk-back indicates the USPTO was looking to be in the immigration business but had trouble getting examiners to buy in on the new focus. If it was a wholly legitimate directive, there'd be no reason to alter it so soon after its enactment. Now that this directive has been clarified, examiners can go back to doing their actual job -- fielding ridiculous trademark applications -- and stop worrying about whether they're going to have to start sharing cubicle space with ICE officers.

Filed Under: immigration status, trademarks, upsto

Intellectual Property Is Neither Intellectual, Nor Property: Discuss

from the have-at-it dept

Well over a decade ago I tried to explain why things like copyright and patents (and especially trademarks) should not be considered "intellectual property," and that focusing on the use of "property" helped to distort nearly every policy debate about those tools. This was especially true among the crowd who consider themselves "free market supporters" or, worse, "against government regulations and handouts." It seemed odd to me that many people in that camp strongly supported both copyright and patents, mainly by pretending they were regular property, while ignoring that both copyrights and patents are literally centralized government regulations that involve handing a monopoly right to a private entity to prevent competition. But supporters seemed to be able to whitewash that, so long as they could insist that these things were "property", contorting themselves into believing that these government handouts were somehow a part of the free market.

For years I got strong pushback from people when I argued that copyright and patents were not property -- and a few years ago, I modified my position only slightly. I pointed out that the copyright or the patent itself can be considered property (that is, the "right" that is given out by the government), but not the underlying expression or invention that those rights protect. Indeed, these days I think so much of the confusion about the question of "property", when it comes to copyright and patents, is that so many people (myself included at times) conflate the rights given by the government with the underlying expression or invention that those rights protect. In other words, the government-granted monopoly over a sound recording does have many aspects that are property-like. But the underlying song does not have many property-like aspects.

Either way, it's great to see the Niskanen Center, a DC-think tank that continually does good work on a variety of subjects, has decided to try to re-climb that mountain to explain to "free market" and "property rights" supporters why "intellectual property is not property." If you've been reading Techdirt for any length of time, most of the arguments won't surprise you. However, it is a very thoughtful and detailed paper that is worth reading.

Imagine two farms sitting side by side in an otherwise virgin wilderness, each of them homesteaded by a husband-and-wife couple (let’s call them Fred and Wilma and Barney and Betty) — two parcels of newly created private property appropriated from the commons by productive labor. One day, as Fred and Wilma are both working outside, they both notice Betty walking through the orchard of apple trees that Barney and she had planted some years back and which are now just ready to bear fruit for the first time. As Betty picks some of the first ripening apples to use in baking a pie, she sings an enchantingly lovely ballad that she and Barney had made up together back when they were courting. For the rest of the day Wilma can’t stop thinking about that beautiful song, while Fred can’t stop thinking about those trees full of delicious apples. That night Wilma sings the song to her baby daughter as a lullaby. Fred, meanwhile, sneaks over onto Barney and Betty’s property, picks a sack full of apples, tiptoes back to his property and proceeds to eat the lot of them, feeding the cores to his pigs before heading back inside.

Do you think that Fred and Wilma both did something wrong? Are they both thieves? Did both of them violate Barney and Betty’s rights? After all, Fred stole their apples, and Wilma “stole” their song — that is, she sang it to someone else without asking for permission. If you’re having trouble seeing Fred and Wilma’s actions as morally equivalent, it’s because of a fundamental difference between the two types of “property” they took from Barney and Betty.

That fundamental difference is that Barney and Betty’s song, like all ideal objects, is a nonrivalrous good. In other words, one person’s use or consumption of it in no way diminishes the ability of others to use or consume it. As expressed with characteristic eloquence by Thomas Jefferson (who perhaps not coincidentally viewed patents and copyrights with skepticism), the “peculiar character [of an idea] is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.”

By contrast, physical objects like apples are rivalrous: Once Fred and his pigs had finished devouring the ones Fred stole, they were gone and nobody else could consume them. Even when physical objects aren’t physically consumed by their owners — think paintings or plots of land — there is still unavoidable rivalry in using, enjoying, and disposing of them. The owner exercises that control over the owned object, and therefore nobody else does.

This is why it’s clear that Fred inflicted harm on his neighbors, since he took the fruit that they grew and now they don’t have it anymore. But Barney and Betty still have their song; the fact that Wilma sang it did nothing to prevent them from singing it anytime they want to. So, if Wilma did harm to Barney and Betty, what exactly is it?

The whole paper is really worth reading, and digs in on how and why people create, the nature of externalities in the creative process, and what actual data shows on the incentives of copyright and patents in driving innovation and creativity. The paper also digs deep on how excessive monopoly rights vastly hinder follow-on creativity and innovation (which is how most innovation and creativity come about in the first place).

In the case of copyright, excessive internalization is an impediment to the process of borrowing that is essential for the growth of creative works. While each artist may contribute new ideas to the cultural landscape, their contributions are based on the previous body of work. We all begin as consumers of ideas — and then some of us go on to create new ones. Take the case of Star Wars. The Jedi, Darth Vader, and the Death Star were all new in 1977, but George Lucas relied heavily on older ideas to make them possible. It is common knowledge that Lucas borrowed from Joseph Campbell’s Hero With a Thousand Faces when crafting the hero’s journey of Luke Skywalker. But the borrowing didn’t stop there. The famous opening crawl is virtually identical to those at the beginning of episodes of Flash Gordon Conquers the Universe. Telling the story from the perspective of two lowly characters, the droids R2-D2 and C-3P0, was inspired by Kurosawa’s The Hidden Fortress — something Lucas freely admits.

But while Lucas’s borrowing was permissible under copyright law, other borrowing is not, as current law gives rights holders control over broadly defined “derivative works.” A number of Star Wars fan films have been shuttered or severely limited in their scope (mostly by prohibiting commercialization) due to threats of litigation by Disney. The genre of fan fiction is a legal gray area, with many tests to determine whether it constitutes fair use, including commercialization and how “transformative” the work is. While the vast majority of these works will never amount to much, their existence is more tolerated than established as a clear-cut case of fair use. A more aggressively enforced copyright regime would almost certainly be the end of most fan fiction.

Thankfully, the paper also takes on the "fruits of our labor" view of both copyright and patents and why that doesn't make much sense either.

The idea that people should be able to enjoy the fruits of their labor has clear intuitive appeal, but its invocation as a justification for stopping other people from making use of your ideas without your permission suffers a fatal difficulty: The argument proves far too much. Indeed, the problem goes beyond the widely understood “negative space” of intellectual creations that stand outside of patent and copyright protection: scientific discoveries, fashion, comedy, etc. Given that every new business venture starts with an idea, why shouldn’t every first entrant in a new industry be able to claim a monopoly? Or, for that matter, why not every first entry in a geographic market? If someone has the bright idea that their hometown needs a Thai restaurant and succeeds in making a go of it, why shouldn’t she be able to prevent competitors from coming in to poach her good idea — at least for a couple of decades? On the other hand, given that every new idea is in some way adapted from earlier ideas, why shouldn’t those first entrants in new industries and new markets be seen as “thieves” and “pirates” who are infringing on earlier ideas? Once you really start working through the implications, the whole argument collapses in a hopeless muddle.

The problem is this: The claim that enjoying the fruits of one’s intellectual labor entitles you to stop competitors has no inherent limiting principle, and thus the claim can be extended headlong into absurdity — as indeed it frequently has been. Of course, one can impose limits on the claim, but those limits have to be based on other principles — in particular, some sense of relative costs and benefits. But now we’re doing policy analysis and the case-specific comparison of costs and benefits, at which point the grandiose-sounding claim that patent and copyright law combat injustice shrivels and fades.

The paper then suggests some reforms for both copyright and patent law that seem quite reasonable. On copyright, they suggest reducing terms, requiring registration, limiting infringement to commercial exploitation, expanding fair use, narrowing derivative works, and ending anti-circumvention (a la DMCA 1201). These are all good suggestions, though the "commercial exploitation" one is one that sounds good but is often hard to implement, because what is and what is not "commercial exploitation" can be somewhat gray and fuzzy at times. But the intent here is sound.

On patents, the paper suggestions are to eliminate both software and business method patents, greatly tighten eligibility requirements, and no infringement in cases of independent invention. To me, as I've argued, the independent invention point is the most important. Indeed, I've argued that we should go further than just saying that independent invention is a defense against infringement. Instead, we should note that independent invention is a sign of obviousness, meaning not only that the second invention isn't infringing, but that the initial patent itself should likely be invalid, as patents are only supposed to be granted if the idea is not obvious to those skilled in the art.

All in all, this is a great and thorough paper, especially for those who really want to insist that copyrights and patents should be treated like traditional property, and position themselves as supporters of "free markets." I fully expect -- as I've experienced in the past -- that those people will not engage seriously with these arguments and will rage and scream about them, but it's still important to make these points.

Filed Under: copyrights, intellectual property, non-rivalrous, patents, property, property rights, rivalrous, trademarks

The Patent And Trademark Office Is Apparently Branching Out Into The Immigration Enforcement Business

from the unified-front-against-a-persistent-threat-or-whatever-the-fuck dept

Here's another one of those weird signs of the time. Under any normal presidential administration, this move by the US Patent and Trademark Office might look a bit strange. But only a bit. There are some legitimate reasons for doing this, but filtered through the administration's xenophobia, it seems to be just another way to hassle non-citizens. (h/t Jef Pearlman)

The U.S. Patent and Trademark Office is facing a backlash from its own staff and questions from Congress, WGBH News has learned, after it issued new instructions this month that seem to require trademark examiners to ask some applicants for proof of legal residence in the U.S. — an immigration provision that the examiners say has no role in trademark approval.

[...]

Examiners were instructed that a foreign citizen applying for a trademark who declares a U.S. address as their “domicile” must provide proof of “lawful permanent residence.” The instructions note, “Foreign citizens must comply with U.S. visa immigration laws to claim the U.S. as their permanent legal residence.” That language — “permanent legal residence” — generally refers to a green card.

According to the USPTO, this is being done to thwart application stuffing by Chinese applicants. There has been a massive increase in trademark applications from China over the past four years, rising from 3.1% of all applicants to over 15% of the total this year.

This is the valid reason to be double-checking the nationality of applicants, especially if the USPTO suspects China is flooding the office with fraudulent applications.

But that's not what's being checked. No one looking at the nationality. They're looking at the immigration status of the applicants. The unofficial standard being applied is green card and up. There's already a requirement that all trademark applicants must be represented by an attorney from the United States. But there's no requirement that applicants need to be citizens or green card holders to submit applications.

In fact, the USPTO says as much:

“We do not require immigration status as part of an application,” USPTO Press Secretary Paul Fucito said in response to questions from WGBH News.

But that's not what examiners are saying:

Trademark examiners who work for the office say they are not so sure that is still true.

The US lawyer requirement is relatively new. It was instituted on August 3. This should help decrease the number of fraudulent applications headed towards examiners since it's unlikely a practicing attorney would willingly participate in fraud.

But if examiners are actually digging up immigration paperwork as part of the examination process, something has gone off the rails. There are plenty of visa holders that shouldn't have their applications discarded simply because they don't meet the bar of permanent resident. If this is common practice, it means someone towards the top has been convinced (or told that) foreigners are flowing into this country to take our jobs trademarks.

Filed Under: china, immigration, immigration status, trademarks, uspto

Homeland Security's Over Obsession With Counterfeits Now Harming Innocent Buyers Of Counterfeit Goods Online

from the this-is-not-theft dept

For many years we've talked about the kind of derangement that happens among many -- especially among those working for Homeland Security's Customs and ICE divisions -- considering the supposed "dangers" of counterfeit goods. Over and over again we've pointed to studies that have shown that the "harm" of counterfeits is massively overblown. And these are not just random studies picked out of a hat. Both the Government Accountability Office (GAO) and the OECD have put out studies on this. When you look at the details, you quickly learn that while there are a few cases of people tricked by counterfeit goods -- and a vanishingly small number of cases where people are put at risk due to counterfeits -- in many, many cases, no one is actually losing out due to counterfeits. They are frequently an aspirational buy. That is, the buyer knows they're buying a counterfeit good, but are doing so because they so appreciate the real version, but can't afford it. And studies show that buyers of counterfeits quite frequently buy the real deal later when they're able to afford it. Thus, counterfeits often act as marketing for the original.

But, for whatever reason, Homeland Security likes to play up the "threats" of counterfeits and makes lots of noise about how many counterfeit things it seizes at the border every year (or... not at the border -- such as the time it raided a lingerie store to get "counterfeit" panties advertising sports teams). And sure, Homeland Security really really wants you to believe it's protecting the public with this kind of thing.

But if that's the goal, explain this story. Harper Reed tried to buy a fancy Rimowa luggage on Amazon last year. There was no indication that it was counterfeit -- it was priced the same as actual Rimowa luggage. But customs intercepted the shipment and wouldn't let it in. That's fair enough, I guess, but it's the next part that's shocking. Because of this Customs refused to renew Reed's Global Entry membership. Global Entry, for those who don't know, is a process by which fliers who frequently travel internationally can fill out a form, go for an interview, pay some money... and be able to speed through customs upon re-entering the US. While some grumble about paying for access, it's actually a more reasonable security program than most -- in that it actually involves effectively pre-clearing people less likely to need scrutiny at the border.

But Reed's status was not renewed because he was listed as trying to "import counterfeit goods." Again, you can see the intent behind this rule. If someone is actually "importing" a bunch of counterfeit goods to sell, you can see how that might be a good reason to deny someone Global Entry. But Reed wasn't trying to import a bunch of counterfeit goods. He was trying to buy a suitcase. He didn't get it from Amazon (he bought one later from a store) and that's fair enough under the law -- but why hold that against him.

Apparently the geniuses at Homeland Security have little desire to distinguish a counterfeiting operation from a dude buying something on Amazon he thought was legit.

When CBP intercepts a shipment, says Mark Schonfeld, an intellectual property lawyer at Burns & Levinson LLP, in Boston, Massachusetts, it sends a seizure notice to the trademark holder (in this case, Rimowa), which includes the names of the importer and exporter. The brand can then decide what action it wants to take, if any. Going after the latter party can be difficult and costly, since the vast majority of counterfeits come from Asia (in 2016, nearly 90 percent of products seized by CBP originated in China and Hong Kong). The importer, however, is by definition domestic, making them the easier target.

Schonfeld says this is the first instance he’s heard of in which a consumer has been flagged for importing a single item, but that legally, the principle is the same. “It definitely can happen to a consumer,” he says. “You know, you can go to Tijuana, just right over the San Diego border and you can easily buy counterfeits there, but no consumer should think that coming back into the United States with the item is risk free.” Much more common are cases in which Amazon itself is named as the importer, particularly since it began courting Chinese sellers with favorable shipping terms in 2015, and as its Fulfillment By Amazon program expands by leaps and bounds each year, offering third-party merchants the chance to take advantage of the e-commerce giant’s logistics infrastructure, customer service, and even Prime two-day shipping by sending goods directly to its warehouses.

Again, at the very least, it seems that intent should be taken into account here. Buying something on Amazon, with no indication (not even price) that the luggage was counterfeit, should not lead one to being accused of being a counterfeiter. But, of course, with DHS feeling so damn strongly about the "evils" of counterfeiting, it's only to be expected that they'll overreact to situations like this as well.

Filed Under: counterfeits, customs, harper reed, homeland security, ice, luggage, online shopping, trademarks
Companies: rimowa

Facebook Transparency Report: Lots Of Government Surveillance, Bad Copyright Takedown Requests

from the sounds-about-right dept

Facebook, which was a bit late to the party, recently released its latest transparency report. In a break from earlier versions of the report, the social media giant has finally moved beyond only detailing requests for information by the government and its alphabet agencies and is now including intellectual property requests and statistics as well. There is a decent amount of information in both sections of the report, but on matters of both intellectual property requests and government information requests, an analysis of the numbers leads to some troubling conclusions.

Let's deal with the IP section first. The headline of much of the media reporting on this has been about the 377,000 or so requests Facebook got to take down content based on IP issues, with well over half of those specifically being about copyright. It's not a small number and some are using it to make the case that Facebook is Mos Eisley when it comes to copyright infringement: a hive of scum and villainy. Tragically for those arguments, the validity of those requests makes this all seem far less impactful.

Aggregate data shows Facebook received about 377,400 complaints from January through June, with many referencing multiple posts. About 60 percent of the reports related to suspected copyright violations on Facebook. A “small fraction” of requests were excluded because they were not sent through an official form, Facebook said.

The company removed user uploads in response to 81 percent of filings for counterfeiting, 68 percent for copyrights and 47 percent for trademarks, according to its report. The percentages were roughly similar for Instagram.

By my math, the copyright front shrinks from the 377k number to 150k of copyright content Facebook decided, rightly or wrongly, was valid enough to take down the content. That isn't a small number still, but it's not as daunting a number as it originally appeared, particularly when you factor in that Facebook generally sides with the disputer over the person who's content it is removing. On trademark, the numbers are much worse, with less than half of the requests being valid enough to have the content removed. The overall picture is one in which there is indeed some infringement on a site as massive as Facebook, but there is also an enormous amount of invalid requests to the site as well. Not the best look for those that think intellectual property enforcement on the site should be expanded even further.

As for government information requests, you will not be shocked to learn that they've gone up rather sharply as of late.

The ninth Facebook transparency report also showed that government requests for information about users increased 21 percent worldwide compared with the second half of 2016, from 64,279 to 78,890.

As we discuss this on the eve of the federal government looking to renew its domestic surveillance powers, it's well worth noting that any of the voices that hollered about the dangers of government spying over, say, the last eight years or so ought to be screaming at the sky, and possibly their own IoT devices, about what has only been an expansion of surveillance and privacy invasion for the general public. That the government is able to get away with this kind of one-sided action only becomes more mysterious as the actions against the public increase over time.

Filed Under: copyright, government takedowns, ip, surveillance, trademarks, transparency, transparency report
Companies: facebook

Deputy Attorney General Trots Out All Sorts Of Silly Analogies About 'Intellectual Property'

from the guys,-stop-this dept

We've always had difficulty understanding why copyright or trademark law should even have "criminal" components to them. It seems fairly obvious that they can be handled easily enough with civil actions, without involving law enforcement. And this matter is only reinforced every time law enforcement tries to get involved in copyright and trademark enforcement. They seem oddly... almost unable to comprehend that infringement is different than theft and that it requires a different thought process and analysis. Time and time again, we see this crop up, both in the US and around the world. And it remains consistent no matter who is in charge. Under Obama, the DOJ was terrible on intellectual property issues, and that's now carrying over to the Trump administration.

Deputy Attorney General Rod Rosenstein just gave a talk at the Interpol International Law Enforcement IP Crime Conference -- which, as you can imagine, is not a place where nuanced discussions on infringement are expected. And Rosenstein lived down to low expectations in delivering a speech full of silly analogies and misleading statements that show little understanding of the deeper underlying issues when it comes to copyright, trademark and patents. It starts out with a particularly silly analogy:

As a child, I learned a fable about a hen that finds some wheat grains and asks other animals for help in planting them. Nobody is willing to help, so the hen does the work itself. At every stage of the process – harvesting the wheat, threshing it, milling it into flour, and baking the flour into bread – nobody wants to help. But when the work is finished, everyone wants to eat the bread.

Modern intellectual property is more complicated than baking bread, but the same fundamental principle applies. If we let some people steal things without compensating the people who produce things, the incentive to create new things will be lost.

Huh? The famed Little Red Hen story isn't about "letting some people steal things without compensation." It's got nothing to do with that. But, already we're off on the wrong foot as Rosenstein has leapt to a misleading understanding of intellectual property issues in the first place -- comparing a finite resource with an infinite one, and falling back on a silly -- and legally incorrect -- claim of "stealing."

Similarly, "the incentive to create new things will be lost" is a familiar trope, but one that is simply proven wrong time and time again by history. As we've noted, over the past twenty years or so, even as the internet has enabled ever greater piracy, it has also created an astounding revolution in new content production. The problem is that so many people assume -- incorrectly -- that the "incentive" for creation is getting the copyright, patent or trademark, rather than the many other incentives. Many of those other incentives do involve making money, but not necessarily by using intellectual property law to do so. And for many, it's not the monetary incentives that drive creation at all. Arguing that infringement decreases incentive to create is simply not borne out by history. It shows a level of ignorance that is disappointing, if not surprising, for a top DOJ official.

Intellectual property enforcement assures innovators and investors that when they devote time and money to develop new concepts and products, they will reap the financial rewards.

No, it doesn't, actually. There is no guarantee that anyone reaps any financial awards. It's not a system of welfare for creators. And, even if you make the argument that the laws themselves help structure a business model that allows the holders of the copyright, patents and trademarks (not necessarily the creators of the underlying works) that still has nothing to do with criminal enforcement. And, again, there are many, many business models that don't rely on copyright, patent or trademark law to "reap the financial rewards." Insisting that those are necessary is short sighted and misleading.

If governments fail to protect intellectual property rights, the immediate consequence will be monetary losses to individual property owners.

Not necessarily. This assumes that any infringing copy is a lost sale -- a myth that also is rarely supported by evidence.

But the long-term impact will be less investment of time and resources, and fewer innovations for society at large.

Another myth, not supported by actual data. As we noted above, even as internet piracy increased, so did the development and output of content.

This conference represents an ongoing commitment by law enforcement, industry partners, and other stakeholders from all over the world to come together and identify ways to protect intellectual property and the industries that fuel the modern global economy. These protections are critical to almost every sector of the economy, from new, life-saving drugs and medical techniques that allow us to live longer and healthier lives; to computers and software that run the devices we use to navigate the airplanes and trains and taxi cabs that brought us here today; to applications on the smartphones we use to purchase coffee.

The thing is, many in the tech industry don't want the DOJ getting into their business. They don't need "protection." They just want to innovate. The people making apps on smartphones these days are often the ones leading the charge against over aggressive enforcement of IP laws. Yet, here, Rosenstein is pretending that he represents their views.

One of our challenges is that intellectual property crime does not look like traditional crime, where the perpetrator takes a physical item directly from the victim. Everybody understands that it is wrong to walk into a business and take property without permission. In contrast, the individual act of downloading a movie from a file-sharing site, or buying a cheap knockoff of a name brand item, may seem harmless. But the accumulated economic loss from thousands or millions of those illegal transactions can destroy legitimate businesses, eliminate the incentive to invest in innovation, and undermine the rule of law.

It doesn't look like traditional crime because it's not traditional crime. And in many cases it seems harmless because it is harmless. Clearly, that's not true in all cases, but in many, it is. Many people downloading a movie would never pay for it in the first place. There's no economic loss there. Many people buying a cheap knockoff brand item, would never buy the full price item. There's no loss there. In fact, multiple studies have shown that when it comes to knockoff goods, the purchase is often an aspirational purchase. That is, they know they're buying a fake, but they buy the knockoff and end up buying the real version later, when they can afford to. In other words, knockoffs and copies often act as cheap or free marketing for more expensive products.

But Rosenstein can't even consider that as a possibility. Rosenstein's piece goes on in this vein for quite some time, and at some point there's no use debunking each and every point. The problem here is really the simplistic "law enforcement" mindset that insists that infringement is theft (it's not) and that any infringement must be bad (even though it's not) and damaging to society (even though it's not). Is it really too much to hope for officials who can actually understand the nuance related to these issues?

Filed Under: copyright, counterfeits, doj, law enforcement, patents, rod rosenstein, trademarks