Michael W. Carroll, Villanova University School of Law, What if the Section 512 safe harbors for online service providers had not been enacted?
If MAI is right, then all transitory copies implicate the reproduction right, creating an explosion of “copyright events” in the digital world. Section 512 limits monetary liability, not the copyright owner’s exclusive rights. Thus, the underlying theory of liability covered is not clear; implicitly, 512 accepts the broad scope of copyright law outlined in the NII White Paper. At the same time, taking the money out of the equation decreases the incentive to test liability theories. (Perhaps we’ll see that in the YouTube litigation.)
512 is a reminder that copyright doesn’t have to be a story of relentless expansion, at least if you have political muscle, even though 512 accepts the general breadth of copyright. Also it’s important that 512 was enacted pre-Napster, whose presence would have made 512 impossible.
Linking: does 512(d) make a difference? Not really; liability would rarely be appropriate anyway. But, without 512 there might have been more litigation clarifying that linking doesn’t exercise any rights, including display. Only secondary liability is appropriate, meaning a judicially enacted notice-and-takedown scheme. Might have had to clarify the Utah Lighthouse case that suggested that linking could infringe.
Core ISP functions: transmitting copies. Netcom had read in a volitional requirement to the reproduction right. 512(a) arguably overrules that, because it’s hard to see what 512(a) means if it doesn’t accept that there’d be infringement in the absence of 512(a). Litigation might have clarified that transmission copies are not “copies,” and Carroll thinks appellate courts would have followed Netcom. Without 512(a), though, there might have been issues with offshore pirate sites – ISPs might have been forced to cut them off.
System caching: A private ordering solution could have emerged leaving essentially the same terms.
512(c) is the one that made a big difference in exempting ISPs from monetary liability for user-directed storage. Storage isn’t one of the exclusive rights in the Copyright Act – so does this include display and distribution as well as reproduction? ISPs as hosts could have been sued for direct reproduction violations – unlike analog landlords, digital landlords own the machines that make the copies. This generated substantially greater uncertainty. Courts might have created a notice-and-takedown scheme through common-law rulemaking, but 512(c) played a big role in fostering web hosting.
In YouTube, we’ll hear from both sides that the other is breaking the “deal” agreed to in 512. Yahoo! and GeoCities were big lobbiers for 512(c), though, and they’re the precursors to MySpace, YouTube, etc. Notwithstanding Viacom’s claims, 512(c) is good for Hollywood – we’d probably still have video sharing, but much more ex ante filtering on legitimate sites. That would have given much more impetus to illegal peer-to-peer applications and led to a buildout of the underground video economy. Also, some of the videos are like fan fiction and should be tolerated uses.
Takeaway: 512 decreased uncertainty, but most ISP functions would still be performed in its absence. Social media would have been driven underground. We didn’t get as much litigation about important doctrinal questions, but the certainty may have been worth it.
Jon Garon, Hamline University School of Law, What if DRM fails?
Steve Jobs says Apple would embrace DRM-free music. Bruce Lehman has said that the DMCA didn’t work out very well, and predicts the rise of new patronage. Garon’s biases: Garon is a typical consumer who hates DRM, gets audiobooks from the library, and skips commercials by only watching DVRed content. At the same time, he’s a playwright and represents copyright owners. Garon agrees somewhat with Lehman, except that we don’t live in the benign world of Canadian government-funded cultural enrichment but a more commercial society.
His thesis: music is different. For music, DRM does more harm than good, ignoring ripped CDs and other sources of music. Only a few percent of music on iPods has DRM. Jobs is right that abandoning DRM would leave the music industry just fine.
But short stories are different – all reasonably sized copyrighted sf stories are available for free on the internet. (I’d love to see the proof of this. It is not my experience, though I admit I have not searched for pirate Frederik Pohl sites.) Big novels are too bulky to read online, but the short story market has collapsed. People are reading a lot less literature. (Is that because of piracy? How could that be so? Are the pirates not reading, just pirating? More importantly for copyright, are people spending less time amd money overall consuming creative works, whether literature or video games? My guess is not.) Commercial publishers can’t afford to take as many risks as they used to. Likewise, theater and independent film are economically unsustainable. Only very short clips are profitable online.
Who will be the new patrons? Consumers. Advertisers, shifting from wraparound to embedded content. Private patrons donating to museums etc.; are these healthy – do we want all theater, all publishing, all opera to follow that elitist model? (Um, what are the chances that, no matter how robust IP rights and DRM, there would be a non-elite-supported opera company? Garon doesn’t seem happy with current tastes in entertainment, but I find it difficult to connect that with lax IP enforcement.) Manufacturers and distributors – Steve Jobs may want to support content to have things to fill his devices.
We can’t follow music. Music is atomized; the album never really worked. We need to get over the failure of DRM for music delivery. If we’re in a world where we can’t fund film or publishing or video games and need to rely on volunteers, technology will just create an ever-greater wasteland.
Michael Landau, Georgia State University College of Law, What if the anti-bootlegging statutes really are upheld under the Commerce Clause?
Martignon in SDNY has been on appeal (for years!) to the Second Circuit. What if the Second Circuit reverses? If you accept that unfixed works and other uncopyrightable works can be protected under the Commerce Clause because they are outside the scope of the Copyright Clause, will it render copyright superfluous? Will it revitalize the database protection attempt? What about the trademark-copyright interface? If you can protect bootlegs forever, maybe you can also protect Mickey Mouse forever.
Also, what if the Second Circuit affirms? Would Congress attempt to fix the hole? If you can fix a sports event simultaneously with its transmission, why not provide that a performance fixed without the performer’s consent is still considered fixed, and to belong to the performer? Why hasn’t Congress done this already, given the uncertainty?
Mary Wong, Franklin Pierce Law Center, What if the WIPO Development Agenda is adopted?
WIPO has been criticized for facilitating the ratcheting up of IP, and for focusing on the alleged economic benefits of high IP protection even though there is no consensus on whether IPRs lead to economic development and social benefits. One size fits all may not be the right solution.
There is increasing involvement in IP issues by NGOs and civil society groups, as well as a recognition of the link between IPRs and human rights. The 2006 Consumers’ International Study on Copyright & A2K on 11 developing countries in Asia found that none of the countries had taken advantage of existing flexibilities in international treaties; generally, they provide greater rights protection than required. Now this issue is part of the development and human rights agenda, providing a perspective from which to decide when there should be limits on IP rights. At this point, even if formal proposals aren’t adopted, there is greater awareness of the development dimension as it relates to already-available limitations and exceptions to copyright, and new interest groups have realized that they need to be at the table.
Q: If the Federal Circuit were in charge of copyright law, would Carroll be so sanguine about the world in the absence of 512?
Carroll: No, because copyright is a common-law field – at least in the 9th and 2nd circuits – and the Federal Circuit lacks the experience and the temperament for that. At that point, probably the parties would have run to Congress.
Lemley: And yet, the Federal Circuit’s take on anticircumvention has been most aggressive in twisting the statute to get the right result.
Bartow, for Garon: Billy Joel sold out South Carolina’s stadium with $80 tickets; Mamma Mia also sold out; local bands sold out. People are spending money on entertainment, just differently. Lucy smoked cigarettes on I Love Lucy. Have things changed that much?
Garon: The cigarette ads were banned. But advertisers have been trying to cheat with product placement from the beginning. The difference is that now we embrace what we used to think was evil and pernicious. Live entertainment continues to matter to us; and music is sui generis in having live performance as an independent revenue stream and having the ability to use branded merchandise as an adjunct as most other art forms can’t. He’s not worried about music. Mamma Mia is a trademark-based content show. The number of Broadway shows that aren’t subsidized are fewer and fewer; but the content is very different from the content in London, which relies less on branding strategies. Some of the differences go to the heart of what kind of society we want to have.
Q for Landau: What implications does Martignon have for a federal right of publicity statute?
A: We need such a statute to avoid problems of copyright preemption. With the exception of name, almost all of the uses for a right of publicity are in copyright’s subject matter, so you could even do it as part of the Copyright Act. But an adjunct to TM law is more likely.
Q: We’d still have a constitutional preemption issue, though.
A: But it would solve state-level differences.
Q for Wong: How do the bilateral TRIPs-plus agreements we’ve been signing affect the WIPO discussions?
A: That’s a key issue for future work, and the next step for the development agenda. (Indeed, we seem to be turning to bilateral agreements precisely because they enable us to leave behind all the new groups that have shown up at the multilateral table.)
Q for Landau: Isn’t the “limited times” for bootlegs the statute of limitations, at least for the person who created the bootleg? That doesn’t help with trafficking, of course.
A: The real harm is the distribution/transmission. Also, if it’s outside the Copyright Clause, nothing prevents perpetual protection. This has an easy statutory fix. Broader question: if the live performance right is eliminated, what about the §106(4) public performance right? The answer there is that the initial work is fixed – but we could say that about the bootleg too.
Q for Carroll: Was section 230 of the CDA a predecessor of 512?
A: Only indirectly. The ISPs were caught in the middle for a lot of forms of liability, but they knew they needed a different deal with the copyright industries than they could get with the plaintiff’s bar, which was their only opposition for 230. Congress was primed for the argument that some new rule was required for these new intermediaries, but mostly Congress just wanted the parties to go do a deal. An interesting issue is 512’s international modeling effects.
Seltzer: Why haven’t we seen more litigation under 512(f) from people harmed by defective notices?
Carroll: Because there’s not enough money in these disputes now that the ISPs are out of it. Other than law professors who want to make a point, most people move on.
Q for Garon: What would be evidence of DRM’s success?
A: It may have already failed. To shift to DRM2, we need the industry to concede the point on music and give up on a one-size-fits-all approach. We need to convince people that film and TV are socially acceptable categories for DRM-protected works. We do condemn people who download thousand-dollar software in ways we don’t condemn music downloaders.
Q: Product placement produces a revenue stream whether or not DRM succeeds. Why won’t we get both?
A: Distributors will look to maximize revenue streams, but artists will balance their individual visions with their commercial needs. A world in which product placement is unnecessary will maintain some space for non-product-placement-based art.
Q: Isn’t it possible that some media are just on their way out?
A: Theater has been declared dead since well before these debates began. What we’ve seen in theater is a change in patronage to large donors. The result: an increased separation between what the general public wants and what the funders are willing to pay for. Mamma Mia is a rock opera, not Les Miz or Andrew Lloyd Webber. The content follows the money.
Q: Artists start out with no money; they’re taking a chance on success, and won’t they continue to do so?
A: Yet people respond to economic incentives to stay in the game – most people give up after 2-3 creative works that don’t find a place in the market. There will always be volunteers, but professionals won’t work if they can’t feed their kids. (And yet DRM just doesn’t seem that helpful to ensure that those kids get fed. Piracy isn’t the problem; the problem, if it is one, is that most people can’t write or sing or draw well enough to make a living doing it.)
Distributors want to maximize eyeballs. There is less and less narrative in film, more violence and explosions. (So if DRM favors distributors over initial authors, as it seems to, I’m not sure how Garon’s prescription treats the disease he sees.) The WPA created an incredible flourishing of US theater – patronage does wax and wane. Historically, though, copyright has contributed greatly to the richness of culture, and he’s worried about that segment.
Q: SF hasn’t died; lots has shifted to graphic novels. TV is better than it’s ever been, even if movies aren’t as good. We’re seeing changes in how talent is deployed, not the collapse of culture.
A: He hopes he’s wrong. But when a 2-hour download takes 2 minutes on your broadband connection, then the collapse will hit.
Saturday, March 31, 2007
What Ifs? Keynote storyteller
Mark A. Lemley, Stanford, Ignoring Patents
2.5 million patents have issued in the last 20 years, over 1/3 of the total number issued in US history. Many are in the information industries. And these are component industries: to make and sell things, you have to put together a bunch of components. The patents generate royalty stacking and holdup concerns, not just in theory but in practice. Microsoft owes 1.2 billion for one invention used in Windows, $500 million for another. Then add in willful infringement and treble damages, as well as the outrageous cost of patent litigation -- $4.5 million to pay your lawyers, win or lose.
And yet – the anticommons hasn’t disabled any of these industries. People are running their businesses notwithstanding the patent shadow.
Why? Because people ignore patents all the time, especially in component industries. This may not be true in the pharmaceutical industry, but he’ll talk about that in a bit.
Scientists, engineers, software writers don’t read patents to gather information. Even if they thought it was a good idea, the business and legal types are telling engineers: whatever you do, don’t read patents. Don’t put us on notice.
Similarly, companies don’t engage in prior art searches before filing for patents or before making products. Not surprisingly, once that happens, they get threat letters. The received wisdom in Silicon Valley is that you always ignore the first threat letter you get. Sometimes they go away. Only if they’re serious do you start evaluating.
When you’re sued for patent infringement, you never stop making the product pending the outcome of the litigation. You always roll the dice, even if you’re also trying to design around the patent just in case. The Blackberry is an example of this, settling for $613 million rather than implementing a workaround.
What if we took seriously the idea that patents are just like real property? Nobody would build a house without being sure they owned the land. If it were a shopping mall and needed to aggregate land to create it, you wouldn’t start building in the hopes that you wouldn’t get sued or the plaintiff would turn out to have a defect in title. Even if you did, no one would loan you the money to do so. In real property, we’ve got to be sure, at least to a high degree of certainty.
Analogously, Intel couldn’t design a new chip until it had cleared all the possible rights. You’d need patent title insurers who’d spring up to clear the rights. In the university setting, scientists would investigate patents before starting research.
Lemley thinks this would be a disaster. The benefits: patent owners would get paid more. The subset of patent owners in competition with accused infringers, and who want to use patents to exclude competitors, would benefit tremendously. Filing a lawsuit would deter people from entering the market.
Research and product sales would be delayed by years, even decades, in every industry. Cost would be the least of the problems – patent applications may be sought, or may have claims that differ when they’re issued. And because of continuations, you can’t identify all the claims until 20 years after the filing date. Even once you’ve identified a patent owner, you don’t know what the patent covers. 46% of patents litigated to judgment are ultimately held invalid. Given the 40% reversal rate on Markman hearings, you don’t know what a patent means until after Federal Circuit review. And there are many, many patents out there. Third-generation wireless – one bit of your cellphone – is covered by nearly 7000 “essential” (self-identified) patents.
This is more than a problem of layering. If I must buy and aggregate rights from a bunch of people, we can’t expect those individuals will set an efficient systemwide price. If one voluntarily reduces price, others will charge more and they’ll be the suckers. This creates a real risk of bargaining breakdown. The real property rule presupposes the absence of bargaining breakdown.
Systemic problems: consumers would lose the benefits of competition, in situations where the patent would be held invalid or not infringed. And patentees only win 25% of their litigated cases – 75% of the time you’re sued, you’re right to refuse to pay. And that helps consumers get the benefit of the product during the period when the patent’s validity and scope are uncertain. Competitors and innovators generally would lose the benefits of going ahead without waiting for approval from patent owners. Design-around efforts would wither. If competition is a better spur to innovation than monopoly, then we’d lose out in innovation as well.
In the pharmaceutical industry, we have a world in which patent owners all neatly list their patents in one place, the Orange Book. The FDA and Hatch-Waxman rules restrict generic entry when there is an Orange Book entry. If you certify that you don’t infringe or the patent is invalid, the patent owner can sue you and get an automatic 30-month injunction. Even after those expire, as they’ve started to do, generic companies are mostly afraid to enter at risk. They act like real property owners.
Does this system work? Pharma is different – Lemley thinks we need stronger patent rights because of the cost and delay of the regulatory environment needed to guarantee safe and efficient drugs. So the benefits are a lot stronger in pharma. Correspondingly, the cumulative innovation that drives software and semiconductors is a lot less important. Discovering a new blockbuster is correspondingly more valuable than improving on the dosage system of that blockbuster. Moreover, there are fewer patents – by orders of magnitude – in the industry, and the claims are a lot clearer. Chemical patents don’t have huge Markman problems the way other patents do, for example when they specify the high-level functional characteristics of a computer program.
Nonetheless, there are problems even in pharma: Evergreening – listing as many patents as possible on the Orange Book, even if they’re obviously bogus or unrelated to the underlying drug. Product-hopping to game the FDA approval system – changing products just as a generic is about to enter the market. Exclusion payments: paying generic competitors to stay out. The result is surprisingly little generic entry while patents are in force and even a number of years after the original patent expires.
Second what-if: What if we wanted to create a robust market for patent license, which wasn’t the current “ignore patents” world but also wasn’t the sclerotic world of land rights? That would require really radical changes to solve the problem of uncertainty early on in the development process. Requirements: much better review of applications, which would have costs of its own; early publication, possibly on the date of application; ban continuations; allow post-grant oppositions; other mechanisms for collecting information before a lawsuit began; a prior user or independent invention defense, since we shouldn’t make people buy rights for things they’ve already invented, or at least change the rules for willfulness when people look at patents; and change remedies to limit the holdup problem – ban injunctions and make royalties reasonable in line with the actual technical contribution of the patent. Only in those circumstances should you make people enter into search and negotiations before they developed new products.
My Q: This sounds like the trademark system, except for the prior user part and the remedies.
Lemley: Yes, it sounds similar, but the market for patents he’s interested in imagining would be fundamentally different – he doesn’t want a market for licensing trademarks because that would cause consumer confusion. (Though Lemley doesn’t believe in licensing rights for TMs generally, at least not for communicative/secondary products.)
Q: What about penalties for wrongly putting a patent in the Orange Book?
A: We might see fewer evergreening problems.
Q: Are there industries in the middle ground between IT and pharma?
A: We need more research! Biotech may be different from classic chemicals, though his guess is that it’s close because of the FDA regulatory background.
Q: Would more third-party involvement help?
A: Interpleader might be helpful – if we could bring all the patent owners together, that might help solve problems and make clear that a single inventor’s claim for “just 1%” of royalties would quickly make a product like a cellphone noneconomic. The difficulty would be patent applications in the pipeline.
Q: When you sit down to create something artistic, you ignore copyright because you assume you’re making an independent creation (wow, this questioner’s experience of creation is very different from mine), so copyright is a good comparison for ignoring patents. In a world with a de facto independent invention defense, do we get all the results you want? Can you have a property right with injunctive remedies and still do well for efficiency?
A: He’s not necessarily advocating independent invention as a defense. Rather, if you wanted to move to a market model, this would be one of the requirements. Copying is difficult to prove or disprove. With copyright, we can usually distinguish between people who copied, though they say they didn’t, and people who didn’t copy. That’s much harder when it comes to a DNA sequence or other more basic concept, like a cheese slicer with a wire that works with a slicer. (I’m not convinced by Lemley’s distinction – the rule works pretty badly in music copyright, especially given that copyright recognizes “unconscious copying” as sufficient.)
Q: What about the potential that people are both plaintiffs and defendants?
A: True for the big guys, who don’t sue each other – enter into cross-licensing or just leave each other alone on a mutually assured destruction theory. Non-practicing entities (e.g., patent trolls) have nothing to lose from Intel’s 10,000 patents. They account for a substantial number of the cases that are actually filed.
Q: Would liability rules mean people would still ignore patents?
A: It’s a system design question. We could still create incentives for people to do deals outside the legal system instead of inside. But perhaps patent challenges are undersupplied – a property system could heighten this problem. If we really had a market system, he’d want a search obligation and an obligation of entering into good-faith negotiations. If you don’t do that, you should pay penalties, but if you do, you should be able to take your chances if you conclude that the patent is invalid or the price too high and not be penalized.
Q: Are patents for outsiders worth it?
A: Intel and others might tell you that they’d be happy with unilateral patent disarmament. But patents might still encourage innovation by people who can’t get into the market, e.g., for chip design. The problem now is that the legitimate small-inventor patent gets lumped in with the general “ignore patents” trend. Also, major companies get a return from innovation because their patent portfolios entitle them to participate in industry oligopolies – though that might not be necessary.
Q: This is a caricature of property law. Every issue beyond 7-8 core cases involves substantial indeterminacy within property law. Everything from adverse possession to easements to equitable servitudes – you don’t know what the answer is until the judge rules. When you step outside the commercial context, indivdual landowners are less likely to review all necessary rights – banks give conditional loans even when people discover easements on their lands. Trespass may be determinate, but not the rest of the property law.
A: Agrees that there is indeterminacy; this is why we can spend a year teaching property. But there is not the same level of indeterminacy in the average real property case. It’s not the case that 46% of real property deeds are invalidated. It’s not the case that people always fight over the boundaries of real property, as they do in every case after Markman. Add to that the hundreds to thousands of potential claimants in patent, which is unusual in real property. It’s true that individuals don’t read their title insurance or loan documents. But the banks generally do, and that’s why there’s title insurance.
2.5 million patents have issued in the last 20 years, over 1/3 of the total number issued in US history. Many are in the information industries. And these are component industries: to make and sell things, you have to put together a bunch of components. The patents generate royalty stacking and holdup concerns, not just in theory but in practice. Microsoft owes 1.2 billion for one invention used in Windows, $500 million for another. Then add in willful infringement and treble damages, as well as the outrageous cost of patent litigation -- $4.5 million to pay your lawyers, win or lose.
And yet – the anticommons hasn’t disabled any of these industries. People are running their businesses notwithstanding the patent shadow.
Why? Because people ignore patents all the time, especially in component industries. This may not be true in the pharmaceutical industry, but he’ll talk about that in a bit.
Scientists, engineers, software writers don’t read patents to gather information. Even if they thought it was a good idea, the business and legal types are telling engineers: whatever you do, don’t read patents. Don’t put us on notice.
Similarly, companies don’t engage in prior art searches before filing for patents or before making products. Not surprisingly, once that happens, they get threat letters. The received wisdom in Silicon Valley is that you always ignore the first threat letter you get. Sometimes they go away. Only if they’re serious do you start evaluating.
When you’re sued for patent infringement, you never stop making the product pending the outcome of the litigation. You always roll the dice, even if you’re also trying to design around the patent just in case. The Blackberry is an example of this, settling for $613 million rather than implementing a workaround.
What if we took seriously the idea that patents are just like real property? Nobody would build a house without being sure they owned the land. If it were a shopping mall and needed to aggregate land to create it, you wouldn’t start building in the hopes that you wouldn’t get sued or the plaintiff would turn out to have a defect in title. Even if you did, no one would loan you the money to do so. In real property, we’ve got to be sure, at least to a high degree of certainty.
Analogously, Intel couldn’t design a new chip until it had cleared all the possible rights. You’d need patent title insurers who’d spring up to clear the rights. In the university setting, scientists would investigate patents before starting research.
Lemley thinks this would be a disaster. The benefits: patent owners would get paid more. The subset of patent owners in competition with accused infringers, and who want to use patents to exclude competitors, would benefit tremendously. Filing a lawsuit would deter people from entering the market.
Research and product sales would be delayed by years, even decades, in every industry. Cost would be the least of the problems – patent applications may be sought, or may have claims that differ when they’re issued. And because of continuations, you can’t identify all the claims until 20 years after the filing date. Even once you’ve identified a patent owner, you don’t know what the patent covers. 46% of patents litigated to judgment are ultimately held invalid. Given the 40% reversal rate on Markman hearings, you don’t know what a patent means until after Federal Circuit review. And there are many, many patents out there. Third-generation wireless – one bit of your cellphone – is covered by nearly 7000 “essential” (self-identified) patents.
This is more than a problem of layering. If I must buy and aggregate rights from a bunch of people, we can’t expect those individuals will set an efficient systemwide price. If one voluntarily reduces price, others will charge more and they’ll be the suckers. This creates a real risk of bargaining breakdown. The real property rule presupposes the absence of bargaining breakdown.
Systemic problems: consumers would lose the benefits of competition, in situations where the patent would be held invalid or not infringed. And patentees only win 25% of their litigated cases – 75% of the time you’re sued, you’re right to refuse to pay. And that helps consumers get the benefit of the product during the period when the patent’s validity and scope are uncertain. Competitors and innovators generally would lose the benefits of going ahead without waiting for approval from patent owners. Design-around efforts would wither. If competition is a better spur to innovation than monopoly, then we’d lose out in innovation as well.
In the pharmaceutical industry, we have a world in which patent owners all neatly list their patents in one place, the Orange Book. The FDA and Hatch-Waxman rules restrict generic entry when there is an Orange Book entry. If you certify that you don’t infringe or the patent is invalid, the patent owner can sue you and get an automatic 30-month injunction. Even after those expire, as they’ve started to do, generic companies are mostly afraid to enter at risk. They act like real property owners.
Does this system work? Pharma is different – Lemley thinks we need stronger patent rights because of the cost and delay of the regulatory environment needed to guarantee safe and efficient drugs. So the benefits are a lot stronger in pharma. Correspondingly, the cumulative innovation that drives software and semiconductors is a lot less important. Discovering a new blockbuster is correspondingly more valuable than improving on the dosage system of that blockbuster. Moreover, there are fewer patents – by orders of magnitude – in the industry, and the claims are a lot clearer. Chemical patents don’t have huge Markman problems the way other patents do, for example when they specify the high-level functional characteristics of a computer program.
Nonetheless, there are problems even in pharma: Evergreening – listing as many patents as possible on the Orange Book, even if they’re obviously bogus or unrelated to the underlying drug. Product-hopping to game the FDA approval system – changing products just as a generic is about to enter the market. Exclusion payments: paying generic competitors to stay out. The result is surprisingly little generic entry while patents are in force and even a number of years after the original patent expires.
Second what-if: What if we wanted to create a robust market for patent license, which wasn’t the current “ignore patents” world but also wasn’t the sclerotic world of land rights? That would require really radical changes to solve the problem of uncertainty early on in the development process. Requirements: much better review of applications, which would have costs of its own; early publication, possibly on the date of application; ban continuations; allow post-grant oppositions; other mechanisms for collecting information before a lawsuit began; a prior user or independent invention defense, since we shouldn’t make people buy rights for things they’ve already invented, or at least change the rules for willfulness when people look at patents; and change remedies to limit the holdup problem – ban injunctions and make royalties reasonable in line with the actual technical contribution of the patent. Only in those circumstances should you make people enter into search and negotiations before they developed new products.
My Q: This sounds like the trademark system, except for the prior user part and the remedies.
Lemley: Yes, it sounds similar, but the market for patents he’s interested in imagining would be fundamentally different – he doesn’t want a market for licensing trademarks because that would cause consumer confusion. (Though Lemley doesn’t believe in licensing rights for TMs generally, at least not for communicative/secondary products.)
Q: What about penalties for wrongly putting a patent in the Orange Book?
A: We might see fewer evergreening problems.
Q: Are there industries in the middle ground between IT and pharma?
A: We need more research! Biotech may be different from classic chemicals, though his guess is that it’s close because of the FDA regulatory background.
Q: Would more third-party involvement help?
A: Interpleader might be helpful – if we could bring all the patent owners together, that might help solve problems and make clear that a single inventor’s claim for “just 1%” of royalties would quickly make a product like a cellphone noneconomic. The difficulty would be patent applications in the pipeline.
Q: When you sit down to create something artistic, you ignore copyright because you assume you’re making an independent creation (wow, this questioner’s experience of creation is very different from mine), so copyright is a good comparison for ignoring patents. In a world with a de facto independent invention defense, do we get all the results you want? Can you have a property right with injunctive remedies and still do well for efficiency?
A: He’s not necessarily advocating independent invention as a defense. Rather, if you wanted to move to a market model, this would be one of the requirements. Copying is difficult to prove or disprove. With copyright, we can usually distinguish between people who copied, though they say they didn’t, and people who didn’t copy. That’s much harder when it comes to a DNA sequence or other more basic concept, like a cheese slicer with a wire that works with a slicer. (I’m not convinced by Lemley’s distinction – the rule works pretty badly in music copyright, especially given that copyright recognizes “unconscious copying” as sufficient.)
Q: What about the potential that people are both plaintiffs and defendants?
A: True for the big guys, who don’t sue each other – enter into cross-licensing or just leave each other alone on a mutually assured destruction theory. Non-practicing entities (e.g., patent trolls) have nothing to lose from Intel’s 10,000 patents. They account for a substantial number of the cases that are actually filed.
Q: Would liability rules mean people would still ignore patents?
A: It’s a system design question. We could still create incentives for people to do deals outside the legal system instead of inside. But perhaps patent challenges are undersupplied – a property system could heighten this problem. If we really had a market system, he’d want a search obligation and an obligation of entering into good-faith negotiations. If you don’t do that, you should pay penalties, but if you do, you should be able to take your chances if you conclude that the patent is invalid or the price too high and not be penalized.
Q: Are patents for outsiders worth it?
A: Intel and others might tell you that they’d be happy with unilateral patent disarmament. But patents might still encourage innovation by people who can’t get into the market, e.g., for chip design. The problem now is that the legitimate small-inventor patent gets lumped in with the general “ignore patents” trend. Also, major companies get a return from innovation because their patent portfolios entitle them to participate in industry oligopolies – though that might not be necessary.
Q: This is a caricature of property law. Every issue beyond 7-8 core cases involves substantial indeterminacy within property law. Everything from adverse possession to easements to equitable servitudes – you don’t know what the answer is until the judge rules. When you step outside the commercial context, indivdual landowners are less likely to review all necessary rights – banks give conditional loans even when people discover easements on their lands. Trespass may be determinate, but not the rest of the property law.
A: Agrees that there is indeterminacy; this is why we can spend a year teaching property. But there is not the same level of indeterminacy in the average real property case. It’s not the case that 46% of real property deeds are invalidated. It’s not the case that people always fight over the boundaries of real property, as they do in every case after Markman. Add to that the hundreds to thousands of potential claimants in patent, which is unusual in real property. It’s true that individuals don’t read their title insurance or loan documents. But the banks generally do, and that’s why there’s title insurance.
What Ifs? Patents
Patent Law
Timothy R. Holbrook, Chicago-Kent College of Law, What if patents and patent applications weren't published until they expired?
We think of patent disclosure as a fairness obligation. But getting claims of infringement out of the blue isn’t that surprising even in a publication system – so what function is really served by publication? It’s supposed to teach how to make or perform the subject of the patent. But there are a lot of incentives not to look at patents, or even applications, such as the possibility of willful infringement.
Also, the information disclosed by a patent application may not be very good – 18 months may be a very long time in a tech-intensive industry. Moreover, the content may not really help you out. Even if you do read the patent, you can’t do much with it during the patent term, given the lack of a robust experimental use exception.
The patent might not afford real public notice of its existence, but once you see it you may have an idea of the scope of the claim. But that assumes awareness of the patent.
The alternative would be more like a trade secret regime. Independent invention is a defense against trade secret, of course, so you may have more notice of what you can’t do under a trade secret regime. And in a world without publication, the assertion of a patent claim would put others on notice – you’d lose some of your trade secret-like protection by asserting infringement.
What about the available defenses? Other unexpired patents wouldn’t be available as recent prior art. But patents may not be the best source of prior art, especially with new tech or new subject matter – people complain that the PTO is too patent-dependent. But patents are a network, and you can look at how they cite each other. The use of the patent system as an index to find other patents is an oft-overlooked benefit of publication.
Insight: need to create incentives for applicants to include greater non-patent-based prior art, to improve the utility of this patent network.
It’s not as if the PTO does a great job right now. So what about hidden patents? There does seem to be some public oversight, e.g. when the peanut butter and jelly sandwich patent issued. Delayed transparency would be a harm. Thus, disclosure isn’t necessarily serving a fairness or quid pro quo objective, but actually helping to improve initial patent quality.
Michael J. Meurer, Boston University School of Law, What if economists ran the patent office?
What do economists think of patents as property? The majority of industrial organization economists today tend to think of the patent system as regulatory and closely connected to competition policy, rather than as property.
The FCC has succeeded by using economists to run sophisticated and successful auctions of spectrum. The economists pushed for an auction and thought very carefully about how to pick the right kind of auction given the circumstances (bidders’ valuations are likely to be correlated, which has complicated effects; collusion is possible). So maybe there’s room for improvement in patent.
The methodology is mechanism design: the state of the art in microeconomics. You structure rules of the game to elicit private information held by the people subject to regulation. Lemley and others have looked for mechanisms to add to the patent system, such as gold-plated and regular patents. That would elicit information from applicants about commercial appeal of a specific technology and the robustness of the overall field.
An economist would also want to experiment with – drastically increase – renewal fees.
The PTO has been hostile to academic economists, unlike other agencies, because it understands that economists are a threat to its way of life. The PTO’s customer service orientation helps applicants, but is the wrong structure overall. The examiner or the applicant needs to parse claim language. We need to divide the examiner’s time between different statutory issues, possibly differing depending on the technology. We need to consider whether to require a second pair of eyes in certain circumstances. Economists could help figure out what incentives to give examiners to spend their time most efficiently.
Joseph Scott Miller, Lewis and Clark Law School, What if Joe Meigs had written the nonobviousness statute?
Subtitle: How the perfect murdered the good in 1948. The issue is error detection – the PTO can make false positive and false negative errors. Miller’s gut feeling is that false positives are worse (in patent) than false negatives. Section 103(a) is a very thin operationalization of nonobviousness – it includes a timeframe (at the time the invention was made) and an audience (PHOSITA), and says that dumb luck is okay as a source of invention, but that’s about it.
In 1909, the Supreme Court says that, if skilled people have failed after repeated effots to discover a new and useful improvement, then the person who makes the discovery is entitled to protection as an inventor. This is a concrete and recognizable way of surpassing ordinary skill in the art. Judge Hand points out that we shouldn’t rely on novices, who are dumb in a dangerous way – a novice may find nothing but the obvious in a combination that hasn’t been discovered for a decade after the need arose. The best test of what persons of ordinary skill can do is what they have done. Know your history in the technology and you can evaluate obviousness! But the Supreme Court overturned Hand’s decision upholding a patent for a cordless automatic lighter for a car.
Rejected heresies: the requirement of a flash of genius. The synergism requirement – illustrated by a case involving the modern checkout counter – space for one customer to unload while the previous customer was being checked out. The 6th Circuit said that a long-existing problem born in 1917 was never solved until 1937, thus justifying patent protection, but the Supreme Court reversed and struck down the patent because “two and two have been added together and still they make only four.” The patent bar demanded that the standard be fixed to eliminate both the flash of genius and the synergism.
Giles Rich felt that a positive statement about patentability was dangerous as possibly restriction; though he didn’t want judges to indulge personal standards, he wanted the ability to make patentability arguments to help his clients. Likewise, another drafter said that § 103 had no standard; it was a requirement with no implementing guidelines.
Joseph Meigs was a chemist who died in 1959, the named inventor on 22 patents, 18 as sole inventor. He was also a patent lawyer. Meigs proposed a patent statute that made nonobviousness a question of fact, and that said that sufficient proof of nonobviousness could come from (a) filling a long-felt want, and (b) prior to the invention, the skill of the hard had not supplied, and could not supply, that want. It’s a thick description, but it’s not exclusive.
Meigs was not politically connected; he testified on his own behalf. The biggest question: at what level of granularity do you need to state the “want” at issue? Giles Rich testified against the bill as too rigid, and might incline courts away from sustaining patents where there was no long-felt want. This is absolutely true: it would make more false negatives than §103. But it would make fewer false positives.
In practice Meigs’ standard is useful for litigators – if they can show trial and failure, they are likely to succeed in showing nonobviousness. Putting it in the statute would signal better to inventors where they should work to get protection. It would also encourage them to defy conventional wisdom in the art. The analysis wouldn’t be hindsight-prone. And it would put today’s evidence into stronger narratives – the art taught away from the invention, the invention was greeted with surprise and skepticism. It would also reanimate multiple invention as a contraindicator to patentability, a doctrine that has now died on the vine.
Katherine J. Strandburg, DePaul University College of Law, What if we relied on user innovation to produce business methods and did away with business method patents?
Some people invent things to use (not sell) them. User innovators are less likely to need patents.
Business methods are often user innovations – administrative or “back-office” methods, such as keeping accounts, inventory tracing, payment processing. They’re often tailored to specific business contexts and embodied in software. They’re sometimes purchased through consulting services or individualized software. They tend to be non-self-disclosing in use, which means they can be kept as trade secrets by user innovators.
A different category is products sold to consumers: hub-and-spoke mutual funds, online gambling, long-distance packages, Netflix, iTunes, services like massages, surgery, piano lessons – not user innovation; often self-disclosing as sold.
A third category, customer service methods, somewhere in the middle: one-click purchasing, method for internet payment, method for advertising. Very often these are user innovation, but self-disclosing in use unlike the back-office innovations.
Greater intrinsic rewards: efficient business practices are their own reward, and create a first mover advantage including customer switching costs. Business methods also meet heterogeneous needs and provide customized solutions. Some business methods are skill-based and inventors do them better. User innovators may have lower invention costs, since innovation is a side effect of use rather than the product of a research program.
User innovators are also less likely to use patents to disseminate their inventions. When use gives a competitive advantage, the user wants to avoid others having embodiments of the invention like one-click purchasing. But seller innovators want to disseminate their inventions to customers. Thus user innovators tend to use patents to restrict others’ use.
User innovators therefore make systematically different inventions and engage in systematically different patent behaviors. If there are these differences in responses to patent’s incentives, can we tailor patent doctrine to recognize that user innovation is different? One possibility: a broad exception for use as a business method, like a research use exception. There would then be no need to determine ahead of time whether something is a business method patent. Linedrawing would be easier in context, and there would be no defense for competing sales of the patented product.
For back office methods, sellers would be protected from competitors by patenting and from users by copyright, know-how, and difficult-to-implement methods. Users would gain the benefit of either earlier disclosure or earlier nonexclusivity.
For products, sellers would be protected from competitors by patenting, and from users by make v. buy tradeoffs.
Finally, customer service methods: if it’s non-self-disclosing, a use exemption would promote trade secrecy. If it’s self-disclosing, competitors will copy the method. The desirability of this effect depends on the extent to which inventive costs (often low) are balanced by first mover advantages, switching costs, etc. (often high).
Bottom line: an exception would address concerns about exclusive control of basic tools of eocnomic competition, similar to concerns about patents on research methods. It would tend to neutralize patents on “trivial” business methods, which are least likely to need patent incentives. Costs: more reliance on trade secrets.
Greg Vetter, University of Houston Law Center, What if the GPL had been patented?
The GPL is a business method of licensing software. Vetter claims it’s useful, novel, and nonobvious. There would be very interesting issues of equivalents (e.g. to the viral elements of the license) and other infringement questions.
New issue: dual licensing, which allows a choice of GPL or proprietary terms. That wouldn’t be possible if the GPL were patented. People have also adjusted the GPL to make exceptions, for example in the Linux kernel – application programs that run on the kernel don’t have to be GPL. Netscape released Mozilla as open source, under a “weak” copyleft – you could make changes to files but would have to apply GPL terms within those files. The exclusion of these possibilities could have had dramatic effects on FOSS.
Still, the hypothetical GPL patent enforcement possibility wouldn’t seriously diminish FOSS’s potential. There are other licensing modes, such as BSD-style licenses. There are synergistic effects of having code out there and available even if it’s not pure GPL. Also, there’s been notable pragmatism in updating the GPL v.3. There are issues about license proliferation – patent control could have limited such proliferation, assuming (as is likely) that the owner, Richard Stallman, would have licensed the licensing method to everyone.
Some software patents now address open source – Microsoft has a patent application for isolating the licensing layer of software, and another company has a patent application for looking for FOSS license terms in software. So this isn’t an impossible hypothetical, despite the incongruity of imagining Stallman with a patent.
Elizabeth I. Winston, Columbus School of Law, Catholic University of America, What if you couldn't patent seeds?
Like Strandburg, Winston is talking about the relationship between patents and innovation. There’s no empirical evidence of a connection between patent protection and innovation in the seed industry, especially given the non-patent alternatives in the industry.
The Plant Patent Act and the PPVA allowed plant patents, and the Supreme Court also decided that they’re eligible for regular utility patents. What impact do they have? Patenting has increased 3400% over the past ten years, but it’s not correlated with rises in productivity.
Technology, the shrinking number of industry players, the shrinking varieties of seed planted, and the shrinking alternatives to genetically modified seeds have all had more impact than patents. Trade secret is also an important part of making the seeds differ from year to year. Contracts, meanwhile, govern farmers’ purchase of seeds, and circumvent research and saved seed exceptions found in the patent laws. Courts have upheld these contracts as implementing patent exclusivity.
Q: Is the seed level important any more? If the changes are occurring at the molecular level, then maybe we wouldn’t notice innovation at the seed level.
Winston: She’s using “seed” in a general sense, to include these features. The courts have acknowledged that the contracts/patents extend to nonpatentable features, like the germ plasm.
Adam Mossof, followup: A lot of these techniques are only allowed under antitrust because of the patent protection. So without patent protection, Monsanto might not be able to use these other methods.
Winston: There are 140 varieties of croppable potatoes – but 7 varieties accounted for 70% of production. Seed companies argue that there are no antitrust problems because there are other varieties of seed, but in practice there aren’t, yet courts accept that argument.
Lemley, for Strandburg: Netflix, an intermediate system – what do you do about that, where there are back-office as well as customer service innovations?
Strandburg: Still working on an answer. The distinction between users and sellers is not well enough defined. Particularly with Netflix, a lot of what you might worry about competitors copying from the back office can be protected by trade secrets. It might be that competitors would need to know those things to copy successfully, which preserves a first-mover advantage. If all a competitor is doing is copying mail-order DVD rental, maybe that’s a “sales” use instead of a “use” use and should be protected by patent.
Lemley, for Vetter: wouldn’t patent licensing have prevented license fragmentation and thus been good for FOSS?
Vetter: The question is whether that would have helped or hurt the movement. Centralizing control over licensing would mean less forking, but is that good? Another point is that patent might have avoided some of the debates over whether the GPL was using copyright or contract, and whether contract was legitimate.
Q for Strandburg: The English approach would be to say that people who are good at inventing business methods should be able to do so and license to people who are good at using them.
Strandburg: But the empirical study of user expertise is that you can’t separate out user inventions that way – certain kinds of inventions tend to come from users because of their experiences.
Q for Strandburg: What is the product I buy from Netflix? The DVD or the service? Does the user/competitor distinction collapse?
Strandburg: She defines it according to what the patent claims. Better statutory language to figure out what “use” is could help.
Q for Strandburg: Why not focus on the inventor instead of the invention? If it’s developed by a business user, maybe there will be a better correlation between the features and the rules.
Strandburg: That might be easier in the research tool exemption area. It’s hard here because figuring out whether an inventor was a user is difficult, though maybe no harder than other lines. (Wouldn’t that threaten to restate the flash of genius test?)
Timothy R. Holbrook, Chicago-Kent College of Law, What if patents and patent applications weren't published until they expired?
We think of patent disclosure as a fairness obligation. But getting claims of infringement out of the blue isn’t that surprising even in a publication system – so what function is really served by publication? It’s supposed to teach how to make or perform the subject of the patent. But there are a lot of incentives not to look at patents, or even applications, such as the possibility of willful infringement.
Also, the information disclosed by a patent application may not be very good – 18 months may be a very long time in a tech-intensive industry. Moreover, the content may not really help you out. Even if you do read the patent, you can’t do much with it during the patent term, given the lack of a robust experimental use exception.
The patent might not afford real public notice of its existence, but once you see it you may have an idea of the scope of the claim. But that assumes awareness of the patent.
The alternative would be more like a trade secret regime. Independent invention is a defense against trade secret, of course, so you may have more notice of what you can’t do under a trade secret regime. And in a world without publication, the assertion of a patent claim would put others on notice – you’d lose some of your trade secret-like protection by asserting infringement.
What about the available defenses? Other unexpired patents wouldn’t be available as recent prior art. But patents may not be the best source of prior art, especially with new tech or new subject matter – people complain that the PTO is too patent-dependent. But patents are a network, and you can look at how they cite each other. The use of the patent system as an index to find other patents is an oft-overlooked benefit of publication.
Insight: need to create incentives for applicants to include greater non-patent-based prior art, to improve the utility of this patent network.
It’s not as if the PTO does a great job right now. So what about hidden patents? There does seem to be some public oversight, e.g. when the peanut butter and jelly sandwich patent issued. Delayed transparency would be a harm. Thus, disclosure isn’t necessarily serving a fairness or quid pro quo objective, but actually helping to improve initial patent quality.
Michael J. Meurer, Boston University School of Law, What if economists ran the patent office?
What do economists think of patents as property? The majority of industrial organization economists today tend to think of the patent system as regulatory and closely connected to competition policy, rather than as property.
The FCC has succeeded by using economists to run sophisticated and successful auctions of spectrum. The economists pushed for an auction and thought very carefully about how to pick the right kind of auction given the circumstances (bidders’ valuations are likely to be correlated, which has complicated effects; collusion is possible). So maybe there’s room for improvement in patent.
The methodology is mechanism design: the state of the art in microeconomics. You structure rules of the game to elicit private information held by the people subject to regulation. Lemley and others have looked for mechanisms to add to the patent system, such as gold-plated and regular patents. That would elicit information from applicants about commercial appeal of a specific technology and the robustness of the overall field.
An economist would also want to experiment with – drastically increase – renewal fees.
The PTO has been hostile to academic economists, unlike other agencies, because it understands that economists are a threat to its way of life. The PTO’s customer service orientation helps applicants, but is the wrong structure overall. The examiner or the applicant needs to parse claim language. We need to divide the examiner’s time between different statutory issues, possibly differing depending on the technology. We need to consider whether to require a second pair of eyes in certain circumstances. Economists could help figure out what incentives to give examiners to spend their time most efficiently.
Joseph Scott Miller, Lewis and Clark Law School, What if Joe Meigs had written the nonobviousness statute?
Subtitle: How the perfect murdered the good in 1948. The issue is error detection – the PTO can make false positive and false negative errors. Miller’s gut feeling is that false positives are worse (in patent) than false negatives. Section 103(a) is a very thin operationalization of nonobviousness – it includes a timeframe (at the time the invention was made) and an audience (PHOSITA), and says that dumb luck is okay as a source of invention, but that’s about it.
In 1909, the Supreme Court says that, if skilled people have failed after repeated effots to discover a new and useful improvement, then the person who makes the discovery is entitled to protection as an inventor. This is a concrete and recognizable way of surpassing ordinary skill in the art. Judge Hand points out that we shouldn’t rely on novices, who are dumb in a dangerous way – a novice may find nothing but the obvious in a combination that hasn’t been discovered for a decade after the need arose. The best test of what persons of ordinary skill can do is what they have done. Know your history in the technology and you can evaluate obviousness! But the Supreme Court overturned Hand’s decision upholding a patent for a cordless automatic lighter for a car.
Rejected heresies: the requirement of a flash of genius. The synergism requirement – illustrated by a case involving the modern checkout counter – space for one customer to unload while the previous customer was being checked out. The 6th Circuit said that a long-existing problem born in 1917 was never solved until 1937, thus justifying patent protection, but the Supreme Court reversed and struck down the patent because “two and two have been added together and still they make only four.” The patent bar demanded that the standard be fixed to eliminate both the flash of genius and the synergism.
Giles Rich felt that a positive statement about patentability was dangerous as possibly restriction; though he didn’t want judges to indulge personal standards, he wanted the ability to make patentability arguments to help his clients. Likewise, another drafter said that § 103 had no standard; it was a requirement with no implementing guidelines.
Joseph Meigs was a chemist who died in 1959, the named inventor on 22 patents, 18 as sole inventor. He was also a patent lawyer. Meigs proposed a patent statute that made nonobviousness a question of fact, and that said that sufficient proof of nonobviousness could come from (a) filling a long-felt want, and (b) prior to the invention, the skill of the hard had not supplied, and could not supply, that want. It’s a thick description, but it’s not exclusive.
Meigs was not politically connected; he testified on his own behalf. The biggest question: at what level of granularity do you need to state the “want” at issue? Giles Rich testified against the bill as too rigid, and might incline courts away from sustaining patents where there was no long-felt want. This is absolutely true: it would make more false negatives than §103. But it would make fewer false positives.
In practice Meigs’ standard is useful for litigators – if they can show trial and failure, they are likely to succeed in showing nonobviousness. Putting it in the statute would signal better to inventors where they should work to get protection. It would also encourage them to defy conventional wisdom in the art. The analysis wouldn’t be hindsight-prone. And it would put today’s evidence into stronger narratives – the art taught away from the invention, the invention was greeted with surprise and skepticism. It would also reanimate multiple invention as a contraindicator to patentability, a doctrine that has now died on the vine.
Katherine J. Strandburg, DePaul University College of Law, What if we relied on user innovation to produce business methods and did away with business method patents?
Some people invent things to use (not sell) them. User innovators are less likely to need patents.
Business methods are often user innovations – administrative or “back-office” methods, such as keeping accounts, inventory tracing, payment processing. They’re often tailored to specific business contexts and embodied in software. They’re sometimes purchased through consulting services or individualized software. They tend to be non-self-disclosing in use, which means they can be kept as trade secrets by user innovators.
A different category is products sold to consumers: hub-and-spoke mutual funds, online gambling, long-distance packages, Netflix, iTunes, services like massages, surgery, piano lessons – not user innovation; often self-disclosing as sold.
A third category, customer service methods, somewhere in the middle: one-click purchasing, method for internet payment, method for advertising. Very often these are user innovation, but self-disclosing in use unlike the back-office innovations.
Greater intrinsic rewards: efficient business practices are their own reward, and create a first mover advantage including customer switching costs. Business methods also meet heterogeneous needs and provide customized solutions. Some business methods are skill-based and inventors do them better. User innovators may have lower invention costs, since innovation is a side effect of use rather than the product of a research program.
User innovators are also less likely to use patents to disseminate their inventions. When use gives a competitive advantage, the user wants to avoid others having embodiments of the invention like one-click purchasing. But seller innovators want to disseminate their inventions to customers. Thus user innovators tend to use patents to restrict others’ use.
User innovators therefore make systematically different inventions and engage in systematically different patent behaviors. If there are these differences in responses to patent’s incentives, can we tailor patent doctrine to recognize that user innovation is different? One possibility: a broad exception for use as a business method, like a research use exception. There would then be no need to determine ahead of time whether something is a business method patent. Linedrawing would be easier in context, and there would be no defense for competing sales of the patented product.
For back office methods, sellers would be protected from competitors by patenting and from users by copyright, know-how, and difficult-to-implement methods. Users would gain the benefit of either earlier disclosure or earlier nonexclusivity.
For products, sellers would be protected from competitors by patenting, and from users by make v. buy tradeoffs.
Finally, customer service methods: if it’s non-self-disclosing, a use exemption would promote trade secrecy. If it’s self-disclosing, competitors will copy the method. The desirability of this effect depends on the extent to which inventive costs (often low) are balanced by first mover advantages, switching costs, etc. (often high).
Bottom line: an exception would address concerns about exclusive control of basic tools of eocnomic competition, similar to concerns about patents on research methods. It would tend to neutralize patents on “trivial” business methods, which are least likely to need patent incentives. Costs: more reliance on trade secrets.
Greg Vetter, University of Houston Law Center, What if the GPL had been patented?
The GPL is a business method of licensing software. Vetter claims it’s useful, novel, and nonobvious. There would be very interesting issues of equivalents (e.g. to the viral elements of the license) and other infringement questions.
New issue: dual licensing, which allows a choice of GPL or proprietary terms. That wouldn’t be possible if the GPL were patented. People have also adjusted the GPL to make exceptions, for example in the Linux kernel – application programs that run on the kernel don’t have to be GPL. Netscape released Mozilla as open source, under a “weak” copyleft – you could make changes to files but would have to apply GPL terms within those files. The exclusion of these possibilities could have had dramatic effects on FOSS.
Still, the hypothetical GPL patent enforcement possibility wouldn’t seriously diminish FOSS’s potential. There are other licensing modes, such as BSD-style licenses. There are synergistic effects of having code out there and available even if it’s not pure GPL. Also, there’s been notable pragmatism in updating the GPL v.3. There are issues about license proliferation – patent control could have limited such proliferation, assuming (as is likely) that the owner, Richard Stallman, would have licensed the licensing method to everyone.
Some software patents now address open source – Microsoft has a patent application for isolating the licensing layer of software, and another company has a patent application for looking for FOSS license terms in software. So this isn’t an impossible hypothetical, despite the incongruity of imagining Stallman with a patent.
Elizabeth I. Winston, Columbus School of Law, Catholic University of America, What if you couldn't patent seeds?
Like Strandburg, Winston is talking about the relationship between patents and innovation. There’s no empirical evidence of a connection between patent protection and innovation in the seed industry, especially given the non-patent alternatives in the industry.
The Plant Patent Act and the PPVA allowed plant patents, and the Supreme Court also decided that they’re eligible for regular utility patents. What impact do they have? Patenting has increased 3400% over the past ten years, but it’s not correlated with rises in productivity.
Technology, the shrinking number of industry players, the shrinking varieties of seed planted, and the shrinking alternatives to genetically modified seeds have all had more impact than patents. Trade secret is also an important part of making the seeds differ from year to year. Contracts, meanwhile, govern farmers’ purchase of seeds, and circumvent research and saved seed exceptions found in the patent laws. Courts have upheld these contracts as implementing patent exclusivity.
Q: Is the seed level important any more? If the changes are occurring at the molecular level, then maybe we wouldn’t notice innovation at the seed level.
Winston: She’s using “seed” in a general sense, to include these features. The courts have acknowledged that the contracts/patents extend to nonpatentable features, like the germ plasm.
Adam Mossof, followup: A lot of these techniques are only allowed under antitrust because of the patent protection. So without patent protection, Monsanto might not be able to use these other methods.
Winston: There are 140 varieties of croppable potatoes – but 7 varieties accounted for 70% of production. Seed companies argue that there are no antitrust problems because there are other varieties of seed, but in practice there aren’t, yet courts accept that argument.
Lemley, for Strandburg: Netflix, an intermediate system – what do you do about that, where there are back-office as well as customer service innovations?
Strandburg: Still working on an answer. The distinction between users and sellers is not well enough defined. Particularly with Netflix, a lot of what you might worry about competitors copying from the back office can be protected by trade secrets. It might be that competitors would need to know those things to copy successfully, which preserves a first-mover advantage. If all a competitor is doing is copying mail-order DVD rental, maybe that’s a “sales” use instead of a “use” use and should be protected by patent.
Lemley, for Vetter: wouldn’t patent licensing have prevented license fragmentation and thus been good for FOSS?
Vetter: The question is whether that would have helped or hurt the movement. Centralizing control over licensing would mean less forking, but is that good? Another point is that patent might have avoided some of the debates over whether the GPL was using copyright or contract, and whether contract was legitimate.
Q for Strandburg: The English approach would be to say that people who are good at inventing business methods should be able to do so and license to people who are good at using them.
Strandburg: But the empirical study of user expertise is that you can’t separate out user inventions that way – certain kinds of inventions tend to come from users because of their experiences.
Q for Strandburg: What is the product I buy from Netflix? The DVD or the service? Does the user/competitor distinction collapse?
Strandburg: She defines it according to what the patent claims. Better statutory language to figure out what “use” is could help.
Q for Strandburg: Why not focus on the inventor instead of the invention? If it’s developed by a business user, maybe there will be a better correlation between the features and the rules.
Strandburg: That might be easier in the research tool exemption area. It’s hard here because figuring out whether an inventor was a user is difficult, though maybe no harder than other lines. (Wouldn’t that threaten to restate the flash of genius test?)
Friday, March 30, 2007
What Ifs?
Kevin W. Saunders, Michigan State University College of Law: "What if every 'if only' statement were true?"
Counterfactuals are complicated animals. People do a pretty good job on them, but they can’t explain why.
In standard propositional logic, “p implies q” is true every time p is false, because q’s state doesn’t contradict “p implies q” whether q is true or false. But that’s not good enough for counterfactual reasoning. Also, if p were other than it is, other things would be different: If I were the Queen of France, my husband would be the King.
Nested spheres of possible worlds. Some propositions would be true in every possible world, others wouldn’t. We can look at a curve intersecting those nested spheres as worlds in which p is true – if it were true, the curve would encompass the center. The parts of the curve closest to the center are the closest states of the actual world in which p is true:
Strong theory of strict implication: in any world in which p is true, q would be true. But that’s generally too strong (in a world where I was Queen of France, I might have a different husband). Instead, look at the region where p is true and closest to our world. If q is true in that most similar world, then “p implies q” is right in the counterfactual:
Counterfactual logic creates a failure of transitivity: If J. Edgar Hoover had been born in Russia, he’d have been a Communist. If J. Edgar Hoover had been a Communist, he’d have been a traitor. But if J. Edgar Hoover had been born in Russia, he wouldn’t have been a traitor.
Also, a failure of contraposition: if p implies q, not-q implies not-p. This is true regularly, but not true for counterfactuals.
Counterfactuals are complicated animals. People do a pretty good job on them, but they can’t explain why.
In standard propositional logic, “p implies q” is true every time p is false, because q’s state doesn’t contradict “p implies q” whether q is true or false. But that’s not good enough for counterfactual reasoning. Also, if p were other than it is, other things would be different: If I were the Queen of France, my husband would be the King.
Nested spheres of possible worlds. Some propositions would be true in every possible world, others wouldn’t. We can look at a curve intersecting those nested spheres as worlds in which p is true – if it were true, the curve would encompass the center. The parts of the curve closest to the center are the closest states of the actual world in which p is true:
Strong theory of strict implication: in any world in which p is true, q would be true. But that’s generally too strong (in a world where I was Queen of France, I might have a different husband). Instead, look at the region where p is true and closest to our world. If q is true in that most similar world, then “p implies q” is right in the counterfactual:
Counterfactual logic creates a failure of transitivity: If J. Edgar Hoover had been born in Russia, he’d have been a Communist. If J. Edgar Hoover had been a Communist, he’d have been a traitor. But if J. Edgar Hoover had been born in Russia, he wouldn’t have been a traitor.
Also, a failure of contraposition: if p implies q, not-q implies not-p. This is true regularly, but not true for counterfactuals.
What Ifs and Other Alternative Intellectual Property and Cyberlaw Stories
Michigan State University College of Law
There was a great intro on counterfactuals by Kevin Saunders. I will post on it later if I can figure out how to draw and post the pictures.Panel 1: Free Speech, Privacy and Virtual Reality
Ann Bartow, University of South Carolina School of Law, What if pornography was not eligible for copyright protection?
Bartow started with two provocative questions: How many in the audience thought of themselves as authors? (All of us.) How many had had positive experiences producing or performing in pornography? (Nobody raised a hand.)
IP has generally decided to leave regulation of subject matter in the ordinary sense (gambling, pornography) to those specific fields – gambling devices are patentable, but the legislature can ban gambling. But that skips over the question of incentives. Once we give copyright protection to pornography, we’ve incentivized its creation.
Yesterday’s Perfect 10 decision: these naked women are completely commoditized and fungible – their very fungibility seemed to incite the district court to give more protection under copyright, because there is so much competition in the marketplace. Most of the models transferred their rights of publicity to Perfect 10 – what’s this about? Some of the sites CCBill served used words like “illegal” and “stolen,” and Perfect 10 argued that this served as a red flag of infringement. But the court thought that, in the context of pornography, those words could have been just puffery enhancing the appeal of salacious pictures. So it turns out that content does matter – it wouldn’t have been the same logic for stolen music.
The application of copyright law to photography: Why doesn’t Oscar Wilde have any rights discussed in Saxony? What is the relationship of the body – its infinite variability, its similar appearance in different photos – to the photographer? How much creativity can the photographer exercise over Wilde’s mein?
Why, in an era of animation and computer generation, is live porn still so popular? There’s something about “reality” that adds to porn’s appeal. Bartow asks whether we could deal with the problems in production of pornography by switching to simulation. (Hey, if it’s good enough for Bridgeport Music, why isn’t it good enough for Playboy?) Would copyright be any different? Would the effects on viewers?
Conclusion: Bartow is focused on the production, not the consumption, of pornography. The conversation about pornography in the academy seems to have stopped; Bartow is not anti-sex or pro-censorship, but does want to ask about the conditions of production and whether we want to support them through IP policy.
Amy Gajda, College of Communications & College of Law, University of Illinois, What if Samuel D. Warren’s daughter had eloped?
The Right to Privacy is one of the most important law review articles ever. They wanted to redefine certain protections, specifically “the right to be left alone.” Warren & Brandeis blamed a lot of things on the press – we need to protect the public from personal revelations and from wasting their time on gossip. Prosser believed that the impetus for the article was the press coverage of Mrs. Warren and, specifically, the wedding of a Warren daughter. Problems with Prosser’s theory: Warren doesn’t seem to have had a child old enough to be married at the time he wrote the article. For Samuel Warren’s own wedding, the NYT 1883 described the wedding dress, presents, parties and the number of guests invited. There was also coverage of Mrs. Warren after the wedding. Her father was a big shot, a US senator from Delaware and Secretary of State.
Gajda argues that privacy rights against the press would have developed anyway. Courts had already freely criticized journalism as Warren & Brandeis did, and had already recognized privacy torts. They routinely held journalists in contempt for truthful reports about pending court cases. Even without that experience suppressing truthful speech, the yellow journalism of the day would have prompted some response by someone else.
Warren & Brandeis wanted to recast privacy as more emotional and less economic/reputational. Contract, property rights and trade secrets already protected privacy, and the Warren & Brandeis concept was “another application of an existing role.” Yet courts were already willing to look at the nonreputational harm of exposure to the public – in libel cases, they held that the truth could aggravate the harm to the peace of the family. An 1811 case condemned revelations from a letter written “in mystery and confidence” that revealed the writer’s “open heart.”
Why didn’t The Right to Privacy use these truthful libel cases? Because they have their basis in the Star Chamber, and they were bad news to general defenders of free speech. Brandeis & Warren needed to distinguish truth in which there was no real public interest from truth in which there was.
Final irony: Miss Helen Warren, Warren’s daughter, was a singer who likely courted the publicity that Warren himself criticized.
Greg Lastowka, Rutgers School of Law-Camden, What if reality were pervasively augmented?
General idea: what if digital networks filled your standard visual/auditory field with useful/interesting data? Like sunglasses, providing an overlay to the physical world. You could have different overlays – gamers, Fox News, etc. Is there anything new in this? Physical space carries a lot of data now, not just explicit messages but messages sent by the architecture around us. Billboards exist in reality and in Second Life, which also has a strong anti-billboard contingent.
The problem is that information crowds out other information. Cellphones can cause problems for third parties when a driver is paying attention to the wrong data stream. There are also aesthetic harms. Opt-out may be inadequate – your cellphone in public, like your laptop in class, affects me. Also, it may be difficult to opt out if everyone else has opted in and life is now configured for the default.
Another risk: virtual balkanization, the creation of subgroups sharing a reality that differs from that of others: the Republic.com objection.
A third problem: Advertising creep. The first use of these technologies will be ad-related. (Not porn?)
Privacy: Your sunglasses tell you everything about a house’s owner when you look at the house. Is that worse than the current situation? (It would sure enable my real estate fantasies.) Relatedly: Wikiality. What if people could annotate your house with their own thoughts about it? Flickr has Memory Maps allowing people to tag specific places and record their memories.
Basic question: When the virtual displaces the real, who controls the virtual? Private control will expand, because regulation will start to affect “speech” instead of “conduct.”
Cheryl B. Preston, J. Reuben Clark Law School, Brigham Young University, Free Speech and Internet Pornography: What if Congress and the Supreme Court had been tech savvy in 1995?
Larry Lessig described the CDA as a law of extraordinary stupidity that practically impaled itself on the First Amendment. It was passed with little discussion or thought. Badly drafted, internally inconsistent, and profoundly unconstitutional, the CDA triggered a defensive reaction by people who actually participated in and thought about the internet.
The Supreme Court struck down the offensive parts, but in the process of doing so said some things about tech that are no longer true. E.g., odds are slim that a user would enter a sexually explicit site by accident; children require some sophistication to find internet porn. Pediatrics in February published a study showing 42% of 10 to 17-year-olds have been exposed to internet porn, mostly inadvertently. Compare to Pacifica, which found broadcast to be specially regulable because of its pervasiveness and unique accessibility to children. The internet is equally pervasive and invasive – perhaps more so than radio these days. We intentionally emphasize computer skills for children, in contrast to our educational policies about TV and radio. We shower our kids with electronic devices for internet connection. And children learn the necessary skills for manipulating the internet faster than the rest of us.
Congress wasn’t any worse informed than the rest of us in 1995 – academics were pointing out that only 5% had internet access, and claiming that it was unlikely that the internet would outstrip TV and radio access. (And I’m pretty sure it hasn’t – Preston doesn’t quite claim that it has.)
Even recently, courts think that kids can’t circumvent filters, but Preston knows this is wrong. (I want to see the evidence for this – I’m sure it’s true for some kids, but how many? Can they do it at the library, or do they need control over the computer?)
A better drafted statute might not have stifled the internet. Not all regulation is bad or triggers a slippery slope towards a Chinese wall around knowledge.
Downside of not getting it right in 1995: The explosion of available pornographic material. The DMCA rolled over the techies’ objections to protect copyright, and maybe some middle ground could have been used to regulate porn in a similar way. You used to have to engage in an embarrassing, effortful physical search to find the worst of the worst; now it’s easy access at home. (Videotapes caused the same shift, it seems to me.) It’s hard to stay sober when you live and work at a bar.
The precedent and language from CDA/COPA cases has now stifled the development of law – Congress is discouraged and unwilling to try again. The cases limit the analogy to radio and TV. In addition, the way the Court described the internet becomes the reality – the nature of the internet shaped itself around what the Court said was possible.
She doesn’t think there was a magic answer, but Congress was so ignorant in 1995 that now the temptation is to ignore problems entirely. (How does this interact with legislative proposals to regulate MySpace? To kick sexual predators off the internet entirely? State law regulations of spam?)
Questions: Mark Lemley: What would happen to the availability of porn in the absence of copyrightability? Free copying could increase availability; technical measures might arise as a substitute for IP rights; or the collapse of the incentive might decrease availability.
Bartow: You’re going straight to consumption and creativity and economics – her concern is how porn affects the people who produce it. Porn gets more First Amendment protection than advertising, but copyright treats them both the same. We all recognize that porn is different – note our unwillingness to identify as pornographers.
Lemley: It’s not just money. If you think the harm of porn stems even in part from consumption, you should look at incentives. (I’d add that the production level will obviously be affected by incentives, so incentives are still a significant question even bracketing consumption effects. Copyright for virtual porn and no copyright for real-person porn would substantially change production incentives.)
Michael Landau: What should the role of courts be in determining copyrightability based on content? Congress has prohibited scandalous and immoral TMs, but has enacted no such restriction in §102(b).
Bartow: At the time, Congress assumed no copyrightability. That assumption was flipped decades ago, but Congress simply hasn’t revisited the issue. Congress likes the ability to blame the courts for their decisions. CCNV suggests that the courts have some flexibility, at least in areas like who is an author.
Question: What about women who produce porn? Is it feminist to make one’s own porn?
Bartow: Factually, there’s a bunch of lying that goes on about who’s producing the porn. A lot is PR, fronting for male owners, e.g., Suicide Girls. Contrast the liberal response to porn with the liberal response to Wal-Mart: we have no problem regulating Wal-Mart when it abuses workers; why not porn?
Question: Porn and obscenity are two different things, especially in the production phase. You won’t know if you pass the literary/artistic/social/political value test until the work is complete. (Yeah, I’m sure it’s difficult to tell based on the script.) Also, maybe we can combine code and regulation to create white spaces on the internet along with .xxx domains.
Bartow: The reason she talks about obscenity is that Mitchell Bros. explicitly says that even obscenity is copyrightable.
Preston: We can definitely think about allocating ports or other internet resources a la carte, allowing families to choose what they want to be available at the ISP level. That would prevent even tech-savvy kids from evading restrictions.
Comment for Gadja: Warren & Brandeis took a while to catch on; it took Legal Realism to break down the formal classifications that prevented expansion of the privacy right. That’s the real causal foundation for the new torts.
Q: ISPs can offer filtered Internet without a legal backstop, as they do in Singapore or in AOL’s walled garden approach. But there doesn’t seem to be much uptake here – why? The real problem is not law/tech failure, but a failure of norms.
Preston: The AOL filter can be proxied through at home. What we need is an ISP-level access block, and there’s no current way to do that without overblocking and evasion.
Q: Saudi Arabia blocks about 99% of porn, with a 20-person staff. They’ve constructed their internet to work this way. AOL can also filter out proxy servers. You can make it so difficult that your kids have to be Linux programmers to evade.
Wendy Selzer: Preston’s reference to the success of the DMCA made her gasp; in lots of cases it’s been used to suppress lots of speech. Selzer thinks we’re better served by a black-and-white view of regulation (that is, it’s bad).
Preston: She meant that we haven’t been hands-off in other areas – Congress has enacted limitations with profound effects on the internet, so it’s not as if we have a lack of regulation and regulating porn would be the first/only intrusion.
Selzer: What makes you think Congress can do better regulating porn than copyright?
Preston: That’s the glory of what-ifs.
Brief comment on CCBill
Perfect 10, Inc. v. CCBill LLC, -- F.3d --, 2007 WL 925727 (9th Cir.), obviously has plenty to keep IP lawyers buzzing for a while. The court’s conclusion that the CDA preempts state-law false advertising claims based on making CCBill responsible for third parties’ statements is completely unsurprising. Its broader holding that “intellectual property” means “federal intellectual property,” of course, is much more eye-opening. Notably, Judge Kozinski was a member of the panel, though he didn’t write the opinion. No friend of California’s extremely expansive right of publicity, Kozinski was doubtless sensitive to the variations between state rights of publicity, which do create risks of inconsistent state laws governing third parties. Given the essentially complete overlap between state and federal trademark law, and the relative paucity of internet trade secret cases – especially third-party liability trade secret cases, which are usually losers based on lack of any special relationship between the plaintiff and the third-party disseminator – the real impact of the holding is on right of publicity claims. (It’s not impossible that state common-law copyright claims could also be affected, but I’m not aware of any such litigation.)
Thursday, March 29, 2007
Second Circuit rejects foreign famous marks doctrine federally, certifies state question
ITC Ltd. v. Punchgini, Inc., --- F.3d ----, 2007 WL 914742 (2nd Cir.)The Second Circuit, after a long wait, has finally ruled on the validity of the famous marks exception to the territorial scope of trademark protection – and found no such exception in federal law. Thus, it affirmed the district court’s finding that the plaintiff had abandoned its mark BUKHARA for restaurants in the US, and could not maintain a federal unfair competition claim under §43(a). Significantly, however, it certified to the New York Court of Appeals the questions whether New York recognized the famous marks exception under state law, and if so what standard of fame was required (listing several possibilities, from mere secondary meaning to federal dilution fame). The case isn’t over, but we are well on our way to a clear answer about the validity of the rule in New York, whose decades-old trial court decisions provide the foundation for the claim that the US occasionally does protect famous foreign marks that aren’t in use within its borders.
Turning to less significant matters, the court affirmed the dismissal of plaintiff’s false advertising claim, since plaintiff lacked standing in the absence of evidence that defendant ever made statements comparing its Bukhara Grill to plaintiff’s Bukhara food products sold in the US. Defendant did compare the Bukhara Grill to plaintiff’s New Delhi Bukhara restaurant. Even though a significant percentage of defendant’s customers are of Indian descent, and even if such people are more likely to visit India, the court found any risk to plaintiff’s reputation too attenuated to support standing. Moreover, even if the court accepted plaintiff’s legal claim that well-developed plans to enter a market can support a finding of competitor standing, a question on which it reserved judgment, plaintiff had shown no such well-developed plans.
Sunday, March 25, 2007
The messy intersection of copyright, trade secret, and false advertising
PrecisionFlow Technologies, Inc. v. CVD Equipment Corp., 2007 WL 844893 (N.D.N.Y.)
Plaintiff PFT, which makes custom gas and chemical delivery systems and provides computer chip fabrication services, sued CVD for false advertising and commercial disparagement under the Lanham Act and related state law claims. In essence, PFT claimed that CVD falsely told others in the industry that PFT’s goods and services infringed CVD’s IP rights, causing PFD damage. For example, when PFT bid on a job for Lucent, with which it had an ongoing business relationship, CVD told Lucent that PFT’s performance would infringe CVD’s rights. CVD got the contract instead.
CVD countersued PFT and PFT’s president, the former employee of a company CVD bought, alleging that he stole the company’s IP, including copyrighted technical drawings, software, and operations manuals. CVD has applied for registrations and registered copyrights covering some of the IP it purchased, including technical drawings for the “Silane Delivery System.” CVD claimed that PFT copied substantial portions of the Silane Delivery System and other works, and that PFT misappropriated confidential information, wrongfully disclosed that information to customers, and interfered with CVD’s business relations with Lucent by falsely informing Lucent that PFT was entitled to sell competing goods. Thus, CVD’s counterclaims alleged copyright infringement, unfair competition, unjust enrichment, and tortious interference with prospective business relations.
PFT’s defense to the copyright claims was that the relevant information wasn’t created by the predecessor company and that whatever protectable rights it may have had were abandoned, transferred, or licensed to third parties. This also affects the analysis of whether the information embodied in the works was a trade secret.
The works at issue were identified as: Lucent Silane Delivery System Drawings; four Emcore standard gas panel drawings; Lucent and IBM wiring diagrams and drawings; Silane Delivery System Software; IBM Silane Systems Software; Lucent Gas Cabinet Software; IBM Gas Cabinet Software; and IBM Touch Screen Software. As the names indicate, PFT argued that many of the drawings were provided by customers free of charge, given that customers in this industry typically provide detailed specifications for the equipment they want built, including schematic and/or conceptual drawings and even specifying component manufacturers. PFT’s president said in a declaration that his former employer did little or no independent engineering.
CVD submitted a declaration from its employee, the former president of the predecessor company, who stated that the company would sometimes develop schematic drawings, and that in any event it would prepare detailed proprietary manufacturing, assembly and layout drawings, because the schematic drawings were insufficient for manufacturing purposes. If the customer ordered standard equipment, the company would use and if necessary modify standard detailed drawings it previously created. He added that the company did perform extensive design work, much of which was billed to customers. (Even so, are these copyrightable derivative works? Or do they flow so naturally from the schematic drawings that no independent copyright can subsist, either because of the originality requirement for derivative works or because of merger and related doctrines? Because of the undeveloped posture of the case, and because of the court’s focus on trade secret issues, these questions are unaddressed.)
PFT also argued that the works weren’t kept confidential, submitting declarations that it was common practice for works like the drawings, operations manuals, and software at issue to be freely exchanged in the industry and given to customers without restriction; products and equipment were regularly shown at trade shows and made available for unrestricted inspection at public auction. CVD submitted conflicting evidence, including evidence that the company used nondisclosure agreements with customers (though the agreements don’t seem to have specified what counted as confidential information, raising the question of whether the drawings, manuals, etc. were actually covered).
Given these factual disputes, the court declined to grant summary judgment to the counterdefendants. On the state law counterclaims, the court rejected PFT’s preemption defense because the extra element of breach of duty was allegedly present – even with respect to the unjust enrichment state-law claims. That holding seems shaky, given that unjust enrichment doesn’t require that extra element, unlike the trade secret claims. The elements of unjust enrichment are that the defendant benefited at the plaintiff’s expense and that in equity and good conscience the defendant should make restitution – that’s a tort that can be committed just by copying, in the absence of preemption. Adding in breach of duty in this specific case to avoid preemption is transforming the tort.
The court also rejected PFT’s claims for false advertising under New York law, because CVD’s conduct wasn’t consumer-oriented and didn’t affect the public at large, given the highly specialized goods and services at issue. The Lanham Act has no such limit, and the court found disputed issues of fact on the federal claims and the state-law tortious interference claims.
Saturday, March 24, 2007
Gender & IP, Panel 3
Diane Zimmerman, NYU, comments: The papers here confirm how nuts we are about issues of gender. Zimmerman thinks IP may be more neutral than other fields, but it’s not neutral in terms of the life situations that get played out under the IP rubric. The papers also confirm that we should fear overprotection. Gender-specific denigrating commercial uses need a powerful fair use tradition allowing commenters to fight back.
Finally, this day demonstrates the marginality of IP – it’s a background tool and helps in some instances but it isn’t the thing that most people rely on most of the time to engage in creative activities and get them out to the public. We need to think carefully about what people actually want – Goswami’s paper points out that there’s no such thing as a group of people who want to protect traditional knowledge in a single way; they want many different things, from commercial rights to nonuse by outsiders. What are the economic structures that allow people who do important work to get that work recognized and marketed in the way they want? It is an economic issue, not an IP issue.
Ann Bartow, South Carolina, Gender as Intellectual Property: The Propertization of Women: Her topic is pink, the color of femaleness. Pink is a color for girls in a way that there is no color for boys – maybe for babies, but after that, blue is the color of depression and Viagra. (But see this history of pink/blue for babies.) There’s no enduring cultural connection between men and a particular color, because men are the standard and women are the other.
The pink color of fiberglass insulation as a trademark is one of the Supreme Court’s examples of how color alone can be a mark. In Qualitex, the Court recognized that the Abercrombie spectrum didn’t make much sense for color – what is the generic or descriptive color of a dry-cleaning pad? Is it arbitrary or functional?
Bartow thinks that people use pink in TMs in an instrumental way, a functional way. Many of the 8000 TMs that use pink are for women’s products. When men adopt pink they usually do so humorously, or insultingly – the pink triangle was used by the Nazis to denigrate homosexuals. Now there have been significant attempts to take back the pink triangle, but remember the origins.
Can TMs denigrate women? That’s one strain in Bartow’s analysis. The other is plain old confusion – TMs intentionally impute values and meanings to goods and services that we’re supposed to buy – femaleness and subordination.
Why is Owens-Corning fiberglass insulation pink? Her guess – it looks friendlier, like cotton candy. Victoria’s Secret also has a valuable PINK trademark. (And gee, what could it possibly mean for women to walk around with PINK on their chests or backsides?)
Communicative pink: on Our Bodies, Ourselves; Code Pink (antiwar group); Carolina Girl design that takes the South Carolina flag and makes it pink; on a “Women for Peace” banner. Decorative pink: on products for girls, on Camel’s new No. 9 cigarettes. Pornography pink is also common. (It’s not only pink that aids in the pornification of ads for women; Bartow showed an ad for Clinique moisturizing lotion that looked like a money shot.)
Pink ribbons for breast cancer: Barbara Ehrenreich wrote a powerful critique of this a while back that Bartow’s drawing on. Antiabortion groups use the pink ribbon to promote the theory that abortion causes breast cancer, because there are no TM rights preventing that.
Pink vacuum cleaners (traditionally feminine), pink boxing gloves (transgressive but cute), the Little Pink Tool Kit (to avoid icky boy germs), pink golf clubs (pinked up by Wilson for “the cure”). Message: buying our product helps women.
The locker room for the opposing team at Iowa is painted pink – it’s supposed to make the visitors feel gay and underperform.
All these pink marks are intended to signal otherness: (1) this is for women, (2) buying this helps women, and/or (3) this is a women-related product for men. TM owners free-ride on the existing meaning of symbols and appropriate them for private use.
Elizabeth Judge, University of Ottawa, Canada, Eyeing IP: Gender, Senses, and the Visualization of Intellectual Property: IP law favors the visual as an object of legal protection; subject matter based on other senses is less likely to get protection. This has gendered consequences for access to IP and for access to IP rights. The framing and interpretation of IP has been based on peculiar and narrow epistemologies, especially with respect to how personality is expressed.
If we take the IP system seriously on its own terms, then it’s creating skewed incentives to create visually.
If the media women create in are not within the incentivized areas, IP’s bias limits or redirects them. We should be, normatively, sensing IP rather than looking at it.
Examples: requirements of drawings for patents and industrial designs; stronger protection for graphic than literary characters in TM and copyright; traditional emphasis on the visual in defining what can be a TM; the way personality is defined by visual aspects for the right of publicity. Assumptions: knowledge comes from vision.
Her examples are Canadian, but other systems have the same features.
Industrial Design Act: design means features of shape, configuration, pattern or ornament that “appeal to and are judged solely by the eye.” Aesthetics shouldn’t be limited to the visual – you can lure customers in other ways.
Trademarks: TRIPs allows countries to limit TMs to visually perceptible marks, but doesn’t require it. Canada hasn’t made many moves to accept scent, sound, touch TMs etc. A mark is defined by its purpose, something used to distinguish goods and services. It could include nontraditional marks, but the interpretation has been almost entirely visual – the Federal Court of Canada has pointed to “something that can be represented visually.”
Playboy TM toupees – Playboy registered the picture and wrote out PLAYBOY. On the actual hairpieces, PLAYBOY was nowhere to be found. Instead, salespeople told customers that these were PLAYBOY toupees. The question was whether they were using the mark – the Federal Court said no, there was no use without a visual indication. The case doesn’t necessarily stand for the proposition that sound marks aren’t registrable, but that a registered visual mark isn’t being “used” when salespeople just say the word. But it’s been read more broadly.
If you register musical marks, you get a registration in the distinguishing capacity of the notation, not the music as played. From a cognitive perspective, marks based on other senses should be registrable.
Potential sex differences in sex; Women’s smell memory/odor identification is consistently stronger than men’s.
One concern is providing proper notice to potential competitors. But technology advances, and there are solutions.
Copyright: on its face, the law is sense-neutral – “whatever may be the mode or form of its expression” – but the types of works are generally defined with respect to the visual. For fictional characters, medium matters. Literary characters get less protection than graphic or audiovisual characters – looks win out over personality. Example: the Michelin man, whose image is protected regardless of the other characteristics he exhibits.
Under Canadian law, an “artistic work” requires visual expression.
Janet Cardiff, an experimental artist whose multimedia work focuses on sounds. The experience of the work changes as one moves through space. Under the Copyright Act, she’s not an artist, because it’s only visual media that are “artistic works.”
We should change how we see IP – start sensing it instead. This would be a more sophisticated view of “recognition” both cognitively and psychologically. This is a call for IP expansion, equalizing access to IP rights – it is not in conflict with a call for making IP rights less deep. More user rights, shorter duration, etc. are all consistent with more expansive subject matter.
Ruchira Goswami, West Bengal National University of Juridical Sciences, Calcutta, India, Intellectual Property Rights of Indigenous Peoples: A Gendered Perspective from India: Three different examples (1) embroidery, (2) painting, (3) folk music—all three are from the eastern part of India, and all are done by women and therefore unacknowledged by the overall community. There is no protection for these cultural protections in the current legal regime.
International law: supposed to confirm rights of indigenous peoples over intangible cultural practices and traditions. “IP” has started to become part of that language of self-determination.
The copyright regime is inconsistent with traditional cultural productions – problems of authorship, originality, fixation, duration.
Kantha embroidery– in Bangladesh and West Bengal – began with women weaving blankets and became more sophisticated. The art isn’t dying; women have access to the markets, because many are being trained in kantha. The problem is one of ownership: there are traditional motifs, and then there are urban designers who are ordering new designs and having them done. Traditional motifs are gradually being lost. Women are not designers any more, but are responding to the demands of the market. It isn’t an expression of culture.
Madhubani painting and authentication – from Bihar, line drawings using vegetable dye for color. Lots of human figures, reflecting common scenes and folk texts. They’re easy to replicate and sell at 1/10th the price; the women making the paintings have no legal protection for copying. The creators are indigenous and there is no legal protection for their traditional knowledge because India doesn’t recognize “indigenous” as a relevant category.
Folk music and expropriation – there is a growing market for such music. The lyrics are the same, but the history has been removed. For example, Goswani discussed (and sang!) a song about migrant laborers in Assam who want a better life and are deceived about their prospects. There’s a traditional version, and a modern version available on a CD with a completely different presentation, absent the pathos of the original. Is this a violation of the moral right of the community? It’s not a religious desecration, and the song isn’t lost, but the history and the protest are lost. This hybridization is dangerous.
Central issue: remuneration. Economic returns are desirable – but at what cost? Of course these communities want to access the market and make money. Is authenticity important when your basic needs aren’t being met? Protection has to be a combination of economic returns and compensation for moral right violations. Recognition is important as well – it’s not enough to say that this is traditional music on your CD, but you have to give a history of the community and its struggle.
Problems: IP is exclusionist and individualistic, which is unfamiliar and uncomfortable to women. Human rights discourse is also male-centric. Moreover, women’s rights discourse is weak in South Asia. How can we step outside these paradigms to find the right solution?
Farley: The visual requirements aren’t homogenous – certain visual requirements meet the needs of having a definite scope for the law’s protection. But Qualitex discusses difficulties in uniform perception of the visual – differences in shades.
Judge: Canada needs a similar discussion of the ontological status of marks and our relative capabilities of representing and distinguishing different sense impressions.
Farley: Visual stimuli give us visceral reactions, as Farley’s negative reaction to Bartow’s multiple images of pink. We can call that functional.
Bartow: The Iowa coach suggested that the locker room was a “calming” color.
Q: Chanel No. 5 smells very distinctive; why shouldn’t there be TM rights in it? Copying it is passing off. (I presume through post-sale confusion, since the buyer and the person who applies it would presumably know if the competitor’s bottle were properly lableled.)
Gender & IP, Panel 2
AU’s IP & Gender conference, Panel 2 (informally: international issues and capacity-building)
Helen Lom, Director, WIPO Awards & Gender Issues, WIPO, Empowering Women Through Awareness Raising and Capacity Building About Strategic Uses of Intellectual Property Tools to Gain Economic Advantage: Why? How? WIPO’s Practical Experience: The UN has system-wide commitments to gender equality, both internally (staffing) and externally. The UN sees this from a human rights perspective (Universal Declaration of Human Rights, CEDAW) and an economic development perspective. Closing the gender gap is a key poverty reduction and sustainable development strategy.
Two principal approaches: (1) Gender mainstreaming (making women and men equally integral in every program), which would be ideal in a perfect world, but has to be extremely comprehensive and is resource-intensive. (2) Women-focused activities. Both are strategic approaches and both can be appropriate depending on institutional (how sensitive is senior management to gender issues?) and other issues.
WIPO’s experience as a small, technical organization: WIPO has to address whether IP is gender neutral – many people WIPO deals with think it is -- and whether IP-related differences are causes or symptoms of existing inequalities. Thus, women-focused activities within the framework of WIPO’s technical assistance programs for developing countries may be the most effective approach. So, the plan is to help women use IP tools more effectively, which is both right and smart in terms of poverty reduction and economic development goals.
WIPO’s activities target primarily women inventors and entrepreneurs – who already have some power/education – to help them compete in the marketplace. WIPO cooperates with women’s NGOs, which are already relatively well organized, though IP awareness is still generally low. Gender-specific statistics about IP use and ownership are spotty and limited, but the available evidence suggests that women still underutilize IP and represent a minority of IP owners. Some sort of “affirmative action” is appropriate.
Another possibility: IP awareness raising among women who make traditional crafts. WIPO has a project with indigenous women in Panama, which has a sui generis law for protecting traditional knowledge. Panama sees the project as a way to publicize this new law, with money from the Interamerican Bank. Objectives: both poverty reduction/community development and social recognition of the crucial role women play in creating and preserving traditional art and handicrafts. A separate objective is the preservation of traditional arts and handicrafts.
Challenges: answer the “why only women?” question – why not invite everyone? Because mostly men will show up. Indigenous women suffer from discrimination by indigenous men, who won’t necessarily tell women about the seminars or share what they learn, so women have to be invited specifically. Indigenous boards, running in parallel with the government, control the labeling of indigenous goods, but they’re run by men and women need permission to use the labels. Men need to be coopted as well.
It is important to use examples and objects to raise awareness and build capacity about this highly technical subject – Lom shows them an object that’s labeled with its geographic origin, a trademark, and a story about the producers, and explains that tourists will pay more when a product has such labels. IP isn’t just for the rich and powerful; Lom focuses on accessible IP, like TM rights, and asks “why sell cheap when you can sell expensive?” There are success stories, such as the Inuit/Canadian Igloo certification mark and the Maori/New Zealand Toi Iho certification mark.
Amita Dhanda, NALSAR University, Hyderabad, India, Creative Recipes: Gendering the IPR Teaching Program at NALSAR University: Ghettoizing the gender/woman question is a problem. When we talk about mainstreaming gender, though, we want to avoid malestreaming. Sometimes we find that principles of mainstreaming never translate into practice.
We need to zero in on specific utilities of engendering the curriculum so that we as teachers can answer pedagogical questions: what learning objectives are we trying to fulfill? Symbolically: add women and stir, ask what this field of law has done to women? Many of us are skeptical about this, but it can start interrogating the system. But it can also prevent a more radical approach – we are addressing gender, what more do you want? Better: structural integration of gender analysis into curriculum.
So, what does this have to do with IP as the second enclosure movement? If you are concerned with marginalization and exclusion, then feminist jurisprudence is the way to go. How do the norms and practices of IP law contribute to oppression and exclusion? How can they be changed?
The existing course structure: Familiarizes students with key concepts of IP statutes and their judicial interpretation, equips students with skills to navigate the field, and gives critical scrutiny to different interpretations of key concepts (what is enough to constitute authorship?), but the foundational premises of the field are accepted without question.
Engendering strategies: do a conceptual model inspired by the history of ideas, discussing, e.g., the construction of individual authorship. Employ controversy for pedagogy: drug pricing and patents; anonymous and silenced authors; GIs and collaborative creation. Each issue forces students to grapple with multiple perspectives and interests.
Pedagogically, readings should be selected for inclusion if they’re informative, explanatory, challenging, problematizing, analytical; excluded if they’re evangelical, polarized, or ostensibly balanced. Advocacy writing is good, but not in the classroom.
Teaching methodology: decenter expertise, give primacy to experience. This can challenge the hierarchical perception of intellectual activity in IP law with a feminist belief in the knowledge-creating capacities of all people, including students. Collaborative class exercises, at the end of which you ask the students how much their fellow students’ contributions mattered and who should be deemed an author. Don’t just have faculty members write articles, but have students participate.
Student contributions: Students can conduct research on unmonetized creativity, such as recipes, embroidery designs, rangoli, etc. that subsist in family settings. How does creative activity contribute to family well-being? This makes students aware of creativity that we don’t even notice, let alone reward with IP rights. Does this mean that creation is its own reward? Or does this justify expanding IP law to cover property within the family?
Many people in the academy accept the necessity of gender analysis, but do not actively seek to perform it or do not have the tools to do so. Thus we must continually explain to our colleagues how gender can enrich our understanding of justice, and create tools to help teachers use gender in their classes.
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