Here we'll explore the nexus of legal rulings, Capitol Hill
policy-making, technical standards development, and technological
innovation that creates -- and will recreate -- the networked world as we
know it. Among the topics we'll touch on: intellectual property
conflicts, technical architecture and innovation, the evolution of
copyright, private vs. public interests in Net policy-making, lobbying
and the law, and more.
Disclaimer: the opinions expressed in this weblog are those of the authors and not of their respective institutions.
what’s the argument which says that Amazon has proved itself to be a mortal, existential threat to the publishing industry?
The picture he paints is one of Amazon as an agent of change, making it vastly easier for people to buy and read books. This ought to be good for publishers who, after all, should be wanting people to buy and read more books.
Salmon theorizes that the two biggest factors are Amazon's price aggressiveness and publishers' inherently conservative nature. Both are true, but I think he's missing several key pieces of his story.
For one thing, he notes that Amazon was taking losses on its aggressive price discounting of e-books, but fails to note that publishers only made profit on the retail prices for e-books, not the wholesale. You can argue about whether an e-book should cost sufficiently less to make than a physical book that a discounted price is in order, but it's still true that when Amazon cut its price the publishers took a hit that was out of their control.
Salmon further asserts that, "It’s not like Amazon has disintermediated publishers" - but in fact that's exactly what is happening. There's a massive explosion of self-publishing in the e-book world, driven in large part by programs such as Amazon's CreateSpace. These programs completely take publishers out of the loop, allowing any author to reach their audience not exactly directly but through the Amazon infrastructure, including the site and Kindle devices. If that's not disintermediation, I don't know what is.
Salmon may be looking at the wrong thing, perhaps comparing the dollars. Certainly big-name professional publishing is likely to be much more profitable than self-publishing for the vast majority of authors. But in terms of number of authors published and in terms of number of books produced, self-published e-books are racing past their physical counterparts.
Money aside, I think the biggest threat that Amazon poses to publishers is loss of control. As publishers lose control over pricing, over the selection of the next big thing, over schedules and distribution, etc. they find their existence threatened. If they're not in control of these things, what's the point of having a publisher anyway?
Well, we know that self-publishing is really hard work but that's not something immediately obvious and of course Amazon and others try to make it seem easy. If you can't see any value in publishing through a traditional publisher then you almost certainly can't see any reason to give that publisher a cut of your earnings. And if that idea gets firmly enough entrenched, those publishers are gone. So, yeah, Amazon's bad for publishers (too).
This brings us to a paper (abstract here on SSRN) with the title "Fair Use, Girl Talk, and Digital Sampling" by W. Michael Schuster II. The paper purports to show that sales of the songs sampled by Girl Talk increased in the year after the album's release when compared to sales the year before. That's an important argument if true, as it would lend support to the thesis that sampling brings attention, which brings sales and therefore copyright regimes should be relaxed to allow more sampling.
Much as I'd like to see support for that hypothesis, I don't think this paper provides it. As Stewart Baker (another Girl Talk fan) blogged, "Schuster achieves his results by playing with the sample, dropping nine songs from a sample of about 200 because they completely wreck his argument".
Schuster argues that he is justified in dropping these songs from the data set because they were hits before Girl Talk used them and we know that hit songs tend to have (often steep) declines in sales after their popularity peak is gone. That's likely true, and Schuster is far from the first author to clean up a data set for publication. However, when your cleaning involves removing only those data points that end up refuting your conclusion the work becomes suspect.
We need more scholarship in this area, and not to draw strong conclusions from any single study.
I think the answer is "probably yes, but people will read it the way they want."
Specifically, EFF Deeplinks blog posted about piracydata.org. The item, written by Maira Sutton and Parker Higgins, gives us the "see, tolja so" point of view. Headlined "Movie Watchers Can't Get What They Want" it pushes the idea that a significant cause of people downloading/watching movie content through illegal means is because they don't have access to legal means of getting these movies.
In the past I've written sympathetically about this point of view: when people appear at your (virtual) door waving cash and saying "take our money, please" it's not generally a good business practice to turn them away. Not only do you lose that immediate cash, but you build an expectation in peoples' minds that they won't be able to buy things honestly so their only alternatives are illegal ones.
So Jerry Brito, Eli Dourado, and Matt Sherman have created a site that mashes up TorrentFreak data on BitTorrent activity with a service that checks for availability of content on legitimate streaming services. The result is a weekly chart with convenient checks and x's for Streaming, digital rental, and digital purchase. So far the chart has a lot of red marks, as popular films are not appearing on streaming services pretty much at all, and sporadically on the other two options. This leads Sutton and Higgins to finger-wag at Hollywood, and I have some sympathy for that. Rapid release of popular features on streaming services would likely capture some of this revenue stream.
But... and there's always a but, that's not the whole picture. For example, the latest data (ending Oct 14, 2013) is captioned, "only 46% of the most-pirated movies have been available legally in some digital form." That use of 'only' is interesting, because I could write a sentence using the same data that says, "Nearly half the most-pirated movies are available in some digital form." I suspect that is exactly how the Cartel would spin these data.
Furthermore, that spin exposes a salient fact: there's not just one revenue stream here. If people are pirating movies they could get in some digital form then it's worth asking why. Maybe it's because they've been conditioned to believe that they won't be able to get it legally so they don't bother to look. Maybe it's because they would rather stream than purchase. Maybe if a streaming option was available it would not capture the audience that is getting the movie over Bittorrent but instead would cannibalize the audience that is now purchasing digital copies.
Bottom line, the data on this chart are too weak and vague to tell us anything meaningful. Attempting to draw strong conclusions from it as the EFF seem to want to do is a mistake.
His charts are based on data from the American Bookseller's Association which shows a small but steady growth in membership over the years 2009-2012 both in number of companies represented and in locations these businesses occupy. He then hypothesizes that much of the pre-Recession collapse of independent bookstores was due to the proliferation and growth of chain stores. Now that these chains are themselves collapsing, space may be opening up for indies to grow again.
Physical stores still can do a wide variety of things that Amazon cannot, obviously including physical presence like author signings, but also providing expert advice and superior scanning/browsing. Chain stores could do these things and offered economies of scale that independents often could not match. Amazon almost certainly beats lots of indies on prices on many titles, and has an unmatched breadth of offering. This is particularly true for small and self-published authors who simply lack the distribution machinery to get their volumes into indie stores - if they have a printed version at all, which most do not.
Independent bookstores are not sitting still, that's for sure. Many are offering print-on-demand option, and some will even sell you e-readers, though I regard that as a suicidal move. Bookstores are also well-positioned to be community hubs - what Ray Oldenburg meant by "third places".
The core question revolves around what happens when there is no obviously distinguishable difference between an original and a reproduction: will the value of originals collapse? Kaminska argues that they will. Salmon's counterpoint is that improvements in reproduction technology in the past have not caused collapses, so why should this one? In addition, he notes that even without technology there are many clever forgers operating today, whose works cannot be distinguished from originals by non-experts. These copies are not valued as highly as the originals, nor does their existence cause the value of the original to go down.
Why? Salmon ascribes the value of the originals to "[t]he invisible aura of authenticity" and gives examples of how people value authentic items, even when the copy is indistinguishable. He further believes that art may well move into a mode more like the music industry has adopted, where the (unique) quality of experience has become the thing promoted, and the (easily duplicated) art object becomes secondary.
Kaminska's response is to argue that in a world of perfect copies authenticity cannot be determined - you might be able to carbon-date a Van Gogh, but pixels don't have that ability. To the extent that art becomes digital/digitized it loses many of the markers available now for establishing authenticity. She further denies that art is like music in that although there are lots of performative art works, a significant aspect of art is the presentation, which includes selection and curation of shows, galleries, etc.
There's a lot more to the argument and I encourage you to read the originals. My personal feeling at the moment is that it will not be either/or, it will be both/and. But what do I know.
He points out that people like Lowery are mistakenly comparing "plays" on Pandora - which are a single person listening - to "plays" on broadcast radio that reach many thousands of listeners or "plays" on a subscription station such as XM which also reach many listeners. If Pandora pays a sliver of the amount paid by XM it does so based on streaming to a proportionally smaller sliver of audience. Oh, and by the way, broadcast radio pays nothing per play. So this is not even close to an apples-to-apples comparison even though everyone uses the word "plays" as though they all meant the same thing.
Westergren also points out that while it has sought to get a rate comparable to other forms of radio it feels it has been targeted by organizations specifically trying to get Pandora (and only Pandora) to pay more. Whatever the rate is set, the argument goes, Pandora should pay rates that establish a level playing field among Pandora and other streaming Internet services.
There's also a good bit to read about Westergren's ongoing notion of what Pandora's mission is: founded by artists in order to be for artists. That includes playing and promoting artists who aren't getting exposure elsewhere, and Westergren talks about his commitment to various aspects of this mission. To me, though, this is beside the point: what matters is that Pandora appears to be the target of a singling out, and a deliberate distortion of the situation. That needs to stop, now.
Wu suggests the use of consumer-protection laws, specifically targeting unfair or deceptive practices. The definition of "unfair" varies wildly since all states and the Feds have such laws. Wu notes also that some NPEs have misrepresented "...the strength of their patents, the extent of other settlements, and their actual willingness to litigate." I'm not sure what it means to misrepresent the "strength" of a patent - presumably Wu is referring to the scope of valid claims or the applicability of the claims to the supposed infringement. Certainly deliberate misrepresentation should be treated as fraud, but I'm not sure how hard it would be to prove deliberate misrepresentation.
Settlements and willingness to litigate, though, are clearly outside the bounds of these laws. I recommend the Planet Money podcast from last week on the patent being asserted against podcasting in which Zoe Chase gives a good view of the "game" played around all civil legal actions. Knowing whether or not someone else will carry through on a threat to sue is a standard feature of this sort of brinksmanship everywhere, not just patents.
Wu then suggests using unfair-competition laws against NPEs who aggregate patents. The idea that assembling a patent portfolio might be a Sherman Act violation when that portfolio is used to stop people from operating a business is certainly a novel theory. I know even less about antitrust law than I do about IP law, but I'm inherently dubious. On the other hand, the RICO laws have been used in ways far beyond their original targets so perhaps the courts will see fit to extend the scope of the Sherman or Clayton Acts in this way.
Wu also suggests that the FTC get into the act, through its power to manage competition and prevent monopolies. Section 5, which Wu points to, seems to target unfair or deceptive practices. This is interesting in that it might be a way to rule out an entire style of business practices. As we've discussed in the past, the use of patents for offensive versus defensive purposes is a matter of the owner's choice; however, the FTC has the power to rule that certain offensive uses of patents are sufficiently anticompetitive as to be illegal. I would be very interested to see the FTC hold hearings on this and air some expert opinions. Right now they're gathering comments and who knows what will follow. That said, any move by the Feds to change how patents are able to be used would almost certainly be challenged in the courts in cases that would drag on for years.
Unfortunately, although Wu notes that patents have been issued with "extreme leniency" (which is quite some understatement) he doesn't advocate for the kinds of changes necessary to prevent patent offal in the first place. Whether or not you like Wu's suggested remedies they are just that - remedies. Far better to fix the problem than clean up the mess afterward.
The place where I agree with Wu most strongly is where he argues that the reasons arrayed against these arguments are not reasons for inaction. Instead they call for proceeding with caution. Patent practices - both issuance and use - are in severe need of reform to keep up with new business practices and changing technology.
The 'yes' side was written by Martin Goetz, himself an inventor and entrepreneur. So far as anyone can tell, Goetz holds the first-ever software patent. The 'no' side was written by Brian J. Love, an IP law professor from Santa Clara University School of Law. So far as I can tell, Professor Love does not actually litigate or make patent applications, so this is sort of a mismatch of real-world practitioner versus theorist. I guess it won't surprise many readers that I consider the real-world practitioner to have the stronger arguments.
In particular, Goetz makes the singular point that "software and hardware are interchangeable" and that it's an implementation decision which bits of an invention go in software versus which bits go in hardware. This remains the key point I have yet to see anti-software patent people argue clearly against.
Goetz is, I think, one-sided in claiming purely that patents are effective protection for innovations. Here Love is on more solid ground as we have ample real-world examples of patents (software and otherwise) being used to stifle innovation and that the rapid pace of technological innovation is not suited for the more leisurely and extended protection that patents offer. Goetz might, I think, agree in principle but as a pragmatist he points out that there are no other means available. Both men agree that the system is flawed and needs fixing.
Flaherty's issue appears to be that there are patents covering aspects of 3D printing and therefore companies are not inventing things de novo without constraint. This is hardly a shock - every business of the last couple centuries has been born into a world where patents existed and some of those patents were even relevant to the new field of business. Indeed, the point of a patent is that you've introduced some innovation or improvement, often by improving upon existing related processes. Much of homebrew 3D printing is innovating and improving on the areas of 2D printing and process manufacturing that have existed for decades. To find that there are relevant patents is far less surprising than it would be if there were no patents.
Furthermore, although the last few years have seen a surge of companies, models, and innovations in 3D printing, the ideas and technologies go back quite a ways. Again, older technologies are often covered by patents, upon which new inventors improve. The specific 10 patents that Flaherty highlights seem pretty normal to me, despite how much he wants to hype things up for this story.
What do you do in such an environment? Well, you do what businesses have always done - you deal with the existing intellectual property. You can license it, innovate around it, show that your machine or process doesn't infringe the specific claims of the patent, file a patent on your improvement that cites the existing patent as recognized prior art, and so on. Bringing 3D printing to every home that wants one is a laudable goal but it's no more likely to be "stymied" by patenting than any other home-use machine, though Flaherty seems fond of hyperbolic descriptives like "fortresses of patents".
In fact, Flaherty seems to hyperventilate over companies doing exactly what I describe. He notes that patent #5,387,380 is held by MIT, which licensed it to a company that... hold your breath, it's scary! ... innovated on it and filed its own patents on its innovations. By the way, MIT doesn't sign exclusive licensing agreements - anyone else who wants to go license that patent from MIT and innovate on it is free to do so. He also seems unhappy that the current crop of 3D-printing companies like 3D Systems and Makerbot are themselves applying for patents.
This is just silly FUD. Patents in 3D printing aren't special - they have all the same strengths and weaknesses as patenting in other industries. It's just that home 3D printing is hot right now and sexy and ... well, that sells more ad space.
Salmon notes that the tip jar and accompanying text give the impression that the blogger needs the tip revenue to support her hard work. However, a slightly deeper look reveals that not only does she have another "day job" that provides income, she heavily uses affiliate links both on her blog and on social media like Twitter. Her actual income from these links isn't known, of course, but given her popularity and standard conversion rates it's possible to generate estimates. Given that these estimates appear relatively large, it's a fair question to ask whether the tip jar on her blog is actually necessary, in the sense of "I will not have money if you don't leave a tip here."
That's a very different situation from the musicians of NoiseTrade, or even Amanda Palmer's famous Kickstarter. In those cases it's clear that the funding provided by the sponsoring individuals is all there is. It's a level of transparency that may be necessary for this kind of model to work. Palmer's problems with her Kickstarter included complaints about its size - to which she provided a breakdown of how the funds were to be used. It's natural for people to think "hey, you have $VERYLARGEAMOUNT, why do you need it?" and it may be incumbent on those who are asking for public donations to include a publicity/transparency plan in their campaigns.
Or, maybe not. Let's dig into this a little bit. Forgive me if this gets a bit detailed. First of all, the measure of "did well" seems to be "had a large increase percentage-wise in stock price". In a year in which the S&P 500 (a benchmark index against which other things tend to be measured) rose 13%, media companies rose a reported 16-43%. That is a good set of numbers. Picking two popular tech companies, Apple and Google I find that Apple (despite hitting a 6-month low mid-2012) is up about 43% and Google is up about 15%. Sound familiar?
Furthermore I see Apple is trading around $525/share and Google is trading around $733/share today. In case you've forgotten basic math - which it appears the Times has - a 15% rise in a $730 stock is a LOT more than a 15% rise in a $58/share stock (which is where Viacom appears to be today). Yes, percentage rises matter and yes performance compared to the S&P is an interesting number, but let's be realistic here.
It's worth digging into what, exactly, is powering this rise in the old-media companys' stock prices and it's two things. One is that they're using their cash to buy back stock and pay dividends. Tech companies - even the fantastically profitable ones - still tend not to do that. This makes the old-media company stock more valuable to investors, particular in times of sluggish markets. For those not into financial wonkery, it may be surprising to hear that the markets these days are extremely sluggish, with price volatility at all-time lows and trillions of dollars that used to be invested in the market having moved elsewhere.
So, a lower-priced stock that pays dividends is more attractive to investors than a higher-priced one that does not pay dividends. Not exactly earth-shaking news. More importantly, it tells us exactly nothing about the prospects for the future of these businesses, nor the media models they represent.
The answer: selling Internet. Most people get their IP connections from a cable company, and some cable companies scored big content deals with Internet companies this past year that further increased their bottom lines. Other companies (*cough*NewsCorp*cough*) did internal reorganizations to wall off big money-losing parts of their business. The result is a situation in which non-old-media revenue is propping up old-media companies. The broadband you're buying from that cable company comes with a hefty mark-up, and is likely a protected near-monopoly. Only a tiny fraction of the country has any choice in where to get Internet service.
All that fat-margin IP revenue serves to mask the fact that the television and cable-channel business is a dying enterprise. Both Thompson and Carr (Times) are careful to hedge their stories in the final 'grafs but I'll say it flat-out: old media companies will change or become walking dead in 2013-2014 and buried soon thereafter.
Most interestingly, though, he notes that many of Sullivan's readers "...pay $20 a day on coffee and lunch; it’s not a lot." That stopped me to think, as I don't spend that kind of money per day and it did seem like a fair bit to me. However, perhaps this means my perspective is too parochial. Perhaps there are people who don't think anything of spending $20/day eating out and for whom $20/year would similarly be below the threshold of concern, even if they had to pay it to get access to a dozen or so writers' contents that they wanted.
It's been received wisdom for some time that there are significant price-points in selling certain objects. You can get people to respond in highly non-linear ways by varying the price of something in a linear fashion. And maybe $20/year is that kind of a price-point. It's certainly true that people used to subscribe to many paper magazines that cost more or less $20/year. And some of us had comic-book or other habits that we were comfortable with as long as it didn't seem "too expensive."
So maybe I'm just an old cheapskate here and it's no big deal. What do you guys think?
I realize that's an appealing and perhaps even common-sense notion and they even quote a graph with the word "Causality" on it, but that is not in fact what is going on and it's not even what the original graph ought to be claiming.
What happened, near as I can make out, is that an outfit called Next Big Media did some data analysis. They looked at some public numbers, such as hits on an artist's Wikipedia page, publicly released iTunes sales, and so on. Then, to their credit, they did some actual statistical analysis. In particular, they did what's called a Granger causality test, which attempts to show that one variable has enough predictive value in its time series to be assigned causative agency in another variable.
Causative agency is much stronger than the usual notion of prediction and it's a tricky thing to pin down. You can, for example, see that in certain months there's a large rise in the number of people wearing overcoats. The calendar date is therefore a good predictor of overcoat use, but it's not a causative factor.
Using a Granger test is good in that it avoids the most simplistic "correlation = causation" failure. However, as Wikipedia and other sources will tell you, Granger Causality is not necessarily true causality. For one thing, it's a test that works only when you have two variables, not three (or more). For another, it's known to fail when there's a (so-called hidden) variable that also follows the same time series. In this case, we can call that variable "popularity". What this study is telling you is that if you can tell when someone is getting popular then you can predict they're going to sell more music.
This, ladies and gentlemen, is not particularly enlightening. We know this, and we further know that public resources such as Facebook pages, Google searches, and Wikipedia article activity are reasonable measures of popularity, particularly when you measure what's popular within the limited subset of the population that is online and connected. Unsurprisingly, this is also the subset of the population that is most likely to buy from iTunes rather than Wal*Mart or other physical music retailer.
There are other methodological flaws in the study - for example, they seem not to be taking into account things like "has just released a new album" or "has appeared on The Simpsons" or "is touring my country" or any of a zillion other factors that may cause jumps in social media popularity, and likewise jumps in sales. I could go on, but you get the gist.
I realize that news outlets have to fill a certain number of (even virtual) column inches, but really when the best thing you can conclude is "artists should make sure their Wikipedia pages are updated and maybe get on Twitter too" - that's pretty lame.
Well, sure, they retracted the memo as soon as someone in the Cartel noticed it and picked up the phone to complain, but hey at least there are people inside the party thinking innovatively about... wait? What's that you say? They fired his ass?
NPD continues to produce shill material for the Cartel, pushing its anti-sharing and anti-customer messaging. Last time I pointed to how they were drawing wrong conclusions from their data; this time Geist points out they can't even do basic math. And of course getting math wrong means you get your message wrong, in this case hilariously the opposite of what they're paid to shill.
The root of the issue is that NPD are trying to show that using P2P systems (presumably to share music) causes one to spend less on music, measured by spending on CDs, downloads, music service subscriptions, and so on. But aside from getting simple addition wrong (by double-counting a subtotal) what Geist points out is that NPD's own data show that P2P users spend roughly 50% more, particularly if you don't accept NPD's dubious assertion that spending on merchandise and concert tickets doesn't really count - because somehow being a fan who downloads music is separable from being a fan who buys tickets and merch.
Yeah, right. When you all get back from fairytale land, let me know. Meantime I continue to be disappointed by any serious journalist who publishes anything NPD produces, except for mockery purposes.
Whether you read the book or the V.C. posts, I also recommend you read McArdle's response in The Daily Beast. In her column she takes issue with the core argument that experiences with low-IP industries are comparable to, or can serve as any guide for, high-IP industries. Her key point is that in the low-IP industries, copies are generally inferior in quality whereas in digital industries copies are perfect. Also, digital copies are far easier to mass-produce than copies of physical objects like clothes.
Sadly, while I agree with her major theses, I think she then goes off the deep end. For example, she believes that a low-IP model would "impl[y] the end of drug discovery." That's just grossly overstated, and ignores several things. One is the option of using much-cheaper small-scale discovery steps, which I discussed back in 2011. It's possible that a low-IP model won't ensure drug-company profits on a multi-billion-dollar pipeline that produces one blockbuster drug every few years, but why should that business model be sacred?
Second, it ignores the "Advil effect." Briefly put, the effect is this: Advil was only patent-protected against generics for two years, and that was over 20 years ago. Despite that, brand-name Advil still controls over 50% of the market for ibuprofen. That is at least prima facie evidence that lifelong patent exclusivity isn't required for a drug to be successful across decades.
Her discussion of the music business is even worse, being at best anecdotal and in places outright insulting. For example, she bemoans the (implied if IP protection is weakened) death of blockbuster-producing major label acts. Excuse me if I don't cry a river over the removal of corporate manufactured acts from the airwaves, hopefully clearing the way for some of the hundreds of thousands of hard-working non-major-label musicians to get airplay. McArdle's phrase "low-productivity artisinal profit model" almost made me snarf. Imagine the reaction of, say, Amanda Palmer to being told she is "low-productivity".
Again, McArdle enshrines the current business models as sacrosanct. Palmer may sell 1/10th the number of units of someone who gets pushed to the front racks at Wal-Mart, but so what? If those front racks disappeared entirely would we be any worse off? There's no quality difference I can discern in the disc I got from Ms. Palmer through Kickstarter compared to the disc produced by a major-label factory. And if I'm getting a quality product and am a satisfied customer/fan, isn't that the point? I don't require a Big Corporate Seal of Imprimatur in order to hear good music and I see no reason why intellectual property regimes should privilege BCSI over AFP who, it should be noted, offered the entire album as a digital download with no DRM for $1.
By the end McArdle softens her critique somewhat. She admits that her points are "not necessarily arguments against looser IP". Well, yeah. That's sort of a shame, as I think there are some core things to be said about reproduction fidelity and relative cost in response to Raustiala and Sprigman. Maybe once I've dug myself out of this backlog I will return to the topic, if I have anything new to say.
Start by reading the agreement as posted to Github. There's a lot of discussion around it, and the specific language will likely change, but the basic agreement is very short and readable. It is intended to replace the default blanket assignment that is used in most industries. In the default you give the company everything, and they can do anything with it. Your name still appears on the patent, but you assign all rights to your employer - usually as a consideration of employment, meaning you can't work (at tech, bio, pharma, or any other IP-using company) unless you agree to this.
The company then is free to use the patents however it wishes. You may recall that this was the topic of some outrage about a month ago, when Andy Baio complained bitterly in a WIRED piece about how Yahoo was using patents (not his, keep in mind, but he was upset anyway). This freedom is restricted under Twitter's proposed IPA, which specifically limits companies' ability to use assigned patents to what the IPA calls "Defensive Purposes."
In theory, a company with this agreement in place could use patents to defend itself, but not to initiate patent-enforcement action. That's a nice theory, but there are two problems I see with it. The first, and smaller problem, is that the way the language of the IPA currently stands, it permits IPA-covered patents to be asserted
against an Entity that has filed, maintained, or voluntarily participated in a patent infringement lawsuit against another in the past ten years
Which is to say, everybody. Really, if you can name a going tech/bio/pharma concern that hasn't been involved in patent litigation in the past 10 years I'll be shocked. It's probably not 100%, but it's certainly 80% and all the big players are in those 80%. So unless the IPA's language is changed, its effect will be nil.
But leave that aside for the moment, and consider what it means to be a publicly traded corporation. It means you are legally bound to do whatever increases shareholder value. Voluntarily disarming yourself in this way leaves you at a competitive disadvantage against other players in your marketplace who are free to infringe your patents, so long as they don't sue. Can you imagine trying to go before your biggest shareholders and say "Well, yes, I'm going to allow our competitors to continue infringing all these patents even though we think we have a good legal case."
You'd be fired in a heartbeat, and with very good justification. You'd be lucky if you didn't find yourself on the wrong end of a shareholder lawsuit. Private companies can get something of a pass on this kind of thing as they don't have the same legal obligations to shareholders. In addition, private companies can be much more easily molded to the personalities of the founders and controlling early stakeholders. But big public companies? The Apples, IBMs, HPs, GEs, Genzymes, Motorolas, Honeywells, etc? They're all going to continue to use patents offensively to protect their markets and products. I hear Google used to be a not-evil place, too.
The IPA is not an inherently bad idea. I applaud Messinger and Twitter for thinking innovatively and trying to get something new started. But I think that the press are being vastly overoptimistic about the likelihood of success here; for example, see Joe Brockmeier's piece.
He lists four reasons why companies should adopt the IPA, which come down to hoping a lot. #1 is that developers will prefer to work at an IPA-using company. I'm sorry but 99.999% of developers don't think about patents and certainly don't think about them during the hiring process. Developers go where the work is interesting and the pay is good. Developers go where they get to do stuff that's fun and looks good on their resumes.
Number 2 is that companies won't need incentive plans to convince developers to file patents. I take it from this that Brockmeier has never filed a patent. The process is BORING and TEDIOUS in the extreme, involving hours of meetings with lawyers who don't understand your work and who insist you do all sorts of annoying arcana. Incentive programs exist because companies realize that developers hate this stuff, but hey for five thousand bucks they can get a really cool new toy so sure, they'll put up with the annoyance. The future use of whatever comes out the lawyer's pen is not even part of the consideration.
Number 3 - it could reduce the number of trolls, but frankly trolls are an overblown annoyance. They're a pack of fleas on the ass of the bull that is rampaging in the tech china shop. The bull is composed of those very same big names (IBM, Apple, HP, Microsoft, etc) aided and abetted by a thoroughly broken patent system. I think Mark Cuban gets overheated at times, but I definitely understand his visceral desire to burn down the entire broken edifice that is software patenting right now. Patent trolls are a symptom, not the disease.
Number 4 - the IPA can be a poison pill. Which is to say that if you're someone like AOL or Yahoo and your company is collapsing then you can't even scrape a bit of value out of what little you have left. Boy, that's attractive! I'm about to default on my mortgage, so I'll set my car on fire, too! Seriously, who thinks like that?
The press needs to take a much more realistic look at this proposal and talk about the ways in which it can be made more workable. For example, I'm personally a fan of patent pools, in which companies contribute mutual value, take mutual value and have financial incentives to avoid hostile legal actions. IPA-like agreements and additional steps like compulsory licensing could play a big part in creating an environment where nobody gets everything, but everyone gets enough to be satisfied, without having to disarm themselves.
Over a year ago, I pointed out that a potentially big story was being missed: people were migrating off file-sharing networks because of a change to always-on, high-speed, mobile Internet use that meant people would rather have their media streamed to them wherever they were, rather than held as bits on a single disk. Having media in the cloud was worth more than downloading, legal or illegal.
But never mind all that interesting new stuff, the RIAA has its own version of history and it's going to stick to that version no matter what. In a blog entry posted last week, Joshua Friedlander, the Cartel's VP of "Strategic Data Analysis," trumpets their success at smashing sharing networks. He's not just relying on marketing "research" like last time, he's relying on a truly dreadful paper put out by an actual (Wellesley) college professor.
To highlight just one critical flaw, I call your attention to the methods used, which involve looking at results data (the change in purchases from iTunes) and then inferring what caused those changes. Rather than doing something like asking people "why are you buying more music" or investigating things like public awareness, Professor Danaher simply assumes the counterfactual. If sales went up, it must be because of Factor A. Shame on him for bad experimental design, and double shame on Friedlander for citing this paper as if it was actual published work. It's not, it's a "working paper" which means it hasn't been subjected to the kind of peer review that would highlight methodological flaws. Two words, Professor Danaher: confounding factors.
Friedlander also points to "Nielsen Netview data" (which I could not find the source for) in order to tell us that "the vast majority of those who used Limewire in September 2010 did not use it in September 2011." Could that possibly be because Limewire was shut down in October of 2010? So, a year after a service was shut down, 90% of people had stopped using it. That's a remarkable achievement; next, do a survey on how many people are renting DVDs from Blockbuster.
Also shocking is that if you mention Limewire, and then ask people whether they use other sharing sites, they tend to say "no." Could that be because people are not stupid? Seriously, I'm more surprised that 35% of people who used to use Limewire would admit to migrating to another file-sharing network. Brazen is as brazen does, but no, officer I promise never to speed again. Honest!
Let's start with a couple things we agree on: Maria Pallante, the Register of Copyrights, is a copyright maximalist. As you can see from her public background, she's worked for organizations like the National Writer's Union and the Guggenheim Museum that consistently hold a maximalist, and author-centric view of copyright. It's also clear that she believes the purpose of copyright is to help people make money, and that exceptions to copyright monopolies should be narrowly drawn.
Why this is surprising, or why it causes Techcrunch's Mike Masnick positively to foam at the mouth is beyond me. Masnick notes that in two recent talks she's taken a retrograde and maximalist position, and then goes on to rant that this means she "doesn't understand her job" and that holding such views should be "grounds for termination."
Beg pardon? Since when has the Copyright Office been any bastion of progressive viewpoints, or even vaguely friendly to "the copyleft agenda" - whatever that might be.
Masnick's major point seems to be that he thinks the purpose of copyright is to promote some nebulous social value. If the head of the Copyright Office seems to think the purpose of copyrights is to make money for the rights-holder that's kind of disappointing and unenlightened, but hardly a shock. Masnick seems to be referring to what I've been calling "The Breyer Test", but hasn't noticed that Breyer was writing a minority opinion.
It's an opinion I happen to agree with, but it's still the minority opinion. What Pallante is reflecting is the majority opinion, which is to say the settled law of the land. So we have a high government official saying she agrees with the law of the land, and this is cause for ranting... how? I dunno, Techdirt is a better (or at least more popular) blog than Copyfight, so maybe I should write more rants and less reasoned posts.
Franzen is concerned for the physical book. He comes across as not precisely anti-technology/anti-Internet, but as someone who sees the creative writing environment and its output as physical books as somehow separate and better. Scalzi is, shall we say, skeptical. Both make good points and are worth reading.
I am myself conflicted. I live my life online and am constantly connected. But I have also been influenced by Muriel Cooper and her love of typography and the printed medium. Books are beautiful and useful in physical form; I don't want e-books to wipe that out. I want the two to co-exist, as each has its benefits.
The blog entry on m-phi is initially concerned with discussing how a possibly revolutionary proof in fundamental mathematical theory was published, subject to scrutiny, and rapid consensus formed that an error had been made. The consensus and supporting arguments were sufficient to convince the original author of the theory to retract his assertion. This is no small thing, particularly since he had a book in the works to explain his discovery. The blog then goes on to reference Jody Azzouni's book chapter "How and Why Mathematics is Unique as a Social Practice".
As related in m-phi, the book's central contention is that mathematics as a discipline - and therefore the mathematicians who practice it - are "very peculiar" in that they tend toward consensus not as a result of social pressures or academic rigidity, but rather as a result of how mathematics works as a discipline. Some have even argued that this is evidence for the notion of Platonism in mathematics.
From a Copyfight perspective, this poses a strong challenge: how do we generalize this kind of behavior? I think it's reasonable to expect that people who read and contribute to this blog believe in the open sharing of ideas and information. We believe that such openness accelerates progress, solves problems more rapidly, and leads to the development of generally better solutions than structures where solutions are developed in isolation. So where else can we look for examples to support this hypothesis?
He reminds would-be screenwriters that ideas can't be protected in the first place, only tangible forms in which the idea is fixed. In addition, he notes that:
[T]here is no bigger sign of an amateur than someone who’s worried about their stuff being stolen
In Hollywood, as elsewhere, creativity is a collaborative process. Ideas have been done a hundred times before and been seen by the producers at least ten times before. Real people who really work in this industry share, critique, feed off each other's stuff, pay homage, make suggestions, and in general participate in a free flow of ideas that feed the creative process.
Gervich's advice to aspiring screenwriters is much the same advice as is given to authors in other fields: make your stuff unique. Make your voice stand out. Make a contribution that is wholly yours and that cannot be replaced. The idea is not unique - the writer is. Separating the two, and focusing on protecting and nurturing the latter is the whole point.
I've been avoiding writing about the LimeWire debacle, not least because of potential conflict of interest (*). As always, I speak for me and nobody else. Not Corante, not my company, and certainly not Gorton or LimeWire.
With that out of the way, let me just say: CNET, you're wrong. Your headline writer is wrong, and Greg Sandoval (whom I normally think better of) is wrong. Allow me to demonstrate.
the percentage of Internet users who download music via peer-to-peer services was at 9 percent in the fourth quarter of 2010, compared to 16 percent in the same period earlier in 2007
Well, that certainly seems significant. In the three years since LimeWire was shut down, fewer people admit to shar... wait, you mean LimeWire wasn't shut down three years ago? Err, no. It wasn't. It was shut down in October of 2010. So approximately 2.5 months worth of LimeWire absence was included in the period measured, out of a total of 36 months. For those bad at math, that's less than 10% of the time.
The claim, then, is that an event that happened in the last 3 months of a three year period somehow caused a retroactive drop? Either that violates causality as I understand it, or someone in the P2P industry has invented time travel and isn't sharing it. Or maybe, NPD is full of shit and Sandoval is guilty of just repeating what he's told rather than thinking for himself.
To cut NPD a small amount of slack here, they do admit that former LimeWire users are moving to other sharing networks. But really, this is just marketing puffery. NPD has no idea what caused the drop in self-reported file sharing over the past three years. Maybe it was that people thought it was an increasingly bad idea to admit that they used LimeWire to random marketers when there was a relentless stream of bad headlines about LimeWire.
I found the above two links in under 15 seconds of "research". Were I an actual paid reporter - as Sandoval purports to be - I would have done some actual research (which is different from "market research" puffery issued to please a paying client) and found out more about where the music sharing has gone. P2P networks still have significant traffic in copyrighted files. But YouTube and Twitter and other "Web 2.0" sites have picked up an enormous amount of the slack.
And were I an actual paid reporter, I might have dug into what I think is possibly the most interesting music-sharing story of 2011, which is that people aren't downloading music as much anymore, but they're sharing it more than ever. Streaming music, both legal and illegal, is finally taking off in a big-time way. People no longer feel as much need to have their own copy of an MP3 on their disks because they're confident they can be connected all the time to a network that will supply them the sounds they want when they want it. Between broadband penetration to homes and a proliferation of pocket devices (mostly calling themselves cell phones) that have the ability to stream low-bitrate MP3s or better, we are likely to see the local storage of media go the same way as email has gone in the past decade. And that will impact old markets like P2P networks far far more than yet another sharing company shut down by the Cartel.
I hope to be writing more about this in the rest of this year.
(*) In my day job I work for a company in which Mark Gorton is a major stakeholder. I've met him twice at company parties. He has no impact on my livelihood directly, but the case against LimeWire has affected all the companies in which Gorton is invested. So there's a potential conflict that readers should know about when they consider my writing.
"Arcade Fire are now one of the biggest live acts in the world. It's not all about record sales. It's about making great records and it's about building a loyal fan base. Ther band make great albums, they're not a radio driven singles band. On top of that, they own their own masters and copyrights and are in complete control of their own destiny. Things couldn't be better.
Why? Well, it seems that Mr. Williams is at best uninformed and at worst... um, I think the word is lying about what Creative Commons does. It seems to have started with a tweet from Mike Rugnetta. He got a fund-raising missive from ASCAP and posted a picture of it.
In the letter, ASCAP asks for money to fight organizations like CC, EFF, and Public Knowledge that, it claims, are trying to undermine "our" copyrights. Oh really? This isn't the first time ASCAP has misrepresented what CC does, as Lessig points out in his response on The Huffington Post. Sadly, Lessig isn't calling for pistols at dawn (dueling is illegal in the US, if you get right down to it) and his challenge is entirely too gentle.
But it's there, and you can read it. I doubt Paul Williams will read it, and I doubt he'll respond. It's not that I think Paul Williams is right - it's that he cannot possibly win this debate and he'd be a fool to get into it. He doesn't want to hand CC or EFF or Lessig any more free publicity.
Which is where I, and I hope you dear readers, will help out. Publicity for this kind of thing is really the best response. Respond to lies by stating the truth; respond to confusion with clarity; respond to uncertainty with understanding. And just in case you get the chance? Slap Williams across the cheek with a white glove. Do it for me.
What you have there is a real musician, Lenny Kravitz, coming unexpectedly on a group of people performing his music ("Fly Away"). So what does a real musician do? He doesn't ask about if they have the right to play this music - he listens, he claps, he jams with them, sings with them, and generally delights the audience as well as the performers.
If you wanted evidence that Weidenbaum was right, here it is. This is what musicians do; this is how music is made and loved and passed on. Uptight Cartel executives take notice, please.
...even if the (current) music industry dies the death it seems so richly to deserve. So assures us Marc Weidenbaum , publisher of the online electronic 'zine Disquiet. Normally, Disquiet only has things to say about its musical topics, which are primarily ambient and electronic music.
However, in the May issue of The Atlantic, editor Megan McArdle took to task the current generation of "freeloaders", complaining that "...a generation of file-sharers is ruining the future of entertainment." Are we, now? Responding to the news that last year was yet another dismal year for the recording portion of the Cartel, McArdle recites figures that lament the aging of the music acts that pull in big bucks. She's apparently completely unaware of the club scene, the DJ scene, the remix scene or - frankly - anything that someone under 30 would consider modern, new, interesting music.
It's true that if your concert tickets are $200 each then you're not going to get a lot of young people at your shows. But really is that something wrong with the audience, or with your ticket price? It seems that McArdle is confusing a couple of different concepts here.
Weidenbaum points out another fundamental contradiction in the piece - the conflation of "the music industry" with "musicians." And to point out that contradiction he wrote a response and commissioned something very much like a musical (ambient) score to go along with that response. He asked ambient musicians to riff on the illustration that accompanied the Atlantic piece (which itself might have been technically a copyright violation) and then he goes to town on McArdle.
Google did not have the right to make wholesale copies of millions of copyrighted books without permission from the copyright holders. Google's original plan fails every possible fair use test ever tried. See, for example, American Geophysical Union v. Texaco.
If copyright is to mean anything at all, then corporations may not copy entire works that they have never purchased without permission for commercial gain. I can't imagine what sort of argument -- short of copyright nihilism -- would justify such a radical change in copyright law. [...]
If the University of Michigan wanted to do this copying for its own patrons, then it certainly could. I wish more libraries would push their rights under copyright. But corporations do not have the same leeway as libraries. Libraries work for us. Corporations work for themselves. [...]
So I am very pleased that Google has decided to work with publishers (like it said it would originally) to convince them that offering their text in searchable form is good business for all. I still have some major problems with the contracts that these libraries signed with Google. I think the libraries are getting played badly here and they are violating their own principles of openness and public service by letting Google take charge and set the terms of this service.
Google might be a very good corporation -- one of the best ever, probably. But it's still not a library. Let's try to remember that.
[The] caselaw doesn't amount to what Siva implies it does. Though it's only a brief citation, it seems Siva seriously misreads American Geophysical Union v. Texaco. The court didn't rule against Texaco because it was a corporation. In fact, the appeals court specifically disagreed with the district court's "undue emphasis" on the for-profit nature of Texaco.
We can put aside caselaw and go to straight-up normative analysis - Siva thinks that this Google Print is bad, bad, bad. What I see is gross hyperbole. What Google's doing is nothing like widespread infringing file-sharing on P2P. Sure, they're copying the entire book, but they're only providing small selections. I don't see how that amounts to a "copyright meltdown." (I know that you can try to do different searches to over time accumulate the whole book, but Google does enough to frustrate that, I think.)
Libraries good, corporations bad doesn't ring true for me. Without a doubt, I'm glad that people are becoming more skeptical of Google, despite their "we're not evil" mantra. However, in this case, Google was providing an important public service, one that happened to benefit the company commercially, but one that also did not pose a serious threat to copyright holders (in fact, it probably would help them), and for those reasons I think Google Print should be lawful.
Scrivener's Error has an interesting (and harsh) critique of Stallman's essay (Time is of the Essence). Petit of Scrivener's Error focuses on the limited term of patent. He's right about that, but I imagine that a patent on literary works would have a tremendous effect on the market nevertheless. I suspect we would be looking at much more consolidation among publishers, for example. And a market that is much more expensive to enter.
(I want to be crystal clear that I'm speaking in this post solely for myself. Not for anyone else who posts here, nor for any other blogger and certainly not for any organization.)
On the one side of this line, I don't think I'm a journalist. In my mind a journalist is someone who reports on, investigates, publicizes events from the world and makes them known to an interested public in the service of making that public informed. I think we American intellectuals agree that one of the ideals of democracy is action and decision taken by an informed public.
But that's not what I do. What I do is point out things other people have done, or said. I give emphasis and weight to what I find worthy, and I push an overt agenda. On this side of the line what I'm doing is much closer to editorial than reportage. What I strive for is less an informed voice than for a sea of voices distinct within the stream of debate.
I don't much like nor respect the current American journalistic notion of "fairness." There are not always two sides to a debate; sometimes there's one or there are many. Nor should a voice be constrained from calling a spade a spade or labeling bullsh*t as bullsh*t. You may notice that the sources I quote from (Cringely, Aharonian, Geist, etc.) are often strongly opinionated. I may not always agree with them, but I respect them trying to take a stand and expand the boundaries of discussion rather than just regurgitating the latest anonymous AP wire item or White House release.
If that's the image, am I journalist? I'd lean towards "no."
But then we get these emails. People read what I write and send me pointers or information. I like getting these emails and I'll often write entries in response to them. If someone mailed me something and asked me to keep their name out of it, I'd do it. Pretty much without thinking. I was brought up watching the Watergate hearings and I believe in the (at least theoretical) power of the press to balance out the powers and expose the corruption of our institutions. I recognize that the ability to have and protect anonymous sources is essential to that function. I believe that any time a reporter gives up a source we weaken the whole structure.
If that's an aspiration, am I a journalist? I'd lean towards "yes."
So, pax Seth. I recognize you're not trying to argue where to draw that boundary. But I think we bloggers had better have this argument, and damned soon.
BoingBoing links to a new "copyright experiment" (Monolith and digital copyright). The software project, called Monolith, takes two digital files and XOR's them (what the author refers to as "munging"), creating a third file. The author calls the two input files "element" and "basis." I think many people might call them "plaintext" and "key." The output file (aka the "monolith" file) would be called the "cryptotext."
The conceit of the concept is that neither the cryptotext nor the key is copyrighted. Thus, it should be legal to distribute both. Otherwise, the author of Monolith claims, everything is copyrighted and nothing can be distributed because there is always a number such that, if XOR'd with another number, will produce a copyrighted work.
This argument is not new and it not terrible interesting. It basically postulates that any encrypted transmission of information is actually not a transmission of information at all.
Posted over on my blog and on Joe Gratz's blog... you can find the testimony of MaryBeth Peters (PDF), Register of Copyrights, in an oversight hearing this morning before the House Judiciary's subcommittee on Courts, the Internet & IP. A slightly different view of the role of copyright in our society than you usually see here...
However, while Felten's generational distinction is an important one, I'm not sure his theory fully explains what is going on. The main problem I see is that Eric Boorstin's thesis (Music Sales in the Age of File Sharing), which found that internet access correlates with increased music purchases for older people but decreased music purchases by younger people, isn't really about file sharing per se. The disconnect here is that there is no data for the correlation between filesharing and internet access.
I want to clarify that my analysis had very little to do with bloggers who copy headlines. Frankly, I'm one of the few bloggers who almost always uses the titles of stories and posts when I link to them. Look at the above paragraph, through my archive here, Ernest Miller at Copyfight, or my personal blog The Importance Of .... To the extent that I implied bloggers would not get a different analysis, "perhaps," I was expressing my cynicism about the courts and copyright.
As I note in comments to Wendy's post, bloggers are almost certainly situated differently than the case that was apparently decided in Japan. A fair use analysis of a blogger copying newspaper headlines would almost certainly be found to be a fair use. Without going into all possible details, for example,
1) What is the character of the use?
Goes for the defense. Blogging is almost always an example of a core fair use, such as criticism, comment, news reporting, or teaching, and is frequently part of scholarship and research. For most bloggers, the use is also non-commercial.
2) What is the nature of the work?
Goes for the defense. First, there is a question as to what the work is. Generally, bloggers are commenting on the article of which the headline is a title, not simply the headline itself (though sometimes that happens too - see, Wonkette Gay Marriage: Way to Drive the Point Home). This is unlike the case in Japan in which one could argue that it was the headlines themselves which were being used as the content. In the case of the headline as title, the copyright is virtually nonexistent.
3) How much of the work is used?
Goes for the defense. Again, generally the work will be the article, not the headline. The headline is a very small part of the article. Unlike the case in Japan where the headlines were being used as content and the entire headline (numerous headlines) were being copied.
4) What will be the effect of the use upon the potential market for or value of the copyrighted work?
Goes for the defense. Generally, the market effect of commentary and criticism is not really relevant.
Also, as Wendy points out, if a blogger is posting an RSS feed of headlines on their webpage, the fact of the RSS feed indicates an implied license to use them. I'm working on a longer posting about RSS and copyright, but bloggers shouldn't feel chilled to copy headlines for their blog. On the other hand, I still wouldn't feel confident advising a commercial portal to feel entirely free of liability in stripping headlines from a newspaper that told them to knock it off.
Ernie does a fair use analysis of the copying of headlines (below) -- an issue of more than passing interest to bloggers and blog search tools that routinely copy headlines or extract them from RSS feeds (as the Trademark Blog picks up). Defenses of implied license for some uses aside, I think the headline republishers have a stronger case than Ernie credits, because copyright does not protect titles, short words, and phrases (see Copyright Office Circular 34). Thanks to that exclusion, librarians don't have to rely on fair use to list books in card catalogues or their online equivalents, and others than copyright holders can prepare indexes directing readers where to find more information. If the subject matter is unprotectable or only slightly protected in the first place, or if the use is "transformative" -- indexing rather than publishing articles, the "effect on the market" is less important.