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AALS Section on Antitrust and Economic Regulation Call for Papers: Google and Antitrust

Posted by Josh Wright on May 7, 2012

The AALS Section on Antitrust and Economic Regulation call for papers features a topic near and dear to my heart this year: Google and Antitrust.   Here is the announcement:

Call for Papers Announcement

AALS Section on Antitrust and Economic Regulation

Google and Antitrust

 

2013 AALS Annual Meeting

January 4-7, 2013

New Orleans, Louisiana

The AALS Section on Antitrust and Economic Regulation will hold a program on Google and Antitrust during the AALS 2013 Annual Meeting in New Orleans. The program will explore the Federal Trade Commission’s potential antitrust case against Google and the Google Book Search settlement. The program will feature a roundtable panel involving leading scholars who have addressed these issues: Dan Crane (Michigan), Marina Lao (Seton Hall), Frank Pasquale (Seton Hall), and Pam Samuelson (Berkeley). We are looking to add one additional panelist through this Call for Papers.

Submission procedure:

Anyone interested in participating is encouraged to submit a draft paper (preferred, and roughly in the range of 20-40 pages) or proposal by e-mail to Michael A. Carrier, at mcarrier@camlaw.rutgers.edu by September 4, 2012.

Eligibility:

Full-time faculty members of AALS member law schools are eligible to submit papers. Faculty at fee-paid law schools; foreign, visiting and adjunct faculty members; graduate students; fellows; and non-law school faculty are not eligible to submit. Papers may already be accepted for publication, as long as the paper will not be published before the AALS meeting.

Registration fee and expenses:

Call-for-Paper participants will be responsible for paying their annual meeting registration fee and travel expenses.

How will papers be reviewed?

Papers will be reviewed and selected by members of the Executive Committee of the AALS Section on Antirust and Economic Regulation: Darren Bush (Houston), Michael Carrier (Rutgers-Camden), Daniel Crane (Michigan), Hillary Greene (Connecticut), Scott Hemphill (Columbia), and D. Daniel Sokol (Florida).

Will the program be published in a journal?

Yes, as a symposium in the Harvard Journal of Law & Technology Digest.

Deadline date for submission:

September 4, 2012. Decisions will be announced by September 28, 2012.

Program date and time:

Saturday, January 5, 2013, 10:30am – 12:15pm.

Contact for submission and inquires:

Michael A. Carrier

Chair, AALS Section on Antitrust and Economic Regulation

Rutgers Law School – Camden
217 North Fifth Street
Camden, NJ 08102
(856) 225-6380
mcarrier@camlaw.rutgers.edu

Posted in antitrust, copyright, economics, federal trade commission, google, monopolization, settlements | Leave a Comment »

Stan Liebowitz on Piracy and Music Sales

Posted by Josh Wright on January 23, 2012

Stan Liebowitz (UT-Dallas) offers a characteristically thoughtful and provocative op-ed in the WSJ today commenting on SOPA and the Protect IP Act.  Here’s an excerpt:

You may have noticed last Wednesday’s blackout of Wikipedia or Google’s strange blindfolded-logo screen. These were attempts to kill the Protect IP Act and the Stop Online Piracy Act, proposed legislation intended to hinder piracy and counterfeiting. The laws now before Congress may not be perfect, and they can still be amended. But to do nothing and stay with the status quo is to keep our creative industries at risk by failing to enforce their property rights.

Critics of these proposed laws claim that they are unnecessary and will lead to frivolous claims, reduce innovation and stifle free speech. Those are gross exaggerations. The same critics have been making these claims about every previous attempt to rein in piracy, including the Digital Millennium Copyright Act that was called a draconian antipiracy measure at the time of its passage in 1998. As we all know, the DMCA did not kill the Internet, or even do any noticeable damage to freedom—or to pirates.

Scads of Internet pundits and bloggers have vehemently argued that piracy is really a sales-promoting activity—because it gives people a free sample that might lead to a purchase—or that any piracy problems have been due to a failure of industry to embrace the Internet. Yet these claims are little more than wishful thinking. Some reflect a hostility to commercial activities—think Occupy Wall Street, or self-interest. Others make “freedom” claims on behalf of sites that profit by helping individuals find pirate sites, makers of complementary hardware, or companies that benefit from Internet usage and collect revenues whether the material being accessed was legally obtained or not.

In my examination of peer-reviewed studies, the great majority have results that conform to common sense: Piracy harms copyright owners. I was also somewhat surprised to discover that the typical finding of such academic studies was that the entire enormous decline that has occurred is due to piracy.

Contrary to an often-repeated myth, providing consumers with convenient downloads at reasonable prices, as iTunes did, does not appear to have ameliorated piracy at all. The sales decline after iTunes exploded on the scene was about the same as the decline before iTunes existed. Apparently it really is difficult to compete with free. Is that really such a surprise?

Do check out the whole thing.

 

 

Posted in business, copyright, economics, intellectual property, music, technology | Comments Off

SOPA, Incentives and Efficiency

Posted by Paul H. Rubin on January 22, 2012

The fight over SOPA is about the ownership of intellectual property.  Rights to intellectual property have two effects.  The benefits of intellectual property are the incentives for creation.  The costs are that after some work is created any price above marginal cost (which is often zero for digital property) will discourage valuable use.

Every piece of intellectual property than now exists was created with the incentives that were in place when it was created.  No change in intellectual property rights can have any effect on existing works.  Therefore, any change in property rights should be entirely prospective.  That is, any change in property rights should effect only works copyrighted after the passage of the legislation.

Of course, there are huge rents associated with the ownership of existing rights, and fights over these rents will  continue.  But we should recognize that these fights are over rents — payments which have no incentive effects.  If our goal is efficiency, we should stop wasting resources on these fights and start from now.

 

Posted in copyright, intellectual property, truth on the market | 5 Comments »

New on SSRN: Kobayashi and Ribstein on private lawmaking

Posted by Larry Ribstein on July 18, 2011

The paper, with Kobayashi, is Law As A Byproduct: Theories Of Private Law Production.  Here’s the abstract:

Public lawmakers lack incentives to engage in a socially optimal amount of legal innovation. Private lawmaking is a potential solution to this problem. However, private lawmaking faces a dilemma: In order to be effective privately produced laws need to be publicly enacted, but under current law enactment eliminates the intellectual property rights that are essential to motivate private lawmakers. Because of this dilemma, much private lawmaking is done as a byproduct of other activities. The mixed incentives entailed in this “byproduct” approach make it a second-best response to the problems of public lawmaking. Potential solutions involve finding a better balance between public access and private rights.

The paper treats the creation of law as a form of intellectual property.  The central problem the paper identifies is the weakness of intellectual property protection of law.  This forces private lawmaking into the second-best world of “byproduct” lawmaking, where private lawmaking is essentially a form of lobbying.  This particularly includes the practicing bar’s significant role in lawmaking, and uniform laws.  The paper draws illustrations of byproduct laws from the development of the limited liability company, including the “L3C” spinoff.  We conclude with suggestions of how to fix intellectual property law to bring private lawmaking closer to a first-best world.

This paper is a natural outgrowth of several strands of my work alone and with others, including on LLCs and uncorporations, jurisdictional competition, lawyers as lawmakers, uniform laws, the “information revolution’s” effect on the law industry, and law teaching.

Posted in copyright, intellectual property, Jurisdictional competition, lawyers, legal profession, limited liability companies, patent, uncorporations | 1 Comment »

Google Book Project

Posted by Paul H. Rubin on March 24, 2011

Google’s efforts to make out of print books available online has run into a major stumbling block. Judge Chin ordered that books can only be digitized by Google if the author opts in; the agreement which he through out called for opt out.  This is an shame and a highly inefficient result.  As reported, the intricacies of copyright law and the unavailability of many rights holders means that opt in is not feasible in many cases.  As a result, thousands of books will not be digitized at all.  Instead of transferring rights to authors (which was apparently Judge Chin’s intent) he has simply destroyed valuable property rights.  This case was argued as an issue of the distribution of rights, but it is really about the creation of  rights — or, as it turns out, their non-creation.

Posted in copyright, google, litigation | Tagged: | 5 Comments »

Sprigman and Buccafusco on Behavioral Law and Economics and the Road from Lab to Law

Posted by Josh Wright on December 7, 2010

Christopher Sprigman is Professor of Law at the University of Virginia

Christopher J. Buccafusco is Assistant Professor of Law at Chicago-Kent College of Law

In our second post, we want to discuss some of the implications of the study (the details of which we described in our first post). One of the consistent concerns about BL&E in this symposium is about the too-quick jump from data to policy. We should emphasize that we think more work needs to be done to support these potential policy suggestions, but, importantly,we think that the answers to the policy issues rest fundamentally on empirical questions.

As we noted in the previous post, our research supports the idea that creators of new works will value them substantially more than will either mere owners or would-be purchasers of the works. These valuation anomalies are likely to create sub-optimal transaction levels in IP markets. The higher transaction and negotiation costs associated with bridging a large bargaining gap are particularly troubling in the IP context where efficient transfer of rights proves crucial. In both the copyright and patent contexts, initial rights-holders (usually authors in the case of copyright and inventors in patent) often are not particularly well positioned to exploit their work. Given the gap between initial entitlement and effective commercial exploitation, an efficient IP law must provide a smooth transition between the initial rights-holder and the eventual transferee or licensee. In this post, we want to suggest two possible solutions to the transaction costs problems – one based on private contracting and another based on changes to legal entitlements.

Read the rest of this entry »

Posted in behavioral economics, copyright, free to choose symposium, intellectual property, patent | 5 Comments »

Sprigman and Buccafusco on Valuing Intellectual Property

Posted by Josh Wright on December 6, 2010

Christopher Sprigman is Professor or Law at the University of Virginia

Christopher J. Buccafusco is Assistant Professor of Law at Chicago-Kent College of Law

We would like to start by thanking Josh for inviting us to participate in what promises to be a fascinating discussion on an important subject.  We’re looking forward to engaging with the other members of the symposium.

To begin with, we would like to talk about some of our own experimental research on the valuation anomaly widely known as the “endowment effect.”  Over the past quarter century, laboratory and field research in the social sciences has provided considerable evidence for the existence of a significant gap between the valuations that people attach to goods that they own and the valuations they attach to goods they are considering purchasing.  Thus, in one classic and well-replicated study, subjects to whom a university coffee mug was given indicated substantially higher willingness-to-accept values than subjects who indicated their willingness-to-pay for the mug.  This and similar studies suggest that aspects of goods that should be irrelevant from the perspective of neoclassical economics – such as the fact of prior ownership – can systematically bias valuations of those goods and lead to sub-optimal exchanges and inefficiencies.

In a series of recent studies, we sought to extend these findings into the realm of intellectual property law.  We hypothesized that the valuations that creators attach to their works will be even higher than those of mere owners and would-be purchasers. Read the rest of this entry »

Posted in behavioral economics, copyright, free to choose symposium, intellectual property, patent | 8 Comments »

Some Competing Economics of Copyright and Fashion

Posted by Josh Wright on August 24, 2010

In the WSJ, Scott Hemphill (Columbia) and Jeannie Suk (Harvard) defend Charles Schumer’s proposed bill, which would extend copyright protection to fashion design:

Sen. Charles Schumer (D., N.Y.) introduced a bill earlier this month that attempts to get around this problem. It prohibits only design copies that are substantially identical. In layman’s terms, a good way to tell if a copy should be allowed is to ask whether it fails the “squint test”: If you need to squint to see the difference between two designs, then one is an infringing copy of the other.

A knockoff would fail this test if it’s difficult to tell it apart from the original. That means changing barely noticeable details, like moving a button, or using a different thread in some stitching, won’t do the trick. But designs that are merely inspired by prior designs would pass the test and remain legal. The very worst offenders would be caught or deterred. Designers would be left free to riff on—but not rip off—each other’s work. …

Opponents of fashion design protection argue that it would hurt the industry. They imagine a world in which Brooks Brothers monopolizes the pinstripe, or Diane von Furstenberg controls the wrap dress. But that catwalk of horribles has nothing to do with the new fashion bill, which is carefully limited to substantially identical copies of a particular original design.

Some consumers may regret not being able to buy knockoffs that are essentially replicas of desired items. In the long run, though, as with books and movies, the expectation is that consumers will benefit from the wide variety of creative works to which this sensibly narrow copying prohibition gives breathing space. In this case, what is good for American producers is also good for American consumers.

In the NYT, Kal Raustiala (UCLA) and Christopher Sprigman (UVA) argue that extending copyright protection is going to make consumers worse off:

It strikes many people as strange that fashion designs are not already protected against copying. Creative artists like musicians and filmmakers argue, quite persuasively, that their success requires copyright protection for their work. If others could steal it, they say, innovation would grind to a halt.

But there is a good reason that fashion designs have never been protected by copyright. Some designers have lost sales to knockoffs, but the copying of designs has not been a serious threat to the survival of the industry. To the contrary, much of the growth and creativity in the industry depends on imitation.

Why is that? Because of something we all know instinctively about fashion. As Shakespeare put it, “The fashion wears out more apparel than the man.” That is, many people buy new clothes not because they need them, but only to keep up with the latest style.

Without copyright restrictions, designers are free to rework a design and jump on board what they hope will be a money-making style. The result is the industry’s most sacred concept: the trend. Copying creates trends, and trends are what sell fashion. Every season we see designers “take inspiration” from others. Trends catch on, become overexposed and die. Then new designs take their place.

What about the argument that new bill would only restrict “substantially identical” copies of “unique” designs?  Raustiala and Sprigman argue that we should be worried about expansive interpretation of the law, and point to patent protection as an alternative:

But the greater risk is that once it’s in the hands of lawyers and judges, such a law would expand in a way that harms many designers and consumers. Plaintiffs’ lawyers would make creative arguments, and judges would tend to interpret the bill’s language expansively. This has been the pattern in copyright for decades. Indeed, lawyers (and those designers who could afford them) would be among the biggest beneficiaries, as disputes would likely erupt into expensive, time-consuming lawsuits featuring designers squabbling over ownership of allegedly unique styles.

In any case, a legal mechanism already exists to protect a truly novel design: a patent. But instead of a specialized federal agency determining what is novel, Senator Schumer’s bill would require that the novelty be assessed by a judge, whose sole experience with fashion might consist of a semi-annual trip to a department store.

To make matters worse, the bill would allow plaintiffs to pursue the wealthiest manufacturers and sellers of fashion. Retailers, for example, could be held liable for any copies they sold. Unlike earlier proposals, Mr. Schumer’s bill contains no requirement that copyrighted designs be registered so that retailers and other designers are put on notice.

Both authors have written lengthier (and very good) articles on the subject.  Hemphill and Suk are here; Raustiala and Sprigman are here.

Posted in copyright, economics, intellectual property, markets | 4 Comments »

Copyright Conundrum

Posted by Michael Sykuta on August 4, 2010

Earlier this year, the US Supreme Court granted a writ of certiorari to Costco in the case of OMEGA SA v. Costco Wholesale Corp. (541 F. 3d 982 (2008)).  At issue is whether the ‘first sale doctrine’ of US copyright law (17 U.S.C. § 109(a)), which limits the copyright owner’s ability to restrict distribution of its product after first sale, applies to foreign-manufactured products whose first sale was outside the U.S. and whose importation to the U.S. was not authorized by the manufacturer. (I happened to run across a July 31 op-ed by Eric Felten at the WSJ lamenting the potential for the case to limit the ability of libraries to lend books, particularly books originally published and purchased overseas.) The case raises some interesting issues about the role and purpose of copyright protection, segregated market price discrimination in a global economy, and the role of the gray markets in arbitraging global price disparities.

Read the rest of this entry »

Posted in copyright, intellectual property, international trade, law and economics, markets, Sykuta | Comments Off

Apple and Amazon E-Book Most Favored Nation Clauses

Posted by Josh Wright on August 3, 2010

Connecticut AG Richard Blumenthal has reportedly contacted Apple and Amazon concerning their pricing arrangements with publishers (WSJ, CNN):

Mr. Blumenthal said he has sent letters to Amazon and Apple asking them to “meet with his office” to address his concerns that agreements in place may restrict rivals from offering cheaper e-books. For instance, he said, “both Amazon and Apple have reached agreements with the largest e-book publishers that ensure both will receive the best prices for e-books over any competitors.”

A “most favored nation” (MFN) clause is a contractual agreement between a supplier and a customer that requires the supplier to sell to the customer on pricing terms at least as favorable as the pricing terms on which that supplier sells to other customers.  They are common both in the retail distribution of a number of products, as well as health care, and in long-term contracts.  Apple and Amazon are also moving to the so-called “agency” model for an increasing number of titles.  Under that distribution model,  the publisher sets it own retail prices and the publisher and retailer (Apple, Amazon) negotiate a split of the revenues (in this case, reportedly 70 percent to the publisher).

With respect to the MFNs, Blumenthal also noted the following in his statement:

“These agreements among publishers, Amazon and Apple appear to have already resulted in uniform prices for many of the most popular e-books—potentially depriving consumers of competitive prices,” said Mr. Blumenthal in a prepared statement.”

Of course, parallel pricing activity merely raises the classic antitrust cartel identification problem, i.e. both collusive and competitive pricing can look uniform (in the limit, think of the simple perfect competition model in which all sellers price at marginal cost).  The anticompetitive theory concerning MFNs is that they can facilitate tacit collusion by increasing the cost of targeted discounts aimed at attracting new business (since a discount to one must be given to all) (see Salop, 1986).  On the other hand, MFNs can also create efficiencies, and thus, lower prices.  For example, in a market with search costs where uninformed buyers can avoid those costs and “free-ride” on the bargaining effort of the informed buyers by bargaining for MFNs.  MFNs can also increase pricing flexibility in long-term economic relationships while constraining opportunism (see Crocker & Lyon) and facilitate entry of new products by guaranteeing the original entrant that subsequent entrants do not free-ride on his creation of the market and bargain for lower input prices.  One can think of this as compensating the original entrant for bearing the risk of innovation.

In the meantime, e-book sales are apparently on the rise:

Electronic book sales have been rapidly heating up. The Association of American Publishers said that e-book sales at 13 reporting publishers grew 163% from a year earlier to $29.3 million in May. The category accounted for 8.5% of the total trade books market through the end of May, compared to 2.9% for the same period in 2009.

The standard antitrust approach would require the Connecticut AG to demonstrate under a rule of reason analysis that the clauses facilitated collusion and that any economic harms outweighed the efficiencies of the MFN.  The dramatic increase in output in the market is, of course, not dispositive as a matter of antitrust economics because, for example, one is always free to argue that output would have increased more but for the agreements.  But if the facts are that output continues to increase at the same pace or faster with the MFN clauses in effect, it does not help the AG’s case.

Posted in antitrust, business, cartels, copyright, economics, intellectual property, MFNs, technology | Comments Off

 
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