Archives For copyright

Over at the Center for the Protection of Intellectual Property (CPIP), Mark Schultz has an important blog posting on the Mercatus Center‘s recent launch of its new copyright piracy website, piracydata.org.  The launch of this website has caused a bit of a tempest in a teapot with a positive report on it in the Washington Post and with a report in the Columbia Journalism Review pointing out problems in its data and errors in its claims.  (It is a bit ironic that a libertarian organization is having trouble with the launch of a website at the same time that there is similar reporting on troubles of the launch of another website on the opposite side of the political spectrum, Obamacare.)

Professor Schultz, who is a Senior Scholar at CPIP and a law professor at Southern Illinois University, makes many important points in his blog posting (too many to recount here).  One of his more important identifications is that the piracydata.org website reflects an unfortunate tendency among libertarian IP skeptics, who seem to fall victim to an error that they often identify in leftist critiques of the free market, at least on non-IP issues.  That is, some libertarian IP skeptics seem all to quick to deduce conclusions about actual, real-world business models from solely theoretical knowledge about what they think these business models should be in some “ideal” world.

Professor Schultz also identifies that, despite protestations to the contrary, Jerry Brito has explicitly framed his website as a “blame the victim” defense of copyright piracy — stating explicitly on Twitter that “Hollywood should blame itself for its piracy problems.” Consistent with such statements, of course, conventional wisdom has quickly gelled around the piracydata.org website that it is in fact a condemnation of the creative industries’ business models.  (Professor Schultz backs up this point with many references and links, including a screen grab of Jerry’s tweet.)

Professor Schultz ultimately concludes his important essay as follows:

perhaps the authors should simply dispense with the pretext. All too often, we see arguments such as this that say ‘I think copyright is important and abhor piracy, BUT . . . ‘ And, after the “but” comes outrage at most any attempt by creators to enforce their rights and protect their investment. Or, as in this case, advice that excuses piracy and counsels surrender to piracy as the only practical way forward. Perhaps it would be less hypocritical for such commentators to admit that they are members of the Copyleft. While I think that it’s a terribly misguided and unfortunate position, it is all too respectable in libertarian circles these days. See the debate in which I participated earlier this year in Cato Unbound.

In any event, however, how about a little more modesty and a little more respect for copyright owners? In truth, the “content” industry leaders I’ve met are, as I’ve told them, way smarter than the Internet says they are. They are certainly smarter about their business than any policy analysts or other Washingtonians I’ve met.

The movie industry knows these numbers very well and knows about the challenges imposed by its release windows. They know their business better than their critics. All sorts of internal, business, and practical constraints may keep them from fixing their problems overnight, but it’s not a lack of will or insight that’s doing it. If you love the free market, then perhaps it’s time to respect the people with the best information about their property and the greatest motivation to engage in mutually beneficial voluntary exchanges.

Or you can just contribute to the mountain of lame excuses for piracy that have piled up over the last decade.

This is a compelling call to arms  for some libertarians doing policy work in the creative industries to take more seriously in practice their theoretical commitments to private ordering and free enterprise.

As the blogging king (Instapundit) is wont to say: Read the whole thing.

[Cross posted at the Center for the Protection of Intellectual Property blog.]

Today’s public policy debates frame copyright policy solely in terms of a “trade off” between the benefits of incentivizing new works and the social deadweight losses imposed by the access restrictions imposed by these (temporary) “monopolies.” I recently posted to SSRN a new research paper, called How Copyright Drives Innovation in Scholarly Publishing, explaining that this is a fundamental mistake that has distorted the policy debates about scholarly publishing.

This policy mistake is important because it has lead commentators and decision-makers to dismiss as irrelevant to copyright policy the investments by scholarly publishers of $100s of millions in creating innovative distribution mechanisms in our new digital world. These substantial sunk costs are in addition to the $100s of millions expended annually by publishers in creating, publishing and maintaining reliable, high-quality, standardized articles distributed each year in a wide-ranging variety of academic disciplines and fields of research. The articles now number in the millions themselves; in 2009, for instance, over 2,000 publishers issued almost 1.5 million articles just in the scientific, technical and medical fields, exclusive of the humanities and social sciences.

The mistaken incentive-to-invent conventional wisdom in copyright policy is further compounded by widespread misinformation today about the allegedly “zero cost” of digital publication. As a result, many people are simply unaware of the substantial investments in infrastructure, skilled labor and other resources required to create, publish and maintain scholarly articles on the Internet and in other digital platforms.

This is not merely a so-called “academic debate” about copyright policy and publishing.

The policy distortion caused by the narrow, reductionist incentive-to-create conventional wisdom, when combined with the misinformation about the economics of digital business models, has been spurring calls for “open access” mandates for scholarly research, such as at the National Institute of Health and in recently proposed legislation (FASTR Act) and in other proposed regulations. This policy distortion even influenced Justice Breyer’s opinion in the recent decision in Kirtsaeng v. John Wiley & Sons (U.S. Supreme Court, March 19, 2013), as he blithely dismissed commercial incentivizes as being irrelevant to fundamental copyright policy. These legal initiatives and the Kirtsaeng decision are motivated in various ways by the incentive-to-create conventional wisdom, by the misunderstanding of the economics of scholarly publishing, and by anti-copyright rhetoric on both the left and right, all of which has become more pervasive in recent years.

But, as I explain in my paper, courts and commentators have long recognized that incentivizing authors to produce new works is not the sole justification for copyright—copyright also incentivizes intermediaries like scholarly publishers to invest in and create innovative legal and market mechanisms for publishing and distributing articles that report on scholarly research. These two policies—the incentive to create and the incentive to commercialize—are interrelated, as both are necessary in justifying how copyright law secures the dynamic innovation that makes possible the “progress of science.” In short, if the law does not secure the fruits of labors of publishers who create legal and market mechanisms for disseminating works, then authors’ labors will go unrewarded as well.

As Justice Sandra Day O’Connor famously observed in the 1984 decision in Harper & Row v. Nation Enterprises: “In our haste to disseminate news, it should not be forgotten the Framers intended copyright itself to be the engine of free expression. By establishing a marketable right to the use of one’s expression, copyright supplies the economic incentive to create and disseminate ideas.” Thus, in Harper & Row, the Supreme Court reached the uncontroversial conclusion that copyright secures the fruits of productive labors “where an author and publisher have invested extensive resources in creating an original work.” (emphases added)

This concern with commercial incentives in copyright law is not just theory; in fact, it is most salient in scholarly publishing because researchers are not motivated by the pecuniary benefits offered to authors in conventional publishing contexts. As a result of the policy distortion caused by the incentive-to-create conventional wisdom, some academics and scholars now view scholarly publishing by commercial firms who own the copyrights in the articles as “a form of censorship.” Yet, as courts have observed: “It is not surprising that [scholarly] authors favor liberal photocopying . . . . But the authors have not risked their capital to achieve dissemination. The publishers have.” As economics professor Mark McCabe observed (somewhat sardonically) in a research paper released last year for the National Academy of Sciences: he and his fellow academic “economists knew the value of their journals, but not their prices.”

The widespread ignorance among the public, academics and commentators about the economics of scholarly publishing in the Internet age is quite profound relative to the actual numbers.  Based on interviews with six different scholarly publishers—Reed Elsevier, Wiley, SAGE, the New England Journal of Medicine, the American Chemical Society, and the American Institute of Physics—my research paper details for the first time ever in a publication and at great length the necessary transaction costs incurred by any successful publishing enterprise in the Internet age.  To take but one small example from my research paper: Reed Elsevier began developing its online publishing platform in 1995, a scant two years after the advent of the World Wide Web, and its sunk costs in creating this first publishing platform and then digitally archiving its previously published content was over $75 million. Other scholarly publishers report similarly high costs in both absolute and relative terms.

Given the widespread misunderstandings of the economics of Internet-based business models, it bears noting that such high costs are not unique to scholarly publishers.  Microsoft reportedly spent $10 billion developing Windows Vista before it sold a single copy, of which it ultimately did not sell many at all. Google regularly invests $100s of millions, such as $890 million in the first quarter of 2011, in upgrading its data centers.  It is somewhat surprising that such things still have to be pointed out a scant decade after the bursting of the dot.com bubble, a bubble precipitated by exactly the same mistaken view that businesses have somehow been “liberated” from the economic realities of cost by the Internet.

Just as with the extensive infrastructure and staffing costs, the actual costs incurred by publishers in operating the peer review system for their scholarly journals are also widely misunderstood.  Individual publishers now receive hundreds of thousands—the large scholarly publisher, Reed Elsevier, receives more than one million—manuscripts per year. Reed Elsevier’s annual budget for operating its peer review system is over $100 million, which reflects the full scope of staffing, infrastructure, and other transaction costs inherent in operating a quality-control system that rejects 65% of the submitted manuscripts. Reed Elsevier’s budget for its peer review system is consistent with industry-wide studies that have reported that the peer review system costs approximately $2.9 billion annually in operation costs (translating into dollars the British £1.9 billion pounds reported in the study). For those articles accepted for publication, there are additional, extensive production costs, and then there are extensive post-publication costs in updating hypertext links of citations, cyber security of the websites, and related digital issues.

In sum, many people mistakenly believe that scholarly publishers are no longer necessary because the Internet has made moot all such intermediaries of traditional brick-and-mortar economies—a viewpoint reinforced by the equally mistaken incentive-to-create conventional wisdom in the copyright policy debates today. But intermediaries like scholarly publishers face the exact same incentive problems that is universally recognized for authors by the incentive-to-create conventional wisdom: no will make the necessary investments to create a work or to distribute if the fruits of their labors are not secured to them. This basic economic fact—dynamic development of innovative distribution mechanisms require substantial investment in both people and resources—is what makes commercialization an essential feature of both copyright policy and law (and of all intellectual property doctrines).

It is for this reason that copyright law has long promoted and secured the value that academics and scholars have come to depend on in their journal articles—reliable, high-quality, standardized, networked, and accessible research that meets the differing expectations of readers in a variety of fields of scholarly research. This is the value created by the scholarly publishers. Scholarly publishers thus serve an essential function in copyright law by making the investments in and creating the innovative distribution mechanisms that fulfill the constitutional goal of copyright to advance the “progress of science.”

DISCLOSURE: The paper summarized in this blog posting was supported separately by a Leonardo Da Vinci Fellowship and by the Association of American Publishers (AAP). The author thanks Mark Schultz for very helpful comments on earlier drafts, and the AAP for providing invaluable introductions to the five scholarly publishers who shared their publishing data with him.

NOTE: Some small copy-edits were made to this blog posting.

 

Over at Cato Unbound, there has been a discussion this past month on copyright and copyright reform.  In his recent contribution to this discussion, Mark Schultz posted an excellent essay today, Where are the Creators? Consider Creators in Copyright Reform, that calls out the cramped, reductionist view of copyright policy that leads some libertarians and conservatives to castigate this property right as “regulation” or as “monopoly.”  Here’s a small taste from his essay:

I am genuinely puzzled when copyright discussions treat creative works if they are a pre-existing resource that the government arbitrarily allocates. They are not. They aren’t an imaginary regulatory entitlement, such as pollution credits. They aren’t leases or mineral rights on public land handed out to political cronies. Creative works are, instead, the productive intellectual labor of private parties. Real people make this stuff.

At this point in the discussion, a common rhetorical move is to reject what some scholars describe as the romantic myth of authorship. Copyright skeptics point out that authors build on the work of others and that many creative works are the work of corporations, not individuals. This argument was provoked by many decades—a couple centuries, really—of rhetoric that put the individual author on a pedestal. Even if one concedes that authors have, perhaps, been idealized, taking them for granted goes too far.

The absence of creators from the critique of copyright is one of many reasons I doubt the political (and moral) appeal of much of the case for copyright reform we have heard from a few libertarians and conservatives. At the risk of dredging up tiresome memories from the recent presidential election, the argument over “you didn’t build that” was very familiar to me as a scholar of copyright. In both instances, there is a divide between those who value (or, even, romanticize) individual achievement and those who emphasize how much that achievement depends on a social context.

This follows Mark’s earlier and equally excellent essay, Copyright Reform through Private Ordering, in which he identifies how defining and securing copyright as a property right is consistent with and advances the private-ordering regimes embraced by advocates of the free market.  Again, here’s a small taste:

Like other forms of property, copyright thus represents an invitation to a transaction and an opportunity to bargain. This opportunity for parties to transact and bargain is one of the key differences between property and regulation. A regulator has a duty to enforce the law—and if a regulator chooses not to enforce, then a court may order him to do so. Copyright owners need not enforce their rights, of course. Moreover, it is perfectly legitimate to offer a property owner money to forgo their right to enforce their copyrights; such commercial transactions are really the whole point of copyright. Make the same offer to a regulator, and you go to jail.

Read these essays in their entirety—both of them are here and here—as Mark is doing a great job in what is very brief and limited blogging space in providing both the important data and the principled arguments for how copyright is fundamentally consistent with and advances the aspirations of the free market and limited government.  This follows on his earlier, excellent blog posting at the Copyright Alliance that touched on similar themes, Copyright, Economic Freedom, and the RSC Policy Brief.

DISCLOSURE: Mark and I are both on the Academic Advisory Board of the Copyright Alliance.

In Part One, I addressed the argument by some libertarians that so-called “traditional property rights in land” are based in inductive, ground-up “common law court decisions,” but that intellectual property (IP) rights are top-down, artificial statutory entitlements.  Thus, for instance, libertarian law professor, Tom Bell, has written in the University of Illinois Journal of Law, Technology & Policy: “With regard to our tangible rights to person and property, they’re customary and based in common law. Where do the copyrights and patents come from? From the legislative process.” 2006 Univ.Ill. J. L. Tech. & Pol’y 92, 110 (sorry, no link). 

I like Tom, but, as I detailed in Part One, he’s just wrong in his contrast here between the “customary” “common law” court decisions creating property versus the  “legislative process” creating IP rights. This is myth masquerading as history. As all first-year property students learn each year, the foundation of Anglo-American property law is based in a statute, and many property rights in land were created by statutes enacted by Parliament or early American state legislatures.  In fact, the first statute — the Statute Quai Empotores of 1290 — was enacted by Parliament to overrule feudal “custom” enforced by the “common law” decisions at that time, creating by statutory fiat the basic foundational rule of the Anglo-American property right that property rights are alieanable.

As an aside, Geoff Manne asked an excellent question in the comments to Part One: Who cares? My response is that in part it’s important to call out the use of a descriptive historical claim to bootstrap a normative argument. The question is not who cares, but rather the question is why does Tom, Jerry Brito and other libertarians care so much about creating this historical myth, and repeatedly asserting it in their writings and in their presentations? The reason is because this triggers a normative context for many libertarians steeped in Hayek’s theories about the virtues of disaggregated decision-making given dispersed or localized knowledge, as contrasted with the vices of centralized, top-down planning. Thus, by expressly contrasting as an alleged historical fact that property arises from “customary” “common law” court decisions versus the top-down “legislative processes” creating IP, this provides normative traction against IP rights without having to do the heavy lifting of actually proving this as a normative conclusion. Such is the rhetorical value of historical myths generally — they provide normative framings in the guise of a neutral, objective statement of historical fact — and this is why they are a common feature of policy debates, especially in patent law.

What’s even more interesting is that this is not just a historical myth about the source of property rights in land, which were created by both statutes and court decisions, but it’s also an historical myth about IP rights, which are also created by both statutes and court decisions. The institutional and doctrinal interplay between Parliament’s statutes and the application and extension of these statutes by English courts in creating and enforcing property rights in land was repeated in the creation and extension of the modern Anglo-American IP system.  Who would have thunk?

Although there are lots of historical nuances to the actual legal developments, a blog posting is ideal to point out the general institutional and systemic development that occurred with IP rights. It’s often remarked, for instance, that the birth of Anglo-American patent law is in Parliament’s Statute of Monopolies (1624).  Although it’s true (at least in a generalized sense), the actual development of modern patent law — the legal regime that secures a property right in a novel and useful invention — occurred entirely at the hands of the English common law courts in the eighteenth century, who (re)interpreted this statute and extended it far beyond its original text.  (I have extensively detailed this historical development here.)  Albeit with some differences, a similar institutional pattern occurred with Parliament enacting the first modern copyright statute in 1709, the Statute of Anne, which was then interpreted, applied and extended by the English common law courts.

This institutional and doctrinal pattern repeated in America. From the very first enactment of copyright and patent statutes by the states under the Articles of Confederation, and then by Congress enacting the first federal patent and copyright statutes in 1790, courts then interpreted, applied and extended these statutes in common law fashion.  In fact, it is a cliché in patent law that many patent doctrines today were created, not by Congress, but by two judges – Justice Joseph Story and Judge Learned Hand.  Famous patent law historian, Frank Prager, writes that it is “often said that Story was one of the architects of American patent law.”  There’s an entire book published of Judge Learned Hand’s decisions in patent law. That’s how important these two judges have been in creating patent law doctrines.

So, the pattern has been that Congress passes broadly framed statutes, and the federal courts then create doctrines within these statutory frameworks.  In patent law, for instance, courts created the exhaustion doctrine, secondary liability, the experimental use defense, the infringement doctrine of equivalents, and many others.  Beyond this “common law” creation of patent doctrines, courts have further created and defined the actual requirements set forth in the patent statutes for utility, written description, enablement, etc., creating legal phrases and tests that one would search in vain for in the text of the actual patent statutes. Interestingly, Congress sometimes has subsequently codified these judicially created doctrines and sometimes it has left them alone.  Sometimes, Congress even repeals the judicially created tests, as it did in expressly abrogating the judicially created “flash of genius” test in § 103 of the 1952 Patent Act.  All of this goes to show that, just as it’s wrong to say that property rights in land are based solely in custom and common law court decision, it’s equally wrong to say that IP rights are based solely in legislation.

Admittedly, the modern copyright statutes are far more specific and complex than the patent statutes, at least before Congress passed the American Invents Act of 2011 (AIA).  In comparison to the pre-AIA patent statutes, the copyright statutes appear to be excessively complicated with industry and work-specific regimes, such as licensing for cable (§ 111), licensing for satellite transmissions (§ 119), exemptions from liability for libraries (§ 108), and licensing of “phonorecords” (§ 109), among others.  These and other provisions have been cobbled together by repeated amendments and other statutory enactments over the past century or so.  This stands in stark contrast to the invention- and industry-neutral provisions that comprised much of the pre-AIA patent statutes.

So, this is a valid point of differentiation between patents and copyrights, at least as these respective IP rights have developed in the twentieth century.  And there’s certainly a valid argument that complexity in the copyright statutes arising from such attempts to legislate for very specific works and industries increases uncertainties, which in turn unnecessarily increases administration and other transaction costs in the operation of the legal system.

Yet, it bears emphasizing again that, before there arose heavy emphasis on legislation in copyright law, many primary copyright doctrines were in fact first created by courts.  This includes, for instance, fair use and exhaustion doctrines, which were later codified by Congress. Moreover, some very important copyright doctrines remain entirely in the domain of the courts, such as secondary liability. 

The judicially created doctrine of secondary liability in copyright is perhaps the most ironic, if only because it is the use of this doctrine on the Internet against P2P services, like Napster, Aimster, Grokster, and BitTorrent operators, that sends many libertarian IP skeptics and copyleft advocates into paroxysms of outrage about how rent-seeking owners of statutory entitlements are “forcing” companies out of business, shutting down technology and violating the right to liberty on the Internet. But secondary liability is a “customary” “common law” doctrine that developed out of similarly traditional “customary” doctrines in tort law, as further extended by courts to patent and copyright!

As with the historical myth about the origins of property rights in land, the actual facts about the source and nature of IP rights belies the claims by some libertarians that IP rights are congressional “welfare grants” or congressional subsidies for crony corporations. IP rights have developed in the same way as property rights in land with both legislatures and courts creating, repealing, and extending doctrines in an important institutional and doctrinal evolution of these property rights securing technological innovation and creative works.

As I said in Part One, I enjoy a good policy argument about the value of securing property rights in patented innovation or copyrighted works.  I often discuss on panels and in debates how IP rights make possible the private-ordering mechanisms necessary to convert inventions and creative works into real-world innovation and creative products sold to consumers in the marketplace. Economically speaking, as Henry Manne pointed out in a comment to Part One, defining a property right in an asset is what makes possible value-maximizing transactions, and, I would add, morally speaking, it is what secures to the creator of that asset the right to the fruits of his or her productive labors. Thus, I would be happy to debate Tom Bell, Jerry Brito or any other similarly-minded libertarian on these issues in innovation policy, but before we can do so, we must first agree to abandon historical myths and base our normative arguments on actual facts.

The Case for Copyright

Adam Mossoff —  20 November 2012

Mark Schultz, law professor and specialist in copyright law, has written an excellent response to the Republican Study Committee policy brief on copyright law that has been making the rounds on the Internet the past several days.  Although the RSC promptly retracted the policy brief, the blogosphere has erupted in commentary on what appeared to be a radical shift in IP policy by one of the explicitly free market caucuses of GOP members.

Mark’s response is a tour-de-force, if only because in a very brief blog posting, he reveals that much of the RSC policy brief is, at best, based on assumptions about copyright that really require a lot more analytical heavy lifting than anything attempted by its author, or, at worst, simply a highly tendentious reading of copyright law and policy.

Here’s just a small taste of some of Mark’s response:

Some also see copyright as a morally suspect interference with economic freedom because they reject the contention that copyright is property. They instead vilify copyright as an odious monopoly or a government-granted privilege or subsidy.

The monopoly accusation is an elementary and persistent error in the economic analysis of intellectual property, as Edmund Kitch once explained in an article with that very title. Edmund W. Kitch, Elementary and Persistent Errors In The Economic Analysis Of Intellectual Property, 53 Vand. L. Rev. 1727 (2000). Dozens of scholarly articles, hundreds of court cases, and thousands of economics classes have repeated the claim that intellectual property grants a monopoly. As Kitch points out, the persistence of the claim does not lessen the error.

Ownership of a property right alone does not accord the owner a monopoly. The hallmark of a monopoly is market power. Owning something that is unique—whether it is a song, a story, or a house—does not give one that kind of power. Even a beautiful house in a nice location cannot command monopoly prices. The same is true of copyrighted works.

There’s more, including a great discussion about whether copyright really is justified, either morally or constitutionally, as only a social utility enhancing monopoly grant, something near and dear to my own scholarly work in the related field of patent law.  Mark concludes his response with a brilliant exposition on how, contrary to the RSC policy brief author’s claim that copyright violates laissez faire capitalism, copyright in fact makes it possible for private ordering to develop and to take root in a flourishing free market.

As Instapundit likes to say: Read the whole thing!

DISCLOSURE: Mark’s response is posted on the blog for the Copyright Alliance, and Mark and I are both members of the Academic Advisory Board of the Copyright Alliance.

My GMU colleague Adam Mossoff has been on and around the blogs this week — or at least, other people have been writing about him and particularly about his new paper  The Trespass Fallacy in Patent Law.  For example, here are a few reactions at Prawfsblawg and Patently-O.  I’ve been trying to get Professor Mossoff on the blog for some time now to talk about his own research and intellectual property issues more generally, and so I’m thrilled that he will be hanging out here for a bit.  Here’s his bio:

Professor Adam Mossoff teaches and writes in the areas of property and intellectual property law.  His research focuses on the intersection between intellectual property law and property theory, with a special emphasis on natural rights philosophy and its role in the intellectual history of patent law.  He has published numerous articles on topics in patent law, property law, legal history and legal philosophy in the University of Pennsylvania Law ReviewCornell Law Review, and Social Philosophy & Policy, among other journals.  He teaches a range of courses, including patent law, property, trade secrets, cyberlaw, jurisprudence, property theory, and estates and trusts.

Professor Mossoff graduated with honors from the University of Chicago Law School, where he was a research assistant to Richard A. Epstein and held the Bradley Governance Fellowship.  Following law school, he was a John M. Olin Fellow in Law and Visiting Lecturer at Northwestern University School of Law, and he clerked for the Honorable Jacques L. Wiener, Jr. of the U.S. Court of Appeals for the Fifth Circuit. He holds an M.A. in philosophy, specializing in legal and political philosophy, from Columbia University and a B.A. with High Distinction and High Honors in philosophy from the University of Michigan.

While I suspect Adam will take some of his blogging time to write about his new and important essay, no doubt he will have many interesting things to blog about in the intellectual property world.  TOTM is excited to have him with us.

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

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.

 

 

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.

 

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.