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.

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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.

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.

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.

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.

One possibility is that private parties may already be dealing with some of these issues by using royalty contracts. The running royalty – i.e., an arrangement where periodic payments are made according to some percentage of sales or revenues – is a way of effectively “agreeing to disagree” over the value of a creative work. In cases where an author or inventor believes that the work is likely to produce substantially more revenue than the purchaser, use of a running royalty may allow both parties to structure a deal that matches their expectations and that reduces inefficiencies caused by optimism or regret aversion. We should emphasize that we cannot be sure how effective running royalties will be at mitigating endowment effects. Surprisingly little empirical research has been performed on the negotiation of royalties, so it is difficult for us to predict how endowment effects will affect royalty bargaining. It is possible, as we have noted, that royalties might reduce the effects of optimism by allowing the parties to move forward without resolving their differences regarding the likely return on the transaction. But it also seems plausible that the substantial differences in estimates of likely success will continue to hinder parties’ ability to agree on an acceptable split of the profits – the seller’s inaccurately high estimate of the likelihood of the work’s success may feed into a conviction that he deserves a more advantageous split of projected revenues. Indeed, these questions present another level of complexity: in many IP contexts the royalty rate will not be subject to bargaining, because it will be set by industry norms. Again, it is difficult to predict in settings where bargaining is impossible or unlikely whether the inability to bargain and the strength of norms will undermine endowment effects. Inability to bargain may result in an exercise of buy-side market power that partially or wholly offsets endowment effects. Or, it may simply result in a negotiation failure.

Even if the use of running royalties can play a role in mitigating endowment effects, it is very unlikely to be a complete answer to the problem of valuation. Running royalties are expensive to negotiate, implement, and administer. They involve the necessity of ongoing monitoring and periodic payments. As a result, running royalties are appropriate only for transactions that are valuable enough to bear the transaction costs of the running royalty arrangement.

Accordingly, it is worth looking to the possibility of restructuring legal entitlements to debias creators. Our results suggest two good reasons to consider debiasing. First, valuation anomalies proceeding from overoptimism present a better case for debiasing than instances in which the creators have idiosyncratically high valuations that are not driven by a mistake regarding likely market outcomes. Overoptimism can’t be dismissed as just an idiosyncratic preference – it is, rather, an information imperfection, or perhaps a failure to respond to information. In either case, it’s an error. Second – and importantly – our results suggest that the very old and continuing debate about the value of property rules vs. liability rules in IP has been incomplete. IP law is presently structured around property rules. But if the wide disparities between valuations that we found in our study characterize a range of IP transactions, then parties seeking to license or otherwise transfer ownership of creative works will face substantial negotiation costs arising from the need to bridge wide differences in valuation.

Thus far the law’s preference for property rules is based primarily on a presumption, driven mostly by theory and ideology rather than data, that markets and arms-length negotiations will allocate rights more efficiently than the alternative; that is, a legal regime based in liability rules, in which users are free to take, and in which the price of use is set not primarily via private negotiation but by a legislature, court, or government agency. (of course, there will still likely be considerable bargaining in the shadow of liability rules).

Our study undercuts that presumption. While liability rules require non-market price setting, which is beset by its own costs and is likely to lead to misallocation in some cases (although these concerns can easily be overblown, as parties often negotiate in the shadow of a liability rule), IP’s strong property rules may sometimes lead to significant pricing anomalies that hinder transactions and impose separate inefficiencies that liability rules may not create. The valuation spreads that we have identified add a significant and previously unrecognized premium to the transaction costs associated with IP bargaining. The gaps that we report may result in substantially higher costs of bargaining and, accordingly, fewer otherwise valuable transactions taking place.

When considering the respective costs and benefits of property and liability rules, it is important to remember that the inefficiencies created by property rules are neither different in kind nor necessarily less severe than those created by liability rules. Worse, property rules generate inefficiencies that are systematic in one direction—overvaluation and failed bargains—whereas the errors created in valuation under liability rules are more likely to by distributed symmetrically on both sides of the optimal price (that is, non-market pricing is as likely to produce under-valuation as over-valuation). If this is right, then symmetrical mispricing may not create substantial ex ante disincentives to engage in the creation of new works, for even if the creator understands that mispricing is likely under a liability rule, there is an equal chance of either over- or undercompensation.

Accordingly, if IP law’s preference for strong property rules is to be sustained, it must rest not on the basis of presumptions and ideologies but rather on evidence about the costs and associated inefficiencies of negotiation versus non-market pricing. These are empirical questions, and the answers may vary for different types of creativity and different markets. To make a start, we need more studies inquiring into whether pricing anomalies attend IP markets in a variety of circumstances, how large the valuation gaps are likely to be, and what can be done to shrink them.

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.We conducted the experiment with painting students at a major art school acting as our creators and law students acting as our owners and buyers.  In an attempt to model the nature of IP transactions, in which the value of the rights is based on the opportunity for rent-seeking and not on the goods themselves, we created a quality-based contest for the paintings.  The Painters submitted their works to the contest and were told that they would be competing with nine other paintings for a $100 prize to be determined by an expert.  They were further told that they would have a chance to sell their right to win the contest to another subject who would make them a cash offer for their chance to win.  They were asked to indicate the least amount of money they would be willing to accept to sell their chance to win.

In addition, we told another group of subjects, the Owners, that they had been assigned to be the owner of a painting’s chance to win a contest of the same value.  Like the Painters, they were asked to indicate the least amount they would be willing to accept to sell their chance to win the prize.  Finally, we told the third group of subjects, the Buyers, that they would have a chance to purchase one of the paintings’ chances to win a prize and were asked to indicate the most they would be willing to pay to buy the chance.  After indicating their values, all subjects were asked to complete a series of follow-up questions.

As we predicted, Painters’ WTA was significantly greater than Owners’ WTA, and both were significantly greater than Buyers’ WTP.  The mean probabilistic value of any painting should have been around $10 weighted by its relative quality.  The Buyers were fairly close to this number, indicating a willingness to pay $17 to acquire the chance to win the contest.  Owners, as in a typical endowment effect study, wanted considerably more, about $40, to part with their chance to win the prize.  The Painters, however, were unwilling to sell their ~1-in-10 chance to win the prize for anything less than $74.

We asked follow-up questions designed to help us sort out what was going on here.  First, it is important to note that subjects’ predicted probability that their painting would win the prize was strongly correlated with their valuation.  This suggests that subjects understood the nature of the contest and were making logical assessments of value.  Although their assessments were logical, they demonstrated significant systematic biases.  Just as with mean value, subjects’ role significantly predicted their predicted probability of winning with Painters > Owners > Buyers.  Interestingly, subjects’ emotional attachment to the work and time spent creating it were not significant predictors of value, while their anticipated regret at learning they had sold the winning painting was very close to being significant.  While any of these last three might create rational reasons for overvaluing one’s work, valuations based primarily on over-optimism about quality and likelihood of success appears more problematic from the perspective of rational choice theory.  Painters’ and Owners’ relationships with the works generates excessively optimistic assessments of value that lead them to over-price their works.  This over-pricing creates substantial WTA-WTP gaps that may create sub-optimal transfers of works and market inefficiencies.

These findings are particularly significant for IP law, because transactions between creators and other parties (e.g., publishers, producers, investors) are often essential to the ultimate production of works.  In our next post, we will discuss ways in which IP markets may already deal with some of these problems (e.g., via royalty contracts and collective rights agencies) and possible changes to the law that might mitigate them, including the use of liability rules, formalities, and the fair use doctrine.

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.

Omega markets high-end Swiss watches around the world. The watches have a small “Omega Globe Design” logo engraved on the back, a logo which Omega copyrighted in the US. Omega sells the watches in different countries around the globe at prices the local markets will bear, resulting in prices in the US being significantly higher than prices in some other countries, specifically Latin American countries such as Paraguay.  Some watches originally sold to authorized buyers in Paraguay ended up being imported into the US and eventually sold through Costco’s wholesale stores at a roughly 35% discount to Omega’s usual US price target (based on the WSJ article). Omega filed a copyright infringement case against Costco, which Costco won in district court by arguing that the first sale in Paraguay invalidated Omega’s claim under § 109(a). Omega appealed and the 9th Circuit reversed the lower court ruling, finding that the ‘first sale doctrine’ only applies to the first authorized sale within the US, not to foreign sales of foreign goods that are subsequently imported to the US.

The 9th Circuit goes to some lengths in splitting hairs to support its current finding in light of its previously failed ruling in Quality King v. L’anza. In Qualty King, L’anza exported a US-made product with a copyrighted label to sell at a discount in certain foreign markets. When some of the products were imported back into the US without L’anza’s authorization and sold at a discount relative to L’anza’s domestic prices, L’anza filed the same type of claim filed by Omega.  In that case, the 9th Circuit ruled in favor of L’anza, arguing that the § 602 restriction on unauthorized importation was not subject to the first sale doctrine.  The US Supreme Court, however, reversed that decision (see 523 U.S. 135 (1998)), arguing that the ‘first sale doctrine’ applied to L’anza’s initial sale to the foreign distributor(s). In Omega, the 9th Circuit argues that their original interpretation holds despite Quality King because in the Omega case the watches in question were never authorized in a US transaction for sale, whether domestic or foreign.  Now the Supreme Court has another chance to address the 9th Circuit’s reasoning.

I won’t pretend to be a copyright lawyer. Perhaps there are some technical, doctrinal rationalizations around boundaries of authority for US copyright law that might preserve the 9th Circuit’s ruling in Omega. However, the larger question is whether such use (or abuse) of copyright law is reasonable economic policy, particularly in a global marketplace. In that vein, Justice Stevens’ unanimous opinion in Quality King is instructive (with emphasis added):

In construing the statute, however, we must remember that its principal purpose was to promote the progress of the “useful Arts,” U. S.Const., Art. I,§ 8, cl.8, by rewarding creativity, and its principal function is the protection of original works, rather than ordinary commercial products that use copyrighted material as a marketing aid.

It is clear in both Omega and Quality King that the copyrighted logo or design served, at best, as a marketing aid. I say ‘at best’ because the use of the copyright in these particular cases is not about preserving a brand name or image from piracy or unauthorized replication per se, but is simply using US copyright law to enforce larger price differentials across discriminated geographic markets than the global market would otherwise allow.

Don’t get me wrong. I’m not suggesting that manufacturers should not be able to determine the price at which they are willing to sell their products across different markets, and to set prices that reflect local market demand conditions. Price discrimination happens all the time across all sorts of distinguishable margins (e.g., geography, time, gender, age, student-status). The key–and the limit–to price discrimination is the ability of the ‘gray market’ to effectively arbitrage those price differences by purchasing in one (lower value demand) market and reselling the product in another (higher value demand) market. In a global economy, the ability of arbitragers to legally purchase and transport products across geographic regions for resale imposes competitive pricing discipline on global markets. It’s the underlying assumption of what economists refer to as the ‘law of one price’ (subject to a variety of transaction costs, of course).

Instead, I’m simply suggesting that US copyright law was not intended to restrict the workings of the global market in such a way as to arbitrarily inflate the price differentials across markets. From an agnostic perspective, the Supreme Court would seem to concur in their unanimous Quality King ruling (again, emphasis added):

The parties and their amici have debated at length the wisdom or unwisdom of governmental restraints on what is sometimes described as either the “gray market” or the practice of “parallel importation.” In K mart Corp. v. Cartier, Inc., 486 U. S. 281 (1988), we used those terms to refer to the importation of foreign-manufactured goods bearing a valid United States trademark without the consent of the trademark holder. Id., at 285-286.We are not at all sure that those terms appropriately describe the consequences of an American manufacturer’s decision to limit its promotional efforts to the domestic market and to sell its products abroad at discounted prices that are so low that its foreign distributors can compete in the domestic market. But even if they do, whether or not we think it would be wise policy to provide statutory protection for such price discrimination is not a matter that is relevant to our duty to interpret the text of the Copyright Act.

The Copyright Act was not intended as a means of allowing a domestic manufacturer to more effectively discriminate between domestic and foreign markets. The question is whether the Court will come to the same conclusion in the case of a foreign manufacturer. Regardless the legal lines, the underlying economic principle is no different in a global economy.

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.

Steve Gibson has a plan to save the media world’s financial crisis — and it’s not the iPad.  Borrowing a page from patent trolls, the CEO of fledgling Las Vegas-based Righthaven has begun buying out the copyrights to newspaper content for the sole purpose of suing blogs and websites that re-post those articles without permission. And he says he’s making money.

“We believe it’s the best solution out there,” Gibson says. “Media companies’ assets are very much their copyrights. These companies need to understand and appreciate that those assets have value more than merely the present advertising revenues.”

Gibson’s vision is to monetize news content on the backend, by scouring the internet for infringing copies of his client’s articles, then suing and relying on the harsh penalties in the Copyright Act — up to $150,000 for a single infringement — to compel quick settlements. Since Righthaven’s formation in March, the company has filed at least 80 federal lawsuits against website operators and individual bloggers who’ve re-posted articles from the Las Vegas Review-Journal, his first client.

Now he’s talking expansion. The Review-Journal’s publisher, Stephens Media in Las Vegas, runs over 70 other newspapers in nine states, and Gibson says he already has an agreement to expand his practice to cover those properties. (Stephens Media declined comment, and referred inquiries to Gibson.) Hundreds of lawsuits, he says, are already in the works by year’s end. “We perceive there to be millions, if not billions, of infringements out there,” he says.

The story goes on to note that the primary challenge facing Gibson’s company, Righthaven, is generating sufficient volume because the suits are based on a single or small number of infringements.  Here’s an example of a complaint against the National Organization for the Reform of Marijuana laws (NORML) and here’s another.