Google Doesn't Rely On Intellectual Property For Its Leadership Position

from the stop-saying-it dept

In the various debates we have on intellectual property, we often hear people insisting that Google's dominance is based on intellectual property -- even though there's very little evidence to support this at all. The people who make this argument are guilty of the same mistake made in studies that count all things covered by intellectual property laws as if they only exist because of those laws. Entertainment industry lobbyists, like The Copyright Alliance, love to tout that "$1.52 trillion of the nation's GDP" comes from intellectual property. But that's both misleading and wrong. The number itself is exaggerated, but it also gives credit to intellectual property for anything that touches IP. For example, when we dug into the methodology, we saw that the study counts things that clearly were not because of IP law: such as furniture and jewelry. Are the Copyright Alliance and its entertainment backers really trying to suggest that without copyright law we would have no furniture or jewelry?

Similarly, Google often gets lumped into these discussions, with people insisting that its position in the market is due to copyright and patents. Google does, in fact, have a bunch of patents -- but I watch the patent app filings and patent grants on a bunch of different companies each week, and Google tends to file significantly fewer patents than other comparable companies. Furthermore, I don't know of a single case where Google even hinted at or threatened another company with a patent infringement suit (if there are any examples, please let me know). It appears that Google has focused very much on just using patents for defensive purposes, since it is regularly sued by others for infringement.

Matt Asay, over at News.com, has now highlighted an even stronger example of how Google is showing that it's not relying on intellectual property, but on execution, for its business position. The company recently open sourced its Closure tools, which it uses to build its web services (disclosure: I'm good friends with one of the folks involved in this project, and yes, he reads Techdirt regularly). As Asay puts it:

In many ways, Google is giving away the recipe to those that would like to build a Google clone.

The problem? Google is so much more than software.

In fact, one of the primary reasons that Google can write and open-source so much software is that it isn't a software company. Not even remotely. I could have every line of Google's software, both open source and proprietary, and I couldn't hope to compete with Google.

Google is what Google does with the software, and not the software itself.

It's the execution, not the idea. It's the service, not the code.

In fact, this sort of activity confuses the hell out of companies that do rely on intellectual property. Again, Asay makes this clear:

Google and Red Hat have moved beyond software. Software enables their operations, but software doesn't define such operations. Google, for its part, is open sourcing Microsoft, one line of code at a time, and Microsoft hasn't a clue as to how to respond, because it only knows the old world: competition through better IP.

And that -- right there -- is the key point we keep trying to make around here. You don't need to rely on intellectual property. And, if you do, you are opening yourself up wide to competition that doesn't rely on IP and innovates in a way that simply cuts your legs out from under you. Yet... we'll still hear stories for years about how all of Google's billions are because of its intellectual property, even as it gives away more and more of it each and every day.

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Is WIPO Taking An Evidence-Based Approach To IP Enforcement?

from the finally dept

While the World Intellectual Property Organization (WIPO) is often seen as being inherently in favor of stronger intellectual property rights, every so often, the organization shows itself open to more reasonable approaches. A few years back, for example, it questioned the evidence on patents, and had trouble finding any real evidence that stronger patents resulted in greater innovation. Now, via Slashdot, we hear about a discussion at WIPO concerning "enforcement" issues where a number of papers were presented that pushed back on excessive pro-IP positions. These included a paper by WIPO Chief Economist, Carsten Fink, which calls out many of the previous studies on "losses" due to counterfeiting and piracy, and notes how misguided many of them are. While I think Fink uses some outdated and since disproved economic theory in his paper, overall it's nice to see at least some acknowledgment of moving more towards evidence based policy setting, rather than the maximalist's default "more is better" position.

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Internet Hating Sony Pictures CEO Insists Piracy Is Killing Movie Business; But Facts Show Otherwise

from the whoops dept

Ah, remember Michael Lynton? The Sony Pictures CEO who earlier this year insisted that nothing good had come from the internet at all. When everyone started mocking him for this statement, rather than back off, he doubled down and insisted it was true, using examples that were easily debunked. Apparently, he hasn't learned his lesson. He's back at it, pushing for the UK (and others) to pass laws kicking people off the internet (so-called "three strikes" laws) while insisting that due to piracy there's less money to make movies and fewer movies being made. Of course, those are things that can be fact checked, and the folks over at TorrentFreak did exactly that, pointing out that more movies are coming out each year and more money is being made. Oops.

The way Lynton tries to get around this is by not actually talking about how many movies are coming out, but just counting the number of movies that came out of "the leading studios." I find this quite amusing, because in the podcast we discussed last week involving Paramount's Scott Martin, part of his argument was that while the big studios were fine, the independents were all suffering and fewer movies were coming out because of it -- and, as a "fan" of independent movies, he found that sad. I didn't bother to check the numbers, but it appears that Martin was simply wrong. More movies are being made, and it looks like an increasing percentage of them are coming from smaller independent shops.

The problem, again, seems to be that the folks at the movie studios (just like those at the record labels) only like to count the big hits as successes -- rather than the smaller projects that actually make money and make up the majority of the actual market. It's the same sort of thinking that makes movie studio people insist that we need to explain to them how they can keep making $200 million movies. That's the wrong question. The question is how do you make profitable movies. The technology has advanced such that it's cheaper and cheaper to make movies (which is why we have more of them). But notice that the studios never focus on ways to make movies in a more economical way, but how can they keep spending. Perhaps that's a bigger problem than "online piracy."

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Senegal President Wants Royalty On Tourist Trap He Built

from the something's-not-right-here dept

While some may point out that the bigger issue in this story may be ego, hubris or (perhaps) corruption, the story of Senegal's President Abdoulaye Wade, and his $27 million statue has a ridiculous intellectual property twist, as well. Apparently, Wade had the government spend $27 million on a statue with a "heroic" pose -- this is a country where the per capita yearly income seems to be in the low four figures (CIA Factbook says $1,600). Approximately half of the country lives in poverty. So, clearly, what they need is a giant expensive statue. But the IP angle is that Wade is claiming, since the statue was his idea, he, personally, should receive 35% of any tourism revenue, as a royalty. So, just to get this straight -- he appears to have used a bunch of taxpayer money to spend millions on a statue -- and he wants to personally get a huge cut of all tourist revenue. And while this may be driven by corruption, it's the sort of concept that would only occur to someone in a world where such "ownership" and demands for royalties after an idea is put in place are commonplace.

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US Chamber Of Commerce Makes Up Things About Intellectual Property

from the why-do-people-trust-this-stuff? dept

We had just been discussing how the US Chamber of Commerce (currently losing some big name members for its troubling connection to reality on certain topics) was misinterpreting some stats about patent laws to push for stronger protectionism, and along comes an opinion piece by Mark Esper, the Chamber of Commerce's executive VP of its "Global Intellectual Property Center." Take a wild guess what he argues for? You got it! Stronger intellectual property all around. The problem is that the editorial is riddled with factual and logical errors that aren't just sloppy, but are almost laughable.

The legal rights that governed IP for generations provided a known system of incentives that both fostered and spread innovation. It was the inducements built into our free-enterprise system, coupled with the talents and hard work of entrepreneurs, which moved this nation forward. It worked back then, and it will work now.

This is actually entirely unsupported by the evidence. Studies have shown -- repeatedly -- that no causal relationship has been shown between IP rights and innovation. Furthermore, it's pretty laughable to pick a gov't granted monopoly and claim that this is an "inducement built into a free-enterprise system." IP is the opposite of free enterprise. It's a gov't-granted monopoly. Also, in the paragraph above, he's talking about IP post World War II. What he skips over is that after that period, both patent law and copyright law were greatly expanded, such that they barely resemble what was seen following WWII (especially copyrights).

Six decades later, nearly half the U.S. economy is driven by industries that depend heavily on intellectual property rights. If we are to jumpstart a second economic renaissance, then we must begin by protecting and stimulating the lifeblood of America's economy: its ideas.

Well, beyond the lack of evidence that IP stimulates ideas, every time we talk about IP stifling ideas, IP system defenders rush onto this blog to remind us that neither copyright nor patents are supposed to protect "ideas," but rather "expressions" or "inventions." Someone should inform Esper of this.

The counterfeiting and piracy of American goods cost the U.S. economy over $200 billion annually, and the loss of hundreds of thousands of jobs. This growing problem, coupled with the fact that some foreign governments are working to weaken IP laws that protect American patents, threatens to slow down innovation by undermining the incentives that foster it.

Where to start? Well, how about that $200 billion number? It's made up. Almost entirely. Both the GAO and the OECD looked into the numbers bandied about by the Chamber of Commerce and other lobbying groups and found (oops) that they were exaggerated, sometimes by an order of magnitude or more.

As for the claim that "foreign governments" are trying to "weaken IP laws?" Again, totally made up. Around the globe, almost all of the efforts have been for strengthening, not weakening IP laws. And, again, studies have shown that stronger IP laws do not correlate to greater innovation, and often the reverse.

This is occurring at a time when industries that rely on IP, such as pharmaceuticals, IT, and entertainment, employ 18 million Americans, and are expected to exceed the national average when it comes to future job growth. At the same time, workers in IP-based industries are projected to earn approximately $7,000 more than their counterparts in non-IP lines of work.

This assumes, entirely incorrectly, that those jobs don't exist in the absence of IP. Unfortunately, the evidence is again totally against Esper. Countries that had no patents on pharma goods, such as India and Italy for many years, still had incredibly thriving pharmaceutical industries. In fact, Italy's pharma industry shrunk after it put in place patents for pharma. So, the idea that stronger patents are needed to protect jobs? There doesn't seem to be any support for that.

In short, America's future depends on intellectual property

See, this is a neat trick. He's assuming that all intellectual output relies on IP laws. That's not true. America's future may depend on innovation, but that's not the same as saying it depends on stronger IP laws.

Our IP is valued at over $5 trillion -- more than the GDP of any other country. Intellectual property also accounts for more than half of all U.S. exports, helping drive 40 percent of U.S. economic growth. In 2006 alone, IP exports contributed $37 billion to our trade balance, demonstrating the power of IP in the global marketplace.

Ah, the use of funny math. Again, this involves some number games, whereby lots of things that have absolutely nothing to do with patent, trademark or copyright law are "counted" as being included in these numbers. The fact that much of it would have happened anyway, even with no such laws, is totally ignored.

In every state in the union, IP has played an integral role in molding the economy. Take President Obama's home state of Illinois, for instance. Illinois is ranked sixth in the nation for patents, and creative industries have contributed to over $1 billion in local wages. It is home to 144 university-based and 71 federal research centers, and features eight premier research and technology parks that grow the high-tech companies and jobs of the future.

Nice job pandering to the President. Of course, again, note the implicit (but false) assumption, that it's IP laws that are entirely responsible for this output. Note the implicit (but false) assumption that the research coming out of those universities and research centers are due to IP laws.

Intellectual property is woven into the fabric of our lives and the nation's economy, and has played a critical role in all the major advancements that have made the 20th century one of the most defining times in human history. It is the author of great American moments, from the Apollo program and the PC, to the Internet and iPods, and all the great songs, stories and movies in between that have shaped our culture.

Again, falsely attributing all of those to IP laws. Amusingly, of course, the internet had almost nothing to do with IP laws, and the only time IP has become involved in internet infrastructure, it's been to hold back innovations. And iPods? The thing (well, its predecessor, the Diamond Rio) that the recording industry tried to sue out of existence using IP laws? Yeah, that's not a very strong argument to put forth. The PC's success was actually based on the fact that much of it was built upon open standards and widely shared and copied technology, rather than being locked down by IP laws. The Apollo program I'm less familiar with from an IP standpoint, but seeing as it was a gov't program put forth due to a challenge from President Kennedy and funded by the US gov't, there's is no indication that it required patents as incentive for that particular innovation...

We cannot take IP rights for granted. Rather, we must strengthen IP enforcement and continue promoting innovation and creativity, and the laws that protect both. The next economic renaissance needs to happen now, and strong IP rights will help usher in this new era of job growth and economic revitalization.

Stunning. Right after naming a bunch of innovations that happened because of looser IP restrictions, you suddenly insist that we need stronger IP enforcement? Have you no shame?

I haven't paid much attention to the US Chamber of Commerce, but does anyone actually take them seriously when they spew nonsense like this? Update: Add Apple to the list of big name companies leaving the US Chamber of Commerce. Time to start paying attention to reality.

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Shooting Down The Claim That The AK-47 Needed Intellectual Property Protection

from the makes-no-sense dept

We see all sorts of odd arguments in favor of intellectual property, but I think this latest one may be the most ridiculous of all. Gautam John points us to a story by Andrew Leonard (whose work I usually think is fantastic, but this time...) claiming that the AK-47 is in trouble because of a failure to use intellectual property. But that's not what the details show at all. Basically, the issue is that the "official" maker of AK-47s may be on the verge of bankruptcy due to a whole variety of reasons including "a slump in arms exports, high levels of outstanding debt, and the machinations of a mysterious ultranationalist businessman." So... uh... why is it an IP issue? Well, the Soviet Union apparently offered tons of licenses to many different providers in the early days of the AK, so there's lots of competition. Leonard notes:

But the real problem may be more akin to the woes currently afflicting the newspaper industry and recorded music business: It's very hard to make a buck when your product is easily copied and widely accessible.

Well, considering all those other problems were listed first, it's unclear why it's the "easily copied" problem that's the culprit. But even if we grant the premise, the argument still makes no sense at all. First of all, the AK-47 has been made by many different manufacturers for many, many years. It makes no sense that it would be the competition that has now put it out of business, since that competition has been around for ages. Common sense would tell you that it's not the copying that's the problem. If it was, this issue would have come up years ago, rather than 60 years after the AK-47 was first created. Second, the report is just about this one manufacturer struggling, not all of the others. That suggests, again, that the problem isn't in the fact that the AK-47 is so easily copied. After all, all those other manufacturers face that same "problem."

Finally, there's no evidence at all that a lack of intellectual property is harming the AK-47 at all. In fact, from the sound of things, it's still an incredibly popular weapon. The problem is just with a single manufacturer who has other issues to deal with. So, the end result if this one firm goes out of business does no net damage to the market for AK-47s. Others step in to take up the slack. Just because one firm in a market fails, it hardly means that there needed to be stronger intellectual property. That's a huge, and totally unsubstantiated leap.

Separately, part of Leonard's reasoning for this is based on a myth that's been debunked for years. He compares the AK-47 to other technologies where "lower quality" products won out due to "path dependence," and names the QWERTY keyboard and the VHS (over Betamax) examples. The problem is that, as popular as that story is, it's a myth. The idea that Dvorak was better than QWERTY isn't supported by the evidence. Other similar stories have also been debunked. With things like VHS and Betamax, the problem is that the "quality" that people rely on is not the factor by which buyers made their purchase decision on. Sure, the video quality of Betamax may have been "better," but the overall utility of VHS was much greater because it could record much more per tape.

So, sorry, but I don't see any evidence that the AK-47 either relied on "path dependence" for success, or that it would be better off today if there was some intellectual property around it. In fact, I'd argue that the whole claim that intellectual property was the problem actually stems from a different story from a couple years ago, where the Russian gov't suddenly started claiming intellectual property rights over the AK-47 and started demanding payments from manufacturers. That's not using IP to encourage innovation. It's a gov't using it as a tax (which, if anything, would make life more difficult for AK-47 manufacturers... perhaps like the one now going out of business).

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EU Worried About IP Harming Innovation... But Gets It Backwards

from the sigh dept

Rob H alerts us to an article that starts out sounding reasonable... pointing out that politicians in the EU are meeting because they're worried about intellectual property laws holding back innovation in Europe... but then it goes off the rails. You see, they're not worried that the laws are holding back innovation because they're too strict, but because they're too weak. As you look, though, you realize that these politicians have basically been lobbied by businesses that want protectionist policies. The "report" they discuss talks not about how to better incentivize innovation, but how to "better favour business." What that means is they went and spoke with a bunch of incumbent businesses, not innovative startups, and those businesses said they want more patents. Someone should send them a copy of Boldrin and Levine's book...

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The Way Forward On Intellectual Property For China And India

from the what-to-do-now... dept

This is the final post in our series on intellectual property in China and India. Feel free to read through the whole thing.

The continued development of the knowledge economies in both China and India requires thoughtful, practical policies that will give the needed incentive and capacity to innovators while providing benefits to as many as possible. In contrast to the beliefs of many, further strengthened intellectual property rights are unlikely to provide a positive impact on the economies of China and India. Instead, the two emerging giants should dedicate maximum attention to the other ingredients of a knowledge economy while structuring, to every extent possible under international treaty obligations, their domestic intellectual property regime to provide the optimum balance between incentives and access, bearing in mind that to diffuse the gains from existing innovations, the latter is to be favored.

Perhaps the single-most beneficial thing China and India can do to promote innovation and a dynamic knowledge economy is to provide high-quality education for all. This can be done in numerous manners, but it is important that science and technology education is promoted, perhaps even subsidized, to make it more attractive and affordable. Developing highly-skilled workers will provide the creativity and drive essential to the invention, adoption and productive utilization of new technology. While providing training for scientists and engineers, China and India must also create a strong managerial class to absorb and adopt technologies from around the world (Maskus 2000).

Additional policies can promote innovation, as well. Labor laws, especially in India, should be restructured to create maximum mobility and provide competitive salaries for the best and brightest. Government procurement laws, the rules of science and technology ministries and funding sources can be reformed to provide the incentives that intellectual property seeks to create, but without the unintended consequences of limited access and monopoly prices (Graff 2007). Universities, an important source of knowledge, should be connected with industry and receive funding for basic and applied research. Further, economic policies should encourage open competition, macroeconomic stability and a robust ICT infrastructure.

China and India should seek to structure their respective intellectual property regimes to best promote their individual interests, not an unclear global compromise that is driven by nations far wealthier than themselves. China and India are unique due to their size in which advanced capabilities exist in parallel with deep-seated poverty. Although existing international treaties largely confine China and India, they do have some room for flexibility. For example, TRIPs leaves room for domestic standards regarding novelty, nonobviousness and the scope of patent protection (Abramson 2007). This can be used to tilt the intellectual property regime towards second-comers, especially domestic innovators (Reichman 1997). For example, nonobviousness should be interpreted widely, allowing Chinese and Indians to legally utilize overly blatant foreign patents. Disclosure should be strengthened, leading to additional information spillover. And competition laws can be used to curb many of the adverse effects of IP. In the face of overly-strong intellectual property abroad, China and India should structure their legal incentives to encourage long-term competitiveness, establishing an innovation system that will be increasingly attractive to MNCs who find innovation difficult in the West.

A number of specific recommendations are possible, as well. Think tanks and research institutions focused on issues concerning intellectual property should be established with independent, objective and well-trained staff. Both existing IP systems should be run efficiently and with social interests in mind. This means training judges, administrators and bureaucrats in the nuances of intellectual property and their costs and benefits. When addressing university commercialization, India and China should fund and manage research in the public interest, mandating transparency, avoiding exclusive licensing unless necessary for commercialization, and potentially retaining government use rights for resulting innovations (So 2008). Although it has not been the focus of this paper, on the topic of traditional knowledge, China should follow India’s lead in actively defending the public use of exiting knowledge by fighting attempts to reappropriate the public domain through marginal changes to traditional knowledge. India’s successful challenge of patents on neem and Basmati rice provide useful examples (Boldrin 2008). Finally, the capacity of domestic institutions to support limited intellectual property should be strengthened, most prominently by prosecuting misuses of the IP regime (Okediji 2006 PDF).
    
With increased global prominence, China and India should accept their rightful place in the international system. As far as it is in their populations’ interests, they should resist further elevation of intellectual property, seek expanded compulsory licensing capability, and promote exceptions and limitations for educational materials for students.

Above all, China and India should seek consistency and transparency in their intellectual property policies to create a business environment conducive towards investment and innovation. IP should not be strong; IP should be efficient. As an imperfect tool, it should be used pragmatically and critically.

Robust, clear and enforced intellectual property is very likely a part of a successful knowledge economy, but the advantage of strengthened IP is frequently overstated. In contrast to the other parts of a knowledge economy, intellectual property has a tendency to be misused to the detriment of the economy. For both China and India, placing faith in exclusive rights will limit the ability of the impoverished masses to find productive employment and threaten the long-term sustainability of their innovativeness.

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Other posts in this series:

• Do China And India Really Want Stronger Intellectual Property?
• A Brief History Of Intellectual Property In China And India
• Why Might China And India Want To Strengthen National Intellectual Property Policy?
• Why Increased IP In China And India Is Likely To Disproportionately Benefit The Developed World
• In China And India, Stronger Intellectual Property Is Unnecessary
• There Is No Harmony In A Patent Thicket
• The Way Forward On Intellectual Property For China And India

Kevin Donovan is an expert at the Insight Community. To get insight and analysis from Kevin Donovan and other experts on challenges your company faces, click here.

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And Of Course: DOJ Announces New Focus, Funding On Intellectual Property Enforcement

from the did-you-expect-anything-else dept

As we all know by now, the new administration hired a bunch of the entertainment industry's favorite lawyers, and during the confirmation hearings for the most senior among them, a desire to have the Justice Department focus more on intellectual property was a key point. So, it shouldn't be much of a surprise that the Justice Department has announced new grants to focus on intellectual property enforcement. It's not a huge amount ($1.9 million) and, as per the DOJ's purview, the focus is on criminal intellectual property infringement, but you really wonder if there aren't more important things for the DOJ to be focused on these days. Still... thanks to the Justice Department PR folks who sent me a press release for the first time ever. Apparently, someone there is reading us.

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There Is No Harmony In A Patent Thicket

from the just-thorns dept

This is the sixth post in a series of posts looking at the question of intellectual property rights in both China and India. We've got one more post to go.

Why Intellectual Property Is Insufficient For Economic Development In China And India

The strong focus on intellectual property presented by advisers to China and India miss the ecosystem in which useful innovation takes place. This ecosystem includes, among other things, education, entrepreneurship and openness. For example, intellectual property can only add to growth when coupled with trade liberalization, something India significantly lacks (Gould 1996). However, because a larger market provides a larger incentive for commercial innovation, some researchers have found that with increased market size should come decreased intellectual property (Boldrin 2005). This finding, that for every 2% of economic growth, the duration of IP should be reduced by 0.5% would have significant implications in rapidly growing China and India, but it receives little to no attention amidst the drive for ever stronger intellectual property. Finally, even though intellectual property may stimulate cross-border licensing of technology, it is unlikely to bring a sudden inflow of foreign investment because other facts account for the variation in the behavior of MNCs in different countries (Fink 2005).

Watch out for the Patent Thicket

As China and India are exhorted to increase intellectual property protection and enforcement to higher standards - “harmonization” in the rhetoric of its proponents - they risk emulating the detrimental IP systems of the developed world. The United States, widely viewed as the most innovative nation in the world, has a patent system that  has, according to Jaffe, "become sand rather than lubricant in the wheels of American progress” (Jaffe 2004). Even more worrying, the trend in international intellectual property is actually speeding past the American level of protection, raising concerns that the incredibly strong IP in countries will diminish, rather than promote, innovative capabilities.

Patent thickets - "a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology" - and the "tragedy of the anticommons" - where "too much ownership... wrecks markets, stops innovations and costs lives" - are useful concepts for policy-makers in China and India to keep in mind as they are encouraged to increase their intellectual property. Instead of being incentives for innovation, 47% of firms are using patent portfolios in negotiations and 50% as defensive protection from lawsuits (Boldrin 2008). If China and India grant patents too broadly, they risk overshooting privatization, likely stunting the domestic growth of complex technologies and innovations whose production will be covered by dozens of competing patent claims (Jaffe 2004). This will only be exacerbated by bad standards that do not restrict exclusive rights to truly novel, useful and non-obvious inventions (Boyle 2008).

Are China and India Overshooting Optimal Intellectual Property?

There is already evidence that the two emerging superpowers are making these errors. East Asian countries are patenting at a per capita rate of 4 times the developed world, leading to quick patent quantity convergence (Brahmbhatt 2007). China, whose patent office led the world with 800,000 applications in 2008, is now also home to the most patent lawsuits per year (“Battle of Ideas”). While, prima facie, the enormous absolute populations of China and India will likely make their patenting activity among the highest, given the relatively small sectors engaged in truly innovative work, these figures are worrying. In fact, the same motivations that have been fingered as the causes of the American patent system’s woes – government downsizing and competitiveness – are currently present in China and India, increasing the likelihood that they follow America’s folly (Jaffe 2004).

Another American policy of uncertain quality that is being emulated in China and India is university commercialization. The Bayh-Dole Act, passed by Congress in 1980, encouraged universities to commercialize their innovations through patents, but its effectiveness is highly suspect. Bayh-Dole changed “academic norms regarding open, swift and disinterested scientific exchange” (So 2008). In India, this is already a concern with 71% of surveyed executives feeling “that lack of collaboration between industry and research institutes was the main hurdle to innovation in India” (Dutz 2007). The facilitators of that exchange, Technology Transfer Offices, have “become gatekeepers that in many cases constrain the flow of inventions and frustrate faculty, entrepreneurs, and industry” (So 2008). Yet, China and India are both encouraging university patents (Graff 2007).

Flying Right Past the USA

Unfortunately, simply recreating the flawed American system is unlikely. The world’s largest economic force, the USA, is actively using its trading power to increase international IP standards beyond the current TRIPs-mandated level. Through bilateral free trade agreements (FTAs) and the multilateral Anti-Counterfeiting Trade Agreement, currently being negotiated in secret, the United States is promulgating even more expansive intellectual property policies. The FTAs have strengthened intellectual property rights beyond the high standard already set by TRIPs in dozens of countries. These measures include extending copyright for an additional 20 years, preventing parallel importation of patented pharmaceutical products, limiting compulsory licensing ability, limiting copyright exceptions and limitations through the illegalization of technological circumvention measures, and explicitly extending patents to biological innovations (Fink 2005 PDF). Countries accept these provisions in return for lower tariffs and better quota allotments, but while those are temporary, the expansive intellectual property policies are not.

In addition to all the previously explained reasons why this is likely detrimental to the developing nations who agree, it is useful to note that these policies promoted by the USTR are deeply hypocritical, especially when it comes to copyright. The United States copyright laws give considerable breadth to consumers through the fair use provision. This limitation on exclusive rights has been estimated to contribute $4.5 trillion per year to the US economy (Rogers 2007 PDF). Consumer International, a nonprofit, ranks the United States as among the best copyright policies in regards to consumer protection; notably, it is joined by China and India, condemned by the USTR and copyright industries as too permissive (“IP Watch List” 2009).

Speaking of intellectual property as unidirectional makes little sense when one recognizes that the benefits are neither clear-cut nor absolute. Additional costs of further strengthened IP in China and India will be higher administrative costs, less imitation, and a decrease in the incremental innovation that provides real growth (Reichman 1997).

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Other posts in this series:

• Do China And India Really Want Stronger Intellectual Property?
• A Brief History Of Intellectual Property In China And India
• Why Might China And India Want To Strengthen National Intellectual Property Policy?
• Why Increased IP In China And India Is Likely To Disproportionately Benefit The Developed World
• In China And India, Stronger Intellectual Property Is Unnecessary
• There Is No Harmony In A Patent Thicket
• The Way Forward On Intellectual Property For China And India

Kevin Donovan is an expert at the Insight Community. To get insight and analysis from Kevin Donovan and other experts on challenges your company faces, click here.

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Techdirt Book Reading List 2009

from the food-for-thought dept

A couple years ago, after completing my series of posts on the economics of ideas and infinite goods, I wrote up a reading list of books that were useful in thinking about all of this. With our recent launch of a book version of that series, called Approaching Infinity, I updated that list with a bunch of more recent books (basically, the books sitting on my desk again...), and wanted to share them here. For this post, I'm only writing up short reviews, but plan to revisit some of these books with much more detailed reviews, in the future. Not surprisingly, we'll kick it off with four of the books that I feel are the most important for anyone to read if they're interested in these things. Together, they make up the four books that you can get together (all signed by their authors!) in the Techdirt Book Club package.

The Essentials:

• Moral Panics and the Copyright Wars by William Patry

  Patry, long established as one of the foremost experts on copyright law, has written an outstanding text that discusses how copyright law has been twisted and abused by corporate interests who don’t use it for its intended purpose (to promote the progress of creative works) but as a tool to prop up an outdated business model. On top of this, he explores the misleading and inflammatory language used by those seeking to abuse copyright law in this manner. Highly engaging and a must read for anyone who’s worried about the state of copyright today. Oh, and as a bonus, Patry has started blogging again in support of the book, after he gave up on blogging a couple years ago.

• The Public Domain by James Boyle

  Law professor James Boyle has been one of the foremost critics of the undue expansion of copyright law over the years, fighting against things like the DMCA and the Sonny Bono Copyright Extension Act. Over the years, he’s noticed a troubling trend among some to question why the public domain is even needed — so he wrote an entire book to explain why. It’s filled with story after story that highlights both the importance of the public domain and how overly aggressive copyright laws have held back the public domain and the creativity that it previously allowed. As a highlight, don’t miss the incredible chapter on the birth of soul music by Ray Charles. If today’s copyright regime had been in force at the time, we might not have had soul music at all. Think of all the great music we may be missing today thanks to current copyright laws.

• Against Intellectual Monopoly by David Levine and Michele Boldrin

  This book was on the list two years ago, but that was an earlier digital-only draft, as opposed to the full hardcover version now available. Levine and Boldrin are two well-known economists who began investigating the impacts of intellectual property, and were eventually quite disturbed by what they found. That is, they could find no evidence that either copyrights or patents actually achieved their stated intention of "promoting the progress." Instead, they found a lot of evidence that the opposite occurred — and that copyright and patent law served to hinder the progress and slow down its pace. Chock full of examples and citations to important studies, this book is a must read for anyone trying to understand the state of today’s intellectual property law and how closely it lives up to its stated purpose.

• The Gridlock Economy by Michael Heller

  An excellent addition to the literature on property law and the economics of property. Heller recognized what he refers to as "the tragedy of the anti-commons," when too many property rights get in the way of the efficient allocation of resources, and notes how this has come into play on things like patents and broadcast spectrum. If you’re trying to understand the economics of intellectual property, especially if you’re a strong believer in property rights (as we are) this is an excellent book to understand where property rights can go too far.

Intellectual Property

• No Law by David L. Lange & H. Jefferson Powell.

  This is an incredibly worthwhile read. I plan to do a much more detailed review shortly. It methodically lays out the argument for how and why copyright law as it's written today clearly violates the First Amendment ("Congress shall make no law... prohibiting the free exercise thereof; or abridging the freedom of speech..."). The book is, at times, a bit dense to read through, but you kind of expect that from two lawyers. However, the detailed and thought provoking look at the history of intellectual property law, along with related legal concepts such as misappropriation and unfair competition -- as well as its detailed dissection of a few key court cases -- is, alone, worth the price of admission. I have some other problems with the book (including its eventual suggestions for how to "fix" copyright law), but there's so much value in the first half of the book that I'd highly recommend it.

• Patent Failure by James Bessen & Michael J. Meurer

  A must read for anyone looking to understand the patent system today. Bessen & Meurer go through a ton of the research that has been done about patent systems, and include a bunch of their own, and make the case that the patent system simply does not work for the majority of industries out there. The book is incredibly strong in detailing study after study after study that details, in an incontrovertible way, that the patent system is fundamentally broken and clearly hinders innovation much more significantly than it helps it.

• Copyright's Paradox by Neil Netanel

  Similar to No Law above, Copyright's Paradox goes into great detail showing how copyright law appears to quite obviously violate the First Amendment, and why that needs to be dealt with.

• The Patent Crisis by Dan L. Burk and Mark A. Lemley

  Mark Lemley should be a familiar name around here for his views on intellectual property, and this book certainly is a worthwhile read. It does a great job laying out the many problems with the patent system and why it often does significantly more harm than good. Where I find it a bit less convincing, however, is in suggesting that the court system can fix these problems. I agree that the current Congressional patent reform bills aren't very good, but I'm not convinced the courts will go anywhere close to far enough in fixing the system.

• Intellectual Property and Theories of Justice Edited by Axel Gosseries, Alain Marciano and Alain Strowel

  This is a collection of academic papers having to do with intellectual property, as related to not just legal and economic arguments, but philosophical ones as well. I don't agree with all of the different papers, obviously, but there's a lot to get your mind churning on different ideas and different approaches to intellectual property issues within this book.

Economics & Innovation

• Free by Chris Anderson

  By now, you should probably already know about this book, but Chris puts into book form much of what we talk about on Techdirt. My review of the book notes that it's well-worth reading, though I think he could have gone farther and could have done a better job anticipating how to respond to the obvious critiques from people who were responding emotionally, rather than based on the actual points raised by the book.

• The Venturesome Economy by Amar Bhide

  This is a fantastic read if you're looking to understand innovation in a global economy. It puts to rests various myths about globalization or off-shoring being bad for the US economy, and shows how innovation itself is global, but the key question is learning how to actually implement ideas, and how to take concepts and continually innovate, rather than just focusing on a small part of the puzzle.

• The Pirate's Dilemma by Matt Mason

  While it suffers from sensationalism, at times (too much so at points), the book does a fantastic job of highlighting example after example after example of how what some people feared as "piracy" was simply a leading indicator of innovation. In every case, the same pattern emerges: some existing industry freaks out over so-called "pirates," but the "pirates" are merely the market telling the industry what it wants, and what's possible. Eventually (often over massive protests from that industry) someone comes along and figures out how to deliver what the market wants -- and to do so profitably. This is a must-read for anyone who calls things "piracy" without understanding the real implications of what's going on.

• Predictably Irrational by Dan Ariely

  A quick and easy read that gets people to rethink certain easy assumptions about economic behavior. While I disagree with the idea that the actions are somehow "irrational," I do think it highlights how there are often more variables at play in an economic analysis than a simplified analysis takes into account. For folks around here, his investigations into how people respond to "free" within an economic model (i.e., they value it more than you would expect) are particularly noteworthy.

• Here Comes Everybody by Clay Shirky

  Pretty much anything by Clay Shirky should be required reading already, but this book is one of the best out there in getting you to understand how the old systems of production and consumption are changing due to enabling technologies, and how the old distinctions between production and consumption are melting away.

• Remix by Larry Lessig

  Not necessarily Lessig's strongest book, but still absolutely worth reading. It goes well with Matt Mason's (and James Boyle's) book above, in getting you to understand the nature of creativity, and the way in which nearly all creativity involves mixing one's own unique ideas with those that have come before.

• What Would Google Do by Jeff Jarvis

  While admittedly it can feel a bit preachy at times, once you get past that aspect of it, you realize that it's a manual for innovative decision making (not just in business). It's about recognizing that businesses by themselves don't get to call the shots any more, and if they don't realize that, they're probably not going to stay in business very long.

• Rebel Code by Glyn Moody

  If you want to understand how the concepts we talk about here can be applied in practice, the open source community is a good place to start. Glyn Moody has written an excellent account of exactly how that came about.

• The Future of the Internet: And How to Stop It by Jonathan Zittrain

  I actually disagree with the conclusions of this book, but there are still a number of good points raised within it, about how there's always a fight between "control" and "openness" in new technologies. Zittrain worries about the trend towards control, though I think in the end the market will settle things, and "control" will lose out to openness in the long run.

• A Culture of Improvement by Robert Friedel

  This rather epic tome goes deep into how innovation occurs in Western Society through a basic mechanism of a "culture of improvement": the idea that when something doesn't work right, we seek out a better solution. If you want to understand how innovation occurs, this is a good starting point.

• From Concept to Consumer by Phil Baker

  We've said it time and again: the real key to innovation is not the idea, but actually implementing it, and innovating to get the idea out there, and to see how you can deliver more of what a consumer needs. Written by someone who's done that many times over, this book is basically a guidebook for those looking to go from the idea stage to actually bringing a product to market. For those who think that the invention is the important stuff, and bringing it to market is just "business stuff," this is a worthwhile read.

Obviously, there have been a ton of other great books that have come out over the past couple of years, but these are the ones that I've kept close to my desk recently, and wanted to share with all of you.

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What A Job: Making Sure No Brands Appear In A Movie

from the holy-waste-of-resources dept

Rob Hyndman alerts us to a column from an entertainment industry lawyer, explaining his job in "errors and omissions clearance procedures." Basically, the job is watching movies to make sure nothing gets on the screen that doesn't have permission:

Every single character's name in the script must be checked to ensure there isn't someone out there with that exact name who may think they are being portrayed without their permission. All the proposed signage for stores, institutions and other locations must be researched to ensure the names and logos are not subject to copyright or trademark restrictions. If the characters and locations are real, permission must be granted and consents signed. Only certain phone and license plate numbers may be used.

Once the script is written and production begins, all props on set must be checked to ensure no copyright or trademark infringement exists. Fictional cereal being eaten in the fictional restaurant by the fictional family must be cleared before the box can be put on the table.

A rough version of the finished production is then reviewed to ensure nothing was missed and no golden arches appear in the background of the outdoor shot at an intersection in a busy downtown location.

What a stupendous waste of time, money and resources. But it shows what a ridiculous society we've created, where intellectual property law means that you can't have a McDonald's appear anywhere in the background in a movie. I'm sure that's exactly what our founding fathers were concerned about when they put in place the constitutional clause about "promoting the progress."

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Famed Choreographer Dies... Intellectual Property Lawyers Take Over?

from the this-can't-end-well dept

A few years back, we wrote about the guy who claimed to have invented The Electric Slide sending DMCA takedown notices to people who put up videos of people (at weddings, for example) dancing the dance. Eventually, the EFF sued and the guy backed down, but it looks like we haven't seen the end of aggressive enforcement of copyright control over choreography. Mockingbird writes in to let us know of a story talking about the recent death of choreographer Merce Cunningham, which focuses on how his estate is moving rapidly to execute a plan concerning the intellectual property he held in his dances. After discussing one of his famous routines that involved (literally) rolling some dice to determine the sequence, the article notes:

Yet, in a press conference held in Cunningham's dance studio shortly before his death, Fishman announced, "The future of his life's work cannot be left to chance."

And from there, we get statements such as:

Cunningham, according to board member Allan Sperling, "wanted clarity with respect to the ownership, control, and continuity of his choreography." Mr. Sperling adds, "He wanted it to be in the hands of those he trusted to carry out his philosophy and approach." The trust, which has meticulously documented his works, controls licensing of revivals. "Presumably," Sperling says, "the trustees will set standards for the way the work is performed."

From there, the article branches off into a discussion on copyright. While it gets some of the facts wrong (claiming that copyright exists to protect an artist's income, rather than the truth: it exists to create an incentive to create), it at least tries to balance some of the questions, discussing things like Creative Commons and the public domain. It also discusses exactly how other choreographers have been held back by copyright:

New York choreographer Jane Comfort has been inhibited artistically in the past by copyright barriers. She now commissions new scores for her dances rather than attempting to use copyrighted music. "It is stultifying and difficult," she says. "The music industry and literary estates can be really tough."

The article also quotes numerous other creative types hoping to get away from copyright and the hoops and hurdles people need to go through to create:

Contemporary composer Joel Durand, a professor of composition at the University of Washington in Seattle, knows composers rely on royalties for income but says, "I wish we were not so obsessively entrenched in our little discoveries." He'd like his work to be freely available since, Durand says, "Everything we do is universal in a spiritual way. It all belongs to everybody because it doesn't come from us as individuals." Works "of an aesthetic nature," he adds, are produced "in collaboration with the world, and the creator should offer it to all rather than clasp their fists around their thought for gain."

Holby, too, wonders if unfettered access might flower into "a new Renaissance with everyone inspiring everyone else."

But... don't expect that to happen with Cunningham's work from the sound of things. Even though the article notes that when he was alive he embraced change, collaboration, innovation and new technologies -- it's difficult to square that with this whole idea of his estate carefully controlling and licensing his works. It's equally troubling to think that you can stop someone from dancing in a certain way just because someone else choreographed it first.

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In China And India, Stronger Intellectual Property Is Unnecessary

from the red-herring dept

This is the fifth post in a series of posts looking at the question of intellectual property rights in both China and India. We'll be adding new posts to this series each week for the next few weeks.

Access Is More Important Than "Incentive"

China and India are countries of enormous internal economic differences, primarily stemming from productivity gaps. The technologies that enable world-class economic efficiency in some parts of China and India need to be diffused throughout the country, but the monopoly pricing associated with IPR limits the ability of the poor to access empowering technology.

Despite the presence of high-tech hubs like Bangalore and Hyderabad, India ranks 63rd out of 72 surveyed countries for the Technology Achievement Index (Dahlman 2005). In China, Beijing and Shanghai have knowledge-intensities 6.1 and 5.3 times the national average, respectively (Dahlman 2001).  These disparities indicate an inability to effectively diffuse innovations, likely resulting from the higher prices and protectionism associated with increased intellectual property. The low productivity in most Indian enterprises indicates an enormous opportunity to make better use of existing knowledge; one analysis “implies that the output of the Indian economy could be as much as 4.8 times higher if enterprises were to absorb and use the knowledge that already exists in the economy” (Dutz 2007). Intellectual property is certainly an important factor, but not the only factor preventing this diffusion: after all, India's remarkable agricultural productivity growth known as the Green Revolution took place prior to global intellectual property harmonization.

Because R&D requires much more than financial incentives (educated workforce, infrastructure, etc.), close to 80% of global R&D is carried out in the developed world. Therefore, innovation in the developing world is more appropriately adoption and adaptation of existing technology. Instead of hoping that increased intellectual property will attract it (likely a fool's errand), there are other ways to access global knowledge such as reverse engineering, imitation, utilizing diaspora linkages and networks, and simply purchasing knowledge-embodying goods. Even with broadly condemned intellectual property policy, China and India remain highly desirable locations for the R&D labs of major international corporations. Several surveys indicate that India is the preferred location for innovation centers, likely stemming from the critical mass of low-cost, highly-skilled knowledge workers – the average annual salary of a scientist or engineer in India is $22,600, compared to $90,000 in the United States. Additionally, given the ability to digitize and internationally transfer much of their work, India is attractive regardless of concerns about intellectual property infringement (Dutz 2007). And the benefit to India is impressive:

“Between 1998 and 2003, MNCs made $1.3 billion in R&D investments in India. More than 300 MNCs are setting up R&D and technical centers in India. They employ 80,000 scientists and engineers and spend about $4 billion a year. Planned investment totals $4.7 billion… The growth of MNC R&D centers generates positive spillovers to the Indian economy, with the demonstration effect to indigenous corporations being the most critical” (Dutz 2007).

Although MNCs state their preference for higher intellectual property, a recent study noted that “it is unlikely that product patents will make a dramatic difference to their choices;” instead a change in IP will likely most affect domestic firms who are increasing amount and type of R&D without the incentive of intellectual property (Lanjouw 1997). India, and China where a similar trend is present and increasing, can further their attractiveness to FDI through tax breaks, increased liberalization and actively utilizing their diaspora.

Unnecessary for Innovation. Period.

Stronger intellectual property may also be unnecessary in another way. Although they are promoted as a tool for enhancing economic competitiveness, readers of Techdirt will know that their effectiveness is, at most, questionable. In the 1980s, there was a boom in American patenting activity, seemingly corresponding with changes to intellectual property laws that were made in response to worries about diminishing national competitiveness (Dahlman 2001). A measure of useful innovation, Total Factor Productivity, should have increased accordingly with the rise in useful, novel and non-obvious inventions, but this has not been the case (Boldrin 2008), providing compelling evidence that, contrary to common usage, patent activity is not equitable with economic benefits.

But even if we take patent activity as a reliable indicator of useful innovation, the case for stronger IP is doubtful. Strengthened intellectual property is unlikely to have caused the increase in American patenting in the 1980s: a study of patent reforms over 150 years in 60 countries confirms “that reforms have few positive effects on patent applications by entities based in the country undertaking the policy change” (Lerner 2002).

If traditional patents are not indicative of innovation and productivity-enhancement, is it possible that newer, related exclusive rights could do so? One such right, known as Plant Breeder’s Rights, provides patent-like protection to agricultural innovations. Here again, the evidence fails to provide compelling support for monopoly rights. The premier international treaties on the subject, the PVPA/UPOV, have not led to an increase in experimental or commercial wheat yields; instead, agricultural rights take away from the public domain seeds by allowing commercial entities to patent hardly novel strains. When enforced, these exclusive rights price previously affordable agricultural inputs beyond the means of the millions of subsistence farmers in China and India (Boldrin 2008).

Instead of focusing on intellectual property as the sole source of incentive for innovation, China and India should actively explore and promote ways in which to promote investment in public goods without bringing the distortions of monopoly rights.  As legal scholar Larry Lessig writes in The Future of Ideas, “There is no necessity to marry the incentive to innovate to conferral of monopoly power in innovations” (Lessig 2002). Digital, networked technology expands the ability for people to collaborate across time and space, significantly decreasing the up-front costs of innovation that intellectual property seeks to recuperate through exclusive rights. Models of open source innovation have proven spectacularly successful in software development where innovation is a cumulative and competitive process (Jaffe 2004). Open licensing models also hold promise in biotechnology where much of the research costs are provided by academic researchers who have an interest in promoting knowledge widely (Kapczynkski 2005). In fact, IT and biotechnology were successful in large part due to the freely available research made possible by university knowledge (So 2008). Funding can also be provided by non-profit entities such as government-awarded prizes for socially desirable innovations (Love 2007). Finally, even in a market without intellectual property, large up-front costs associated with innovation can be recouped through trade secrecy and the first-mover advantage (Jaffe 2004).

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Other posts in this series:

• Do China And India Really Want Stronger Intellectual Property?
• A Brief History Of Intellectual Property In China And India
• Why Might China And India Want To Strengthen National Intellectual Property Policy?
• Why Increased IP In China And India Is Likely To Disproportionately Benefit The Developed World
• In China And India, Stronger Intellectual Property Is Unnecessary
• There Is No Harmony In A Patent Thicket
• The Way Forward On Intellectual Property For China And India

Kevin Donovan is an expert at the Insight Community. To get insight and analysis from Kevin Donovan and other experts on challenges your company faces, click here.

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Why Increased IP In China And India Is Likely To Disproportionately Benefit The Developed World

from the cui-bono dept

This is the fourth post in a series of posts looking at the question of intellectual property rights in both China and India. We'll be adding new posts to this series each week for the next few weeks.

India and China face profound, perhaps even existential, economic challenges as they seek to continue providing growth for the hundreds of millions of impoverished citizens who demand economic opportunity and empowerment. As low- and middle-income countries, respectively, the desirability of policies that prove charitable to other countries, especially developed ones, is minimal. Yet, evidence from India shows that intellectual property enhancement involves the transfer of rents from poor countries to rich ones. Although proponents of increased IP believe the process is mutually advantageous, the small absolute market size of developing countries like India and China does not provide adequate incentives to change the level or direction of total R&D expenditure (Dutta & Sharma PDF).

Intellectual property harmonization actually allows foreign rights holders to capture profits, obtain jobs, decrease the balance of payments, and cause dependency (Lanjouw 1997). The anti-competitive, monopolistic nature of intellectual property makes it harder for developing countries to gain access to the most valuable technologies needed for economic convergence (Reichman 1997). One study showed that even if stronger intellectual property could accelerate FDI, it would limit the imitative capability of indigenous firms (Lai 1998). Other work found that there is a strong positive effect of intellectual property on domestic imports, leading to a decrease in the balance of payments (Maskus 1995). Moreover, stronger global IP encourages American exports, something India and China should not necessarily favor (Smith 1999). The world’s most successful economies, such as Japan or the United States, rose to prominence by specifically limiting the scope and breadth of patents (Maskus 2000).

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Other posts in this series:

• Do China And India Really Want Stronger Intellectual Property?
• A Brief History Of Intellectual Property In China And India
• Why Might China And India Want To Strengthen National Intellectual Property Policy?
• Why Increased IP In China And India Is Likely To Disproportionately Benefit The Developed World
• In China And India, Stronger Intellectual Property Is Unnecessary
• There Is No Harmony In A Patent Thicket
• The Way Forward On Intellectual Property For China And India

Kevin Donovan is an expert at the Insight Community. To get insight and analysis from Kevin Donovan and other experts on challenges your company faces, click here.

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Why Might China And India Want To Strengthen National Intellectual Property Policy?

from the pay-attention-to-who's-talking dept

This is the third post in a series of posts looking at the question of intellectual property rights in both China and India. We'll be adding new posts to this series each week for the next few weeks.

In the last post, we explained the numerous changes made to strengthen intellectual property in China and India. Yet, to many observers, it has not been enough. Governments, donors, academics and private industry encourage, some more subtly than others, China and India to “harmonize” their domestic intellectual property by strengthening regulations and enforcement.

The Vested Interests

According to the US-China Business Council, an industry group representing American companies operating in China, weak penalties, delayed enforcement and protectionist policies limit China’s ability to become a leading innovator (“Statement of the US-China Business Council” PDF). A survey of its members says intellectual property enforcement is China’s most serious shortfall in implementing WTO commitments, though 1/3 said it had improved. They advocate increased enforcement, more training for judges and prosecutors, public awareness campaigns and lower thresholds for criminal penalties.

The United States Trade Representative (USTR), too, condemns China’s IP regime. The USTR has placed China on the Priority Watch List of its annual “Special 301 Report” that evaluates the IP policies of dozens of countries. India, too, makes this list as a “significant concern,” though China is the primary country of concern (USTR Special 301 2008 Report). In the report, the USTR cites the US copyright industry’s estimate that piracy cost the United States $500 million in 2004 (USTR Special 301 2005 Report). Another estimate by the International Intellectual Property Association says that copyright piracy in 2008 in India and China cost the U.S. $1,096.2 million and $3,504 million, respectively (IIPA 2009 PDF). These sources also claim that counterfeiting reduces tax receipts and domestic growth. To combat this alleged threat to America’s economy, the USTR is actively working to increase global intellectual property standards through bilateral free trade agreements and the Anti-Counterfeiting Trade Agreement, currently being negotiated in secret (USTR Special 301 2008 Report). 

The Academics

These groups motives and facts should be viewed with caution - their statistics have been shown to be wildly innacurate and their motives dubious.  There are others, however, who advocate for stronger intellectual property in China and India, and believe it to be in the best interest of the two countries. Under this thinking, promoting IP in China and India will further their ability to capitalize on international information flows and promote domestic innovation. 

Most basically, the increased export opportunities available as a WTO member makes the adoption of new technologies profitable for more firms (Dutta & Sharma PDF). A recent study has shown that royalty payments for technology transfer, R&D expenditures and total levels of foreign patent applications all increase with intellectual property reforms (Branstetter 2006). One common line of thinking closely related is the belief that FDI will increase with stronger intellectual property. Executives at multinational corporations (MNCs) say that IP rules are a very important factor in deciding R&D locations – before investing substantially in new R&D, companies want to be assured that they will have the opportunity to recoup those costs through exclusive control of their innovations (Lanjouw 1997). China and India suffer from ineffective R&D – they devote a small share of labor and GDP to research, and in both countries much of the work is done by the government – so foreign investment in the sector could prove useful. India, especially, needs improvement in the commercialization of its patents (Dahlman 2005). It is argued that market incentives (via IP) would increase efficiency.

Unfortunately, the evidence is not clear-cut. A 2005 study found that IP laws have little discernible influence on the growth of R&D stocks, though the international transfer of and propensity to patent do seem to be influenced (Jaumotte 2005). Another study from the same year, though, shows that stronger intellectual property will improve the incentives for a foreign rights holder to enter emerging markets, but that it will also increase that firm’s market power, diminishing the ability of domestic firms to compete. However, technology has spillover effects, especially due to the disclosure required by patent applications, which can, in theory, make productivity gains from foreign firms available to domestic firms. Yet, although a 2004 study finds that FDI could theoretically lead to widespread gains in domestic productivity, because companies block spillover through various means, in practice, the sectoral gains are minimal. This is particularly worrisome for China and India because the sectors in which they presumably have some burgeoning capabilities will receive little benefit from international linkages.

One study found that increased intellectual property has a significant positive impact on the productivity of R&D, as measured by patents per dollar of R&D, though this metric is suspect because a patent does not necessarily translate into any economically or socially desirable outcome (Brahmbhatt 2007).

In the coming weeks, we'll discuss the likely downsides of increased intellectual property in China and India.

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Other posts in this series:

• Do China And India Really Want Stronger Intellectual Property?
• A Brief History Of Intellectual Property In China And India
• Why Might China And India Want To Strengthen National Intellectual Property Policy?
• Why Increased IP In China And India Is Likely To Disproportionately Benefit The Developed World
• In China And India, Stronger Intellectual Property Is Unnecessary
• There Is No Harmony In A Patent Thicket
• The Way Forward On Intellectual Property For China And India

Kevin Donovan is an expert at the Insight Community. To get insight and analysis from Kevin Donovan and other experts on challenges your company faces, click here.

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Even The Pope Is Worried About The State Of Intellectual Property

from the didn't-see-that-coming dept

The US Constitution clearly states that the sole purpose of intellectual property monopolies is "to promote the progress of science and the useful arts." For quite some time, we've felt that current intellectual property law does not live up to that challenge... and it appears that, of all people, the Pope may agree. Pope Benedict XVI is certainly not subject to the US Constitution, but Roberto Valenzuela alerts us to the Pope's "Caritas in veritate" (Charity in Truth) that just came out today. In it, the Pope discusses what is progress and the importance of economic development, which makes for quite an interesting read, whether you are religious or not. The Pope talks about how economic development, prosperity and economic growth has helped lift many out of poverty and built up nations and created tremendous opportunities for people. However, he is worried about "malfunctions and dramatic problems" in the system. Such as? Well, intellectual property for one thing:

On the part of rich countries there is excessive zeal for protecting knowledge through an unduly rigid assertion of the right to intellectual property, especially in the field of health care

While there's plenty that I don't necessarily agree with, a lot of the talk certainly does appear to be pretty economically literate, suggesting that an overabundant focus on short term profits can do significant harm to long-term economic growth. He talks up the importance of increasing knowledge and research and better sharing the results of that research.

The impact of technology is a constant theme throughout the entire thing, with an entire section focused on technology towards the end, where he does worry that our fascination with technology its own sake often obscures the its overall impact. He talks about the responsible use of technology, but (and perhaps I'm reading too much into it) he doesn't appear to be condemning technological progress, but noting that for its gains to be sustainable, people do need to think about the wider impact. However, I certainly disagree with his assessment that technology for things like social communications can have a direct moral implication, as opposed to being "neutral."

It's a worthwhile (if long) read, no matter where you stand on these issues -- but the very fact that even the Pope is concerned about the excesses of intellectual property being used to harm economic and social development again suggests that this is a problem that is having a pretty wide impact.

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A Brief History Of Intellectual Property In China And India

from the ups-and-downs dept

This is the second post in a series of posts looking at the question of intellectual property rights in both China and India. We'll be adding new posts to this series each week for the next few weeks.

To fully understand why increased intellectual property in China and India is unnecessary and objectionable, it helps to understand the relationship intellectual property has with economic development. Historically, intellectual property has generally increased with economic development, but the relationship is not straightforward. Although there is no reliable cross-country index of intellectual property policy, in large part due to the difficulty of quantifying concepts like enforcement quality, some trends are discernable. When a country is poor, IP is unnecessary for a host of reasons, not the least of which is the limited access to productivity enhancing technologies that intellectual property brings and the domestic inability to innovate in a commercially viable manner. But instead of constantly increasing with wealth, IP actually falls with an initial increase in wealth before dramaticaly growing (Maskus 2000). As a country develops, it obtains imitative abilities that make legal prohibition on copying foreign technologies an artificial obstruction to economic growth. However, with further global integration and increased domestic innovative capabilities, patent protection tends to increase. However, China and India have both realized that their relative poverty makes access to technology a more pressing concern, justifying relaxed IP standards.

India's On-Again, Off-Again Relationship With Intellectual Property

India' colonial status brought with it patent legislation, so by 1911 India's IP regime conformed with developed world status (Graff 2007). However, seeking to develop a domestic pharmaceutical industry, in 1970, India abolished patents on pharmaceutical products. This allowed domestic firms to imitate and adapt foreign therapeutic inventions. The policy was a success: the 2,237 licensed drug manufacturers in 1969-1970 grew to 16,000 by 1991-1993, production of drugs grew at an average rate of 14.4% per year from 1980 to 1993, India became a net exporter of pharmaceutical products, and the market share of foreign multinational corporations (MNCs) dropped from 80-90% to 40% (Fink 2005). In 1995, six of the top ten pharmaceutical firms in India were domestic, and employment in the sector had reached half a million people (Lanjouw 1997).

However, to gain access to the global market enabled by the World Trade Organization, India had to ratify the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), the most influential treaty on global intellectual property. Doing so included introducing full product patents on pharmaceutical innovations, extending all patents from 5-14 years to 20 years, and accepting limitations on compulsory licensing (Abramson 2007). Observers noted that this was likely to lead to a loss of consumer surplus (Chaudhuri et al.). However, the government agreed against its wishes to TRIPs for the additional benefits of WTO membership (Lanjouw 1997). Under TRIPs regulations, patenting has accelerated in India (Dahlman 2005).

China As The Late Bloomer

China was a latecomer to intellectual property. Its first patent law came into effect in 1985, followed by a copyright law in 1990 (Graff 2007). However, since then, the pace of progress has been rapid; it has now joined all major international IP treaties (Maskus 2005). Its patenting activity is increasing rapidly, too, with domestic firms nearly doubling the number of patents they received in the past four years (“Chinese firms…”). China’s Patent Office now leads the world, reviewing 800,000 applications in 2008, and in 2009, domestic firms are poised to receive more patents than foreigners for the first time ever (“Battle of Ideas”). Chinese firms are also receiving more patents abroad: in 1999 they only won 90 patents in America, but by last year they had increased that number to 1,225, demonstrating a desire to use their inventions globally (“Battle of Ideas”).

Chinese intellectual property, however, is still frequently critiqued. Enforcement is notoriously weak with the United States citing “rampant counterfeiting and piracy problems.” Strikingly, according to the USTR, China was the origin for 67% of seizures of counterfeit goods at the American border in 2008. In response to these and other concerns, China has recently updated its patent laws, increasing statutory damages and expanding the investigative power of the patent office (Lim 2009).

In the next post, we'll take an extended look at the case made for stronger intellectual property in China and India. 

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Other posts in this series:

• Do China And India Really Want Stronger Intellectual Property?
• A Brief History Of Intellectual Property In China And India
• Why Might China And India Want To Strengthen National Intellectual Property Policy?
• Why Increased IP In China And India Is Likely To Disproportionately Benefit The Developed World
• In China And India, Stronger Intellectual Property Is Unnecessary
• There Is No Harmony In A Patent Thicket
• The Way Forward On Intellectual Property For China And India

Kevin Donovan is an expert at the Insight Community. To get insight and analysis from Kevin Donovan and other experts on challenges your company faces, click here.

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Do China And India Really Want Stronger Intellectual Property?

from the stay-tuned-to-find-out dept

Over the past few months, I have been researching the role that intellectual property plays in China and India, with specific attention to the frequent calls for increased protection in those countries. I believe that a careful and critical review of national goals, potential solutions and likely outcomes will, in fact, make intellectual property harmonization a disagreeable mechanism for bringing China and India to continued global prestige. This series, adapted from a recent paper, will first outline the role that intellectual property can play in economic development. Because of their relative importance, patents will be the focus. Following brief overviews of the intellectual property systems in China and India, it will examine the case for stronger IP in China and India. The most time will be dedicated to explaining why strengthened intellectual property is likely to disproportionately advantage the developed world, decrease the ability of China and India to diffuse productivity-enhancing innovations, prove both insufficient and unnecessary for promoting innovation, and even be counterproductive to the countries' innovation systems. Finally, the series will end with recommendations for the way forward for China and India.

Every year, in conjunction with the content industry, the US Trade Representative produces the Special 301 report that identifies other nations as significant concerns in regards to intellectual property. It is among the most prominent reminders of the substantial pressure placed on countries to consistently strengthen their national intellectual property regimes. For two developing nations, China and India, the pressure is particularly noteworthy. Governments, donors, private industry and academia give these rising superpowers dozens of reasons to believe that stronger intellectual property is a highly desirable improvement to their respective business environments. They propose international intellectual property "harmonization" - a process through which the developing world upgrades protection and enforcement of intellectual property to levels seen in the developed world, if not further.

A Brief Background On The Challenges Facing China And India

China's spectacular rise over the past three decades has been thanks, in large part, to good infrastructure and low-cost labor. But to continue its meteoric climb, China must make a sustained commitment to developing as a knowledge economy - one that effectively harnesses and uses new and existing knowledge to improve productivity and increase overall welfare. Right now, the service sector is very underdeveloped in China for a country of its per capita income; and although China is now the third largest spender in absolute R&D, productivity is low and regional inequalities are stark. China's leaders must take a multipronged approach to development by: promoting competition; upgrading education and learning; exploiting global knowledge; diffusing new technologies; supporting small and medium enterprises; and establishing a viable social security system.

Although China receives much of the media attention, India, too, has enjoyed historic success over the past couple decades. India's unique characteristics - skilled, English-speaking knowledge workers with diaspora linkage, free market institutions, a well-developed financial sector, and macroeconomic stability - make the knowledge economy an attractive national goal. However, the success stories of Indian IT firms betray the significant challenges facing India. India needs to strengthen the institutions supporting an efficient innovation system. It remains a relatively closed economy that receives minimal foreign direct investment (between 2003 and 2004, India received only $4.26 billion, compared to $53.5 billion in China) (Dahlman 2005). Further, it currently devotes little GDP to R&D, and private sector involvement is crowded out by government intervention. Finally, India must continue to develop a broad base of educated and skilled workers.

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Other posts in this series:

• Do China And India Really Want Stronger Intellectual Property?
• A Brief History Of Intellectual Property In China And India
• Why Might China And India Want To Strengthen National Intellectual Property Policy?
• Why Increased IP In China And India Is Likely To Disproportionately Benefit The Developed World
• In China And India, Stronger Intellectual Property Is Unnecessary
• There Is No Harmony In A Patent Thicket
• The Way Forward On Intellectual Property For China And India

Kevin Donovan is an expert at the Insight Community. To get insight and analysis from Kevin Donovan and other experts on challenges your company faces, click here.

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Rep. Wexler And The Lies Of The Copyright Industry

from the time-to-do-some-education dept

Earlier this week, CISAC, a copyright collection society held its "World Copyright Summit," which was effectively a gathering of groups of collections societies and copyright holders who want to strengthen copyright at every turn, so that they can collect more cash -- without ever needing to actually give people a reason to buy. IP Watch has a good summary of the event, where you see it was basically a bunch of people trying to figure out how to have governments around the world force people to hand money over to them. As per usual, the only voice of reason appears to have been Gary Shapiro, who tried to tell the assembled folks that their strategy to date has been a disaster, and they need to understand the differences between "property" and "copyright." In response -- the audience groaned. It would appear his message did not get across.

That said, I wanted to respond to two of our elected officials who both spoke at the event and who said somethings that are quite questionable. Rep. Robert Wexler gave a troubling speech in which he claimed that those who look to protect consumer rights, and question the value of stronger copyright are "lying" and need to be dealt with. Senator Orrin Hatch -- who once suggested remotely destroying the computers of anyone suspected of copyright infringement -- gave another misguided and misinformed talk. Both deserve a response. Let's start with some excerpts from Wexler's talk -- and I'll cover Hatch's in a separate post:

In the public debate, outside Washington and Brussels -- and beyond trade journals and economic reports, most people, first, would not be able to describe what intellectual property is. Second, too many do not see digital piracy -- for example -- as the serious theft that we here in this room know it to be.

These regrettable opinions from the public at large are being harnessed by a ground swell of anti-intellectual property sentiment from the so called 'Napster generation,' which has come of age in a digital file-sharing era

Notice that he immediately goes with the demonization effort, rather than understanding the actual issues. He sets it up that people don't understand intellectual property, rather than that they may have a legitimate beef with what current intellectual property laws have created. He doesn't even consider the idea that many people do have tremendous understanding of intellectual property issues and have found them to be troublesome. Instead, he brushes it off as being the "Napster generation." Finally, he shows that he, himself, does not understand intellectual property (or the law!) in calling it "theft." Rep. Wexler should (as a lawyer and a Congressional Representative) be familiar with the difference between theft and infringement. That he is not is troubling.

Two years ago, as Chair of the Caucus, I sent a letter to my colleagues in the House of Representatives focusing on some of the major problems and challenges we face on intellectual property issues around the globe.

In a tongue and cheek manner, I used the genuine formation of the "Pirate Political Party" in Sweden as an abstract way to point out how silly and extreme those on the other side of this debate had become. Evidently, I was quite wrong about the extreme part.

As nearly everyone in this room knows, this week that same "Pirate Political Party" won a seat in the EU parliament. It won 7.1 % of the total vote in Sweden, and even more shockingly, it had the HIGHEST percentage of 18-25 year-old voters. That statistic should alarm all of us in this room who care about intellectual property law.

First of all, rather than mocking The Pirate Party, perhaps Rep. Wexler should have taken the time to actually understand its arguments. It is a party that is focused on important civil rights issues -- many of which Wexler appears to support.

The fact that younger people came out to vote in such large numbers is significant because we know that getting someone to the poll the FIRST time is the hardest part.

Those young voters are now much more likely to vote in the next election -- and the election after that. Soon, those 18-25 year olds will be home owners, and business owners and employees of major companies.

So doesn't it make sense to pay attention to their concerns and actually understand them before brushing them off?

First and foremost, those of us who understand the importance of intellectual property law have failed to do the job in educating others toward our point of view. Artists, creators, governments, and industry must join together to spread this message.

The truth is that we have a great story to tell and we must tell it better.

Our collective job is to raise awareness of the potential of intellectual property to contribute to the social, cultural and economic advancement of countries and individuals throughout the world.

We must send an unequivocal message that the theft of intellectual property -- whether the corporate piracy of software, organized crime manufacturing of optical disks, or personal Internet downloading -- will not be tolerated.

Does anyone else find it ironic that it's the so-called "creative class" which copyright supporters insist are enabled by copyright supposedly have not been able to tell this "great story?" Perhaps the problem is that there is no great story to tell. Perhaps the problem is that more and more people are recognizing that the "great story" is one that suppresses the rights of every day users, stifles innovation, holds back progress and stamps on our rights of free speech and communication? Has it occurred to Wexler that for the past decade, the industry has been telling this story over and over and over again -- and every time they do, more and more people realize that it doesn't add up?

We are facing two significant problems simultaneously. First, our voices are getting increasingly lost in a sea of misinformation from the anti-intellectual property community. And second, our opponents don't necessarily have to play by the rules.

The anti-intellectual property advocates are free to make simple arguments that often resonate with an audience because they are not based in "facts" or "legal rights."

First, it's rather demeaning to refer to those who believe in actually making sure that intellectual property laws live up to the values put forth by the Constitution ("promoting the progress...") are necessarily "anti-intellectual property rights." Folks like William Patry, James Boyle and Larry Lessig, I think, would all take significant exception to the idea that the ideas they put forth are "anti-intellectual property" and/or not based in "facts" or "legal rights." Rep. Wexler, have you read any of their writings?

And if we're talking about making simple arguments that resonate with an audience because they are not based on facts or legal rights, shouldn't we start with calling copyright infringement "theft"?

Perhaps the real problem is that the arguments put forth by these scholars actually is both based in facts and legal rights, and those facts and legal rights are compelling because they're true.

I found this out on a personal level, when I was in Congress during the original file-sharing debate about Napster. I remember unveiling a strongly worded statement against Napster and a defense of our intellectual property legal regime. I thought I sounded pretty good. I knew I wouldn't be popular with high school and college students in my district. But I was shocked when my father called me and said I sounded like I was on the wrong side of the issue. I knew if I couldn't even convince my own father -- that we had a big problem.

Or, if you couldn't convince your father, perhaps it suggested that you hadn't truly understood the issue and had made an argument that was poorly reasoned. Perhaps the problem wasn't with your father's views or the views of the students in your district -- but with your argument?

Julian Sanchez from CATO has discussed this exact problem, which he calls a "one-way hash" where "for every confused or muddled claim, it would take about a dozen paragraphs of explication to make clear to someone not intimately familiar with [the subject] what's wrong with it."

So, what a blogger in Sweden writes in a few minutes would take hours or days for the copyright community to answer in an appropriate factual response. It takes much longer to argue using facts and precedent than it does to say anything you want because it sounds plausible -- just like it takes far longer to make a movie than it does to steal it.

This is an odd statement for a variety of reasons. Amusingly, of course, it's Julian Sanchez (a sometimes contributor to this very site) who did an amazing job digging deep into research to discover that it's the copyright holders who have been flat out lying about the impact of "piracy" using entirely made up numbers. He, in fact, took the "confused or muddled claims" of Wexler and the entertainment industry, and used about a dozen paragraphs of explication to make it clear to Wexler and others, what's wrong with his very argument.

So what a politician in Washington says in a few minutes took hours or days from the consumers rights community to answer in an appropriate factual response. It takes much longer to argue using facts and precedent than it does to say anything you want because it sounds plausible.

Right, Rep. Wexler?

And, yet, Wexler is simply wrong here as well. Because Sanchez's well, researched, detailed analysis of the lies the copyright industry and politicians tell the public, did get the message out. Because those of us who believe in basing our opinions on factual information have no problem taking the time to read such arguments and understanding them. It's a shame you chose not to.

Even worse, the less someone knows about the subject, the more likely they are to be swayed by these empty arguments -- and the more likely they are to be convinced that they are right. And none of this is going away.

Perhaps we travel in different circles, but I have found the exact opposite to be true. Most people, having been taught from a young age, the "wonders" of intellectual property as a driving force to our economy, have an instinctual, inherent belief that more and stronger IP laws must be a good thing. I know I certainly felt that way for a long time. It was only as I was exposed to more facts, more details and more evidence that I began to realize just how troubling it is to create such intellectual monopolies, in an effort to create artificial scarcity, to lock up ideas and expression -- all to allow profit over freedom of expression. It's the people who spend more time trying to understand these issues that are so troubled by them. It's the people who read and think through these ideas on a daily basis who are so troubled by what you are suggesting. Rather than dismissing us all as know-nothings who haven't considered these ideas, why not try talking to some of us?

For example, a recent UN-sponsored internet governance forum in India brought together various international leaders to discuss the many global issues related to the Internet. This is an important topic, which should have rightfully generated a tangential interest in related intellectual property issues. However, at almost every single panel and discussion there was a significant intellectual property component. And the opinions expressed about intellectual property rights were largely unfavorable. So what we ended up with was a UN-sponsored event educating an international government audience about how strong intellectual property protection is a hindrance to the developing world.

This message is particularly frustrating for me, as I am sure to those in this room, because I believe so strongly that vibrant intellectual property law is a KEY to economic development in these same developing countries.

Perhaps the issue is that the folks talking about the problems of IP in the developing world had actually read the research that showed how damaging IP rights are in the developing world. Perhaps the issue was that they had bothered to understand the details and the facts, and didn't just go on the "strong belief" you seem to have, that is not backed up by facts.

Rep. Wexler, in the next few weeks, we are going to be running a detailed series on the question of IP in the developing world. I would recommend taking the time to read it.

The creativity and innovation that have transformed the United States and enhanced our standard of living should stand as MODELS for nations still in transition to healthy and resilient modern economies. Everyone here knows that intellectual property is the backbone of global economic competitiveness.

Actually, you should revisit what "everyone knows" because the actual research suggests something quite different. Especially in the copyright space, it was the lack of copyright protection that helped grow many of our creative industries when we were a developing country. It was our lack of copyright protection on foreign works that helped spread those books and ideas and helped us grow. It was the fact that Hollywood hid from Thomas Edison's intellectual property claims that allowed them to grow and thrive. It was Walt Disney's copying of the copyrighted film Steamboat Bill that kicked off the Disney empire.

It was only after these industries were built and established that they suddenly called out to the gov't for greater protection against new industries and new upstarts. The Copyright Act of 1909, which was a massive change in copyright law was driven, in large part, due to the supposed "threat" of the player piano. For the past hundred years, all we have seen is the growth and strengthening of copyright laws not as the backbone of our economy and global competitiveness, but because those industries did not want to compete against upstarts and innovations from around the globe.

Almost three quarters of real business value in the US is intangible. The most recent report found that the total copyright industry contributed $1.38 trillion to the US economy or 11.12 percent of the Gross Domestic Product. In 2005, the total copyright industry employed 11.3 million workers in the US or 8.5 percent of the total workforce. The licensing of U.S. patents contributed an additional $150 billion according to KPMG, and that number is growing.

There are millions of jobs created by the U.S. copyright industries -- and these jobs are more important than ever based on our economic crisis. With American, and international, businesses in such dire straights, the value of innovation of these businesses is even more important than ever. And while our overall economy has contracted, the innovation industries continue to grow both in American and internationally.

So why is this not a home run?

Because most people realize those stats are bogus. They realize that they are lies and not based on fact, but are spoken to an appreciative audience because they "sound plausible." The truth is much different, however. The jobs and the economic output are not due to copyright. They may be protected by copyright, but you and many others make the false assumption that those jobs and that content disappears in the absence of copyright. You make the false assumption that there aren't other business models that work much better and which help grow the economy even more, without relying on copyright.

My job for example is likely one of those many millions that are included as being within "the copyright industry." Yet, I reject that claim. I have built a company and a business model that, despite being in the falsely named "copyright industry" does not rely on copyright. The numbers you cite are bogus for the very reason that it assumes that those jobs don't exist absent copyright laws. That is simply not true. Did removing the sugar monopoly mean that no one made money in sugar any more?

The Office of the U.S. Trade Representative cited 50 countries, even key allies, such as Canada and India, for failure to adequately protect U.S. intellectual property rights. A study by the Business Software Alliance showed that software piracy alone amounted to $53 billion in losses in 2008. Intellectual property theft isn't just software and movies anymore either. It is everything from copies of machine tools and counterfeit car parts to knock offs of golf clubs, designer handbags, watches and jewelry.

The BSA's study has been debunked left and right for years. Its claims of "losses" are laughable to anyone who looked at the "facts" rather than at the lies that are written out quickly because they "sound plausible." For someone who insists on not being misled by such lies, you seem to repeat them quite often yourself. We've done a detailed explanation of the mistakes in the BSA's analysis. Perhaps the research and the facts that went into that were too troublesome for you to read over in those many paragraphs, when you could just accept their quick and laughable claims because they "seemed plausible" to you?

Those of us in this room know how intellectual property can bring us together as you create the very technologies that speed communications and make physical borders obsolete. Let us capture and utilize the spirit of international reconciliation that will be fostered over the next four (or eight) years as impetus for us as an international intellectual property community to come together and work collaboratively.

Which "technologies" exactly are you talking about? The MP3 player which the folks in that room sought to have outlawed? The VCR which they called "the Boston Strangler to the movie industry"? The internet, which they're now looking to hamper with new laws and limitations? The player piano? The radio? The television? These are all new technologies that the "copyright industry" freaked out about when they first came about.

However, we must recognize that punitive measures and enforcement-focused outreach alone are doomed to failure in this digital age. It is the battle of message that we must win first and foremost. We can and we will succeed in this effort, but our tactics and messages must improve.

Yes. I agree. Your tactics and message must improve. Because based on this, you are spouting lies and misleading statements without bothering to understand the facts or the evidence. That won't convince anyone.

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