The President touted the importance of ownership during this week's Conference on the Economy. The importance of ownership in small businesses and in money were keys to securing the future of the economy. He, and the panelists, failed to mention anything about the ownership of intellectual property, however. Perhaps this subject area did not fit into the agenda, but it seems to me that ownership of intellectual property needs to be an integral part of innovation and productivity. It will be interesting to see if the President's love of people owning something will extend past savings accounts and into intellectual property.

The ruling is a triumph for Google in that it derives as much as 95 percent of its advertising revenue from keyword-triggered ads, which appear next to Web search results. Trademarks play a central role to the sale of such ads because people often use Web search to find products and services with common, trademarked brand names such as Nike or Geico.

The U.S. copyright system, like most, is based on the very notion that the public has an overt interest in protecting intellectual property, and not merely in restricting it. Stated in another way, the public interest in copyright is not limited to the notion of fair use or the public domain, but rather extends to the entire system of copyright. While the public certainly has an interest in securing cheap access to copyrighted materials, society's primary interest is in ensuring the production and distribution of original materials so that there exists something to access.

It is essential that policy makers keep in mind that the copyright system replaced private patronage as the mechanism for permitting creators to live through their craft. By permitting creative genius to be fuelled by market forces, we unleash the cultural power and potential of the public at large, freeing creative impulses from the tyranny of government control and making creative works accessible to the public at large. While the copyright system carries with it the potential for abuse, it remains by far the most powerful tool for fostering creativity and democratizing cultural production and access thereto.

[W]e recognize that the creative process indeed is an evolutionary one, and that present creators draw upon past expression for inspiration. The copyright community relies upon the idea/ expression dichotomy, and the concept of fair use. As a consequence, copyright owners have a greater interest in preserving limitations to copyright protection to permit new forms of expression than do general members of the public. Creators need to stand on the shoulders of giants, right? For Lessig and his allies, fair use is little more than a useful slogan.

The Web uses relatively simple technologies with sufficient scalability, efficiency and utility that they have resulted in a remarkable information space of interrelated resources, growing across languages, cultures and media. This architecture document discusses the core design components of the Web in an effort to preserve these properties of the information space as its technologies evolve. Read the press release, Member testimonials, and visit the TAG home page. (News archive)

"I'm hoping that people who have a lot of experience doing other stuff besides the Web will use it to get up to speed on how to design Web applications," said Dan Connolly, a W3C technical staffer and member of its Technical Architecture Group (TAG), which prepared the architecture document. "If your expertise is in financial transaction processing and you want to hook your thing to the Web, this can tell you everything you absolutely must know."

Users searching with Google will see links in their search results page when there are books relevant to their query. Clicking on a title delivers a Google Print page where users can browse the full text of public domain works and brief excerpts and/or bibliographic data of copyrighted material. Library content will be displayed in keeping with copyright law. For more information and examples, please visit http://print.google.com/googleprint/library.html.

We respect the rights of copyright holders and the tremendous creative effort of authors. Library books that are still in copyright will show up in search results, but users will only see bibliographic information and a few small text snippets until we get permission from publishers to show more.

[T]he tech companies seem to have misunderstood the nature of the fight. They assume it is really about accounting, and that if only they explain often enough that treating options as expenses will not in fact help investors then their opponents will relent.

Sorry, guys. The pro-expense 'em forces do not care about helping investors; they care about discouraging stock options.

In the modern corporation, intangible assets now constitute 70% or so of the value of the company, a shift from 25 years ago, when 75% of the value was in tangible assets. By using options, companies make the creators of these intangible assets into owners, and venture capitalists make the creative classes into partners. Options are a complicated, but quite creative, solution to a number of difficult problems in the valuation of intellect-based assets.

The idea of making the creative classes into owners is not welcomed by old line capitalists, organized labor, public employees, and other power centers. Hence the fight to discourage options.

If you think this view is paranoid, read the whole argument, which appeared in the Milken Institute Review (the deep link is here), along with an earlier background paper.

When the socialist Front Populaire came into power in France in 1936, Leon Blum asked distinguished economist Alfred Sauvy to be part of his cabinet. The latter expressed doubts about the future prime minister's grasp of economics, and received this irascible reply: "If I knew anything about economics, would I be a socialist?"

Many decades later, the consequences of socialists' lack of knowledge of economics are all too real. A case in point: the European pharmaceutical industry. It is a shell of its former self. Far fewer life-saving drugs get developed than would otherwise be the case.

The biggest culprits? Price controls and drug reimportation. If the price of something is below the cost of producing it, manufacturers cannot make a profit. Without profits, they go out of business.

The Motion Picture Association of America, Inc. today announced that its member companies have filed suit against individuals operating servers that index millions of illegal copies of movies and TV programs used on computer networks such as BitTorrent. The MPAA and its members also are working closely with law enforcement and civil authorities around the world to shut down illegal servers on eDonkey and DirectConnect networks.

“The operators of these servers exercise total control over which files are included on their servers and even determine if some kinds of files aren’t allowed,” said John Malcolm, the MPAA’s Senior Vice President and Director of Worldwide Anti-Piracy Operations. “For instance, some operators won’t post pornography on their systems, but they have no compunction allowing illegal files of copyrighted movies and TV shows to flow through their servers. We are moving to stop that. The message today is clear: if you illegally trade movies online, we can find you and we will hold you accountable.”

The study of telecom reform the US Chamber of Commerce delivered in October, with me among the authors, estimated that well-defined property rights and other reforms could trigger $58 billion of capital spending and over half a trillion dollars of GDP over 5 years, cut telecom per-minute charges by half, and permanently increase productivity by providing small businesses with the high-speed telecom services they need to compete with other companies in China, Korea, and India that already have it. (emphasis added)

I doubt that any of the folks at DARPA who worked on TCP/IP had any expectation that they would make a difference, but with online shopping picking up some of the slack, and in the process relieving the crowds, congestion, and frustration associated with traditional retail Christmases, old-fashioned Christmas shopping might actually become pleasant again, in a way it hasn't been in decades -- all thanks to the Internet.

Now there's a Christmas miracle. Brought to you not by elves, but by the people responsible for most of the miracles in our lives: Engineers!

Smaller tech firms say the act, designed to prevent accounting fraud, creates busywork that drains resources — and shareholders' pockets. "All of this is really just paper-pushing," says David Anastasi, CEO of business software maker Captaris. "I haven't met one investor that thinks it's a good thing."

In a quick check of some . . . small-cap companies, I found that costs are indeed burdensome: Saucony . . . had $415,000 in Sarbanes-Oxley expenses, with revenues of $42.4 million for the quarter; Hooker Furniture . . . said the 18% increase in its SG&A expenses was primarily due to the new compliance costs; eSpeed . . . reported that on quarterly revenues of $39.8 million, it incurred Sarbanes-Oxley expenses of $700,000 -- a 70% increase over 2003 attributed solely to compliance! . . . .

Not everyone is suffering from the onerous requirements. . . . Big Four accounting giant Deloitte Touche reported revenues of $16.4 billion, a 9% increase over last year, fueled in part by the compliance business the firm reeled in as a result of the law.

As Will Rogers once quipped, "With Congress, every time they make a joke it's a law, and every time they make a law it's a joke."

[A] fundamental problem with mainstream economics is that it is worthless to try analyzing markets in terms of a static equilibrium in which the competitive process has already done its work. . . . [Other] models are more realistic, so far as they get away from the unlikely assumptions of perfect competition. But they fail because they are still concerned with the analysis of equilibrium states rather than the process by which they emerge.

DCIA Members obey copyright laws and oppose infringement, and respect and support the Department of Justice in its enforcement role. We commend David Israelite and his team for the enormous effort evidenced by their recent IP report, many recommendations of which we support with respect to serious organized piracy for criminally commercial purposes, where economic and, in some cases, other harms have been documented, and where there is an absence of non-infringing activity. We also appreciate the perspective expressed by Assistant Attorney General Hewitt Pate in Aspen at last summer’s summit meeting.

[T]he chronic misspellings, cheap materials and smudgy ink that mark the knock-offs commonly found in Asia are the least of the problem. Mr. Clinton's carefully chosen words have been murdered by additions and deletions wholly out of keeping with the original. Copies available in China have Mr. Clinton serially quoting Mao and extolling the feng shui of his hometown in Arkansas.

In reality, despite overwhelming support in polls, importation is a terrible idea. Drug costs are lower in other countries because they impose price controls, so importation amounts to imposing price controls in the United States.

Foreign countries contribute little or nothing to the huge costs of researching new drugs — estimated to be $800 million per product — and they produce few medical breakthroughs. Price controls would slow down medical progress here, too.

And Canada, the first country of choice for importation, can’t handle a major upsurge in demand from the United States. Its drug market is only 10 percent the size of ours, so prices there would skyrocket if millions of Americans started buying. Canada’s health minister has said Canada doesn’t want to be America’s drugstore.

So, if mass imports are to be permitted, they would have to cover Europe and Latin America as sources. The U.S. Food and Drug Administration conceivably could monitor warehouses in a few nations, but the cost of doing so all over the world would be prohibitive. Adulterated and fake products — or poisons planted by terrorists — would inevitably find their way into the United States.

Regardless of logic or danger, however, there’s a tidal wave of popular support for drug importation, driven partly by high U.S. drug prices and falling respect for the drug industry.

One could argue that the system should deny access here too, since the file is probably copyrighted by somebody, and ignorance of the copyright owner's identity is no excuse for infringement. But what if the system allows the distribution of unrecognized files, arguing that the copyright owner is free to register the file with Snocap if he really wants to be paid? Is this enough to shield the P2P operator from liability if the file is infringing? This might make an interesting moot-court case.

Approximately 114 million American adults (57%) engage in artistic activity (play musical instruments; sing; write; draw; paint; dance; act; make films; etc.). Of these, 32 million consider themselves "artists," and 10 million of these make some money from art.

84% of all artists and 95% of paid artists use computers, versus 72% of all adults. 16% of artists have websites, and over half use them to provide free samples.

Only 42% of artists (and only 45% of musicians) are "very" or "somewhat" concerned about the issue of file-sharing on the Internet. So far, the impact of the Internet has not been great; only 6% of online artists report a big impact of the Internet on their ability to protect work, and another 19% reported some effect.

Artists are as confused as everyone else over the proper limits of fair use, the legitimacy of downloading for personal use, the proper scope of copyright, and other thorny issues.

The clash over new technology grows out of a long history of disputes between business and artists about the proper balance between creators, the people who pay for and market creations, and consumers who want access to large catalogs of digital musical files . . . .

As we have explained, "[t]he economic philosophy behind the [Copyright] [C]lause . . . is the conviction that encouragement of individual effort by personal gain is the best way to advance the public welfare, through the talents of authors and inventors." Mazer v. Stein, 347 U.S. 201, 219 (1954). Accordingly, "copyright law celebrates the profit motive, recognizing that the incentive to profit from the exploitation of copyrights will redound to the public benefit by resulting in the proliferation of knowledge. . . . The profit motive is the engine that ensures the progress of science." American Geophysical Union v. Texaco Inc., 802 F. Supp. 1, 27 (SDNY 1992), affd 60 F.2d 913 (CA2 1994). Rewarding authors for their creative labor and "promoting . . . Progress" are thus complementary; as James Madison observed, in copyright "[t]he public good fully coincides . . . with the claims of individuals." The Federalist, No. 43, p. 272 (C. Rossiter ed., 1961). [Brackets, ellipses, and emphasis in Eldred.]

The inspiration for Unity actually came from an ongoing conversation over at another Crooked Timber post. It’s a simple idea: Unity is a completely open-source blog. Anybody may upload posts and articles… and anybody may alter or erase them. It’s a place where you can punish deliberate falsehood or disrespect by the simple expedient of erasing it. The playing field is as level as it could possibly be. Of course, right now it’s also a very empty playing field. :) I’d appreciate your support.
[emphasis added]

"The CDDL is not expected to be compatible with the GPL, since it contains requirements that are not in the GPL," Claire Giordano of Sun's CDDL team said in its submission. "Thus, it is likely that files released under the CDDL will not be able to be combined with files released under the GPL to create a larger program."

powerful techniques [to] create a breadth and depth of emotion in a game, and induce a player to identify with the role he or she is playing. . . . The over 300 distinct Emotioneering [TM] techniques in this book include (to name but a few): ways to give emotional depth to an NPC (non-player character), even if the NPC has just one line of dialogue; techniques to bond a player to a game's NPCs; and techniques to transform a game into an intense emotional journey.

Folks, take these ramblings as the virtually unedited observations from each day of the Kazaa trial. At best, it’s anti journalism. It’s everything you won’t read in the serious press. At worst, it’s undisciplined opinion, gossip, and just a little naughty.

Fundamental values are indeed at stake in the construction of cyberspace, but those values can best be protected by allowing the widest possible scope for uncoordinated and uncoerced individual choice among different values and among different embodiments of those values. We don't need "a plan" but a multitude of plans from among which individuals can choose, and "the market," and not action by a global collective, is most likely to bring that plenitude to us.

Certainly there is a place for some commons within our society, but that society should be structured and governed by property rights. The commons crowd seems to reverse that equation by suggesting we need to carve out a little room for property rights in a world of collective rule. And that sort of thinking is downright dangerous, for if we allow ourselves to believe that collectivism is the central organizing principle of cyberspace, we are doomed to repeat the mistakes of the past. Treating the Internet, broadband networks, spectrum, and IP like socialized property will not lead to a cyber-nirvana but to a scarcity of those very things.

Are markets and property rights really antithetical to openness, ideas, expression, knowledge, culture, diversity, and democracy? History shows that the exact opposite is the case. Markets and property rights have served as the foundation for those virtues. Indeed, and it is still the case today, cultures and nations that refuse to allow markets and property rights to develop have a lamentable track record on all of those fronts. History has shown, again and again, that the absence of property rights and free exchange leads to economic ruin, cultural stagnation, and political tyranny. It seems that the seductive charm of "the commons" is once again leading a large number of people to think a world without property rights is not only possible, but would somehow bring about a mythical cyber-nirvana.