Here are the slides for an upcoming talk on standard setting after Rambus, Broadcom (3rd. Cir.), Qualcomm (Fed. Cir.), and N-Data at the Advanced Patent Law Institute Conference in Palo Alto. Drop me a note if you are attending and would like me to address any other topics (offline, probably, the slot is only for 30 minutes).
Here are the slides from my talk at the PLI seminar Understanding the IP License 2009 in Chicago. This was a fun event with a great crowd. Thanks to everyone for making this such a rewarding trip!
This great feature by the Canadian Broadcasting Corporation examines the (many) apparent and (few, but serious) real tensions between creating a commons of publicly available works and rewarding artists and how copyrights and patents have morphed from a necessary evil (circa 1787) to “tangible property plus.” Happy Halloween!
In its decision in In re Cipro, the Federal Circuit presents us with what John Ralston Saul calls the “hypnotic clarity of false choices.” Either any “analysis of patent validity is [in]appropriate in the absence of fraud or sham litigation.” Or we have to embark on some form of probabilistic ex ante analysis of patent claims every time a patent holder with market power wants to exclude a competing infringer. That dichotomy makes the preemption theory, i.e., no antitrust claim within the zone of exclusion, unless fraud/sham, more plausible than it is. Or, at least, it makes it look principled and less messy. But antitrust deals with quantitative problems all the time, in fact, the shift from per se categories to rule of reason concepts as the default reflects the willingness of courts to deal with complexity, context, and shades of gray. Consider the general evolution of the rule of reason from a muddled, unweighted multi-factor test in Chicago Board of Trade to a mixture of procedural and substantive criteria, aimed at sorting cases into buckets of (1) lawfulness (e.g., no market power), (2) illegality (e.g., no rebuttal to a plausible theory of harm) and (3) those in which a true balancing of the positive and negative effects cannot be avoided, using the minimum amount of information required to make each such choice. In practice, (1) and (2) have become much more significant than (3). So why is it that we approach the issue of patent validity in the context of an antitrust claim as if the only choice was between patent formalism on the one hand and the IP equivalent of Chicago Board of Trade on the other? A more fruitful inquiry would be one into identifying easily observable proxies for validity and invalidity the presence (or absence) of which would then shift the burdens of persuasion. For example, a successful domestic defense of the validity of the patent in question is certainly a reasonable proxy for validity, raising the bar for those calling the “zone of exclusion” shield in question. Depending on substantive patent standards, a successful defense of the patent abroad may also serve as a proxy for validity. Conversely, reverse payments that greatly exceed the expected profits of the generic challenger may justify a higher burden of persuasion to be placed on the defendant. As always in a rule of reason inquiry, context matters. But to retreat into formalism just because in some sub-set of cases an antitrust trial will have to include a full-fledged patent trial seems unwarranted.
Check out this great tool to determine whether a work is in the public domain. The problem (not with the tool, but with the law) is the the correct answer in most cases is “maybe.” This comes in the wake of frustrating news from Europe re retroactive extension of copyrights.
A few days ago, another lawsuit was filed against Apple for maintaining a monopoly in the digital music market (via slashdot). According to Information Week:
The complaint against Apple claims that the company controls 75% of the online video market, 83% of the online music market, more than 90% of the hard-drive based music player market, and 70% of the Flash-based music player market.…
The complaint takes issue with Apple’s refusal to support the Windows Media Audio format. “Apple’s iPod is alone among mass-market Digital Music Players in not supporting the WMA format,” it states, noting that America Online, Wal-Mart, Napster, MusicMatch, Best Buy, Yahoo Music, FYE Download Zone, and Virgin Digital all support protected WMA files.
This is based on the proposition that music companies “are generally unwilling to license their music for online sale except in protected formats.” Such assertions look increasingly tenuous as unprotected music becomes more widely available through legitimate channels. Amazon.com, for example, claims to offer “Earth’s biggest selection of a la carte DRM-free MP3 music downloads with more than 2.9 million songs from over 33,000 record labels.” A week ago, Amazon said that Warner Music Group would make its artists’ songs available in the unprotected MP3 format. EMI last year also began offering unprotected music online. And that’s to say nothing of Web sites like Amie Street that have been offering unprotected music from independent artists for even longer.
Apple, for its part, might reasonably claim it doesn’t want to license WMA from Microsoft, a cost the complaint speculates is unlikely to exceed $800,000, or 3 cents per iPod sold in 2005.
But the complaint goes beyond software licensing politics and charges Apple with deliberately designing its iPod hardware to be incompatible with WMA. One of the third-party components in iPods, the Portal Player System-On-A-Chip, supports WMA, according to the complaint. “Apple, however, deliberately designed the iPod’s software so that it would only play a single protected digital format, Apple’s FairPlay-modified AAC format,” the complaint states. “Deliberately disabling a desirable feature of a computer product is known as ‘crippling’ a product, and software that does this is known as ‘crippleware.’ “
More at The Unofficial Apple Weblog (“Here we go again”), MacUser (”People never get tired of suing Apple”) and Apple Unvarnished (”The lawsuit heads off into ridiculousness …“).
A while ago we discussed Radiohead’s decision to sell its new album on a “pay us what you think it’s worth” basis. Today’s NYT has a nice article on the band and the album release. With respect to the donationware pricing, Jon Pareles reports:
The band and its managers are not releasing the download’s sales figures or average price, and may never do so. “It’s our linen,” Mr. Hufford said. “We don’t want to wash it in public.” A statement from the band rejected estimates by the online survey company ComScore that during October about three-fifths of worldwide downloaders took the album free, while the rest paid an average of $6. Factoring in free downloads, ComScore said the average price per download was $2.26. But it did not specify a total number of downloads, saying only that a “significant percentage” of the 1.2 million people who visited the Radiohead Web site, inrainbows.com, in October downloaded the album. Under a typical recording contract, a band receives royalties of about 15 percent of an album’s wholesale price after expenses are recovered. Without middlemen, and with zero material costs for a download, $2.26 per album would work out to Radiohead’s advantage — not to mention the worldwide publicity.As a general matter, the tradeoff here is one between royalty-free dissemination and obscurity.
Technorati Tags: music, radiohead, law & economics
Joshua Spivak posted a nice review of Bruce Abramson’s The Secret Circuit over at the The San Francisco Chronicle.
In “The Secret Circuit: The Little-Known Court Where the Rules of the Information Age Unfold,” Bruce Abramson, author of “Digital Phoenix,” a study of the information economy’s collapse and revitalization, pulls back the curtain of American legal and economic policy to provide an engaging discussion of the recent developments and debates that have led to the creation of the country’s strong patent system. Focusing on the relatively obscure U.S. Court of Appeals for the Federal Circuit in Washington, Abramson provides an excellent discussion of how and why America’s politicians decided to strengthen patent protection, what this new arrangement meant for the American economy and whether further reforms need to be undertaken. Though the end of the book gets a little lost in the minutiae of the circuit court’s non-intellectual property caseload, the overall work is sound, providing a great examination of an important engine for America’s economic growth.
Here are the slides for the October 29, 2007 class on the anatomy of a license agreement and the “antitrust moments,” in negotiating a license agreement.
Here is an interesting presentation by Nicolas Petit on the VirginMesa case. Virgin claimed that Apple was abusing a dominant position by refusing to license its FairPlay technology to Virgin. Apple is vertically integrated with the iTunes store upstream and the iPod downstream. The two are connected via FairPlay DRM. Virgin is present only at the upstream level and complains that without a FairPlay license its customers cannot play Virgin music files on their iPods. That claim, of course, is almost comical, and the French Competition Council rightly dismissed it. The reason that Virgin’s files don’t play on the iPod is that Virgin’s DRM is incompatible with the iPod, not that the iPod uses FairPlay to tether songs purchased from the iTunes music store to the iPod. The iTunes store-iPod integration is by no means airtight, if anything, it is “one way,” in the sense that (most) iTunes store files only play on iPods, not “two way,” in the sense that iPods only play iTunes music store files. And even the one-way integration is rather loose. Any iTunes file can (in descending order of legality and ascending order of convenience) be burnt to CD, audio ripped, or stripped of DRM entirely. No one keeps Virgin from selling music in mp3 format, which plays just fine on the iPod. And, hey, it’s good karma, too.
These slides discuss two of the most common responses to the “patent thicket” problem, cross-licenses and patent pools. As always, comments are welcome.
If economic growth through innovation is the policy goal underwriting both the IP laws and (at least parts of) the antitrust laws, then the question arises whether we are better off with “competition only” policies or with a mixture of “competition plus IP protection” policies. In this class, we explore the arguments of the more radical critics of intellectual property. Accordingly, we ask the question: Why have intellectual property laws at all?
Here are my slides from a recent PLI Seminar on Antitrust Issues in Licensing. Enjoy!
Technorati Tags: antitrust, IP licensing
I very much liked Cory Doctorow’s keynote address at this year’s OSCON on the normative aspects of our technological choices. Open societies need open and autonomy-promoting infrastructres: economic, political, legal, and technological. Design choices are rarely value neutral, indeed, there is a ghost in every machine. As we noted earlier on this blog (in broadly Rawlsian terms) in the context of net neutrality:
Net neutrality is first and foremost a question about the background institutions of a just society. The end-to-end Internet architecture is about to put an end to one-way sender-recipient communication that has all but destroyed the discursive nature of the political process. Net neutrality is about a basic infrastructure of equality built into the protocols of our communication, providing equal freedoms for all. The Bill of Rights was not about maximizing total welfare. It was — and is — about guaranteeing a fully adequate set of equal political and civil liberties to everyone. Architecture mirrors legal code. We insist on equal access to public spaces, and — despite congestion — we insist on equal access to public roads. (And where we do think about congestion pricing, we engage in a full-blown policy debate, in which economics is one but not the only concern.)
Technorati Tags: policy
Here is the (draft) syllabus for the course on Antitrust and Innovation, which I will teach at the Benjamin N. Cardozo School of Law this fall. While there are many excellent casebooks on antitrust on the one hand and IP on the other, there is precious little teaching material focusing specifically on the antitrust/IP interface. (One notable exception is Gary Myers, The Intersection of Antitrust and Intellectual Property (2007).) In selecting materials for the course, I tried to give roughly equal weight to:
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