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Counterfeiting Costs US Businesses $200 Billion Annually


Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course
Posted: August 30, 2010 @ 9:43 pm

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In looking around for something to write I stumbled across a press release from August 10, 2010, issued by Your Baby Can, LLC. This is the company that advertises almost non-stop on Sirius/XM every morning, at least on ESPN Radio, claiming that all you have to do is put your children in front of the video and they miraculously learn to read. I have often joked about the commercial and how unrealistic and almost comical it seems, but when I noticed a copyright/counterfeiting angle I was immediately intrigued.

The press release explained that Your Baby Can, LLC was awarded another judgment against an Internet counterfeiter, this time in the amount of $155,600. On July 17, 2010 Judge Valerie Baker Fairbank signed a judgment in favor of Your Baby Can, LLC, against Ms. Judy Chan for that amount. Judy Chan was found guilty of selling counterfeits of Your Baby Can Read! on eBay under the seller ID “fine_treasure4u.” So the plot thickens.

In the past the PLI Patent Bar Review Course, which I teach for and enjoys the reputation as the Number 1 patent bar review course in the nation, has had counterfeiting problems with courses, or portions of courses, being copied and sold on eBay.  It would seem that eBay specifically and the Internet generally are a counterfeiter’s dream come true.



As Your Baby Can explains, counterfeit products typically leave consumers quite disappointed because they are inferior. In fact, according to Your Baby Can, hundreds of unhappy customers seek help from Your Baby Can to get refunds on inferior products purchased from counterfeiters. Perhaps these purchasers mistakenly believe they are purchasing authorized products, or are just reaching out for assistance have been scammed. Unfortunately no company can help consumers that are duped by unlawful counterfeiters, so consumers need to be extremely careful when they purchase and they are not purchasing directly from the source. The best way to avoid being scammed into buying counterfeits is by purchasing products only from official websites and distributors.

According to the Your Baby Can press release, counterfeiting costs American businesses an estimated $200 billion a year. This number struck me as exceptionally high, so I did a little digging. The New York Times has recently done a couple stories on counterfeit products, and in one story – Economic Indicator: Even Cheaper Knockoffs – this $200 billion a year figure is used.

It has been pointed out on the Internet in a variety of places that there is little information to back up this figure (see Hey NY Times), and that is indeed true it seems, but hardly surprising. Counterfeiters are criminals and do whatever they can not to get caught. There are a variety of ways to judge the true costs, but unless you could get reliable information on every black-market sale the numbers would and could always be questioned. Obviously, getting criminals to report their crimes is fanciful and ridiculous to the extreme, so quibble with the figures if you will, but who among us really thinks counterfeiting isn’t a huge issue?

As explained by the Organisation for Economic Co-Operation and Development in a draft report: “The overall degree to which products are being counterfeited and pirated is unknown and there do not appear to be any methodologies which could be employed to develop an acceptable overall estimate.”  The OECD draft report goes on to explain that based on best estimates that international trade in counterfeit and pirated goods could well have accounted for up to US$ 200 billion in 2005, but that figure does not tell the entire story. This $200 billion figure does not include counterfeit and pirated products that are produced and consumed domestically, nor does it include the significant volume of pirated digital products distributed via the Internet.



The OECD draft report also explains that the scope of products being counterfeited and pirated is expanding, making a shift from luxury goods to common products.  Given the notoriously low quality of counterfeit products there is a growing health and safety risk associated with substandard counterfeit products.

The International AntiCounterfeiting Coalition Inc., (IACC), which is a Washington, D.C.-based non-profit organization devoted to combating product counterfeiting and piracy, has some extremely eye opening statistics relating to counterfeiting and the cost in terms of jobs.  The IACC claims:

  • Counterfeiting costs U.S. businesses $200 billion to $250 billion annually.
  • Counterfeit merchandise is directly responsible for the loss of more than 750,000 American jobs.
  • Since 1982, the global trade in illegitimate goods has increased from $5.5 billion to approximately $600 billion annually.
  • Approximately 5%-7% of the world trade is in counterfeit goods.
  • U.S. companies suffer $9 billion in trade losses due to international copyright piracy.
  • Counterfeiting poses a threat to global health and safety.

Critics will be quick to point out that the  the IACC is comprised of a cross section of business and industry – from autos, apparel, luxury goods and pharmaceuticals, to food, software and entertainment.  As an non-profit with members from the private sector they may well have an interest in elevating the problem, and perhaps the critics are correct.  Perhaps these numbers are high but surveys carried out in the United States by Gallup indicate that 13-14% of survey respondents personally purchased, copied or downloaded products that they knew or suspected were not genuine in 2004 and 2005. See OECD draft report at section 3.27. So we are fooling ourselves if we are tempted not to believe counterfeiting is a major and growing problem.

While it is clear that counterfeiting costs U.S. businesses many billions of dollars a year and costs the economy many millions of jobs every year, which right about now could be quite helpful to have, perhaps the most alarming thing is the close tie to organized crime. According to the OECD,

There is clear evidence that criminal networks are playing a significant role in counterfeiting and piracy… The high profitability of many counterfeiting and piracy operations and low risk of detection and prosecution have provided an attractive environment for the illegal activities. The networks sometimes resort to extortion and bribery of public officials to facilitate their operations, thereby weakening the effectiveness of public institutions at the expense of society at large.

When the rule of law is compromised and justice is for sale it is hard to look the other way.  Increasingly the realities of justice for sale are making themselves known in the United States as drug lords murder politicians and those who won’t go to work for the cartels.  When public officials are bribed and criminals are given a free reign we all have a lot to worry about, and particularly at a time when our economy can hardly stand any more stress than it already has absorbed.

Counterfeiting is a major crime and innovative companies with real products, like Your Baby Can and the Practising Law Institute and so many others all suffer a little bit of damage.  This toll or tax on creativity and business is unacceptable.  It is a drag on the economy, it prevents job creation and it costs many billions of dollars in lost taxable revenue.

Companies need to enforce their rights as vigorously as possible and show that, at least in the United States, crime does not pay when it comes to unlawfully duplicating copyrighted materials.  That means enforcement actions in Court, vigorous monitoring of online websites, such as eBay, and working with local, state and federal law enforcement where possible.  It also means letting our elected Officials in Washington, DC hear from us and demand more action.

I for one am sick and tired of the government having the solutions to our economic plight sitting right there in front of them and doing nothing.  For crying out loud, pursuing job killing policies is one thing, but can’t we actually work to enforce the laws and do the day to day things that could help business and create a positive job growth climate?  Is that too much to ask for?

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Posted in: Copyright, IP News, IPWatchdog.com Articles, US Economy

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

123 comments
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  1. One problem with the estimates is that it generally assumes that all users would be customers. For certain markets, such as China, this is completely unreasonable given current prices, and it’s not even going to be close to true domestically. With digital media, you have a global market, and it might be more profitable in many cases to sell to Western markets at the prices they will pay and let the developed market pirate than to have a price the whole world is willing to pay. Regional pricing doesn’t work with digital goods because it is a global market, and will only become more and more of one. With physical goods, such as pharmaceuticals, I’ve heard that many companies claim to adjust prices to fit the country’s needs, but I’ve also heard these claims aren’t very accurate as well.

    The ties to organized crime are rather dubious, and appear to pretty much be just an appeal to emotion. A certain percentage of street vendors selling things like fake Rolex watches may fund criminal organizations, but there is much more to infringing goods than that sort, and by no means is the entirety of the counterfeit street goods market even funding any organized crime. For software and other digital media, I’d say most of it is done without little or no profitability, so it’s quite possible the various profits made in the production and distribution of legitimate goods send more money per copy to organized crime. After all, 0.001% of $600 per copy is far more than even an impossible 200% of $0.02 per copy.

    While sometimes the illegal goods are of inferior quality, there are also many occasions where the consumer gets added benefits, particularly with digital goods. Pirated versions of movies generally cut out the anti-piracy ads and pirated media in general is usually without DRM or with a crack for the DRM being easily available, giving users a version that has less hassle. The Microsoft affiliated research on ‘Darknet theory’ provides a pretty good explanation about how DRM can be broken once, and then run everywhere.

    As for the government having solutions, stronger enforcement of copyright would be costly, would likely further impede civil liberties, increase the growing perception that the government is in the pockets of media
    conglomerates, and have little effect in curbing piracy. Lawrence Lessig has even gone so far as to suggest that the current laws being so unreasonable are actually a major driving force behind apathy towards respecting copyright and even abolitionist movements. The derogatory term of ‘pirate’ towards infringer being embraced and romanticized to the point of political parties forming with the name exemplifies that.

  2. Gene,

    Pat Choate’s excellent book “Hot Property” documents the cost of counterfeiting to the US. It also shows that our trading partners have failed to live up to a number of TRIP’s IP provisions and neither the Bush or Obama administration has tried to enforce these provisions.

    The above estimates do not include the cost of stealing patented US technology. An inventor has a right to their invention (US Constitution) and this right is regularly breached because patent laws unlike copyright laws only apply in each individual country.

  3. Gene,

    I suppose you remember the Apple v. Microsoft case? While it is listed as a copyright case, people that I knew who worked for Apple at the time considered Windows to be a counterfeit of the Macintosh OS. For that matter there are people at Microsoft who consider Linux to be a counterfeit of Windows.

    So under the circumstances, I’m somewhat skeptical of the numbers. While numbers don’t lie, liars can figure.

    It all depends on how widely you define the word ‘counterfeit’ – define it widely enough and you get one set of numbers, define it more narrowly and you get another set. If you consider counterfeits to include patent infringing goods, the numbers you mention might be plausible. But is an Android phone really a counterfeit of an IPhone or of a Blackberry? Patent infringement isn’t counterfeiting, just as copyright infringement isn’t, and both are covered by other laws.

    I personally see counterfeiting as a trademark issue. If you make Louis Vutton bags, with the Vutton label, and you aren’t Vutton, you are a cheat. If on the other hand you design a product to fit a certain market, and it resembles another product, but is obviously yours, then you aren’t counterfeiting.

    Wayne

  4. Gene,

    A big issue with this is how do you define ‘counterfeit’? I knew people at Apple, and as far as they were concerned Windows was a counterfeit of MacOS. I know people at Microsoft, and as far as they are concerned Linux is a counterfeit of Windows.

    Depending on how ‘counterfeit’ is defined, the lost sales numbers that you quote may be higher or lower. As Mark Twain is reputed to have said, ‘Figures don’t lie, but liars figure.’

    Wayne

  5. Wayne (aka TMH)-

    Oh how true is that Mark Twain quote!

    I don’t know you are correct (through my own knowledge) but what you say sounds so typical for the tech elites. Typically counterfeit would be used when what is being sold is a replica. I think it is correct to observe that under the trademark laws in the US the term “counterfeit” gets used interchangeably with “knock-off.” So neither of the examples you gave would really be counterfeits, although there could be underlying infringement of various sorts there.

    From my own personal vantage point it seems that counterfeits are most problematic where there is digitization involved, such as with music and software, so they create an exact copy, stamp it and sell it. It is also a problem with tangible goods where inferior products are created to look identical and then the trademark of the company is stamped on it and the goods sold.

    -Gene

  6. Gene,

    Agreed. When someone manufactures and sells knock of DVDs, like what I saw in China, where there were thousands of DVDs in the stores, in what looked like original packaging, that’s counterfeiting.

    On the other hand Peer2Peer file sharing isn’t counterfeiting, because there no expectation that you are getting the real thing. That of course can cause problems for the independents like Tangram Films, who are using The Pirate Bay for distribution (Download and watch Nasty Old People, it’s pretty good).

    As to there not being any methodologies, I’ve heard of a couple studies which came up with different numbers, I’ll see if I can remember where I found them, and post the links.

    Wayne

  7. According to many sources it is also huge in pharmaceuticals. I have read that many drug cartels have switched to making fake pharmaceuticals, because the profits are higher and the risk of getting caught is lower.

  8. Gene,

    Yes, DVD/CD counterfeiting is rife in certain places. You would have freaked if you saw what I saw in China. Another issue is fake Canadian Standard Association marks. All electrical equipment sold in Canada must pass CSA tests, we’ve had a couple of cases recently where sub-standard goods were illegally imported with the mark attached.

    Peer2Peer file sharing on the other hand isn’t counterfeiting, because the user knows they aren’t getting the real thing. Though in some cases they are, for example Tangram Films uploads their movies to The Pirate Bay (And you really should download ‘Nasty Old People’ and watch it, it’s pretty good). The point being, that using The Pirate Bay or Limewire maybe copyright infringement, but it’s not counterfeiting.

    There are some other studies I’ve seen, if I can remember where I found them, I’ll post the links here. Every study comes up with a different set of numbers, due to differing definitions.

    Wayne

  9. @Gene
    Would you consider it counterfeiting if all of the parties know that the item is not legitimate? If you see the primary purpose of trademarks is part of consumer protection, then consumers that are aware that they are not getting the good through legitimate venues are not being fooled and thus not subject to harm by being defrauded.

    I think a large share of the projected losses probably come from things like generic drugs in India that are still covered by patents elsewhere, and trademarks most likely aren’t even an issue. The patients, the doctors, and the pharmacies are probably all well aware that the pill developed by a major pharmaceutical company is not being handled through the proper channels, but the key chemical can be easily reproduced to the same quality as the patent holder and licensees can, so to those consumers, it’s largely irrelevant.

  10. It is no surprise Bobby that through your entire discussion you neglect one basic factor: ownership.

  11. @Blind Dogma
    Trademark, copyright, and patent infringement are not the same as counterfeiting, at least unless you are taking an exceptionally broad definition of counterfeit, and different manifestations of infringement have very different consequences. If you are lumping them all together, making up numbers and crying “MINE MINE MINE!”, you will never have good data, a good argument, or be able to form a good policy to address it.

  12. Trademark, copyright, and patent infringement are not the same as counterfeiting,

    Never said that they were.

    If you are lumping them all together, making up numbers and crying “MINE MINE MINE!”

    At the same time – you do neglect the aspect of ownership in everything that you have said. I was just pointing that out (amazing how often I have to do that with the anti-software patent crowd – which reminds me, I am still waiting for some basic answers from you on the other thread).

  13. @Blind Dogma
    In the US, the rights given are just a means to an end for the public benefit, at least in the case of patent and copyright. You could argue that trademark is different, but even a large share of it’s justification is still based on the public, and this is perhaps even more the case with counterfeiting. I’m not denying that the rights holders legally have these rights, but our policies must be driven by what’s good for the public, not what makes the wealthy remain wealthy.

  14. Bobby,

    You confess your ignorance (and display your agenda): “In the US, the rights given are just a means to an end for the public benefit, at least in the case of patent and copyright” – is just wrong.

    There is a trade between equal powers – a Quid Pro Quo – Once you awaken to your continued blindness to the other side of the equation, your continued failure to properly put forth the needed balanced policy arguments will become apparent to you.

    But please, feel free to take the Fifth on this issue as well.

  15. @Blind Dogma
    No, it’s explicitly a means to an end in our tradition. Congress is granted the power to ‘promote the progress’ (which is where the public benefits) and they are allowed to do it by granting exclusive rights for a limited time (which is the author/inventor benefits). The trade off should be between the freedoms the public enjoys and the greater wealth they can enjoy by temporarily ceding some of these freedoms to authors and inventors as a way to motivate them to produce more works publicly.

  16. At the same time – you do neglect the aspect of ownership in everything that you have said. I was just pointing that out (amazing how often I have to do that with the anti-software patent crowd – which reminds me, I am still waiting for some basic answers from you on the other thread).

    Ah, yes, ownership. An interesting concept. The problem of course being how to define ownership. Consider J.K. Rowling – a couple of years ago she claimed that nothing had influenced her Harry Potter novels, and that she, and she alone owned all of the ideas and plots in them. But when the first one was published, myself, and thousands of others noted the similarities with Tom Brown’s School Days which was published in 1857, and is possibly the first boarding school novel. There are differences of course, Draco Mallfoy is a lot like Harry Flashman, but not the same, in one book the school game is cricket, in the other it’s quidditch.

    So how do you determine who owns an idea? Can someone own an abstract (not physical) construct? For that matter, who owns air?

    Wayne

  17. Bobby,

    I did not misunderstand your position, so saying it again won’t change the fact that you are wrong.

    Instead of being so quick to repeat yourself, think for a second – is there another party that you are forgetting? Just who is it that should be receiving the liberal encouragement? The party you neglect is the creator, the authors and inventors, explicitly called out in the Constitution. To apply your logic, the government should just mandate that all creation belongs to everyone. That is explicitly not our tradition.

  18. @Blind Dogma
    We are not arguing about the mechanisms of copyright. The difference is in the philosophy of what forces need to be balanced. I’m saying that the availability of media to the public and the freedom to enjoy that media are the primary concerns. If the US government creates a machine that costs $5 to build and has output the equivalent of the works and inventions of Goethe, Shakespeare, Mozart, Tesla, etc in any field, then copyright and patents should end then and there under the philosophy I am suggesting. The same would be true if these systems were hypothetically* shown to not produce a significant net difference in production, even if it did still benefit the welfare of authors in a manner unrelated to production. You seem to be at least touching on the old French tradition where authors and inventors have a natural right to their works, which is inappropriate for the US and would likely keep copyright and patents in those scenarios.

    *please don’t take this hypothetical as a claim that this is literally the case, because I know the idea that 18th century psychology on the incredibly complex subject of motivation for creative and innovative thought was significantly flawed would make you go berserk, let alone the idea that significant technological and social changes could greatly impact the efficiency of such a system.

  19. then copyright and patents should end then and there under the philosophy I am suggesting.

    And I thought you were suggesting tradition – now you have changed your tune to your philosophy.

    Amazing how often your tune changes when I point out little things to you.
    Bobby – some sage advice – when you find yourself in a hole – first step is to put down the shovel.

    And you still need to recognize the other side (as I mentioned – the Constitution sure does).

  20. @Blind Dogma
    I’m choosing somewhat different words. The British/US and French traditions have different philosophies that are public centric and artist centric respectively. As for authors and inventors, the benefit the public gets from them in works must outweigh the cost the public pays in freedom. Any rights they are given are a grant, a subsidy, or perhaps even a handout given at the expense of the public.

  21. Bobby,

    You are still focusing your policy on one side.

    When you get to the point of realization that that “expense of the public involves a party other than the public, you will begin to be able to balance your policy positions due to the fact that more than one party is rightfully involved. When you reach this realization point, feel free to go back to your initial posts in this thread and objectively see that my point 10 is valid – you have neglected the factor of ownership in your stated policy positions.

    Of course, I may just be putting words in your mouth (that, or my delicious Kool Aid).

  22. The government only takes from the public, and is acting on behalf of the public because individuals managing this exchange of rights for works would be totally impractical. There is nothing that the government can take from the authors and inventors in our copyright system, so authors and inventors are similar to a set of contractors doing work for the public with the compensation being in rights instead of money. When the government hires contractors using public assets, we generally expect them to try to get the most benefit for the least cost. If the government fails to do this and the public finds out, people get rightfully upset. Yes, they have to get a deal that contractors will accept, but they aren’t acting for the contractors.

  23. Your last post in no way accepts the basic legal premise of Quid-Pro-Quo.

    I do recognize that you are trying, just try to incorporate a sense of balance into your policy positions – Policy serves everyone, not one side at the expense of the other.

  24. “Policy serves everyone, not one side at the expense of the other.”
    Authors and inventors have no rights to their published works by default (i.e. before the copyright/patent system gets involved), so there is no expense to them.

  25. Bobby,

    Wrong – on so many levels. Your agenda is clearly blinding you to the basics of intellectual property.

    Let’s take a quick quiz – Copyright inures the moment your expression is captured in a medium, prior to any registration with a government entity – True or False?

  26. Bobby, Quiz #2

    An applicant must prove that he deserves a patent – True or False?

  27. You misunderstand what I mean by ‘before the copyright/patent system gets involved.’ I mean the state that we are in if Congress doesn’t have an active copyright act, not before you register the work. In other words, I’m saying the default state would be if our current copyright and patent acts were nullified, and in that state, an author or inventor has no rights to any published work. Congress doesn’t have to have patents or copyright, they simply have the power to enact them if they choose.

    As for your questions, yes, copyright protects once in a fixed form, although in the US you need to register to get statutory damages, and for most of our history, we didn’t have automatic copyright (Night of the Living Dead for example, fell into the public domain due to clerical error). For your second question, unless it’s a trick question, yes, there is some burden of proof that an invention is non-obvious, patentable subject matter, and such.

  28. I’m glad that I am the one that misunderstands your shifting arguments. (How does one type an eye-roll?)

    So now we have gone to a completely hypothetical world where patent and copyright law do not exist. So your position is that in this world, the government can ignore the ownership aspects of intellectual property when it decides to enact laws based on some policy of your liking….

    …is that about it? Is that all you want? Well, back here in the real world, the law is in fact the law and my comment way back at number ten still applies.

    btw – in my misunderstood real world, what does the answer to question one (here and now) do to your position? What does the law (real world – here and now) at 35 U.S.C. 102 (specifically “A person shall be entitled to a patent unless -“) mean to you? I am really interested in your understanding of the word “unless” and its implications to your position.

    And of course, by all means, since we are in the real world here and now, please feel free to take the Fifth if these questions get too difficult for you, or if you feel that I am putting words in your mouth (or heck, if you just plain feel your grasp of the subject matter slipping out of your control) – But, if these questions merely point out that your agenda-driven position is not tenable, at least have the courtesy to say so.

  29. …and by the way, this fantasy world of yours would probably need a different Constitution, given that you still have not addressed the fundamental aspect that another party other than the people at large is explicitly mentioned. Funny, you never did get around to addressing that…

    …shall I add that to my list of questions that you choose not to answer?

  30. What I’m saying is that copyright and patent laws grant statutory rights, as opposed to constitutional or natural rights. The US government grants Pell Grants to students that qualify for them, and as far as I know, there is no need for Congress to renew the legislation behind them, but legislation ending Pell Grants would not be taking anything from anyone, it would just be an end to giving them to students. This is similar to the way copyright and patents are. There are some statutory benefits, but surely you wouldn’t claim certain students have an inherent right to get federal funding. Their current right to do so comes from a statutory law, and if that law is repealed, that right disappears.

    And I’ve mentioned the role of authors and inventors beforehand. They are like contractors, although the nature of this contract is fairly unique. Being mentioned doesn’t mean they have any inherent rights, just that they are a necessary to getting works in a tangible form at the current time.

  31. What you just said still does not speak to policy grounded in the real world and still avoids the ownership issue. You are dreaming of an alternate universe where intellectual property rights do not exist and you are (dreamily) re-writing policy in this Utopian world.

    When you want to stop being delusional and come back to this country, this time and the Law as we really have it and base your policy position against these real world constraints, maybe, just maybe, then someone may take you seriously and not dismiss your agenda-driven position for the meaningless and baseless wish that it is.

  32. In 1790, Congress passed the first copyright and patent acts. Prior to these acts, there were no federal rights to authors and inventors for their works in the US, statutory or otherwise. This is an undeniable fact centered in the real world. Therefore, the first copyright and patent acts could only take rights from the public, because there were no rights for authors and inventors to waive or lose, and the law didn’t force them to do anything. That Congress could not be acting on behalf of the author’s rights because there were no rights to speak of. So, that Congress was only acting on behalf of the public. Later acts were modifications of these original acts, so their nature would be the same, at least in theory.

  33. I think Bobby is correct on the nature of U.S. IP (copyright and patent) rights. There is “ownership” under U.S. copyright and patent laws because the congress passed laws creating those rights in order to encourage the creation of things that would benefit the public. Some of the European IP laws are based on natural rights, which is the idea that the authors have some inherent ownership rights in the fruits of their works. U.S. law does not recognize these inherent rights (except maybe in one of the recently added sections to the copyright act). I would say that U.S. IP law is utilitarian in nature because the rights only exist to achieve a desired result; there is only “ownership” because congress passed a law creating rights that do not otherwise exist.

    Isn’t ownership of property, especially intangible property, really just a legal construct?

  34. here’s an interesting item in the Telegraph, UK:
    http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/7969335/Fake-goods-are-fine-says-EU-study.html

  35. Rick and Bobby – some basic law and political philosophy , both you must need.

    There is a difference between a law creating a right and a law recognizing a right and deciding how to treat that right.

    Bobby – you still want to play in your fantasy land where the current law has been stricken and you are setting up a new law based on policies that you like. You still disregard the ownership factor, which means that your policies are still unbalanced. Your ardency on this is clearly driven by your agenda and your desire not to recognize the ownership factor. This is a common theme to the anti-software patent crowd, and one that leads to the basic questions that you still refuse to answer.

    Rick – you are trending dangerously close to a communist viewpoint that property is merely a legal construct. I take it that law is not your background. I do not intend to use “communist” in a red scare manner – I am using it in its philosophical sense (some earnestly believe that communism would be a great political system – I tend to believe that it would be a great political system if, and only if, certain elements of basic human nature could be universally eradicated – they can’t so it isn’t)

    I believe that you wish to establish a premise that the actual patent and copyright laws were passed only after the Constitution and that therefore, any rights pertaining to those secondary laws must be inferior. The premise that you seek is misguided. The fact that the Constitution calls out the specific power for which branch of the government to make patent law speaks less to the option of having patent law, and does not speak at all to the nature of the patent right. It was indeed hotly debated whether intellectual property is like other property, but the fact that this is covered by the Constitution trumps the Bobby point of when a secondary law was passed. Keep in mind that the Constitution is a different type of law. Not only is intellectual property recognized, but ownership – the critical factor lacking in Bobby’s policy positions – is also explicitly recognized in the Constitution. Ownership cannot be defined as a secondary effect. Ownership cannot be ignored.

    Put it this way – a policy that ignores ownership will surely fail because any such policy would be so one sided that the other side won’t play the game. Such policies would be de facto communistic with “the people” taking the individual’s work product for the good of the state (contemplate why “the people” overrides the individual in all communist philosophies).

  36. “I believe that you wish to establish a premise that the actual patent and copyright laws were passed only after the Constitution and that therefore, any rights pertaining to those secondary laws must be inferior.”
    Statutory rights are inferior to constitutional and natural rights. If you are going to claim that authors and inventors have natural or constitutional rights, I don’t think you are going to be able to defend it well, at least not until you move to another country.

    “The fact that the Constitution calls out the specific power for which branch of the government to make patent law speaks less to the option of having patent law, and does not speak at all to the nature of the patent right.”
    The key thing to note is that patent rights are optional, and that option for giving these rights has more constitutional limits on it than a declaration of war. Giving these rights is not a duty, like assembling Congress or approving appointments by the president.

    “Put it this way – a policy that ignores ownership will surely fail because any such policy would be so one sided that the other side won’t play the game.”
    You are failing to understand my points. There are two possibly conflicting interests for the public here. The right to read books, and having books to read. The second interest is where copyright and patents come in if we need them, and is there to make sure the other side ‘plays the game’. If giving an author/inventor a period of exclusivity gives the public significantly more works in a manner that justifies the freedoms lost, then it is worth it for the public to temporarily cede those freedoms. If you have doubts that copyright and patents can accomplish this, then perhaps you should question these institutions. If you don’t have doubts, than this policy should work just fine.

    “It was indeed hotly debated whether intellectual property is like other property, but the fact that this is covered by the Constitution trumps the Bobby point of when a secondary law was passed.”
    The French tradition decided it was, and the British and American traditions decided it wasn’t. I’ve already addressed the Constitution’s role, and it doesn’t say authors inventors automatically have these rights, but rather that they can be given these rights by statute. Compare this to life, liberty and property, and the rights given in bill of rights and other amendments. No laws need to be passed for these rights to be protected.

    “Such policies would be de facto communistic with “the people” taking the individual’s work product for the good of the state”
    Even the extreme policy, having no copyright and patents, would be quite in line with Lassez Faire capitalism, because copyright and patent in their current forms are regulations. Taking the individuals work would be busting into say Mark Twain’s home and distributing copies of unpublished works and private journals or forcing quotas on them, which is not happening.

  37. and it doesn’t say authors inventors automatically have these rights, but rather that they can be given these rights by statute. Compare this to life, liberty and property, and the rights given in bill of rights and other amendments. No laws need to be passed for these rights to be protected.

    Bobby, – please find the errors contained in this snippet of yours, and you will understand why your unbalanced views are not supported by law. Feel free to reference the quizzes I provided earlier, and note especially that your reference to “life, liberty and property” is pivotal.

  38. Debate generally work by you pointing out the flaws in my argument, and you’ve not addressed many of my points. Perhaps you are conflating automatic copyright once a work is in a tangible form with copyright being a natural or constitutional right (which is what I mean by before, automatic, and default), and my apologies if my wording confuses you. Even doing so, you fail to acknowledge that automatic copyright is a fairly recent addition to our system, and it would be claiming that our joining of the Berne convention fundamentally changed the nature of US copyright. Patents have never been automatic, with the closest parallel being our practice of granting patents to the first to invent instead of the first to file.

    So, I ask you, are copyright and patents statutory, constitutional, or natural rights in the US?
    Also, from the public’s perspective, do you think that giving an author/inventor a reasonable period and scope of exclusivity gives the public significantly more works in a manner that justifies the freedoms lost?

  39. Why should I answer your questions when you do not answer mine?

  40. but for sh-ts and grins:

    are copyright and patents statutory, constitutional, or natural rights in the US?

    Yes, copyrights and patents are statutory, constitutional and natural rights in the US.

    Once you answer my questions you will understand why my answer to your question is fitting and proper.

  41. As to your “the public’s perspective” question, I would counter with an offering for you to read Judge Rich’s comments on the merits of patents concerning “best or better” advance and how that fallacy is addressed. The Judge Rich article I speak of is referenced in the Steven’s concurrence in Bilski. I believe that will give you an appropriate answer to the question as it pertains to individual or art specific patents. As to overall patenting, only a fool would posit that no patent system is better than a patent system (and since this is one of Gene’s common discussion points – I’ll let you search his threads for the abundant arguments put forth.

  42. You’ve not really asked any questions in this conversation except for who the other party is and the recipient of the rights in this system, and I’ve acknowledged that authors and inventors are the recipients.

    “Yes, copyrights and patents are statutory, constitutional and natural rights in the US.”
    I’ll attack the constitutional claim, since it’s easier to define than a natural. If a right is a constitutional right, then a statute that passes that would removes this right would be unconstitutional. Thus, a repeal of copyright and patent laws would fit that description if patent and copyright are constitutional rights. Are you claiming that a statute repealing these laws could be declared unconstitutional?

    “As to your “the public’s perspective” question, I would counter with an offering for you to read Judge Rich’s comments on the merits of patents concerning “best or better” advance and how that fallacy is addressed”
    That’s not really addressing the point unless you arguing that the general public is too dumb to comprehend the value of diversity, which is the point Rich was most focused on. If it is, note that I’m speaking more specifically of the public’s welfare, not the public’s general opinion. The difference between the two is one of the reasons we have representative democracy, and I am not saying that Congress needs to use a referendum to make decisions.

    “As to overall patenting, only a fool would posit that no patent system is better than a patent system”
    That’s not true. A patent system can have a net negative effect. It does have negative effects and positive effects, and it is only beneficial when the positive effects outweigh the negative effects. Allowing too many patents for obvious improvements and/or too long a period of exclusivity could easily give you a patent system that gets in the way more than it helps, and even Rich seems to acknowledge that. Furthermore, a system that produces a benefit at one time may not produce a benefit later as society and technology change the costs and benefits.

  43. Actually, the Obama administration recently enacted the Joint Strategic Plan for Intellectual Property Enforcement, precisely in order to address the problem of counterfeiting (though White House staff have informed me that it does cover patent law, as well). Its intended to enhance both domestic and international enforcement of IP. More info:
    http://patlit.blogspot.com/2010/06/obama-introduces-ip-enforcement-plan.html
    http://online.wsj.com/article/SB10001424052748703369704575461964181065980.html?mod=googlenews_wsj

  44. If a right is a constitutional right, then a statute that passes that would removes this right would be unconstitutional.

    Ever try to yell “fire” in a crowded theater and then use the logic of your argument presented here? Let me know how that works for you.

    note that I’m speaking more specifically of the public’s welfare, not the public’s general opinion.

    Reread Judge Rich’s notice then – he was speaking to the benefit to the public’s welfare – even disregarding a popular belief that any one specific patent is not an advance. Are you disavowing this belief, then? Or do you simply not understand what Judge Rich is saying and how that affects your philosophy?

    That’s not true.

    Oh but it is – pure empirical observation (amongst many arguments) verifies this. Furthermore, Judge Rich acknowledges no such thing as you wish to conjecture (and place in extremus) no matter how much you try to revise history. Judge Rich was an advocate for the Patent System. Your mere statement of “A patent system can have a net negative effect.” is a bald assertion without merit or proof of any kind. It is pure conjecture and wishful thinking based on your agendas and philosophies. As the party wanting change – the weight of proof is on your shoulders.

    Your (in extremus) comment concerning “Allowing too many patents for obvious improvements and/or too long a period of exclusivity ” is doubly at fault in legal logic.

    One – The system does not allow any obvious improvements – that is the law. Now what you feel is obvious may be quite a different matter, and ther eis no doubt that patents are granted in error – but those errors extend beyond merely “obvious” errors, and system are in place to help correct those errors. It is an error on your part to ascribe to the system that obvious improvements are allowed. That is simply not the system we have.

    Two – periods of exclusivity have had nothing to do with the conversation up to this point and thus your introduction of them as a legal point is a non sequitur. I have not seen any rationale for what you feel is a proper period of exclusivity, how you objectively arrive at that number, and just what effect is induced with the differences between the numbers as they are currently by law and your wished numbers.

  45. …And circling back to the original point of my post 10 – you may have reluctantly “acknowledged that authors and inventors are the recipients” (because I dragged it out of you), but you still have not reviewed and revised your policy points for a balanced treatment of those recipients because you still fail to appreciate the concept of “ownership”.

  46. “Ever try to yell “fire” in a crowded theater and then use the logic of your argument presented here? Let me know how that works for you.”
    Limiting a constitutional right and eradicating it are two different things, and even small limits on constitutional rights are often heavily challenged. My hypothetical involves the constitutionality of complete eradication of copyright and patent, so it would be more like a universal ban on all guns if being able to get a patent or copyright is a constitutional right.

    “Reread Judge Rich’s notice then – he was speaking to the benefit to the public’s welfare”
    Yes, he was saying that having diversity is good for the public’s welfare, but he didn’t produce any conclusive evidence that the patent system was actually a net benefit here (unless you have a different version of the article that includes extensive independent studies on the effects of the patent system), just an argument that granting patents for something that is not the best in the field at the time could be helpful. Back on track, though, if a patent system is beneficial to the public to an extent that it justifies the temporary forfeit of rights, then why isn’t a system that merely bases the public’s interests adequate?

    “A patent system can have a net negative effect.” is a bald assertion without merit or proof of any kind. It is pure conjecture and wishful thinking based on your agendas and philosophies.”
    I’m not saying that OUR patent system has a negative effect (although questioning our system is certainly healthy), but that a patent system CAN potentially have a net negative effect. This would mean that the benefits of a patent system are conditional. The claim that any system is unconditionally beneficial is a bold claim that is very unlikely to ever be true. A little research suggests that at one point, the French patent system held that public use was considered enough disclosure, and if I had to guess, a scientific study would suggest that this patent system was probably harmful.

    “As the party wanting change – the weight of proof is on your shoulders.”
    I’m not asking for a change, at least not here. Our system IS based upon the public welfare. I could contend that the past few revisions to copyright and patent have not been close to effectively taking consideration for the public’s welfare and were driven mostly by international pressure and media conglomerates, but that is a different conversation, and we’ve already diverted the argument enough by you saying I didn’t take into consideration ownership instead of debating the actual points I made about counterfeiting and other infringement.

  47. Technically it would be Constitutional in the United States, based on the clear wording of the Constitution. It would not be popular in some quarters though :)

    However that begs another question – what if countries that don’t mention patents in their Constitution decide that patents no longer are in the interest of their country? Or for that matter if the United States passes a Constitutional Amendment removing that line from the Constitution?

    The question, with any law, is does it suit the requirements of society. To quote myself:

    For an example of shaping society, consider the difference in gun laws between the Canada and the United States. The difference is caused in part by a section of the United States Constitution, and also by a certain paranoia that many Americans seem to suffer from. The societal differences also cause technical differences, for example hospitals in the United States are far more experienced in handling gunshot wounds than Canadian hospitals. Whether this expertise is an advantage or not, depends upon the individual’s viewpoint.

    Wayne

  48. Bobby,

    Patents and copyrights are “Rights” under the US Constitution. They are not a temporary forfeit of rights. You do not have the product to my labor whether physical or mental. So there is not such balancing “that it justifies the temporary forfeit of rights” as you claim. Patents and copyrights are based on natural law, just like real property rights. The failure to protect inventor or author’s rights is more of breach of the Constitution than establishing a state church or government censorship of the press (by the way note FCC on this point).

  49. Dave Boundy is a man familiar with patent and administrative law, and someone I deeply admire and respect.

    While not talking directly to the point of discussion here, I find a footnote from his comments regarding the proposed Appeals rules to the USPTO may in fact be pertinent to this discussion:

    A patent is “property,” 35 U.S.C. § 282, and an applicant is “entitled” to it, 35 U.S.C.
    § 102, In re Oetiker, 977 F.2d 1443, 1446, 24 USPQ2d 13443, 1444 (Fed. Cir. 1992) (“If
    examination at the initial stage does not produce a prima facie case of unpatentability, then
    without more the applicant is entitled to grant of the patent”) until the Office meets a prima
    facie burden to show grounds to withhold grant. Therefore patent applications are within
    Constitutional Due Process. See Board of Regents of State Colleges v. Roth, 408 U.S. 564,
    577 (1972).

  50. then why isn’t a system that merely bases the public’s interests adequate?

    Bobby,

    The fact that you still have to ask this question indicates that you still don’t understand the scope of issues involved and simply don’t (or refuse to) see the impact of the aspect of “ownership”. Your dogma blinds you. I cannot make you see that which you refuse to see.

  51. @Dave
    Copyright and patent are utilitarian in the US, and their power is granted by statutes Congress passes. They temporarily restrict the freedom of the public to freely copy, with the idea being that giving up this freedom is a worthwhile investment under the right conditions because we would have more ideas and media to utilize. And yes, a statute eliminating all patents and copyrights would be Constitutional, although it would be disliked by certain groups.

    @Blind Dogma
    Your previous answer was that it would make the other side (authors and inventors) ‘not play.’ However, you’ve said that waiving rights is beneficial to the public, so that would mean that you hold that it is beneficial to the public to waive enough rights to get the authors and inventors to ‘play’. The effect of a utilitarian public centric policy is either going to be enough to convince them to contribute or it isn’t. If you think that authors and inventors deserve additional rights beyond what is beneficial to the public to waive, then I have to disagree and would suggest moving to another country. If you think the utilitarian approach is adequate, and you just want the rights given to be labeled ‘property,’ just pretend I’ve said that it is because I only want to argue about debateable points, not attempt to break a mantra of repeating ‘ownership’ ad nauseam.

  52. Bobby,

    Can you read? The Constitution does not say it would be a nice idea to protect inventors and authors from leaches, it says they have a RIGHT to their creations.

  53. I think it’s you that can’t read, Dave.

    ” it says they have a RIGHT to their creations.”

    No, it says that Congress has the optional power (not a duty) to promote the progress (the utilitarian element) by giving them exclusive rights for a limited time through legislation. If you think Congress has a duty to pass copyright and patent laws, then you must also think that Congress has a duty to declare war, but I’m pretty sure we are not in a declared war right now, because both of those are worded in similar manners in the same section of the Constitution.

  54. The preamble is not limiting – something you should know from patent law. The Constitution is clear that “Authors and Inventors (have an) exclusive Right to their respective Writings and Discoveries.”

  55. Authors and inventors have rights when and only when Congress grants them rights (Congress have granted these rights virtually all of our history to date, though, although the acts were not always covering everything protected today, and had many limitations other countries didn’t. Anyway, doing so in he past does not mean an obligation to continue to do so). The constitution says that Congress can, not must, secure them the right, and that right is explicitly for a limited time only. For copyright, if the subject matter is not ‘original’, such as an alphabetical phone directory, and thus doesn’t serve the utilitarian purpose, it is not copyrightable regardless of the amount of effort required, as SCOTUS ruled in Feist v. Rural.

  56. Bobby,

    I have never said “you’ve said that waiving rights is beneficial to the public.“, especially in the context of our current discussion.

    You’ve gone from active denial to putting out active lies.

    and would suggest moving to another country
    Your very quick to suggest that those who have the law in their favor move to another country, when it is you that wishes to change the law. It is easier if you simply moved, as you do not care for (nor care to understand) our laws – here and now.

    and you just want the rights given to be labeled ‘property,’
    That’s because that is what they are – by law. If you don’t like the law – move.

  57. Bobby,

    The ad nauseam.continues until you accept the uncontroverted legal fact. If you stopped resisting reality, you wouldn’t be so sick.

    Open question: does “secure” mean “create”?

  58. “especially in the context of our current discussion.”
    You seemed to imply that you were confiming that it was with

    As to overall patenting, only a fool would posit that no patent system is better than a patent system”

    I did assume that you meant ‘for the public welfare’ given the context of the argument, but if you were merely meaning better for rights holders, I apologize. If you haven’t answered, then you’ve still yet to acknowledge whether or not you think a utilitarian system can result in more works being produced. And I ask you to answer again, with an answer this time please instead of a reference to an article.

    “Your very quick to suggest that those who have the law in their favor move to another country, when it is you that wishes to change the law. It is easier if you simply moved, as you do not care for (nor care to understand) our laws – here and now.”
    Again, I am not asking for a change in law here. Our patent and copyright systems are explicitly utilitarian, but there are plenty of countries where their systems are significantly more based on authors and inventors having natural rights.

    “That’s because that is what they are – by law. If you don’t like the law – move.”
    I wouldn’t really agree, but it’s not particularly important. Regardless of what you call it, the legal rights given are merely statutory, function in a fairly unique legally defined manner, and our system is utilitarian.

    As for secure, I would say ‘obtain’ or ‘make safe’ would be good substitutes, and they obtain these rights by taking them away from the public. Congress generally secures funding for various expenses by taking money from the public in the form of taxes.

  59. You seemed to imply

    You see Bobby, when you find it impossible to accept a balanced viewpoint (including the notion of ownership), your filter corrupts all input. You force everything to conform to your agenda, and when a clearly stated (and legally correct) viewpoint is juxtaposed, you cannot handle the requisite understanding. As I said earlier – I cannot force you to see that which you refuse to see.

    are explicitly utilitarian

    You will have to do more than merely proclaim this is as being so. Especially given the philosophical underpinnings of Utilitarianism, as opposed to the common notion of “utility” – to the uninformed, your message seems seductive – for the legally trained, you are dead wrong.

    by taking them away from the public.

    What< exactly, is them? You did not answer Dale’s point on this, and the Utilitarian Philosophy breaks down at this point (hence your becoming ill at being forced to recognize “ownership”).

    How can the creation from an individual be taking something away from the public? Here is the antithesis of the individualism that underlies the United States and its Laws. The subversion of Utilitarianism is directly analogous to communism. Your dogma betrays you.

  60. …And Congress secures Liberty by….

  61. “You will have to do more than merely proclaim this is as being so.”
    I have repeatedly said that the constitution explicitly says the purpose of copyright and patents is to promote progress. The Statute of Anne, which was influential to our system, was ‘An act for the Encouragement of Learning.’ The purpose for both of these are utilitarian, or if there is some flaw with that specific wording, aimed at benefits for the public.

    “What< exactly, is them?"
    Rights. You take the rights to freely copy away from the public to secure a legal right for the rights holder.

    "How can the creation from an individual be taking something away from the public?"
    it doesn't. Merely creating takes nothing away from the public. Restricting the ability to copy something that has appeared in public is taking away freedom from the public. You see this freedom available when works that are not copyrighted or patented, such as most reports from the US government, can be copied and modified freely.

    "directly analogous to communism"
    Again with the communism rant. Not granting legal monopolies to private individuals or corporations for information made public is not communism, and strong enforcement of these monopolies are what require a large, oppressive government (which is not really communism, but I would guess you are speaking of China or Russian style communism than actual Marx Communism)

  62. only the French, and the deluded, think IP “rights” are natural rights.

  63. The purpose for both of these are utilitarian

    Let’s not confuse “utility” as part of a bargain with the philosophy of Utilitarianism – two vastly different things.

    Rights. You take the rights to freely copy away from the public to secure a legal right for the rights holder.

    The hypocrisy is overflowing – if they are rights, as you say, how can they be taken away – you are filtering the owner’s actual work into nothingness and inserting your communist collective. There is no such thing as the right to freely copy – that, in various degrees, is called theft, piracy, and/or plagerism. In most civil societies, such behavior is discouraged. In the free-loading anti-software patent world, it (obviously) is a virtue. “Communism” as a label for the political philosophy is more correct than your tangential jaunt in to Chinese, Russian, or “true Marxism”.

    that has appeared in public

    Ditto. If it has appeared in public, than it is not a creation and is not rightly a work of authorship or invention. Your filter is producing nonsense again. Your inability to process a balanced view is telling.

    Again with the communism rant.

    It fits. Deal.

  64. Dale,

    Can you read? The Constitution does not say it would be a nice idea to protect inventors and authors from leaches, it says they have a RIGHT to their creations.

    Actually I can read, and no, that is not what it says. If you used the same logic on the line that mentions war, the United States would have to be at war all of the time, which is manifestly is not.

    Wayne

  65. “Let’s not confuse “utility” as part of a bargain with the philosophy of Utilitarianism – two vastly different things.”
    I’m not sure which branch of utilitarianism it is that bothers you, but I said if you find it accurate, substitute ‘aimed at benefit for the public’

    “if they are rights, as you say, how can they be taken away”
    Through the force of law. The government taking rights away is generally considered part of the social contract.

    “There is no such thing as the right to freely copy”
    Yes, there is. I can freely copy and/or modify the works of Shakespeare, or any work authored before 1923 and any invention before 1990 (okay, there might be a few exceptions held over from our previous system and some drugs that received extensions). Walt Disney, who was one of the most monumental forces in US media, heavily used works from the public domain to build a media empire. So, are you saying Walt Disney is a free-loading commie plagiarist? Are you saying that Wal-Mart is run by free-loading commies because they stock generic aspirin and have their own instead of giving the proper respects to Bayer?

    “If it has appeared in public, than it is not a creation and is not rightly a work of authorship or invention. ”
    Wait, what? Everything protected by copyright and patents has appeared in public. If it hasn’t, it’s would probably be a trade secret.

  66. Funny the Constitution says that inventors have a RIGHT. So I guess the founding fathers were French? It does not say that congress may pursue policies to encourage the practical arts. The word RIGHT has a very specific meaning to the founding fathers – and it clearly did not mean that protecting the rights of inventors and authors was optional.

  67. “Funny the Constitution says that inventors have a RIGHT”
    No, the constitution doesn’t.

    “It does not say that congress may pursue policies to encourage the practical arts.”
    It says precisely that.

    “The word RIGHT has a very specific meaning to the founding fathers ”
    Inalienable rights had a special meaning. Not all legal rights are inalienable rights. Minimum wage is a legal right, but we have no constitutional or natural rights to the minimum wage.

    “and it clearly did not mean that protecting the rights of inventors and authors was optional.”
    The constitution says in plain language that it is, and in a letter from Thomas Jefferson to Isaac McPherson, he said that “Inventions then cannot, in nature, be a subject of property” and that “Society may give an exclusive right to the profits arising from them, as an encouragement to men to pursue ideas which may produce utility, but this may or may not be done, according to the will and convenience of the society, without claim or complaint from anybody.” He was referring to the option for any country to do this, but it is clearly optional in the US. Now, one thing that is not optional is for an individual to not follow copyright and patent laws when the government decides that they are granting patents and copyrights, but that’s not even close to Congress not having an option in the matter.

  68. Bobby, you clearly do not understand what the word RIGHT means. The Constitution give Congress the power to set up laws to protect this RIGHT instead of the States. It does not specify the exact laws to protect this RIGHT. But it does not give Congress the option of protecting a RIGHT or it would not have used the word RIGHT.

  69. Bobby,

    The word “right” is a red herring and misses the elephant for its trunk.

    An invention is, when it is first created, the private property of the inventor.

    Why?
    Because the inventor can choose to immediately thereafter destroy “his” invention.

    Example: “Eureka I found it. Now I will destroy it so that no one else will see this invention. Why should I share my invention with the rest of the world when the world is filled with ingrates who just take and never say thank you?”

    The patent system asks the inventor to give, to disclose, his invention to the public, to disclaim his privacy rights in the invention.

    This is known as the quid quo pro deal.
    The inventor gives up something that was naturally his, namely, the secrecy of his (or her) invention.
    In exchange for that (quid quo pro), the government creates and gives to the inventor certain “rights” for a limited term of years.

  70. I know what right means, and I’m saying this right is granted by statute and not guaranteed by the Constitution. You are aware that not all rights are natural or constitutional rights, aren’t you?

    Let’s say, hypothetically that every one of the founding fathers felt that without a doubt that an author and inventor had a natural right to their invention. Even if this were so (just to be clear, it isnt), it wouldn’t change the fact that our constitution does not require it, and thus it would be completely legal to copy and all books and inventions freely if there were no copyright and patent laws.

    The only way the constitution could be more clear is if the copyright clause as we know it was followed by “Listen, 21st century attorneys, Congress doesn’t have to do this. It is an option, and this option is to be exercised only to promote progress, not because authors and inventor have a natural right to their works”

    If you don’t believe me, push for Congress to pass a law to end patent and copyrights. If it would be unconstitutional, then it would be no concern. If it is held to be constitutional, I would be proven right.

  71. @Step Back
    I’m not really disagreeing with you. When something is secret or private, whoever has that secret has exclusive control of that secret. I am not saying that authors and inventors don’t have the right to secrets or privacy. I am saying that outside of statutes granting exclusive rights, they don’t have the right to control how others utilize ideas once they are brought to the public. In theory, the grant of temporary exclusive rights through copyright and patents is going to motivate more works to be created and disclosed, meaning the public benefits.

    I do have to say that I doubt that your hypothetical ‘eureka’ scenario would be a common occurrence, though, and of course nothing stops it from happening now, because our current terms are probably seen as ingrateful. The more likely (yet not certain) bad scenario is for slightly less money in R&D and the mechanisms for certain things being secret, although a general idea of how they work would likely be reverse engineered.

  72. meant to say
    ‘because our current terms are probably seen as ingrateful to some’

  73. ‘The human race is divided into two sharply differentiated and mutually antagonistic classes: a small minority that plays with ideas and is capable of taking them in, and a vast majority that finds them painful, and is thus arrayed against them, and against all who have traffic with them.’

  74. ‘There is no squabbling so violent as that between people who accepted an idea yesterday and those who will accept the same idea tomorrow.’

  75. ‘There is a principle which is a bar against all information, which cannot fail to keep a man in everlasting ignorance–that principle is contempt prior to investigation.’

  76. But it does not give Congress the option of protecting a RIGHT or it would not have used the word RIGHT.

    Yes, it uses the word “right”. But it also uses a bunch of other words that you should consider reading.

    “The Congress shall have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;”

    The “shall have power” bit is what makes it optional. Congress has the power, should it so choose, to secure to inventors the exclusive right. Should Congress ever choose not to exercise that power, no court in the land would compel its exercise. Congress also “shall have Power … To borrow money on the credit of the United States”, and you’d have a tough time convincing me that such power is mandatory other than as a matter of practical necessity.

  77. and this option is to be exercised only to promote progress, not because authors and inventor have a natural right to their works

    @Bobby, comment #70

    This is where you appear to misunderstand Article 1, section 8, clause 8

    “To promote the progress of science & useful arts” is an ‘intended use’, not a mandatory and exclusive use.

    The copy-rights that are secured by act of Congress to authors of science fiction works does not directly promote progress in science –and in some case it may retard it– but nonetheless, Article 1, section 8, clause 8 does recognize that the works are “their” respective writings and discoveries. The word “their” recognizes a natural property right.

  78. ““To promote the progress of science & useful arts” is an ‘intended use’, not a mandatory and exclusive use.”
    Actually, that’s the congressional power given, and copyright and patent are the specific means to do so. The highway patrol gives out speeding tickets to ensure the public safety on our highways, not because giving speeding tickets is something worthwhile in and of itself (although under some circumstances, they get a direct benefit for every ticket they issue). To put it it similar terms to the copyright clause, ‘the highway patrol has the power to ensure the safety of the public, by issuing punitive tickets for excessive speed.’

    “The copy-rights that are secured by act of Congress to authors of science fiction works does not directly promote progress in science”
    I believe science in that context referred to knowledge and literature, not the natural sciences we normally associate with ‘science.’ You can argue that a book sets literature back, but that argument would be rather dubious, especially since one can reasonably argue that you can learn a lot even from idiots.

    “The word “their” recognizes a natural property right.”
    I would disagree, and Jefferson explicitly saying otherwise would seem to back that. Possessive pronouns don’t always imply property, and the protection of rights holders is only given by statute. You have “your” friends and “your” family, but they are not your property, and people are explicitly forbidden from being property in the constitution. Specifying that the authors and inventors are to be given a right for only the works they have created in another way would have to have been a good bit more verbose to not use a possessive pronoun.

  79. The “shall have power” bit is what makes it optional.

    That would be incorrect. Shall is a directive. This section of the Consitution deals with describing which branch shall have which powers. To read optionality (either for or against) is simply misreading the document.

    and Jefferson explicitly saying otherwise

    Sorry Bobby – I lost that debate – and so have you.

  80. Dale, you know full well that then constitution establishes the Congress’s ability to secure rights to inventors, but it does not itself establish the existence of such a right. It leaves it to Congress, which also has the constitutional authority to raise taxes. Congress has the power to do all sorts of things it ought not necessarily to do. Moreover, some rights are legally created, and others are natural rights, according to our founding documents. IP is in no sense a natural right.

  81. @Jefferson
    The shall is applied to ‘having power’, not granting copyright and patents. Congress ‘shall have power’ to do many things, but Article I, section 8 is about what Conress can do, not what it has to do.

  82. Shall have the power was a way of delegating the power to Congress as opposed to the states. It would not have used the word RIGHT if it was optional.

    The preamble does not modify the word RIGHT. A preamble is never meant to modify, it is merely a title or an explanation, but not a condition. Those of you who practice patent law should already know this.

  83. It would not have used the word RIGHT if it was optional.

    Why can’t it be optional to grant a right? If I own a building, I have the power to grant you a leasehold interest (a right) in a portion of that building. I am not required to do so. It is optional.

    “The Congress shall have Power … To promote [purpose] by securing … to … Inventors the exclusive Right …;”

    Congress has the option to secure to inventors an exclusive right. The “having the option” is mandatory and cannot be taken away from Congress.

    Anyway, granting patents is clearly optional, because Congress places all sorts of conditions and restrictions on the ability of inventors to secure patents. You may have heard of them, they’re called “35 USC”. If you don’t meet the conditions of the statute, Congress is not required to grant you a patent even though you may in fact have made an invention.

    This really isn’t complicated. We do more advanced things with English every day, don’t we?

  84. Article I, Section 8 provides the powers that Congress has, but I don’t see how it could be interpreted to require Congress to exercise those powers. So the “shall” in the clause reserves in Congress these powers to the exclusion of the Executive Branch, the Judicial Branch and the States and Territories.

    Now an example. Article I, Section 8 says, in part: “The Congress shall have Power… To declare War…” Under the theory that this list of powers must be exercised then Congress would be required to declare War and there could be no period of time in US history in which there is no declared War. I cannot see that being a reading the the clause that anyone would ever subscribe to.

    In short, I think it is absurd to envision the US as doing away with copyrights and patents, but I don’t see any prohibition in the document that would prevent Congress from undertaking such a destructive and idiotic course of action.

    -Gene

  85. @Dave
    Congress has a duty to assemble and a duty to approve the presidential cabinet and judicial nominations. These are not optional. Congressional powers in Article I, section 8 do not have to be utilized, and the mere usage of the term ‘right’ doesn’t mean that they have to. The right to a minimum wage is granted by the commerce clause, again in section 8. The specific right is not named, but it is encompassed by the scope of the commerce clause, and thus draws from the same section as the copyright clause. The national minimum wage is not a constitutional right, but it is a statutory right. It would be constitutional for Congress to stop granting this right, just as it would be constitutional for Congress to stop granting copyright and patents. The non-optional rights generally explicitly state that the right shall not be infringed or they specify the conditions under which it can be infringed. For example, the third amendment says that soldiers can’t be forcibly quartered in private housing during peacetime, but leaves an exception during war so long as there are laws that address it. The thirteenth amendment bans slavery and involuntary servitude, with an exception for duly convicted prisoners.

  86. @Gene,

    Good to see we agree on something, finally.

  87. Gene,

    Thanks for pointing that out – since I know that if I had pointed it out certain people would ignore it, since I am not a lawyer.

    It is really amazing how many people have not actually read the laws that they are arguing over. This is not an American only issue, we are having a similar situation in Canada right now with the ‘Long Gun Registry’. Most of the people discussing the registry haven’t read the regulation, and so some of the arguments have no relation to reality. And you cannot read one line, and claim to understand everything, it’s necessary to read the entire document – in the case the American Constitution. Reading one line in isolation causes confusion.

    Wayne

  88. TMH (aka Wayne)-

    I know you are not a lawyer, but I love your contributions. I think it is fair to say you are skeptical, but rather well informed and really looking for a good debate, so tip of the hat to you!

    I agree that many people are not really reading or reading only portions, etc., but why is that? Increasingly I am thinking the Internet is causing a far more informed electorate, which is a net positive. There are bumps along the way though. I wouldn’t get too hard on people who aren’t as informed as they could be. At least they care enough to take a position, and that is a critical first step. On top of that, everyone can be mistaken from time to time. I also think it is understandable why some might believe the word “shall” has a particular meaning. In order to understand that clause you need to read the entire document and know what the intention was.

    I am surprised this debate surfaced and I am efforting an article on that clause of the Constitution. If I cannot get anyone as a guest author I will write it myself in the coming weeks.

    Stay well.

    -Gene

  89. Gene,

    In many ways the Internet may be the greatest educational tool that was never designed (if you know the history of the net you’ll know what I mean by that).

    An informed electorate is the basis of a sound democracy. Which is one of the things that drives me crazy about the United States. If you read American media and compare it to Canadian or British media, you will notice that there are a lot of issues that American media never covers. I don’t know why that happens, but I’ve found that Americans tend to be uneducated about a lot of things that citizens of other countries are well aware of. It’s like the American media is deliberately not giving Americans the information that they need.

    It’s not that Americans aren’t smart enough to understand. It’s just that they don’t know. I’ve had any number of conversations with people when I’ve visited the States. I can remember the shock on people’s faces when I told them that we have same sex marriage in Canada. The first response is often along the lines of “Sodam and Gommorah’ and they are astounded when I tell them that it hasn’t had any negative effects.

    The American public is not well served by the American Media. Quite frankly you’d be better off reading British or Canadian media a lot of the time to find out what is happening in the United States.

    Wayne

  90. It’s like the American media is deliberately not giving Americans the information that they need.

    Shhh – it’s part of the great American Socialists Agenda – fat, dumb and dependent on the government.

  91. Some people are suggesting that Congress has the power to abolish patents and copyrights in the United States. The argument is that Article 1, Section 8, Clause 8 of the Constitution states “The Congress shall have Power To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writing and Discoveries” and whether they exercise this power is optional.

    This interpretation relies on the idea that when Congress is granted a Power it is unlimited. The United States was founded on the idea that Government power is not unlimited like the Devine Right of Kings. The United States was founded on the idea that powers of government are limited and come with duties, while Rights of citizens are unlimited and do not come with duties. I know this will come as a shock to those people raised on the modern liberal interpretation, which wants unlimited powers for government and sees the Bill of Rights as a list of negative rights – see Barack Obama. Congress, under Article 1, Section 8 also has the power to set “an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States.” This is not optional on the part of Congress, with the power comes the duty to establish these rules.

    The interpretation of the Constitution that suggests Congress has the option to establish systems to protect inventors’ and authors’ rights is totally inconsistent with the history of the Constitution. The purpose of the Constitution was to set out the powers of the federal government. Article 1, Section 8 lists the powers but also the responsibilities of Congress. For instance, even the power to declare war comes with the responsibility to do so when the U.S. is under attack from foreign powers.

    How do we know that Congress has the duty to protect the “Rights” of inventors and authors? Because the Declaration of Independence say so:

    We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men,

    It is well known that the unalienable Rights of the Declaration of Independence are the Natural Rights of Locke – Life, Liberty, and Property. Many people believe that Jefferson changed property to the pursuit of happiness because he was worried it would be interpreted as endorsing slavery. When the Founders used the word “right” they meant natural rights. The purpose of government is to secure these rights. When the Constitution states that inventors and authors have “Rights” in their creations, they mean natural rights and they understood that the purpose of governments was to secure these rights. This means that Congress has a duty to secure the rights of inventors and authors under Article 1, Section 8, Clause 8. If the words patent and copyright are meant as rights in inventions and writing, then it is clear Congress does not have the option of eliminating them. It is also clear that patents and copyrights are not limited by the preamble. Natural rights are not utilitarian, but are endowed on men by their Creator.

  92. @Dale
    I’ve already cited Jefferson as stating that patents are not a natural right. He is the founding father most connected with inalienable rights, and he was the first US patent clerk, so he’s a pretty good indicator of where the founding fathers stood on the matter. I’m not sure why you keep insisting that ‘right’ in the constitution means natural right, but the ‘limited time’ mentioned in the constitution explicitly states that at some point, inventors will be alienated from that right, and there is no indication that it is not optional.

  93. Dear Bobby,

    Thank you for those kind words. I regret to remind you that my voice was not the only voice associated with the establishment of law in our fine country, and that the theories of Locke do indeed permeate our fine system.

    I would also suggest that you structure your arguments with more care. Citing to my views, when those views do not have the force of law is a rather poor response to the fine work of one Dale B. Halling.

    Finally, your Utilitarian stench sickens me. Stop distorting the individualism of this Great Nation into some commie-pinko wanna be free for all just so that you can steal other peoples’ works. If we didn’t want a patent system, we would have expressly said so. If you want to live somewhere without patents, I am sure that you can still find some forsaken rock to crawl to (and preferably under). I didn’t fight tyranny so hard to see it bastardized by your misbegotten philosophy.

  94. “I regret to remind you that my voice was not the only voice associated with the establishment of law in our fine country, and that the theories of Locke do indeed permeate our fine system. ”
    True, but I haven’t seen good evidence of greatly contracting testimonies from other founding fathers. Franklin was pretty much the closest competitor in scientific contributions, and he said “as we enjoy great advantages from the inventions of others, we should be glad of an opportunity to serve others by any invention of ours; and this we should do freely and generously.”

    “Stop distorting the individualism of this Great Nation into some commie-pinko wanna be free for all just so that you can steal other peoples’ works.”
    Again, with the commie claims. While commies probably don’t support IP, little to no patents and copyright would also be in line with free market capitalism. By the way, you can’t actually steal other people’s works, although I understand the convenience. If you can’t step outside of the property metaphor, at least go with trespassing. Back on track, though, our patent system is explicitly to be utilitarian. Perhaps ‘Utilitarian’ has a different meaning to you and Blind Dogma, but I’ve already said that you can substitute “aimed at the benefit of the public.”

    “If we didn’t want a patent system, we would have expressly said so.”
    The Constitution says we can go either way. Leaving options open grants flexibility, and it has the limitations on extent more clearly defined than just leaving it up to the commerce clause.

  95. By the way, you can’t actually steal other people’s works

    Wow, You actually said that, didn’t you. Try again

    If you can’t step outside of the property metaphor

    It’s not a metaphor – it is property. That’s why it is called Intellectual Property.

    Try again.

    The Constitution says we can go either way

    Reread Dale’s piece. Try to remember Duty of Government. Try to remember the clause lacks a permissive “may” – which would have been a true optional alternative.

    Try again.
    Try again.
    And keep trying until you get it right.

  96. It’s also known as Intangible Property, and Ineffectual Property.

    Wayne

  97. There are a lot of things that smart a$$ people will call a lot of other things.

    Of course, we will not repeat here what you are called, and in keeping with the civil tone, let’s keep the designation of “Intellectual Property”, because, after all, that is how it is known.

  98. You deserve every thing you get. I can’t even imagine an Academic acting this way. Haven’t you learned anything? And I thought your arrogance was just pig headed opinionated intelligence. I thought everybody has an Opinion. Although your’s was at times one sided, “You” were entitled to your opinion, just like everyone else.

    Shortcuts:
    Shortcuts are the devils work. The only place they get you is in the front of the line. And what you do there is wait, and wait, and wait. I thought you were a good man. You even told me you were. I think you mentioned you had no children? It’s a good thing.
    One good thing , I learned who is is.

  99. “Wow, You actually said that, didn’t you. Try again”
    The closest you can come to stealing is copying an idea, then causing brain damage to make the originator of the idea forget. You can steal a tangible implementation of the idea too, but the idea is intangible, and can’t be stolen.

    “It’s not a metaphor – it is property. That’s why it is called Intellectual Property.”
    There are similarities and differences from what is universally recognized as property, and it is called a patent or a copyright. Accountants call it intangible assets. Some others have called it intellectual monopoly, and the Statute of Monopolies is where modern patent law is largely considered to have originated. Intellectual property is popular among those with an interest in extending the scope of protection, but it’s by no means the only term used.

    “Reread Dale’s piece. Try to remember Duty of Government. Try to remember the clause lacks a permissive “may” – which would have been a true optional alternative.”
    Borrowing money and declaring war don’t say ‘may,’ but Congress isn’t obliged to do those either. I’m not sure why the idea that Congress could get rid of them is so upsetting because it doesn’t mean they will.

  100. Bobby,

    from what I want to be recognized

    Translated for you to fit your filter. “Statute of Monopolies” has never been used to describe the US patent system. Never.

    You say that the term “Intellectual Property” is used by those who want to extend the scope – you need to back this up with more than just your empty prattling. This is a recognized term of art that simply does not extend the scope. The scope is pretty well straight forward and is even indicated in the Constitution – “Exclusive” being the key word.

    I am not sure where you get off on trying to redefine the spectrum of IP to fit your twisted views. All you are ending up doing is announcing your ignorance and your agenda. Take a deep breath and put down the shovel.

  101. ““Statute of Monopolies” has never been used to describe the US patent system. Never. ”
    I didn’t say it was. But modern patent law is widely considered to have originated from it, and it was defined as a monopoly. A good deal of the writings of the founding fathers refer to it as a monopoly as well.

    “You say that the term “Intellectual Property” is used by those who want to extend the scope – you need to back this up with more than just your empty prattling.”
    Those who want to extend the scope, such as the RIAA, speak of it as IP. Even some of the strongest opponents use the same term, but there are quite a few who feel it is inaccurate. Saying it is popular with those who want to expand the scope doesn’t mean it is unpopular with those who don’t want to expand the scope. As for the term itself, the public generally identifies with ‘property’ more than ‘monopoly,’ ‘asset,’ ‘patent,’ or ‘copyright,’ so it is the most favorable term to use when seeking extensions.

    “The scope is pretty well straight forward and is even indicated in the Constitution – “Exclusive” being the key word.”
    Where fair use and other exceptions come in is not that clearly defined. Also, how limited ‘limited time’ is not explicitly defined.

    “All you are ending up doing is announcing your ignorance and your agenda. ”
    Says the guy who erroneously said that patents are a constitutional right.

  102. Actually Bobby, if you read the history of the Statute of Monopolies, patents were not considered Monopolies. That is why they where not included in the Statue of Monopolies. A patent is not a monopoly.

    A patent gives the holder the right to exclude others from making, using or selling the invention. 35 USC 154. It does not give the holder the right to make, use or sell their invention. A monopoly is an exclusive right to a market, such as an electric utility company. An electric utility company has the exclusive right to sell electricity in a certain territory. Since a patent does not even give the holder the right to sell their invention, let alone an exclusive right to a market, it is clearly not a monopoly.

    When a person describes a patent as a monopoly to be consistent they should also state that they have a monopoly over their car or over their house. In fact, they have more rights in their car and house than a patent gives the inventor over their invention, since you have a right to use and sell your car or house. A patent does not give these rights to an inventor over his invention. All invention are built upon existing elements (conservation of matter) and if the elements that the invention uses are patented, then the inventor will not have the right to sell their invention without a license.

    Some economists argue that a patent is designed to give the holder monopoly power. Those economists who are consistent also state that all property rights give some monopoly power. The property rights are monopolies thesis shows how confused economic thought is on this subject. The only logically consistent definition of a monopoly is an exclusive right to a market.

    According to Wikipedia “In economics, a government-granted monopoly (also called a “de jure monopoly”) is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service; potential competitors are excluded from the market by law, regulation, or other mechanisms of government enforcement.” Since patents are clearly “government granted”, then this is the appropriate definition. Since a patent does not even provide the holder the right to sell their invention, it clearly does not grant an exclusive privilege to a firm to be the sole provider of a good or service.

    There is a lot of nonsense in the economic profession about monopolies. Even the definition above can lead to nonsense. For instance, according to Locke’s Natural Rights theory you own yourself so you own the product of your labor, both mental and physical. This means anything you produce you have the exclusive right to make and sell, does this make you a monopolist?

    The historical basis for monopolies is the Statute of Monopolies of 1623 in England. The Statute of Monopolies prohibited the Crown from issuing monopolies for items that were already known or being produced. The idea was to protect the Natural Rights of Englishmen to practice their craft, in today’s language the government in issuing a monopoly was interfering with private citizens rights to their property. However, the Statute did not prevent an exclusive grant for inventions. The reason for this in the words of the day was an invention did not interfere or take away anything from private citizens. The invention did not exist before it was invented, so it does not take away anything from private citizens to provide a limited term property right to the inventor.

    Modern antitrust law has turned the concept of monopolies on their head. Instead of being a limitation on government power, like the Statute of Monopolies, it is a limitation on private action. Instead of protecting people’s rights to their property, like the Statute of Monopolies, it limits or takes away private property. The only logically consistent definition of a monopoly is an exclusive right to a market. No property right, gives you an exclusive right to a market. Market success is not an exclusive right to a market. Only the government can create a monopoly.

    People who suggest a patent is a monopoly are not being intellectually honest and perpetuating a myth to advance a political agenda.

  103. I think that Intangible Property is a better term myself.

    Wayne

  104. but there are quite a few who feel it is inaccurate

    Your feelings cloud your judgment. Your feelings are not law – in fact thanks to EG (copied below, we see that the Law plainly states that Property is the correct Legal term.

    Your continuing pretensions about “seeking extensions” are unwarranted and unsubstantiated. Such is Dogma driven drivel.

    From EG on another thread concerning “Property”:

    “IP is not property.”- DK

    Not true, at least in the U.S.

    35 USC 261: “patents shall have the attributes of personal property.”

    17 USC 201(a)(1): “The ownership of a copyright may be transferred in whole or in part by any means of conveyance or by operation of law, and may be bequeathed by will or pass as personal property by the applicable laws of intestate succession.”

    other exceptions come in
    So you acknowledge my point then (as it appears so, since you are now talking about exceptions and other facets that would only apply if my point were true).

    erroneously said that patents are a constitutional right.
    Your statement that I am erroneous remains to be decided. Your argument is not compelling. And don’t forget that I said “Yes, copyrights and patents are statutory, constitutional and natural rights in the US.” If you are going to attack my position at least state it correctly.

  105. I think that Intangible Property is a better term myself.

    Mad Hatter,

    Please make congruent your thought and the statutory classes of patents that are objects.

  106. Please make congruent your thought and the statutory classes of patents that are objects.

    A patent isn’t an object. The item the patent covers may however be an object.

    You are confusing the idea with the product.

    Wayne

  107. @EG
    Yes, I would contend that property is a form of monopoly, and that at least all free people are monopolists in some manner. I have an exclusive right to my body. If I perform work for someone else for a wage, I am ‘licensing’ my body at $X per hour for X hours. If I make something myself freely, I can sell it. However, once it is in the legitimate, indefinite possession of someone else, I no longer own it. I have no means to restrict its usage. The theory behind patent and copyright is that by granting a temporary monopoly, authors and inventors are better able to make a profit from their labor, which will result in a more productive, literate, and knowledgeable public.

    “Since a patent does not even provide the holder the right to sell their invention, it clearly does not grant an exclusive privilege to a firm to be the sole provider of a good or service.”
    The patent holder has the right to sell their invention without a patent. Saying that it’s not a monopoly because they already have one component of a monopoly is ridiculous.

  108. Mad Hatter,

    Deftly answered – kudos.

    However….

    The Patent itself is a physical object (nicely bound with a pretty red ribbon). This object is a piece of property and has the legal power that the property right is imbued with. For example, the actual physical copy must be produced for litigation and other post issuance matters in the Office.

  109. Bobby,

    You clearly know nothing about patent law. You can have a patent on item and infringe another person’s patent – thus you do not have the right to make, sell, or use your patented invention.

    Property is a monopoly is complete non-sense. You clearly do not understand property rights either. You do not provide a definition of monopoly because you don’t have a clear definition in your mind. If property is a monopoly why didn’t the statute of monopolies or the Sherman Antitrust law outlaw private property?

  110. @Dale
    “thus you do not have the right to make, sell, or use your patented invention. ”
    That is a more complex matter, but that’s really just a complex set of monopolies. There could be a monopoly on bread and a monopoly on flour, but the holder of the bread monopoly would still have a monopoly on bread, even if said monopoly makes things complex.

    “If property is a monopoly why didn’t the statute of monopolies or the Sherman Antitrust law outlaw private property?”
    The Sherman Antitrust Act didn’t ban monopolies, but regulated abusive monopolies. Antitust action wasn’t brought against Microsoft because they had such a large share of the market, but because they used their power to drive competition out of the market. With the Statute of Monopolies, i think it only concerned artificial monopolies granted by the government, which personal property didn’t fall into.

  111. “It’s like the American media is deliberately not giving Americans the information that they need.”

    Shhh – it’s part of the great American Socialists Agenda – fat, dumb and dependent on the government.

    Considering that most of the media is owned by the ‘right wing’ (see Fox News) I thought it was a Conservative Agenda.

    Wayne

  112. Dale,

    I estimate that Bobby will either:

    Filter your point beyond recognitiotn and spit back something equally nonsensical, or
    Take the fifth.

    He is clearly outside his bounds of knowledge.

  113. He clearly does not understand the difference between property rights and monopolies. He also clearly lives in Alice in Wonderland, where words mean what he wants them to mean. A monopoly is anything he disapproves of.

  114. Deftly answered – kudos.

    However….

    The Patent itself is a physical object (nicely bound with a pretty red ribbon). This object is a piece of property and has the legal power that the property right is imbued with. For example, the actual physical copy must be produced for litigation and other post issuance matters in the Office.

    You are mistaking the physical record of the patent, for the patent itself. The USPTO could decide not to send out physical copies of the record. Not having a physical copy would not affect the validity of the patent. Yes, there might need to be changes to the regulation to cover the change in business practice so that the courts would accept the electronic version, but that is only a minor detail.

    Wayne

  115. If you read my posts, Dale, I am not saying monopolies are inherently bad. I like having property. Utilities make sense as monopolies, although I prefer them to be member owned. If granting temporary monopolies can effectively improve creative productivity without a burden to society that outweighs the benefits, then the monopolies of patent and copyright are fine.

  116. Mad Hatter,

    No kudos this time – the “record of the patent is called a file wrapper. Such is not what I described. The physical object I described is called a Patent. Whether or not the Office could decide to send something out is immaterial. They do. You are incorrect as to not having the physical copy not affecting validity, in so far as the few items I mentioned very much impact validity – try pressing a court case without the document – you won’t get far.

    Sure, if an electronic version does come out, that may change some things – but as they say – if ifs and buts….

    They also say that the devil is in the details. I believe that if such electronic versions would be created, that the language involved would also mirror the fact that the electronic version would indeed represent the actual physical Patent for all legal (and otherwise) meanings.

  117. Hello all, jumping onto this thread REALLY late…

    I agree that counterfeiting is a large problem, and that some countries simply do/will not enforce/respect IP rights of others…

    The problem I have with some aspects of the law against Counterfeiting (at least in the U.S.) , is the case of the innocent infringer (aside from a printer/publisher), and how it interacts with the Lanham Act.
    Say that an individual purchases a DVD set from an online auction house, believing that the item is authentic. They use the item for a year, and them attempt to resel the item for the price that they paid. Now, it’s likely that they originally purchased the item for below market price (probably 40%-50% below), but I wouldn’t call it willful blindness, as the stock photos for these items are that of the counterfeit item and not the authentic, and the person may simply think that they are purchasing a “grey market” good. Other than the price, there is often no indication that the item is not authentic.

    The Trademark Law (Sects. 1114 and 1125) doesn’t seem to distinguish between the innocent infringer and the infringer that repeatedly violates through counterfeiting (again printers/publishers aside). There doesn’t appear to be any intent element involved, yet Stat. Dmgs apply (with a minimum being $1000). Rather “counterfeiting” without intent, is a Strict Liability tort (as it is defined in 1116(d))…

    Am I misunderstanding the Lanham Act? Is there some provision in statute or caselaw that allows the one-time, single attempted sale (with no sale being made, and the auction being removed by the online auction site) to be dismissed with only destruction of the offending item (and possibly payment of the FMV of the good at issue)?

    Interested in any thoughts.

  118. It’s hard to tell whether the 200-250 billion figure is an exaggeration or an underestimate, but a related problem is clearly costing American consumers billions. US law grants the standard patent rights to drug companies (US and foreign, I believe) in US markets while most of the rest of the world limits these rights with price controls and government health providers that have an effective purchasing monopoly for their respective countries. Drug makers develop new drugs in hopes of making big returns in the US and whatever they can get elsewhere. Consequently, US consumers end up footing most of the bill for new drug development while most of the rest of the world gets these drugs at something much closer to their manufacturing costs. I would call this outrageously unfair to the US, but many of those griping about Chinese “currency manipulation”, OPEC and other perceived grievances scarcely notice it. Since we spend in the order of 220 billion on prescription drugs (a large portion of which goes toward the expensive drugs that are still under patent) at prices that are typically about double what they pay in Canada (which pays more than many European countries, some of which didn’t recognize any drug patents until recently), the extra costs to Americans would have to be in the order of 100 billion, give or take a few 10s of billions. Of course, requiring drug makers with patent protection to either negotiate higher prices in other rich countries or charge Americans less would likely slow the development of new drugs and threaten the pharmaceutical jobs here and elsewhere; this would probably lead to a subtle game of chicken between the US and the rest of the developed world. But, some cautious move in this direction should be made eventually, the US shouldn’t just keep getting screwed forever. One question that pertains to both this issue and to that of outright piracy is why the US is willing to grant patent rights to citizens and corporations of countries that refuse to grant similar rights to US citizens and corporations.

  119. To close off this thread, nine months later, in another thread titled One Grave Problem: Counterfeiting, Piracy and IP Theft, Gene quoted U.S. Commerce Secretary Gary Locke on IP theft.

    I took the other, and challenged Gene to provide proof that the thefts that he, and Commerce Secretary Gary Locke claimed to be happening, were really happening. Gene’s response to me was:

    You really think there is no money in pirated software, pirated DVDs and pirated CDs? I find it hard to believe you can make such a statement.

    Given that all of the evidence readily available suggests you are wrong I think it is up to you to provide proof.

    Understand that I’m not trying to insult Gene. I think that he believes what he’s saying. I just think that he’s wrong in this case, because he’s not looking in the right direction. That he’s not looking at all of the evidence. Here is my response to Gene:

    What readily available evidence?

    Think of all of the drug busts you’ve read about in the newspapers. Have any of them mentioned finding CD/DVD replication equipment on site, or large numbers of illicitly copies of Audio/Video/Software discs? None of them have, because no equipment was found, nor were any discs found.

    That’s because drug gangs aren’t into money losing operations, and large scale music/video/software counterfeiting is a great way to lose money. There are just too many legitimate vendors selling at extremely low prices (or giving the stuff away) to make counterfeiting profitable.

    Consider your local gas station. It probably sells ITunes cards. So does your grocery store. And your pharmacy. And the hardware store. How do they compete with The Pirate Bay? Better selection, better quality, better buying experience. You can compete quite well with free as Apple has proved.

    Or consider Libre Office. Why would anyone want to buy Microsoft Office when you can download Libre Office for free, and it works better than Microsoft Office (if you don’t believe me, try passing files various versions of Microsoft Office – a very frustrating experience – Libre Office is more compatible with Microsoft Office than Microsoft Office is).

    Sure there is some small scale counterfeiting going on. Very small scale. Five and Dime store stuff, nothing bigger.

    In other words, U.S. Commerce Secretary Gary Locke is full of the brown stuff I used to have to shovel when I was growing up on the farm. As a farm boy, I know that stuff all too well, and can recognize it a mile off.

    I don’t know that Commerce Secretary Locke understands that the information he has presented is incorrect. I do know that it’s incorrect. Why he is presenting incorrect information I can only speculate on. I have a series of ideas on this, but no proof.

    But it is provable that he isn’t telling the truth. Exactly why he isn’t telling the truth is the issue now.

    Wayne

  120. Wayne,

    Try reading Pat Choate’s great book “Hot Property” http://www.amazon.com/Hot-Property-Stealing-Ideas-Globalization/dp/0375402128/ref=sr_1_4?s=books&ie=UTF8&qid=1305339082&sr=1-4. You’re position that counterfeiting and stealing other people’s IP is a minor problem is just not credible. You’re position without some sort of evidence is right up there with the Flat Earth Society. The burden of proof is on the person who is asserting a position that is contrary to all available evidence and outrageous on its face.

  121. Try reading Pat Choate’s great book “Hot Property” http://www.amazon.com/Hot-Property-Stealing-Ideas-Globalization/dp/0375402128/ref=sr_1_4?s=books&ie=UTF8&qid=1305339082&sr=1-4. You’re position that counterfeiting and stealing other people’s IP is a minor problem is just not credible. You’re position without some sort of evidence is right up there with the Flat Earth Society. The burden of proof is on the person who is asserting a position that is contrary to all available evidence and outrageous on its face.

    Dale,

    No, I’m taking the position that the information that you have is incorrect.

    Wayne

  122. Wayne,

    Wrong in the sense that it is off by 1% or off by orders of magnitude?

  123. Wrong as in several orders of magnitude. I’ll refer to the numbers that Gene is quoting:

    In any event, Congress is the process of drafting and reintroducing online infringement legislation to curb the illegal activities of rogue websites which cost the U.S. economy an estimated $58 billion in total annual output according to the U.S. Chamber of Commerce. Undoubtedly many will question that number, but only those who choose to turn a blind eye to criminal activity will ignore the magnitude of the problem. Sadly, no matter what the U.S. government does or what companies like Rosetta Stone do, as long as consumers are willing to participate in the criminal enterprise as purchasers of counterfeit products it will be an uphill battle.>

    Which is $58 Billion, came from the U.S. Chamber of Commerce, and is only through rogue websites.

    One Order of Magnitude – $5.8 Billion
    Two Orders of Magnitude – $580 Million
    Three Orders of Magnitude – $58 Million

    Exactly what the number is, I can’t tell you. I can tell you that the $58 Billion number is inaccurate if counterfeiting is cause.

    On the other hand, $58 Billion is probably an Order of Magnitude low (in other words the number should be $580 Billion) if you take into account the amount of sales that Business Software Alliance members have lost to non-traditional software companies like the Apache Foundation, International Business Machines, Red Hat, Novell, Mandriva, SGI, Mozilla Foundation, Canonical, SugarCRM, EnterpriseDB, etc., so from that point of view the Chamber of Commerce was conservative.

    Wayne