Fantasy & Reality in Intellectual Property Policy

My new column for the FT is up.  It deals with the incredible weakness of the data on which our intellectual property policy proceeds.   Ungated version after the jump

Fantasy and Reality in Intellectual Property Policy

By James Boyle

Published: December 1 2010 01:12 | Last updated: December 1 2010 01:12

What do we really know about the costs of violations of intellectual property for national economies? Or, conversely, about the economic benefits of strengthening copyright, trademark and patent protection? You could be forgiven for thinking that we know a great deal.

A widely quoted FBI assessment from 2002 estimated that US businesses lose between $200bn and $250bn to counterfeiting annually. A 2002 press release from the Customs and Border Patrol estimated counterfeit goods costing businesses $200bn dollars in losses annually and 750,000 jobs. The Federal Trade Commission was quoted as a source by industry groups for a claim that the American automobile industry alone loses $3bn annually from counterfeit car parts.

Those sound like authoritative sources and scarily large numbers. Unfortunately, when the General Accounting Office – the US government’s non partisan independent watchdog – sought the basis for those figures, it found that in each case there was no methodology, there was no study. Or in the GAO report’s words, they “cannot be substantiated or traced back to an underlying data source or methodology.” The FBI and the Border Patrol at least turn out to have made the numbers up in that authoritative scholarly form, “the press release,” while the poor FTC simply had industry groups attribute numbers to it with no basis in fact.

Despite their baselessness, to quote the GAO again, “[t]hese estimates attributed to FBI, CBP, and FTC continue to be referenced by various industry and government sources as evidence of the significance of the counterfeiting and piracy problem to the US economy.” Is this a problem confined to the US? No. An OECD report found similar problems in relying on “fragmentary and anecdotal” evidence across all member countries.

If government is doing a poor job getting us the real data, what about industry? Again, there is no shortage of estimates. As the website Techdirt pointed out, the CEO of the Motion Picture Association of America recently claimed that “piracy” (illicit copying of copyrighted works) and “counterfeiting” (of trademarked goods) are responsible for “millions of lost jobs and dollars.” Techdirt, which has done sterling service in giving these issues the kind of rigorous scrutiny that they deserve, also (derisively) quoted the International Intellectual Property Alliance 2007 report claiming that copyright dependent industries employed 8.5 per cent of the US workforce and contributed more than 11 per cent of GDP.

These are impressive numbers. For policy makers who are being asked to support expansions of intellectual property rights, such as those contained in the Anti Counterfeiting Trade Agreement currently being debated internationally, or the Combating Online Infringement and Counterfeiting Act, which is working its way through the American Senate, the numbers speak with particular force. In the aftermath of a recession, saving jobs is even more of a legislative priority than in prosperous times. If copyright and trademark supports these jobs, and if infringement causes all these losses, then obviously the data supports sweeping expansion of both rights and enforcement?

Not so fast. First of all, the economic benefits are produced not by the rights alone, but by the balance between rights and exceptions. Using exactly the same (flawed) methods as those favored by the content industries, the Computer and Communications Industry Association laid out the boundaries of what they called “the fair use” industries, industries that depend on the limitations and exceptions to copyright for their existence.

Companies, ranging from Google to IBM to eBay, depend centrally on carve outs and limitations to copyright and trademark. These limitations and exceptions range beyond fair use and include the safe-harbours in the US and the EU that establish the legality of “conduits,” such as internet service providers,  and of sites like YouTube, the important principle that facts and ideas are free of copyright protection, the ability to do comparative advertising using trademarked names of products, and the limitations that save the vital task of indexing the web from being copyright infringement on a large scale.

Again, using the same techniques as the content industries employed, the CCIA pointed out that the “fair use industries” generated 4.7tn dollars in 2007 and employed one in eight of US workers.

Leaving aside the precise details of the studies, their flaws are, indeed, mirror images of each other, the CCIA’s true and important contribution to the debate is to point out that increasing rights and enforcement does not mean increasing general welfare or employment. In fact, it actually may do the reverse. Say you are a conscientious policy maker presiding over a limited budget for enforcement, with many priorities ranging from health to welfare to shutting down child pornography. The record industry comes to you with a study that demonstrates that CD sales are falling and claims that copyright infringement is to blame. “The music industry is dying,” you are told, “you must save those jobs.”

But then you delve deeper into the scholarly literature and find that, apparently driven by the ability to share music and find new fans online, the overall music industry has actually expanded. CD sales have fallen, but concert and other revenues more than offset the loss. Should you expand copyright protections, give the Justice Department sweeping new powers to ban websites without procedural checks and balances, make it easier to issue “takedown” notices – even though the evidence shows that a huge proportion of takedown notices are illicit attempts by competitor firms to squelch competition?

Once you get beyond the government’s fabricated statistics and the industry groups’ fanciful ones, the answer to that question is far from obvious. In fact, government action to shore up one business model may produce net welfare losses to society as a whole. The USPTO recently asked for comments on the enforcement of intellectual property rights online. One hopes that the answers it received were more substantive, nuanced and data-rich than those that have dominated the discussion so far. Fantasy figures make for nightmarish policy choices.

James Boyle is a Professor of Law at Duke Law School and the author of The Public Domain: Enclosing the Commons of the Mind.

The nice folk at the Financial Times, where I write a column, have an enlightened attitude towards copyright.  When they arranged for me to be a columnist, they agreed to let me keep the copyright and to make articles available  under a Creative Commons license.  This is one of my recent columns for the FT.  If you find it of interest, you might want to reward them by checking out http://www.ft.com/techforum There is lots more there.

Wednesday, December 1st, 2010 Uncategorized

2 Comments to Fantasy & Reality in Intellectual Property Policy

  1. [...] Artículo de James Boyle (reconocido experto mundial sobre el tema), aparecido en el Financial Times, que no sólo cuestiona las cifras habitualmente sostenidas por los defensores del copyright, sino que sostiene que la economía legal y los puestos de trabajo que genera el “fair use” (excepciones al copyright, el copyleft, el dominio público, etc) son SUPERIORES a la industria de la censura, digo del copyright. [...]

  2. jorge.cortell.net » Sinde, lee esto on January 2nd, 2011
  3. [...] Fantasy & Reality in Intellectual Property Policy | The Public Domain |. Share this:TwitterFacebookLike this:LikeBe the first to like this post. This entry was posted in Uncategorized. [...]

  4. Fantasy & Reality in Intellectual Property Policy | The Public Domain | « monicaguise on December 5th, 2011

From the Blog

  • Open Coursebook in Intellectual Property

    Cover of Intellectual Property: Law & the Information Society and link to purchase at Amazon.comDuke’s Center for the Study of the Public Domain is announcing the publication of Intellectual Property: Law & the Information Society—Cases and Materials by James Boyle and Jennifer Jenkins. This book, the first in a series of Duke Open Coursebooks, is available for free download under a Creative Commons license. It can also be purchased in a glossy paperback print edition for $29.99, $130 cheaper than other intellectual property casebooks.

    read more

  • So you’ve invented fantasy football, now what?

    We are posting excerpts from our new coursebook Intellectual Property: Law and the Information Society which will be published in two weeks is out now! It will be is of course  freely downloadable, and sold in paper for about $135 less than other casebooks.  (And yes, it will include  discussions  of whether one should ever use the term “intellectual property.” )  The book is full of practice examples..  This is one from Chapter One, on the theories behind intellectual property: “What if you came up with the idea of Fantasy Football?”  No legal knowledge necessary.  Why don’t you test your argumentative abilities…?

  • Free/Low Cost Intellectual Property Statutory Supplement

    Today, we are proud to announce the publication of our 2014 Intellectual Property  Statutory Supplement as a freely downloadable Open Course Book. Statutes Cover  It offers the full text of the Federal Trademark, Copyright and Patent statutes (including edits detailing the changes made by the America Invents Act.)  It also has a number of important international treaties and a  chart which compares the various types of Federal intellectual property rights — their constitutional basis, subject matter, length, exceptions and so on.You can see it here in print, or download it for free, here

  • Persnickety Snit

    This is the fourth in a series of postings of material drawn from our forthcoming, Creative Commons licensed, open coursebook on Intellectual Property.  It is about lawyers and language. 

  • Macaulay on Copyright

    Macaulay’s 1841 speech to the House of Commons on copyright law is often cited and not much read.  In fact, the phrase “cite unseen” gains a new meaning.  That is a shame, because it is masterful.  (And funny.) One fascinating moment?  When Macaulay warns that copyright maximalism will lead to a future of rampant illegality, as all happily violate a law that is presumed to have lost all moral legitimacy.

    At present the holder of copyright has the public feeling on his side. Those who invade copyright are regarded as knaves who take the bread out of the mouths of deserving men. Everybody is well pleased to see them restrained by the law, and compelled to refund their ill-gotten gains. No tradesman of good repute will have anything to do with such disgraceful transactions. Pass this law: and that feeling is at an end. Men very different from the present race of piratical booksellers will soon infringe this intolerable monopoly. Great masses of capital will be constantly employed in the violation of the law. Every art will be employed to evade legal pursuit; and the whole nation will be in the plot…  Remember too that, when once it ceases to be considered as wrong and discreditable to invade literary property, no person can say where the invasion will stop. The public seldom makes nice distinctions. The wholesome copyright which now exists will share in the disgrace and danger of the new copyright which you are about to create.

    The legal change he thought would do that?  Extending copyright to the absurd length of life plus 50 years.  (It is now life plus 70).  Ah, Thomas, if only you could have been there for the Sonny Bono Term Extension debates.

  • Mark Twain on the Need for Perpetual Copyright

    This is the second in a series of postings of material drawn from our forthcoming, Creative Commons licensed, open coursebook on Intellectual Property.  The first was Victor Hugo: Guardian of the Public Domain The book will be released in late August.

    In 1906, Samuel Clemens (who we remember better by his pen name Mark Twain) addressed Congress on the reform of the Copyright Act.  Delicious.

  • Victor Hugo: Guardian of the Public Domain

    Jennifer Jenkins and I are frantically working to put together a new open casebook on Intellectual Property Law.  (It will be available, in beta version, this Fall under a CC license, and freely downloadable in multiple formats of course.  Plus it should sell in paper form for about $130 less than the competing casebooks. The accompanying statutory supplement will be 1/5  the price of most statutory supplements — also freely downloadable.)  More about that later.  While assembling the materials for a casebook, one gets to revisit the archives, reread the great writers.  Today I was revisiting Victor Hugo.  Hugo was a fabulous — inspiring, passionate — proponent of the rights of authors, and the connection of those rights to free expression and free ideas.

  • “We Need To Start Seeing Other Futures..”

    Today is the second day of “Copyright Week!” Talk about a lede. That sentence has all the inherent excitement of “Periodontal Health Awareness Week” or “‘Hug Your Proctologist! No, After He’s Washed His Hands’ Week.” And that’s a shame. Copyright Week is a week devoted to our relationship with our own culture. Hint: things aren’t going well. The relationship is on the rocks.

  • Discussion: “The Foolish War Against Song-Lyric Websites”

    Professor Alex Sayf Cummings, author of a fascinating book called Democracy of Sound: Music Piracy and the Remaking of American Copyright in the 20th Century (recommended as a  thought-provoking read)  has an interesting  post up about attempts to shut down music lyric sites such as Rapgenius.com.

  • The Top Ten List of a Conference Planner

    Academics (and others) arrange conferences.  Perfectly normal people are invited to those conferences to speak.  Most of them are just as charming as can be… but then there are the special ones.  This Top 10 List of the special people one has to respond to is devoted to all conference planners everywhere.  Hold your heads up high.  After this, purgatory should be a snap.

  • (EM)I Has A Dream

    EM(I) Has A DreamAugust 28th, 2013 is the 50th anniversary of Martin Luther King’s “I Have a Dream” speech. The copyright in the speech is administered by EMI, with the consent of the King family. Thus the speech may not be freely played on video or reproduced and costlessly distributed across the nation — even today. Its transient appearance depends on the copyright owner’s momentary sufferance, not public right. It may disappear from your video library tomorrow. It has even been licensed to advertise commercial products, including cars and mobile phone plans.

  • The Prosecution of Aaron: A Response to Orin Kerr

    Aaron Swartz committed suicide last week.  He was 26, a genius and my friend.  Not a really good friend, but someone I had worked with off and on for 11 years, liked a lot, had laughed with frequently, occasionally shaken my head over and deeply admired.

  • The Hargreaves Review

    An Intellectual Property System for the Internet Age

    James Boyle

    In November 2010, the Prime Minister commissioned a review of the Britain’s intellectual property laws and their effect on economic growth, quoting the founders of Google that “they could never have started their company in Britain” because of a lack of flexibility in British copyright..  Mr. Cameron wanted to see if we could have UK intellectual property laws “fit for the Internet age.”   Today the Review will be published. Its conclusion?  “Could it be true that laws designed more than three centuries ago with the express purpose of creating economic incentives for innovation by protecting creators’ rights are today obstructing innovation and economic growth?  The short answer is: yes.” Those words are from Professor Ian Hargreaves, head of the Review.   (Full disclosure: I was on the Review’s panel of expert advisors.)

  • Keith Aoki — A Remembrance Book

    A slideshow and downloadable book remembering Keith in words and pictures.  You can order a glossy, high quality copy of the book itself here from Createspace or here from Amazon.  We tried to make it as beautiful as something Keith would create.  We failed. But we came close; have a look at how striking it is… all because of Keith’s art.

  • Now THAT is how you teach a class

  • RIP, Keith Aoki

    Our friend, colleague, co-author and brilliant artist and scholar Keith Aoki died yesterday in his house in Sacramento.  He was 55 years old.

  • The Future of the Constitution?

    The Brookings Institution has organized a volume on “The Future of the Constitution” edited by Jeff Rosen and Benjamin Wittes and featuring articles by me, Larry Lessig, Jonathan Zittrain, Tim Wu and many others.  How will our constitutional tradition deal with the challenges posed by new technologies?  The topics range from possible personhood claims by artificial intelligences, to the future of free speech and the Net, to neuroscience and criminal punishment.  The essays are freely available online. Details after the jump.

  • Presumed Guilty

    My new FT column is up. Shakespeare, copyright, Scott Turow and a shadowy group of law professors..  What could be more fun? Ungated version after the jump. 

  • Waiting for ‘Waiting for Godot’

    What Could Have Been Entering the Public Domain on January 1, 2011?
    read more

  • Fantasy & Reality in Intellectual Property Policy

    My new column for the FT is up.  It deals with the incredible weakness of the data on which our intellectual property policy proceeds.   Ungated version after the jump

  • CBC Radio Interview on the History of Copyright

    Nora Young and the folk at CBC’s Spark have done it again, with a really nicely presented episode that includes a feature on copyright.  Nora interviews me about the history of copyright…  in 5 minutes.

  • EFF Pioneer Award Video

    Is here. I appear at 3:25 or so.

  • EFF Party in San Francisco!

    On November 8th, Cory Doctorow, John Perry Barlow, and numerous other digital luminaries will be gathering at the Minna Gallery in San Francisco for the EFF’s Pioneer Awards Party.  Cory is going to be the MC and — when not featured on XKCD blogging from a ballon in a red cape and goggles…

  • Net Neutrality Debate

    Great hour long radio show on net neutrality from NPR’s The State of Things.  Me, the inimitable Paul Jones of iBiblio, and Ryan Radia of the Competitive Enterprise Institute.  Frank Stasio is just a great interviewer.  Listen to it here

  • Op Art Comic in todays SF Chronicle

    We have a centerfold Op Art comic on “Copyright’s Futures”  in today’s San Francisco Chronicle.  The comic is

  • Follow thepublicdomain on Twitter.

    Comic

    read

    Get my new book

    the book


    › Buy the book on Amazon
    › Download the book