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 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. » 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

  • The Line: AI & The Future Of Personhood

    James Boyle

    My new book, The Line: AI and the Future of Personhood, will be published by MIT Press in 2024 under a Creative Commons License and MIT is allowing me to post preprint excerpts. The book is a labor of (mainly) love — together with the familiar accompanying authorial side-dishes: excited discovery, frustration, writing block, self-loathing, epiphany, and massive societal change that means you have to rewrite everything. So just the usual stuff. It is not a run-of-the-mill academic discussion, though. For one thing, I hope it is readable. It might even occasionally make you laugh. For another, I will spend as much time on art and constitutional law as I do on ethics, treat movies and books and the heated debates about corporate personality as seriously as I do the abstract philosophy of personhood. These are the cultural materials with which we will build our new conceptions of personhood, elaborate our fears and our empathy, stress our commonalities and our differences. To download the first two chapters, click here. For a sample, read on…..

    read more
  • Everything You Know About §230 Is Wrong (But Why?)

    James Boyle, Oct 25th, 2021

    There are a few useful phrases that allow one instantly to classify a statement.  For example, if any piece of popular health advice contains the word “toxins,” you can probably disregard it.  Other than, “avoid ingesting them.” Another such heuristic is that if someone tells you “I just read something about §230..” the smart bet is to respond, “you were probably misinformed.” 

    read more

  • Free, Open, Intellectual Property Textbook

    Jennifer Jenkins and I have just published the 2021 edition of our free, Creative Commons licensed, Intellectual Property textbook.

    read more

  • ‘Dumping: On Law Reviews’. The Green Bag

    I will probably never be published in a law review ever again after writing this.  I find myself curiously untroubled by the thought.  

    read more

  • Mark of the Devil: The University as Brand Bully

    I teach at Duke University, an institution I love.  The reverse may not be true however, at least after my most recent paper (with Jennifer Jenkins) — Mark of the Devil:  The University as Brand Bully.  (forthcoming in the Fordham Intellectual Property and Entertainment Law Journal).  The paper is about the university most frequently accused of being a “trademark bully” — an entity that makes assertions and threats far beyond what trademark law actually allows, something that is all too common, with costs to both competition and free speech.   Unfortunately, that university is our own — Duke. 

    read more

  • Tragedy/Comedy of the Commons @ 50

    The Economist was kind enough to ask me to write an article commemorating the 50th anniversary of Garrett Hardin’s Tragedy of the Commons.  ““THE ONLY way we can preserve and nurture other and more precious freedoms is by relinquishing the freedom to breed.” This ominous sentence comes not from China’s one-child policy but from one of the 20th century’s most influential—and misunderstood—essays in economics. “The tragedy of the commons”, by Garrett Hardin, marks its 50th anniversary on December 13th.”  Read the rest here.

  • Theft: A History of Music — Free Comic


    read more

  • (When) Is Copyright Reform Possible?

    I am posting here a draft of a chapter for Ruth Okediji’s forthcoming book on the possibilities of international intellectual property reform.  In my case, the article recounts the lessons I learned from being part of the Hargreaves Review of Intellectual Property in the UK.

    “In the five months we have had to compile the Review, we have sought never to lose sight of David Cameron’s “exam question”. 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. We have found that the UK’s intellectual property framework, especially with regard to copyright, is falling behind what is needed. Copyright, once the exclusive concern of authors and their publishers, is today preventing medical researchers studying data and text in pursuit of new treatments. Copying has become basic to numerous industrial processes, as well as to a burgeoning service economy based upon the internet. The UK cannot afford to let a legal framework designed around artists impede vigorous participation in these emerging business sectors.” Ian Hargreaves, Foreword: Hargreaves Review (2011)

    Read the chapter.

  • Apple Updates — A Comic

    sampleEver been utterly frustrated, made furious, by an Apple upgrade that made things worse?  This post is for you.  (With apologies to Randall Munroe.)

    read more

  • 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. If you do not want to use the entire casebook you can view and download the individual chapters (in a variety of formats) here. 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…?

    read more

  • 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

    read more

  • 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. 

    read more

  • 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.

    read more

  • 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.

    read more

  • 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.

    read more

  • “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.

    read more

  • 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

    read more

  • 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.

    read more

  • (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.

    read more

  • 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.

    read more

  • 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.)

    read more

  • 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.

    read more

  • Now THAT is how you teach a class

    read more

  • 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.

    read more

  • Follow thepublicdomain on Twitter.