Posts Tagged ‘Intellectual Property’
September 30th, 2015 at 4:23 pm
GroupM, the Leading Global Media Investment Group, Announces Important Anti-Piracy Effort
Posted by Timothy Lee Print

This month, GroupM, the world’s leading media investment management company, announced that it will now require its media partners advertising on websites to receive anti-piracy certification from the Trustworthy Accountability Group (TAG).  This new initiative will go far to keep its clients’ advertisements off of rogue websites, as GroupM summarized in its announcement:

‘We’re in the business of giving the world’s most valuable brands marketing advantages with smart media strategies.  This inherently means we’re vigilant for clients’ brand safety.  Our work with TAG in the development and full adoption of anti-piracy guidelines is a major leap forward,’ said John Montgomery, Chairman, GroupM Connect, North America and Co-Chair of the TAG Anti-Piracy Working Group.  ’With IAB, 4As, and ANA, we’ve worked for years to make the digital ecosystem more trustworthy.  Fighting pirates of copyrighted content required every ounce of our tenacity and ingenuity, but with the advent of TAG’s Brand Integrity Program Against Piracy, we have powerful new tools and safeguards.’”

Such advertising on piracy sites accounted for an estimated $209 million in ill-gotten revenue in 2014 alone, so this constitutes a significant, voluntary private sector milestone.  Summarizing the nature of the problem, Mr. Montgomery observed:

There’s no brand in the world that wants their advertising to appear on a pirate site or wants to be seen as supporting piracy, even inadvertently…  A brand’s entire reputation is at stake – something that they’ve been nurturing for decades or, in some cases, centuries.  The people who create pirate sites are the same ones who perpetrate clickbait fraud – they’re the ones who spread malware and create armies of bots that generate most of the automated clicks in the business…  Which is why being worried about ad fraud without also being aware of the role piracy plays in its perpetration is like fretting over a flood in your apartment while neglecting to turn off the tap.”

Hopefully, other ad industry players will follow GroupM’s lead in utilizing TAG, but CFIF and anyone who supports the rule of law and property rights – including intellectual property (IP) rights – owe them an enormous “thank you.”  Accordingly, please click here to join us in thanking them.

July 28th, 2015 at 3:47 pm
Congress Should Oppose the So-Called “Local Radio Freedom Act”
Posted by Timothy Lee Print

Elementary concepts of fairness demand that musical artists and performers remain free to negotiate performance rights with broadcasters that seek to play their songs.  Indeed, current law allows artists to mutually bargain with satellite, Internet and cable stations.

The only exception:  traditional AM-FM radio stations, which are unfairly protected by federal law from having to negotiate with artists for performance rights.  This is precisely the sort of crony capitalism against which the American electorate is increasingly irate.

Unfortunately, rather than advocating market reform, some in Congress wish to cement the current protectionist status quo.  Under the so-called “Local Radio Freedom Act,” whose very name contradicts its real-world effect, terrestrial radio’s unjustifiable exemption from having to negotiate performance rights would be made more permanent.  The bill would foreclose bargained-for negotiation between artists and stations for compensation, perpetuating stations’ ability to earn billions by playing songs without paying for them.  And in an example of of supreme chutzpah, the same traditional radio stations benefiting from that loophole turn around and ask Congress to require cable and satellite providers to pay them for retransmission of television programs of stations they happen to own.

The bill’s proponents advance the offensive claim that artists seeking payment should just shut up and appreciate that their works get played over the air, thereby providing them publicity and advertising.  But that’s not something that stations should dictate.  The creators and performers of those songs should be free to determine which market model they prefer – performance for payment or free of charge.  That’s how a free market works.

Accordingly, we at CFIF have joined an array of fellow free-market organizations in a letter to Congress stating our objections to this protectionist and crony capitalist proposed legislation:

We urge you to refrain from co-sponsoring the Local Radio Freedom Act, which sanctions the status quo, and has a chilling effect on the development of a forward-thinking policy that respects the rights of all music producers in all media.  The Constitution protects private property rights and specifically delegates to Congress the authority to protect creative works.  Unfortunately, LRFA closes the discussion about how to best protect property rights by resolving that terrestrial radio should never pay performance royalties on music broadcast on their stations used for raising advertising revenue.  This is not equitable treatment for any musical artist or music distribution service.”

Americans are justifiably fed up with the sort of protectionism and cronyism that this proposed legislation represents.  We accordingly urge Congress to reject it, and that our hundreds of thousands of supporters and activists across the country to contact their representatives in Congress and express their opposition as well.

June 29th, 2015 at 1:03 pm
Protectionist “Local Radio Freedom Act” Would Prevent Payment to Musicians for Songs
Posted by Timothy Lee Print

Under current law, recording artists remain free to negotiate performance payment rights with Internet, cable and satellite stations.  Due to an unfair exception, however, artists cannot negotiate in the same manner with traditional AM-FM radio.  Unfortunately, proposed federal legislation backed by broadcasting interests would cement that anomaly.  Deceptively entitled the “Local Radio Freedom Act” (”LRFA”), the bill would stifle a potentially freer marketplace and foreclose future negotiation for payment to musicians for songs.

If successful, that would perpetuate terrestrial radio broadcasters’ ability to exploit a legal loophole allowing them to earn billions of dollars by playing songs whose artists would remain uncompensated.  Exacerbating matters, those same terrestrial broadcasters simultaneously ask Congress to require cable and satellite providers to pay them for retransmission of television programming from stations that they own.  That similarly violates straightforward concepts of fairness and intellectual consistency.

This past January, CFIF joined an array of other free-market organizations in a letter to Congress opposing the LRFA and setting forth the policy basis for our objection:

The Constitution protects private property rights and specifically delegates to Congress authority to protect creative works.  Unfortunately, LRFA closes the discussion about how best to protect property rights by resolving that terrestrial radio should never pay performance royalties on music broadcast on their stations used for raising advertising revenue.  That is not equitable treatment for any musical artist or music distribution service.”

Fortunately, there’s a superior alternative also before Congress.

Representative Marsha Blackburn (R – Tennessee), perhaps the most reliable advocate of property rights in Congress, has joined Representatives from both parties in introducing the Fair Play, Fair Pay Act of 2015.  This bill would correct the existing unfairness described above by finally requiring terrestrial broadcasters to negotiate with artists who seek compensation for broadcast of their creative works.

Advocates of LRFA claim that artists have no reason to complain when terrestrial radio plays their works without compensation, since that provides them publicity and free advertising.  But that’s something for artists and broadcasters to freely negotiate, rather than have broadcasters make that decision for them and deprive them of choice in the matter.  Some artists may indeed opt to allow their works to be broadcast for free.  But as Taylor Swift just illustrated in standing up for her rights, other artists have a right to disagree and negotiate payment for those playing their songs.

CFIF believes that property rights, including intellectual property (IP) rights for artists and musicians, must be fiercely defended.  America’s foundation of strong IP protections is one reason we’re the most innovative and artistically productive nation in human history.  Accordingly, we encourage our supporters and activists to contact their representatives, demanding that they reject the dangerous LRFA and support Rep. Blackburn’s PRMA.

May 29th, 2015 at 11:03 am
Pass Free Trade Legislation, But Ignore Calls to Insert “Fair Use” Provisions That Weaken American IP Protections
Posted by Timothy Lee Print

We at CFIF strongly advocate both free trade and intellectual property (IP) protection.  Although typically distinct policy questions, they are currently intertwined as Congress finally and fortunately moves toward passing free trade legislation.

The pending legislation rightly demands that trading partners recognize American IP rights, but that has naturally drawn fire from some of the usual suspects (e.g., Google, the Internet Association, et al.) who tend to oppose stronger IP rights because those protections tend to run contrary to their own particular business interests.  Specifically, those interests seek to include copyright limitations in free trade bills, including mandatory “Fair Use” exceptions.

That would be a bad idea.

Among other problems, those voices misstate domestic law in suggesting that “generally, an Internet company in the U.S. is not held liable for the conduct or content of third parties who use its platform.”  While existing law provides a level of immunity for Internet companies, such immunity is limited and does not excuse violations in numerous circumstances, including:  (1) when the interactive computer service materially contributes to the illegal content; (2) when the interactive computer service itself engages in fraud/misrepresentation; (3) when the interactive computer service engages in, or aids and abets, criminal activity; or (4) if the illegal activity violates IP laws.  Accordingly, omitting discussion of an Internet company’s liability for copyright infringement is particularly and intentionally misleading.  American law regarding the liability of intermediaries is infinitely more complicated, and intermediaries may face liability under a variety of circumstances, including where they induce the infringement of third persons (the Grokster standard), and in other circumstances in which they meet the standards of contributory infringement or vicarious liability.  Additionally, “safe harbors” under applicable law remain conditioned on a number of affirmative acts on the part of intermediaries, such as promptly taking action once they learn of infringing content (rather than merely upon receiving formal notice), maintaining policies with regard to repeat violators and adoption of standard technical measures designed to prevent infringement.

Thus, domestic law does not extend some blanket, general exemption from liability for Internet companies with regard to the conduct of third parties, and the scope of liability in the U.S. continues to evolve, both from a judicial standpoint and a legislative one.  Furthermore, Congress is presently considering the appropriate contours of the safe harbors established in the 20-year-old DMCA, with many members expressing concerns about the levels of piracy that prevail, and the fact that “notice and takedown” has been largely ineffective in reducing piracy levels, with a particularly devastating impact on individual creators and actors who can ill afford to pursue takedowns only to have the same content immediately re-uploaded.  Accordingly, it remains unclear exactly what liability regime the US should be seeking to export.  But it’s absolutely clear that American interest in foreign markets remains primarily in promoting greater discipline and accountability to reduce piracy levels that deprive the US billions of dollars in earnings.

Furthermore, U.S. trade agreements already include provisions relating to exceptions and limitations.  They also already recite the relevant provisions of international law that define the scope of permissible exceptions and limitations.  Those binding provisions are contained in a variety of agreements, including the Berne Convention, TRIPS, the WIPO Treaties (WCT and WPPT), and each of our free trade agreements.  Other nations have employed different means to achieve what they believe is a proper balance between protection and limitations, but remain they bound by the provisions of international law.  A particularly wide variance exists in how common law and civil law nations approach exceptions and limitations.  More specifically, courts in civil law countries are not permitted to interpret general provisions, and legal standards that require the weighing of different factors are a poor fit.  As a result, legal provisions such as Fair Use are ill-suited to the jurisprudence of most countries across the globe.

Moreover, as the world’s leading producer and exporter of copyright protected materials, the U.S. maintains a tremendous economic interest in ensuring the effective protection of copyright works.  While all parties strongly endorse balanced copyright protection that both protects works and provides reasonable flexibility, the biggest problem in foreign markets is lack of discipline, and not overboard protection.

It is critical that Congress passes free trade legislation currently on its agenda, and those who seek to exploit it as a device to weaken American IP protections must be rejected.

February 6th, 2015 at 11:50 am
We’re Still # 1: U.S. Chamber of Commerce Global Intellectual Property Center Releases Third International IP Index
Posted by Timothy Lee Print

This week, the U.S. Chamber of Commerce Global Intellectual Property Center released its third annual GIPC International IP Index, and it provides some welcome good news.

Namely, the U.S. retains its top global ranking in a survey that expanded this year to include 30 nations, “comprising nearly 80% of the global gross domestic product (GDP).”  The Index provides critical “empirical literature showing a robust relationship between strengthening levels of IP protection and an increase in economic benefits such as foreign direct investment, job creation, technology transfer, and economic development.”

We at CFIF often note the way in which strong IP protection is the causal factor explaining why the U.S. stands as the most innovative and prosperous nation in human history – by far.  With the release of this year’s Index, the Chamber and GIPC provide the latest empirical support for that critical causal connection.

November 7th, 2014 at 12:24 pm
WSJ’s Gordon Crovitz Veers Off Course on Intellectual Property Rights
Posted by Timothy Lee Print

Each Monday, The Wall Street Journal’s “Information Age” column by L. Gordon Crovitz is a must-read.  His analyses are invariably intelligent and his policy positions are usually wise.

On intellectual property (IP), however, Crovitz occasionally hits discordant notes.  Unfortunately, this week provided another example.

In “Even Silicon Valley Tilts Republican,” he highlights the surprising news that this year, technology companies reversed tradition and gave 52% of their political contributions to Republicans.  He also touches upon the topic of patent law reform, which CFIF has broadly supported.  But then he veers off logical course by maligning patent rights, specifically with regard to software patents:

Patents make little sense for software, which almost always builds on an earlier work.  There are some 250,000 potential patent violations in smartphones alone.  Companies known as ‘patent trolls’ stockpile patents to extract huge settlements from technology companies, not to build products.  Plaintiff lawyers joke that their focus has gone from ‘PI to IP.’  Now that personal-injury litigation has been reformed in many states, they’re turning to intellectual property lawsuits such as patent infringement.”

It’s difficult to fathom how Crovitz continues to make such a claim.

The United States maintains by many measures the world’s strongest patent and IP protections.  It also leads the world in technological innovation, including software and smartphones.  That’s not coincidence.  It’s cause-and-effect.  In an excellent recent piece for, patent attorney Gene Quinn offers a superior analysis on IP rights and innovation in such areas:

Why will anyone invest the extraordinary sums of money to create the innovations we want without an expectation of exclusivity that will allow for a recoupment of the investment plus a reasonable return on investment?  ‘The Truly Staggering Cost of Inventing New Drugs unveils a Forbes study finding:  ‘The average drug developed by a major pharmaceutical company costs at least $4 billion, and it can be as much as $11 billion.’  And it is pure fiction to believe that software development doesn’t follow the same economic realities.  When IBM produces one of their large-scale projects, there will have been many hundreds of people working on the software solution for at least several years.  The same is true for a new Apple operating system, or the next version of Microsoft Windows.  It is pure fantasy to believe that software programs are written over a long weekend by a single person who is merely a second-year engineering student.  Software that is compatible, secure and actually works is rare these days, and takes real development effort, which costs real sums of money.  The quickest way to get less innovation is to destroy the patent system.”

Quinn is correct, and the real-world facts speak for themselves.  Strong patent protections spur the innovation for which America and its tech sector are known.  Moreover, there isn’t anything inherently wrong if a patent holder with no ability or intention of manufacturing or marketing an invention sues for violation.  A patent right is simply a property right enforceable by law, just as a songwriter can rightfully sue for infringement even if he or she didn’t have the ability to sing the song, assemble a band, reserve a recording studio or find an agent.

That obviously doesn’t mean that we should in any way condone the filing of frivolous lawsuits based upon false claims of patent infringement.  But it does mean that much of the “patent troll” problem can be resolved via litigation reform, such as requiring greater specificity in court pleadings and shifting of attorneys’ fees and costs to more of a “loser pays” system.

What we don’t want to do is demonize patent rights, which have been the foundation for American innovation through the decades and centuries.

July 8th, 2014 at 3:58 pm
What Economists Miss in the Patent Reform Debate
Posted by Timothy Lee Print

Following up on our patent reform post last week, today’s Wall Street Journal includes an interesting viewpoint via letters to the editor.  Specifically, Paul Adams of Albuquerque, New Mexico notes that while some economists short-sightedly applaud the way in which weakening patent protections and encouraging copying can lower costs in the near-term, they ignore the longer-term incentive to invest and invent that strong patent protections provide:

It may satisfy economists that allowing copying by large corporations will drive down prices for consumers since there is no other way to compete.  But that does enhance technology.  In fact, one benefit of the patent system is the pressure on competitors to invent a different and likely better solution, thereby advancing the technology.  I have on many occasions assisted competitors in ‘designing around’ a patent creating a new product or service.  There are few patents of such broad scope that there is not an alternative.”

Opponents of strong patent protections often fancy themselves clear-sighted, dispassionate, economics-based observers, but their positions are more accurately penny-wise but pound-foolish, as Mr. Adams correctly notes.

April 25th, 2014 at 12:44 pm
Chamber of Commerce 2014 IP Champions Event Anticipates World Intellectual Property Day
Posted by Timothy Lee Print

Tomorrow (April 26) we celebrate the annual World Intellectual Property Day, recognizing IP’s critical role in protecting and promoting scientific, artistic and commercial innovation.

In that vein, the U.S. Chamber of Commerce’s Global IP Center held its 2014 IP Champions event in Washington, D.C. this week to celebrate organizations and people who have particularly embodied and advanced IP over the past year.  It brought a packed audience, the panels were informative and entertaining, and the award recipients spanned an impressive range of scientists, songwriters, entrepreneurs, engineers, foreign dignitaries and political leaders like Congressman Doug Collins (R – Georgia).

Most importantly, the recipients highlighted the critical value of patents, copyrights and trademarks in protecting their creations, encouraging further innovation and – critically – helping protect consumers against unsafe and defective counterfeit goods.  It is no coincidence that the United States stands as the most scientifically and artistically prolific nation in human history, given our tradition of strong IP protections in comparison to other nations and legal systems.  That’s a truism that bears emphasis and preservation in our increasingly interconnected global economy, lest we recede in our leadership role and witness a diminution in the pace of innovation.

February 10th, 2014 at 5:00 pm
MPAA’s Ben Sheffner Sets the Record Straight on the Value of Copyright Protections
Posted by Timothy Lee Print

Do America’s copyright protections stifle artistic innovation?

Obviously, that question answers itself.  After all, no nation in human history even approaches the United States in terms of sheer scale of musical, film and other creative innovation.  And that’s due precisely to our strong copyright laws that reward creativity and incentivize more.  Moreover, Americans’ ability to access a greater amount of artistic content, more easily, more cheaply and via more outlets increases daily.

Bizarrely, however, the contrary assertion remains regrettably fashionable even among some self-proclaimed “libertarian” and “conservative” circles.  Fortunately, voices of reason rebut the pernicious anti-intellectual property (IP) movement’s myths, and bring clarity to the debate.  One such voice of reason is Ben Sheffner, the MPAA’s Vice President of Legal Affairs.  In this abbreviated and this full-length debate video recently released, Mr. Sheffner clarifies the realities and refutes the curious claim that copyright laws inhibit innovation.  Quite the contrary, he makes clear, strong copyright laws not only preserve the fruits of creators’ labor, they incentivize the risk-taking and investment critical to spark additional creativity now and into the future.

Mr. Sheffner does an excellent job, and absolutely schools Derek Khanna multiple times on both the broader and finer points of intellectual property generally, and copyright more specifically.

January 16th, 2014 at 4:12 pm
Free Trade Negotiations Offer Opportunity to Improve Intellectual Property Protections
Posted by Timothy Lee Print

In our Liberty Update this week, we highlight the new 2014 Index of Economic Freedom, which itself highlights the critical importance of property rights and free trade in generating prosperity.  The facts, and that correlation, are simply beyond dispute.

On that note, current Trans Pacific Partnership (TPP) free-trade agreement negotiations provide a critical opportunity to upgrade intellectual property (IP) protections that have gradually become outdated since the landmark North American Free Trade Agreement (NAFTA) was signed two decades ago.  That was the expert conclusion of Mark T. Elliot, Executive Vice President of the U.S. Chamber of Commerce’s Global Intellectual Property Center, in testimony this week before the House of Representatives at a hearing entitled “NAFTA at Twenty:  Accomplishments, Challenges, and the Way Forward.”

At the time of signing, NAFTA intended to create the best levels of IP protection and enforcement…  It was a testament to how important IP was viewed by Mexico, Canada, and the United States.  However, as this was signed twenty years ago, this level of IP protection is now a very low bar in 2014.  In 2012, the Chamber released an International IP Index, a comprehensive review of the intellectual property environment in 11 key markets based on existing international standards and best practices.  The United States, the United Kingdom, and Australia all perform well in the Index…  Mexico and Canada, however, rank closer to the likes of Russia, Malaysia, and China.

In Mexico, however, we continue to see progress… and the business community has been working productively with the Mexican government.  In contrast, Canada’s relative low score is a result of wide-ranging IP problems including:  enforcement, weak on membership and poor ratification of international treaties, and significant problems with patent and copyright laws.  Canada is the largest trading partner for the United States… [making] it all the more bewildering to the business community at how substandard Canada’s IP system is.”

When NAFTA was signed, it was an idea ahead of its time.  And as former Clinton Administration Chief of Staff Thomas “Mack” McLarty noted a recent Wall Street Journal commentary, the results have been spectacular:

U.S. trade with Mexico and Canada has tripled to more than $1 trillion a year, supporting millions of American jobs.  The U.S. exported more last year to Mexico than to Brazil, Russia, India and China combined; and more to Canada, with 35 million people, than to the European Union, with 500 million…  NAFTA also opened the door for free trade agreements across Latin America, a catalyst for economic and political reforms.  Mexico was transformed from one of the most closed economies in the world to one of the most open, and it subsequently threw off decades of one-party rule.   Today, U.S. products make up 40% of the contents of goods imported here from Mexico (compared with 4% in goods imported from China).  An integrated market boosts exports and imports, and helps keep good jobs at home.”

Today, we face a perfect opportunity to improve upon NAFTA’s good thing.   As Mr. Elliot testified:

2014 will present many opportunities for the United States, Canada, and Mexico to further improve their IP environments…  In particular, all three countries are participants in the Trans Pacific Partnership (TPP) Agreement negotiations.  The TPP is being negotiated between 12 different countries, and it is essential that it include robust standards for IP protection, using the Korea-U.S. free trade agreement as a model and providing 12 years of regulatory data protection for biologic products.  We encourage the U.S., Canadian, Mexican, and all TPP negotiators to uphold their positions and protect IP from the efforts to weaken existing laws and norms.  The TPP provides the U.S., Canada, and Mexico the opportunity to stand shoulder-to-shoulder in support of strong IP protections, innovation, and access to the creations and inventions of the 21st century.  A TPP agreement that includes a high-standard IP chapter is good for jobs and good for international trade.  The TPP will also allow Canada to raise its IP standards, promote innovation, and bolster its growing economy.  2014 should be the year when the North American neighbors work together to improve each other’s IP environments and the IP environments of countries around the world.”

Free trade and strong IP rights are critical components of economic freedom, which the latest Index of Economic Freedom shows is causally related to a nation’s prosperity.  America, Canada, Mexico and the other negotiating nations face an important opportunity in 2014 to improve upon both, which will boost our prosperity at a time when we desperately need it.

November 4th, 2013 at 2:43 pm
CFIF TechNotes
Posted by Timothy Lee Print

(1)  In a Daily Caller commentary entitled “Conservatives and Libertarians Should Support America’s Copyright Protections, Not Malign Them” I highlight the causal connection between U.S. intellectual property (IP) protections and our unmatched artistic and technological dominance:

America’s system of copyright and intellectual property (IP) protections, which incentivize creators and reward their efforts, has resulted in the most innovative, influential, artistic, and prosperous nation in human history.  No country or alternative system even rivals our record of creative preeminence in music, movies, television shows, news, and literature.”

On that basis, I also address some myths regarding proposed Congressional legislation entitled the Free Market Royalty Act (FMRA):

That bill would finally end terrestrial radio’s special government privilege against paying performance rights that artists are allowed to negotiate with all other forms of use.  Simply put, the proposed legislation doesn’t “regulate the market” as Khanna claims.  More accurately, the FMRA seeks to create a more level playing field for all forms of broadcast.  Currently, artists aren’t compensated when their works are played on terrestrial radio, except through a cumbersome licensing process.  This bill would change that and allow them to negotiate.”

(2)  Over at AEI’s, Jeffrey Eisenach and James Glassman wrote that “It’s Time to Move Ahead at the FCC”:

The DISCLOSE Act was proposed in 2010 by Sen. Charles Schumer (D-NY) and Rep. Chris Van Hollen (D-Md) in the wake of the Citizens United decision by the U.S. Supreme Court.  The act, in our view, was genuinely pernicious and in all likelihood unconstitutional.  For example, it would prohibit political contributions by recipients of TARP (Troubled Asset Relief Program) money and by any firm that received government contracts of more than $10 million.”

The authors agree with Senator Ted Cruz (R – Texas) that it is “understandable and appropriate” to raise questions, but that now the FCC can hopefully move on and act in ways that spawn innovation, incentivize investment and reduce costs for consumers.

On that note, as reported in USA Today, “The U.S. Senate on Tuesday confirmed venture capitalist Thomas Wheeler to head the FCC and, as a commissioner, Mike O’Rielly, who had been an advisor to Senate Minority Whip John Cornyn, R-Tex.”   With these confirmations, the FCC now has a full roster.

to reduce costs for consumers, spawn faster innovation, and incentivize more capital investment. Let’s get on with it. – See more at:
hether the mandatory disclosure provisions of DISCLOSE Lite are constitutional is highly questionable, and we seriously doubt the FCC has authority to impose such requirements on its own.   In any case, it would be completely inappropriate for an independent regulatory agency like the FCC to even attempt unilateral action, especially in the face of strong opposition.  It is perfectly understandable and appropriate for Sen. Cruz to raise these question – See more at:

(3)  At, Richard Bennett writes in a piece entitled “IP Transition:  The One Percent Problem” that “the way forward is to incentivize the formation of private firms operating with diminishing levels of public subsidy”:

The hardest thing to do in Washington is to unwind a body of regulation with a long history, and the telephone has been around forever in technology terms.  In 1876, Alexander Graham Bell picked up a telephone and said:  “Mr. Watson–come here–I want to see you.”  In 1913, The Justice Department made an out-of-court settlement with AT&T that allowed it to operate as a government-sanctioned monopoly as long as it provided universal service within a defined territory and allowed other telephone systems to interconnect with its network to serve others.  By 1984, technology changes made this arrangement untenable and the Justice Department’s anti-monopoly suit against AT&T broke the company up into a number of parts.  After 12 years in which the nation’s telecom business was run out of a judge’s chambers, Congress finally passed the Telecommunications Act of 1996, imposing new obligations meant to promote competition for local and long-distance telephone service.  By 2010, the Telecom Act was irrelevant as telephone users had began to end their Plain Old Telephone Service (POTS) subscriptions in favor of mobile telephony and broadband.  Today POTS is not economically viable.”

(4)  On The Hill’s technology blog, Kate Tummarello and Brendan Sasso update us on events affecting the FCC and FTC:

The government shutdown has forced the Federal Communications Commission to delay the planned auction of the “H block” of wireless spectrum.  The commission had set the auction for Jan. 14, but on Monday, the agency announced that date will be bumped back to Jan. 22.  House FTC hearing postponed: The House Commerce, Manufacturing and Trade subcommittee has postponed Thursday’s planned hearing on the future of the Federal Trade Commission.  The House canceled Thursday’s session so members can attend the funeral of Rep. Bill Young (R-Fla.).”

(5)  At Politico, Brooks Boliek writes an update piece entitled “FCC Forced to Play Catch-Up After Shutdown”:

The FCC is delaying high-profile actions, including a key spectrum auction, as it plays catch-up after the government shutdown.  Acting Chairwoman Mignon Clyburn had originally scheduled an auction for the so-called H-Block for Jan. 14.  The auction, which will be the first major airwaves sale since 2008, is now slated to start on Jan. 22, the FCC announced today.  That could push it into next year’s fiscal battles.  The bill that just passed Congress funds the government through Jan. 15 and raises the debt ceiling through Feb. 7.  The shutdown delays add new pressure to the FCC, which is in the midst of major policy initiatives and stuck at three commissioners with two nominees stalled in Congress.  The H-Block is the first of a string of planned auctions designed to get more airwaves into the marketplace to feed data-hungry smartphones and power high-speed communications systems.  The commission lost critical planning time with most of its nearly 2,000 staffers furloughed for 16 days.  ‘These schedule changes are necessary to give potential bidders and commission staff additional time for planning and preparation,’ the FCC said in a public notice issued Monday.”

(6)  At Mountain View Voice, Angela Hey details online education innovations in “Coursera Educates Five Million Students and Revenues Start Growing”:

Mountain View’s Coursera offers free online courses from the world’s leading universities.  Today, at the Global Mobile Internet Conference in San Francisco’s Moscone Center, Stanford professor Andrew Ng described why he co-founded Coursera, which launched in 2012.  The conference, which is also held in Beijing, features mobile apps, wearable devices and connected cars.  Ng is director of Stanford’s artificial intelligence laboratory.  At Stanford he can teach 400 students.  With Coursera he taught 100,000 students in his machine learning class.  The other co-founder is Daphne Koller, a Stanford professor of computer science.  Five million students have registered Coursera accounts to take MOOCs (massive open online courses).”

(7)  Over at Forbes, Steve Forbes himself laments how telecom sector regulations simply aren’t keeping appropriate pace with technological change in “Government Should Mandate that Car Makers Invest Billions in Horse-Drawn Carriages!”:

Should Ford Motor have to reintroduce the Model T instead of investing in new cars that meet the needs of today’s consumers?  Should Apple be made to bring back the Apple II instead of investing in new products?   Should dental device makers be forced to invest in drills powered not by electricity but by foot pedals?  Crazy?  Not in telecommunications.  Special interests want to require traditional landline telephone companies like Verizon and AT&T to increase investment in antiquated technologies like copper-based telephone services that most consumers are choosing not to use.  These phone companies are restricted by archaic regulations that were put in place back when the Bell system was a monopoly.  Consumers then had one option, the landline phone.”

(8)  Finally, over at Broadcasting & Cable, John Eggerton writes on points of left-right agreement and disagreement in “Public Knowledge, AT&T Weigh in with Hill on IP Trials”:

Public Knowledge and AT&T agree on five touchstones for the IP transition but disagree on AT&T’s suggested trials, according to testimony for an Oct. 23 House Communications Subcommittee hearing on the transition.  Harold Feld, senior VP of Public Knowledge, delineated those values in his testimony as follows:  service to all Americans, interconnection and competition, consumer protection, reliability, and public safety.  Feld adds that AT&T’s suggested IP transition trials should be rejected.  However, AT&T countered Feld’s statement, saying the FCC should expedite those ‘real world tests.’  Feld will tell the legislators that test trials are needed, but they must be guided by those values and they should not be the trials AT&T has offered up.  In his prepared testimony AT&T senior VP James Cicconi complimented Feld on ‘identifying the key consumer protections needed for a successful IP transition.  We may end up differing on details,” he said, “but their framework is sound.  Clearly the fundamental principles of universal connectivity, interconnection, consumer protection, reliability and public safety are hallmarks of our Nation’s commitment to communications and cannot be lost in this process.’  Cicconi says its trials offer ‘clear benefits’ with no costs and says AT&T is not looking for the IP world to be a regulation-free zone.  ‘We understand that there will be a set of core consumer protections that exist,’ he said.  ‘While I might disagree with the FCC on particular matters, I would concede readily the FCC can play a strong role in protecting consumers, and it has demonstrated that in recent years.  Public safety should fall within the FCC’s consumer protection mandate as well.’”

And those are your CFIF TechNotes for this week!

July 26th, 2013 at 4:23 pm
New Survey: Americans Overwhelmingly Support Intellectual Property Rights, Efforts to Fight Piracy
Posted by Timothy Lee Print

I had the honor this week of participating in a panel on Capitol Hill hosted by The American Consumer Institute (ACI), whose speakers also included Rep. Marsha Blackburn (R – Tennessee), ACI’s Steve Pociask,Todd McCracken of the National Small Business Association, Sandra Aistars of the Copyright Alliance and Dr. Joseph Fuhr, Jr., Professor at Widener University and ACI Senior Fellow.  At that time, ACI unveiled its new public opinion survey showing overwhelming support for intellectual property (IP) rights and legal efforts to combat IP piracy.  Remarkably, in this era of political polarization, that support approaches 90%, so political leaders should pay attention.

Today, IP rights are under constant threat not only by way of theft and counterfeiting, but also by special interests here and abroad who seek to undermine IP protections.  For example, some of the nations with whom the U.S. is negotiating free trade agreements believe that IP should receive little, if any, legal protection.  Accordingly, for my part I emphasized that IP is precisely the basis on which the U.S. has evolved into the most prosperous, innovative nation in human history.  After all, many alternative legal systems exist providing less protection for IP.  Yet it is here in America, with its strong tradition of IP protection, where the overwhelming amount of innovation has occurred over the past two centuries.  That is not by accident, and it’s not coincidence.

Our IP system has delivered a higher standard of living and record of creation than any other system that the world has ever known.

But I also emphasized that IP protections aren’t just utilitarian in nature, as some seem to claim.  Rather, IP protections also reflect our view that the right to enjoy the fruits of one’s labor and efforts is a natural, unalienable one.  As stated by John Locke, “Our handiwork becomes our property because our hands – and the energy, consciousness, and control that fuel their labor – are our property.”  That right is at the core of American society itself.  The Constitution reads, “The Congress shall have the Power … [t]o 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.”  That reflects not only British common law, which is the basis for our own legal system, but also the Founding Fathers’ views.  In The Federalist No. 43, James Madison noted, “The copyright of authors has been solemnly adjudged, in Great Britain, to be a right of common law.”

Today, American IP is valued at approximately $5 trillion, which is greater than the gross domestic product (GDP) of any other nation in the world.  It also accounts for over half of American exports, which is critical at a time of increasing international competition.  Unfortunately, piracy of U.S. IP constitutes a multi-billion dollar threat, which steals our wealth and deprives our innovators the fruits of their labor.

With ACI’s new study, lawmakers can recognize where the American public overwhelmingly stands.  That data can prove critical in the ongoing battle to protect IP rights and increase legal protections to fight piracy both domestically and abroad.

June 12th, 2013 at 4:51 pm
What Senator Ted Cruz Just Said About Intellectual Property
Posted by Timothy Lee Print

Speaking at an America’s Future Foundation (AFF) gathering, Senator Ted Cruz stood up decisively for intellectual property (IP) rights in America.  Whereas too many contemporary political figures either falsely malign IP protections or equivocate while trying to please everyone, Sen. Cruz advocated more vigorous enforcement of IP, highlighted IP’s unique role in America becoming the most innovative and prosperous society in human history, described the incentive it provides for small businesses (which create most new jobs in America), detailed its importance in sparking desperately-needed economic growth and sounded the alarm regarding domestic and foreign IP theft.   In addition, he offered an interesting personal insight by describing his legal work as an attorney before the Supreme Court.


For good measure, Senator Cruz also took a nice swing at the misnamed Marketplace Fairness Act, the pernicious Internet sales tax legislation that somehow passed the Senate but fortunately appears doomed in the House.  He’s looking like a gem.

February 15th, 2013 at 10:13 am
Video: Intellectual Property and the American Dream
Posted by CFIF Staff Print

In this week’s Freedom Minute, CFIF’s Renee Giachino discusses how recent efforts to erode fundamental intellectual property rights are in fact a direct assault on the American dream.


January 18th, 2013 at 3:55 pm
“Internet Freedom” Doesn’t Mean Freedom to Steal
Posted by Timothy Lee Print

Various groups that favor such things as making the Internet a public utility have declared today “Internet Freedom Day.”  That’s a euphemism, unfortunately, meant to disguise a deeper animosity toward property rights.  What they falsely label “freedom of expression” is often a transparent aversion to straightforward intellectual property rights.

Intellectual property, or IP, simply refers to the legal protection accorded to creators in the same way that someone possesses a natural physical property right.  The only distinction is that IP protects inventions, artistic expressions and distinguishing trademarks.  Although opponents of IP falsely attempt to distinguish it from physical property by, among other things, asserting that physical property is finite whereas IP is infinite, that’s a sloppy distinction without a difference.  After all, if your automobile sits unused in a garage as you read this, then according to their logic its social utility would be increased by allowing someone who doesn’t own your car to use it while you are not.  Try telling a recording artist that after investing effort and financial resources in securing costly studio time and top-quality backup singers and band members, he or she has no right to the creation or to enjoy the fruits of his or her labor.

Protection of IP is necessary to not only secure for innovators the just fruits of their labor, but also to provide societal incentive for innovation.  No reasonable person opposes Internet freedom, but nor should that concept be used to disguise animosity toward property rights.

Today, IP remains under threat from foreign piracy, costing hundreds of billions of dollars per year.

Businesses reliant upon IP account for more than 60% of American exports, which are by nature more vulnerable to foreign piracy.  Those businesses also employ almost 55 million workers, pay their employees an average wage 30% higher than non-IP counterparts and account for $5.7 trillion of the nation’s GDP. Meanwhile, parasitic overseas websites continue to threaten that IP wellspring of innovation, jobs and prosperity.  Although estimates vary, foreign IP piracy now amounts to a cumulative enterprise that inflicts at least $500 billion in loss annually and now accounts for approximately 25% of all Internet traffic.

Each moment, rogue sites across the world seek to make an easy and illegal profit by selling things they had no hand in creating.  That has to stop.  Although many proponents of today’s so-called “Internet Freedom Day” will falsely demonize future efforts to curtail IP theft, they must be recognized as apologists for illegality.  Just something to bear in mind amidst the synthetic hoopla.

January 4th, 2013 at 8:40 am
Podcast: The Impacts of Rampant Intellectual Property Theft
Posted by CFIF Staff Print

CFIF’s Timothy Lee discusses increased enforcement activities against counterfeit goods and pirated music and movies, the detrimental impact such goods have on innovation, and the intellectual and historical roots of copyright law.

Listen to the interview here.

August 8th, 2012 at 4:00 pm
Senator Rand Paul Proclaims the Need to Protect Intellectual Property

“I do believe in intellectual property. I do believe you have a right to your property.”

So said Senator Rand Paul (R-KY) in response to a question following his remarks during an event last week at the Heritage Foundation titled, “Will the Real Internet Freedom Please Stand Up?

In Article I, Section 8 of the U.S. Constitution, our nation’s Founders specifically provided for the protection of intellectual property (IP) in order “To promote the Progress of Science and useful Arts.”  While the fundamental concept of providing artisans, authors and inventors exclusive right to their respective works and discoveries has remained relatively uncontroversial for most of the nation’s history, recent debates regarding what to do about widespread infringement over the Internet have caused some to diminish IP protection by setting it aside as merely some abstract, disposable ideal.

That mindset is dangerous, both in theory and in practice.

First and foremost, intellectual property is vital to free enterprise and drives economic growth. According to a recent study by the Global Intellectual Property Center, IP-intensive industries currently employ more than 55 million Americans and account for 74% of all U.S. exports and $5.8 trillion in GDP.  Without strong IP protections, the incentive to innovate is removed, drying up investment, stalling growth and progress, and thus undercutting the entire economy.

Little if any incentive would exist for an author to write the next great novel, Hollywood to produce the next cinema blockbuster or a pharmaceutical company to develop a cure for cancer if none of them are able to benefit economically from their works.

Moreover, when the importance of IP is diminished or dismissed altogether, its protection is afforded different levels of enforcement not on par with that of physical property.  But the concept of property should not be rooted in its physical existence.  Owning property is a contract that provides the title-holder specific rights that lead to economic benefits, not simply a plot of land. In that way, intellectual property is no different than any other form of property. 

Senator Paul gets it. In his remarks – previewed as “what could be the most significant talk on Internet freedom this year” by the Heritage Foundation’s Robert Bluey – Paul declared, “There are some libertarians who don’t believe in copyright. I am not one of them. I think you have to protect intellectual property.”

Senator Paul’s comments reveal that not only do some libertarians get IP wrong, but that all property needs protection and enforcement thereof. As evidenced by over 200 years of practice, patent, trademark and copyright protections promote the general welfare and lead to great economic advantages by driving innovation and developing capital. The end result comes in the form of countless benefits from millions of IP-intensive jobs, billions in exports and trillions in GDP spilling over to the rest of society.

Property, including intellectual property, is preeminent and deserves strong protections.

May 14th, 2012 at 4:45 pm
Trans-Pacific Partnership Negotiations Offer Important IP Opportunity
Posted by Timothy Lee Print

At this moment in Dallas, Texas, the Trans-Pacific Partnership (TPP) trade negotiations have resumed, with important implications for intellectual property (IP).

According to the U.S. Commerce Department, 75 domestic industries it identifies as “IP-intensive” account for 40 million jobs, approximately 28% of our total employment.  Industries reliant upon IP also account for $5 trillion – some 35% – of total American gross domestic product (GDP), 61% of U.S. merchandise exports and pay wages 42% higher than non-IP employers.

It is therefore critical that TPP negotiators establish a solid foundation for IP protection as they move toward finalization.

The TPP currently consists of eight Pacific trading partners in addition to the U.S. – Australia, New Zealand, Singapore, Malaysia, Vietnam, Brunei, Chile and Peru.  In 2010 alone, America exported $89 billion in goods to those nations, making the TPP one of our largest collective export markets.  The express goal of the TPP charter is “to establish a comprehensive, next-generation regional agreement that liberalizes trade and investment and addresses new and traditional trade issues and 21st-century challenges.”  And with other Pacific region nations Japan, Canada and Mexico expressing interest in joining the TPP, the agreement currently under negotiation can set the foundation for future trade practices across the Pacific realm.

To its credit, the U.S. stands as a worldwide leader in demanding strong IP standards in agreements such as this, as reflected by domestic laws and international accords such as the one completed just last year with Korea.  Similarly, with pressure on to finalize TPP negotiations, we must ensure strong IP protections in the final agreement.  Doing so will prove beneficial in terms of protecting American jobs against theft and counterfeit, protecting American consumers against potentially dangerous products, reducing the threat to American creativity and innovation posed by copyright infringement, promoting future innovation, protecting American competitiveness against those who seek to steal our ideas and creations and setting clear rules for worldwide commerce.

If successful, we can set a sound foundation of IP protection, which will prove critical for American innovation, jobs, exports and continued prosperity in an increasingly Pacific-dominated 21st century.

January 13th, 2012 at 1:35 pm
Video: Want to Protect American Jobs? Start by Fighting Internet Piracy
Posted by CFIF Staff Print

In this week’s Freedom Minute, CFIF’s Renee Giachino debunks the misinformation by opponents of the Stop Online Piracy Act (SOPA) and discusses the immediate need for Congress to pass legislation to crack down on foreign rogue websites that are dedicated to stealing U.S. intellectual property.


July 15th, 2011 at 12:39 pm
CFIF to Congress: Fight Online Theft Through the PROTECT IP Act
Posted by Timothy Lee Print

This week, CFIF joined dozens of employers, entrepreneurs and groups spanning the political spectrum on Capitol Hill to ask Congress to help put a stop to online theft by rogue websites that steal jobs and cost American businesses $135 billion annually.  In this era it is rare to find an issue that achieves almost complete consensus among ideologies and interest groups, but this is one.

Rogue websites steal intellectual property (IP) through counterfeiting, knockoff goods, piracy and misappropriation of movies, music, books and software.  Such thieves don’t pay taxes, they don’t follow American laws, they cut into American exports at a time of enormous trade deficits and they cut into our jobs and earnings.  Astoundingly, such sites constitute approximately 25% of all Internet traffic (53 billion visits per year), deceive honest customers, spread malware and even threaten lives and health with counterfeit pharmaceuticals and cosmetics.

Simply put, there is no justification or defense whatsoever for rogue websites.  So what to do?

Well, on May 12, 2011 Senators Orrin Hatch (R – Utah), Chuck Grassley (R – Iowa) and Patrick Leahy (D – Vermont) along with nine other original co-sponsors  introduced S. 968, the PROTECT IP Act.  That legislation would at long last halt rogue site access to the American market and help secure the fundamental rule of law.  Because many rogue sites operate outside our borders, the Act would allow the Department of Justice or private individuals to obtain court orders halting search engine connections to sites proven through due process to be “dedicated to infringing activity.”  The Act would also require payment processors and online advertising networks to discontinue payments to rogue sites.

Chances are that you or others close to you are impacted by rogue websites causing inestimable damage to U.S. jobs and prosperity.  We can help put a stop to that travesty by supporting the PROTECT IP Act and asking our Senators and Representatives to do the same.