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Posts Tagged ‘IP’
July 6th, 2020 at 2:32 pm
“Blanket Licensing” – a Collectivist, Bureaucratic, One-Size-Fits-All Deprivation of Property Rights Proposal
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America’s legacy of unparalleled copyright protections and free market orientation has cultivated a music industry unrivaled in today’s world or throughout human history.

From the first days of the phonograph, through the jazz age, through the rock era, through disco, through country, through hip-hop and every other popular musical iteration since its advent, it’s not by accident that we lead the world in the same manner in which we lead in such industries as cinema and television programming.  We can thank our nation’s emphasis on strong copyright protections.

Unfortunately, that reality doesn’t deter some activists from periodically advocating a more collectivist, top-down governmental reordering of the music industry in a way that would deprive artists and creators of their property rights.  Some advocates simply will not relent in their unceasing and misguided campaign to undermine copyright protections that have provided the wellspring for U.S. musical preeminence.  They seek to replace strong copyright protections and the freedom of market participants to mutually negotiate, ultimately to consumers’ obvious benefit, and replace them with a government-determined rate and a one-size-fits-all bureaucratic approach that eliminates market participants’ autonomy.

As just the latest example, British activist Cory Doctorow of the Electronic Freedom Foundation (EFF) now proposes a “blanket licensing” idea under which anyone wishing to offer music to pubic audiences would be required to open an account with a collecting society.  His heavily bureaucratic proposal would curtail the ability of copyright owners to negotiate royalties as they see fit with internet music platforms.

In an era of endless musical genres and methods to access them according to one’s preference, how does imposing such a collectivist, centralized, one-size-fits-all regime make sense?

The obvious answer is that it doesn’t.

Doctorow’s proposal betrays a fundamental flaw by misconceptualizing the nature of copyright itself by misstating “copyright’s real purpose:  spurring creativity and innovation.”

While Doctorow can be forgiven for his unfamiliarity with American constitutional principles, and while the utilitarian goal of creativity and innovation is indeed a primary feature of copyright and other intellectual property (IP) protections, that’s an inaccurate and incomplete statement of its “real purpose.”  Rather, copyright through common law and American constitutional history is valued as a natural property right of the creator, as we at CFIF articulated in our policy manual entitled ”The Constitutional and Historical Foundations of Copyright Protection”:

The Copyright Clause in the U.S. Constitution and the pre-existing rights it secures both arose from a long intellectual and historical tradition that reflected both the importance of economic incentives (the utilitarian argument) and the notion that individuals have an inherent and inviolable right to the fruits of their own labor.  As the Supreme Court has explained, ‘[t]he economic philosophy behind the clause empowering Congress to grant patents and copyrights’ is the conviction that:  ‘(1) encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors in “Science and the useful Arts”’ and (2) ‘[s]acrificial days devoted to such creative activities deserve rewards commensurate with the services rendered.’  Mazer v. Stein, 347 U.S. 201, 219 (1954).  Another early decision emphasized that only through copyright protection ‘can we protect intellectual property, the labors of the mind, productions and interests as much a man’s own, and as much the fruit of his honest industry, as the wheat he cultivates or the flocks he rears.’  Davoll v. Brown, 7 F.Cas. 197, 199 (D. Mass. 1845).

Accordingly, Doctorow’s proposal violates the central concept that copyright holders possess a natural right to their creations.  Even ignoring the natural right foundation of copyright, however, no other system of copyright protection has resulted in greater utility than our own, given America’s uniquely prolific music industry as noted above.

In addition to violating the fundamental rights of copyright owners to mutually bargain with music platforms, Seth Cooper of the Free State Foundation cogently summarizes how EFF’s proposal doesn’t accord with the obvious realities of today’s music marketplace:

[T]he EFF plan sidesteps the fact that there are several major Internet music service providers and numerous smaller providers.  Popular interactive (or ‘on-demand’) streaming music providers include Spotify, Tidal, Apple Music, Amazon Music, and Google Play Music.  Popular webcasters include Pandora, iHeartRadio, and Deezer.  And there are many others.  SoundExchange reported that some 3,600 webcasting services were operating in 2019.

Importantly, consumer choices also include nationwide satellite radio broadcaster Sirius XM and local AM/FM radio broadcasters.  Indeed, radio broadcasts are widely available through apps on smartphones and other devices.  Additional choices include digital downloads from major Internet music service providers as well as independent and individual artist websites.  CDs and vinyl records are also available at retail.

Given the number of competitors and platform choices, it is highly unlikely that Internet music services possess market power – or the ability to charge consumers above-market prices and otherwise engage in anti-competitive conduct.  There’s no showing of market power here and so the case for government intervention falls apart.” 

Accordingly, the EFF proposal contravenes fundamental concepts of copyright protections, it proposes to reorder a music marketplace that continues to function well for all of its stakeholders and it clashes with contemporary market realities.

We currently enjoy a functional market with innumerable market participants, and copyright owners across the spectrum possess the freedom to negotiate with a wide variety of potential distributors.  EFF’s proposal nevertheless aims to strip creators of the property rights they currently enjoy without justification.  The market simply isn’t broken.  Supporters of EFF’s proposal curiously assert that today’s market is corrupted by monopolies, but as Mr. Cooper sets forth nicely above, a broad global spectrum of potential avenues exist for consumers to freely access as they prefer.

Accordingly, the notion that we should upend a market in which consumers can access an ever-greater variety of music at low cost is an untenable one.

A better option would be for Congress to expand copyright holders’ protections to the sphere of terrestrial radio via the Ask Musicians for Music Act (AMFM Act), to extend what we know works, rather than foolishly venture into demonstrably defective novel proposals.

May 18th, 2020 at 10:37 am
New Gallup Report Undermines the Myth of “Superior” European Healthcare
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Socialized medicine advocates curiously but persistently suggest that European models offer a superior alternative to the American healthcare system that relies more on private market forces and strong intellectual property rights.  Gallup offers an important corrective, even if unintentionally.  Whereas the percentage of Americans rating their healthcare as positive has remained within a high 76% to 83% window for years, Europeans consistently rate their healthcare satisfaction substantially lower, with only Germany matching American satisfaction levels:

 

Germany:  84% approve/15% disapprove

United Kingdom:  76% approve/22% disapprove

France:  74% approve/25% disapprove

Spain:  68% approve/31% disapprove

Italy:  51% approve/487% disapprove

 

That’s important to remember as calls for socialized medicine become louder amid the coronavirus pandemic and as November elections approach.

April 17th, 2020 at 9:59 am
Image of the Day: Free Markets Bring Innovation
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In this week’s Liberty Update, we highlight how cheap slurs against “Big Pharma” have suddenly and rightfully fallen silent amid the coronavirus pandemic, as people understand that private pharmaceutical innovators offer the best hope for new vaccines and treatments.  Along with strong patent protections, one of the key components in unleashing America’s pharmaceutical innovators – who lead the world by producing an astounding two-thirds of new medicines worldwide – is an emphasis on free-market principles, as opposed to socialized models that stifle innovation and prevent new drugs from reaching even developed nations’ consumers.  Our friends at the Heritage Foundation offer a nice illustration of that correlation:

 

 

Freedom Means Innovation

Freedom Means Innovation

 

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March 23rd, 2020 at 10:22 am
Trump Administration Stands Up for U.S. Copyright Protections Under Potential South African Threat
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At CFIF, we’ve unceasingly highlighted the foundational role of intellectual property (IP) rights – patents, copyrights, trademarks and trade secrets – in what we know as “American Exceptionalism.”

No nation matches our legacy of IP protection throughout the decades and centuries.  Our Founding Fathers specifically inserted IP protections in Article I of the Constitution, even before the First Amendment or other Bill of Rights protections.

As a direct result no nation in human history remotely matches our legacy of scientific inventiveness, artistic innovation, global influence, power and prosperity.

And today, IP-centric industries account for about 40% of the total U.S. economy, and 45 million jobs – nearly 30% of the U.S. labor force.  For perspective, that U.S. IP economic sector outsizes the entire economies of every other economy on Earth with the sole exception of China.

Recently, we’ve particularly highlighted the role that patent rights play in medical innovation, which has obviously taken on increased importance amid the coronavirus pandemic.  Believe it or not, America accounts for an astounding two-thirds of all worldwide pharmaceutical innovation, due in large part to the IP incentives that allow innovators to receive the fruits of their difficult and costly labor.  That continues today, more than ever.

But in the IP realm, copyright plays just as vital a role in America’s legacy of innovation, influence and prosperity.  After all, just ask yourself what nation today or throughout history even approaches our artistic influence from music to cinema to television to any other form of artistic creation.  That’s the direct result of strong copyright protections for innovators in the U.S.

Unfortunately, other nations not only don’t respect copyright and other IP rights to the degree that we do, they actively seek to undermine U.S. protections.  As the latest example, the nation of South Africa, which hasn’t adequately or effectively protected U.S. copyrights.  And making matters worse, the South African legislature recently passed two proposed laws that further weaken copyright protections and sent them to the South African president for signature.

Fortunately, the Trump Administration is standing up for U.S. copyright and must remain so.

By way of quick background, the U.S. government practices what is known as the Generalized System of Preferences (GSP) program, which allows for duty-free importation of various goods from developing nations that we designate as beneficiaries of the program.  In April of last year, as part of our annual review of GSP beneficiary nations, the International Intellectual Property Alliance (IIPA) formally requested that the U.S. government specifically analyze South Africa’s status under GSP eligibility criteria because of South Africa’s longstanding inadequacy in terms of copyright protection for American copyrighted works.  In October, the administration accepted that petition and commenced a review, including a public hearing that occurred on January 30 of this year.  As the U.S. government rightly reconsiders South Africa’s GSP eligibility, petitioners ask that its legislature reconsider the two proposed bills and remove the defective anti-copyright provisions.

If that corrective action by South Africa’s government does not occur, the U.S. should in fairness withdraw South Africa’s continuing enjoyment of the GSP program’s benefits.

Unfortunately, some groups here in the U.S. seek to undermine American copyright laws, and are acting to pressure the Trump Administration and government officials to give South Africa a free pass.

That mustn’t be allowed.  Our protection of copyright and other IP rights is a primary – if not the primary – reason for America’s unrivaled legacy of innovation and prosperity.

The Trump Administration has strengthened America’s IP legacy after eight years of decay under Barack Obama.  For example, the administration strengthened IP protections during renegotiation of the North American Free Trade Agreement (NAFTA) in the new U.S.-Mexico-Canada Agreement (USMCA).  That included stronger patent protections for pharmaceuticals, as well as higher enforcement against counterfeit copyrighted and other goods.  It is doing the right thing with regard to South Africa as well, and it mustn’t allow domestic or overseas interest groups to pressure it into doing otherwise.

Particularly at a time like this, we cannot allow other countries to undermine our legal rights globally, whether South Africa or others.

 

March 13th, 2020 at 1:13 pm
Image of the Day: Patent Rights and U.S. Pharmaceutical Leadership
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In our Liberty Update this week, we emphasize the critical role that strong patent rights play in U.S. pharmaceutical innovation.  Although the U.S. accounts for just 4% of the world’s population and 24% of the global economy, we account for an astonishing 2/3 of new drugs introduced worldwide, as this helpful image illustrates perfectly:

Patent Rights Protect U.S. Pharmaceutical Innovation Leadership

Patent Rights = Global Pharmaceutical Innovation Leadership

 

Strong patent protections, along with our more market-oriented approach, have made America the world leader in pharmaceutical innovation.  At a moment like this amid the coronavirus pandemic, it’s more important than ever to protect that legacy and oppose misguided efforts by some in Congress to undermine it.

December 6th, 2019 at 12:41 pm
Members of Congress Stand Up for Property Rights
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In rare but refreshing bipartisan good news out of Congress, Senator Thom Tillis (R – North Carolina) and Representatives Ben Cline (R – Virginia), Theodore Deutch (D – Florida), Martha Roby (R – Alabama) and Harley Rouda (D – California) have just taken a firm stand protecting property rights – copyrights specifically – and merit our praise.

As we’ve long highlighted, property rights constitute a central pillar of “American Exceptionalism,” and that includes intellectual property (IP) rights – copyrights, patents, trademarks and trade secrets.   Our Founding Fathers considered IP so important that they deliberately and explicitly singled it out for protection in the text of the Constitution.  As a direct result, we’ve become the most innovative and prosperous nation in human history.  And it’s not even close.

For that reason, it comes as welcome news that Senator Tillis and Representatives Cline, Deutch, Roby and Rouda recently sent a letter to the American Law Institute (ALI) to question its curious decision to develop what’s known as a “restatement” of copyright law, which Congress has already legislated over years, decades and even centuries.

For non-lawyers unacquainted with ALI, it’s an organization established in 1923 that issues what are known as “Restatements” that summarize common law principles such as contract or tort laws.  Accordingly, Restatements can assist law students, lawyers, judges or other professionals about various legal concepts as a helpful handy reference.

As Senator Tillis and Representatives Cline, Deutch, Roby and Rouda correctly point out in their December 3 letter, however, the ALI has joined too many other organizations such as the American Bar Association (ABA) in undertaking a more left-leaning political and ideological mission in recent years.  None other than Supreme Court Justice Antonin Scalia cogently highlighted that concern, as the letter notes:

The late Justice Antonin Scalia, who was the most frequent author of opinions citing ALI publications in nine opinions, wrote that ‘modern’ Restatements “are of questionable value, and must be used with caution.’  He added that, ‘[o]ver time, the Restatements’ authors have abandoned the mission of describing the law, and have chosen instead to set forth their aspirations for what the law ought to be.’  In his dissent in Kansas v. Nebraska, Justice Scalia stated that newer Restatements ‘should be given no weight whatever as to the current state of the law, and no more weight regarding what the law ought to be than the recommendation of any respected lawyer or scholar.’”

Their letter notes that Justice Scalia was not alone.  Rather, “many states have also begun to repudiate the more recent and controversial Restatement projects,” and the U.S. Copyright Office, the U.S. Patent and Trademark Office, the ABA’s own IP Law section and numerous judges and academics have expressed similar concerns.

And as it relates to copyrights, the letter wisely emphasizes that the ALI’s latest effort is particularly inappropriate:

Traditionally, Restatements have focused almost exclusively on areas of common law because judicial rulings across different jurisdictions may vary and ALI’s interpretations are predisposed to assembly, analysis, and summaries.  By contrast, laws created through federal statute, including federal copyright law, are ill-suited for treatment in a Restatement because the law is clearly articulated by Congress in both the statute and the legislative history…  Throughout its almost 100 years of history, the ALI has never chosen to draft a Restatement of an area of law that is almost exclusively federal statutory law – until now.”

The letter concludes by expressing concern that the ALI may seek to issue similar questionable Restatements on such areas as patent law, and by emphasizing that copyright law is and remains within Congress’s authority, rendering the sort of action attempted by ALI inappropriate and potentially damaging.

For that important wisdom and initiative, Senator Tillis and Representatives Cline, Deutch, Roby and Rouda deserve our respect and praise.

October 1st, 2019 at 4:32 pm
Cicilline Bill Would Jeopardize Pharmaceutical Innovation by Weakening Patent Protections
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In the ongoing debate over healthcare reform, it’s important to keep our collective eye on the ball.  In that vein, as CFIF has repeatedly emphasized, we must ensure that free market principles prevail, and that includes protecting patent rights rather than weakening them.  Otherwise, American consumers will pay the price in fewer pharmaceutical innovations, shortages and worse health outcomes.

After all, as we’ve often pointed out, it’s not by accident that the United States accounts for an astonishing two-thirds of all new pharmaceuticals in the world.  That reflects the fact that we lead the world in intellectual property (IP) protections and avoid the destructive price controls that nations favoring socialized medicine impose.  As a consequence, patients in those countries don’t receive the new lifesaving and life-enhancing drugs that we do.

Unfortunately, there’s bad news to report in that regard, as Representative David Cicilline (D – Rhode Island) has introduced the misnamed “Affordable Prescriptions for Patients Through Promoting Competition Act.”  Most conspicuously, his proposal would begin prohibiting patent protections for pharmaceutical innovators developing improvements to their existing products.

Here’s why this is important.  Existing laws that have made us the most innovative nation in history allow for patent protection for new and useful improvements to existing pharmaceuticals.  Such improvements can help patients in such ways as eliminating side effects, reducing the necessary frequency or dosage, enhancing potency, boosting effectiveness or even addressing other illnesses beyond the drug’s original purpose.

But if innovators can no longer expect patent protections for the billions of dollars and years of hard work invested in developing them, then those innovations will begin to dry up.  Developing new or improved drugs typically requires over 10 years, and only approximately 10% of new discoveries actually make it to market after regulatory approval.  Accordingly, we must enhance the prospect that the fruits of innovators’ labors will be obtainable, not diminish them.

Representative Cicilline’s proposed bill is therefore a potentially catastrophic one for American consumers, who rely upon pharmaceutical innovators more and more to save lives and maintain health.  We therefore call upon all Members of Congress to oppose it.

 

July 9th, 2019 at 5:48 pm
Patent Protection at a Critical Juncture
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At CFIF, we’ve consistently and unapologetically celebrated the central role of intellectual property (IP) rights – patents, copyrights, trademarks and trade secrets – in making America the most innovative, prosperous and powerful nation in human history.

Recent legal developments domestically, as well as growing focus upon Chinese IP malfeasance internationally, provide new emphasis on the importance of strong U.S. patent protections for American inventors, and highlight some increasingly obvious concerns regarding patent infringers exploiting the U.S. Patent Trial and Appeals Board (PTAB) for nefarious and selfish purposes.

A couple of weeks ago, patent holder plaintiff TQ Delta won on all eight counts in its first case in a series against 2Wire, Inc. over digital communication technology patents.  The win thereby sets a strong precedent of IP enforcement in what will be the first trial over its DSL patent porfolio.

In another recent example that will instantly resonate with parents as their children splash amid water balloons in their backyards this summer, a federal judge in Texas went to the rare extreme of actually doubling a multimillion-dollar jury award in favor of toy company Tinnus Enterprises, maker of “Bunch O Balloons” water balloon devices, in its patent infringement case against Telebrands.  More often, judges reduce jury awards that they consider excessive.  In this case, however, U.S. District Judge Robert Schroeder III held that the “serial infringement” of Tinnus’s patents and “flagrant” litigation misconduct merited more than doubling the original damages assessment.

The ongoing case of EagleView v. Verisk offers another salient example, a proverbial David innovator versus a Goliath infringer.  It also presents a perfect opportunity to correct a patent infringement injustice and offer a deterrent lesson to other potential patent violators of the consequences they will face.  In a nutshell, the plaintiff EagleView develops products that create 3-D models from aerial images of rooftops, from which insurers and construction companies can more accurately reach repair cost estimates.  After defendant Verisk unsuccessfully attempted to purchase EagleView in 2014, it allegedly shifted to using its subsidiary Xactware Solutions to infringing EagleView’s patented technology, triggering EagleView’s lawsuit for willful patent infringement.

Since that date, Verisk has employed an array of tactics to prevent EagleView’s lawsuit from reaching a jury, such as filing multiple petitions at the PTAB to invalidate EagleView’s underlying patents, which a federal Court of Appeals found “unpersuasive.”  Verisk has also petitioned the District Court multiple times to invalidate EagleView’s underlying patents, which the Court rejected similarly.  Now, Verisk has even resorted to joining the LOT Network, an openly anti-IP group that includes Google and other titans.  Hopefully, those tactics will be put to an end at long last.

All of this serves to highlight once again the need to protect IP, and patent rights specifically, at the legislative, executive and judicial levels.  At the Congressional and executive levels, legislation to address patent eligibility and U.S. Patent and Trademark Office (PTO) reform are critical, as CFIF has previously emphasized.  Additionally, abuse at the PTAB level must not be tolerated.  And at the judicial level, courts must hold patent infringers accountable, and grant injunctive relief to patent holders to halt violations.  By holding violators accountable, we can not only deter other potential violators, but also provide the incentive to innovators by creating greater assurance that their work will be rewarded and protected.

America’s tradition of leading the world in innovation and IP protection is ultimately at stake.

February 14th, 2019 at 5:08 pm
Want to Address Drug Costs? Avoid Price Controls, Eliminate PBMs and Don’t Weaken Patents
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In an excellent piece in today’s Wall Street Journal, Scott Atlas of Stanford University highlights how Americans enjoy far greater access to new lifesaving drugs than patients in Europe and elsewhere, and how the movement to impose government price controls would only restrict access to new drugs and degrade Americans’ health outcomes, as we at CFIF have been emphasizing:

America has superior treatment results for virtually all serious diseases reliant on drug treatment, including cancer, heart disease, stroke, high blood pressure and diabetes.  Price controls would jeopardize that advantage…

Pegging drug prices to those of foreign countries, as both Bernie Sanders and Donald Trump have proposed, would ultimately lead to the same consequences Europeans endure – reduced access to critical drugs and worse outcomes, including more deaths from disease.”

Mr. Atlas also notes how the Trump Administration has taken positive steps toward actually reducing drug prices, by targeting rebates received by pharmacy-benefit managers (PBMs) from drug manufacturers:

The Trump Administration has announced a proposal to do away with rebates paid by drug manufacturers to pharmacy-benefit managers, replacing them with discounts to beneficiaries at the point of sale.  PBMs are middlemen that control ‘formularies,’ the lists of drugs covered by a plan.  Rebates from drug companies to PBMs are payments for influence – either to position a drug on the formulary as ‘exclusive’ or to give it preferred status over competitors.

PBMs act counter to patient interest while aggravating the lack of price transparency.   These complex behind-the-scenes payments – $179 billion in 2016 – reward inflated list prices, on which patient premiums are often based.  This prevents patients from taking account of price…  Go-betweens like PBMs should be eliminated.”

Finally, and just as critically, Mr. Atlas adds that weakening patent and intellectual property (IP) rights would constitute a particularly destructive course:

Drugs are the most significant reason for the past half-century’s unprecedented gains against deadly disease.  But policies that aim to reduce drug prices – price regulation and weaker patent protection – are also associated with delayed availability, less innovation, and limited access.”

Mr. Atlas delves into statistics showing the enormous advantage that Americans enjoy in terms of new drugs and health outcomes, and his piece is well worth the full read.  Hopefully policymakers at all levels of government are listening.

May 25th, 2018 at 8:50 am
Stephen Moore: Trade Deals Must Protect Intellectual Property Rights
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CFIF recently highlighted the importance of strengthening intellectual property rights as part of ongoing trade negotiations in a piece entitled “Intellectual Property:  NAFTA Renegotiation Priority #1.” Days later, Senator Pat Toomey (R – Pennsylvania) echoed that call in his Wall Street Journal commentary.

This week, celebrated economist Stephen Moore added his voice in a brilliant commentary entitled “Trade Deals Must Protect Intellectual Property Rights”:

American investments, ingenuity and entrepreneurship have made intellectual property one of our nation’s most important assets.  IP-intensive industries, including software, biotechnology and entertainment, now support nearly one-third of all U.S. jobs.  But too often, our foreign trading partners take unfair advantage of our IP innovations to enrich themselves at our expense.”

Moore proceeds to highlight the pharmaceutical sector as one particularly abused by foreign governments, and notes the enormous cost of IP theft to the U.S. economy by nations like China, then stresses the ominous danger if we fail to act:

Intellectual property is every bit as vital to our economy – if not more so – than steel or aluminum.    America leads the world in computer software;  drugs;  artificial intelligence;  patents;  trademarks;  and music, entertainment and other creative industries.  But how long can that last when competitor nations are ripping off our entrepreneurial companies to the tune of half a trillion dollars a year?”

It’s an excellent piece worth the read, and a welcome call from someone to whom the White House listens.

May 11th, 2018 at 1:03 pm
Sen. Pat Toomey in WSJ: Strengthen IP Rules During NAFTA Renegotiation
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In this week’s Liberty Update, we emphasize how intellectual property (IP) protection should be priority number one for the Trump Administration as it renegotiates the North American Free Trade Agreement (NAFTA) this month.

In that vein, we’re pleased to see Senator Pat Toomey (R – Pennsylvania) echo that point in his commentary in today’s Wall Street Journal:

[T]he administration can accept the advice from many members of Congress and others to modernize Nafta in ways that expand trade opportunities without curtailing American consumers’ freedom…  Nafta’s pre-internet intellectual property rules could be strengthened.”

Well said, and hopefully the message resonates within the Trump Administration to continue its remarkable recent string of economic and international successes.

April 11th, 2018 at 5:17 pm
Great News: Comprehensive Music Reform Legislation Introduced in Congress
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CFIF steadfastly supports America’s world-leading tradition of strong intellectual property rights, which have made us the most creative, inventive and prosperous nation in human history.

That includes the music industry, which stands unrivaled in terms of worldwide influence and fecundity, but which we’ve noted merits attention from Congress:

Under byzantine laws, artists receive just compensation whenever their post-1972 recordings are played, but in many cases not for their pre-1972 recordings.  That’s an indefensible and arbitrary artifact that has persisted far too long.  Why should Neil Diamond receive payment whenever ‘America’ is played, but not classics like ‘Solitary Man?’

Fortunately, the opportunity to correct that unfairness has arrived.  Even better, legislation to correct the existing flawed system arrives alongside other music legislation that galvanizes the coalition to finally correct the situation.  As a result, a broad coalition of music organizations representing everyone from songwriters, composers, performers, publishers and labels support three new pieces of legislation…”

Well, this week offers very welcome news.

The Music Modernization Act (H.R. 5447) has been introduced in Congress, as cogently summarized by the musicFIRST Coalition:

Introduced by House Judiciary Committee Chairman Bob Goodlatte (R – VA) and Ranking Member Jerrold Nadler (D – NY), the Music Modernization Act combines music licensing reforms outlined in the CLASSICS Act, Songwriters Equity Act of 2015, the rate standard parity provisions of the Fair Play Fair Pay Act, and AMP Act into a single, consensus piece of legislation.  The MMA addresses specific music legacy issues such as establishing federal copyright protection for artists who recorded before 1972, creating a single licensing entity to administer music publishing rights for all digital music and ensuring producers and engineers receive royalties for their contributions to the music they help create.

The consensus legislation introduced today in the House would not have been possible without the leadership from Chairman Goodlatte, Ranking Member Nadler, Rep. Doug Collins (R – GA), Rep. Darrell Issa (R- CA), Rep. Hakeem Jeffries (D – NY) and other leaders from both parties who worked together to craft legislation that is broadly supported by the entire music industry, streaming services and music creators.”

This legislation is long overdue.  CFIF therefore applauds the Committee for its unanimous support, and urges swift passage by the House to finally rectify the existing unfairness in the nation’s music laws.

February 26th, 2018 at 9:14 am
Image of the Day: U.S. Falls to 12th in Worldwide Patent Protection
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As we’ve constantly stressed, America’s history of leading the world in protecting intellectual property (IP) explains our status as the most inventive, creative and prosperous nation in human history perhaps more than any other factor.  That includes patent protection, where the U.S. has traditionally led the world.  Unfortunately, over the past eight years the U.S. has surrendered that status and plummeted to 12th in the U.S. Chamber of Commerce’s annual ranking of patent protections.

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U.S. Falls to 12th

U.S. Falls to 12th

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Obviously, many of the nations that now surpass us compete with us for jobs, investment and companies looking to innovate.  It’s therefore critical that we pass the STRONGER Patents Act currently before Congress, which CFIF enthusiastically supports, to restore our status as the world’s leader in patent protection lest we continue to lose ground.

April 26th, 2017 at 10:20 am
Celebrating World Intellectual Property Day!
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Happy World Intellectual Property Day!

It’s no secret that private property rights constitute a natural human right, as well as the foundation for prosperity and innovation across time and geography.  And among the forms of private property, it’s important to recognize that intellectual property (IP) constitutes a core component.

For proof, look no further than the U.S. Chamber of Commerce’s annual International IP Index, which year after year confirms the cause-and-effect relationship between IP protections and prosperity:

The most up-to-date data on the benefits of IP protection reveals that IP is, in fact, a critical instrument for countries seeking to enhance access to innovation, grow domestic innovative output, and enjoy the dynamic growth benefits of an innovative economy.  Conversely, weak IP protection stymies long-term strategic aspirations for innovation and development.

Taken together, the 21 correlations included in this Index present a clear picture:  IP protection goes hand-in-hand with the aspirations topping government agendas around the world.  As Table 1 suggests, a robust national IP environment correlates strongly (having a strength of 0.6 or above) with a wide range of macroeconomic indicators that fall under the umbrella of innovation and creativity – the very same indicators that are found in national strategies for development of many economies today.  This message has only become stronger over the past 3 editions of the Index.  Adding several new variables each year and expanding the sample size by 50% (from 30 to 45 economies), the strength of the relationship between IP rights and crucial economic activities has grown.”

And nowhere is that relationship more obvious than in the United States.  Our Founding Fathers believed so strongly in IP rights as a natural right and a foundation for prosperity that they specifically protected them in the text of the Constitution.  And since that time, America’s world-leading tradition of IP protection has made us the most inventive, creative and prosperous nation in human history, without any proximate rival in that regard.

In an increasingly globalized economy, it’s important that we celebrate IP and ensure that more of the world protect it in the way that America has.  So join CFIF in celebrating World IP Day today!

April 13th, 2017 at 2:21 pm
So Google Favors Intellectual Property After All… Its Own, Anyway
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So it appears that Google isn’t so opposed to intellectual property (IP) rights after all.  As long as it comes to its own, that is.

That’s the upshot of a high-profile federal lawsuit in which Google subsidiary Waymo accuses Uber of stealing its patents and trade secrets:

Waymo LLC, the self-driving car unit of Google parent Alphabet Inc., asked a federal court on Friday to halt Uber Technologies Inc.’s efforts to develop autonomous vehicles allegedly based on stolen design secrets.  The request was made to the U.S. District Court in San Francisco, following a suit filed last month accusing Anthony Levandowski, a former key manager in the Google self-driving car project, of taking 14,000 files before quitting last year to create a self-driving truck maker.  That startup, called Otto, was quickly acquired by Uber last year…

Waymo also filed an expert witness statement to the court from a laser-optics physicist who said he believes Uber’s laser-sensor technology uses Waymo’s trade secrets and infringes on its patents.  Waymo also added a fourth patent to its infringement claims in an amended suit on Friday.”

We take no position on the merits of the case, and maintain no particular grudge against Google as a company.  But its leading role in undermining IP rights in the United States, which made us the most inventive, artistically innovative and prosperous nation in human history, makes its current pleas a bit ironic, to put it mildly.

For years, we’ve been alerting readers to the endless, destructive litany of ways in which Google has undermined IP and public policy for its own benefit:

Here’s the irony.  Google somehow manages to arouse righteous legions of supposed anti-corporatist activists on its behalf (think sunshine anarchists and libertarians of convenience).  Yet Google itself exercises more self-serving, crony capitalist throw weight than any counterpart entity.

For example, consider so-called ‘Net Neutrality,’ with which conservatives and true libertarians are now familiar, that would suddenly empower the federal government to micromanage Internet service.  Google stands to gain enormous free-rider benefits, which explains why it is the chief corporate proponent of that proposed regulatory expansion.

Or think of Google Books, which posts the text of books that Google has gone ahead and scanned for viewing on its site.  Who cares if Google hasn’t first obtained permission from the actual authors and creators, right?  Google counts on the sheer cost and hassle of litigation to discourage individual creators against putting up a legal fight to protect their rights.

How does that square with ‘Don’t Be Evil?’

Or how about this?  Last August, Google voluntarily agreed to a $500 million fine for assisting Canadian online pharmaceutical sellers in accessing American consumers.  That amount is an entire Solyndra, and one of the largest forfeiture penalties in U.S. history.  Google fully admitted that it, ‘improperly assisted Canadian online pharmacy advertisers to run advertisements that targeted the United States,’ and prosecutors added that Google, ‘was fully aware as early as 2003 that generally it was illegal for pharmacies to ship controlled and non-controlled prescription drugs into the United States from Canada.’

But once again, it’s not Google’s health or property at stake, so who cares?”

More recently, Google has used its enormous influence within the Obama Administration to push the Obama Federal Communications Commission’s (FCC’s) destructive cable set-top box proposal, which would have compromised consumer privacy, as well as the Obama FCC’s “privacy” regulation of 2016, which Congress just rightfully rescinded.

Intellectual property rights were so important to our Founding Fathers that they specifically safeguarded them in the text of the Constitution.  Since that time, IP rights have provided the “secret sauce” by which we’ve achieved such incomparable technological, artistic and influential supremacy.

Regardless of the merits of the Google’s litigation against Uber, it has every right to safeguard its own IP rights.  It would be nice if it finally dawned on them that they don’t wear hypocrisy well, however, and that they should stop undermining the same protections for others.

January 23rd, 2017 at 3:43 pm
Intellectual Property: Trump Administration Can Reverse Eight Years of Erosion Under Obama
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In Forbes today, intellectual property (IP) attorney Howard Hogan highlights the importance of IP to the American economy (38% of GDP and 30% of jobs) and considers the opportunity for positive change under a Trump Administration after eight years of poor leadership under Barack Obama.

Hogan highlights the pernicious influence of Google during the past eight years, given its self-interest in weakening America’s historic protection of IP rights and free-riding off of others’ creations:

Arguably, no company has been more influential than Google in setting policy in America in recent years…  White House officials met with employees of Google or related companies 427 times – an average of more than once a week, while approximately 30 Google personnel have taken positions in the Obama Administration, and about 20 former members of the White House staff have landed at Google…

One of the consistent goals of this political machine has been to promote policies that have the effect of weakening legal protections for IP rights.  The reason for these policy preferences lies in Google’s role as content distributor and advertiser.  Google does not create the overwhelming majority of the content that its users seek;  it generates much of its revenue by displaying ads while connecting users to content created by others, or by selling platforms to access such content.  For Google, the ability to distribute popular third-party content or sell rights to use other companies’ trademarks with few strings attached is tantalizingly profitable.”

Among the destructive agenda items pushed by Google?  The “set-top box” proposal within Obama’s Federal Communications Commission (FCC), which we at CFIF continue to emphatically oppose:

A recent example was the so-called ‘set-top box rule’ proposed by the Chairman of the Federal Communications Commission.  The proposal would have used a statute designed to promote competition among cable television set-top boxes as a vehicle to force cable companies to give tech companies like Google free access to raw video and data feeds that cable companies provide to their customers.

While much about the proposed rule remains controversial, there is no doubt that it would have benefited the Googles of the world, who could sell devices and advertising based on content that they had not licensed from copyright owners, without paying royalties, and with little fear that the owners would be able to enforce the licensing restrictions that led them to offer the video content to cable companies in the first place.  Google and its allied advocacy groups all filed comments in support of the proposal.  Even President Obama threw his support behind the rule, prompting some to question whether he was exerting undue pressure on a supposedly independent agency.”

As Howard concludes, companies like Google contribute a great deal to the American economy and our lives, but we must also do a far better job of protecting American IP rights, which may be our greatest comparative advantage over other nations in an increasingly competitive global information economy.

November 4th, 2016 at 2:48 pm
Cronyism Within Obama’s FCC and Library of Congress Threatens U.S. Copyright and Intellectual Property Protections
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In today’s political atmosphere of Wikileaks and FBI investigation of potential collusion, the charge of government cronyism is perhaps more damning than any other.

For that reason, a blockbuster editorial in yesterday’s Wall Street Journal was particularly devastating:

Most Americans think of Google as a search engine doing unalloyed social good, but the company also wants to make money and wield political influence along the way.  So you don’t have to be a conspiracy theorist to notice that an abrupt change of leadership at the U.S. Copyright Office is good news for Google, which aims to pay less for profiting from the property of others.”

So what’s the backstory here?  In a nutshell, this tawdry ordeal centers on the suspicious demotion within the Library of Congress of Maria Pallante, who until two weeks ago served as U.S. Register of Copyrights.  In that capacity, Ms. Pallante advocated reorganizing the Copyright Office as an independent agency, but perhaps more significantly was too protective of people’s property rights, including copyright, for Google’s taste.

Chief among Ms. Pallante’s inconvenient heresies?  Her opposition to the malignant set-top cable box proposal from Obama’s Federal Communications Commission (FCC), which we at CFIF have steadfastly criticized:

Earlier this year the Federal Communications Commission proposed something known as the set-top box rule.  The thrust was to force cable companies to build a universal adapter so Google and others could broadcast content without paying licensing fees or abiding by carriage agreements.   Google supported the new rule.  Less pleased were creators, who wouldn’t be paid for their work.

A bipartisan group of House Members in July sent a letter asking the copyright office to weigh in.  Ms. Pallante replied that the rule ‘would seem to take a valuable good’ and ‘deliver it to third parties who are not in privity with the copyright owners, but who may nevertheless exploit the content for profit.’  Ms. Pallante suggested revising the rule, which the FCC did.

This prompted outrage from groups funded by Google.  Take Public Knowledge, whose website notes that Google is a ‘platinum’ supporter – chipping in $25,000 a year and probably more.  Public Knowledge’s senior counsel assailed the House letter, and in September it released a report claiming ‘systematic bias at the U.S. copyright office.’  Ms. Pallante was singled out as ‘captured’ by industry for the sin of focusing on ‘enforcement’ of copyright rather than rewriting it.  Something else happened in September:  Ms. Pallante got a new boss when Ms. Hayden was sworn in as Librarian of Congress, a presidential appointment.  Ms. Hayden formerly ran the American Library Association, which takes a permissive view of copyright law and accepts money from, you guessed it, Google.  A month later Ms. Pallante was pushed out.”

It all reeks of crony capitalism on behalf of Google, whose business model depends in part on exploiting others’ copyrighted artistic creations without compensation.

As The Wall Street Journal’s editorial concluded, “The guarantee to own what you create is the reason entrepreneurs take the risks that power the economy.”  Indeed, the U.S. maintains the world’s most protective copyright and intellectual property (IP) laws, which remains the driving force in our status as the most creative, inventive and prosperous nation in human history.  Americans shouldn’t tolerate cronyism in pursuit of such bad ideas as the FCC’s set-top box proposal that threaten that status.

August 8th, 2016 at 12:07 pm
U.S. Copyright Office Joins Broad Criticism of FCC’s Destructive Cable Set-Top Box Proposal
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CFIF and other conservative and libertarian groups strongly oppose a new proposal from Obama’s overactive Federal Communications Commission (FCC) to regulate cable television set-top boxes, and that opposition is widely shared among a bipartisan Congressional coalition and even the political left.

Now, even the U.S. Copyright Office has joined the voices criticizing the FCC’s misguided proposal:

The U.S. Copyright Office criticized a federal agency’s plan to open up the market for pay-TV set-top boxes in a letter to lawmakers on Wednesday.  The letter adds political pressure on Federal Communications Commission Chairman Tom Wheeler, who has been pushing since the beginning of the year for new FCC rules to open up the market for the costly set-top boxes…  ‘As currently proposed, the [FCC] rule could interfere with copyright owners’ rights to license their works as provided by copyright law.’  That is because those who create programming, and hold the copyright on it, have negotiated specific deals with cable companies, and those deals could be upended if other companies also obtain access to the programming through their own set-top boxes.  The letter adds that the Copyright Office is ‘hopeful that the FCC will refine its approach as necessary to avoid conflicts with copyright law and authors’ interests under that law.'”

It’s pretty damning and humiliating that even a counterpart executive branch agency raps the highly-politicized FCC across the knuckles in such an open manner.

Nevertheless, it’s a welcome rebuke against the FCC’s proposal, which constitutes a 1990s-vintage, one-size-fits all mandate to make cable TV set-top boxes artificially compatible with third-party devices.  It additionally constitutes transparent crony capitalism, threatens consumer privacy, undermines the creative community and damages property rights by facilitating piracy of creative content.  And technologically speaking, the set-top box proposal freezes in place an outdated set-top box business model that private innovation and technological advance are already leaving in the dust, with cable companies and other entertainment industry entrepreneurs already abandoning traditional cable boxes in favor of apps and other devices owned and guided by individual consumers.

Hopefully, the Copyright Office’s welcome input helps drive a well-deserved nail into the proposal’s metaphorical coffin.

July 22nd, 2016 at 1:07 pm
Taylor Swift: Intellectual Property and Anti-Counterfeiting Champion
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We take no position in the ongoing Taylor Swift versus Kanye West divide.  But as perhaps surprisingly featured in a Wall Street Journal opinion this week, we do applaud her strong stance in defense of intellectual property (IP) and against the scourge of counterfeiting:

Pop star Taylor Swift has been feuding in recent days with rapper Kanye West and his wife, Kim Kardashian.  The details of the drama are lurid and complicated, but young aficionados of Snapchat and Instagram have been following it all intently.  If only the same were true for other Taylor Swift feuds that have received less attention.  Namely, those the 26-year-old songstress has fought in defense of a principle often scorned by fellow celebrities and the social-media generation generally:  the value of intellectual property.

In battles against tech titans, Chinese e-commerce swindlers and others, Ms. Swift has repeatedly insisted on being paid for her music and brand – and in the process has taught some valuable lessons in basic economics.  This may be the ‘information wants to be free’ era, when online content is glibly swiped by millions who would never dream of shoplifting, but Ms. Swift has a deep appreciation for the profit motive and the fruits it bestows on society.”

As we’ve often noted, it’s no coincidence that the United States has become the most artistically innovative and influential nation in human history while maintaining the world’s strongest IP protections.  Rather, it’s a direct causal relationship, as Ms. Swift recognizes:

Ms. Swift explained why she fights.  ‘Music is art, and art is important and rare.  Important, rare things are valuable.  Valuable things should be paid for.’  She added, ‘My hope for the future, not just in the music industry, but in every girl I meet, is that they all realize their worth and ask for it.'”

Whatever one thinks of Ms. Swift as a musician or pop culture icon, her high-profile leadership in defending IP is to be celebrated.

July 18th, 2016 at 12:11 pm
Intellectual Property Protection Means Greater Biomedical Innovation
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Reasonable people understand that nations more protective of property rights and the rule of law enjoy higher levels of innovation and prosperity.  The fields of pharmaceutical advancement and biomedical innovation more specifically are no exception.

In a cogent new piece, U.S. Chamber of Commerce Executive Director of Intellectual Property Policy Patrick Kilbride demonstrates how strong intellectual property (IP) protections fuel biomedical innovation that benefits the world:

[E]conomies with the strongest IP protections are 60 percent more likely to provide environments conducive to biotech innovation.  And economies with specific protections for the life sciences field see an average of 13 times more biomedical investment than those lacking IP protections…  [A]s intellectual property systems have strengthened over time, public and private investment in health care has increased, as well as individual earnings to support heath costs.”  (emphasis in original)

Why does that matter?  Because international and even domestic forces seek to  undermine IP protections, threatening the goose that continues to lay golden eggs:

We live in a world where concerted efforts are being made daily to erode intellectual property rights, based on the false premise that IP somehow threatens access to medical care.  While the facts simply don’t support this theory, it hasn’t stopped activists around the world from spreading misinformation and chipping away at the very IP protections that produced life-saving medicines in the first place.  Just a few short years ago, India stripped a leukemia drug of its patent, claiming that it inhibited access by its citizens.  The result?  Due to government interference, fewer Indian citizens had affordable access to this medication than before the patent was annulled.  In Canada, an overzealous judiciary revoked 25 previously granted pharmaceutical patents and sparked a case involving NAFTA protections that could do lasting harm to future investments in life-saving medicines.  And Colombia’s prime minister of health has repaid medical researchers scrambling to find a cure for the Zika epidemic by pursuing an arbitrary and dangerous attack on others in the industry, effectively stripping a pharmaceutical company of its patent for another drug.  It is also against this backdrop that the United Nations Secretary General has pressed for establishment of a High-Level Panel on Access to Medicines (HLP) to quickly produce a report, based on the same false premise:  that ‘failure to reduce the costs of patented medicines is resulting in millions of people being denied access to lifesaving treatments.'”

As Abraham Lincoln observed, “The patent system added the fuel of interest to the fire of genius.”  It’s incumbent upon us to safeguard IP protections that continue to fire the genius of medical innovation.  Too many lives are at stake across the world to allow the grim alternative.