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Re: Hypothetical situation to chew on

On Wed, 5 Jan 2005 23:48:40 +0000, Andrew Suffield <asuffield@debian.org> wrote:
> On Wed, Jan 05, 2005 at 01:36:46PM -0800, Michael K. Edwards wrote:
> > The classical forms of intellectual property -- copyright, patent,
> > trademark, and trade secrets -- were developed to protect very
> > different kinds of "intangible assets".
> That's a myth, spread by a propaganda campaign run by large
> corporations over the past few decades. They want people to believe it
> so that they can claim moral authority for the continued protection of
> these assets.

With regard to developments in the last two decades, extending the
life and scope of existing copyrights in a way that benefits only a
few corporate owners of entertainment properties, I largely agree. 
But I think you present a somewhat one-sided view of the European
history of abstract property rights, and by implication of 19th and
most of 20th century US and world history in this area as well.

I'm no historian (and no lawyer), but I don't think the record's hard
to read.  At least in England and its colonies, the creation of
statutory property rights in commercial applications of knowledge has
fairly consistently been an improvement over the previous practice. 
There have been periods of backsliding and regulatory capture (as we
face in the US today), but legislators and judges have generally done
a better job of keeping an eye on the public interest than ministers
and guilds.

Granting limited protection to commercial enterprises involving
originality, inventiveness, quality assurance, and organizational
mastery is good public policy -- as long as the public interest is
served by the encouragement of creative efforts, the eventual release
of knowledge into the public domain, and reliable access to
high-quality goods at reasonable prices.  If the current state of law
about software consistently fails these public interest criteria (as I
believe it does), then perhaps we need new and better law, not


> This process culminated in 1710, with the enactment of the Statute of
> Anne in the UK, marking the first form of copyright as we know it
> today. It permitted anybody to print anything, with certain
> restrictions designed to protect the revenue stream of the publishers
> (essentially the ones we have now, time limit 28 years).  ... [snip]

... and was enacted in an environment where previously no property
right in ideas or expression was widely recognized, and the only
recourse available to authors was to demand that their authorized
publisher seek enforcement of the limits of the royal grant on other
publishers.  See Donaldson v. Beckett 1774
(http://www.copyrighthistory.com/donaldson.html ), and in particular
Lord Camden's review of the legal history of printing prior to the
Statute of Anne.  While I find Lord Camden's assessment that "Glory is
the reward of science, and those who deserve it, scorn all meaner
views" rather overblown, he puts the case well that no property right
in authorship of a work once published could be found prior to 1710.

> Copyright was not designed to protect assets. It was designed to take
> them away. Rights of authors did not enter into it, nor was there any
> 'trade' of rights between publishers and the people (another popular
> myth). The purpose of copyright in its modern form was to grant the
> people the right to copy works, which they did not previously have.

That just doesn't fit the history.  The Statute of Anne created a
legal foundation for an automatic exclusive right of publication,
something that was previously subject to the whim of royal ministers. 
This right was transferable (and generally transferred) from author to
publisher.  To protect other publishers from inadvertent violation, a
copyright registry was established.  To protect the public from
monopolistic price gouging, a judicial price review mechanism was
detailed.  To preserve public access to knowledge in the long run,
copyright was made to expire after a maximum of 28 years from first
publication, and to give authors a shot at an upside for works of
lasting interest (and a second chance with another publisher if the
first one didn't generate demand), copyright reverted to the author
after 14 years, forcing a renegotiation of terms.

The system was far from perfect, but it succeeded in creating a
statutory property right where previously there existed only executive
prerogative.  It didn't so much grant or deny anyone the right to copy
works; it recognized authors as the moral owners of their works, and
granted them the right to authorize a particular publisher to make
copies, within constraints motivated by public policy considerations.


> Patents follow a fairly similar story; they began as monopolies on a
> certain trade, prohibiting anybody else from competing with a
> specified person, this time created by the state rather than the
> churce, as a method of raising funds. Widespread abuse led to them
> being locked down in 1624 by the Statute of Monopolies (again in the
> UK), which was the beginning of the modern patent system.
> Again, it was to take assets away, not protect them.

Again, it was to formalize a statutory property right, administered
via civil judiciary mechanisms, to replace a widely abused system of
executive prerogative (which had nominally been abolished in 1610).  I
would consider the Statute of Monopolies to have created a form of
asset -- a tradable, legally recognized form of ownership, with a
clearly defined scope on which to base a valuation -- while abolishing
a form of privilege.

And, for the first time in the UK, the public interest was considered
to the extent of limiting patents to new inventions and limiting the
period of their validity to 14 years (21 years for those extant at the
passage of the Statute and otherwise permissible).  There was also an
ill-defined anti-monopolistic-price-gouging clause, precursor to the
one in the Statute of Anne.

> Trademarks are essentially unrelated. They began as a way of marking
> some property as yours (think of branding cattle), with prohibitions
> on altering them introduced as basic anti-theft measures. They then
> developed into the current system of branding sometime between the
> 10th and 15th centuries (I forget the details of when and how, but it
> was started in the UK again - did we invent *all* of this crap?).

Trademark is certainly related in practice; trademark infringement,
disparagement, and dilution claims are frequently associated with
litigation about other forms of misappropriation, and the trend is
towards merger of the administrative agencies that handle registration
of various IP claims.

Trademark in English law is generally reckoned to start with the
"Bakers Marking Law" of 1266 (see
http://www.caslon.com.au/ipchronology.htm ), codifying existing
practice among bakers.  (I'm going on secondary sources here; I
haven't tracked down the text of these laws or cases.)  I think that
the notion of trademarks as marking property ownership (a la cattle
brands) is a real stretch; as far as I am concerned, a trademark is a
mark of authenticity in trade goods, and enforced against
counterfeiting, not theft.  (The practice long predates the term, if
you accept as fact references to brick markings in 500 BCE Rome.)

The first trademark infringement case litigated in England was
Southern v. How 1618, but the ownership of a trademark as a form of
abstract property was established in a 1452 case in which a baker's
widow succeeded her husband as the owner of his mark.  (If anyone has
a URL for the text of these decisions, I'd like to read them.) 
There's a good (and widely cited) summary for legal purposes in New
Kids on the Block v. News America Publishing 1992,

(The New Kids opinion was written by Hon. Alex Kozinski, who also
wrote the Micro Star v. Formgen 1998 opinion for the 9th Circuit --
http://caselaw.lp.findlaw.com/data2/circs/9th/9656426.html -- surely
one of the funniest appellate decisions in recent history, and also
good law about software copyright and derivative works.  The opening
lines of the opinion:  "Duke Nukem routinely vanquishes Octabrain and
the Protozoid Slimer. But what about the dreaded Micro Star?")

> Trade secrets are a modern (20th century) perversion, but they're also
> a US perversion. They aren't considered property in Commonwealth
> countries. Breaking into your competitor's offices and stealing their
> files is theft, but there's no law against obtaining them via means
> that would otherwise be legal (except in the US and a few countries
> who duplicated their insanity). They're probably the only one designed
> to protect assets.

The notion of a firm's (or guild's) processes being secret and
protectable is much older than any legislation about the term "trade
secret".  The history is again one of progressive codification and a
transition from private enforcement (and criminal enforcement at the
demand of the powerful) to the civil court system.  Injunctive relief
against trade secret misappropriation in the UK dates to 1820 (Yovatt
v. Winyard), and in the US dates to a Massachusetts Supreme Court
decision of 1868 (Peabody v. Norfolk).  Prior to the adoption of
statutes at the state level in the late 1980's and 1990's (many based
on the Uniform Trade Secrets Act), the judicial record (and in
particular the 1939 Restatement thereof) constituted the US law on
trade secrets.

Ironically enough, trade secret is the only form of intellectual
property that I cited which doesn't create an asset, in the sense that
it doesn't create any tradable right like copyright or patent.  The
legal theory underlying trade secret law isn't so much about property
as it is about tort (breach of confidence) and contract (breach of
contractual non-disclosure provisions).  The only sense in which it
protects an asset is that it extends injunctive relief to the actions
of third parties who receive confidential information from the
breaching party.

This protects the commercial advantage of secret knowledge, which some
accountants now recognize as an asset under the category of
"goodwill"; if you think that's bogus (as I do), blame it on the
accountants, not the judges.  In my opinion, this brings us closer to
where the modern system has gone wrong.  There's a sort of collective
insanity that multiplies the number of "shares outstanding" in a
publicly held corporation by the price at which some idiot was most
recently reported to have sold a share to some other idiot, and tries
to ascribe a real-world meaning to the resulting "market
capitalization".  Try to justify that number, and all kinds of
fanciful forms of "proprietary value" appear -- defended all the more
viciously for their emptiness.

> > In the US, the DMCA and UCITA amount to attempts to create a new form
> > of intellectual property specific to software and digital media.  I
> > happen to think they are very poor public policy in their details.
> > But I'd prefer a well-thought-out "digital rights" legal formula over
> > distortions to the existing mechanisms.  The way it is now -- stealth
> > amendments bought by software and media giants, regulatory capture at
> > the USPTO, DRM arms races, and widespread contempt for the law -- is
> > no good.
> That's no surprise, since the system was never designed to cope with
> this sort of thing. Given its position in history, the intent was
> probably to continue to introduce new laws to stop this kind of crap
> as it came up; that was the prevailing approach to legislation at the
> time. But the political landscape shifted to favour the large
> corporations, so that never happened.

The present situation is hardly the first time that commercial
interests have had the upper hand over the public interest in the
rewriting of statutes about property rights.  But the existence of
such statutes is, on balance, a good thing, and bad statutes have a
way of being replaced by better statutes eventually.  (Unfortunately,
this generally takes several generations of progressively more
intolerable abuse by the powerful.)  Widespread contempt for, and
evasion of, the law may help persuade legislators that better laws are
needed; but the interim is not conducive to human happiness.

Each piece of the existing IP system was created to replace the rule
of might with the rule of law in the area that it covers.  It's no
coincidence that property is 90% of the law; in a culture which
generally respects property rights, creating a property right is an
effective way to replace anarchy, despotism, and cartels.  One reason
why copyright is generally dated from the Statute of Anne instead of
the 1662 Licensing Act is that the latter ratified the existence of a
cartel, created by despotic prerogative, and failed to create the sort
of limited property right that is consistent with the public interest.

Besides, surely the declared intentions of the drafters deserve some weight?

Statute of Monopolies (Sir Edward Coke):  "Forasmuch as your most
excellent majesty ... did, in the year of our Lord God 1610, publish
in print to the whole realm and to all posterity that all grants of
monopolies and of the benefit of any penal laws, or of power to
dispense with the law or to compound for the forfeiture, are contrary
to your majesty's laws ... yet, nevertheless, upon misinformations and
untrue pretences of public good, many such grants have been unduly
obtained and unlawfully put in execution, to the great grievance and
inconvenience of your majesty's subjects, contrary to the laws of this
your realm and contrary to your majesty's royal and blessed intention
so published as aforesaid: for avoiding whereof and preventing of the
like in time to come, may it please your most excellent majesty ..."

Statute of Anne:  "Whereas Printers, Booksellers, and other Persons,
have of late frequently taken the Liberty of Printing, Reprinting, and
Publishing, or causing to be Print-
ed, Reprinted, and Published Books, and other Writings, without the
Consent of the Authors or Proprietors of such Books and Writings, to
their very great Detriment, and too often to the Ruin of them and
their Families: For Preventing therefore such Practices for the
future, and for the Encouragement of Learned Men to Compose and Write
useful Books; May it please Your Majesty ..."

- Michael

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