Opinion

Felix Salmon

Why movie studios happily violate journalists’ copyright

Felix Salmon
Jan 7, 2014 19:18 UTC

The white-goods queen of Eighth Avenue asks my opinion on @aoscott adgate. I take requests, over here, so: is it kosher for a movie producer to selectively quote from the Twitter feed of the NYT’s movie reviewer, in a print ad, even when the reviewer in question explicitly said he would not give permission?

The simple answer is no. The tweet from Tony Scott was used in the NYT print ad precisely because he’s a public figure of authority to NYT readers. As a public figure, he’s entitled to determine when and whether he’s used to promote some commercial interest. Besides, the use of the tweet is arguably a violation both of copyright and of Twitter’s terms of service (which say that tweets can’t be used in advertising “without explicit permission of the original content creator”).

The more complicated answer, however, is that this is a form of blurb, and blurbs from publications have been used — without either the publication or the author’s explicit consent — for decades. Reviewers write reviews, journalists write articles, and then producers happily pick a word or two and slap it in huge type across their ads or marquees. The more high-minded journalists have always disliked this practice, but have been largely powerless to prevent it. And when a play or a movie wants to spend tens of thousands of dollars on an ad buy, where the ad in question features such blurbs, the producers (or media buyers) in question are always welcomed with open arms.

In any organization, the bits of the business which bring in the money tend to be the bits of the business with the most power and influence. At high-minded publications like the NYT, the ad side is grown-up enough to stop itself from trying to directly interfere with what the edit side produces. But still, products like the NYT’s thick annual “Summer Movies” section are entirely driven by the massive quantity of ads that they generate. There’s an unspoken rule that the coverage in such supplements is going to generally be upbeat and fluffy — that it’s going to make readers want to see the movies being written about.

And even if the ad side has no control at all over the edit side, it does at least enforce reciprocity: that the edit side won’t seek to control what the ad side allows to be printed. If there’s a fight between ad and edit over whether or not NYT reviews can be selectively quoted in movie ads, then ultimately the ad side is going to make the final determination. And whatever the clients (the movie studios) want, is very likely to end up being exactly what the clients get.

For me, then, the fact that the ad used a tweet rather than a formal review is not such a big deal. In some way it’s more interesting that the use of a tweet spurred vastly more discussion and outrage than any highly-selective blurb, culled from a more traditional source, has done in years. You’d think that tweets were more easy-come, easy-go — that people wouldn’t care as much about tweets as intellectual property. But it seems that they do! At least, they do when those tweets start appearing in print.

In a world where the brands of individual journalists have never been more valuable, and where the money flowing from print ad revenues has never been lower, this storm in a teacup might be a sign that the balance of power is changing. It may be a sign that the big ad buyers don’t have quite as much ability to dictate the rules as they used to. Or, it might just be a slow news week. Frankly, I suspect that the movie studios are going to continue to produce whatever ads they want to produce, and that the NYT is going to continue to publish just about anything that the studios would like them to publish. Just so long as the ads in question don’t use dirty words or show too much skin.

COMMENT

I’m surprised that this article discusses copyrights and quoting another person and manages not to discuss fair use. When the reviewer comments on the movie, they may use a line or two in their review. They can do so under fair use. While I don’t believe that using a reviewer’s quote in a movie ad is definitely a fair use, I do believe that the argument should at least be acknowledged.

Posted by JenR | Report as abusive

How the world benefits from Chinese piracy

Felix Salmon
Jun 25, 2013 06:09 UTC

Kal Raustiala and Christopher Sprigman have a  fantastic article in the latest issue of Foreign Affairs about IP laws and piracy in China. The title, which I love, is “Fake It Till You Make It,” and the gist is clear:

Given that Chinese copying has benefits as well as costs, and considering China’s historical resistance to Western pressure, the fact is that trying to push China to change its policies and behavior on intellectual property law is not worth the political and diplomatic capital the United States is spending on it.

This is if anything a vast understatement. Chinese IP piracy — if what we’re talking about can properly be called that, given the degree to which it is condoned by the Chinese government — is wonderful for China, for its economic growth, for helping hundreds of millions of its citizens out of poverty, and for the sake of global innovation more broadly. You and I, as US consumers, actually benefit from it. The only losers are the large US corporations who seek to extract rents from various copyrights and patents — even as they, notoriously, tend to be quite unwilling to pay taxes on any of their overseas revenues.

Raustiala and Sprigman make a strong case that Chinese piracy, far from being symptomatic of a deep-seated inability to innovate, is actually an economically vital form of innovation. After all, we’re generally not talking about outright counterfeits here. Within China, most piracy falls under the general heading of “indigenous innovation” — a euphemism, to be sure, but an accurate one all the same:

Nearly all creations rest on prior work, and the ability to freely copy and refine existing designs fuels fields as varied as fashion, finance, and software. Copying can also foster stronger competition, grow markets, and build brands…

Many Chinese have gained valuable design and manufacturing skills by copying goods originally produced elsewhere.

Raustiala and Sprigman use the example of Xiaomi, a phone company which has sold some 7 million phones, for a total of more than $1.6 billion, since its launch less than two years ago. Xiaomi copies a lot of Apple’s innovations, but it also generates many of its own, and it iterates much faster than Apple does. Much the same can be said for Weibo, which started by copying Twitter but which at this point is arguably more advanced than the original.

Or look at the Chinese YouTube, Youku, which is displacing television in large part because it has no copyright verification. As Chinese media companies evolve to take advantage of Youku, they will be much better placed to compete in the 21st Century than US companies which rely on copyright laws to keep consumers boxed in to increasingly-unnatural modes of consumption. If you’re playing litigious defense, that might help your current cashflows — but it’s not going to help you win a generation which will increasingly neither know nor care what “live TV” means.

Chinese piracy also brings innovation within the grasp of a huge population of poorer Chinese, with long-term positive effects for all. Raustiala and Sprigman talk about the phenomenon of shanzhai — low-cost copies of items which would not be affordable otherwise.

Like so much else in China, the meaning of shanzhai is undergoing a drastic change. As The Wall Street Journal recently noted, “Once a term used to suggest something cheap or inferior, shanzhai now suggests to many a certain Chinese cleverness and ingenuity.” Indeed, Beijing seems to believe that shanzhai is something to cultivate. In 2009, an official from China’s National Copyright Administration declared that “shanzhai shows the cultural creativity of the common people.” He added, “It fits a market need and people like it”…

China’s huge population is still poor, and few can afford Western products. Copies of Western products, as a result, do not necessarily represent lost sales. Instead, they often serve as effective advertisements for the originals: gateway products that, in the long run, might spur demand for the real thing as China’s burgeoning middle class grows… Although shanzhai products are celebrated, those Chinese who can buy the original products generally do.

None of this should be surprising to America, which, as Raustiala and Sprigman show, used pretty much all of these tactics when its own economy was rising. None other than Benjamin Franklin himself made a substantial sum from republishing the works of British authors without permission or payment. The phase that China is going through is a natural and healthy one, both for China and for the US; the big multinational IP giants might not like it, but they are clearly the winners in the global economy already, and hardly need an extra legislative boost.

Indeed, my only complaint with the article is that it doesn’t go far enough. For instance, it cites a 2011 figure from the US International Trade Commission that piracy costs the US economy some $50 billion a year; it doesn’t say that that figure is highly implausible. (The reasons why are left as an exercise for the reader; you might want to start here.) And the authors assert, without bothering to argue the case, that strong IP rights “are essential in fields such as pharmaceuticals”. I’d disagree.

In any case, I hope that Michael Froman, the newly sworn-in United States Trade Representative, pays close attention to this article. As Raustiala and Sprigman conclude, “the United States should consider its own history as a pirate nation — and relax.” Maybe if Froman takes that advice, he’ll have much more success making progress at the WTO.

COMMENT

very funny
China has weibo BECAUSE they can’t use twitter or facebook
they use Youku BECAUSE they are not able to access Youtube
it is a tyranny state without freedom and rule of law
and you are suggesting that they have no need to promote intellectual property law?

you talk about Benjamin Franklin, i am wondering if they had the idea of intellectual property at that time, how can you compare him with China?

Posted by natyshow | Report as abusive

Prosecute the patent trolls!

Felix Salmon
Jun 4, 2013 18:01 UTC

Here’s an idea: take the resources that the SEC is currently using to prosecute insider trading, and give them instead to the FTC, so that they can be used to aggressively prosecute patent trolls instead. The cost would be the same (by definition), and the benefit would surely be much greater, as today’s wonderful report from the White House underscores.

Patent trolls are known by various names — one is “non-practicing entities”, or NPEs. Another term is “Patent Assertion Entities”, or PAEs. But whatever they’re called, the most important research into the costs of trolls is this paper from researchers at Boston University:

We find that NPE lawsuits are associated with half a trillion dollars of lost wealth to defendants from 1990 through 2010. During the last four years the lost wealth has averaged over $80 billion per year.

And we’re not talking about a steady loss of $80 billion per year, either. If the PAEs were costing $80 billion per year from 2007-2010, they’re probably making three or four times as much today, given how quickly their business is growing. Here’s a chart showing PAE activity, in red, versus all other patent cases, in blue:

trolls.tiff

The patent trolls are harming the nation in all manner of unquantifiable ways as well. This American Life just aired a fantastic episode on the subject of patent trolls, which features a man called Nick Desaulniers who wanted to build a low-cost heart monitor. But he was quickly dissuaded: after doing a patent search, he came away “horrified at how generic some of the patents were”,  and persuaded that there was no way he could possibly build a business. “However many jobs I could have created or however many lives I could have saved,” he concluded, “that’s it.”

Patent trolls are surely contributing to the decline in new-company formation:

Fewer Americans are choosing that path. In 1982, new companies—those in business less than five years—made up roughly half of all U.S. businesses, according to census data. By 2011, they accounted for just over a third. Over the same period, the share of the labor force working at new companies fell to 11% from more than 20%.

Both trends predate the recession and have continued in the recovery…

For the first time since such records have been kept, the Census found in 2008 that more Americans worked for big businesses—those with at least 500 workers—than small ones. The trend has continued since.

Go to any technology conference these days, and you’re likely to find VCs who say that there are entire sectors they refuse to invest in, just because the waters are so troll-infested. Google and Apple might be able to do interesting things in wearable computing, for instance, but a single lawsuit could easily wipe out a startup in the same space — even if it was entirely frivolous. Even the 3D printing industry seems to have boiled down to a handful of companies, despite the fact that most of the patents in the space have expired, because it seems to be all to easy to get patents on tiny improvements to established technology. Technological innovation is increasingly a game that only the largest technology players can indulge in; every VC has a story of a portfolio company which gets sued for patent infringement and then gets a lowball acquisition offer from the plaintiff. Either sell out to us, is the message, or we’ll destroy you with legal fees.

Clearly, something must be done. But I’m not convinced that the White House’s wish list is really adequate to the task at hand. None of it would prevent the kind of trollery detailed in the This American Life episode; at best it might just force Intellectual Ventures, the biggest and worst of the trolls, to be marginally more transparent about what it was doing. Instead, the government should start going after patent trolls in much the same way as Preet Bharara is going after inside traders. Tim Wu explains that the ammunition already exists:

There are good laws in place that could fight trolls, but they sit largely unused. First are the consumer-protection laws, which bar “unfair or deceptive acts and practices.” Some patent trolls, to better coerce settlement, purposely misrepresent matters such as the strength of their patents, the extent of other settlements, and their actual willingness to litigate. Second, there are plenty of remedies available under the unfair-competition laws. Some trolls work by aggregating an enormous number of patents, and then present the threat that one of their thousands of patents might actually be valid. The creation of these portfolios for trolling may be “agreements in restraint of trade” under Section 1 of the Sherman Antitrust Act, or they may “substantially lessen competition” under the Clayton Antitrust Act. More generally, the methods of the trolls are hardly what you would call ordinary methods of competition; they should be considered, rather, what the Federal Trade Commission calls “unfair methods of competition” under Section 5 of the F.T.C. Act. The Commission has the power to define and punish methods of business that are inherently harmful with few or no redeeming benefits, and that’s what trolling is. Finally, it is possible that the criminal laws barring larceny and schemes to defraud may cover the conduct of some trolls.

I would love to see some zealous prosecutors, armed with subpoena power, taking on Intellectual Ventures as aggressively as possible — as well as any other trolls they could find. Nathan Myhrvold is just as rich as Stevie Cohen, and causes much more harm to the economy. Rather than announcing the creation of “an accessible, plain-English web site offering answers to common questions by those facing demands from a possible troll”, let’s see the full weight of the government brought to bear in the form of civil and criminal cases against all patent trolls, up to and including including the biggest. That would surely be much more effective, and requires no legislative action at all.

Update: In the NYT, some highly respected jurists — Randall Rader, Colleen Chien, and David Hricik — have much the same idea. Don’t worry, I won’t sue them for infringing my intellectual property.

COMMENT

This is surreal – an open season on american inventors, almost like Ayn Rand novel

Large multinational corps pay huge $$$ to crooked DC politicians to kill invention in this country once and for all

Obama reading from the script written in Silicon Valley’s boardrooms… Nothing can be more disgusting

Well, OK guys, enough is enough

As a holder of one valid tecnnical patent I am going on strike – no more public patent disclosures of new tech from me

Who is Johnn Galt ?

This country is quickly winding down

The Founding Fathers are rolling over in their graves

Shame

Posted by angrydude | Report as abusive

Why patent trolls don’t need valid patents

Felix Salmon
Mar 4, 2012 18:48 UTC

Farhad Manjoo has an interesting profile of Cheryl Malone’s Article One Partners, a company which crowdsources the discovery of prior art for use in patent suits. These “amateur sleuths are stamping out patent trolls,” according to the title of the page; the headline is “How To Kill Patent Trolls.”

Which is why it’s surprising that there’s no indication in the article whatsoever that patent trolls are even being harmed, let alone killed, by the actions of Article One. Instead, the whole piece is based on a rather rocky syllogism. If you can find prior art, goes the argument, you can kill a patent troll. Article One finds prior art. Therefore, Article One kills patent trolls. Here’s Manjoo:

Patent trolls should be easy to defeat. Say a company tries to enforce some ridiculous claim, as in the recent case over a 1994 patent covering the entire “interactive Web.” It doesn’t seem hard to invalidate a patent that broad. All you need to do is find descriptions of that invention that date back to before the patent was filed.

The problem is that searching for old inventions is really difficult.

Does Manjoo really believe that “all you need to do” is find prior art, and the court case automagically disappears in a puff of smoke? It would be wonderful were that the case. But the real world, sadly, behaves differently.

Probably the most famous patent-troll case in recent years was the one where a troll named NTP managed to extract $612.5 million from Research in Motion. That case covered five different patents: of the five, the U.S. Patent Office had given “non-final” rejections to all of them, and had issued a final rejection to one, when the case was settled.

RIM had discovered prior art for all of the patents that NTP was suing over — but that didn’t really help them at all. The problem was that the patents had already been awarded to NTP, which meant that NTP was within its rights to sue RIM for as long as it held those patents. Once RIM found out what NTP was up to, it could and did challenge the patents at the U.S. Patent Office, which has a procedure for such things. But the U.S. Patent Office is an entirely separate entity from the U.S. District Court, where judge James Spencer made it very clear that his job was to rule only on whether RIM was violating NTP’s patents, and not on whether NTP’s patents were properly granted. Had RIM not settled the case, the court could and probably would have shut down the entire BlackBerry service.

RIM, of course, offered to post a substantially greater settlement if it could get the money back were NTP’s patents deemed invalid; NTP, naturally, rejected that offer. And challenging patents at the U.S. Patent Office takes time; if you’ve already been sued by a patent troll in U.S. District Court or just about anywhere else, it’s almost certainly too late at that point to look for prior art, take it to the USPTO, get the patent invalidated, and win the case that way. Meanwhile, it’s pretty much impossible to keep tabs on every patent awarded to a possible troll, and try to challenge those patents at the USPTO on the off chance that if you don’t, those patents might be used against you.

So while Article One is surely doing God’s work out there, I think it’s massively overoptimistic to believe that they will make so much as a dent in the patent-troll industry. What they’re doing might well be necessary to kill patent trolls. But it’s very, very far from sufficient.

Update: As commenter rootless_e points out, the jury in the NTP vs RIM case did find against RIM’s claims of prior art. Largely because RIM’s courtroom strategy was unbelievably boneheaded. But the fact remains that RIM was forced to settle the claim before the USPTO could invalidate NTP’s patents.

COMMENT

@DaDaDan – IDK — did US provide political backdoor pressure for WIPO to adopt these new ideas, then bringing public pressure for the US to align federal law to match?

For instance, if you examine the history of ACTA, the international negotiations first begun under prodding by former President George Bush, which led to COICA, then PIPA/SOPA, and the Leahy-Smith Act.

Posted by GRRR | Report as abusive

Do any real people support SOPA?

Felix Salmon
Dec 15, 2011 15:45 UTC

Very few of us live in a world remotely representative of the nation as a whole; I certainly don’t. How many of my friends and acquaintances have a college degree? How many live in dense urban centers? How many have smartphones? How many have ever voted Republican? In all these respects and many more, the world I see is incredibly skewed. But what about the Stop Online Piracy Act?

I spent last night with a fascinating group of Silicon Valley geeks, talking Bitcoin; among them was Dan Kaminsky, who’s spending most of his time these days lobbying hard against SOPA. And it occurred to me, as we talked very briefly about how the lobbying effort was going, how very lopsided my view of SOPA is.

Everybody I know, and everything I’ve come across on the internet, falls into one of two categories: either they’re vehemently opposed to SOPA, or else they simply don’t know about it. Racking my brain for any counterexamples, the only one I can come up with is a pre-roll ad which I’ve seen before a couple of my videos here on Reuters.com, which complains about pharmaceutical counterfeiting.

In one sense, this is entirely natural: I’m a journalist, and journalists by their nature hate anything which smacks of censorship. On the other hand, I’m also a media professional, and the pro-SOPA lobby is led by media companies of various descriptions. I just don’t know anybody who’s part of it.

Yet the bill is very much alive, and it seems that if a bill makes it to Barack Obama’s desk, he’ll sign it.

Today, in his big NYT piece about the war being fought in Washington, Edward Wyatt is careful to be symmetrical in his descriptions, and talks about how “the howls of protest” against SOPA “have been loud and lavishly financed” by Silicon Valley — it’s one of those articles based on the idea of explaining that there’s a disagreement, without bothering to try to adjudicate whether one side makes vastly more sense than the other.

You don’t need me to tell you that SOPA is an incredibly bad idea — others can do so much, much better than I can. But here’s where I have a genuine question. I know that the MPAA and the RIAA are lobbying hard for SOPA. (As well as, oddly, the AFL-CIO.) They seem to have a lot of politicians on their side. I can also point to an almost unlimited list of people and organizations who are lobbying equally hard against it — although it’s harder to find die-hard opponents of the bill in Congress.

But does SOPA actually have any popular support? Are there any real outside-the-beltway people who think it’s a good idea? If so, where are they? And if not, how did Congress become so bad at reflecting popular opinion?

I guess what I’m asking here is whether the strength of support for SOPA in Washington is an example of the failure of democracy, or whether it’s just another case of a bitterly divided country. I suspect it’s the former, but I really would be interested in finding out about anybody who doesn’t share my views on this subject.

Update: I’m told that Creative America is a grassroots organization of real people who support SOPA. I’m not entirely sure I believe it, though.

COMMENT

Just for a repost if anyone hasnt gotten it already :D
EC 17, 2011
10:33 PM EST
The media industry is acting like the internet is the problem. BWAHAHAHA. Seriously, what happened with vhs? Cassette? CD? DVD? Don’t need the internet to pirate.
VHS, record right off the tv or borrow a movie from a friend.
Cassette meets radio.
CD meet computer with burning software. (borrow musician’s hard work)
DVD meet computer with burning software. (borrow movie)
No internets or tubes needed to do the above.
See what I did there? Piracy doesn’t end with censoring the internet. It ends when the archaic format for distribution evolves to meet the consumer(The people you are trying to screw over.)
Sure, censor the net and you have all your profits back…(sarcasm) Good job big media!
Posted by Jimnay | Report as abusive

Jimnay whoever you are,
your a brilliant person. as he states clearly, its not about what the internet does or doesnt do,.. people will still find ways to pirate stuff. as for me i find means of finding ways either getting it for free or finding a alternative, for example… microsoft office, its pricy…. comparison? Openoffice.. same exact thing. just not so glamourous.. expensive high detailed 3d image maker…. close to $1000 right? comparison… blender3d…. warcraft 3…. comparison.. = glest!!!

Posted by mike32547 | Report as abusive

The NYT’s silly trademark spat

Felix Salmon
Oct 26, 2011 20:53 UTC

Here’s what I don’t get about the NYT’s silly nastygram targeting HuffPo’s new Parentlode blog. It ends like this:

If I have not received a response to these demands within three (3) business days of receipt of this letter, we will have no choice but to pursue all available legal remedies.

This, it seems, puts the NYT, and its legal office, in something of a bind. It’s extremely unlikely that they’re going to get a response to their demands within three (3) business days, or, frankly, ever. Which means that the NYT will have two choices. Either it does nothing — and implicitly admit that its nastygrams are all bark and no bite. Or else it launches a spectacularly pointless and expensive trademark-infringement lawsuit against a blog with a really stupid name, on the grounds that the stupid name (“Parentlode”) is designed “to create an association in the minds of readers” with the NYT’s old Motherlode blog.

Of course the Parentlode name is designed to create that association. As is the rather more germane fact that Parentlode is being written by Lisa Belkin, who founded Motherlode.

Blog names do, of course, have a tendency to follow their authors around. Adam Clark Estes makes a very good point:

Learning the digital ropes, building a devoted audience, tending your personal brand: these are all the sorts of things that journalists are supposed to be doing to adapt to the new news climate. It’s exactly what Andrew Sullivan, who had moved his Daily Dish brand from Time to The Atlantic to The Daily Beast, has done. So too Mickey Kaus who’s ported his Kausfiles moniker from Slate to Newsweek and now The Daily Caller. If Belkin made a mistake it was not initially insisting that she could take “Motherlode” with her if she ever left The Times, as the Freakonomics guys did when they moved their branded blog from The Times to their own site.

We’ve even done it here at Reuters: Matt Goldstein has a blog called Unstructured Finance, which is the same as the name of his old blog at Businessweek; I’m quite sure we’re not going to get sued by Bloomberg as a result.

The NYT lawsuit, then, is pure peevishness — and I don’t understand why that’s an attitude they’re interested in communicating to the world. What’s more, it’s a clear sign that the NYT is still very uncomfortable with helping to build personal brands. Here’s a bit more of the C&D:

Amazingly, Ms. Belkin explicitly draws attention to the connection to the NYTimes.com blog in her first posting today and encourages the false impression that the HuffPo blog is a continuation of the Motherlode blog, albeit with a new name.

False impression? I’d say that’s a true impression. If a blogger moves her blog from one publication to another, then it’s reasonable to consider the new blog a continuation of the old one. This blog, for instance, is very much a continuation of my old blog at Portfolio.com. It features a bunch of cross-posts from when I was at Portfolio, and Portfolio ran a bunch of cross-posts from here after I moved. Even as they hired Ryan Avent to continue to blog at my old home over there.

Obviously, the NYT and HuffPo aren’t nearly as collegial as Portfolio and Reuters were. But there’s a deeper difference: Portfolio was owned by Conde Nast, which is deeply invested in creating individual brands and turning its writers and bloggers into stars. Conde understands that if you want to keep and attract stars, you do that by treating them very well. The NYT, by contrast, seems to think that it’s a good idea to punish its erstwhile blog stars by threatening their new employer with lawsuits. It’s a strategy which can’t help but damage the NYT’s reputation as a great home for writers. Which is yet another reason why it’s so stupid.

COMMENT

If the C&D combined with the fact that it’s a really stupid name add up to enough incentive for them to change it, then it will have been for the better, anyway.

Posted by dWj | Report as abusive

When composers can’t hear their own compositions

Felix Salmon
Sep 11, 2011 19:00 UTC

Nico Muhly has a fantastic rant about the way in which professional orchestras make it effectively impossible for composers to actually listen to their own pieces, after they’ve been played; the most pungent comment on his post comes from fellow composer Jeff Harrington, who says that he’s never heard a piece that he wrote for two great musicians who have played it 30 times.

The problem here is not that the pieces aren’t recorded — they are. Rather, it’s that the recordings are digital. Because they’re digital, they can be copied perfectly, and distributed widely, with great ease — and that’s something that orchestras are very scared of. They make good money from their digital recordings, and they don’t want to risk unlicensed recordings being found in the wild.

This is a pretty short-sighted view. Nico Muhly isn’t asking orchestras to let him put their recordings online; he just wants to be able to listen, privately, to what his piece sounded like when it was actually played by humans in a concert hall. But in fact it wouldn’t do any harm to anybody if that recording turned up embedded on his website. People who listen to it there would be much more likely to buy the official recording if and when it appeared. Either way, Muhly’s main point stands: composers will write significantly better music for orchestra if they can hear what it sounds like after they’ve done so. And not just composers, either: the same is true for soloists, as well.

In general, it’s depressing and unsurprising to discover that orchestral unions are even more hidebound and reflexively negative, when it comes to the digital world, than record labels. They look at the world of digital music as something to be scared of, and to say “no” to as loudly as possible, unless and until someone comes along with a big bag of money and pays them to say yes. It’s the same zero-sum mindset behind the Authors Guild’s opposition to Google’s attempts to make their work much easier to search for and find.

Google Books was only ever going to encourage more people to buy more books, yet the Authors Guild insisted on hobbling it and extracting as much money as they could from Google before allowing it to go ahead. And making it easy for people to listen to new music online is the best possible way for orchestras and composers to build a new fan base and long-term audience — but instead the orchestras are fighting that which is in their own best interest.

Orchestras suffer no losses if people listen to their sounds outside the concert hall where those sounds were originally performed. In fact, they benefit: anybody who listens to those sounds online is someone who might become a fan and subscriber. But the unions don’t think that way: they just know that they’re paid for performing in the concert hall, and they’re not being paid any extra if and when that performance appears online. And so they’ll oppose any attempt to get it there.

I’m not sure what the best way around this problem might be, but I fear that it’s part of the reason why the extremely vibrant new-music scene has relatively few pieces for full-scale orchestra. They’re hard to write, expensive to perform, and then impossible to distribute in recorded form.

If the artform does survive, I suspect it will be thanks the one group of composers who regularly do hear their music recorded — soundtrack composers for film and TV. So, Nico, is Hollywood calling? That might be one solution to your problem.

(Via the Browser)

COMMENT

Don’t even get me started on music publishers. If these 800-pound-gorilla industry leaders had put all their profits to good use, then we’d be buying e-books for our Random House Kindle, listening to music on Universal iPods, and composing music on Hal Leonard’s Sibelius/Finale.

Instead, because these institutions are so reticent to change while simultaneously maximizing profits for executives, new institutions are being built that better fit today’s landscape.

Music has never been easier to distribute, with options like Tunecore and Bandcamp. My wife self-publishes her sheet music as PDFs via a simple Paypal form. (There is a slightly more complex form for larger purchases, which basically acts as a sales lead generator) We bundle rehearsal or performance videos with Bandcamp music purchases – which even gives the listener the option to download the music in lossless quality! Got a question for the composer? Like so many now, she’s on Twitter. This transparency and accessibility is a /good/ thing.

There are still ‘classical’ record labels that require that you pay THEM, and then you end up with a box of unsold CDs in your basement, because no one buys CDs anymore.

Take that money you save from doing this yourself (or with trusted partners) and spend it on a publicist, or keep it DIY and buy your own Facebook and Google ads (you might be surprised at how effective Facebook ads are). If things are going so well that you don’t have time to do it yourself, then you should have enough money to start outsourcing. If you’re successful, others may want to employ your team. You might even accidentally become a leader in the field.

That’s not to say composers should give up making music in order to become full-time promoters, but you also shouldn’t completely absolve yourself from the process that goes into you getting paid for writing music. That money doesn’t come from nowhere. And if no one hears your music, that money doesn’t come, period.

Posted by Leviathant | Report as abusive

The cost of patent trolls

Felix Salmon
Jul 25, 2011 00:11 UTC

I love This American Life’s investigation into patent troll Nathan Myhrvold and his company Intellectual Ventures. You should go read — or listen to — the whole thing, but in a nutshell, they explored what happened if they took Intellectual Ventures at its word.

IV pointed TAL to an inventor called Chris Crawford — a man with a patent which he sold to IV. Inventors! Getting paid! For inventing! Except when TAL tried to talk to Crawford, he wouldn’t answer their calls. And it turns out that IV had sold his patent to Oasis Research, a Texas company with a nameplate address and no employees, for some up-front consideration and a percentage of all litigation proceeds.

TAL goes into clear detail about the idiocies of the patent system — how even software engineers with patents don’t believe that software processes should be patentable; how patents are regularly awarded for ideas which have been around for years; how multiple patents are often awarded for much the same idea; how IV is essentially running an intellectual-property protection racket; and how big companies are amassing patent portfolios not so that they own the intellectual property behind their products, but rather so that they can threaten to sue any company which sues them.

The end result is a highly dysfunctional situation where virtually any startup is at risk of being shut down by a patent suit; and where nameplate companies with no business and no revenues, like Oasis Research, are the perfect vehicles to launch patent suits, since they’re not susceptible to countersuits. Essentially, if you’re small, you have to hope to fly below the radar; if you’re big, you have to pay billions of dollars on patents you have no particular interest in. Here’s how TAL describes the $4.5 billion that Apple, Microsoft, Nokia and others paid for Nortel’s patent portfolio:

That’s $4.5 billion on patents that these companies almost certainly don’t want for their technical secrets. That $4.5 billion won’t build anything new, won’t bring new products to the shelves, won’t open up new factories that can hire people who need jobs. That’s $4.5 billion dollars that adds to the price of every product these companies sell you. That’s $4.5 billion dollars buying arms for an ongoing patent war.

The big companies — Google, Apple, Microsoft — will probably survive. The likely casualties are the companies out there now that no one’s ever heard of that could one day take their place.

The US is in desperate need of patent overhaul. We need to make it easier and quicker to get good patents, and much harder or impossible to get bad patents. We need to abolish the abomination that is the business-method patent entirely. And most crucially we need to allow defendants in patent suits to argue that the patent is invalid because it was awarded in error, with lots of prior art at the time the patent was awarded. Right now, patents can be appealed — but not in the court where they’re being enforced, with the result that trolls with invalid patents can still get paid out to the tune of billions of dollars.

Chuck Schumer’s bill taking aim at business-method patents in the financial industry is a good start; if the sun continues to rise in the east after it passes, that might embolden legislators to start taking aim at business-method patents more generally.

But this is a Congress which is clearly incapable of doing the most obviously right things: given the choice, they’ll always and predictably pick demagoguery coupled with devastation over simple common sense every time. The incoherent and anachronistic patent system is, sadly, with us for the foreseeable future. And the cost of that will be huge, in terms of seven-figure lawyers’ fees, rents extracted by trolls, and, most importantly, lost innovation and entrepreneurialism.

COMMENT

This is a joke isn’t it? A patent trolls clients aren’t Microsoft, Google or Exxon. They’re the little guys and girls who discover something only to watch a big company use it with impunity. Do something to level the playing field for the inventors.

1) There are very few patent attorneys who litigate on a contingency basis. Change the rules.

2) The patent trolls should be bound by contract law perhaps licensed as attorneys. They often screw the inventor by corrupting his/her patent attorney with promises of riches. Make some rules.

Don’t feel sorry for the Fortune 500. Their business practices too often resemble a mugging.

Posted by bobguz | Report as abusive

Bringing sense to business-method patents

Felix Salmon
Jul 5, 2011 15:16 UTC

It’s rare that I consider Andrew Ross Sorkin too harsh on Wall Street, but today is one of those times.

Sorkin’s thesis, narrowly considered, is undeniable. Wall Street has clout in Congress; because of that clout, it can get bank-friendly provisions inserted into legislation. But the broader thrust of the column is I think misguided: that the legislation is a bad thing, and that it unfairly benefits banks to the detriment of civil society and the rule of law.

It’s worth reading the column in full to feel the force of Sorkin’s disapproval. He quotes five different people in the column, of whom four are fiercely opposed to the legislation. The fifth, Chuck Schumer, is quoted with the construction “has said” — a phrase dripping with condescension and disbelief. (Schumer’s opponents are given the much more straightforward “according to,” “said,” “said,” and “wrote”.) This might be the first and last Sorkin column to ever treat Maxine Waters with more respect than Chuck Schumer.

The provision in question makes it much harder for financial-services firms to enforce what’s known as “business method” patents. These are relatively new animals, and not particularly welcome ones, either. There’s no good reason why financial innovations should be patented, and there’s every reason why they shouldn’t be. Patents are a way of skewing the playing field and giving one player an artificial advantage over everybody else — the exact opposite of how financial markets are meant to work.

There are far too many patents in general, and enforcement of them often resembles a multi-billion-dollar lottery. But at least outside the financial sector there can be good reason for such things to exist: without them, much R&D expenditure would simply cease. But financial companies don’t have R&D budgets, and given the sorry track record of financial innovation that’s probably just as well. What’s more, the more successful financial innovations — mutual funds, say, or venture capital, or even coco bonds, should they turn out to actually work — are very much in the public domain, open for anybody and everybody to copy.

Sorkin’s attempts to defend the idea of financial business-method patents ring pretty hollow. Some companies’ patents might be “put into jeopardy”, he writes, while others will have to spend money on lawyers trying to defend them. Well, yes. That’s the whole point.

The banks “are attempting to write into law what they have been unable to achieve in litigation,” Representative Maxine Waters, Democrat of California, wrote in a letter to colleagues…

Admittedly, it seems somewhat preposterous that simply processing scanned checks, as DataTreasury does, could be a patentable business method. But we have courts, which have upheld these patents, for a reason…

Experts like F. Scott Kieff, a professor at George Washington University Law School and a senior fellow at the Hoover Institution at Stanford, worry that the law is too broad…

He is worried about the law’s impact not just on investors in the United States, but also about even broader implications. “When word gets out that intellectual property rights are not being taken seriously in the U.S., especially for any class of patents that can be a convenient political target of powerful, well-heeled interest groups like banks, our voracious international competitors will pounce,” he said.

Sorkin never explains why the law might be bad for “investors in the United States”. Given that investors are the foremost consumers of financial services, one imagines they will be very happy if they no longer have to pay rents to patent holders in order to use those services.

As for those “voracious international competitors”, I have absolutely no idea who they are, what they are going to be pouncing on, or even who they’re supposed to be competing with. This is pure rhetoric, unsupported with any actual analysis; Sorkin does wave his hand at an article published in “a Hoover Institution journal”, but without any kind of link it’s impossible to follow the thread any further.

And Sorkin seems to have forgotten that it’s Congress’s job to make laws, which courts then enforce. If the existing law has gone astray — as patent law clearly has — then Congress has the obligation to set it back on its right and proper path. Section 18 isn’t too broad, it’s too narrow.

But that’s not how Sorkin sees it:

Section 18 represents a much larger issue: It is perhaps the most blatant demonstration of the lobbying power of Wall Street and, just as important, the willingness of Congress to support the interests of the banks, even in the face of clear evidence that the law has no purpose other than to benefit the financial services industry.

Well, yes, the law will benefit the financial services industry. No one is arguing that point. And it will hurt rentiers with patents. The important question is whether it’s a good idea from a public-policy perspective. Sorkin ducks that question entirely. But the fact is that if we want a level playing field in financial services, getting rid of business-method patents is an extremely good idea.

Update: Kevin Drum agrees that business-method patents are a bad idea, but still opposes this bill, in much the same way that some free-trade advocates oppose bilateral trade agreements. I see the point; where you stand on this issue is likely a function of how likely you think wholesale patent reform is.

COMMENT

Nothing that helps Wall Street is good policy. Full stop.

Posted by libarbarian | Report as abusive
  •