On Tuesday, the Supreme Court heard oral arguments in a major technology case, ABC v. Aereo. The case attracted a huge amount of attention – “Aereo” was the #1 Google search on Tuesday. And that isn’t really surprising. What the Court decides in Aereo could have profound effects on the future not only of television, but of the Internet as well.
Aereo’s business model is clever and, potentially, very disruptive. As they have done since the dawn of television, the major networks – ABC, NBC, CBS, and FOX – broadcast their signals over the air. You can receive these signals with a digital antenna – the modern equivalent of rabbit ears – and millions of Americans who don’t subscribe to cable or satellite still do.
Aereo is nominally in the antenna business. Aereo owns thousands of tiny digital antennas – each about the size of a dime – on the roof of a building in Brooklyn. In exchange for a monthly fee that ranges from $8-$12, an Aereo subscriber can dial into one of these antennas to watch whatever she wants.
By now, pretty much everyone has heard about how Comedy Central star Nathan Fielder opened his personal version of a Starbucks in an L.A. strip mall. Fielder’s “Dumb Starbucks” looked just like a real Starbucks – same logos, colors, store layouts, and similar products and menu. With the exception that everything was preceded by the word “dumb”, including the “Dumb Blonde Roast” coffee and the “Dumb Norah Jones” CDs on sale by the register. Also, the coffee was free.
Fielder kept his involvement under wraps at first. But by Monday he revealed his ownership, and by Tuesday the L.A. County Board of Health had shut him down for operating without a license. And yet, while Dumb Starbucks lived, it created a sensation, with lines snaking down the street and Fielder invited onto Jimmy Kimmel to talk about his adventure.
Starbucks itself was not amused. “We are aware of this store, and it is not affiliated with Starbucks. We are evaluating next steps, and while we appreciate the humor, they cannot use our name, which is a protected trademark.” Starbucks spokeswoman Laurel Harper said in a statement. When pressed on whether Starbucks intends to take legal action, she replied, “That may happen. We’re not sure at this point.”
Last week, we described how the famed U.K. street artist Banksy had set up a stand in New York’s Central Park selling real Banksy pieces – stenciled figures spray-painted on canvas – for $60. The art was worth a lot more than that, yet almost no one bought any. We asked how that could be – and got a lot of great reader responses in the comments. Thanks!
It turns out that there’s a second part to this story. One week after Banksy tried and failed to sell his art, a bunch of unrelated artists set up a stand selling fake Banksys for $60. The pieces were exact replicas of the ones Banksy had tried to sell in his stand. But this time the artists told shoppers very clearly that the pieces were fake. And yet they sold out their stock in an hour.
Many news outlets this week carried the story that Banksy, the celebrated British street artist, had set up an innocuous-looking booth near Central Park that offered original signed works for $60 each—despite their value being much closer to $60,000 apiece. Even with this astounding discount, only a handful were sold—as the video in the post, from Banksy’s website, shows.
What’s interesting to us is what this says about art and the role of copies. While copying is a huge concern in many art forms—especially music and film—in fine art, it is comparatively insignificant. In China, there are whole villages full of artisans devoted to copying the great masters of Western art, and certainly fakes and frauds are well known in the West as well. Yet there is not a thriving black market in Banksy knockoffs—or, for that matter, in the work of other major contemporary artists. Why is that?
Vancouver is one of the world’s most lovely and livable cities. It sits on a glittering Pacific inlet at the base of dramatic mountains, has a temperate, mild climate, and a diverse and affluent population. But for people who love to eat, it has one glaring flaw. There is no Trader Joe’s. [Related: do you know who own’s Trader Joe’s?]
That has always rankled Vancouverite Michael Hallatt. So much so that a couple of years ago Hallatt decided to open a store in the affluent Vancouver neighborhood of Kitsilano. He named it “Pirate Joe’s.” Hallatt stocked his new store by making frequent trips across the border to Trader Joe’s around the city of Bellingham, Washington. Hallatt spent over $350,000 on Trader Joe’s items, including Charmingly Chewy Chocolate Chip Cookies, Milk Chocolate Covered Potato Chips, Gluten Free Rice Pasta, and Tea Tree Tingle Conditioner. Hallatt marks the products up by a couple of bucks and puts them on the shelves of Pirate Joe’s, where hungry Vancouverites have been snapping them up.
Which sounds like a decent business for Hallatt, and also a sweet deal for Trader Joe’s, which gets to sell a lot of its product in a market where it would otherwise sell nothing. But apparently Trader Joe’s doesn’t want Hallatt’s money. And now they’ve filed a lawsuit in Seattle claiming that Hallatt’s Pirate Joe’s business is infringing their trademarks.
Why on earth would Trader Joe’s be suing one of their best customers? And what, if anything, is wrong with reselling products?
Copyright law has two main economic justifications. One is familiar—the idea that copyright promotes the production of creative work by ensuring that creators, and not copyists, gain the value of their creations. Yet production is not enough, since works also need to be distributed over time. And here lays the second main justification: copyright’s power does not end at the moment of creation, but instead provides a continuing incentive for creators (or their financial backers) to distribute and market works. Absent that incentive, creative works will not be readily available to the public.
In a fascinating new paper (available on SSRN) by Paul Heald analyzes this second claim. Here is a snippet from the introduction. We’ve bolded the most striking part of the study:
Influential copyright lobbyists presently circle the globe advocating ever longer terms of copyright protection based on this under-exploitation hypothesis–that bad things happen when a copyright expires, the work loses its owner, and it falls into the public domain. By analyzing present distribution patterns of books and music, this article tests the assumption that works will be under-exploited unless they are owned and therefore questions the validity of arguments in favor of copyright term extension…
[Our research] collects data from a random selection of new editions for sale on www.amazon.com (“Amazon”) and music found on new movie DVD’s for sale on Amazon. By examining what is for sale “on the shelf,” the analysis of this data reveals a striking finding that directly contradicts the under-exploitation theory of copyright: Copyright correlates significantly with the disappearance of works rather than with their availability. Shortly after works are created and proprietized, they tend to disappear from public view only to reappear in significantly increased numbers when they fall into the public domain and lose their owners. For example, more than twice as many new books originally published in the 1890’s are for sale by Amazon than books from the 1950’s, despite the fact that many fewer books were published in the 1890’s.
In The Knockoff Economy,we wrote about how turning products into experiences is one way to blunt the detrimental effects of copies. Products – especially digital ones – are often very easy to copy. But experiences can be highly copy-resistant. Just think of music: it’s easy to pirate a song, but it’s very difficult to effectively pirate a live show. Or movies: it’s easy to pirate a film, but it’s impossible to pirate the experience of watching a movie at a premium theater like The Arclight Hollywood in Los Angeles. You can’t cheaply copy the comfy reserved seats, the fancy food and drink, the great sight lines and sound.
All this, of course, comes at a price. But it helps justify the idea of going to a movie theater in an age when home downloads, on a widescreen computer monitor, can be pretty good.
Between the din of the cicadas appearing up and down the East Coast and the media frenzy over the government’s mass surveillance programs, you might not have heard much about New Yorkers’ real obsession at the moment: the “cronut.” A cross between a croissant and a donut, the cronut is the invention of baker Dominique Ansel, who operates out of a shop in SoHo. Cronuts are so popular that lines form at 6 a.m. — 2 hours before the shop opens — and Ansel runs out within minutes. Thanks to the wonders of the Internet (and Craigslist) there is even a cronut black market, with unauthorized cronut scalpers charging up to $40 apiece for home delivery (a mark up of 700%). And of course there are cronut knockoffs appearing all over the world. Ansel has even trademarked the name “cronut.”
Which brings up two questions:
1. Why did it take so long for someone to invent a croissant-donut mash-up?
2. And, perhaps more importantly for those who want to eat them, why do we see a cronut shortage? The genius of capitalism is that it matches supply with demand – and if there’s a lot of demand for cronuts, supply should quickly expand. Especially here. Cronuts aren’t especially hard to make, don’t require expensive equipment, and are currently unregulated (although give Mayor Bloomberg time.)
Digital rights management, or DRM, is a set of technologies used to control piracy. An example is the “Fairplay” system that Apple used until recently on most songs sold in its iTunes store. Fairplay was a set of digital locks that blocked certain uses – for example, a song could be played only on up to five authorized computers. As you might imagine, DRM has been controversial, at least among some people who want to make uses of content they’ve purchased – like making a back-up copy, or copying small portions of a work for fair use purposes. Music DRM once involved the installation – without users’ knowledge — of a particularly malicious bit of software that modified, and sometimes broke, the operating systems of customers’ computers. That strategy imploded amidst government investigations, class-action lawsuits, and a storm of terrible publicity. In contrast, e-book DRM has been nowhere near as controversial, or ineffective. Still, the fact remains that many DRM-haters exist.
Arbitrage is defined as taking advantage of price differences between two markets. A few years ago Supap Kirtsaeng, a math major at Cornell, found that his textbooks could be purchased more cheaply in his native Thailand than in Ithaca, so he asked friends to buy the books there and ship them to him. He started selling them on eBay and soon cleared almost $40,000. Eventually a major textbook publisher, John Wiley & Sons, got wind of Kirtsaeng’s business and filed a copyright lawsuit.
That the suit involved copyright may seem odd, since Kirtsaeng wasn’t copying anything. He was just re-selling items that he’d already paid for — a time-honored way to make money in almost any economy.
But because the items were books, some special rules applied. The textbooks were foreign editions (i.e., printed abroad), and Wiley had inserted the following language into the title pages: “This book is authorized for sale in Europe, Asia, Africa, and the Middle East only and may be not exported out of these territories. Exportation from or importation of this book to another region without the Publisher’s authorization is illegal and is a violation of the Publisher’s rights.” Wiley argued that by importing the books Kirtsaeng was violating the copyright owner’s exclusive right under the U.S. Copyright Act to authorize distribution.
The idea of patenting a living organism is strange to some people, if not frightening. Nonetheless, these kinds of patents have existed for decades. On Tuesday, the Supreme Court held argument in Bowman v. Monsanto, a case that will test just how far these patents reach.
Vernon Hugh Bowman is a 75-year-old Indiana soybean farmer. Like pretty much every soybean farmer in America, Bowman is a regular purchaser of “Roundup-Ready” soybean seed from Monsanto. Farmers who plant the variety are able to kill weeds, but not soybeans, by spraying their fields with Roundup. Today, over 90% of the soybean crop in the U.S. uses Monsanto’s patented variety.
One special feature of a living thing is that it can grow and reproduce. And so farmers who buy Roundup-Ready soybean seed sign a contract with Monsanto promising that they will not replant any of the soybeans that they harvest. Monsanto wants farmers to buy a fresh batch of seed every time they plant a soybean crop — and not grow their own.
Hollywood is abuzz with reports that the tiny islands of Antigua and Barbuda may begin operating their own national versions of the Pirate Bay, where individuals can cheaply, or even freely, download the latest films and TV shows. The clincher: this will all be legal.
How is that possible? Because the World Trade Organization says so. Let us explain.
When the U.S. helped create the WTO back in the early 1990s, it had a few main goals. One was to create a serious world trade court. The WTO has a lot of complex rules on trade, and the idea was to build a legal system that could neutrally adjudicate allegations of rule breaking. And it would work by allowing the winning country to retaliate against the loser by “suspending obligations.”
In other words, if the U.S. takes Japan to trade court and wins, Japan has to stop doing whatever bad thing it was doing. And if it doesn’t, the U.S. gets to retaliate–by, for example, increasing tariffs on Japanese goods up to the amount of harm Japan was causing.
China is famously a hotbed of copying. Western firms constantly kvetch about Chinese knockoffs of their products—and often with good reason. China’s intellectual property laws are fairly strong, at least on paper. The problem is that the laws aren’t effectively enforced – and it’s an open question whether the Chinese government is capable of shutting down the copyists. China’s uneasy relationship with intellectual-property law is due in no small part to China’s “shanzhai” culture. What is shanzhai? The literal meaning of the word is “mountain stronghold,” but it has come to connote imitation, and more, imitation done in a way that is upfront about its fakery and may even be celebrated for it.
Shanzhai culture is incredibly vibrant and shows no sign of slowing down. Shanzhai cellphones, for instance, are sometimes applauded for their ingenuity. Some include nifty features not seen on the original they are imitating. Some mash-up features found on competing phones into a single device. All are cheap.
In the wake of President Obama‘s solid re-election victory last night, we are left wondering (geeks that we are) about what (if anything) an Obama second term suggests about the future of IP law. We’ll talk mostly about copyright policy here: Any action on IP policy in the next couple of Congresses would probably focus on copyright, not least because we’ve just been through a substantial reform of the patent law and no one has any appetite to revisit that right away.
Even focusing only on copyright, the picture is far from clear. Millions of people joined in a wave of online activism back in January to defeat the copyright expansions offered in the SOPA and PIPA bills. But the coalition that defeated SOPA and PIPA is new and no one’s sure whether it’s a one-off or the beginning of a broader movement to slow, stop, or even reverse copyright’s relentless expansion. We’d note also that two of the entertainment industry’s favorite people in the House, Reps. Howard Berman and Mary Bono Mack, were both defeated last night. We doubt the losses have much to do with the pair’s outspoken copyright maximalism, but losing Berman and Bono is a further blow to a pro-copyright side that is still getting its collective head around the SOPA/PIPA debacle.
The New York Times published an interesting article last week about an ongoing dispute in Europe between Google and European newspapers (and their supporters in government). The issue is whether Google must pay for the privilege of linking to those sites, or should be able to link for free. Of course, at stake is who gains the revenue that comes from aggregating and compiling links.
As the Times notes:
Google got rich by selling a simple proposition: The links it provides to other Web sites are worth a lot of money, so much that millions of advertisers are willing to pay the company billions of dollars for them.
Now some European newspaper and magazine publishers, frustrated by their inability to make more of their own money from the Web, want to reverse the equation. Google, they say, should pay them for links, because they provide the material on which the Web giant is generating all that revenue.
We are excited to the announce the winner of The Knockoff Economy contest for best photo of a knockoff. In fact, we are excited to announce that we have two winners (we had a lot of great entries, but these two jumped out). And, since they kind of go together in an odd way, we decided to award them both the prize. Winners receive a signed copy of The Knockoff Economy plus a copy of the new album Just Tell Me That You Want Me, featuring covers (i.e., legal knockoffs) of Fleetwood Mac songs by artists like Karen Elson, Lykke Li, and The New Pornographers.
Our congratulations to Donna Ivanisevic for the Louis Vuitton condom (originally created and sold, ever so briefly, for World AIDS Day) and to Terry Stedman (disclosure: a former student of Kal’s) for the Louis Vuitton Virgin Mary:
We want to thank everyone for their questions — it’s great to see people responding to, critiquing and, in some cases, tweaking, the ideas we set out in The Knockoff Economy. We are fascinated by the complex relationship between copying and creativity — and we’re thankful that many of you are as well. So, to the Q&A . . .
Q. The issue that concerns my industry most is internet sales of prescription skin products such as retin-A and hydroquinone. Some might be counterfeit, but many are probably diverted products. The manufacturer sells them to a physician, the unscrupulous physician sells them on the internet at a deep discount, the patient may be hurt by expired or dangerous medications or may not use them correctly even if they are real. This hurts legitimate physicians by drawing business away from them, but also hurts a manufacturer’s reputation. (Apparently, people who have qualms about buying Viagra online don’t think twice before buying skin medications from those same sources.)
Do you plan to do any research in this area? Will you be looking at diversion in addition to counterfeits?
The Knockoff Economy: How Imitation Sparks Innovationis out! The book explores the relationship between copying and creativity. Copying has a well-known destructive side—which is why we have intellectual property rights—but it also has a much less appreciated productive side. We explain how some creative industries not only survive in the face of copying, but thrive due to copying. These industries offer an important set of lessons about intellectual property law and highlight the often complex balance between innovation and imitation. While many of the cases we explore are unusual—such as fashion and fonts—we close the book with a broader examination of the main themes and lessons and a brief look at the music business, which is perhaps the poster child for the (often exaggerated) perils of copying.
The Knockoff Economy grew out of an earlier paper of ours on innovation in the fashion industry. We realized there were many creative fields that fell outside the scope of intellectual property law in one way or another, and just as importantly, these fields turned out to be really fun to explore. Writing the book allowed us to dig into things like football and fonts, and to do so in a way that, we hope, opens up a broader debate on the law and economics of innovation.
Here is an excerpt from The Knockoff Economy: How Imitation Sparks Innovation, which has just been published by Oxford University Press. Next week, we’ll be taking questions from Freakonomics readers in a Q&A. We’ll also run a contest for the wackiest photo of a knockoff item.
THE KNOCKOFF ECONOMY
The traditional justification for trademark law, which protects brands, has little to do with innovation. Instead, trademark law’s justification is that brands help consumers identify the source of products, and thereby buy the item they want–and not an imitation. And yet brands—like Apple, or J. Crew–play an important and often unappreciated creativity-inducing role in several of the industries we explore in The Knockoff Economy.
Put in economic terms, trademarks reduce the search costs associated with consumption. If you’ve had a positive experience with basketball shoes from Adidas, then marking them with the trademark-protected three-stripes helps ensure that you can quickly find their shoes the next time you are shopping. And of course it also lets everyone else know which shoes you prefer.
Here is an excerpt from The Knockoff Economy: How Imitation Sparks Innovation, which has just been published by Oxford University Press. Over the next few weeks, we’ll be running 2 excerpts from the book here on the blog and taking questions from Freakonomics readers in a Q&A. We’ll also run a contest for the wackiest photo of a knockoff item.
In The Knockoff Economy we examine the relationship between copying and creativity. Most people who study this area look at industries such as music or publishing, where intellectual property (IP) protections are central. We do something different: we explore innovative industries—such as fashion, food, fonts, and finance–in which IP is either unavailable or not effective. In these industries copying is common, yet we find that innovation thrives. In a world in which technology is making copying ever easier, we think these industries have a lot to teach us. And one of the key lessons is that copying is not just a destructive force; it can also be productive. Harnessing the productive side of copying—the ability to refine, improve, and update existing innovations—is at the heart of this excerpt.
THE KNOCKOFF ECONOMY
Rules against copying don’t just cover outright imitation. They also address variations: works that use that some portion of another creative work but add in new stuff, and in the process transform the original work. Think of Shepard Fairey’s famous Hope poster of Barack Obama, which took an existing photograph and reworked it into an iconic image:
In states like California, where medical marijuana is a big business, dispensaries often feature dozens of kinds of marijuana. Each has it own (supposed) qualities, often reflected in the price per gram. And these names, while colorful, are pretty standardized: newspapers like the LA Weekly run pages of ads that list prices for “White Widow,” “Skywalker OG,” “Strawberry Kush,” and “Charlie Sheen”.
Can you trademark a strain of marijuana to keep a competitor from copying your “brand”? The answer is more complicated than you might think.
First, names like Strawberry Kush are not necessarily brands, but more like plant varieties, such as Meyer lemon or Alphonso mangoes. Plant varieties in general cannot be trademarked. Instead, breeders essentially get a form of plant patent. Growers and breeders can add a trademark on top of that, but the underlying plant variety name ultimately goes into the public domain for all to use. In other words, Fuji apples are a variety; Ranier Brand Fuji Apples is a trademark. A competitor can’t call their Fuji apples “Ranier”, but nothing stops a competitor from identifying their apples as Fujis.
The battle over gay rights and the Southern fast food chain Chick-fil-A has dominated the news in the last couple of weeks.
Kiss-ins, boycotts, and counterprotests have all ensued. But maybe the most clever response to the anti-gay marriage comments is the “chicken offset,” the brainchild of a lawyer, political operative, and all-around character named Ted Frank (disclosure: one of us – Sprigman – went to law school with Ted).
These build on the existing idea of “carbon offsets,” which started out as a way to bring market flexibility to CO2 emissions caps. If a polluter exceeds a cap, it can purchase an offset. The money that the polluter pays for the offsets supports projects that reduce CO2 emissions – say, the construction of a wind farm. The new, green projects “offset” the bad emissions.
Today, firms like Brighter Planet offer offsets that consumers can voluntarily purchase to balance out the carbon output of their flying, their houses, their weddings, and even their pets (did you know that the average housecat has a carbon pawprint of over 0.5 ton – mostly from production and transport of cat food?).
Ted’s stroke of inspiration was to tweak the concept of the offset and apply it to chicken sandwiches. As he explains on his new website, chickenoffsets.com, he loves Chick-fil-A sandwiches, but doesn’t want his love to come at the expense of his gay friends. And so every time you give in to that chicken sandwich jones, Ted will sell you an offset for $1. He promises that he’ll give at least 90% of that dollar to pro-gay rights groups. Which is much more than anti-gay groups are going to make on your lunch at Chick-fil-A.
This week in San Jose, a trial opened that may be the World War III of patents. Apple is suing Samsung, alleging that the Korean tech giant has knocked off many features of its iPhone and iPad. Apple wants $2.5 billion in damages – a record in a patent case — and a court order forbidding Samsung from selling some of its most popular phones and tablets in the United States. Samsung claims that Apple is the one stealing, and that some of Apple’s patents are invalid because they are so commonplace.
With respect to at least one of Apple’s patents, Samsung has a point. A patent at the heart of the dispute. Design Patent 504,889 — which lists Steve Jobs and Apple design guru Jonathan Ive, among others, as the “inventors” — is a claim for a rectangular electronic device with rounded corners. That’s right, Apple is claiming control over rectangles. The full claim is only 2 lines long, and amazingly broad – Apple is claiming all devices with the basic shape shown here.
Like a lot of products, pharmaceuticals get knocked off. And when that happens to a drug that’s protected by a patent, the next event is unsurprising: a lawsuit brought by the patent holder. But there is a very unusual twist in the pharma world. When the dust settles, quite frequently it is the major pharmaceutical firm that is paying the company that has knocked off their patented drug.
In one recent case involving Cipro, a widely-used antibiotic with annual sales exceeding $1 billion, Bayer (the patent owner) paid $400 million to a generic drug maker, Barr Laboratories, to settle their patent dispute. Why would the patent holder make such a huge payment to the knockoff artist, and not the other way around?
Last week, the Obama campaign released this sharp-elbowed political ad featuring Mitt Romney’s off-key rendition of “America the Beautiful.” And the Romney campaign promptly issued a sort of knock off — an ad featuring President Obama singing Al Green’s “Let’s Stay Together.” The Romney ad uses the song to criticize Obama’s allegedly too-cozy relationship with lobbyists and campaign fundraisers.
We can’t show you the Romney ad, as it’s been pulled from YouTube. Why? Because BMG Rights Management, the music publisher that owns the copyright in “Let’s Stay Together,” has sent YouTube a copyright takedown notice under the Digital Millennium Copyright Act, and YouTube has complied.
And we also can’t show you the original news footage of Obama singing — that’s also been taken down from YouTube following BMG’s copyright complaint. The Obama ad featuring Romney’s singing is still up there – fortunately for the Obama campaign, “America the Beautiful” is a very old song (first released in 1910) and so the copyright has expired and the song is in the public domain.
Whether the Olympics are around the corner (as they are now) or a few years away, there are always Olympic-themed events going on. Recently, a group called Ravelry sponsored a knitting competition called the “Ravelympics.” [Related post on Ravelry: “Is There an Elitist Oligarchy in the Underworld of Knitters?”] Whereas most people probably imagined a bunch of grandmothers knitting mufflers, the U.S. Olympic Committee saw a conspiracy to infringe its trademark in the word “Olympics.”
After enduring a lot of criticism, the USOC backed off the knitters. But what the USOC tried to do isn’t unusual.
In fact, just recently luxury goods purveyor Louis Vuitton threatened to sue Penn law school over a poster for an academic conference on the law of fashion that featured an artist’s funny take on the Louis Vuitton logo (with the famous “LV” replaced with a “TM”). Louis Vuitton didn’t see the joke, and threatened the law school (which, being a law school, knew enough not to be scared).
We’ve noted before on this blog that food receives limited protection from copying. But that doesn’t mean it receives no protection. As we all know, Coca-Cola’s secret formula is still secret. And sometimes food companies patent novel (and not so novel) dishes and techniques.
Patent and “trade secret” (the legal right Coke relies on) present very different economic benefits, however. Trade secret is forever—if the secret can be kept secret. Patent, by contrast, lasts 20 years and protects the invention against any copyist. More importantly, patent is fundamentally based on disclosure: to patent something, you have to explain how it works.
How do firms choose between the two? That’s a big question. But we can get a window on it by looking at something that has been in the news lately—the so-called “Vegas Strip Steak.”
A few months ago we wrote about whether shoemaker-to-the-stars Christian Louboutin ought to have a monopoly over red shoe soles. Last week, in Kentucky, a similar issue arose concerning red wax. The red in question was on the neck of bottles of booze—specifically, Maker’s Mark bourbon and Jose Cuervo’s Riserva de la Familia tequila, which both feature a bottle cap seal made of red, dripping wax (Cuervo has since shifted to a straight-edged red wax seal). Maker’s, which used the dripping wax seal first, sued Cuervo, claiming trademark infringement.
The day before Beastie Boy Adam Yauch’s untimely death from cancer, a lawsuit was filed in New York accusing him and his bandmates of illegal sampling. What’s unusual about this case is that the samples in question supposedly appeared on the 1989 album Paul’s Boutique. An obvious question is why almost 25 years went by before anyone decided to sue.
The reason? The alleged samples can’t actually be heard by the ordinary listener. Which raises a kind of existential question about intellectual property. If no one can tell that something is copied, is it still illegal to copy it? And if so, why?
Let’s assume for the sake of argument that the samples in question exist. They are snippets of songs by Trouble Funk, a 80s era go-go band. Trouble Funk’s complaint declares that the way the Beastie Boys sampled the tracks “effectively concealed to the casual listener” the fact that they are samples at all. And it was “only after conducting a careful audio analysis” that Trouble Funk even knew for sure that they had been sampled.
Almost a year ago, we posted here about patent trolling – when individuals and firms use patents as a tool to extract settlements out of defendants who wish to avoid expensive patent litigation, even when the target thinks it can ultimately win.
Because they can be so valuable, patents are a big source of litigation, especially in the tech industry. Apple and Samsung have been at each other’s throats over smartphone patents, as have Apple and Motorola. Microsoft has been battling with Motorola over whether its Xbox violates Motorola’s patents, and Microsoft has also threatened smartphone maker HTC. Oracle sued Google, claiming Google’s Android cellphone operating system infringed on Oracle patents. Microsoft sued Barnes & Noble, claiming that its Nook e-reader violates Microsoft patents. Apple and Google are now eyeing each other warily over “slide to unlock” technology that Apple has patented and accuses Google of copying in its Android smartphone operating system. Google, as a defensive move, paid $12.5 billion to buy Motorola’s portfolio of nearly 25,000 patents.
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