Last week, the New York Times ran an interesting and important op-ed by Stuart Green, a law professor, who argues that although illegal downloading of songs or videos from the Internet may be wrong, it’s not really “theft” in the sense that the term has been understood historically in the law. Nor is it theft according to the moral intuitions of ordinary people (as Green’s own research with psychologist Matthew Kugler shows), who draw a sharp distinction between online file sharing and ordinary theft, even when the economic value of the property taken is the same.
The question of who owns culture is a big one, especially when products associated with certain cultures or nations turn out to be very popular in the marketplace. Take espresso. In a famous scene from The Sopranos, Paulie Walnuts rants inside a Starbucks-like café as he watches the cash register ring with espresso orders:
Paulie: The fuckin’ Italian people. How did we miss out on this?
Pussy: What?
Paulie: Fuckin’ espresso, cappuccino. We invented this shit and all these other cocksuckers are getting’ rich off it.
Pussy: Yeah, isn’t it amazing?
Paulie: And it’s not just the money. It’s a pride thing. All our food: pizza, calzone, buffalo mozzarell’, olive oil. These fucks had nothing. They ate pootsie before we gave them the gift of our cuisine. But this, this is the worst. This espresso shit.
Pussy: Take it easy.
Supporters of stronger intellectual property enforcement — such as those behind the proposed new Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) bills in Congress — argue that online piracy is a huge problem, one which costs the U.S. economy between $200 and $250 billion per year, and is responsible for the loss of 750,000 American jobs.
These numbers seem truly dire: a $250 billion per year loss would be almost $800 for every man, woman, and child in America. And 750,000 jobs – that’s twice the number of those employed in the entire motion picture industry in 2010.
The good news is that the numbers are wrong.
In America, it’s sometime said, all big trends start in California. That’s true for great things like hot tubs, the iPod, and Pinkberry. It’s also true for bad things, like tax revolts, Pinkberry, and . . . artist resale royalties.
Artist resale royalties? In a previous post, we explained how California’s law guaranteeing artists 5 percent of the profits from any later sale of their artwork has some unintended consequences. The California law helps the tiny fraction of artists fortunate enough to have their work appreciate significantly in value. But it does nothing for the 99% of artists whose work has little enduring commercial value. Not only does it not help them, it probably hurts them.
You might wonder first how yoga, dating back thousands of years in India, can be copyrighted at all. (Not easily, as we will explain in a moment.) But the question we raise emerges from a very current dispute between two rival yoga studios.
Bikram Choudhury is the founder of Bikram Yoga, a popular chain of yoga studios frequented by celebrities such as Lady Gaga and David Beckham. In Bikram Yoga classes, students enter a room heated to 105 degrees Fahrenheit to perform a set of 26 traditional poses and two breathing exercises. While you might think demand for this would be low, “hot yoga” has made Choudhury very rich. He has a villa in Beverly Hills, and a collection of more than three dozen Rolls-Royces and Bentleys.
How is California more like Europe than the United States? We can think of a few ways, but one of the most interesting involves the rights of artists. As this recent story in the New York Times points out, in 1976 California passed a law that guarantees artists 5 percent of the profits in a later sale of their artwork. In doing so, California copied France and a number of other nations, in which such profit-sharing with artists is required by law. In the rest of the United States, by contrast, artists have no right to the profits a collector might make when they resell their artwork.
From an economic point of view, the California rule is a little strange. As we discussed in a previous post, if I sell my house and in five years it rises substantially in value (an anachronistic example these days, we recognize), I don’t get a cut of the windfall. A deal is a deal.
Just about a year ago we posted about the incredibly innovative game of football. As we described, all of the innovation we’ve seen in football – the spread offense, the zone blitz, the wildcat, and dozens of other offensive and defensive formations, strategies, and counter-strategies – occurs without anyone ever asserting ownership. Rival teams are free to copy new plays, and they do.
It’s not as if ownership would be impossible – existing intellectual property rules might cover at least some football innovations as copyrightable “choreographic works,” or as patentable processes. The fact remains, however, that no one has ever tried to copyright or patent a new play or formation.
In a recent article, the poetry critic of the New York Times complained that to do poetry criticism right, it’s often necessary to quote extensively from a poem. Indeed, in the case of a short poem, it might be helpful to readers to copy the whole thing. But, the critic said, this can’t be done because it might run afoul of copyright law.
It is true that copyright law prohibits the unauthorized copying of any substantial part of someone’s poem, song, or other work. What does “substantial” mean? Well, in one recent case, a federal court held that rap group N.W.A.’s unauthorized sample of a two-second guitar chord was infringing. The court’s holding was clear: “Get a license, or do not sample.”
Is this a good policy? From an economic perspective, no. Use of a small bit of someone else’s creative work to build a new creative work rarely harms the economic interests of the first copyright owner, because most “derivative” works do not directly compete with the original. In the case mentioned above, no one thought that N.W.A.’s rap song “100 Miles and Runnin’” would lure potential paying customers away from Funkadelic’s “Get Off Your Ass And Jam.” (Note: neither song is safe for work.)
A rash of recent news articles (like here and here) have noted that in a little over a year, an obscure provision of U.S. copyright law takes effect – one which allows songwriters and musicians to exercise their “termination rights” and take back from the record labels many thousands of songs they licensed 35 years ago.
So, for example, Boston will be able to take back Don’t Look Back. Gloria Gaynor can repo Love Tracks, and Elvis Costello can reclaim This Year’s Model. Less auspiciously, Kiss guitarist Ace Frehley can reclaim his entire solo album. (The music industry may not mind losing this one.) And every Jan. 1, a whole new crop of artists looking to lay claim to their termination rights will appear.
The music industry, already reeling from online piracy and digital downloads, is fighting back against what they see as the looming loss of their property—and the huge profits that still come from some of these records. Why would Congress create a system where, 35 years after making a record that no one knew for sure would be a hit, musicians could take back control—and profits—over the best-selling songs?
Could Pablo Picasso sue Claude Monet for using his signature melancholy blue color? That question was raised this week by a federal judge in New York. The suit before the judge was not actually brought by Picasso. But it did involve a trademark in a color.
As his many fans know, Christian Louboutin is an artist of the foot. His shoes are widely revered (see songstress Jennifer Lopez’s ode, “Louboutins”) and not cheap: close to four figures in many cases, and sometimes more. Louboutin shoes also feature a well-known quirk: red soles. And when the venerable fashion house of Yves St. Laurent began selling red soled shoes recently, Louboutin—who had trademarked said soles in 2008—quickly sued.
Or do they signify desperation? This is the question that arose earlier this month in Congress, when the House Judiciary Committee again took up the question of creating copyright protection for fashion designs.
We (really, Chris) testified as the sole opponents to the Innovative Design Protection and Piracy Prevention Act, or IDPPPA, which would for the first time in American history provide a short (3 year) copyright for fashion designs, such as the cut and look of a particular dress or suit. To bolster our argument against the IDPPPA, Chris presented data from the Bureau of Labor Statistics that showed that since 1998 apparel prices in the U.S. had dropped or stayed steady—with one exception. At the very top level, prices rose dramatically in this period—by over 200%. The full testimony and graph can be found here.
Applying for a patent is expensive. Fees can exceed $25,000, and most applications require at least a couple years of effort. We might expect that anyone considering applying for a patent would be fairly certain of the merits of their case for one. And yet, of the patents granted by the U.S. Patent and Trademark Office (PTO) that are subsequently litigated, 40% are declared invalid in court.
A court’s declaration that a patent is “invalid” means it should never have been granted in the first place, usually because the invention has been done before, or because it’s obvious to anyone familiar with the patent’s particular scientific or technical field. So why do so many people spend so much time and money filing for patents that are ultimately declared invalid?
We recently wrote about Disney’s attempt to trademark “Seal Team Six”–the name of the Navy SEAL unit that killed Osama bin Laden. Disney’s bid to make a buck off the SEALs didn’t go down very well – the public response was overwhelmingly negative. It also caught the attention of the Navy, which made clear that it had a better claim over the name. Last Thursday, Disney gave up.
But just as one bizarre trademark dispute recedes, another one springs up.
Last Wednesday, the New York Stock Exchange threatened to sue the widely-read liberal blog Talking Points Memo over TPM’s use of a file photograph of the NYSE trading floor. (Copy of letter here).
On May 1st, Seal Team Six killed Osama bin Laden. On May 3rd, the Walt Disney Company—usually known for animated films about princesses and singing bears–applied for a trademark on the term “Seal Team Six.”
The standard economic rationale for trademark law is that trademarks reduce search costs for consumers. Think about a trip to buy new running sneakers. There may be dozens of pairs on the shelves of your local store. And many hundreds more online. How do you choose?
Today nearly every company and organization has a website—there are by some counts nearly half a billion of them (and a Google estimate suggested one trillion unique URLs). Yet if you search for the website of the most important law firm in Hollywood, Ziffren Brittenham, you won’t find it. (Disclosure: Ken Ziffren is a colleague and trustee at UCLA Law School).
Similarly, even a casual fan of TV and film knows that the Creative Artists Agency, or CAA, is one of the biggest power centers in Hollywood. CAA does have a website. But it doesn’t tell you anything beyond the addresses of the firm’s various offices.
Have these major Hollywood players not heard of the internet? Or do they have some other strategy?
Former heavyweight champ Mike Tyson is famous for a lot of things, including biting off Evander Holyfield’s ear in a fight. A few years later he got this unusual tattoo on his face, also now famous.
Last week, Victor Whitmill, the tattoo artist who inked Tyson, filed suit against Warner Brothers, claiming they had infringed his copyright in Tyson’s tattoo. Which raises an interesting question: Can you copyright a tattoo?
Trademarks are so significant in our economy that many firms and individuals register any mark they think may prove valuable. Which is why the system of private regulation of “skate name” trademarks among derby girls is so interesting.
The next battle in the Google Books dispute comes in a week, when lawyers on both sides meet to consider their next move after a federal judge rejected a settlement proposal. Should Congress step in?
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