Topic: Telecom, Internet & Information Policy

Patent Failure

This week I’m filling in for libertarian blogger Megan McArdle at the Atlantic. Yesterday I finished a three part discussion of Patent Failure, an excellent new book on the patent system by James Besson and Michael Meurer.

The use of the phrase “intellectual property” to describe patents and copyrights has become so commonplace that we barely give it a second thought. I think that’s unfortunate, because the question of whether patents can sensibly be considered a kind of property is an empirical question, not merely a matter of semantics or tradition.

In my first post, I discuss the key characteristics of a patents system — clear boundaries and positive incentives for innovation, and argue that the patent system tends to fulfill those characteristics with respect to the chemical and pharmaceutical industry. In my second post, I shift my attention to the rest of the patent system, and show evidence from Bessen and Meurer that the patent system seems to be creating dis-incentives for innovation in industries other than chemicals and pharmaceuticals. Finally, in my third post, I suggest that the problem is a lack of clear boundaries, and discuss some of the reform proposals Bessen and Meurer offer to fix the patent system’s problems.

The best thing about the book, from my perspective, is that it takes the idea of patents as property seriously and then tries to bring some empirical evidence to bear on whether the patent system behaves the way we expect a property rights system to behave. Because of the analytical clarity of their approach, it gives us a meaningful yardstick with which to judge potential reforms.

Alaska Will Not Implement REAL ID

Passed into law Wednesday:

Section 1. AS 44.99 is amended by adding a new section to article 1 to read:

4 Sec. 44.99.040. Limitation on certain state expenditures. A state agency may not expend funds solely for the purpose of implementing or aiding in the implementation of the requirements of the federal Real ID Act of 2005 (P.L. 109-13, Division B).

Headline Writers’ Lacking Literary Knowledge

Twice in two days now, I’ve come across news articles using the term “Big Brother” to refer to private sector information practices that affect privacy. Big Brother is not an appropriate shorthand here. In his book 1984, George Orwell gave the name “Big Brother” to the oppressive government that observed and controlled the lives of the book’s protagonists. The unique oppressive powers of this governmental entity were a central motif of the book.

Yesterday’s Washington Post had an article headlined “FTC Wants to Know What Big Brother Knows About You.” Is the Federal Trade Commision examining warrantless wiretapping, one hopes? Alas, no — they’re looking at “behavioral targeting” on the Web. This is when advertisers collect information about Web surfers with cookies, using it to direct more relevant ads their way.

Consumers who care to can “opt out” of nearly all “behavioral targeting” by setting their browsers not to receive third-party cookies. In both Internet Explorer and Firefox, the “Tools” pull-down has a selection called “Options.” Clicking the “Privacy” tab allows users to set blanket bans on cookies or site-specific preferences.

Behavioral targeting is in no way an exercise of the legal monopoly on coercion, much less an oppressive exercise of that power.

Ars Technica, an otherwise excellent tech publication, mangled the same literary reference in this headline: “Big Brother is Watching: Companies Snoop E-mail to Combat Leaks.” Employers monitoring communications on their systems are neither exercising government power nor oppressing their employees.

The most cogent, if not the kindest, explanation of this came in the comments to a recent blog post by Bruce Shneier (one I disagreed with). There, commenter “ManOnBlog” said:

You check your constitutional rights at the door when you go to work. They can tap your phone, read your email, paw through your computer, open your locker, etc. The list of what they can’t do legally is shorter than what they can do.

Commenter “@ ManOnBlog” replied:

> You check your constitutional rights at the door when you go to work.

No, you don’t.

> They can tap your phone

No, they can’t. They can tap *their* phone, which you use.

> Read your email

No, they can’t. They can read *their* email, which you use in the course of your job (although generally speaking they need to be VERY CAREFUL about this, because although your corporate mail store is indeed company property they have obligations to protect the individual information that is in that mail store if it is your personal info).

> paw through your computer

No, they can’t. They can paw through *their* computer. Again, see the email line above.

> open your locker


The distinction between government and private action is something more people should understand — especially people who write headlines for a living.

L-1 and China - Oh, Nevermind - Naomi Klein

In a recent Cato TechKnowledge, I highlighted a company called L-1 Identity Solutions that is likely to be a key sponsor of any continuing efforts to implement the REAL ID Act, our moribund national ID law.

L-1 features prominently in a current Rolling Stone article which points out how the company is working with China to build surveillance technologies that the state will use in its attempt to maintain a grip on power.

But before you get to that, you have to stomach this:

Remember how we’ve always been told that free markets and free people go hand in hand? That was a lie. It turns out that the most efficient delivery system for capitalism is actually a communist-style police state, fortressed with American “homeland security” technologies, pumped up with “war on terror” rhetoric. And the global corporations currently earning superprofits from this social experiment are unlikely to be content if the lucrative new market remains confined to cities such as Shenzhen. Like everything else assembled in China with American parts, Police State 2.0 is ready for export to a neighborhood near you.

There are serious issues here, but they’re so mixed up with ideological vomitus that it’s hard to carry on reading. If this paragraph isn’t just meaningless, the author has obviously deemphasized telling an interesting story in favor of indoctrinating readers with–well, whatever the substance is behind those anti-globalization street-puppet shows.

Sure enough, when I went to see who wrote it, it was Naomi Klein. The same Naomi Klein, I assume, who inspired Johan Norberg to pen his recent briefing paper, “The Klein Doctrine: The Rise of Disaster Polemics.”

Milton Friedman’s legacy survives her book with ease, so it didn’t trouble me much. But confusing the kids who read Rolling Stone about the role of communism in keeping China unfree? That could actually do some damage.

Reversing the Course of a River

Bruce Schneier is a smart and interesting guy. His sound thinking on computer security has influenced me a great deal, and it extrapolates well into related fields like national security. So I’m always interested to find writings of his with which I disagree. A recent essay in Wired, entitled “Our Data, Ourselves” is one. It calls for “a comprehensive data privacy law.”

This law should protect all information about us, and not be limited merely to financial or health information. It should limit others’ ability to buy and sell our information without our knowledge and consent. It should allow us to see information about us held by others, and correct any inaccuracies we find. It should prevent the government from going after our information without judicial oversight. It should enforce data deletion, and limit data collection, where necessary. And we need more than token penalties for deliberate violations.

If he really believes that these rules should govern the collection and use of data - “all information about us!” - what an administrative nightmare that would be to implement. The benefits of doing so would be quite small in comparison.

Some of these things are agreeable, such as judicial oversight of government data collection (the Fourth Amendment is that law) but even a solid libertarian like myself wouldn’t endorse judicial oversight of government officials looking up information about me on public Web sites, for example.

And should I have a right to review any email in which people discuss this blog post and its author? Incredible.

The flaw in this article (beyond its carelessness) is Bruce’s treatment of these information practices as all-new, and needing an all-new regulatory regime, just because decision-making is now undertaken using “data.”

Whoever controls our data can decide whether we can get a bank loan, on an airplane or into a country. Or what sort of discount we get from a merchant, or even how we’re treated by customer support.

But it’s always been true that decisions like these are made using “data” - perhaps not in digital form, but data/information all the same. When has a decision ever been made not using “data”? We don’t need to throw out old rules about privacy, fairness, and so on just because information is digitized.

Many of Schneier’s premises are correct. The change from analog to digital data systems does cause a lot more tracks to form behind people as they traverse the economy and society. This creates lots of efficiency, convenience, wealth, and problems - threats to privacy, fair treatment, personal security, seclusion, and liberty. Let’s deal with them - each one - on their merits rather than trying to write a single law to overhaul the use of information in society.

Reversing the course of a river would be a tiny problem compared to what Schneier proposes.

Lieberman: Censor

The Google Public Policy blog has a write up of the company’s recent interactions with Senator Joseph Lieberman (D-CT) and his staff regarding some videos hosted on YouTube.

Senator Lieberman thinks that certain terrorism videos shouldn’t be displayed. Well, actually, a U.S. Senator has no business telling anyone what information should or shouldn’t be published. Congress can pass a law on the subject, which law would never pass First Amendment muster.

Perhaps Senator Lieberman thinks that censoring communications is some kind of anti-terrorism policy. Advocacy of terrorism of glorification of terrorist acts is stupid and dastardly, but the cure for bad speech is more speech or better speech, not censorship.


Here’s a video highlighting the Peer-to-Patent project originated by Beth Noveck and New York Law School’s “Do Tank.”

Whether because of inappropriately low standards for granting patents or recent decades’ outburst of inventiveness in technological fields, the Patent and Trademark Office is swamped. Patent examiners lack the breadth of knowledge in relevant fields to do the job they should be doing on each patent application. Drawing on the knowledge of interested and knowledgeable people can only improve the process, and this project aims to do just that.

I’ve written favorably about Peer-to-Patent at TechLiberationFront a couple of times, but here’s a cautionary note: A successful Peer-to-Patent program would result in a dispersion of power from patent examiners and the USPTO to the participants in the project. Surface support from the USPTO notwithstanding, the application of public choice theory to bureaucracies (by Cato’s own Bill Niskanen) tells us that the agency won’t give up this power without a fight.