New York City passed a law requiring certain restaurants, like fast food chains, to include nutrition information on their menus. Subway complied. Other fast food chains sued, and Dunkin Donuts claimed it was impossible to fit the information by creating a really hard to read menu containing it. The NYC Department of Health called their bluff by creating a much better mockup.

Wendy's thinks it must be illegal for anyone to show them how their menu could be better, and has claimed that a mockup made of their menu is "misleading" and an "improper use of Wendy's trademark".

It's a legal strategy for the modern era: If your arguments aren't working so well in court, claim that the people making the arguments are infringing your copyrights trademarks in the process!

In a welcome departure from the recent trend of ever-lengthening copyright terms, the United Kingdom has declined to extend its copyright term beyond 50 years. Andrew Gowers, former head of Financial Times and chair of the committee looking into the proposed extension, said, "I could have made a case for reducing it based on the economic arguments. As it is, we left it in place rather than increasing it to 95 years as some of the music industry wanted and again, I think we steered a happy middle course rather than siding with one or other of the opposite poles of this debate."

So the economics pointed to a shorter term, but political realities made that impossible. Keep that in mind when we get our next copyright term extension battle here in the US!

Just like "security reasons" has become the catch-all excuse for justifying ridiculous restrictions on freedom, from banning water on planes to preventing photography in Silver Spring, MD, "copyright" has become a catch-all argument for interfering with freedom of expression, whether or not the activity in question has anything to do with copyright at all.

Via Google Blogoscoped, the t-shirt design competition site Threadless (which I really like, and own many of their shirts) is running a Gmail-inspired shirt competition but rejected shirts that incorporated the Gmail envelope symbol, claiming, "The reason your design was declined is: The design contains copyrighted material."

Threadless is welcome to forbid whatever type of shirts they want to, and the competition rules have been changed to now read, "Your design should not have the brand name or logo on it." But I wish people would stop using "copyrighted material" as the catch-all excuse. How about "The design contains the brand logo and we don't want that." Or "The design contains a protected trademark." Or "We just don't like your design" (I think the rejected design is pretty cute though.) Claiming "copyright" is like claiming "security reasons" - it's a dumb excuse meant to shut down all argument by people who don't really understand what they are talking about.

Companies in non-content industries are catching a disease from our content industries: control-itis. We know that content industries like music, movies, publishing, and software have started to believe consumers need to ask permission to do anything at all with their content. Whereas once you could lend a book to a friend or sell it to a used bookstore, now the publishers want to charge you for these activities, and the nature of electronic technology which makes a copy even to show something on the screen means copyright law comes into play. What were once free uses have now become fair uses, as Lessig talks about in the Read-Write Culture video we included on the iPods we sent to Senators.

While viewing a piece of writing on a computer might constitute copying, consumers still have the right to resell lawfully acquired works - the First Sale doctrine, which survives despite publishers' deepest wishes. But according to Consumer Law and Policy Blog, some companies are using copyright claims to try to interfere with eBay auctions of their goods (via Consumerist).

Most of the article talks about the recent Supreme Court Leegin decision about price-fixing, but the most astonishing argument is Innovate Motorsports' claim that any sale of their goods violates copyright, trademark, and patent rights. (The kitchen sink too? I'm sure they would have tried to throw trade secret law in there if they could have made up some kind of justification.) Their eBay page has such beauties as "Innovate is the owner of certain copyrights to ... product literature, catalogues, product specifications, installation guides, user guides ... These items may not be used by anyone without express written permission from Innovate." In other words, it's not just that making a copy of some of their copyrighted material is a regulated use; even simply using it, like reading or selling it, is under their control according to their argument. Likewise, they claim that "the sale of our products by anyone other than authorized dealers, in strict compliance with the terms of their license, constitutes patent infringement." Unless they have a patent on selling their products on eBay (which they don't, and which would be a stupid patent), then no, it's not a violation of their patent to sell a product made with a patented process.

These claims seem clearly ridiculous. But in today's IP climate, it's a serious problem. eBay has taken down auctions for Innovate items under their VeRO program just like the auctions we wrote about previously. And with Congress's willingness to grant more control to companies to monopolize their markets, we can't count on our right to sell lawfully acquired physical goods forever without vigilantly defending this right. Most of all, the more companies keep repeating clearly false notions that they are entitled to control every aspect of secondary markets in their goods, people may start to believe them.

Candidate Ron Paul spoke last Friday at Google. According to the Mercury News:

Ron Paul, the Texas GOP congressman and long-shot candidate for president, credits a rabid Internet following with spreading his staunch libertarian and anti-war message into the mainstream media.... But he did not sanitize his talk for his Net-centric audience.

He said he does not support network neutrality, the concept that telecommunications companies should be restricted from controlling broadband access to the detriment of Web companies like Google, nor does he support tech-friendly immigration reforms in Congress recently. And he doesn't believe in federal student government loans, which a huge majority of the audience, by a show of hands, had used to make it through college.

Is this Ron Paul showing that he won't pander to any audience, or evidence Ron Paul is stuck in the same pro-big lobbyist mindset, where government continues to give large established industries like the telecom monopolies more power over markets even when they are stifling competition and innovation?

Maybe both?

Free Press has a new campaign, "Free the iPhone", which is actually about much more than the iPhone. It's about openness in general on the 700 MHz spectrum that's coming up for auction soon, and they have three requests:

1. The freedom to use whatever device we want on any network.

Also known as "Cellular Carterfone", this will enable innovation in the wireless market by allowing companies such as Apple to release innovative products without needing the permission of a carrier (and having to sign onerous exclusivity deals to get it).

2. The freedom to choose among many providers in a competitive wholesale marketplace.

Chip Pickering pointed out in Wednesday's telecom hearing that wholesaling is "a very healthy component of any fully functioning economic market." The wireless market has no wholesalers because spectrum is so scarce and barriers to entry so high, and every company that owns wireless spectrum also sells service, cutting down on the potential for innovation in business models.

3. The freedom to access any content or services we want through our devices.

Whether it's Sprint crippling GPS or Verizon refusing to allow Bluetooth except on headsets, carriers (except, now, T-Mobile) blocking access to WiFi or VOIP, or blocking ringtones except their own expensive ones, the entrenched carriers are blocking innovation by trying to charge for every type of content you might want to buy. An open network should work like the Internet - if someone wants to set up a server and pay for the bandwidth to let you upload or download data to that server, you should be able to. It's that simple.

Check out Free the iPhone and free not just the iPhone, but every other innovative phone, application, service, and business model that's better than Verizon's, AT&T's, Sprint's, and T-Mobile's today.

In 2005, the EFF exposed information that printers secretly encode with a pattern of dots on every printed page. Now, according to Seeing Yellow (via BoingBoing), when someone complained to their printer manufacturer about this practice, "Secret Service agents showed up at his door several days later."

Seeing Yellow, part of the MIT Media Lab, wants citizens to contact their printer manufacturers, to make it clear to the printer companies and to the Secret Service that violating users' privacy is not appreciated. Companies telling government agencies when individual citizens oppose their policies is a bad precedent and, whether yellow dots are a big deal or not, we should not tolerate government agents investigating our opinions about printer technology.

University of Cambridge economist Rufus Pollock has applied the science of economics to the question of the optimal copyright term. From the paper abstract:

The optimal level for copyright has been a matter for extensive debate over the last decade... A parsimonious theoretical model is used to prove several novel propositions about the optimal level of protection. Specifically, we demonstrate that (a) optimal copyright falls as the costs of production go down (for example as a result of digitization) and that (b) the optimal level of copyright will, in general, fall over time. The second part of the paper focuses on the specific case of copyright term. Using a simple model we characterise optimal term as a function of a few key parameters. We estimate this function using a combination of new and existing data on recordings and books and find an optimal term of around fourteen years. This is substantially shorter than any current copyright term and implies that existing copyright terms are too long.

Here's the paper.

One reaction I had was, "Hm, fourteen years - perhaps not a coincidence that he ended up with the same result as the U.S. founders originally set? Could the parameters have been tweaked to yield that result?" The formulas have four empirical values as inputs: the ratio of deadweight loss to welfare under copyright (α), the rate of diminishing returns as the number of works increase (γ), the rate of "cultural decay" which diminishes the market value of a work over time (β), and the discount rate (δ).

With various combinations of inputs based on values estimaed by other researchers in pervious literature, Pollock derives copyright terms from 2 to 50 years; to justify today's copyright terms which average around 70-120 years (longer if human lifespan grows) would necessitate implausibly extreme values for these variables.

Rep. Chip Pickering, Republican from Mississippi, asked the telecom representatives who are opposed to Open Access and Wireless Carterfone on the new 700 MHz spectrum that's coming up for auction, what's wrong with letting that spectrum have those restrictions? He asked, "You do not have to do Carterfone on 700, you don't have to bid on that spectrum if it's conditioned in that way. You don't have to change your business model... But if there are those who want to invest in a new business model that will create more dynamic vibrant healthy competitive wireless sector, what's wrong with that?"

We know the real answer. Verizon and the other telecom companies want to buy the spectrum so they can prevent any new competitors, just as Google's Rick Whitt warned. That's good for Verizon and bad for consumers. And at one point, Ed Evans, CEO of Stelera Wireless and board member of the CTIA, let that slip:

Pickering: Are you concerned that if you do allow openness in the upper bands that it will intensify competition in the lower bands, in the lower markets, and drive your price at the auction up?

Evans: I believe you would actually shut down capital investment into rural markets by doing that... Then I've acquires spectrum under a certain set of rules, and now under a different set of rules there's a new piece of spectrum that is out there, whereby we don't know what they're going to do with it, we don't know what they're going to deploy, we don't know what type of technology, but we know that it is open and therefore you've substantially lowered the barrier to entry for any competitor to come in, literally anybody in the world who wanted to walk in and try to turn on a wireless network.

Pickering: I think you've captured the issue. Do you want more competition or less competition?

Evans goes on to argue that the technology for open access doesn't exist, and so the FCC is wasting spectrum and should instead only use it for the same technology we have today. At least we know where the CTIA stands on innovation: if it's not already out there, the FCC shouldn't allow it.

At today's hearing on number portability in the Senate (not the same as yesterday's House hearing on wireless carriers we blogged about this morning), Senator Ted "Series of Tubes" Stevens made an insightful point, though wrapped up in a little of his typical crazy-soundingness (via Consumerist):

Stevens: "Let me be just the Devil's Advocate here. Could I just decide I want to keep my wireline and I want to add wireless to it? Can I have two providers on the same number?"
Awkward pause: "Um, I don't think that technology exists right now."
Stevens: "If I had an IP phone, by definition, I'd have to leave the wire... wireline phone to use it?"
Answer: "I think that is the case with the technology today."
Stevens: "Is it coming? Why shouldn't I be able to say, just by a little switch on my phone at home that's wired, I'm going off on the wireless now, I want to use this as I ride my motorcycle."
Stevens: "I'm bad. Pardon me."

Sorry, telecom industry people, the technology for this kind of thing does exist. And Stevens has a point - why aren't carriers offering it? They're just locked into a pattern of thinking about each telecom service as a totally isolated silo, trying to kill IP phones, and trying to extract more money from consumers for using existing features, rather than innovating. So locked in, in fact, that they don't even think it's technologically possible to let a consumer switch from landline to mobile phone using one number.

The telecom industry, it's not a big truck. It's a series of Scrooges!

In his testimony, Jason Devitt talked about many types of applications that don't come to market today, but he ran out of time before covering the most important one: applications that don't look very lucrative, and therefore the carriers have no interest. From his written testimony:

Inevitably, carriers are not interested in devoting time and resources to devices or applications that they don't believe will be of interest to the majority of their tens of millions of customers. . . Forcing entrepreneurs to seek permission to innovate in mobile services is killing powerful new ideas before you ever get to hear about them. Imagine the founder of Amazon having to persuade Sprint in 1995 that he could do a better job selling books online than Barnes & Noble. Imagine the founder of eBay trying to explain to a mid-level manager at Verizon that trading stamps, coins, and dolls online would be a good way to make money. Picture the founders of Google in 1999 persuading AT&T to let them launch another search engine. This is the daily reality for those who develop mobile applications.

There's another related class of applications Devitt doesn't mention: applications that will probably never make any money. In addition to the Amazons, eBays, and Googles, of wireless technology which entrepreneurs will create, we want the cool little toy applications like Friend Wheel, the personal Web sites, and the ability for nonprofit organizations to organize using mobile technology. All of these are unlikely to ever grow into a lucrative income stream for mobile carriers, but thrive on the Internet, where no carrier has to give permission or extract a burdensome toll.

At yesterday's "iPhone hearing" before Congress, witnesses talked about the failures in today's wireless market and the need to force carriers to open up their networks to all devices and all applications (that operate properly on the network).

Jason Devitt, founder of Skydeck and previously of Vindigo, testified, "I'm a small business owner. I don't like regulators... In the context of wireless spectrum I do not have a choice between no regulations and regulations. We have a choice between badly written regulations and regulations that work."

Why are regulations necessary? Because the market isn't working today. Innovators like Devitt have to ask permission to innovate. Devitt explains:

Read more...

Thomas Carter [who invented the Carterfone] was not a judge who broke apart a monopoly by fiat. Thomas Carter was an entrepreneur who wanted to bring an interesting product to market and was furious—madd as hell—to discover that he required permission to innovate.

I am an entrepreneur and I am mad as hell that I require permission to innovate in the wireless market. I don't have to go to the great companies that build our public highways and ask them for their views on what kind of cars I can put on those roads. I don't have to ask Con Ed for permission when I want to put a refrigerateor on the electricity network. I don't have to ask Verizon, thanks be to Thomas Carter, for permission to attach a computer to their network or to launch a Web site.

But for some reason I have never been able to understand, I have to ask permission of Verizon Wireless to attach a computer—or the computers that they now call phones—to their wireless networks and I have to ask their permission to run applications and services on those phones. Worse, I have to ask the permission of my comptetitors because they are competing with me to provide services to consumers.

And competition isn't solving this problem. "Despite the fact that, as the CTIA and the FCC keep telling us, the wireless sector is the most competitive telecommunications sector in this country ... nevertheless there are hundreds of interseting applications and services that are not getting in front of consumers because of the current structure of the market, and that's a problem that we can only address through regulation."

Watch Devitt's entire testimony:

Freakonomics co-author Stephen Dubner poses a thought-provoking question on the Freakonomics Blog: If public libraries didn't exist, could you start one today?

The law protects public libraries, and their right to lend books to people. But the publishing industry doesn't like that it can't control what happens to books after they are bought. Dubner analyzes the pros and cons of libraries from the point of view of the publishing industry: on the one hand, many people can read a book but the author and publisher only sell one copy. On the other hand, libraries foster literacy, expose people to new authors, make reading accessible to the poor, etc.

Dubner writes, "Perhaps they’d come up with a licensing agreement: the book costs $20 to own, with an additional $2 per year for every year beyond Year 1 it’s in circulation. I’m sure there would be a lot of other potential arrangements. And I am just as sure that, like a lot of systems that evolve over time, the library system is one that, if it were being built from scratch today, would have a very different set of dynamics and economics."

Or, perhaps libraries wouldn't exist at all. We know from experience that content industries often don't act in their own long-term best interest. The RIAA shot itself in the foot with its unwillingness to find a profitable way to allow filesharing; authors and book publishers are suing Google for making it easy for people to find their books, even though the users can't read more than a few lines of copyrighted books without permission. So let's assume public libraries are good (and I believe they are) - unfortunately, we couldn't count on the publishing industry to make it possible for them to exist.

The publishers might insist on too much revenue, in an attempt to protect their margins on existing books, even at the cost of the public good and their own long-term success. This is similar to the way the recording industry is trying to kill Internet radio with royalty fees so high almost no stations could continue operating, or the way Verizon squelches wireless innovation because they won't allow applications on their phones unless they make significant profit.

The movie industry would have stopped the VCR if it could have, afraid that home video would cut into theater profits. It did, but they ultimately more than offset the loss with video rentals and sales. We have every reason to think that publishers would do the same to libraries if the first libraries were forming today.

IP laws give one participant in a market - the content rightsholder - complete monopoly power over that market. Sometimes that's the only way to make a market work so creators get compensation. But often, it just means that the market fails entirely. If we don't give the monopoly holders everything they want, sometimes that's best for them in the long run. Or maybe it's just good enough for them, while the public greatly benefits.

Programmers are familiar with the dangers of broad, obvious, and/or non-novel patents and the litigation created by patent trolls, but many disciplines are affected by this problem as well. Here's an article for User Experience professionals laying out the problem with design patents for design innovations that shouldn't be patented in the first place.

Thanks, Ben of ActBlue!

The USPTO seems to feel it is innovative to put voter data in a database, then display a summary of it to a user. Some Minnesota Republicans have a patent on voter files.

For you patent lawyers out there: is it commonplace to use language like "The array of operand manipulative cells electronically communicate with the database and are operable to produce a subset of synthesized voter data compiled on a second level that is derived from the vote data points compiled on the first level", which as far as I can tell means "the computer shows the user a summary of the data"? Or is this a tricky way to try to make something simple seem complicated so the patent examiners think it's non-obvious? (Or both?)

Congressman Ed Markey is holding a hearing tomorrow on "Wireless Innovation and Consumer Protection".

On the new site openleft.com, Free Press's Ben Scott dubs this the "iPhone hearing" and explains the issues at hand around the wireless industry.