Ronald J. Riley Sued By The Lawyer Who Copyrights Cease-And-Desist Letters

from the who-to-root-for? dept

If you read the comments on this site regularly -- especially concerning posts having to do with patents or the patent system -- you're probably quite familiar with a guy named Ronald J. Riley. He's quite the character. He's also quite the fan of the existing patent system. He's started a bunch of different "organizations" supposedly to protect the patent system, though there are plenty of accusations that Riley's main focus in life is getting unsuspecting inventors to give him money. Someone has even created a site cataloguing Riley's ridiculous statements. It's not clear what Riley has actually done in his life, but he has been effective over the years in using his made up organizations to give himself an air of legitimacy, which often gets him quoted in the press on patent issues, despite showing a consistently poor understanding of the process of innovation, technology and the patent system itself (for example, he believes the purpose is only to protect small inventors, not to promote overall innovation -- and he believes that anyone accused of patent infringement clearly "stole" the idea, even if they came up with it independently).

Riley also has a history of being... well... a bit abrasive in comments on various sites all across the internet, including here at Techdirt. He enjoys personally insulting me or lying about me and does so on a regular basis (such as here and here for just a couple of examples). Most hilariously, he continually accuses me of somehow being on the payroll of companies who support the patent reform bill that keeps showing up in Congress every year, despite the fact I have clearly stated that I think the bill will make the situation worse rather than better. Riley is also famous for taking credit every time this same patent reform bill fails to move through Congress, ignoring that it's actually the powerful pharmaceutical industry lobbyists that kill it, not Riley. In the three plus years that he's been commenting here, Riley has never once had anything other than an insult or a lie to say about me.

Given all that, I can't believe that I'm actually about to defend him.

A few people have sent in the news that Ronald J. Riley is being sued by the Dozier Internet Law Firm. From Dozier's press release, the actual charges are not at all clear. The only thing listed in the press release is that "Riley's misconduct includes his attacking bloggers and blog and forum moderators with threats of getting IP addresses of anonymous bloggers and then tracking them down." Given the way Riley acts around here, those accusations don't seem particularly surprising -- but it's not clear what's illegal about them. Perhaps there is more to this lawsuit, and if so, Dozier should be much more forthcoming about it, because based on what's been described, it certainly seems like Dozier is just suing Riley because Riley is a pest. And while Riley may be a pest, may be insulting and may even be misleading, it's hard to see what's illegal about his activities. Despite the fact that he regularly insults me and lies about me, I have no problem with Riley posting his ridiculous messages -- as it just encourages others to show how clueless Riley is.

And, of course, Dozier is something of a piece of work himself. You may recall his name from when he tried to send an online review site a cease-and-desist letter that he claimed they could not post on their own site because it was covered by copyright. He later announced that courts had said cease-and-desist letter copyrights were acceptable, even though that turned out to be quite an exaggeration of what had actually happened.

So, here we have a lawyer who has repeatedly tried to silence critics with questionable use of copyright law, suing a patent system defender who throws around insults and lies like they're going out of fashion. These two were made for each other, so it's really difficult to root for one over the other -- but, based on the facts explained so far, it's difficult to see what Riley has done wrong, other than be an annoying jerk. And, even if that's annoying, it's still not illegal.

Update: In the comments, someone points out that the entire lawsuit filing is available on Dozier's website. Amusingly, it actually quotes one of RJR's comments here on Techdirt (though, the lawsuit doesn't mention where it's from). Basically, I stand by what I said originally. While Dozier does a good job outlining RJR's history and pattern of lies and mistruths, his ability to either make up organizations or surreptitiously recreate defunct organizations that had a good reputation, there's little in there that appears to be illegal. The only actual charges seem to be from highly questionable claims that RJR somehow infringes on Dozier's trademarks.

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Is The Copyright Royalty Board Unconstitutional?

from the this-sounds-familiar... dept

Last month, we wrote about a Constitutional challenge to the patent appeals board. It was based on the theory that the Constitution clearly says that certain appointments can only be made by the President, the courts or the heads of a department. A legal change a few years back let the USPTO director appoint judges to the patent appeals board -- but the Patent Office director is not the head of a department. He reports to the Commerce Secretary who should be nominating the judges -- thus suggesting that all of the appointments over the last few years have been unconstitutional.

Of course, it didn't take long for folks to recognize that the same question may apply well beyond the patent appeals board. In fact, there's a court case challenging whether the current Copyright Royalty Board is constitutional as well. While the article doesn't go into details, it sounds like it's an identical issue. The CRB members are appointed by the Librarian of Congress rather than the President or the head of a department. This particular lawsuit has been filed by an organization that was hoping to compete with SoundExchange for collecting and distributing royalties. The CRB rejected the request. Given how many problems SoundExchange has had in carrying out its charter, it would seem like competition is a pretty good idea. However, rather than fighting that decision specifically, the company recognizes this same constitutional question. Funny how the boards involved in both copyrights and patents may be unconstitutional for the same basic reason.

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What Kind Of Progress Are We Promoting?

from the the-big-question dept

Continuing my series of posts exploring some of the basics of "intellectual property," I wanted to discuss that key clause in the Constitution that I brought up in the first post in the series:

"The Congress shall have Power... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;"

Unfortunately, many have interpreted this clause to mean that any such monopoly granted must "promote the progress of Science and useful Arts." However, a much more reasonable reading of this clause -- especially given Jefferson and Madison's clearly stated concerns about it as they argued over whether or not to include it -- is that these monopoly grants (whether copyright or patent) should only be considered Constitutional if they actually "promote the progress." What Madison and Jefferson saw (which is all too often ignored these days) is that granting a monopoly has both negative impacts and positive impacts. If the positive impacts outweigh the negative, then you can say that the granted monopolies promote the progress. If it's the other way around, however....

Now there are some who insist that there are no negative impacts of such monopolies, but that's easily shown to be false. Clearly, by limiting the ability of everyone else to make use of the ideas or content, that's a loss. The argument in favor of these monopolies is straightforward: that without the monopoly, there is little (or perhaps no) incentive for the creator to create the content or bring a product to market in the first place. Even for those who recognize the downsides to patents and copyright, many will argue that this particular benefit vastly outweighs the negatives. However, it would appear to be a more open question than many believe.

There are different parts to break out in examining the question of whether or not a patent or copyright actually "promotes the progress." First, it's weighing the negative impacts. To do that, you start out by determining the deadweight loss from the monopoly pricing that is enforced via the patent or copyright. This would be the higher price that can be charged for the good, thanks to the exclusivity granted by the government. The second, much more difficult to calculate, concept to figure out is whether (and to what degree) that exclusivity also slows down additional later improvements, which would, clearly, go against the concept of promoting the progress. This point is often ignored in discussions about patents, due to the fact that many look at an invention in a "static" world -- where the invention (or new content) is the end of production. However, in a dynamic world, innovation is actually an ongoing process of experimenting and changing and tinkering. If each stage of that process is limited and blocked, then clearly it can slow down "the progress" by quite a bit. Third is to look at other costs, such as diverted resources to legal fees.

Of course, it's important to look at the benefits side of the equation as well, and weigh them against the negatives. On that side, the question should be whether or not the content or invention would be created at all in the absence of the protection. To answer that question, what you really need to look at is whether or not there are alternative business models that would create an acceptable likelihood of return to still have the product created. If such models exist, then it would suggest that the "benefit" of the monopoly is somewhat limited. However, if such models do not exist, then you need to account for the loss associated with the invention or content never being created, including the further impacts down the line (if there were no steam engine, would there be no steamboats etc...). You can also look at whether or not such inventions or content would take longer to produce in the absence of protection, and account for how that might slow down the pace of innovation. When it comes to patents, there are also some who claim that another important benefit is "disclosure." That is, a part of the bargain for getting the patent is that you need to disclose the details of the concept so that others can learn from it, and that disclosure should, in theory, create further innovations.

So what does the evidence show? I had been working out a list of all the research to include in this post when I saw that James Bessen and Michael J. Meurer had written up part of a summary of their new book, Patent Failures, which we had mentioned recently. The summary goes through much of the peer reviewed research that I had been planning to mention on the impact (good and bad) of patents, and reveals a rather consistent finding: there is almost no evidence that patents help promote the progress. Specifically:

"it is hard to find evidence suggesting patents are a major factor spurring R&D investment, that patents contribute to economic growth, or even that the patent system is a source of great wealth to important inventors and innovators."

What they find, instead, is that whenever there's a correlation between increased research and development and patents, it's a reverse causality. That is, greater patent protection trails greater research and development. Greater patent protection, however, does not increase research and development. What that clearly suggests is that stronger patent systems are put in place after the research and development is done, in order to protect those who did the work against competition, not to spur further innovation. That may make the earlier inventors happy (it lets them rest on their laurels rather than continue to innovate), but it goes against the very purpose of the patent system, and results in an overall societal loss. This certainly isn't a new finding, and much of the research discussed by Bessen and Meurer can also be found in David Levine and Michele Boldrin's book Against Intellectual Monopoly.

This isn't just the result of one study, either, but a number of different studies comparing a number of different things, both over different time periods, across different countries, different types of products and many other factors. And almost all of the research points in the same direction. There is little evidence that patents actually do what the Constitution says they must to remain Constitutional. There is, potentially, one exception. Bessen and Meurer do note that there is some evidence that patents do have an impact on R&D in the pharmaceutical business (on this Levine and Boldrin disagree with Bessen and Meurer). Indeed, there are some people who claim that a situation like pharmaceuticals is the one case of market failure where patents could make sense, since there's a high capital expenditure requirement on the front end, and the barrier to copying is exceptionally low on the output. This post is long enough already, but there are reasons to even doubt that patents are necessary in pharmaceuticals as well (and actually many reasons to believe that they actively harm the market for health care). However, we'll have to cover that another time.

In the meantime, the next post in the series will pick up on exactly why the negatives associated with patents seem to almost always outweigh the positives.

---

Links to other posts in the series:

• On The Constitutional Reasons Behind Copyright And Patents
• Patents, Copyrights And Trademarks, Oh My!
• If Intellectual Property Is Neither Intellectual, Nor Property, What Is It?
• What Kind Of Progress Are We Promoting?
• Why Do Patents Tend To Cause More Harm Than Good?
• The Case For And Against Software And Business Model Patents

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Hollywood Is Hardly An Innocent Victim In Trade Disputes

from the poetic-justice dept

My Cato colleague Sallie James describes the ongoing standoff between the US and the rest of the world at the World Trade Organization over gambling. When Congress banned online gambling, tiny Antigua filed a complaint alleging that the actions violated WTO rules. Antigua won, but the United States has so far bullied them out of taking advantage of their victory. The US has threatened to retaliate against Antigua if the latter begins targeting US copyrights as authorized in the trade ruling. James says that the United States is in the process of negotiating alternative compensation, including increased access to other American services markets. If that deal falls through, she warns, Hollywood might find itself "footing the bill" for the US government's ill-conceived gambling ban.

I certainly agree with her that the gambling ban was a bad idea, but I'm not sure it makes sense to paint Hollywood as an innocent victim here. After all, Hollywood has been pushing for decades to link trade policy and copyright law, going so far as to support free-trade agreements that include terms micro-managing other countries' copyright policies and requiring them to enact laws like the DMCA as a condition of access to American markets. Free traders rightly object when special interests try to use free trade agreements as a way to coerce countries into enacting their preferred labor and environmental policies. We should be equally incensed when Hollywood lobbies for the use of trade agreements to coerce countries into enacting their preferred copyright policies. So there's a certain amount of poetic justice in the fact that Hollywood has found its copyrights in the crosshairs of a trade dispute. James also correctly notes that retaliatory tarriffs are an insane way to impose damages on the losing country in a WTO dispute because tariffs hurt consumers in the "winning" country at the same time it hurts producers in the "losing" country. In contrast, if damages are imposed by targeting copyright law, consumers in the winning country will actually be made better off by lower prices for the copyrighted products in question. So while it would be best of Congress repealed its idiotic gambling ban, I'm not going too upset if Hollywood's attempts to link copyright law to trade policy come back to bite them.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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Antigua Seriously Pushing For WTO Approval To Distribute Free Music And Movies

from the well,-look-at-that... dept

Since 2003, we've been following the saga of Antigua's fight against the US in the World Trade Organization. Basically, Antigua argued that the US's ban on online gambling violated the free trade agreement the two countries had signed -- as it blocked online gambling sites based in Antigua (of which there are a bunch). Since then, the case has been fun to watch if only for how the US has responded to it. The WTO ruled in favor of Antigua at which point the US basically ignored the WTO, despite the WTO occasionally making angry noises. Then, there was the time that the US went so far as to declare that the WTO had reversed that original ruling on appeal... but the details showed that the US was making up that claim and the WTO was still supporting Antigua. Earlier this year, after the WTO started stomping its feet again, the US responded by saying it was simply (unilaterally) going to change its free trade agreement with Antigua, so that online gambling wasn't included. Obviously, Antigua finds that solution quite troublesome.

Back in early 2006, however, a few people began buzzing about an idea that Antigua could use to force the US to pay attention: become an WTO-backed ignorer of US copyright law. Since the US knew it could effectively ignore Antigua over online gambling, the idea was that Antigua should simply say that if the US won't support its free trade agreement, then it would start ignoring US copyright laws, and would then (with WTO-backing, mind you) allow modern versions of all sorts of copyright-violating services to prosper. We didn't think that Antigua would seriously go in this direction, but as a new NY Times article makes clear it's exactly what Antigua is now pushing for. Of course, the real hope is that in doing so, the Big Copyright players will force the US government to back down on the gambling issue. However, it might be a lot more interesting to see what would happen if Antigua really did become the protected legal home of more modern versions of (the old) Napster, my.mp3.com, the Pirate Bay, Allofmp3.com and others. Of course, as reader OKVol points out to us, the real irony here is that in potentially ignoring copyright monopolies, Antigua may be getting closer to real free trade than in living up to the terms of the free trade agreement between the two countries.

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