Streetwise Professor

January 26, 2013

Robert Amsterdam: Strange Bedfellow With Legal Nihilists

Filed under: Politics,Regulation,Russia — The Professor @ 9:42 pm

One of the primary reasons I became interested in Russia was the Khodorkovsky prosecution.  (The expropriation of Shell’s Sakhalin II was another.)  My writing about Khodorkovsky brought me in contact with Robert Amsterdam, a member of his legal team.  Amsterdam was one of the first to link to my blog, and add me to his blogroll.  I broadly agreed with his highly critical views of Russia, and Putinism in particular.  I have met him once, and conversed on the phone several times.  Although I concluded that he was likely fairly progressive in his leanings, based on his views about Russia and his work in Thailand, and some of his writings about resource nationalism, I believed that he believed in the rule of law, applied impartially, and that he believed that private property is a bulwark of liberty.

I was therefore extremely dismayed to see that he has joined the Kim Dotcom legal defense.  Amsterdam offers several justifications for this choice.  First, that the prosecution is “essentially bogus.”  Second, that the US government, with the complicity of the government of New Zealand, utilized excessive force in arresting Dotcom.  Third, that the US government took this action for crass political reason, namely, to retain the political and financial support of the motion picture industry.

I find none of these persuasive.  The crucial issue-without which none of the others would arise-is the legitimacy of the prosecution.  That is, is there a legitimate basis for the charges brought against Kim Dotcom and his (alleged) co-conspirators?

Here’s what Amsterdam says:

The prosecution’s case is essentially bogus.  Kim’s lawyer Ira Rothken has picked apart the allegations in a number of interviews, exposing the flaws in every point of the indictment.  As an Internet services intermediary, Megaupload diligently complied with takedown requests to remove infringing materials, and went even further to allow some 180 content-producing companies direct access to the servers to delete infringing materials themselves, which was unprecedented for any cloud storage provider.  Despite never once having been sued by any movie studio or record company, the DOJ wants to hold Megaupload liable for infringement via third party cases of piracy by users – however there exists no federal criminal statute for secondary copyright infringement, so essentially they are trying to unlawfully apply civil law in a criminal law context.  As Rothken has argued, the aggressive persecution of Kim Dotcom and other Megaupload founders has been full of “dirty tactics” by U.S. prosecutors.The prosecution’s case is essentially bogus.  Kim’s lawyer Ira Rothken has picked apart the allegations in a number of interviews, exposing the flaws in every point of the indictment.  As an Internet services intermediary, Megaupload diligently complied with takedown requests to remove infringing materials, and went even further to allow some 180 content-producing companies direct access to the servers to delete infringing materials themselves, which was unprecedented for any cloud storage provider.  Despite never once having been sued by any movie studio or record company, the DOJ wants to hold Megaupload liable for infringement via third party cases of piracy by users – however there exists no federal criminal statute for secondary copyright infringement, so essentially they are trying to unlawfully apply civil law in a criminal law context.  As Rothken has argued, the aggressive persecution of Kim Dotcom and other Megaupload founders has been full of “dirty tactics” by U.S. prosecutors.

Here is the indictment.  Compare and contrast with what Amsterdam writes.

It alleges that although Dotcom and Megaupload took some actions to remove copyrighted material from their sites, it provided financial incentives for users to upload copyrighted material; failed to terminate access from known copyright infringers; made no significant efforts to identify or remove copyrighted material, or prevent it from being uploaded; impeded copyright holders from identifying those using the sites to upload copyrighted material; did not delete material they knew to be copyrighted, even after being informed by the copyright holder;  complied selectively with obligations to remove copyrighted material, but failed to do so when it was in their financial incentive to do so; falsely represented to copyright holders that they had removed copyrighted material, when in fact they had only removed a subset of the links that provided access to that material; monitored law enforcement surveillance of Mega sites, and took active measures to conceal copyright infringement taking place on these sites; personally uploaded pirated copyrighted material; and on and on.

Let’s not pretend like we all fell off the cabbage truck.  It is more than obvious that Megaupload was created to facilitate the uploading and distribution of pirated copyrighted material.  That’s what it was used for.  Megaupload profited from this by selling premium subscriptions and by selling advertising to those who visited the site to view copyrighted material. It’s not hard to connect the Dotcoms here, though Amsterdam pretends there are none to connect.  Megaupload had a direct financial stake in facilitating the uploading and downloading of pirated material.  That’s what brought people to the site.  That’s what induced them to pay for premium subscriptions.  That’s what brought the eyeballs that paid for the ads.  That’s what the indictment alleges.  That it was, in essence, a fence of stolen property.  Intellectual property, yes, but property nonetheless-under United States law.  (More on this below.)  An entity that facilitated the marketing of stolen property, and made money for providing this service.

The indictment’s allegations flatly contradict Amsterdam’s claims that Dotcom and Megaupload were “diligent” in their efforts to protect copyrights.  In contrast, the indictment alleges that these efforts were perfunctory, and intended to feign compliance as a means of covering a concerted scheme to facilitate the distribution of pirated copyrighted materials.  Read some of the emails in the indictment.  It is clear that Dotcom and the others indicted were aware that copyrighted material was being accessed via Mega, that making money off of providing access to these materials was the essence of their business model, and that they took some actions that gave the illusion of compliance while taking other actions to protect the business model.  Sort of reminds one of a fence that runs a legit pawn shop on the side, and from time to time turns over stolen property to the cops.

It is interesting to note that Dotcom’s defense’s attempts to dismiss the charges focus on the very narrow issue of the service of the indictment on Megaupload, rather than the substance of the charges.

Let’s also not pretend that Kim Dotcom has no history.  He has a very long and disreputable history, in fact.   Hacker.  Inside trader.  Fraud.  More than a history, a rapsheet-complete with a conviction.  What’s more, he revels in his outlawry.  Flaunts it, in fact.  For going on two decades, he has reveled in breaking the law and profiting from it.

Dotcom also operates in a milieu that denies the legitimacy of most intellectual property law: some, in fact, deny the legitimacy of any IP law.  These people rationalize that since it is costless to copy, copies should be costless.  That is the socialism of the wired fool (or is it “efool” or “iFool”?).  What is copied has to be created.  If it is copied for free, it is far less likely to be created.

This is the fundamental tension in intellectual property.  It is hard to balance the incentives, but these “copyleftists” (as Catherine Fitzpatrick trenchantly and accurately characterizes them) don’t even recognize there is any need to balance.  This is, quite frankly, idiocy.  I could give lectures on the subject.  Oh.  Wait.  I have.

But the copyleftists self-righteously (how’s that for irony?) shriek that any attempt to constrain their ability to access IP is an unconscionable infringement of freedom.  From this, it is a short step to rationalizing the taking of intellectual property.  If you believe “(intellectual) property is theft” there is no moral bar against appropriating it-“liberating” it.  And from there, it is a shorter step still to believing that any attempt to enforce intellectual property law is a gross injustice, and that the enforcers are the corrupt creatures of the real thieves-those who claim for themselves what should be freely available to everyone.

And that is exactly what Robert Amsterdam is buying into when he defends Dotcom.  If you believe that copyright is legitimate property, and recognize that there laws-including criminal statutes-to protect this property, then you have to acknowledge there is a legitimate basis for the prosecution of Dotcom.

But in arguing that US prosecutors are the corrupt creatures of Chris Dodd and the movie industry, Amsterdam buys into the whole IP as theft meme.  Lord knows I am no fan of the guy who put the Dodd into Frankendodd, but in this instance he is representing a legitimate interest that expects and deserves that its property be protected by law enforcement.

Let me put this another way. Amsterdam has been a vociferous critic of legal nihilism in Russia.  With considerable justification, and I am in agreement with him on this.  But Dotcom and his defenders are total legal nihilists. Some of the copyleftist community are nihilists on what they consider to be principled grounds: the IP is theft principle, to be specific.  Aaron Swartz fell into this category.  Dotcom is a legal nihilist for purely mercenary reasons: to support his .1 percent lifestyle.   But the motive is not really material, even when it is materialistic.  A nihilist is a nihilist.   These people want to annihilate IP law.  For different reasons, but they want to annihilate it.  By signing onto the Dotcom defense Amsterdam is abetting the same legal nihilism that he excoriates in Russia.  There are legitimate means to change the law: breaking it isn’t one of them.

There is further Russia-related irony here.  Who has been among Dotcom’s most vociferous defenders? None other than The Media Outlet Formerly Known as Russia Today.  Yes, that RT.  The Kremlin agitprop operation.  An operation that is, shall we say, hardly Khodorkovsky friendly, and which is the puppet of Khodorkovsky’s main tormentor: Vladimir Putin.  RT loves-loves-Kim Dotcom.  Mikhail Khodorkovsky, not so much.  Does your strange bedfellow steal the covers, Robert?

And further the we-didn’t-fall-off-the-cabbage-truck theme.  Russia is one of the main sources of pirated material, and one of the main consumers of pirated material.  Each VKontakte user watches an average of 8.5 hours of video a month, virtually all of which is pirated. Russia is notorious for its IP piracy-and for the studied refusal of the government to do anything about it.  Indeed, it is equally notorious that the security forces provide the krysha for all varieties of cybercrime, including piracy.

As the operator of the largest market for pirated material (and by market, I mean a venue where buyers and sellers can interact to engage in exchange), Kim Dotcom was in a highly symbiotic relationship with such types.  Highly symbiotic: Dotcom provided a venue-an exchange, if you will-where these types could sell their ill-gotten goods, and made a very lucrative living by doing so.

Meaning this was not a Six Degrees of Kevin Bacon sort of association between Dotcom and the Russian security services.  There are far fewer degrees of separation of Kim Dotcom from the very people who persecute (by his own characterization) Amsterdam’s most famous client: the client who propelled Amsterdam to international prominence (and large billings), yet who continues to rot in a jail cell in Chita. Losing any sleep with your new bedfellow, Robert?

One last point.  Amsterdam makes a big deal out of the fact that Megaupload/Dotcom were “never sued by any movie studio or record company.”  A similar claim is heard repeatedly in regards to JSTOR, MIT, and Aaron Swartz.

Please.  Presumably Amsterdam makes this point to insinuate that the movie studios or record companies didn’t believe that Dotcom was costing them any business: if they did, why didn’t they sue?  But how can he possibly reconcile this insinuation with his other claim: that the movie industry collectively pursued Dotcom with Javert-like obsessiveness?   If movie companies were individually unharmed by Megaupload, why would they fund collective action to force the government to prosecute him?   You can’t have it both ways.

Moreover, taken at face value, Amsterdam’s claim (and similar claims made regarding Swartz) would imply that there is no need for state civil or criminal enforcement of any property right.  Just leave everything to private right of action.  If that’s his position, I would like to hear his defense of it.

There are in fact strong arguments on the other side.

For one, economies of specialization in investigation and enforcement are one reason to have state enforcement.

Free rider problems are another.  Indeed, the Dotcom case illustrates that point clearly.

Amsterdam mentions 180 content providers.   The efforts of any one of these firms to force Megaupload to cease operations, or to operate in a way which protected IP, would redound to the benefit of the other 179.  There is a public good problem/free rider problem here, and given this (severe) problem purely private enforcement leads to too little effort to enforce property rights.  Public enforcement internalizes (at least partially) an externality.

It is interesting to consider what Amsterdam brings to this case.  His law firm’s website does not disclose any experience in US criminal cases, or intellectual property law.  Instead, it primarily touts its expertise in political defense and political advocacy.  That’s quite telling, and of a piece with the efforts of copyleftists and the hacking underworld to politicize every attempt to enforce laws relating to copyright and computer security.  There’s an old saying: if the law is on your side, argue the law.  If the facts are on your side, argue the facts.  If neither the law nor the facts are on your side, pound the table.  In computer and IP related legal matters, the last sentence of the aphorism should be modified to read: “If neither the law nor the facts are on your side, pound the politics.”  That is likely to be Amsterdam’s role in this case.

But in playing this role, he is associating with a very dubious character who facilitated massive theft, and profited therefrom.  Making a political cause celebre of Dotcom will play well with Anons, the EFF crowd, the Googlesphere and others in the anti-IP precincts of the left.  Precincts that are quite well-heeled, by the way, and spend large sums on political influence in order to advance their economic interest-just like the movie industry.  But in so doing, Amsterdam gives ammunition to Putin and his ilk, who will no doubt smirkingly point to Dotcom and say that Amsterdam is willing to defend wealthy guilty-as-sin crooks by politicizing their cases-thereby discrediting his advocacy of Khodorkovsky.  And they’ll have a point.

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19 Comments »

  1. Great piece, and good work on debunking the word salad on the charges — the indictment makes clear that the charges have to do with Kim Dotcoms cunning and duplicitious profiteering off the “California business model,” allowing the uploads and selling the premiums and the ads.

    I didn’t invent the term “copylefist”; I first heard it from Linux open source types in Second Life who used the term as a kind of joke about themselves.

    All these years I have known Robert Amsterdam, I have never known him to be “progressive” or leftist or Libertarian of the CATO school, i.e. against SOPA. I thought he was more or less in the human rights liberal mainstream.

    I don’t understand how this happened. Indeed it is all about legal nihilism.

    http://3dblogger.typepad.com/wired_state/2013/01/robert-amsterdam-and-the-redefinition-of-crime-with-kim-dotcom.html

    Comment by Catherine Fitzpatrick — January 26, 2013 @ 10:07 pm

  2. Ironically, the Khodorkovsky – Dotcom comparison is quite apt as Khodorkovsky really is guilty of what he’s been charged with. Hence why Mr. Amsterdam has to resort to pounding the politics in both cases.

    Although of course I’m well aware that in SWPLand Khodorkovsky is a hero because anti-Putin and Dotcom is a villain because anti-US corporations. To his credit at least Dotcom is honest about being a legal nihilist unlike SWP, catfitz, and the rest of the Hive here.

    Comment by S/O — January 27, 2013 @ 3:57 am

  3. Tsk. Attacking a defence lawyer for the person he defends? How can an adversarial system of law work under such circumstances?

    I would rather praise those who take on the unlikeable defendants. On the Larry Flynt grounds and to misquote: if the legal system will defend even a scumbag like me then you know he’ll be willing to defend you.

    This also seems wrong: “These people want to annihilate IP law.”

    Even assuming that Dotcom has done everything you say. He most certainly doesn’t want to annihlate IP law. He wants everyone else to obey it: otherwise, where’s the niche to make money by breaking it?

    Comment by Tim Worstall — January 27, 2013 @ 6:16 am

  4. Indeed, S/O, the SWPhive love convicted frauds and tax-cheats, and alledged murderers, so long as they hate Putin too.

    And notice that the SWPhive say nothing about Russian demographics now that births there exceed deaths. They hate Putin so much that anything that reflects credit on him drops down their memory-hole.

    Comment by Wanderer — January 27, 2013 @ 10:04 am

  5. @S/O This is not a pro-corporation/anti-corporation issue. Anyone who is even remotely familiar with these issues knows that there is a huge divide among corporations, with content providers (movie studios, music companies) pitted against Google, Facebook, and the Valley internet industry generally. As Catherine says, there is a “California Model” which is based on making money by facilitating access to content, and they aren’t that picky about the provenance of that content. It is a battle over property rights, specifically the definition and enforcement of IP, Between LA and the Bay, not between The Masses and The Evil Corporations. Or is that what they teach in the Cal political econ program?

    The ProfessorComment by The Professor — January 27, 2013 @ 1:53 pm

  6. @Tim. This isn’t a matter of the typical defense attorney who says “I will defend anybody.” Amsterdam claims that he represents a very special kind of client; one who is falsely charged for political reasons. If, like Amsterdam, you claim that you are defending the politically persecuted, you have to be damn sure that your clients are indeed being politically persecuted. As I note in the last paragraph, turning ordinary criminals into political cases undermines the credibility of your advocacy of other defendants. This is especially the case where the defendant is able to write big checks. Amsterdam had to fight those allegations in the Khodorkovsky case, and as I said in the post, he is basically providing Putin with ammunition to discredit the defense of Khodorkovsky by taking on such a dubious client.

    IOW, Amsterdam has a brand, and this sullies it.

    I will concede that Dotcom is a parasite, and does not want to kill the host. But that is not true of a lot of the copyleft movement that champions him. They are truly nihilists.

    The ProfessorComment by The Professor — January 27, 2013 @ 2:03 pm

  7. @wanderer. Re demographics: You are a fanatic, in the Churchillian sense. You can’t change your mind and you won’t change the subject. As if this post has anything to do about demography. And the data point you suggest is widely understood to be a blip, the ripple effect of a mini-baby boom in the 80s, soon to be overwhelmed by the much bigger wave of the birth dearth of the late-80s and 1990s. I would also be interested in seeing any data regarding the breakdown by ethnicity. Is your statement true of Great Russians? If not, does that matter to you? If not, why not? If so, why?

    The ProfessorComment by The Professor — January 27, 2013 @ 2:43 pm

  8. Good serious work! It was a pleasure to read.

    Comment by Karolina — January 27, 2013 @ 4:07 pm

  9. “as I said in the post, he is basically providing Putin with ammunition to discredit the defense of Khodorkovsky…”

    As if the Europen Court of Human Rights hadn’t already obliterated that notion.

    Re demographics, Putin-haters have gone from denying the possibility of births exceeding deaths to denying that Putin had anything to do with it.

    This is progress, of a sort, I suppose.

    Comment by wanderer — January 27, 2013 @ 4:52 pm

  10. As long as we are using the “cabbage truck” rubric, I think most copyright skeptics (not copylefters) believe that the copyright holders in Hollywood lost their moral legitimacy when they induced Congress to extend the terms of their expiring rights just before they entered the public domain. (The Supreme Court compounded the law’s loss of legitimacy with its acquiescence to this extension.) There is no way anyone not recently departing said cabbage truck could see the copyright extension as anything but special-interest bribery and subversion of the interests of the commonweal, much like the old railroad barons buying off state legislatures en masse. You can’t put the toothpaste of legitimacy back into the tube–the extension smelled to high heaven, violated public understandings of the bargain between creators and users, smacked of ex post facto law, and appeared to violate the original understanding and textual meaning of the Constitution.

    When you combine the above with the commonly accepted view among creators in the software industry that software patents exercise an almost entirely negative effect on innovation and progress, you have a lot of non-cabbage-truck people who find IP laws ludicrously counterproductive as currently written and enforced.

    It is these real-world phenomena, not theoretical copyleftism, that make “nihilism” appear less unpalatable to the educated public than it otherwise would. As a believer in moderate IP, I would rather not have the Justice Department further enhance the nihilist narrative. We need to re-legitimize IP by returning it to something resembling a maximizer of progress in the arts and sciences.

    Comment by srp — January 27, 2013 @ 7:54 pm

  11. Oh, nonsense SRP. Silicon Valley never saw an IP law they didn’t hate. They have absolutely no intention of every validating it because it runs squarely against the California Business Model as I keep explaining.

    Who are you to judge what is valid as an extension of a copyright or not?!

    And hey, those copyleftists who are raging about patents killing “innovation” in software — what a bunch of blatant hypocrites. Today marks the day that 30 years ago, Mitch Kapor began selling Lotus 1-2-3, the *proprietary* software that he made millions on. Millions that he was happy to make. Like Wes Boyd of moveon.org was happy to make millions on his toaster screensavers. Like John Perry Barlow was happy to make millions on the Grateful Dead’s records sold in stores — which made up 30% of their revenue — it’s an illusion that they lived of t-shirts sold while they gave away soundboard tapes at concerts. Like lots of other lefties were happy to make their millions. Then, once they had them, they began to pine for collectivist utopias and began funding the copyleftist revolution through Electronic Frontier Foundation and all the rest. Then all of a sudden the “innovation” that they got paid millions for had to have a free environment because their model now involved selling accounts to drill for market data and sell ads to — no longer the software itself. Except…plenty of proprietary software is still sold by these guys, and even the Anonymous thugs who work at Microsoft or IBM by day concede where their open source revolution is going — into the pockets of Big IT.

    The real-world nihilism is exactly this — “your information wants to be free; mine is available for a fee”. There is nothing “innovative” about yet another platform or app that uses the same old tired and dwindling ad revenue model that relies on free upload of other people’s IP. Naturally these scofflaws and outright pirates, starting with Google on down to Dotcom, find this “ludicrously ocounterproductive”.

    We need to have a day where everybody stops searching on Google and concentrate their minds wonderfully, give them a taste of their anti_SOPA medicine.

    Comment by Catherine Fitzpatrick — January 28, 2013 @ 3:02 am

  12. catfitz pays to write at an inferior blogging platform just to spite those damn technocommunists who offer WordPress for free.

    Comment by S/O — January 28, 2013 @ 4:31 am

  13. S/O is to stupid to understand some platforms gives you invaluable service . Like not getting comments from the Putin-mafias propagandists on Berkley ? Anatoly sublime berkley

    http://streetwiseprofessor.com/?p=6221#comment-91017

    Comment by Anders — January 28, 2013 @ 11:53 am

  14. @Catherine Fitzpatrick: You are agreeing with me that Silicon Valley never saw an IP law that they didn’t hate. That’s overstated, but largely true. They don’t believe that their own work should be covered by patents, either (although now that they own lots of IP that they paid for that egg will be hard to unscramble). That goes all the way back to the semiconductor people in the 1970s and 1980s, who believed that their own innovations as well as their competitors’ were more or less “inevitably” going to be discovered and so did not deserve patent protection. In software today, ask any grunt programmer or developer (not just in California) doing general-purpose computing work and they’ll tell you that software patents are generally obvious, wrongly issued, constantly reinvented because its easier than looking up what’s been filed, and act as a barrier to innovation. Since the constitutional purpose of these laws is to promote innovation, legitimacy naturally goes down the drain. It is a pragmatic as well as principled response to the fiasco that is IP in the tech sector (“patents by the pound” anyone?).

    Personally, I live amongst the Hollywood IP rajahs and I enjoy going to the movies, but if the cost of having movies were the maiming of due process and the First Amendment, I’d prefer entertaining myself some other way. But the point is idle–as a practical, political matter, the IP nihilism that is so popular across society (and your anger about this popularity oozes out of your writing) was turbocharged by the manifestly unjust copyright extension act as I said.

    Comment by srp — January 28, 2013 @ 8:10 pm

  15. […] Source: http://streetwiseprofessor.com/?p=6984 […]

    Pingback by Robert Amsterdam: Strange Bedfellow With Legal Nihilists « bepificyb — January 28, 2013 @ 9:20 pm

  16. Well, big surprise, of course I disagree.

    http://robertamsterdam.com/2013/01/whos-afraid-of-kim-dotcom/

    Comment by Robert Amsterdam — January 28, 2013 @ 11:49 pm

  17. @srp-Re turbocharged: sounds like “two wrongs make a right” “reasoning.” That is more a convenient rationalization for people who want to consume video/music for free, or for cheap. It’s also an exaggeration to say that there is no due process in enforcing copyright, or that it maims 1st Amendment rights. The hyperbole doesn’t help battle Bono and restore balance to copyright. I’d also suggest that most of the blatant theft (and the theft of the most valuable properties) is not of things that were protected after Bono, but not before.

    The distinction between software and entertainment content is interesting. The issues are quite different. The California model that Catherine mentions is entertainment-focused, and is predicated on getting a complementary good (the content) without paying for it. There is a parasitical aspect to it, and Dotcom represents the extremes of that parasitism. Google is the more buttoned down version, but a good fraction of its revenue/earnings is/are derived from parasitism .

    Software is so hard to make generalizations about. I have extensive experience in software patents related to trading (front ends, matching engines, etc.) I’ve seen the good, the bad, and the ugly. There are bad patents issued. The PTO is often quite ignorant about the prior art. But there is also a lot of shameless copying that does deprive inventors of a reward.

    The reason this is such a controversial subject is the nature of information as a good. The high fixed cost, low-to-zero marginal cost nature of information/ideas pose difficult challenges. Look at the industries that have been the subject of longstanding regulatory controversies, they almost all have this characteristic. My PhD thesis, donkey years ago, was about one such industry (ocean shipping). But electricity, telecoms, some transportation industries have this characteristic to one degree or another. Hell, think of the old Coase Marginal Cost Controversy article.

    The ongoing controversies inhere in the difficult nature of the good. The right set of rules involves some balance that is hard to find, especially given the ways that political economy distort the process of establishing that balance. But I am highly confident that the copyleftist extreme position is wrong, and that as flawed as the existing system is in the US it is preferable to what the nihilists want to impose.

    The ProfessorComment by The Professor — January 29, 2013 @ 10:34 pm

  18. I’m not a nihilist at all, but it becomes very difficult to defend reasonable IP in the face of the obviously counterproductive aspects of the current regime and the strident rhetoric used to justify that regime. This is as much a rhetorical and political economy problem as anything else. (I actually don’t think the biggest problem today is the traditional tradeoff between ex ante incentives to invent vs. ex post incentives to disseminate inventions; the difficult tradeoff today is between ex ante incentives to invent and ex ante disincentives to invent, both caused by the IP system. Current innovation depends on access to a pool of unobstructed prior art, and in both the technical and cultural areas IP hypertrophy is destroying the necessary commons.)

    I teach MBAs, many of whom are engineers and developers working in IT and telecom businesses (including large ones) and they are uniformly cynical about the role of IP in their industries. It is hard not to be when almost no one actually gets ideas by looking at others’ patented work but rather simply reinvents things in the course of the normal design process. In other words, almost all infringements are accidental and non-parasitic. Hence the obvious absurdity of the “patents by the pound” approach of valuing by counting rather than reading a firm’s IP portfolio. The maximalist rhetoric and tactics of the Hollywood people only make things worse. Kim Dotcom falls neatly into this category of massive overreaching, as does the Swartz case, as did SOPA. All-or-nothing strategies are likely to end up with nothing.

    The last time I taught a class I mentioned that simply outlawing software patents was a non-starter because the innovative part of modern electro-mechanical inventions was often embedded in its control software, so that hard-core “traditional” patents would also be wiped out by such a rule. In other words, now that inventions that used to be realized in arrangements of gears and cams are now embedded in software, you can’t just call something a “software patent.” My students informed me that that was the first argument they had ever heard that made software patents sound remotely plausible. If my techie-MBA audience is so far down the IP-cynicism track, on the work with which they are most familiar, then the pro-IP community needs to rethink its rhetoric and tactics.

    Comment by srp — January 31, 2013 @ 8:52 pm

  19. Late to the comment stream, but SWP you miss a key element of Dotcom’s defense, and perhaps Amsterdam does not articulate effectively with statement of “dirty tactics”. I will re-interpret dirty tactics as the lack of due process and jurisdiction, the cornerstones of law.

    The philosophical battle between copyright and copyleft is a legitimate debate, and never simply a platitude between thieves and good people. So let’s table the philosophical debate for a moment, and suggest than SWP and his able readers do not have the fatal conceit to draw the perfect gray line around “fair use of intellectual property”.

    Since the adjudication of individual claims may be legitimate, it is essential that the plaintiff and defense are given due process, an appeals process AND crucially the liberty of the actors to chose a physical (and/or virtual) location where the existing law will be honored, and which may suit particular activities.

    Following SWP…, central clearinghouses, and large centralized risk models work against their intended goals. So why should a centrally-divined law coming from the US Attorneys office work in protecting copyright? Instead competition amongst the laws of various nation/location is crucial for innovation of the law, and carefully drawing that gray line of fair use around the difficult subject of IP. If we want to determine the best economic rules around non-rivalrous goods, then we should encourage the development a competitive marketplace of laws, not grab our pitchforks on dough boys in foreign lands.

    Dotcom’s transgressions are minor compared the theft of IP from the state actors in Russia and China. So why does the Eric Holder not descend upon the Chinese Politburo or Kremlin for stealing and unlawfully disseminating IP? Because the threat of retaliation is too great, and Kim Dotcom looked defenseless in comparison. So I applaud Amsterdam (and Kim for that matter) for defending themselves against the tyranny of the US state, irrespective of the alleged theft transgressions. The US has no jurisdiction on citizens in foreign lands, and the thorny problem of electronic communication, digital goods and IP should be worked out in a hyper-competitive marketplace of ideas and laws. (Not by Eric Holders attorneys)

    Let the best country and/or legal jurisdiction win the copyright battle, and solve the challenge of non-rivalrous IP dissemination. Also there are many fledgling commercial technologies for IP, such as micro-payment systems and encryption, which are undeveloped due the heavy spending on Chris Dodd and his legal mafia.

    The overreaching power of the US state beyond its jurisdiction is the critical piece of the Kim Dotcom story. Eric Holder’s Divine Presence Around the Entire World is far more threatening than petty theft, real or imagined by the folks in California.

    Comment by scott — February 5, 2013 @ 1:57 am

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