July 30, 2003

Samuelson: Con Law of IP after Eldred

Berkeley Professor Pamela Samuelson, in "Constitutional Law of Intellectual Property after Eldred" suggests that constitutional law scholars will have plenty to chew on even after the Supreme Court decision in Eldred v. Ashcroft, 123 S.Ct. 769 (2003) upholding the Copyright Term Extension Act. She disputes the contentions from some that the "Ashcroft-favorable decision" in Eldred will "deconstitutionalize" intellectual property law and reduce scholarly attention to the constitutional law issues of the topic field. She disagrees, outlining the issues in six fields that she sees as likely areas of focus (continued):

    1. The Eldred Court's silence about the constitutional significance of the public domain. Another chance is coming in Dastar v. Twentieth Century Fox, 2002 WL 649087 (9th Cir. 2002) cert. granted 123 S.Ct. 1382 (2003).

    2. Challenges to several Congressional acts in the 1990's restoring copyrights in foreign works in the public domain due to non-compliance with U.S. formalities, for which justification has been claimed under various international treaties.

    3. Potential legislation (like that in the European Union) to protect databases compiled of public domain content. Constitutional challenges could be based upon Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991).

    4. The theory that law changes that alter the traditional contours of intellectual property law should be subject to heightened scrutiny such as that applied by the 2nd Circuit in Universal Studios v. Corley, 273 F.3d 429 (2nd Cir. 2000).

    5. Expanded implications of the First Amendment in intellectual property cases, perhaps even in the patent field.

    6. Supremacy Clause challenges to mass-market license terms that limit activities that would be lawful under copyright law as 'fair use'. Vault v. Quard Software 847 F.2d 255 (5th Cir. 1988) and Bowers v. Bay State Technologies, 320 F.3d 1317 (Fed. Cir. 2003) reached conflicting decisions that may end up before the Supreme Court to resolve.

This note is from "Unintended Consequences," a legal weblog at DougSimpson.com.

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July 27, 2003

Zippo Test Applied re Jurisdiction in Trademark Case: Fourth Circuit

The Fourth Circuit Court of Appeals found no jurisidiction in Maryland in an alleged trademark infringement case. It applied the "sliding scale" model for applying Calder principles to cases arising from electronic commerce, first articulated in Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997).

Thanks to TechLawAdvisor.com for the heads-up on this case.

Read more for court's language summarizing its decision on jurisdiction.

    "[I]t is relevant that [defendant/appellee] CPC's sites are "semi-interactive," in that they contain features that make it possible for a user to exchange information with the host computer. When a website is neither merely passive nor highly interactive, the exercise of jurisdiction is determined "by examining the level of interactivity and commercial nature of the exchange of information that occurs." See Zippo, 952 F. Supp. at 1126."

    Second, we find it pertinent that the overall content of CPC's web- site has a strongly local character.

    "In sum, when CPC set up its generally accessible, semi-interactive Internet website, it did not thereby direct electronic activity into Maryland with the manifest intent of engaging in business or other interactions within that state in particular. * * * Thus, while Maryland does have a strong interest in adjudicating disputes involving the alleged infringement of trademarks owned by resident corporations, and while we give due regard to [plaintiff/appellant] Carefirst's choice to seek relief in that state * * *, it nonetheless remains the case that CPC "could not [on the basis of its Internet activities] have `reasonably anticipate[d] being haled into [a Maryland] court.'" Young, 315 F.3d at 264 (quoting Calder, 465 U.S. at 790). Consequently, the website fails to furnish a Maryland contact adequate to support personal jurisdiction over CPC in the Maryland courts."


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Stat Construction Zone on Blawgs

Statutory Construction Zone Extra posts a copy of their article "LEGAL AND APPELLATE WEBLOGS: WHAT THEY ARE, WHY YOU SHOULD READ THEM, AND WHY YOU SHOULD CONSIDER STARTING YOUR OWN". Thanks to LawTechAdvisor.com for the heads up on this digital authorized 'reprint' of the article originally published in the Journal of Appellate Practice and Process.

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July 26, 2003

IP and AT in Cardizem CD

The U.S. Court of Appeals ruled that an agreement to settle a patent dispute constituted a per se violation of the Sherman Act as a horizontal restraint of trade. The parties were the patentee of a drug ("HMR") and the FDA-approved manufacturer of its generic version ("Andrx"). HMR charged Andrx with patent infringement, then agreed to pay Andrx $40 million per year if Andrx refrained from marketing its generic in the U.S. Customers brought an action for violations of the Sherman Act and state antitrust laws.

The court found that the settlement Agreement "cannot be fairly characterized as merely an attempt to enforce patent rights or an interim settlement of the patent litigation. As the plaintiffs point out, it is one thing to take advantage of a monopoly that naturally arises from a patent, but another thing altogether to bolster the patent's effectiveness(13) in inhibiting competitors by paying the only potential competitor $40 million per year to stay out of the market." In re Cardizem CD Antitrust Litigation , 332 F.3d 896 (6th Cir. 2003). (Thanks to Greenberg Traurig for the alert to this decision.)

This decision brings to mind what is sometimes called the "intellectual property defense" to an antitrust action, discussed in the continuation of this posting.

The “Intellectual Property Defense”

United States’ patent law provides for a protected property right for the exclusive use of an invention for which a patent has been granted. The patent holder may practice the patent itself while denying permission for any others to “practice” the patent, keeping any commercial benefit for its exclusive use. Or, the holder may grant patent licenses to some but not others, discriminating among them and setting prices for licenses as high (or higher) than the market will bear. The holder may sit on its patent, neither practicing it nor allowing others to do so. In each of these decisions, the holder has recourse to law to enforce its rights under the patent law, for the limited life of the patent.

Although this property right is sometimes referred to as a “monopoly,” Chief Judge Markey of the Court of Appeals for the Federal Circuit repeatedly admonished against such a characterization, for example, in Carl Schenck, A.G. v. Nortron Corp., 713 F.2d 782, 786 n. 3 (Fed. Cir. 1983), Judge Markey stated:

    Nortron begins its file wrapper estoppel argument with "Patents are an exception to the general rule against monopolies...". A patent, under the statute, is property. 35 U.S.C. 261. Nowhere in any statute is a patent described as a monopoly. The patent right is but the right to exclude others, the very definition of "property." That the property right represented by a patent, like other property rights, may be used in a scheme violative of antitrust laws creates no "conflict" between laws establishing any of those property rights and the antitrust laws. The antitrust laws, enacted long after the original patent laws, deal with appropriation of what should belong to others. A valid patent gives the public what it did not earlier have. Patents are valid or invalid under the statute, 35 U.S.C. It is but an obfuscation to refer to a patent as "the patent monopoly" or to describe a patent as an "exception to the general rule against monopolies."

The interaction between intellectual property law and antitrust law has challenged courts for many years. The Sherman Act, outlaws “monopolization” as well as “contracts, combinations and conspiracies in restraint of trade.” The Federal Trade Commission (FTC) Act and regulations passed under its authority constrain "unfair competition" defined in various ways. Other federal and state laws expand on these two statutes.

The “intellectual property defense” is often cited in response to legal actions sounding in antitrust when the alleged anticompetitive behavior involves the licensing or refusal to license patented inventions. Two recent Court of Appeals decisions illustrate the scope (and limitations) of the “intellectual property defense.”

Image Service Technical Servs. v. Eastman Kodak Co. , 125 F.3d 1195 (9th Cir. 1997), involving Kodak’s refusal to sell aftermarket parts to the plaintiffs. The plaintiffs charged Kodak with monopolization, and the Court of Appeals affirmed a jury verdict against Kodak. Kodak’s defense, raised late in the litigation, was to the effect that some of the parts were protected by patent or copyright. The Court found the defense to be inadequate and just a pretext, because not all of the withheld parts were so protected.

In a more recent case, In re Independent Service Organizations Antitrust Litigation , 203 F.3d 1322 (Fed. Cir. 2000), cert. denied, 531 U.S. 1143 (2001), the Court of Appeals upheld the right of Xerox to refuse to sell aftermarket parts and license related software to certain independent service organizations (“ISOs”) that were attempting to compete with it in the servicing market. In the case of Xerox, all of the items in question (not just some) were protected by patent or copyright. The Court noted that "[i]n the absence of any indication of illegal tying, fraud in the Patent and Trademark Office, or sham litigation, the patent holder may enforce his statutory right to exclude others from making, using or selling the claimed invention free from liability under the antitrust laws."

There are several concise discussions of the Kodak and Xerox cases online, including:

The United States Department of Justice, Antitrust Division has published "Antitrust Guidelines for Licensing of Intellectual Property" in which they extensively discuss the basics of this interaction between intellectual property law and antitrust and unfair competition law:

    “Intellectual property law bestows on the owners of intellectual property certain rights to exclude others. These rights help the owners to profit from the use of their property. An intellectual property owner's rights to exclude are similar to the rights enjoyed by owners of other forms of private property. As with other forms of private property, certain types of conduct with respect to intellectual property may have anticompetitive effects against which the antitrust laws can and do protect. Intellectual property is thus neither particularly free from scrutiny under the antitrust laws, nor particularly suspect under them.”

    “Market power is the ability profitably to maintain prices above, or output below, competitive levels for a significant period of time.(10) The Agencies will not presume that a patent, copyright, or trade secret necessarily confers market power upon its owner. Although the intellectual property right confers the power to exclude with respect to the specific product, process, or work in question, there will often be sufficient actual or potential close substitutes for such product, process, or work to prevent the exercise of market power.(11) If a patent or other form of intellectual property does confer market power, that market power does not by itself offend the antitrust laws. As with any other tangible or intangible asset that enables its owner to obtain significant supracompetitive profits, market power (or even a monopoly) that is solely "a consequence of a superior product, business acumen, or historic accident" does not violate the antitrust laws.(12) Nor does such market power impose on the intellectual property owner an obligation to license the use of that property to others. As in other antitrust contexts, however, market power could be illegally acquired or maintained, or, even if lawfully acquired and maintained, would be relevant to the ability of an intellectual property owner to harm competition through unreasonable conduct in connection with such property.”

The Guidelines go on to discuss (with example scenarios) situations in which a violation might be found, and those in which restrictions would not be likely to offend the antitrust laws. Certain restraints on trade are considered "per se" unlawful, and include "naked price-fixing, output restraints, and market division among horizontal competitors, as well as certain group boycotts and resale price maintenance." Guidelines, 3.4. In the Cardizem CD case decided in June 2003, HRM and Andrx were found to have fallen into the "market division among horizontal competitors" category of per se violations.


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July 23, 2003

Copyright and Fair Use Site at Stanford

Relaunched: Stanford University Libraries Copyright & Fair Use Website

This very handy portal has links to:
* primary materials including statutes, international treaties and cases.
* various exemplar guidelines, articles and communities
* key copyright sites, including a "Copyright Crash Course" at Univ. of Texas
* detailed "Copyright and Fair Use Overview" from Nolo, based upon the book "Getting Permission"
* resources for librarians
* current issues and recent legislation

I'll be exploring this frequently. Thanks to BeSpacific for the heads up on this grand reopening.

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July 22, 2003

Patenting Insurance

Obtaining business method patents on insurance operational processes or new products is a new trend in the marketplace. Walker Digital, L.L.C. in Stamford, CT holds over 200 patents, including some related to financial services and negotiations. Walker's most famous business method is the "name your own price" method used by Priceline.com.

Two consultants, Tom Bakos and Mark Nowotarski, have publicly posted insights into the trend toward patenting of new insurance business methods. A series of their articles in National Underwriter and elsewhere are listed and linked from Mr. Nowotarski's company website . Mr. Nowotarski is a patent agent and inventor based in Stamford, Connecticut. Mr. Bakos, a consulting actuary based in Ridgway, Colorado, offers a digital copy of an article summarizing patent, copyright and trademark principles relevant to insurance. It was published in the July/August 2002 issue of Contingencies, a publication of the American Academy of Actuaries.

I'll be doing additional exploring of the intellectual property realm in relation to insurance and other financial services and noting observations here in Unintended Consequences. If you have some areas of interest to suggest exploring, please let me know via email: douginhartford "at" earthlink.net

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July 20, 2003

Gene Link to Depression

The Chronicle reports that geneticists demonstrated a link between a specific gene and increased risk of clinical depression in response to stress. Published 7/18 in Science, the finding could lead to new medication, as well as new attempts by insurers, employers and others to test for the gene as part of screening of individuals. The full article is a pay-access item at www.sciencemag.org ... or free at your local science-oriented library.

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July 17, 2003

Online Rumors Challenge Privacy of Minors: Japan

Japan's Justice Ministry asked a popular Japanese website, "2 Channel," to delete anonymous postings on their discussion forum, according to Asahi Shimbun. The postings speculate about the identity of a 12-year old suspect in the murder of a Nagasaki 4-year old found dead on July 2, and include individual children's names and class photos said to include the suspect. The Ministry based its request (and others like it in the past) on the grounds that such postings violate the right of privacy of the children identified or pictured. Thanks to Online Journalism at USC Annenberg for the tip on this story.

This case raises questions related to the recent Court of Appeals decision in Batzel v. Smith, where a website operator's republication of allegedly defamatory rumors was found to enjoy immunity under 230 of the CDA. The postings in the Nagasaki case were made on a Japanese language site focused on issues of regional interest.

Hmmmm ... if this case arose within the jurisdiction of the CDA, would the immunity in 230 extend to invasion of privacy as well as defamation? There are exceptions to immunity in the act. 230(d) provides that it will not be construed to impair the effect of any "Federal criminal statute," nor "to limit or expand any law pertaining to intellectual property," nor "to prevent any State from enforcing any State law that is consistent with this section," nor "to limit the application of the Electronic Communications Privacy Act of 1986 * * * or any similar State law." CDA 230(d).

The Children's Online Privacy Protection Act (COPPA) addresses attempts to collect information from children under 13, not to the publication of information invading their privacy. And it has no criminal sactions that I've found. Children's Online Protection Act (COPA) has criminal sanctions, but is aimed at "harmful to minors" material that fits within a "community standards" obscenity test limited to sex content, which doesn't seem to cover this category. Besides, last I heard, COPA was under a Supreme Court stay while the Court of Appeals reviews its doubtful constitutionality.

Hmmm... leaves some interesting ambiguities to resolve.

What if: there were (as Lawrence Lessig suggests might be proper) a property interest in privacy?

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July 16, 2003

Reading: Wriston, "Twilight of Sovereignty"

Walter B. Wriston wrote "The Twilight of Sovereignty -- How the Information Revolution Is Transforming Our World" (Scribners' 1992) over a decade ago, before the creation of the Web and resulting popularization of the Internet. See also 1997 Replica Books version. Even in '92, the former Chairman of Citicorp anticipated many of the challenges recently described by Lawrence Lessig and others. Wriston addresses the unintended consequences of global proliferation of information technology, particularly upon national governments. Wriston observes that in the ongoing information era, all products (even 'hard' goods like steel) contain an increasing proportion of information content, making both industry and capital highly mobile, not bound by geography. He discusses his conclusion that these changes will steadily bleed national governments ("sovereigns") of their traditional power and control.

The industrial era was built to take advantage of massive economies of scale, which made industry immobile and therefore easier for governments to regulate and to tax. In the information era, intellectual capital is increasingly important, and it "will go where it is wanted," says Wriston, "and it will stay where it is well treated. It cannot be driven, it can only be attracted." Id. p. 36. This makes the information economy "intractably global," according to Wriston, partly because trade in information is global.

Also, Wriston sees knowledge workers as increasingly difficult to govern, because they consider themselves better informed than government regulators. He asserts that the power of those knowledge workers will be most evident in "those great nongovernmental institutions whose subordination to the state is essential to sovereignty as we have known it." As Prof. Lessig later wrote in "Code and Other Laws of Cyberspace," a principal channel of government authority is by working indirectly through direct regulation of those non-governmental authorities that Wriston references in "Twilight."

Wriston also sees political challenges ahead for both the developed and developing nations as television, VCRs and telephones increasingly become available in the developing world. These global media expose increasing numbers of people to a view of an alternative world with alternative forms of government they previously had no opportunity to view.

Wriston brings his perspective as an international banker to his comments about the issuance and control of currency, a traditional aspect of sovereignty that Wriston sees dramatically changing. "Increasingly," writes Wriston, "currency values will be experienced less as a power and privilege of sovereignty than as a discipline on the economic policies of imprudent sovereigns." Id. p. 59.

He suggests that the dramatic increase of trading volumes in international currencies has largely neutralized the traditional role of central banks in affecting currency values by open market transactions: the banks are no longer big enough relative to the global market to have the effect that they once had. He points to the emergence of a Eurocurrency marketplace starting in the 1930's, as a direct response to failed attempts by national governments to control interest rates during the Depression, and capital controls in the US during the 1960's. The modern ability of capital to move instantly across the globe has robbed central banks of their power, says Wriston.

Likewise, Wriston argues that nations have lost the ability to regulate the balance of trade because the global market results in products having informational and physical value added in multiple countries. He also sees a deterioration in the relevance of the statistical measures of economic activity as services and intellectual capital are underreported relative to physical production. This deterioration, says Wriston, impairs the ability of national leaders to make rational policy decisions because they lack reliable statistical data.

Wriston also criticizes traditional accounting's relevance, saying: "In an information-based economy much of what we now consider expenditure -- staff, software or marketing programs, for example -- is actually capital investment: It produces a high return and is self-financing." Id. p. 104. This underreporting results in distorted measures of other statistics dependent upon capital investment totals, he says, pointing the reader to Soshana Zuboff's "In the Age of the Smart Machine" in which that author discusses studies of the effects of automation on productivity and the role of middle managers. An information era forced by global competition places a marketplace premium upon workers' creativity, autonomy and personal judgement, says Wriston, all characteristics that make them less amenable to control by governmental bureaucracy.

As the technologies of print, broadcast and telephone sectors of information converge, national borders will lose their ability to be boundaries for information. Information that they want to keep in or out will no longer be controllable, raising risks to existing power structures, predicts Wriston. Strong cryptography becomes cheap and widespread, equalizing the power of governments and individuals, in the same was as do information systems and "logic bombs" that are developed to neutralize the threat of "smart" technology.

Global instantaneous communication between individuals, uncontrollable by sovereigns, drives nations toward individual freedom and international cooperation, argues Wriston. The spotlight of world opinion is turned on repressive governments, he claims, and both nation-states and corporations will have relatively less power, with "the frustration and inertia that sometimes accompany democracy will more and more affect the international community." Id. p. 175. Yet Wriston concludes that despite that frustration and inertia: "The new electronic infrastructure of the world turns the whole planet into a marketplace for ideas, and the idea of freedom has proved again and again that it will win against any competing idea." Id. p. 176.

Wriston's wisdom overcomes some slightly dated references to specific technology and stands up to the test of the the last decade's dramatic unveiling of his 1992 predictions in "Twilight of Sovereignty." . See also Replica Books version still in print.

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July 08, 2003

Reading: Isenberg: The GigaLaw Guide to Internet Law

Doug Isenberg, an Atlanta attorney and regular columnist for the Wall Street Journal Online and CNET News.com, is the founder of GigaLaw.com, a website focused on the law of the Internet. In his Guide to Internet Law, he has compiled an essential reference work for both attorneys and laypersons seeking to understand or review the multiple elements of law pertinent to activity on the Internet. It would be particularly helpful for generalist attorneys and their clients engaging in "e-business." It is also readable enough that it kept some of my attention while at Cape Cod two weeks ago when I started reading it.

Attorney Isenberg organizes his book into seven major parts of Internet law. The first three parts deal with intellectual property law: "Copyright," including the Digital Millenium Copyright Act, "Domain Names and Trademarks," and "Patent Law." (by Greg Kirsh). As with each of the seven sections of the book, he introduces new legal principles with a case study, and then concisely identifies and explains the statutes and decisions that form the foundation of the relevant law. Where the law is still unsettled, he briefly points out the competing arguments for various outcomes, in clear yet accurate language.

Part IV deals with the hot issue of "Privacy," including short introductions to FCRA, ECPA, HIPAA, the Childrens' Online Privacy Protection Act ("COPPA"), the Gramm-Leach-Bliley Act, as well as European and Canadian regulations. Part V addresses "Free Speech and the First Amendment," including the Communications Decency Act and the Children's Online Protection Act (COPA).

The sixth section includes chapters about "Contract Law and High Technology" that includes an introduction to UETA, UCITA and the federal E-SIGN statute. The book closes with a section on "Employment Law" (by Doug Towns) relevant to employee use of the Internet and considerations particular to high technology companies.

This compact, affordable book provides an invaluable, readable desk reference which Lawrence Lessig described as "an excellent introduction for beginner and expert alike."

Isenberg, "The GigaLaw Guide to Internet Law" (Random House, 2002)

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July 05, 2003

Batzel v. Smith No Blanket Blogger Immunity

Inter Alia quite rightly noted the error in over-enthusiastic bloggers who've gushed that Batzel v. Smith (9th Cir. 2003) found libel immunity for bloggers. Instead, the case parses 230 of the Communications Decency Act ("CDA") and adds some case law to the interpretation of key terms in that statute.

The decision found that the defendant's website and listserver qualified as an "interactive computer service" and that the offending third-party content was "information provided by another" even though contained in an email whose author never intended it to be distributed on the defendant's service and which the defendant consciously selected for republication. Under the majority's interpretation of 230, such was sufficient to trigger the statutory immunity created to overrule the New York State court decision in Stratton v. Oakmont, 1995 WL 323710.

A far cry from blanket "immunity" for bloggers, but the case's contribution to the case law is harder to summarize in a headline for the popular press. We may be deflating enthusiastic blogger celebration for a while, however. (as Jack M. Balkin is already doing at his blog, Balkinization). Meanwhile, the fact that this case got all the way to the Court of Appeals (and that Judge Gould wrote a dissent that "the majority has crafted a rule that encourages the casual spread of harmful lies") is a good warning that bloggers and listserv operators risk legal expense (or worse) if they fail to fact check before actively republishing statements that could be defamatory if not accurate.

Judge Gould, in his dissent, argued against 230 immunity where (as in this case) the defendant was not a service provider that automatically distributed content entered by others (such as an email network or online bbs) but rather one who did "actively select particular messages for publication." Judge Gould sees as the touchstone of CDA immunity "a human being's decision to disseminate a particular communication" and finds sufficient the assurance of immunity for those providing a service that "permits users to post messages directly in the first instance," even if the provider exercises some editorial control after the fact.

Judge Gould, in the disssent, emphasizes the issue is only immunity in this case, and that "there is no immunity under the CDA if Cremers made a discretionary decision to distribute on the Internet defamatory information about another person, without any investigation whatsoever." Judge Gould's opinion did not carry the majority in this case, but is a warning that another outcome could have resulted (and may yet result) in other Circuits and in the Supreme Court.

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July 04, 2003

Reading: Lessig, Code

Professor Lessig raises fundamental constitutional debates in "Code and Other Laws of Cyberspace" (Basic Books, 1999). Maintaining that "code is law," and that the freedom found in cyberspace's early years is only due to choices made by those architecting it. He sees the introduction of commerce to cyberspace as "constructing an architecture that perfects control -- an architecture that makes possible highly efficient regulation." (Lessig, Code, p. 6). He then argues for the maintenance of a creative commons to check controversial forms of control over cyberspace.

A few thoughts about the book follow:

Four themes repeat throughout the book's discussion of the tension between relatively perfect freedom and relatively perfect control in cyberspace:

  • Regulability - "the capacity of government to regulate behavior within its proper reach;"
  • Regulation by Code - upon which government's ability to regulate depends;
  • Competing Sovereigns - conflicts of authorities in cyberspace and real space;
  • Latent Ambiguity - hard choices balancing core values, with real space tools providing little guidance.

    Prof. Lessig maintains that the nature of cyberspace is about to flip from unregulability to regulability, through the use of "architectures of control." As examples, he introduces digital certificates, encryption and the public key infrastructure (PKI). He considers recent history of government action to increase the regulability of the Net, including requiring copy degradation in Digital Audio Tape (DAT) systems; the "V-Chip" in televisions; the failed "Clipper Chip" initiative and the 1998 Digital Millenium Copyright Act (DCMA) ban on software designed to defeat copyright management schemes.

    He suggests that indirect governmental regulation could come through facilitating a certificate-rich Net, in which users must provide digital credentials to access certain services. He finds that increasing commercial applications on the Net increases government's ability to regulate indirectly. "When commerce writes code, then code can be controlled, because commercial entities can be controlled." Id p. 53.

    He also sees certification tools as enabling regulation across state and international borders in ways not practical today. "With a simple way to verify citizenship, a simple way to verify that servers are discriminating on the basis of citizenship, and a federal commitment to support such local discrimination, we could easily imagine an architecture that enables local regulation of Internet behavior." Id p. 55-56. Lessig sees the market forces pressing towards the "zoning" of cyberspace based upon individual users' certificate qualifications.

    Lessig ends the first part of the book with a public policy question for the reader:
    "How the code regulates, who the code writers are, and who controls the code writers -- these are questions that any practice of justice must focus in the age of cyberspace. The answers reveal how cyberspace is regulated. My claim in this part of the book is that cyberspace is regulated, and that the regulation is changing. Its regulation is its code, and its code is changing." Id. p 60.

    Prof. Lessig introduces a schematic of an individual as a dot, surrounded by four larger dots titled Architecture, Market, Norms and Law, each a source of constraints upon the individual. He reminds us that Law can modify the influence of the other three on the individual, and thereby constrain indirectly. He criticizes indirect regulation because "it muddies the responsibility for that constraint and so undermines political accountability. If transparency is a value in constitutional government, indirection is its enemy." Id p. 96.

    He also uses the concept of constitutional "translation," and offers the example of the dissent of Justice Brandeis in Olmstead v. United States, 277 U.S. 438 (1928). In Olmstead, the Court decided that a telephone wiretap did not violate the Fourth Amendment because it was not a physical trespass. Brandeis argued that the Amendment should be translated so as to preserve its meaning despite changes in the technology since its enactment. Prof. Lessig says that Brandeis "wanted to read it differently, we would say, so that it protected the same" and points to this dissent as "a first chapter in the fight to protect cyberspace." Lessig, op cit, p. 116. Brandeis' dissenting viewpoint was not adopted until 1967, with the decision in Katz v. United States 389 U.S. 347 (1967), in which Justice Stewart's opinion created the "reasonable expectation of privacy," the core value of which was the protection of people, not places.

    Regarding intellectual property, Prof. Lessig notes that a least two sorts of property protection are possible in cyberspace: "One is the traditional protection of law. The other protection is a fence, a technological device (a bit of code) that (among other things) blocks the unwanted from entering." Lessig, op cit p 122. He credits to a former research assistant the idea that: "since the intent of the 'owner' is so crucial here, and since the fences of cyberspace can be made to reflect that intent cheaply, it is best to put all the incentive on the owner to define access as he wishes. The right to browse should be the norm, and the burden to lock doors should be placed on the owner." Id. p. 123. This raises the basic question, says Prof. Lessig: "Should the law protect certain types of property -- in particular, intellectual property -- at all?" Id. p. 123.

    Prof. Lessig goes on to assert that private fences (code) can displace public law as the primary protector of intellectual property in cyberspace. "We are not entering a time when copyright is more threatened than it is in real space. We are instead entering a time when copyright is more effectively protected than at any time since Gutenberg. The power to regulate access to and use of copyrighted material is about to be perfected." He goes on to point to Mark Stefik's work concerning "trusted systems" used to track and control copies of copyrighted material. "What copyright seeks to do using the threat of law and the push of norms, trusted systems do through the code." Lessig, op cit p. 130.

    But the professor points out that public interests lie with not giving perfect control to the owners of intellectual property. "The law has a reason to protect the rights of authors, at least insofar as doing so gives them an incentive to produce. With ordinary property, the law must both create an incentive to produce and protect the right of possession; with intellectual property, the law need only create the incentive to produce." Id. p. 133. Fair use, for example, is one limit of copyright law, a limit "constitutionally structured to help build an intellectual and cultural commons." Id. p. 135. The limited duration of copyright protection is another. Lessig asks if private code built to protect intellectual property will also be written to include 'bugs' like fair use and limited terms of protection, concluding that "Loss of fair use is a consequence of the perfection of trusted systems." Id. p. 137.

    Another loss is anonymity -- trusted systems need to track use and charge for it, yet monitoring destroys anonymity. Under the "Cohen Theorem," says Prof. Lessig, reading anonymously is "so intimately connected with speech and freedom of thought that the First Amendment should be understood to guarantee such a right," quoting an article in Conn. Law Review 28 (1996) (p. 981, 982). Lessig argues that cyberspace should be architected to preserve a commons to replace that inherent before code made possible "perfect control," pointing the reader to Boyle, "Shamans, Software and Spleens" (Harvard Univ. Press 1997).

    Chapter 11 deals with privacy, and suggests three elements behind the constitutional concept of privacy: 1) to minimize intrusion (the right to be left alone); 2) preserve dignity; 3) constrain the power of the state to regulate. The author sees encryption as improving privacy, but argues also for "a kind of property right in privacy." Id. p. 160, and explains why his position is different for privacy rights than it is for intellectual property rights: "In the context of intellectual property, our bias should be for freedom. *** We should take a grudging attitude to property rights in intellectual property; we should support them only as much as necessary to build and support information regimes." Id. p. 162.

    Prof. Lessig sees the architecture of the Net as a top protector of free speech, through which architecture the First Amendment (in code) has been effectively exported to the world. One way that happened is by removing architectural restraints on instant global publication of information and opinions, but also removing the function of a publisher that would edit for truth and establish a reputation. "In a world where everyone can publish, it is very hard to know what to believe." Id. p. 171. He addresses means of using the architecture in the application space to control troublesome content such as pornography within the limits of Ginsberg v. New York, comparing a "zoning" approach to a "filtering" approach. He also warns about the hazards of filtering that is both perfect and invisible, and argues for less control over speech than over privacy, and less control over intellectual property.

    Code becomes more abstract in its later chapters as it addresses the latent ambiguities inherent in the conflicts and overlaps of competing sovereigns with interests in behavior in cyberspace. "We should understand the code in cyberspace to be its own sort of regulatory regime, and that this code can sometimes be in competition with the law's regulatory regime." Id. p. 205. He sees the emergence of globally unified regulation through code, shifting power from sovereigns to software, suggesting to the reader a reading of Wriston's "The Twilight of Sovereignty". (Scribner 1992). He also sees a certificate-rich Net as re-enabling sovereigns to claim some of their authority: "Sovereigns get this. They will come to understand that there is a different architecture for the Net that would enable their own control. When they do, they will push to facilitate the predicate to this architecture of regulability -- certificates. And when they do, we again will have to decide whether this architecture of regulability is creating the cyberspace we want." Id. p. 207-208.

    An important, thought provoking book that should be required reading, and re-reading, for any student of cyberspace and the modern world.

    Lawrence Lessig, "Code and Other Laws of Cyberspace" (Basic Books, 1999).

    Posted by dougsimpson at 05:02 PM | Comments (1) | TrackBack
  • Readings: Catching Up

    Seven or eight years ago, when I first began informal study of what has come to be known as "Cyberlaw" or "Internet Law," there were no books on the subject, and very few journal articles. The lack of case law and the lack of commercial demand for services in the new and (then) minor field made for little to write about except speculation.

    Like many others, I speculated and debated the likely future in venues such as the CompuServe Legal Forum and Counsel Connect with some of the early pioneers in the field. We've come a long way since then, but in recent years, my responsibilities with my "day job" drew enough time and energy that now returning to focus on the topic, I find I have much catching up to do in my reading. There is now a wide selection of articles, treatises and entire hardbound books, both practical and theoretical, for the student of the subject.

    I now have the opportunity to do that catching up, and plan to share with my readers (both of them) the relevant material I am finding. Please bear with me as I day by day discover works you may have read years ago and moved beyond. Please add your suggestions for readings and comments on my remarks either through this channel or via a private email. Or give me a call; I'm not hard to find.


    Posted by dougsimpson at 04:28 PM | Comments (0) | TrackBack