1. Intellectual Property
Any unique product of the human intellect that has commercial value (e.g. Books, songs, movies, inventions, programs)
Intellectual Property is not its physical manifestation in some medium
Does our accepted notion of right to own property extend to intellectual property?

2. Concept of Property Rights
Locke’s Second Treatise of Government
Right to property in your own person
Right to the benefits of your own labor
Right to things removed from nature through your own labor
Extends to land by farming
Makes sense as long as 2 conditions hold...

3. Extending to Intellectual Property
Ownership of physical objects vs. ideas
Paradox 1: two people create the same intellectual artifact. Therefore, intellectual objects differ from physical by uniqueness.
Paradox 2: a copy is made, but the original media is not “stolen”. How is this different from stealing a physical object?

4. Benefits of Intellectual Property
If no natural rights to intellectual property, society may still grant rights.
Most people want to be rewarded for spending time to create something.
Society benefits by encouraging creativity.
Some people are altruistic and put ideas in the public domain

5. Limits to Intellectual Property
Tension between need to reward creativity and disseminate ideas as widely as possible
Compromise: Time limit to exclusive right
“Happy Birthday to you” copyrighted in Under the Copyright Term Extension Act of 1998, it’ll remain copyrighted until...

6. Trade Secrets They never expire
Value is in confidentiality; so only useful for things that stay confidential
Does not protect against reverse-engineering.
Ideas can spread by hiring employees from a company with a trade secret.

7. Trademarks and Service Marks
Grants exclusive use of terminology to identify products and services
Promotes consumer confidence in predictability of brand performance
incentive to brand owner to maintain reputation

8. Patents Cover Inventions for 20 years
Puts idea in public domain but gives inventor exclusive rights

9. Copyrights Confer Five Principal rights:
Right to reproduce the copyrighted work
Right to distribute copies to the public
Right to display copies in public
Right to perform the work in public
Right to produce new works derived from the copyrighted work

10. Copyright Legal Tests
Gershwin Publishing Corp. v. Columbia Artists Management, Inc. ( )
Basic Books v. Kinko’s Graphics Corp. (1980’s-91)
Davey Jones Locker / Richard Kenadek (1994)
No Electronic Theft Act of 1997

11. Copyright Creep Copyright act 1790: 28 years 1831: 42 years

12. Fair Use - factors What is the purpose and character of the use?
What is the nature of the work being copied?
How much of the copyrighted work is being used?
How will this use affect the market for the copyrighted work?

13. Fair Use Lawsuits
Sony v. Universal City Studios: Movie studios sued Sony over the Betamax VCR. The court decided it was fair use due to “Time Shifting”.
RIAA v. Diamond Multimedia Systems Inc.: RIAA sued over the new Rio digital portable music player. Court upheld fair use due to “Space Shifting”.

14. Digital Technology & Fair Use
With the advent of CDs, copies of copies are as good as the original
MP3 is 1/10th the size of original music files, making internet sharing practical
Large increase in high-speed internet connections
Personal DVRs

15. Digital Millennium Copyright Act
Passed in 1998 to bring U.S. into compliance with international copyright agreements.
Significantly curtails fair use (e.g. illegal to copy any digitally recorded work)
Illegal to sell or discuss online any software designed to circumvent copy controls
Protects music broadcast over the internet

16. Digital Rights Management
Tracking and controlling the use of content
Encryption
Digital mark

17. Secure Digital Music Initiative
Consortium of 200 entertainment and tech companies to create copy-protected CDs
Unsuccessful for 3 reasons:
Internet copying mushroomed before protections could be put in place
Sponsors were making money selling MP3 players
The digital watermarking scheme was cracked

18. Encrypting DVDs Content Scramble System (CSS)
16-year-old Jon Johansen and DeCSS for Linux (1999)
2001 Ruling against 2600 Magazine for publishing the code
2003 Johansen acquitted in Oslo

19. Making CDs Copyproof Several systems being considered
CD-ROM drives vs. CD players. (“Yellow Book” standard vs. “Red Book”)
Macrovision SafeAudio
Large community of programmers to crack encryption schemes
People can always record what they hear.

20. Criticisms of DRM Technological fixes are bound to fail
Undermines fair use principle
Could reduce competition
Some schemes prevent people from accessing content anonymously.

21. Peer-to-Peer Networks
“A transient network allowing computers running the same networking program to connect with each other and access files stored on each other’s hard drives.”
Stimulate exchange of data by allowing wide access, supporting simultaneous file transfer, and identifying best source for rapid transfer.

22. Napster Began in 1999 to facilitate exchange of music files
Sued by RIAA in Dec 1999.
Went offline in 2001

23. FastTrack
Decentralized peer-to-peer network designed by Niklas Zenniström and Janus Friis.
Used by KaZaA and Grokster
Similar technology Neonet is used by StreamCast’s Morpheus
Supernodes deliver most content

24. BitTorrent Developed by Bram Cohen to overcome the upload bottleneck
Files are broken into pieces and transmitted from multiple computers simultaneously.
Revenge of the Sith available via BitTorrent before it was in theaters.

25. RIAA Lawsuits April 2003 RIAA warns Grokster and KaZaA users
Subpoenaed Verizon for names behind IP’s of Supernodes.
Sept 2003, RIAA sues 261 individuals
Oct 2003, RIAA sends letters to 204 more
Dec 2003, Court rules Verizon does not have to identify customers.

26. MP3 Spoofing
Record industry attempt to make downloading MP3’s less reliable.
Overpeer has posted spoofs of 30,000 songs.
BearShare and KaZaA counter with ratings system

27. Universities in the Middle
RIAA sued 4 students in 2003 asking $100 billion in damages.
In 2002, U.S. Naval Academy seized PC’s of 92 students and punished 85 of them
In 2003, New Jersey Inst. Of Tech. Banned file sharing on its networks
Penn State signed an agreement with Napster so students could download music legally.

28. MGM v. Grokster
Defendants networks were used to transfer billions of files each month
About 90% on Grokster were copyrighted
Grokster and StreamCast promoted themselves to investors as a new Napster
Internal StreamCast memo wanting more copyrighted content than competitors
Grokster sent users a newsletter touting ability to deliver copyrighted songs
Defendants provided tech support to help locate and play copyrighted songs.

29. Legal internet music services
Napster, Rhapsody, pressplay, MusicNet
America Online (2003)
Apple iTunes
Started April 2003
99 cents to download
can use on 3 computers, copy to CD, iPod
By Sept 2004, 70% market share

30. Software Copyrights First appeared in 1964
Copyright act of 1976 explicitly recognizes that software can be copyrighted.
Typically object code copyrighted, source code is trade secret.

31. Violations of Software Copyrights
Copying a program onto a CD to give or sell to someone else
Preloading a program onto the hard disk of a computer being sold
Distributing a program over the internet.
APPLE v. FRANKLIN COMPUTER
SEGA v. ACCOLADE

32. Software Patents
Supreme Court Diamond v. Diehr, ruled in 1981 that a computer controlled process of curing rubber could be patented.
Separating mathematical algorithms from inventions
Existing Technical Knowledge (prior art)
Bad patents

33. Safe Software Development
Two independent teams
Spec team isolated from development team

34. Open-Source Software
Movement to create software by decentralized contributions
Design that does not restrict ownership

35. Consequences of Proprietary Software
Copyrights are trying to enforce restrictions on a medium for which they are not suited
Copyright is now stifling innovation, rather than promoting it
Ownership of intellectual property is less valuable than collaborative intellectual strengths

36. Open-Source Definition
No restrictions on sale or give-away
Source code included for distribution
No restrictions on use or modification
Re-use cannot place more restrictions on licensing

37. Beneficial Consequences of Open Source
Larger pool of potential improvement – by every user
Rapid evolution every time someone adds an improvement
Eliminates copyright issues
Indefinite continued development
Promotes additional user services

38. Examples of Open-Source
BIND – domain name service for the entire Internet
Apache – runs web servers
Sendmail – for sending
Perl – web programming
Various languages and compilers (Python, GNU C, etc.)

39. GNU Project and Linux Examples of open source in action
Creation of fully functional editors, compilers, and operating system
Distribution free, with sellers able to provide packages with extra functionality if desired

40. Impact of Open-Source
Exerts downward pressure on competing systems, such as proprietary OSes
Provides stable, supported platforms for businesses at low cost

41. Critiques of Open-Source
May be low quality if lacking developers
May run afoul of build forking
Higher barrier to use, with focus more on utility than interface
Poor for stimulating innovation due to lack of monetary returns

42. Legitimacy of IP Protection
Rights-based: Difficult proposition; not easily handled like physical ownership
Utilitarian: Piracy damages revenue, which declines innovation, and therefore is harmful to society (unethical).

43. Creative Commons Decentralized creative rights
Noncommercial for non-derivative works freely available to all
Increased exposure

44. Off the Book: Economics of IP
IP fits format of “public goods” (Microeconomics, Hal E. Varian)
Increasing ease of distribution moves away from “pay for exclusive use” model
Transformation to public good requires change in market strategies for IP

45. Off the Book: Ethics of Big IP Companies
RIAA, MPAA increasingly restrict user rights and infringe upon rights of general public
Treat each customer as a revenue stream instead of as a beneficiary of an IP – unethical by Kant
Stifle innovation and damage competition – unethical by utilitarianism

46. Off the Book: Ransom Method
Means to provide income for creators without standard distribution models
Account holds money or commitment; product released when threshold reached
Encourages release of “sample” works
Requires established creator to generate enough revenue

47. Off the Book: Micropatronage
Uses massive scalability of internet exposure to generate income from tiny donations by many users
Requires exposure over large networks
May lack starting capital
Requires internet-distributable model

48. Off the Book: Classical Patronage
Relies on government or wealthy individuals to provide funding
Can provide a common pool for creators
Runs into problem of “art only for the wealthy”
Risks message being subverted by patron