Category: General Law

Dumb Money: A Dumb Purchase

Daniel Gross is one of my favorite financial journalists. When he came out with the book Dumb Money, I wanted to get a copy ASAP, so I bought it as an “eBook.” Now that I’ve finally gotten some time to read it, I can’t believe what a stupid purchase this was.

I’m not criticizing the content. Gross is lively and engaging. But the eBook has astonishing restraints on my use of it. I don’t appear to be able to print even a single page of it. I tried to blog about part of the book, but when I tried to copy two sentences to the post, I got the message “Permissions set by the publisher of this item restrict copying.” I was warned of none of these restrictions on the S&S website when I bought the book. I suppose, as someone who teaches intellectual property, I could have assumed the worst. But it just seems obvious to me that I should get one printout of the thing once I’ve bought it.

So I must congratulate Simon & Schuster. Rather than getting a satisfied customer commenting on Gross’s book today, I’m telling readers of this blog to forget about it. Spend your money on Posner’s book, or a subscription to the American Prospect, or Dissent. Just don’t buy an eBook from Simon & Schuster.

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Smith on the ABA Section on Legal Education

Gordon Smith has a really good post responding to a series of “thought papers” from the ABA Section on Legal Education — Out of the Box Committee.  Two key paragraphs:

People both inside and outside the academy are forever complaining about various supposed shortcomings of legal education, but the longer that I work in legal education, the less patience I have for these complaints. The reason? The complainers seem to have no concept of opportunity cost.

More this and more that inevitably means less of something else. Of course, we could expand the length of legal training, as suggested by one of the thought papers, but that proposal has its own opportunity costs, and they are substantial. Moreover, as noted, it’s just not going to happen. So this is what I want to know: given three years for law school, if you want more globalization or more ethics or more skills training, what are you going to sacrifice to get that thing? If you can tell me that, then we can have a decent conversation.

Exactly.  Gordon is, as always, perceptive and provocative.  Go read the whole thing.

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The Free Speech Implications of Gene Patents

61px-dna-splitLast week, the ACLU and Cardozo Law School’s Public Patent Foundation (PPF) filed a lawsuit in the S.D.N.Y., challenging the constitutionality and validity of Myriad Genetics’ patents for BRCA1 and BRCA2 gene mutations, which are linked to an increase risk of breast and ovarian cancer.  Plaintiffs, a collective of breast cancer and women’s health groups, individual breast cancer patients, and scientific associations, sued the U.S. Patent and Trademark Office, patent owner Myriad Genetics, and directors of the University of Utah Research Foundation.  The lawsuit asserts that the USPTO granted a patent on the association between mutations conferring an increased risk of cancer and, in turn, patented “an idea, a scientific fact, or a piece of knowledge.”  According to the complaint, patenting genetic sequences violates the First Amendment because it hinders the free flow of information.

Although the controversy over BRCA genes isn’t new, the case is groundbreaking.  As PPF’s Daniel Ravicher explained in this month’s The Cancer Letter, no court case in the U.S. has “ever questioned whether genes can be patented.”   The lawsuit calls into question the constitutionality of “thousands of patents covering human genes.”  Although plaintiffs could have challenged other patents, they chose the BRCA ones because, as Ravicher notes, “these are offensive patents, and they have a large impact.”  ACLU’s science advisor Tania Simoncelli explains that Myriad’s control over the BCRA genes hampers clinical research given its exclusive right to prevent anybody from looking at the genes in research.  The patent also impairs patient access to the tests, which can cost over $3,000.

Do gene patents restrict the exchange of ideas in practice?  Harry Ostrer, NYU School of Medicine’s Director of the Human Genetics Program, explained to The New York Times that his laboratory, and others like it, would focus on unsolved mysteries in BRCA gene variants if they did not face the risk of a patent lawsuit from Myriad.  A 2006 report from the National Research Council, however, found that patented biomedical research “rarely imposes a significant burden” for researchers.  Europe’s experience may be instructive: European law precludes patent holders from exercising patents when their IP is being used for research.  Whatever the European example may teach us about gene patentability’s impact on research, this is surely a case to watch.

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Copyright Law and Deregulating Amateur Creativity

While reading Lessig’s recent book, Remix, I was struck by a comment in support of his argument that we should deregulate amateur creativity online.  One of Lessig’s suggestions is that if content owners have too much control of a copyrighted work, they potentially suffer more damage than if they have less control, particularly in terms of reputational issues.  In the context of describing Hollywood’s concern about reputation, he notes that:

“This problem comes not, paradoxically, from a lack of control. It comes from too much control.  Because the law allows the copyright owner to veto use, the copyright owner must worry about misuse.  The solution to that worry is less power.  If the owner can’t control the use, then the misuse is not the owner’s responsibility.” (p 257)

In other words, if everyone knows that anyone in the amateur playing field is free to remix copyrighted works in any way they like then no one will be confused into thinking that Warner Brothers supports a Nazi spin on Bugs Bunny.

I wonder if this oversimplifies some of the reputational issues, though.  In countries with moral rights, particularly those that don’t allow waiver of those rights, the concern is not just that audiences might be confused about the source of a remixed work.  Rather, it is that creators (as distinct from copyright owners of course)  should have some say in how their works are used both for purposes of attribution and integrity.  There is more to the equation than simple consumer confusion.

Additionally, given that courts are so prepared to find pretty much anything happening online as “commercial conduct”, I wonder if Lessig’s theory has a practical limitation in that he would exempt all non-commercial remixes of copyright work from a copyright infringement action.  However, this assumes that courts will not readily find an amateur remix to have commercial elements eg if distributed alongside click-through ads online and thus potentially encroaching on the copyright holder’s market to make money from click-through ads related to the placement of the work online.

In other words, I think there may be a problem here with the boundaries between trademark law and copyright law once one starts talking about exempting amateur remixes from the scope of copyright infringement, be it under fair use or otherwise.  If the concern is with reputation, isn’t there a significant possibility that the whole debate would move to trademark law and/or moral rights law (in countries where those rights are available and relevant)?  Wouldn’t copyright holders simply start asserting trademarks in specific aspects of the work that are used in the remix, and then claiming infringement (where there is a commercial purpose and perhaps a claim for “initial interest confusion”) or dilution (where there is no likelihood of consumer confusion any way you slice it)?

I’m not necessarily disagreeing with where Lessig is coming from, and I do think there should be clearer scope for amateur creativity online, but I wonder if the analysis in Remix isn’t a little overly simplistic.  In particular, I wonder if a better way to look at it is that raised by Jessica Litman in her recent article on Lawful Personal Use where she suggests that personal uses of copyright works may well be regarded as outside the scope of copyright law altogether.  This perhaps avoids the difficult distinctions between what is “commercial” and “noncommercial” use online.  However, even Litman isn’t talking about trademark law so that could still be a problem in the online context if coypright is pared back by the courts.

Brooksley Born: Profile in Financial Courage

borngreenspanWhile public intellectuals like Richard Posner assure us that “no one could have foreseen” today’s financial crisis, many voices called for the types of sensible regulation that may well have prevented it. Today one of them, Brooksley Born, is being honored at the John F. Kennedy Presidential Library with a Profile in Courage Award. It is given to “to one or more public officials who took a stand that took a lot of integrity and nerve.” Here is Born’s citation:

In 1998, as chair of the Commodity Futures Trading Commission (CFTC), Brooksley Born unsuccessfully tried to bring over-the-counter financial derivatives under the regulatory control of the CFTC. The government’s failure to regulate such financial deals has been widely criticized as one of the causes of the current financial crisis. In the booming economic climate of the 1990’s, Born battled other regulators in the Clinton Administration, skeptical members of Congress and lobbyists over the regulation of derivatives, warning that unregulated financial contracts such as credit default swaps could pose grave dangers to the economy.

Her efforts brought fierce opposition from Wall Street and from Administration officials who believed deregulation was essential to the extraordinary economic growth that was then in full bloom. Her adversaries eventually passed legislation prohibiting the CFTC from any oversight of financial derivatives during her term. She stepped down from the CFTC in 1999 and returned to a distinguished career in public interest law.

The silencing of Born was just one more sad consequence of the Clinton administration–whose tilt to Wall Street lobbies was almost indistinguishable from that of Reagan and the Bushes. As Frank Partnoy has said,

History already has shown that [Alan] Greenspan was wrong about virtually everything, and Brooksley was right . . . I think she has been entirely vindicated. . . . If there is one person we should have listened to, it was Brooksley.

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Toward Transparent Derivatives Trading

Could you describe the financial crisis in a sentence? Margaret Atwood’s description (in Payback: Debt and the Shadow Side of Wealth) appears to me as good as any:

[This] scheme. . . boils down to the fact that some large financial institutions peddled mortgages to people who could not possibly pay the monthly rates and then put this snake-oil debt into cardboard boxes with impressive labels on them and sold them to institutions and hedge funds that thought they were worth something.

I’d only add one amendment, to recognize the last step in the agency problem: the products were sold by and to institutions whose managers believed that they could still pocket fees and bonuses without being liable to principals for gross malfeasance. As the former head of AIGFP enjoys his fortune, the joy in passing on the proverbial hot potato must daily bring a smile to his face.

As these black boxes continue to blow up, the WSJ Opinion page recently featured a proposal to open up some of them. Professors Viral Acharya and Robert Engle argue that “derivative trades should all be transparent,” in refreshingly plain English:

Most financial contracts are arrangements between two parties to deliver goods or cash in amounts and at times that depend upon uncertain future events. By their nature, they entail risk, but one kind of risk — “counterparty risk” — can be difficult to evaluate, because the information needed to evaluate it is generally not public. Put simply, a party to a financial contract might sign a second, similar financial contract with someone else — increasing the risk that it may be unable to meet its obligations on the first contract. So the actual risk on one deal depends on what other deals are being done. But in over-the-counter (OTC) markets — in which parties trade privately with each other rather than through a centralized exchange — it is not at all transparent what other deals are being done.

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Money and Politics, A Different Story

1176253_cut_expenses_3In Bowling Alone, Robert Putnam wrote about the decline in civic participation and civility in the last third of the twentieth century.  During that time, we joined and participated in fewer community organizations.  We gave less money away to charities.  We trusted our politicians less and in turn spent less time working on public issues.  In a hopeful note, Putnam highlighted exceptions to this civic disengagement trend, including the rise in youth volunteering, the growth of networked technologies, the vigorous growth of grassroots activity from evangelical conservatives, and the increase in self-help support groups.

The current election season marked a resurgence of political participation perhaps because we brought together some of the factors Putnam identified: youth involvement, the use of information technologies, and increased participation of religious groups.  Here comes another factor that may impact civic engagement: the recession.  As New York magazine’s Jennifer Senior notes, social psychologists have studied money’s effect on our brains.  It makes us self-centered and prone to burrow within ourselves at the expense of our wider communities.  Professor Kathleen Vohs (who has studied such consumer behavior) suggests that when people think about money that they’ve lost, they are more sensitive to physical pain and social rejection.  She offers that our recession mentality may make us “more cooperative.”

We have indeed seen a rise in volunteerism during the economic downturn.  An interesting trend to follow is whether we sustain our engagement in local communities in the way that participation enthusiasts hope and that the technical community has seen in the open source community.  Hopefully, we don’t have to keep losing money to remain committed to civic participation and civility.

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“The Play’s The Thing…”

Over at PrawfsBlawg, Jay Wexler made an intriguing post inviting people to compare movies to the books they were based on to see if there’s any truth to the generally accepted wisdom that “the book’s better than the movie”.  I was wondering if the same might ring true for movies based on plays or stage musicals?  The first thought that lept to mind was the academy award winning movie version of the musical “Chicago” which was definitely better than the stage version I saw – although I saw second string cast towards the end of a West End run in London, so can’t compare to the original Broadway version (or the more recent Broadway revival).  And I would have to say that the movie of “Grease” is better than the stage musical – will anyone ever forget Olivia Newton-John dressed up as a “bad girl” in tight black leather?  Any others?

(On a completely separate –  and less frivolous – note, I’d like to draw people’s attention to a post I made earlier today on Faculty Lounge inviting people to formally introduce incoming junior faculty at their schools and some of their recent scholarship.  Link is here.)

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The Privacy Implications of Wiki Government

120px-chiodini_wikiBeth Noveck has just published what looks to be a terrific book entitled Wiki Government.  (Thankfully, my Prime Amazon membership guarantees the book’s speedy delivery to my door).  Noveck is currently serving on the Obama Administration’s Technology, Innovation, and Reform Team where she will be working on ways to enhance public participation and transparency in government policymaking.  In a video produced by Government Technology, Noveck explains her overall strategy on the participatory democracy front: government needs to make better use of the public’s expertise using Web 2.0 technologies.  Rather than encouraging electronic town halls that might result in massive, unhelpful opinion dumps, agencies and the EOP should use blogs and wikis to recruit subject matter experts on specific issues.  The more focused the question, she explains, the better the public comments are likely to be.  She describes the current Peer to Patent program that recruits citizen input on patent applications as an example and it sounds like the White House blog is engaging in similar activity.

This all sounds very exciting.  We could of course imagine the mischief that interest groups could engage in at these sites, from sock puppetry to hired guns posing as neutral experts on various issues.  But no matter, Noveck’s work will produce important strides in participation, and I am really looking forward to seeing it unfold. 

My question is whether government is thinking about the privacy implications of all of this participation.  Will agency wikis and blogs require and retain personal information about participants?  One would imagine it would, and perhaps should, do so if it is going to weed out trickery and if it is going to create ties with citizen participants who government would like to recruit for help in the future.  Perhaps Noveck’s book will address these questions but I thought I would seek comments and insights from our readers in the meanwhile.

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