Protect IP (fka COICA)

There's a legislative effort underway in the US Congress to pass a bill that attempts to "counter the illegal online sale of counterfeit goods." In its earlier incarnation, it was called COICA. Now it is called Protect IP. Regardless of the name, I've never liked this legislation for a number of reasons.

First, it provides for the ability of law enforcement officials, and even rights holders via injunctive actions, to meddle with the core architecture of the Internet, via shutting down domain name services (DNS), requiring "servers of links" to remove links to purportedly offending services, and by cutting off advertising and payment services.

Second, it tips the delicate balance of power set up in the Digital Millenium Copyright Act (DMCA) in favor of rights holders and away from innovative new services. The DMCA works well and rights holders have been very successful getting infringing material taken down when they request it.

Entrepreneurs who build innovative new Internet services like Google, YouTube, Facebook, Twitter, etc will inevitably see rights holders come after them for aiding and abetting infringers. The purpose of services like Google, YouTube, Facebook, Twitter, etc is not to aid infringers, it is to allow the rapid and unfettered discovery of information throughout the world. Ultimately these services enable and enhance free speech and learning throughout the world. And a small byproduct of that is rights infringers will use these services too. Giving law enforcement officials and rights holders powerful new tools to go after important and innovative new services with little or no due process is unecessary and potentially very dangerous.

When asked about Protect IP recently, Eric Schmidt, Chairman of Google, said "I would be very, very careful if I were a government about arbitrarily [implementing] simple solutions to complex problems."

The entire set of issues surrounding copyright in an increasingly digital world are extremely complex. There are no simple solutions. Trying to recreate a world that has come and gone is not going to work. Technology is a genie that cannot be put back into a bottle. We are better served imagining, inventing, and financing new models and new services that will allow creative activities to thrive in the digital world. We are doing that with investments in new services like Kickstarter, Shapways, Etsy, and others. And others are doing the same with services like Netflix, Rdio, Spotify, Pandora and many more. There is a new model for distributing and profiting from copyrighted material and it is working. Pirates will always exist. But if rights holders make it easy to get their works in Internet native models, they can and will have bright futures. If they spend their money hiring lobbyists and buying off legislators, they will fail. But they might bring down some great new companies along the way. And that would be a shame.


Comments (Archived):

  1. William Mougayar

    With you on this. If they implement it, it could be subject to so many interpretations. The legislators have a different agenda than the rest if us who are creating and innovating.When something is new, it’s usually shapeless at the begining, so it’s difficult to box it in.

    1. JLM

      New frontiers are always the subject of “frontier justice” until the frontier moves further on.Almost nobody finds fault with the recent US efforts in putting down illegal gambling targeted on US citizens though based in Costa Rica or Antigua.Perhaps because these efforts are instigated by legal gambling interests in Las Vegas, Atlantic City and elsewhere.The recent controversies about Google’s mapping services and the collection of location data by Apple and others through smartphones are clear invasions of privacy and arguably equally troubling.Frontier justice is going to be quite arbitrary until the frontier moves on to another location.

      1. fredwilson

        great line JLM”new frontiers are always the subject of frontier justice”i think i’ll have to use that one 

  2. Sean Weinstock

    IP laws are tough. Part of the problem is that the government itself isn’t set up for dynamic change, so it doesn’t adjust well to a world that demands it. Power ends up aggregating, and change isnt welcomed very readily. Today, lots of long standing definitions are being challenged, and the people responsible to reinterpret don’t really have the right backgrounds. It’s only the new generation of lawyers that’s starting to get a good feel for the tech world, and it’s going to take a lot of time to change the surrounding philosophy and understanding of rights/property to accommodate.

    1. JLM

      Perhaps the reality is that the government is getting the shallow end of the legal gene pool while the “new generation of lawyers” invented sex.This is a very fundamental property issue and will ultimately decided on simple property concepts.If an artist writes a song and plays it and someone else misappropriates it and those involved know it when they distribute it — it is going to take some time but the artist’s rights to the value of his talent and work even when misappropriated will ultimately prevail.Even if the misappropriators did invent sex — which they failed to patent, unfortunately.And, why not?  There are really no new ideas at work here.

  3. Dave W Baldwin

    With you on this one.  Will send message to my reps. 

  4. Avi Deitcher

     Your last comment about “rights holders make it easy” aligns with your post a few weeks back about “the anatomy of a pirate” (or similar). Innovative people and businesses think in terms of making things easier, and being paid to do it. Politicians think in terms of image, and a big stick to “get the bad guys” gets more press coverage (and campaign dollars) than “we made it easier for lots of little and big people to interact profitably.” Incentives matter.

    1. Kasi Viswanathan Agilandam

      I don’t fully agree with you on “businesses thinking” … there is also a big lobby in killing  innovation by the businesses as well.Let us take a look around where ever we are … we will never see anything which is 20-years old (I am right now in my office and i don’t see anything which was there 20-years before except me and my colleagues 🙂 ) … then why there is 20-years validity for patents. Why give that long time for anyone to own a innovation … is 5-7 years not enough for anyone to make enough money/lead-the-market on what he/she innovated? No body wants to wait or appreciate that long and that leads all breaches of IP happening around the world.I strongly beleive the entire IP law has to be re-looked and changed according to the changing world we live in. 

      1. JLM

        Why should “property” of any form be available for free to another simply with the passage of time?If you build a house — real property — can your neighbor move in just because of the passage of time?The current legal situation provides for the following durations:Real property — foreverTrademark — 10 years but renewable indefinitelyCopyrights — life of the author plus 70 yearsPatent “invention” — 20 yearsPatent “process” — 14 yearsYou have to pay to maintain an invention patent during its life.I hardly see why the world should be able to simply appropriate your creative technical work in a manner that is less protective than your written word.Simply because you have developed a technical patentable process the neighbors should not be able to splash around in your pool with the passage of 14 years.Is it “property” or not?

        1. Avi Deitcher

          @JLM:twitter : Funny, I had a long debate with an academic 2 weeks ago over the difference between real property and IP.The Constitution clearly recognizes that IP is a legal fiction, that property protection is for physical items, real property. However, recognizing that the *benefits* of both are positive, the founders created a legal fiction that gave property protection to the ephemeral, the intellectual, in order to encourage people (and businesses) to innovate. IP is a legal fiction, but it is a necessary one. How many drugs or software would be developed without it?For real property, you *can* copy my house or desk: just look at it and make it on your own.

          1. JLM

            Corporations are also a legal fiction in that they stand before the bar as “people” when in fact they are only an entity invented by people but they are entitled to be treated as “people” in the courts.Why should intellectual property — which is physically documented and many times translated into a working mechanism or process — be any different?Just for grins — where in the Constitution does it deal w/ IP?  The reason I ask is that if my memory serves me well the English legal basis for copyrights is something called the British Statute of Anne from the early 1700s predating the Constitution.  I think it was in 1709 but I will not bet on it.This document presented the first rationale for the classification of written works as “property” to be held by and for the benefit of authors.It is difficult to see how this has been unfairly held for over 300 years and how the writer of software is very different from the writer of a novel.Just my take.

          2. Sean Weinstock

            With real property exists the idea of Adverse Possession.  Basically, if someone resides on someone else’s property for usually around 10 years (depending on state statute) and claims it for their own without the true owner saying anything, it becomes theirs.  There’s also the idea of inheritance taxes that play a role in the US, which grant the public some value of the assets of the deceased.  The idea that, over time, property should transition to society at large or the people who are actually using it for the benefit of society rather than being maintained in the hands of the person who has paid to build it has existed for a long period of time.  With IP, the idea for the 14 years actually goes against most of America’s fundamental capitalist ideals – the granting of a legally defensible monopoly for a period of time.Corporations don’t stand as people all the time.  In civil trials they do because corporations can pay damages.  In criminal trials, you don’t prosecute the corporation, you prosecute individuals (e.g. Enron).  IP can’t be treated as a person because, unlike a corporation, an idea or product does not act like a person or in representation of a person – “Guns don’t kill people. People kill people.”IP rights are part of a larger legal battle for innovation.  On the contracts side, you have things like non-compete agreements.  Whereas California does not uphold non-competes in tech employee contracts, New York does.  A lot of people credit that, to some degree, with catalyzing Silicon Valley’s growth as people left the major corporations to start innovative projects based on the work they were previously doing.  I think a major interesting development is the way in which the government treats investment in startups, especially in light of Sarbanes-Oxley.  Coupled with the ‘qualified investor’ definition, the current situation seemingly pools capital in the hands of the wealthy to an even greater degree than before rather than allowing for the distributive effects of the capital markets.

          3. Kyle Comeau

            If you can’t challenge a corporation to a duel, are they really a person?

          4. Avi Deitcher

             Fascinating discussion. Too busy to get more deeply involved.Article 1, Section 8, the powers of Congress:To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;If that ain’t IP, I don’t know what is.

          5. JLM

            @deitcher:disqus Further to your Constitutional reference, I am ashamed to say that I was baiting you and I apologize for doing so but you did rise to the bait and win the award for legal research.In fact, the Founding Fathers contemplated and enacted just the protections that we are debating today.  And enshrined them in the US Constitution.In fact, this issue flows from the 1709 Statute of Anne which was the intellectual and legal basis for such a consideration.  It was already settled as a matter of English law when the Colonies were well behaved and squarely under the thumb of the King.Proving once again that this generation did not invent intellectual property nor sex contrary to their bleatings on the subject.The protection of intellectual property in the US is as soundly grounded in the law as any other right based upon the literal utterances of the Founding Fathers through the megaphone of the Constitution.To take it just one step further, it is also solely for the benefit of the originators of the intellectual property not for some greater good of some mythical society or social interest.You have done well.  Thank you and sorry for the gamesmanship.

          6. Avi Deitcher

            No worries. I always enjoy a good intellectual discussion, especially when the topics matter.

          7. joeagliozzo

            Are you kidding me with this? Statute of Anne in 1709?  JLM’s areas of expertise – military history  – checkmilitary strategy – checkconstitutional law – checkpre-revolutionary English common law – checkcorporate finance – checkworld history – checkus history – checkaccounting – checkoperations – checkaviation (pilot) – checkBBQ – checkJLM – you are amazing and an inspiration!

        2. Kasi Viswanathan Agilandam

          Property of any form should be available for free to humanity over passage of time depending on the benefit and availability and scarcity of the same. I believe in Israel one can only own a property for 49/98 years. That i think is the best way … one should not own permanently a property.As some of the yogis put it “Even the body (property) we live in is not permanent… it has a time :-).”Yes patent and thereof are properties of the intellectual world. Intellect is supposed to be distributed to benefit betterment of the world. It is good to give some ownership of limited time to encourage innovators (and the effort and money he/she spent on it). But should be available for free over passage of time.Well that is my humble opinion… but may not be practical in many sense.One of the primary requirement for a patent is “it should help humanity for a betterment”.

          1. JLM

            Israeli property laws result from the fact that Israel received all government land when the British Mandate left town and Israel has appropriated all abandoned Arab lands.The State of Israel made the decision to “lease” all government owned land rather than selling it.Said another way — Israel retained the freehold estate and sold a leasehold estate.In addition, the JNF (Jewish National Fund) acquired a lot of land including some it acquired from the government.  The JNF made the decision to lease its land also in order to ensure that it was made available to Jewish refugees.The JNF also “created” land by reclaiming otherwise barren land through irrigation and other reclamation strategies.About 80% of the land in Israel is owned by the government and JNF and is leased under longterm leases to Jewish settlers and  citizens.The time periods you refer to are the land lease terms which are available.The remaining freehold estate land is owned by private citizens in much the same manner as in any western country.It might also be interesting to know that Prince Charles in his capacity as the Prince of Wales owns about half of London and that if you “own” a flat in London it is likely on land leased from Prince Charlie for up to 100 years.

          2. Kasi Viswanathan Agilandam

            Anything owned permenantly or longer than its real means (tech is changing every 4-5 years now) will lead to unnovation (word not coined by me).My grandparents owned lots-and-lot of land almost the entire village … that made the next and grandchildren unnovative. Now all they own is their houses and small irrigatable land to survive. 

          3. Me

            “appropriated all abandoned Arab lands” – lol. I was with you till you revised history (and are blatantly dishonest). If you are going to go political here, then be fair: large chunks of the land was stolen.There are large chunks of “abandoned” land in Alaska – maybe Canada can just appropriate it!! 😉

          4. JLM

            @ me below —I did not intend to inject politics into the discussion.I have no problem w/ “stolen” as the descriptor for the land.There is plenty of wickedness afoot in the Mid East.The King Ranch in Texas was assembled in a similar manner.  The deeds were negotiated w/ Captain King at the shooting end of a pistol or the noose of a rope.

          5. markslater

            Its not Charles JLM.  

          6. markslater

            @JLM below:@JLM:disqus abandoned lands? are you serious? you and i both know it was stolen. 

        3. fredwilson

          should a patent troll be able to buy someone else’s supposed invention (when in most cases there is prior art and it wasn’t their invention in the least) and then attack a small innovative company and force it out of business? that happened to one of our portfolio companies last year. it’s a tax on innovation and we need to eliminate this kind of thing from happening

          1. JLM

            Patent trolls need to be eliminated on the battlefield — in the Courts.This is why tort reform is so important — make the loser pay everybody’s legal fees and we will see much less of this. 

          2. JamesHRH

            We have costs in Canada ( I am a dormant member of the Bar ) and it is clearly a major reason that Canada is 90% less litigious than the US.

          3. Doug Kersten

             From what I see patent trolls are not being eliminated in the courts.  Especially in East Texas.

          4. Avi Deitcher

             Agreed. This, however, is part of the nature of intellectual property. With real property, there is little question of “prior art” or anything ephemeral: i have my house, you have yours. They may look identical, but clearly they are two separate things. With IP, I have my invention (or, in the case you are likely raising, software as a business process), you have yours. They are separate things, but with IP, you are claiming not the right to *take* my thing (which is what real property protects) but to even *copy* my thing. The analogy would be if I had the right to force you to tear down your house because it looks too much like mine.Nonetheless, we clearly like the idea of IP, and exclusive rights to Inventors and Authors, and so we get into the weeds of who really is the first owner, and thus has the right to protect another?Fred, would you complain if your portfolio company owned the patent, some competitor came along, say funded by KPCB or Benchmark or Sequoia, and your portfolio company forced them out of business for violating your company’s patents?For the record, I do believe business process patents are too broad and not the intent of the Founders, just pointing out that it is a little more complex.

          5. Prokofy

            I don’t think you should extrapolate to the whole industry and to policy just from your own personal anecdotal experiences.

          6. fredwilson

            i am not doing thati’ve been in this business for a long time and i have a pretty good feelingfor how others feel

        4. raycote

          There is a trade off to be made between individual IP-property-rights and the benefits of collective social-capital.The most productive time based tipping point is certainly a complex call that deserves a lot more serious social debate.

          1. JLM

            “Collective social-capital”, whatever the hell that is BTW, does not have 300 years of case law behind it.The Constitution does not provide an amnesty for youthful exuberance and impatience or avariciousness. 

          2. raycote

            SOCIAL CAPITALThe aggregate economic productive value accruing to society as a whole when ideas, tools and technique are disseminated for competitive recombinant reuse.********************************This social-networking, social-capital, value-equations has been in place and effectively operating on the ground with profoundly visceral impact on social productivity for much longer than the 300 years of local US case law.Historically the creative forces underlying this IP-network-effect ( has always managed to quickly wipe the floor with any local IP case law.This social-capital or IP-network-effect is the mother of all network-effects because it rides in on the universal cognitive coattails of human imagination and creativity.China’s recombinant application of everyone else’s IP is a good contemporary example of the viscerally unstoppable tour de force behind social-capital and it’s network effects.Sure China does lip service to IP protection but they will drag their feet until it is all over for their patent encumbered US competitors. They are very aware of the strategic advantage of unencumbered IP integration.Sure that’s not fair but that is the larger global reality.US special interests have pushed to extend IP and copyright law to an absurd point where it has flipped from a tool to an impediment that is now limiting US competitiveness within the context of our contemporary international environment.The history of the world is the history of an ongoing food fight about where to set that tipping point between the interests of the individual and the interests of the group. That tipping point must be regularly updated to keep in lockstep with contemporary technical and social realities.And what is our contemporary reality?A global spaceship running short on supplies, running a hyperactively interconnected an interdependent global network based economy. An economy where social-capital, the ability to socially-network our rapid reuse of IP tools and techniques will collective define our success or failure at surviving as a species.The network-effect is the very substrate of our new economic reality. It is quickly becoming the penny in the currency of all human affairs. I grew up in the age of the rugged individualist. I liked that operational metaphor. It made me feel safe and in control but alas God may still be alive but the poor old rugged individualist is at best on life support.As much as I exalt the American constitution and America’s evolution of the rule of law I sense something has gone seriously wrong over the last few decades. “I sense a disturbance in the force Luke”. There seems to be no functional democratic mechanisms left in place to effectively update that, all important, individual interests vs group interests tipping point.America seems awash in deluded oligarchs and plutocrats determined to saddle America with an arcane, antiquated, individual interests vs group interests tipping point. One that is, in the long run, even counterproductive to their own oligarchic special interest.This alone seems like a good enough reason to start moving everything off sure!

          3. JLM

            @raycote:disqus What a fabulous rant and what power and passion you inject into your writing.  Bravo.Would that any of it were based in reality or that it were even remotely anchored in reality.To suggest that basic property rights are going to be swept away simply because they are inconvenient to a group of folks who want to purloin them under the guise of some greater social good is to disregard the harsh reality that we are simply changing seats at the table trading the Sumner Redstones of the old economy for the Larry Ellisons of the new economy.Oligarchs all.  Meet the new boss…..To suggest that China is anything other than our most obvious military and economic rival and a thug in the marketplace is to suggest that Hitler was just an innocent community organizer set on only upgrading the neighborhood by a bit of social engineering.The Internet may break down all boundaries between nations but it does not change the basic equation of sovereignty and physical security — witness Bibi Netanahu’s thumb in President Obama’s eye while sitting on the President’s divan.All of this noble social network is simply a framework for harnessing and re-harnessing the fundamental entrepreneurial drive which has made America great — young folks want to go get their piece of the American dream and want to “monetize, monetize, monetize” all that social nobility.Warren Buffet — who admittedly knows next to nothing about technology — continues to be the world’s most prolific and successful investor by buying basic industries which are essential to the real lives that real people live.My goodness, he bought a freakin’ railroad! How very John D Rockefeller can a guy get?When LNKD trades at a 600 forward leaning multiple, the world IS nuts.Having said that, again I dig your enthusiasm and swagger — if only it were true.The more things change, the more things stay the same.

          4. fredwilson

            markets come and gogreat businesses don’t

          5. raycote

            @JMLSorry!I seem to have pressed some sort of left vs right polemic hot bottom or something?I was simply zooming out to visualize the historic middle ground.IP rights are somewhat different than physical property rights. Thats why they are so much harder to control.I in no way suggested that basic property rights should be swept away. I simple point out that IP rights need to pass into the public domain in a reasonable short span of time in order to foster further technical progress and innovation.That is what social-capital is. The accumulation of human knowledge and techniques that are freely available to be reused in the synthesis of new technologies. Like the wheel, the lever, the gear and RF transmissions.To deny the existence and value of social-capital is to deny the aggregate value of all previous human knowledge available for our general reuse without tariff.A shot IP patent give the first mover some advantage without holding ideas hostage from reuse within the larger community.I did not suggest China was exemplary in regard to their IP behaviors. I simply point out that their behavior is representative of the historical reality. That IP has always quickly escaped into the larger community because ideas like genetics or hard to own.New ideas are born when an environment primed with the conceptual prerequisites(social-capital) meets a new social or technical imperative. This means that within any given intellectual/technical/social environment most IP discoveries would have been discovered by someone else in short order because the larger community is mutually immersed in those same prerequisite environmental conditions and demands. That is why IP patents should be kept short so that the first group to hit that environmentally obvious new idea game buzzer does not get to stall our collective innovative tour de force. “Oligarchs all.  Meet the new boss…..”Yes agreed!The history of man is the history or top down Oligarchic control structures and that has probably been a necessary reality. But we are not at the end of history regarding possible social geometries. We are somewhere near the beginning. More organic, networked, social structures are crystalizing right before our eyes. Distributed, networked, social control topographies are an unstoppable virus that will inevitably inhabit the body politic sooner than later.——————I quote your assertion!”Would that any of it were based in reality or that it were even remotely anchored in reality.”You may be correct but I remind you!——————-“Knowledge is a ship we must constantly rebuild while at sea”- Otto NeurathKeep your window of doubt wide open, even your most sacrosanct conclusions should never be elevated to a status level above “working conclusions”. That window of doubt is your portal to freedom from self delusion. Enlist and develop your “third eye” to police that window as if your life depended on it.Cheers!

          6. Prokofy

            “Social capital” is a term that socialists use when they want to sound like capitalists and are collectivizing *your* intellectual property LOL. Neat trick!

          7. raycote

            The Open ConspiracyH. G. Wells – 1933“We know nowadays that the nineteenth century expended a great wealth of intelligence upon a barren controversy between Individualism and Socialism. They were treated as mutually exclusive alternatives instead of being questions of degree. Human society has been, is, and always must be an intricate system of adjustments between unconditional liberty and the disciplines and subordinations of co-operative enterprise.”

          8. raycote

            Capital of all kinds owned by an individual= GOODCapital of all kinds owned by large groups of individual shareholders= GOODCapital of any kind owned by large groups of individual citizens= INVALID

      2. Avi Deitcher

         @Kasi: I agree with you, which is why I said, “innovative people and businesses”; the adjective “innovative” applies to both. And, yes, IP law does need to change. But how?

        1. Kasi Viswanathan Agilandam

          How … is the question answerable by the politicians/biggies.Take a look at trademark … it is just a mark … give some life to it … let it live happily, enjoy and die … no permanency. Permanency kills innovation. Take Pepsi and Coke … Innovation stops there when they become dominant for ever. Just with the name they will make sure no other products live or born and they also will become the sludgiest non-innovative idiots. Does it serve the purpose.

          1. JLM

            Odd example in Coke — the real thing.  New Coke sucked.  Customers did not want it.  They wanted Coke — the real thing.There are instances in which customers do not require any innovation.  There are still a billion or so Chinaman who need a Coke. 

  5. SD

    I find that the tech community operates on a double standard with IP. “content” IP (eg music, video, text, etc) is treated as collateral damage for the sake of innovation, but “technology” IP (eg: chip patents, process patents, software patents, etc.) are treated as sacrosanct. Is there a difference?

    1. ShanaC

      because we changed how content IP is defined.  Some days I think less of IP’ing content would probably strengthen Ip for content when it is available to the item 

    2. fredwilson

      there may be a double standard in parts of the tech business but not here at AVC…

  6. baba12

     It all comes down to money. There will always be people who will find ways to circumvent laws.Also most of the new tech related laws are funded by the established companies that have and feel threatened by what is happening in their industries.For so long  they have been gatekeepers and now they find that they are being challenged.Such laws are lobbied by those who feel threatened by the new products/services that  undermine their hegemony and they wrap themselves around laws instead of investing in innovation.When you reach a critical size in most industries, the marginal cost to hold onto one’s fiefdom is very low until someone comes along and threatens the entire Modus operandi. VC’s like Mr.Wilson who fund those innovative products/services along with a lot os early adopters of these products/services  stand to loose out and if the Mr.Wilson’s of the world band together maybe they can lobby to dilute this law or not let it pass.For the proletariat though there will always be someone around the corner who will get them what they need at  price they can pay and circumvent these laws.It always seems like the laws are meant for the middle, those who are rich buy their way out and those who are poor tend to circumvent the laws. It is the middle that gets screwed for playing by the rules always.I’d love to see other VC bloggers like Mr.Wilson band together around this issue and have it stopped.

  7. ShanaC

     DMCA is doing a terrible job with IP….And what should the balance of rights holders versus innovator be?

    1. baba12

      The balance has to be fair, as long as one side sees it to be unfair they will find ways to either pilfer or put higher walls. It all boils down to what is fair and what is the balance.When gatekeepers are involved ( add no value) you tend to see higher walls erected to pay for the gatekeepers.

      1. ShanaC

        Well, we’re still not defining what is fair in this situation.And we do have way too much pilfering of content – so maybe we need thegatekeepers….

  8. Kasi Viswanathan Agilandam

    IP is an oxymoron. It never protects innovation it kills innovation in many areas.

    1. Lucian Armasu

       If anything copyright has stifled innovation over the years. This video shows very well how lack of copyright can foster innovation tremendously:…Fred, off-topic, but I’d like to see a post from you about Bitcoin as well. I know you believe virtual currencies are going to change the world, or at least that’s what you said in a speech at Google a few years ago.

    2. Essay help

       I have new info for myself from your comment!

  9. JLM

    Without taking sides on this matter, if one views the Internet as being one part “real estate” and one part “old media to new media transformation” the thinking behind this bill — perhaps more appropriately the thinking behind this entire subject — is akin to Property Code and libel/defamation laws in which a landlord or a publisher is responsible for the content of its buildings and its printed medium.Under the Property Code (State law), a landlord is responsible for the use of his property by his tenants.  The classic “nuisance” prohibitions are used to get rid of illegal gambling, prostitution, drugs, gangs and other public nuisances.In this real estate view of things, the landlord has control over to whom he leases his property through the mechanism of the lease which must state a “use” and which restricts certain behavior.  If nothing else, it mandates “lawful” uses only.The enforcement mechanism in a lease is a notification of default, an opportunity to cure the default and ultimately eviction with the payment of damages.This concept is one of the most completely “settled” areas of law.Typically any citizen has “standing” to bring the nuisance action under the Property Code.In a similar manner, an old economy media distributor (newspaper, magazine, book publishers) has the obligation to ensure that it does not allow content or advertising which is libelous or defamatory or untrue or plagiarized or even inconsistent with the culture of its audience.In many ways the medium itself provides a personal imprimatur as to the truthfulness of its content.  NYT v The National Inquirer — the Inquirer being the more trustworthy perhaps?Let me also just mumble First Amendment implications, mmmmmmm.The wizardry of the Internet is its free wheeling democracy — anything, any place, anytime, any where — and its abandonment of almost all restrictions to distribution.  No boundaries.The Internet is a lawless new frontier not in the sense that it has no desire to behave well but in the sense that it has not yet elected its Sheriff and the Sheriff has not yet taken control.

    1. Mark Essel

      It’s worth thinking about what type of leader or organization would best serve the internet. It’s future shape and purpose is determined by the choices we make today.There are councils which regulate name spaces ICANN and web standards. I guess they’re the closest thing we have to a sheriff.

      1. JLM

        I have come to think that the Internet is a new world and the Googles of this new world are the new nations.I think the new world is going to have to govern itself.I would like to be the Secretary of Offense for one of the nations.

        1. raycote

          I’m not yet ready to swear allegiance to Google or Facebook. I would first have to know what type of social security and healthcare they would be offering 😉

          1. JLM

            I would be willing to bet it is better than what WE have now, no?Most folks on this blog will never see a penny of SS and will pay for their own healthcare for their entire lives. 

          2. JamesHRH

            Post IPO, Fb SS will be better funded!

          3. Dave W Baldwin

            Open your eyes… @JLM:disqus is not saying you have to swear to Google/Fb/Twit, for the new nations have not been named yet… 

          4. raycote

            I think you may have missed the;-)part of my commentcheers!

          5. Dave W Baldwin

            You have to knock me in the head sometimes…. ;D

    2. Guest

      I am not familiar enough nor smart enough in the DMCA matter to have an informed opinion. What personal opinions I do have conflict at times. I do not know if I can take sides either; I am watching from the sidelines today.

    3. fredwilson

      property is a more complex issue when you move into the digital realmshould amazon “own” the idea of a one click to buy button on a web site?should facebook “own” the idea of a newsfeed in a social network?who owns the remix of a michael jackson song with a bob marley song? 

      1. JLM

        The more I think about it, the more I like the property analogy.  Perhaps we are not being rigorous intellectually in its application.I doubt that anyone would disagree that it would be wrong to use an architect’s plans more than once without paying additional compensation for the architect’s creative work — his IP.But by the same token, if his specifications included GE appliances, Otis Elevators or Kohler plumbing fixtures — vendor products — those constituent elements are not prohibited.Perhaps in that manner some of the constituent products in the digital realm should be viewed as simple vendor products available to all while the overall design of a system employing them should be otherwise protected.

        1. JamesHRH

          SW used to be sold as licenses – why not BizProcess patents?Clearly, ‘One Click’ rocks. If you could license the service or a BizProcess right from Amazon, that seems fair. It has real value & they deserve to derive a return from being innovative.The real key is restraint of innovation. To that issue, what is unfair is Amazon keeping that innovation from the market. If they do not make the innovation readily available, then their patent should be unenforceable.Mercedes built a big part of their brand on NOT enforcing patents they held for safety innovations. Leading & sharing should be rewarded. Leading & hoarding should not.

          1. JLM

            What a patent holder decides to do with his patent should be his decision but I whole heartedly support licensing patents as a means of deriving revenue.14 years is not really very long in the greater scheme of things.The alternatives are not simply leading & sharing v leading & hoarding — the patent holder can deploy the patent in his business as well. 

    4. raycote

      In other words all the usual, well financed, incumbent corporate/government power brokers have not yet succeeded in locking down our new network based business platform.Would that status quo outcome really be very desirable for a modern network based economy?As for your “Property Code” analogy I see your point. Yet the organic complexity of internet stakeholders dynamics would seem to over stretch the comparison.

      1. JLM

        The application of principles is exactly what makes complex issues simple.It removes the complexity of “situational” ethics and principles from the mix.Should the US be allowed to kill Osama bin Laden?As an enemy combatant and terrorist — hell, yes.  Simple principle.  He IS an enemy combatant and a murderer.As a criminal — hmmm?  Well, maybe not.  But, wait, he is not a criminal, he is an enemy combatant, a terrorist.You have to have principles to guide decisions about otherwise complex issues and to reduce them to simpler matters.  Principles are very important.

        1. JamesHRH

          Principles do make the complex simple – if you are looking to take action!

  10. Brad

    Great post Fred. I personally believe that there needs to be some sort of watchdog looking out for this, however I am not sure where it stops. Do you hold ISP’s accountable or even the owners of the wire’s that the communication runs across (comcast, etc.)?Seems typical of our government, write a ridiculous law that confounds the typical everyday users to satisfy a small constituency that is usually big money.

  11. James Dier

    Fred,You are out to lunch and misleading. Google doesn’t want this because it makes tons of money off of piracy — it’s a fact Google will not dispute.The tide is turning back to artists, film makers, etc. You can’t stop it.Tech companies had their free ride off of exploiting artists…and it’s coming to an end. 

    1. S. Pandya

      Content owners are already incredibly well protected in the US. If there is a Youtube video, a simple email or Cease-and-Desist is enough to have the site shut it down.Take your battle to other countries where IP is genuinely an issue rather than strangling the US market further.

    2. fredwilson

      i am not trying to stop the tide from turning backit’s not turning back and never willinstead i am financing new ways for artists, film makers, etc to make even more money in the new modelif you want to keep your head in the sand and ignore the new reality, do so at your own peril

      1. James Dier

        Fred,Show me the economics of a new model making more money for artists?You are full of shit and you know it. The only innovation comes from artists, not corporations. The last several years has been nothing but a redistribution of wealth from artists…You want the dire economic numbers for artists, I can provide them. 

  12. S. Pandya

    This is a really hard problem since the entire playing field is gray. In the US, services like Google and Facebook facilitate knowledge discovery, sharing, collaboration, and innovation. In China, people download MP3s off of Google…I honestly think the issue isn’t with IP, but with the underlying culture. In the US, IP has actually become too restrictive. Whereas in other parts of the world, no one really cares about IP infringement unless the infringer is a big-value (read: large, wealthy corporation) target.Part of the problem with the underlying culture is the ease of litigation. In the US, armies of no-fee contingency attorneys wait for the slightest scent of blood in the ocean. Courts are efficient, and the incentive is to litigate if you believe your rights have been infringed. Ironically, in countries such as India and China, a slow and overburdened judicial system actually forces individuals to prefer options other than litigation.

    1. SD

      Given that the tech industry has won most of these fights (and has not had to pay meaningful damages), I do not think you are seeing many lawyers working on contingency.

  13. Dave W Baldwin

    In reading comments it looks like we do have a problem due to multiple sides of interest.  Regarding the statements of “ok, so you tech want this/that, yet you treat what is written as collateral?”  If we look at John Cage’s 4’33”, we have a piano piece that will be different every time performed due to its purpose is listening to the sounds of the random around the audience… yet if I were to write 4’22” or 5’12”, I would be slapped due to the ‘silence’ of 4’33” being established.  Controversial, but brilliant.Protection of ideas is limited and those that are good with ideas should be able to work on the next one if the current is ripped off and/or just completed by someone else.In the realm of posting random statements by users who post a link to somewhere else, the liability should work backwards where if it is copyrighted not to be shared (free), liable to party who puts it there moving over to the caught party doing the sharing (probably out of ignorance). If the posting companies simply remove when asked due to intended privacy, we cure a lot of the issue politicians want to play with.  Just remember that politicians are in bed with money (campaign cash) along with lawyers…..  

  14. paramendra

    There are people who want to shut off the Internet and go back to cable TV. 

  15. Ronp

    I’m not sure I follow your comment on  “little or no due process” – injunctive relief from the courts will still require due process under FRCP and will still require that the party seeking injunctive relief still need to meet the threshold requirements.

  16. shearic

    I think “arbitrarily implementing simple solutions to complex problems” sums up pretty well what government does in general.

    1. raycote

      Was that a veiled threat to move servers off sure if thing get to silly?

  17. Anthony Ortenzi

    I think that the real concern is the complete lack of transparency that we expect in the enforcement process.  If done completely-in-the-open, rather than “black helicopters”-style, we’d see how the sausage is made and the public could make an informed decision.

  18. Doug Kersten

    I agree that it is overly simplistic and broad in the powers that it grants.  The key issue I found when reading it is that it is very easy to shut down access but there is no corresponding rights or abilities granted to the defendant (including DNS provider, payments provider, etc.) in order to challenge the shut downs prior to them occurring!  The plaintiff (Government or RIGHTS HOLDER) can get a court order and you must shut down.  There is no involvement of the defendant required to determine whether the shutdown is justified.  The provider must shut down the access.  As everyone knows, this can easily destroy a business that is not illegally infringing!   This law is definitely also designed for the drug industry, with specific mentions related to them, which explains many of its supporters.

    1. JLM

      No doubt that this legislation is being pushed by folks who are protecting their entrenched interests but the notion that one can obtain a court order easily is not accurate.To obtain a court order a plaintiff would have to have some business properly before the court — like a lawsuit — through which to obtain the court order.  Courts do not issue orders just by asking for them.  You have to have a vehicle or legal proceeding through which to obtain the court order.The process would require a lawsuit and a request for a temporary restraining order, a temporary injuction and a permanent injunction.The second you get beyond that TRO, you are talking about an evidentiary hearing at which substantial evidence will have to be presented and a defendant will then have an opportunity to mount a defense.Thereafter there will be appeals and it is not unlikely that the offensive behavior will be continued until the last appeal has been decided.Like many laws, the real test will be in the courts.  How does the case law develop?In addition at the very highest levels there will be those who simply attack the law itself not unlike the challenges made to Obamacare.

      1. Doug Kersten

        Perhaps you are a lawyer, I am not.  But I did read the bill and it seems to state that when a court order is presented, it must be adhered to or there will be direct consequences.  The bill says that only specific information must be presented in order for a judge to be able to issue a court order.  However, like I said before, I am not a lawyer, or a judge for that matter.  If what you have stated is correct then I am not sure that I understand Fred’s argument.  Based on your representation of the process both sides are able to present their case.  Although Fred also stated that rights holders would be able to go after services with little or no due process.    I do understand that it is probably a redundant law and I am one for limiting the number of laws as a general principle. I also do not see how removing a link from a search engine, a DNS entry from a server, or the ability to remove advertising/payment capabilities would negatively impact the core architecture of the Internet.  This happens all of the time.I am much more inclined to say the issue is determing what a counterieit good is but the existing lawsalready seem to address that issue.Ultimately, I think the real argument must be that it makes it much, much easier for law enforcement and rights holders to sue companies.  I think everyone can agree that the amount of suing going on isalready out of control.

        1. JLM

          A court order MUST be obeyed under pain of sanctions.The trick is getting the court order and what I have previously expressed is the only pathway to get such an order.They are not handing out court orders in CrackerJack boxes.  You have to have a legal vehicle, seek a TRO, prevail and get a temporary injunction and then get a permanent injunction.At the end of the day, a permanent injunction is the court order to which they refer.The evidentiary hearing necessary to get a temporary injunction is the equivalent of a trial but with a very short discovery period.Anybody with a $25 filing fee can sue anyone they want which as a CEO you well know.We will continue to have such abuses until we have a universal “loser pays” system.  Tort reform is a huge issue for business which is paying all of the legal fees.”Law enforcement” will never really be enthusiastic about this subject.  Ever had an embezzler?  Law enforcement doesn’t give a hoot particularly if you have a fidelity bond.They deal with murders, rapes, kidnappings, assaults, burglaries and only then do they care about white collar crime.  As such it should be.

          1. Doug Kersten

             I don’t know that I agree with this statement, “”Law enforcement” will never really be enthusiastic about this subject.”  The FBI seems pretty dedicated to it –…Sure, anyone can sue anyone else pretty easily already.  So what does this proposed law give that is actually new and would require such a law.  At this point the only thing that I can see is the ability to remove a link from a search engine, a DNS entry from a server, or the ability toremove advertising/payment capabilities.  I can see where such a law could be easily abused and the fact that a lot of money is involved means that plaintiffs, law enforcement, and the courts will be inclined to respond.  It is the American way.

          2. JLM

            The link clearly shows the FBI’s policy position however the actual process of bringing the FBI into any criminal matter which did not arise w/ them is quite complex.I also note that the specific examples notes on the FBI website — eg counterfeit aircraft parts — are more physical than intellectual.The FBI has to work w/ the US Attorney for that District even when the issue bubbles upward from local law enforcement.The US Attorney must be petitioned to “open a file” and to commit funds to that file.  This is a classic competition for capital.If the FBI can convince a US Attorney to open a file, then the FBI has to fund its own investigation.  Again a resource allocation issue.US Attorneys are political appointees and they understandably often have a political agenda.  Not a criticism, mind you, just an observation.This is why many Federal environmental cases originate in certain jurisdictions wherein the local US Attorney champions that cause.I suspect that IP crimes will ultimately be very much like immigration issues — the States in which these crimes are most likely to be committed will have the majority of the potential cases and the law will be made in those jurisdictions.  Not unlike cattle rustling cases are few and far between in the District of Manhattan but securities and organized crime cases are abundant.It is fair to say that much of recent criminal law is simply a “point of emphasis”.  Hate crimes being the most recent example but securities law also being in the hopper.I do not have a strong position on this law other than to suggest that the property analogy is a useful frame of reference.  In particular the implications of the Property Code.I do not see the local Sheriff getting too excited about IP when he has a boat load of murder, drugs, gangs and rapes to deal with.

      2. fredwilson

        when i met with Senator Schumer to express my great displeasure of his co-sponsoring this bill, he asked me what they should fix. i suggested they insert the notion of due process throughout the bill 

        1. Doug Kersten

           I was actually very surprised to see Senator Schumer’s name there also.  My impression is that he is a fair and thoughtful senator based on his past actions.  Hopefully he will follow through.

  19. kidmercury

     legislative problem does not get solved until it is dealt with in its entirety. ignorance is futile. 9/11 was an inside job,kid mercury

    1. raycote

      “ignorance is futile”I love that slogan. It puts a smile on my face every time!

  20. Michael F. Martin

     Fred, I appreciate the sentiment, but it would be helpful if you could be more specific. What is the harm that you see that might be caused — say, to a hypothetical startup that you might invest in next year?I wish I could agree about the DMCA. I feel like it’s increased the uncertainty and legal expenses for both rights holders and accused infringers.

    1. fredwilson

      if this bill were law back when viacom went after youtube, they would have a much easier time shutting youtube down. i think that would have been very bad 

  21. William Carleton

    There is a vigilante safe harbor provision in the bill that may encourage bigger entrenched players to bypass the law and the courts altogether.It reads in part as follows:”SEC. 5. VOLUNTARY ACTION AGAINST WEBSITES STEALING AMERICAN INTELLECTUAL PROPERTY”No financial transaction provider or Internet advertising service shall be liable for damages to any person for voluntarily taking any action described in section 3(d) or 4(d) with regard to an Internet site if the entity acting in good faith and based on credible evidence has a reasonable belief that the Internet site is an Internet site dedicated to infringing activities.”This provision is IN ADDITION to a safe harbor that says businesses complying with a court order under the law would be exempt from the things they do (shutting someone down, cutting off payments, etc.) to comply with the order.  In effect, this provision seems to contemplate that Hollywood, big banks, big advertisers, can do their own policing and not be liable for shutting down sites or people who they do not like.Right now, big businesses worried about piracy have to go through the legal system, either by getting a governmental authority to take action, or by bringing a suit in the courts. As currently written, this bill could turn that process on its head.  If a bank, say, decides with no notice and no process to cut you off for alleged piracy, you may have to go sue them and prove that they did not act in good faith. This all appears designed to protect yesterday’s Hollywood.

    1. Michael F. Martin

      This is very helpful. That is indeed quite incompatible with the framework setup under the DMCA.

      1. Michael F. Martin

         Err.. William’s explanation is helpful. The proposed legislation — not so much.

      2. William Carleton

        Good point about how counter it is to the DMCA. At the risk of over-simplifying, the DMCA implements a policy choice to give the benefit of the doubt to the little person, the innovator, the upstart. It does this by putting the onus on the person alleging infringement to object, after the fact. But this new bill upends that policy and gives the benefit of the doubt to whoever holds the keys to the infrastructure: if you offend them, they can shut you down in the middle of the night and take comfort in knowing that they have a legal safe harbor.

        1. Dave W Baldwin

          So, in crafting a short message to send to your Senators and Reps, it is probably good to use your subject above as the big concern?Excuse my long one earlier, it was pointed toward the social graphs ending up with links from media. 

          1. William Carleton

            I’m not sure. I think Fred hits the central issues and concerns head on, and it may be best to confront those directly. Part of the reason I say that is, the response could be, “okay, we’ll get rid of the vigilante / lawless provision and keep the rest.” But the rest is highly problematic. The whole thing is misguided.I key on the vigilante provision for a couple reasons: (1) I think cynical provisions like that, even if they don’t survive in a final bill, signal what interests really are being served by the proposal; and (2) there’s a trending corporatism in how legislation is made that is very troubling for our democracy. 

  22. Justaguy

    Once you get below the Googles and Microsofts of the world, the rest of the technical community has no interest of voice on the Hill.  Its like engineers think its beneath them, and this attitude percolates through the whole industry.  Microsoft was like this for the first 20 years of its existence, till they realized the problems it was causing them.  VCs protect their interests  to some extent through lobbying organizations built around the private equity industry, but the rest of us…we just grouse on the internet.We need some sort of a group to focus all this energy, like a PAC or something.  A HackPAC. What we do is important: it adds jobs, it makes other industries more efficient, but there’s no one at the table across from the rights holders, the telecoms firms, the national security interests, etc. saying, “Well, yeah, that guy has a point, but on the other hand, if we do what he wants, we’ll have no more Googles, no more Apples, etc…”HackPAC! I came up with the name.  Everyone else can do all the real work!

    1. JLM

      Your observation about MSFT is brilliant.MSFT has no lobbyists and they are in the government Justice Department meat grinder on anti-trust charges which could have dramatically impacted their business.Front page stuff and the piling on begins.They wise up and hire a battalion of lobbyists and suddenly all anti-trust issues evaporate and they have smooth sailing.It is always better to spend your money on lobbyists rather than defense lawyers.Note that absolutely nothing really changed about their behavior.  Just where they spent their money.

  23. David Shellabarger

    IP can not be viewed as physical property because it is infinitely copyable. I think we are seeing a cultural shift in what we value digital goods. We used to value digital goods the same way as physical goods; the product had value because it was scares. There are only so many pieces of land in America so each one has value. There are is only one Mono Lisa, so it has value. The fewer there are, the less the supply, the more value it has.But digital goods are different. They are infinitely copyable for free and therefore the value drops substantially. Not only are they easily copyable, but the internet vastly increase access to IP. The music labels, TV stations and newspapers used to dictate all the media content that was mass market, but that’s not the case anymore. The gatekeepers use to create artificial scarcity, but since the internet levels the playing field, there is an abundance of online music, video and news.All of these industries freaking out due to the huge influx of supply without an equal increase in demand.Piracy is not the problem. The business model of artificial scarcity is the problem.

    1. JLM

      How do you account for the notion that a copyright is valid for the life of the author plus 70 years?A novel or a film can also be copied in great numbers and yet a copyright is valid much longer than a patent.A process patent is only good for 14 years — hardly the barrier that one would expect on something that might change the world.One could patent the “process” of sex for only 14 years but could copyright the book describing it for life plus 70 years.

      1. David Shellabarger

        Well thankful the patent on sex has expired. I hate paying for sex. Fortunantly, when the latest sex help book comes out I don’t have to pay anyone to has sex with my wife.;-)

        1. JLM

          Ahh, romance!  Isn’t it grand?You fall desperately in love with a beautiful woman.  Get married.  Have beautiful children.And, all it costs is everything you make for the rest of your life.So, yeah, I hate paying for sex myself but an awful lot of it has been prepaid.

          1. David Shellabarger

            Grand indeed!I’m trying to enjoy youth as much as possible.:-)

          2. JLM

            As is said:  Youth is wasted on the young.Enjoy! 

      2. raycote

        Media companies have done a better job at lobbying and have been at it longer.Life of the author plus 70 years is just to long!

        1. JLM

          I do not disagree but we are all eventually held to what really happens.Media companies once upon a time ruled America.LBJ used to say — never pick a fight with anyone who buys ink by the barrel. 

  24. JLM

    @sean weinstock below, ran out of indentsNice rant but not grounded in reality unfortunately.Adverse possession is a real estate concept which serves to cloud a title in only the most extraordinary examples and about 99% of all adverse possession cases in the real world deal with access issues and not fee simple or freehold estates.The defenses to any adverse possession case is to simply grant access — it cannot be “adverse” possession if the access is granted — and then to subsequently deny it.An adverse possession case would require the adverse possessor to have lived openly on the land and to have acted exactly like the owner — including having paid property taxes.  Not bloody likely as the tax assessor is not going to accept two property tax payments.This is why 99% of adverse possession cases end up being about access easements.’Inheritance taxes in America were a funding mechanism for wars.  The current inheritance tax was used to fund WWI.  The only reason why inheritance taxes continue is because the decedent cannot hire good enough lobbyists.  This a cynical and ridiculous tax based upon the idea that an untimely death should be a taxable event.  An absurd concept.To suggest that inheritance taxes are justified by some “noble” concept related to society’s interest in a man’s lifes work is to ignore the reality of from whence they were enacted.Temporary taxes to fund wars.  Nothing more.If inheritance taxes were ever put on a ballot it would lose overwhelmingly.The rich never pay inheritance taxes if they are just a smidgen clever.  Joint tenancy with rights of survivorship for all real estate, full gifting, testamentary trusts and insurance.You are gilding the lilly more than a bit when you say that corporations are not prosecuted for crimes — it depends entirely upon the criminal act and pertinent statute.  Take environmental claims and RICO allegations such as GE and the Hudson River over a century of dumping PCBs into the river and who are they going to prosecute?  They can’t find the individuals.In cases like Enron everybody gets prosecuted but the “piercing of the corporate veil” to get to the individuals is based upon the actual fact set which is often garden variety fraud or more importantly securities violations.  The SEC goes after everybody.Corporate officers are often not liable under the “prudent man” theories while the corporation they serve is fully liable for the same actions.  Serve on a public company board and you will get an earful about the prudent man and business decisionmaking defenses.Non-competes and the California perspective turn on an issue I very much respect — one should not be required to offer a non-compete for a paycheck.  If there is independent consideration — and a lot of it — then any contract freely negotiated should be enforceable as two persons can contract for anything.It is when an employer suddenly decides that they need a “non-compete” from a longstanding employee who now knows too much and are not willing to pay additional compensation for it that the enforceability becomes an issue.I agree w/ California in that just because you become more valuable and the company failed to obtain a non-compete at the initial hiring they cannot get one for free subsequently.  At the end of the day they want something for nothing or they would have paid for it up front.The rich are always going to get richer and society should applaud that because they are getting richer by investing their money and taking risks.  We should not penalize success because of class envy.When you are rich you can do more good works than when you are poor. 

    1. Dave W Baldwin

      Re the ND for longstanding employee, funny how the corp. would expect that of him while at same time lobby to ban the Union Dues crap (which I’m glad ran out of steam).Re the rich… best to repeat “Thou shall not make the poor richer by making the rich poorer”  at the same time, if we enable the poor to become richer, then the rich will become richer anyway.Thanks for you contributions. 

  25. Dan

    I totally agree Fred. IP law is a fine balance – I don’t think more legislature is the answer. 

  26. gregshel

    Is it possible to balance the rights of users and the rights of owners?

  27. commercialdoorcompany

    I can assure you JLM that not one of them has copied anyone. it’s just that code should not be patentable.  Roll-up Doors

  28. Mmiller

    Regarding the protection of IP and content rights through legislation of the internet, I would love to see a posting with Mr. Wilson’s views on the privacy legislation currently being debated in CA.

  29. JLM

    @Kyl3Comeau:disqus Hoist by my own petard!  Nailed me but good.  Well played!Of course a corporation will have to designate a corporate duelist as part of its Articles of Organization but it must a genuine corporate officer and not a professional.I see an eventual additional career for me in the future.President, CEO, Corporate Duelist DesigneeBrilliant!

  30. Ashvin Here

    Its just like a coin, there are both pros & cons of strict internet regulations!! But if it will be incorporated very efficiently then we all can have a fresh breath of air and buy genuine goods on the net.

  31. ScottS

    AVC,Maybe your most important blog ever written.  The implications of Government meddling are daunting and terrifying.  Nice job.  We should all be screaming from the mountain top.

  32. Prokofy

    What am I going to do with you, Fred! Some day you will regret your Bolshevik youth.Sen. Leahy’s version is the liberal version that accommodates the concerns of the extremists (like you) about the more conservative COICA bill but still protects IP and still…fights crime. You *do* recognize it as crime, still, right?Or do you think it’s your God-given right (or let me say “cloud-given right”) to the California Business Model, which says “free accounts, upload anything for free, let God sort out the copyright theft later — well, God and some expensive lawyers.”One again, what Second Life teaches us:o DRM in fact works well (copy/mod/transfer – or not)o People pay when you don’t make it easier for them to copy, and you make them an easy micropayments systemo People pay because they want to get paid, too, and they can not just upload and “share” (i.e. collectivize themselves in your big collective farm in the sky) but upload *and get paid for their work*. o economies thrive when people can create, get paid, commission, get paid, sell used commodities, get paid, sell building kits to those who finish off the products, so they both get paid, etc. etc.Whenever you begin to talk that magic woo-woo stuff about “innovation,” I head for the hills. What innovation is there based on theft of other people’s property?When was the last time you heard of anybody investing in open source software?Is your friend Google really making a profit off Youtube yet or are they still paying their lawyers’ bills?Those who natter endlessly about how IP “kills innovation” are talking arrant nonsense that few people ever call them on. Your inability to, um, copy Mickey Mouse or music video is not stopping you from innovation. Um, go and innovate, all you want. We’re waiting.

    1. fredwilson

      i might need to move to california!

  33. Prokofy

    You say markets come and go and great businesses last…Name a great business based on the Internet involving social media, besides and, that is still around after 10 years. Even 7.

    1. fredwilson

  34. JLM

    It is not “new and innovative” if you have to copy the other guys IP.  It is called misappropriation, stealing and plagiarism. 

  35. fredwilson

    about half of our portfolio companies have been sued for patent infringement and i can assure you JLM that not one of them has copied anyone. it’s just that code should not be patentable.  take a look at what this community of software engineers thinks about software patents…it is overwhelmingly the case that software engineers do not support the idea that software should be patentable

  36. Doug Kersten

     You are assuming that a software developer has an actual copy of another guys IP.  This is not usually what happens. Software developers look for solutions to problems (not by looking at others work but by thinking about the problem).  In many cases, like one-click buying, there is really only one solution.  The developer then writes the code that allows the problem to be solved.  The code is usually quite different from the code the owner of the IP may have written (in many cases the owner of the IP has not written a line of code, effectively they have not built anything).  In other words, the majority of the time the developer has not stolen, misappropriated or plagiarised anything.  They have just created something that someone else submitted as an ‘idea’ to the patent office.  This is where software patents and process patents fall apart.

  37. JLM

    There are a huge number of things in life and the law in which the concept of “first in time, first in place” is the underlying principle which drives rights and ownershipAs it should be, in my view.The rightful ownership of such creative work is no different.  The first one done gets the first place in line.  Software is particularly interesting as it is both a “written” creative product and a “process”.Likely it should be viewed both as a copyrightable and a patentable product.A copyright is protected for the life of the author plus 70 years while the process patent is for 14 years.Asking software engineers what they think about patents is like asking doctoral candidates what they think about plagiarism.  The outcome is absolutely predictable.Patents are also fairly disclosed and it is not unreasonable to expect a patent search to be undertaken no differently than it is incumbent upon a real estate purchaser to have an abstract of title prepared and a physical inspection of the property in order to obtain title insurance.

  38. Terence Craig

    Fred – great post.  It is a scary piece of legislation and I completely agree that software patents hamper innovation – patents makes sense for devices not algorithms. The venerable Dr. Knuth said it best in this letter to the Patent Office Kudos on funding 10gen. We are speaking at their event in San Francisco next week. Mongo is a great product and they are great to work with.

  39. Prokofy

    Do the developers of Facebook, Twitter, and Linkedin think that software should not be patentable, Fred? 

  40. Kasi Viswanathan Agilandam

    @JLM loved your comment on ‘doctorates-plagiarism’. 

  41. Lucian Armasu

     The thought that only one person in the world would think of something is ridiculous. The world is huge, and for any one idea there must be hundreds or thousands of people thinking it, and maybe a few dozen working on implementing it.Just because someone is 1 hour earlier at the patent office, doesn’t mean they should get all the credit. Research the times of Edison. Many people believe he was the only one that invented a “lightbulb”. He wasn’t, there were many others, but Edison got the patent, and he also had the popularity the help spread the idea of a lightbulb faster.

  42. JLM

    @ Lucian Armasu below — Ran out of indents.Life is a graded exercise and in its spare moments a bit of a bitch to boot.To embrace the notion that there should not be winners and losers is to suggest the Olympics should be measured with a sun dial and everybody should get a pat on the back.There are no Miss Congeniality prizes in the issuance of patents, copyrights, trademarks and Nobel Prizes.  They go to the “first in time, first in place” — a legal concept that has guided such matters for over 300 years.Most of the success in life is enjoyed by those who are 80% right and done on time.Even innovation has to play within the guard rails set up by the markets it seeks to serve.Can’t compete?  Go find another line of work.

  43. Doug Kersten

     I think you are wrong about developers searching out patents.  There is no need.  I can easily think of a solution to a problem without doing so.  In fact, knowing that such a patent existed for something I created prior to its creation puts me in a more tentative position legally.  The punishment, if I were ever to be convicted of patent infringement, would be greater.  It is not a risk worth taking.

  44. JLM

    @doke01:disqus I have expressed myself in an hamhanded manner.  Let me see if I can clarify.I meant to suggest that someone like you, a CEO, would do a bit of due diligence on an issue BEFORE embarking on its solution to ensure that you would not take off on a course that would foul the intellectual property propeller as soon as you have left the dock.This is a self help remedy not unlike reviewing an abstract of title before making a final decision to buy a property to ensure that the title is clear and vested in the seller.Due diligence is always the defense to recklessness.I suspect that the issue is of enough importance as a resource allocation issue that it rises to the highest level of management prudence and possibly to a level of fiduciary duty.In today’s litigious environment, one cannot put on blinders.  Ignorance is no excuse under the law and has been so forever.If I were a Boardmember and my CEO had failed to undertake such basic due diligence in either a software development program or a property transaction, I would show him the door.The risk is real and to ignore it is not an effective strategy.

  45. David Shellabarger

    Its my understanding that patent law is suppose to maximize innovation.No reward for patent holders discourages others from innovating but long term patents discourage derivative innovation. Its a balance.However, it software this argument doesn’t hold water. Some of the biggest innovations in software are created by volunteers (open-source) and the reward is often due to the implementation not the idea.Basically there is a huge number of software engineers that want to create something who are not interested in even seeking patents, because they don’t see any value in them. Patents only get in their way.This actually hurts innovation rather than maximizing it.

  46. fredwilson

    yes, i think they dobut it is and they need to deal in that business reality