This Month in IP Insanity (April 2015)

Now that the academic year is slowing down, I can start to account for all of the developments in IP law and technology again. Here are a handful of events and discussion points for the past month:

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  1. Tidal has turned out to be a bust. Predictably, Jay-Z has pulled all of his music off of Spotify and Youtube, meaning Tidal is the only place where you can access it. As I commented during the odd fanfare of its release – while we’ve certainly increased access costs, I haven’t really seen any big boon to musical innovation, and it’s not clear that any other artists (big or marginal) will flock to Tidal. It’s probably just a rent-extraction system for the musical elite.
  2. More streaming music news — Spotify is lobbyisting up (which somehow doesn’t sound as catchy as “lawyering up”, perhaps that’s for the better). I’ve reported upon Spotify before, in the context of Taylor Swift’s criticism of streaming music. Spotify seems to be preparing to go to war with Apple, the latter of which is preparing to release it’s own streaming service, the newly acquired and revamped “Beats.” At the same time, the DOJ is considering another pass at music licensing regulations, and the blue moon when Congress decides to revamp copyright laws may also be around the corner (due, no doubt, to the fact that 2018 will see the first batch of copyrights to finally expire since 1923).
  3. Another reason Spotify is lobbyisting up, and yet another music streaming news bit, is that Grooveshark has finally streamed its last. From The Atlantic’s subtitle, “Everyone knew you were probably illegal all along,” one wonders how they were able to persist for so long without properly acquiring licenses to all streamed music. Apparently it was “good lawyers,” but even that will only get you so far for so long…
  4. John Oliver set his hilarious investigative journalist sights on patents, specifically patent trolls. [I should add that I watched this live the night before my dissertation defense, taking it as a good omen.] It was a very entertaining piece, highlighting the true cost of non-practicing entities (NPEs) who extract rents from would-be users or innovators who use something the NPE holds a patent on (but the NPE does not actually produce anything). Alex Tabarrok, commenting on a further link to Timothy Lee, rightfully discuss how trolls are not the fundamental problem with the patent system, just one of the system’s most visible and absurd excesses.
  5. Not a news story, but on a related note, I recently read a dated article by Stephan Kinsella arguing that patent trolls are akin to mafioso, who don’t want to actually block competition (like actual patent holders do), but rather keep it flowing so they can just wet their beak. This framework makes actual patent holders, who would exercise their monopoly power and block future innovation for want of rents, actually seem worse than the trolls, counterintuitively. It sounds very similar to Mancur Olson’s stationary bandit being economically superior to the roving bandit model of government. I’m inclined to agree, but the point again is that the system is broken, not those who are exploiting it best.
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  7. Onto cable TV, the market for which was blown open this past month by Verizon FIOS’s announcement that it will finally will break up the famous cable bundle into smaller packages. This is far from a la carte channel purchasing, long held as the ideal from the consumer’s point of view, but not the economist’s, as Verizon will offer several slimmer packages with about 20 channels including the famous broadcasters and ESPN, etc. It will be interesting to see how this affects the cable industry: established players don’t like it.
  8. Our benevolent overlords at Google now want to get into the phone carrier business. Google’s proposed Project Fi will cost $20 a month for talk and text, beyond free Wifi, and another $10 per gigabyte of data used each month. Most interestingly, unused data can be credited to the next month’s quota. While a welcome innovation, Google will have to build up its network and reputation as a carrier beyond simply a software (and limited hardware) company, to compete with the infrastructure of Verizon, AT&T, and Sprint.
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