 Okay, we're ready? Yes. Hello, everybody. Who here has taken a means as an accounting course with me before? Has anyone here taken one before? Or are there new people here? I'm just curious who the attendees are. We don't have a lot actually online and live right now, which is okay. Okay. Susan, and you're not my – Susan, you're writing me privately. If you want to write to the entire chat list, I think you need to adjust your settings to send to all participants. Okay, good. All right. Well, let's get going here. So just to look at – there are new people here to introduce myself. I am an attorney and use a patent attorney. I'm also a scholar, a senior fellow with Mises Institute, and I do a lot of work on legal theory, libertarian theory, and intellectual property law since that's one area I know pretty well. So we're going to talk about this new patent law. So let me just proceed into it. So what we're going to do – what I'll do is I'll summarize – for those of you who haven't taken a class with me before, I'll try to be as quick as I can so we can cover this law. I'll summarize the basic problem, as I see it, with patent law. And then I'll go over what would constitute real patent reform if we really wanted to make it. And then I'm going to, in view of that, look at the actual law that Obama passed, signed into law last Friday, and then we'll talk about, if we have time, some other upcoming changes to patent law and other IP law. And then we'll – I'll try to take time for some questions and answers at the end. Okay, so a quick background because I suspect a lot of you have read some of this stuff or have taken courses before. I don't want to be too elementary, but let's just step back and think about this. What is intellectual property? Intellectual property is a term that covers types of legal rights to the state grants that are related to things that our minds create. And the traditional types of IP, your intellectual property, are patent, copyright, trademark, and trade secret. And then there are some new ones like moral rights, database rights, both hold designs, semiconductor and mass work protection, et cetera. And then there are others coming down the pike, which we'll talk about at the end of the webinar tonight. The big two that we focus on usually in analysis for problems that they pose to the economy are patent and copyright. And tonight, we're only going to really talk about patents, so it's a lot more narrowly focused than some of the talks I give. And just to let you know how these things arose, patent and copyright law arose three, 400 years ago, a little bit older if you go back farther in history, but basically patents arose in mercantilism. That is the practice of sovereigns like states, monarchs, granting monopolies to their cronies to be the only ones that would be able to manufacture or sell, for example, a given product in a given region. So they were just monopolies. And this culminated in the Statute of Monopolies in England in 1624, which was a reaction to all this abusive grant of monopolies by the Crown. So it kind of reigned them in, but it left the government keep granting monopolies for novel inventions. So that's why patents that we think of today for inventions that is practically usable devices that have something novel and non-obvious about them have survived. So they originated in monopoly and they're the remnant of a monopoly system. And then patents were authorized in the United States Constitution, which was ratified in 1789. They were never thought to be natural rights anchored in natural law, not by the founders like Jefferson and Madison, et cetera, not by John Locke. They were just a prudential measure designed to incentivize invention. It was a temporary, limited monopoly granted by the state. And the idea was that, look, if the state grants these monopolies to authors of books and creators of paintings, et cetera, and inventors of new contraptions and things like this, that will get a little bit more of it. So I call this the founder's hunch. The founders were just assuming this. They didn't really have any empirical evidence to show that this was true. They just assumed it. In the intervening century and a half, two centuries, economists started studying this and they have never, to my knowledge, yet come up with a comprehensive, clear, unequivocal study demonstrating that the original founder's hunch was right. In fact, most of the studies are inconclusive or they conclude that patents, for example, actually harm innovation overall for a variety of reasons, some of which we can try to go into tonight. But the bottom line is the patents originated as a form of state grant of monopoly privileges, a type of mercantilism. They were seen as harmful. They were reduced in 1623-24 to try to reduce the excesses and the abuses. And they were restricted to invention, novel inventions. This was codified into the U.S. Constitution and became part of U.S. patent law a year later. So for the last 200 or so years, we have assumed that patent rights are a type of property right, which is part of the fabric of Western capitalism. So we're all used to this. And people say they're against patents. People that are not used to this line of thinking think, well, are you against property rights? But in fact, patents were not called property rights initially. They were called patents because that's what they were. Patent is a word from the word patente, meaning open, because it was like an open grant from a sovereign to someone telling the world, I'm giving this guy the exclusive authority to be the one guy that can do X. It was a monopoly grant. So that's where patents came from. So they were seen as sort of an encouragement into the pre-market. They were seen as an exception. They were seen as temporary. And they were seen as monopolies. Well, when there was a backlash against their increase in the 1800s, then a propaganda campaign was mounted in their defense in which they started being called by their defenders intellectual property copyright as well. So copyright and patent sort of being called intellectual property because most people believed in property rights, and so it was an attempt to sell this idea. And that idea was successful, and it defended this institution and it stuck. Now, so nowadays if you talk to people and you talk about abolishing property, in-law for property law, patent or copyright, you'll get a large, diverse scale of reaction. Some people feel crazy about it, and sometimes you'll hear, well, that's a violation of my property rights. They're sort of using a natural rights claim, even though the origin of these artificial state-granted monopoly privileges had nothing to do with property. Or you'll hear the standard utilitarian argument, like you'll hear someone say, well, if we don't have patents, how am I supposed to make a product of my invention? And my typical response to this is the fact that you have a question is not an argument. I mean, I'm glad that you're curious about what would happen, but what's your argument for the state granting these things? And of course we have answers, but the point is not to give in to this sort of way of framing the debate that we have the burden of proving that the law should be abolished. The burden is on proving that the law should exist because it's clearly, on first glance, a derogation of private property rights. Because it allows one person who owns property to, I'm sorry, who has a patent right to use the government courts to shut down his competitors. I mean, that's anti-competitive, and it violates the property rights of his competitors. That's the way we would look at it normally. Okay, so I've got a link here to some more elaboration on this idea, but let me skip ahead so we can get to the act. Now, under today's system, it's become increasingly recognized that our current system is, as most people say, it's broken. It needs to be fixed. Bill Gage has a famous quote from a couple of decades ago where he kind of said that if people had understood how patents would be granted now when most of today's ideas were invented and they'd taken out patents, the software industry would be at a complete standstill today. He recognizes something is wrong now, that patents were not as out of hand at the origin of Microsoft and they're at the inception of Microsoft as it is now. The CEO of Google, Eric Schmidt, believes patents are terrible, but he's not very principled about it, but he thinks he sees it as their problem, but he sort of buys into the regular idea that patents are necessary and important, but they've gone too far, so we need to fix it. So they all seem to give lip service to the idea that we need patents, and then there's continual calls for reform around the world, and in fact, in the U.S. there's been calls for reform for patent law since I've been a patent lawyer since 1993 or 1994, and in fact, the current law we're going to discuss shortly was the culmination of a patent reform effort that started about six or seven years ago. So finally something was passed, and so we'll want to discuss that. But almost everyone recognizes that there's something wrong, we need to fix it. Now, let me just give you guys a little context here, a brief overview of how it got to where we are. So in the 1400s to the 1700s, as I mentioned, sovereigns like monarchs were granting these exclusive monopoly privileges. They were trying to raise money, they didn't have to raise taxes this way. In fact, sometimes they would get the recipients of these monopoly privileges to help them collect taxes from others. And then the statute of monopolies in 1624 restricted the scope of these patents, letters patent, but made one exception for novel inventions. And then the U.S. authorized it in the Constitution, and our first patent act was one year later in 1790. Now, 1952, right, about 160 years later, the patent act that we had until that time was radically or significantly revised, or so say its supporters. Another significant change was in 78 when we joined the Patent Cooperation Treaty, which sort of internationalized some aspects of patent law. 1982, a special court of appeals was created which had sold jurisdiction over patents, and the idea there was it would stop the split in the circuits around the country. Different circuits treated patent law differently, like they still do for copyright. So the idea was to unify patent law into one specialized appellate court in D.C., called the CAFC. So it's sort of seen as a Supreme Court of Patents, although the U.S. Supreme Court can overrule them and sometimes does. And then they kick the can back down to the CAFC, and the CAFC refines the patent doctrine further. So you'll hear about the CAFC occasionally if you study U.S. patent law. And when I started practicing, the first thing I learned was right after I started in 1994-95, there were several changes to patent law pursuant to the gap, the general agreement on tariffs and trade, which required the U.S. and other members to modify the patent term and to allow provisional patents. These are details, and there's a lot more details, by the way, which I'm not going into, because it's too inside baseball. Too boring, but I'm just trying to just show, I'm just trying to give you guys a picture of all the so-called major changes that have happened over the last decade and centuries in patent law. About 12, 13 years ago, in 1998, we had another big law which made, according to the then Commissioner, Patent Office Commissioner, Todd Dickinson, the most significant changes since the 1952 Act. So you had the 1789 Patent Act, but 1792, another big revision to the patent law. And then, 1998, another big revision to the patent law. And Friday, a week ago today, we had yet another fairly major change in patent lawyer terms to patent law. Now, and by the way, there are talks all the time about reforms in other countries to reform the patent law and copyright law, but usually a lot of talk. There's rarely major reform in the right direction. Usually it's like a ratchet. Usually these laws get worse and worse. They expand territorially, internationally in scope and in punishment and penalties. It's a ratchet effect, a Higgsian ratchet effect. So before we get to the changes made by Obama's patent law reform, let me just outline what I think you would look for if you wanted to really make a big improvement in patent law. Well, first, I would say abolish patent law. That would be a real reform, but that's not practical. There's no support for that. People have bought into this mentality that we need an illegal property law. So a real reform would be to abolish it. But let's say we can't abolish it. What would be some of the major things you could do that would make a real improvement in the situation? Well, to my mind, the entire patent system is cost imposed upon people, businesses, and the economy. So if you want to improve it, you reduce the cost. And to do that, you need to understand what the patent system does that imposes cost. And there are several obvious candidates. The first thing would be to reduce the term. Patents are granted now and they last about 17 years on average, some 16, some 15, some 19. So the longer they last, then the longer that they stand around as barriers to competition. And in today's world, especially in the high-tech industry, where there's fast-moving competition, you know, an idea is stale after three, four, or five years. So in my mind, the bulk of the benefit to the patentee, the guy that owns the patent, could be captured if he had a three- or four- or five-year patent. But then it would clear up a lot of this dead wood that's just restraining commerce and trade if we could just have patents end it three years, five years. So the number one improvement we can make in patent law would be to reduce the term. And this has been proposed even by the CEO of Amazon, Jeff Bezos, even though he's the one who obtained a patent on the absurdly obvious idea of clicking once on the shopping cart icon in Amazon.com to purchase a book instead of clicking twice. And they use that. Some of you may not remember about six or seven years ago against, I think, Barnes & Noble right before Christmas, and they got an injunction to prevent their competitor from using a one-click method until they worked some settlement out a few months later. Anyway, even Jeff Bezos realizes that at least software patents and some types of patents should have a shorter term. Another big improvement would be to remove the ability of a patent holder to go to court to get an injunction to stop a competitor from making a product. You hear about these patent trolls, but a patent troll will sue someone, and they just want you to settle with them and give them some money because they're not making anything. So their purpose in suing is to extort some ransom or some money from you. So at least you can keep making your product even if some of the Android phone makers might have to pay one or two or $3 per unit sold to some troll, but they can keep making the product. It's like a tax. It's not good, but it's not as bad as if the court says you cannot make this because it competes with Apple iPhone. So removing injunctions or making injunctions much more difficult to get would be another huge improvement in patent law. And then there are others that we could talk about but which are a little bit too inside baseball, and I will skip over them now. I have a lot of others here. One I said was we could have a prior use defense. What that means is under current law, the way it works now, while I should say under law before last Friday, let's say you have A and B. Let's say A comes up with a method for mixing chemicals in their chemical plant. That's an inventive method for mixing chemicals. Gives them an advantage over their competitors, but they keep it as a trade secret. That's perfectly legal. They might do this for 30 years. Well, if one day company B, their engineers independently invent a similar method and they file a patent on that method, then they can get a court order to stop A from using their own methods that they've been using for 30 years. That's the danger of keeping things as a trade secret. If you're using the patent system, it's said to encourage you to disclose your idea, because if you don't disclose it in a patent application and try to get a monopoly to cover you, then the risk you take is someone else could shut you down later. So I've long argued that this is extremely unjust and that an independent – someone who doesn't copy a competitor but comes up with the idea on their own, especially someone who comes up with its first, ought to be able to keep using what they come up with on their own. There are some other improvements I could suggest here, and if someone wants elaboration on this, I could elaborate in the Q&A period. But let me go ahead and go forward, because it will take too much time to go into this background detail at this point. And there's some others here, too. But I laid out the main ones. If someone really was proposing real reform, they would reduce the patent term, reduce the scope of patents, like get rid of software patents, get rid of business method patents, make it harder to get an injunction, reduce the amount of royalties you could ask for. These kinds of things would be a real reduction in the cost of patents. So the question is, does the new law do this? So you can see on these pages they have a lot of suggestions for what real reforms would have looked like. Okay? Now, any time there's reform proposed, if you propose a real reform like I've suggested, the patent bar goes crazy. They start saying that it's a radical change, et cetera. So what this does is it has the effect that any change that you want to propose to patent law is going to be pretty trivial. It can't be too radical. And then, of course, the government's going to make it sound like it's a significant improvement, like Obama's claiming credit for this. And the patent bar is going to say it was radical, but we're going to have to figure it out. And I'm going to have to skip this, too, so we have more time. This page here, this slide 18, these have been quotes from patent lawyers. Gene Quinn, a patent lawyer, is practicing now. And even Paul Michelle, who's the former judge of that CAFC I mentioned, he wrote an article with a startup patentee in the Wall Street Journal, sorry, the New York Times a few months ago, last year. And they basically believe that the more patents you have, the more jobs you stimulate, the more jobs you create, and the more you stimulate the economy. I think it's completely nuts that the idea that the grant of a monopoly privilege by a government bureaucracy is going to stimulate the economy is completely insane. But this is what these guys argue. And this is one reason they would get to say, well, we can't harm the effectiveness of the patent office. We can't make it more difficult to grant patents. We can't reduce the number of patents because it's going to harm the economy. Okay, so now let's turn to the law. I may go a little bit past the 45-minute mark until we get to Q&A because I think when we do that I'll be happy to go over if we need to for Q&A. The law that was passed last Friday was called the Lakey Smith America Invents Act. And of course all these government congressional statutes have euphemisms in their titles to help sell them like the Patriot Act, which is not about patriotism and the Americans with Disabilities Act, et cetera. Social Security Act, which doesn't provide security, et cetera. Anyway, this act is not about invention or innovation. It's about subtly tweaking a system that tampers innovation. In any case, this law has been bouncing around for several years and President Obama signed into law last Friday. Interestingly, I checked the congressional and Senate records and Rand Paul had voted yes on an earlier version of this patent reform law about maybe six months ago, which I was disappointed in. But for some reason, both Rand Paul and Rand Paul voted no on this, and I don't know why. I'm actually curious to find out because neither one has a principled opposition to intellectual property as far as I know, because they're both constitutionalists and patent is contemplated and provided for in the Constitution. So it's not unconstitutional, but it's just a bad idea. So maybe they don't oppose it for that reason, but I'm not sure why they didn't vote for it. In any case, this law was favored by these sort of old school legacy businesses like Microsoft and IBM, but the modern, on-the-edge, cutting-edge tech companies like Apple and Google were opposed to it. Okay, so this is the law. So what does it have in it? Let's take a look at its provisions and see if it makes a significant improvement in the law. Well, first of all, the lawyers are getting into the ramping up to provide analysis of this law for their clients to show that they're on top of it to get more business. So you can see right away that this is good for lawyers. You know, lawyers complain about these things, but really it just generates more business for us because when the law changes, then work is generated because people are confused and they need lawyers to help them navigate the new legal system. So this is going to be good for patent lawyers as far as I can see. And then there's been policy criticism of this or support of it. I've got some articles listed here. You could read through them. Most people have various special interest complaints or nibbling at the edges. They don't have a fundamental criticism of what's wrong with this law and the patent system in general because most of them accept that we need a patent system. And so they're stuck in this mentality that we need a patent system and we need to fix it. We need to improve it. So then you're stuck with just trivial details and legislated my new show. So let's talk about what I call the good, the meh, and the ugly. Most of you know what meh means. It means like meh, like meh, who cares. It's not a big deal, not very good, not very bad. So this bill does have some improvements. Most of them are minor and fairly trivial, except for one which I'll talk about in a minute, which I would surprise that, I'll be honest. Most of the changes are technical, inside baseball, and really only of interest to patent practitioners like myself or to people that are really taking advantage of patents to sue other people like patent trolls or patent aggressors. People using patents to protect their position in the market like Apple or Microsoft or RIM, et cetera. But overall, the system has not radically changed. That's the bottom line, even though you'll hear people say that it's radical or a significant change. So let's talk about the good first. The one thing it did that I was surprised about, because this was not in the earlier versions of the law that I had been studying, was they provided for the first time a very broad prior commercial user defense. So remember earlier I said that if you wanted to change patent law, one thing you'd do is you would make it, you would give a defense to someone, so like grandfather, you'd give a defense to someone who's been using some method or technique or device secretly for decades. You wouldn't let them be sued by someone who independently later invented and patented it. And the law finally does this. Before 1998, there was no defense like this at all. But in 1998, a strange special interest for defense was put in, but it was limited to business methods. So only someone previously practicing or using a business method could use that as a defense if he was sued for violating a new business method patent. So that was almost never of use. It wasn't of general use. But finally, somehow, someone put this prior user defense in the law. So that is actually, I will admit, for the first time in my career as a patent lawyer, an actual improvement that's not trivial to the patent law. It will make it more difficult for patentees to sue their competitors who already previously were using an idea. Not a very big deal, but it will come into use on occasion. But there's still no independent inventor defense. In other words, if I independently invented what you patented, but I independently invented after you patented it, even if I could prove that with some kind of clean room approach, which is used in software and copyright development cases. A clean room with the idea that you put the software developers into an isolated environment where they don't have access to the records or the code of a competitor so that if they come up with something, a new program, new software, if there's some similarity in the function, then it wasn't from copying the competitor's code. And it was probably just because the functional similarity is necessary for that type of problem. You could use an approach like that, a clean room approach like that, to have your inventors independently invent things without looking at the patents of their competitors if there was an independent inventor defense, but there's not. So it wouldn't do any good to have a clean room approach because it wouldn't be a defense. So this law is an improvement, not a huge improvement, but it's not trivial. So it's the first non-trivial improvement I've ever seen to patent law, put it that way. Probably the first non-trivial improvement to patent law in the last ever since 1790. There may have been a few judicial decisions that went back and forth on patent law, which you could say are improvements, but that's just the judicial interpretation and those change every few years, every decade or two at least. All right, another improvement to the law. The law made it a little bit easier for competitors or other people to submit prior art to the Patent Office to challenge a patent that exists or that's pending. Not a big improvement, a little bit of improvement. Also, it revised the law on Joinder. Under the previous law, a patent troll, which is called an NPE, a non-practicing entity, someone who has patents, they buy out these patents from people, but they don't make a product and they just go around suing people to collect royalties. They would sue several people for violating the same patent, even if they were making products that weren't the same product. And that made it easy to join them in one court. Typically, the Eastern District of Texas, Marshall, Texas, which is known as the area all the patent plaintiffs want to sue in because they get the biggest patent award, the better patents or whatever. So there's a lot of what we call forum selection there, forum shopping. They try to find the best court to sue people in. And if you can join a bunch of defendants in the same action, it makes it easier to do that. Well, this new law made it harder for patent plaintiffs to join people if they're not selling exactly the same product. So that's going to make it a little bit harder for patent trolls to get their work done. But all that's going to do is result in is all these patent trolls are just going to open up fake, empty offices in office buildings in Marshall, Texas so they can say they have a place of business there so they can sue all their defendants there. That's already going on by the way. There's a special on NPR a few weeks ago or a couple months ago about patent trolls and they went down this hallway of an office building in Marshall and it was all empty, no lights were on, locked doors with little name plates on them. All these patent entities, patent troll entities set up by intellectual ventures and others like Modesist who's suing Apple, iOS developers, et cetera. So people are going to play games. So that's why I say these are not big improvements except for the first one. The fees are raised a little bit. The patent office was given quasi independent fee setting authority and they're going to raise fees 15%. Now I think it's better raise the fees higher and higher so you have fewer patents. Some claim that this law is pro big business because the fees went up. Well, that's ridiculous. There was already a 50% reduction available for small entities. That is any company that has 500 or fewer employees only has to pay half of the fees that larger companies have to pay. So there's already a built in benefit for small companies and this law adds a new category for the first time called micro entities and they get a 75% fee cut. So I don't think it's big business favoring at all. Patent law is big business favoring but not the amendment. Patent law favors big businesses because it allows larger companies to amass these big patent portfolios. That allows them to have a defensive weapon they can use against their competitors if they're sued and often they will sue each other and then they'll back down and enter into a cross licensing arrangement. And that allows them to stay in business. Maybe a little money changes hands but they stay in business. But the smaller companies that would be startups or innovators or who want to get into that field, they don't have many or any patents. So they were vulnerable to being sued. They have nothing to sue back with. So they would just be shut out. This is why you see, for example, heavy oligopolies in the smartphone industry. You have Apple, RAM, you know, ACC, the five or six big companies, Motorola, Microsoft, and Android. But little ones can't get into the field. So it causes oligopolies to exist. So the patent law itself favors big companies. So does the state itself. The state regulations. For example, the state passes minimum wage laws. The state passes pro union legislation. The state has the FDA and its regulatory process. All these things are extremely extensive and burdensome and the larger entrenched industries can afford it. It's like a tax on them, but it's like a penalizing, crushing tax or burden on a startup. This is another reason why you have barriers to entry to existing industries created by state regulations such as patent law, FDA regulations, minimum wage, trade law, even tariffs and things like this, which are often characterized as anti-business or anti-business, which is nonsense. The reason big business over the decades has lobbied or cooperated with the federal government in getting these laws passed is because they know that it benefits them comparative or relative to smaller entrants and competitors. There's another interesting provision in here. I'll say it's good because basically it makes it harder to get a patent or enforce a patent on certain financial methods or tax strategies. Now, I think anything that reduces the scope of patent law is good. This is fairly trivial so it's not that significant, but it's a move in the right direction. But what's interesting is that it apparently was the result of heavy lobbying by the banking industry because there was a guy named Claudio Ballard who had the patent for check image capturing. He's been using it for years to extract royalties from the banking industry and they were tired of it. So apparently they lobbied Congress to put this provision in there to benefit them. Now, you have Claudio Ballard whining about it. I understand that his gravy train has come to an end. I don't want to favor the banksters, but I think just as despicable as they are, they're on the right here. And this change in law is good. It's just too arbitrary, too narrow. It should be a general reduction in patent scope, in any case. Let's go on. This is another one which is a little bit inside baseball. It basically says that if you are threatened with a lawsuit or you think there might be a patent that your company violates, under the old law, say, 10 years ago, 20 years ago, if you did not go hire an attorney right away to draft you a $20,000, $30,000 patent opinion that said, I've looked at everything and I think you're okay. Then if you lost later in a lawsuit, you could be guilty of willful damages, willful infringement. That's trouble damage. So instead of just paying the damages, if you lose, you could pay triple damages. So what companies would do is they would hire a lawyer like me, pay me $20,000, $30,000, $50,000, $100,000 to write them a long 15, 20-page opinion where I spent weeks studying everything, talking to the engineers, concluding in, quote, good faith. In my opinion, ABC Company does not violate this patent for the following reasons. It doesn't matter if I'm right or wrong. It only matters if the opinion is genuine or legitimate. Because then if my client is sued for patent infringement and they lose, which is always a possibility, then they could say, well, we're not liable for travel damages because we weren't willfully infringing. It wasn't willful because we were relying upon the opinion of an outside lawyer. So there was an industry for writing the opinions because of the law. Well, a few years ago, I think 2007, a case called Seagate, a Supreme Court case, made it less of a presumption of willful infringement if you didn't call a lawyer first. So it sort of made it less necessary to get a lawyer's opinion if you see a patent you're concerned about. And this law basically says the same thing. It says, look, if you don't get a lawyer, that's not – it doesn't prove anything. So it's a slight improvement, but it really already builds upon a case that was already there, the Seagate case. And anyway, it's not a big deal. What about the NAM? Stuff that's like, eh, who cares? Only patent lawyers care about this. Well, the big change made by this law that all the patent lawyers and all the reporters are saying is that it changed American patent law for the first time in 200 years to a first to file system. Let me explain this. If two inventors independently indent the same idea around the same time and they both file a patent on it, well, the patent law is only supposed to give one patent for a given invention, so they can't both get a patent on it. So the question is, well, which one gets the patent? Well, in the rest of the world, the first person to file their patent application with the patent office wins. In the U.S., unlike other countries, the first person to invent wins. So if A invents first and B invents a month later independently – no, they're both independent inventors – but then B files first and then A files later. And then later on somehow it's discovered that these patent applications or patents cover the same invention. Then they would have what's called a interference proceeding. They'd get together and the court would have to determine which guy could cede the idea first. Well, the new law changes that for the first time. And by the way, there's some evidence that for the first few years of the patent law, which is very sketchy, 1790 time, it actually was first to file as well. This is sort of the first modern patent statute, but they didn't have a lot of procedure work out. It wasn't really clear. In any case, for a long time it's been first to invent. So we're finally first to file. Now all the patent law is saying is a huge difference, and it is a huge difference for them to figure out the procedures. It's going to change how we practice patent law. But for the economy and for the innovative field, there's no difference whatsoever. It doesn't change the incentives at all. It might change the incentive about when you file or how you contact a patent lawyer. But it's not going to change innovative incentives. And it's not going to change the circumstance of a company like, let's say, if I get sued for patent infringement, do I care whether I'm sued by A or B? I mean, what difference does it make that I'm sued by the first inventor or the first filer? It makes no difference whatsoever to the problems patent law causes to the system. There are a few other things the law does which I think are pretty boring, which I will skip over here. I will mention quickly the fee diversion issue. The patent office has been self-sufficient for a long time, like the post office is supposed to be. It charges fees, it collects the fees, and then they have an excess, and Congress signs them off to pay for their wars. And so patent proponents complain about this. They say it's not fair. They've been trying to fight this fee diversion for a long time. Well, this law ends that to a small degree, but to me, this is irrelevant. It makes no difference whatsoever. In fact, it makes no sense to argue that all the fees charged by this agency should be able to be kept by the agency. I mean, why should they be able to keep? I mean, they could raise the fees to a million dollars per application. They would still get some filers. They would only have to have a dozen examiners, and they might make $20 million to your profit, because they have a monopoly granted by the state to grant these monopolies. I mean, there's no correlation between the profits that can be made by an agency of a monopolistic state law enforcer and the cost they might have. There's no reason to think that the costs are just going to just happen to be what the monopoly rents that they could extract are. Now, I don't want the money going to the Fed either, but I'm just saying that fee diversion is not an issue. It's just something that patent proponents whine about who are economically illiterate. Okay. Let me go on. I already mentioned the small corporation, the big company. Now, what about the bad? Like I mentioned, there's a micro entity status added, and that's going to allow a smaller fee for smaller companies and certain people. That's bad because it makes it easier to file a patent. One change that shocked me was they got rid of the best mode defense. What it means is under the current, under the previous law, you had to satisfy three criteria. Well, more than three, but three criteria regarding the description in the patent to get a patent. You had to do it in writing. You had to enable. That's it. You have a written description of what your invention is. You had to disclose it to the world. It has to be enabling. You have to give enough detail to teach someone another engineer, for example, enough information so he could go out and make this without having to experiment too much. You don't have to tell them what side your screws are, but you have to give them the basic idea. And third, you had to give them the best mode. You had to disclose the best mode. If you think there's a best way of doing it, you can disclose ways A, B, and C. But if you think A is the best way, you can't hide that because then you could get a patent that would cover A, B, and C because the claims would be broad enough to cover A, B, and C. You'd have a monopoly covering A, B, and C, but you wouldn't have disclosed it. So often when you're sued, you assert that the applicant did not disclose their best mode. That's often the defense used. Well, this new law basically got rid of it altogether. Completely bizarre. They said it was too subjective, carving too many disputes and lawsuits. In other words, it was making it too hard for patent fees to enforce their patents. So they got rid of that. I think it's a huge, a huge bad result here. The other one is that they also added a thing where if it's a nationally important invention or if you pay like $4,800 special fee, they'll fast track it. They'll try to examine it in like one year instead of three years. Well, I think that's bad for two reasons. Number one, it's going to make patents be issued earlier. That means that they get on the market to restrict competition earlier and they last longer now. They might last 19 years instead of 17 years, so they are around longer. And it gives the federal government more money to use to build missiles to bomb brown people in Iraq. So it's all bad. Another one I have bolded here is that right now, under previous law, it was considered to be the government grants these monopolies, these patents. And yet the government tries to prevent companies from privately forming monopolies with our antitrust law, like the Sherman Antitrust Law Act, et cetera, the Clayton Act, et cetera. So there was always said to be a tension between patent law and antitrust law. And it's dangerous to give people these monopolies, these patents, and people can't misuse them. You can only use it for the way the patent law says you can use it. So it was considered to be abuse of your patent monopoly. If you said you had a patent, when you didn't, you can only say it when it's true. So if you actually stamp on your product patent pending when it's not true or this is protected by a patent when it's not, then you could actually be sued under what's called a false marking lawsuit. Now, actually, I think this is good. It means it puts a penalty. It imposes a cost on the use of these government monopolies. Well, the new law gets rid of this. I mean, makes it almost impossible to sue someone for false marking. And in fact, it reduces the requirement to mark your products. You can use a website address mail, et cetera. So I think that's a big step backwards. So the law has one significant step forward, which is this prior commercial use defense. But it has two, at least two significant steps back right, which is getting rid of the best low defense and getting rid of false marking suits. Okay. This is another interesting thing. I'm almost done here with the main part of the talk. This is a special interest provision they added. And it's bad because the patent law has a provision where if the government itself, because of a regulatory delay, slows down the release of your product that might be covered by a patent. Like, for example, if you have a patent on a drug and then you have to get FDA approval to sell the drug, and the FDA takes five years to give you approval, but your patent is already issued and your 17-year time is ticking down, you might have lost one or two or three years of your term when you couldn't sell the drug. So there's a way you can apply to extend the term of your patent if there was a delay caused by the FDA, basically. Well, there's a certain highly specialized procedure to do this. Well, there's a law firm called Wilmer Hale, and they have a big client called the Medicines Company. And Wilmer Hale, a few years back, missed that deadline in applying for the extension of the patent right, which what that means is they committed malpractice or they potentially committed malpractice that could result in the patent expiring when it should, let's say, next year, instead of being extended by another two or three years. If they'd extended by two or three years, it would have given them the ability to keep charging these monopoly, obscenely high monopoly prices for this drug for two or three more years instead of it entering into generic competition. The price would plummet to one tenth of its price or whatever. So this company and this law firm had been lobbying Congress for years to try to change the law to undo their mistake. That's why some people are calling it a dog ate my homework act. And they put this in there. They basically extended the time period to apply for this extension of a patent term. And I believe they made it retroactive so that it would save this company and allow them to charge monopoly prices a little bit longer. And that means the damages that their law firm would have to pay for malpractice disappear as well because now there's no damage. So there was a horrible special interest provision put in here, which it's going to harm some consumers. So in summary, the new law doesn't do anything to stop the fundamental problems of the patent system. It doesn't reduce the term. It doesn't stop patent injunctions. You know, they're still going to be granted. They're still going to be used by companies like Apple to stop competition. They're still going to be money wasted on them. They're still going to be lawsuits filed against people for growing their own crops, which have been contaminated by Monsanto's patented seeds. And they've hurt me because they blew over on the wind. There's still a genetic patent. There's still the smart phone wars and other patent wars. All endocrines will still be formed because of the patent law, et cetera. So that's my basic take on this new patent reform. Just to update you on what's coming down the pike, what other changes can we expect? I don't expect any big patent reform per se in the U.S. for a while. This one took six years to get done. But we do have the anti-counterfeiting trade agreement, ACTA, which is pending. And if that passes, it will be terrible. It will impose American copyright style and other provisions, patent provisions, on a lot of the other parts of the world. There's an increasing move to make punishment more draconian in the U.S. and to extend it to other parts of the world, like banning you from the Internet forever or for three years or whatever. If you're just accused of copyright infringement with someone, like three times or maybe once, depending on the country. So there's lots of horrible things coming down. There's a Protect IP Act, which is horrible. It's going to basically ratchet up the police state if it gets passed, if it may pass, just as this law passed. The American Dense Act passed after six years of basically languishing in Congress. I think because the economy is so bad and the government's getting very little done and everyone's attention is not focused on patents right now. So they just snuck it through. It got done. No one understands this stuff anyway. So they very well may get this done too because it's aimed at stopping piracy. And it could even impose up to a five-year jail sentence to you or me for just embedding the wrong link on your website, like a YouTube link that has a song that has a part of it that is copyright infringing. It's insane. This stuff's getting really out of hand. There's also strong agitation to add fashion rights, to add IP rights that cover drinks that bartenders make, and other rights too. And of course, we're always putting pressure on China and Russia and India and other countries to develop U.S. – to add U.S. style laws and sanctions and enforcement. So that's my conclusion. I think what we should do is it's 7 o'clock PM Eastern time. Let's take a five-minute break, come back at five past the hour, and I will be happy to discuss further or take Q&A. Jackson says, how would an invention lifecycle look without a patent system in place? I'll take a stab at this, but maybe you can elaborate if I don't get your question right. I've got a post somewhere. Sure. Copy your question if I didn't ask, but let me get the Marks question first. It's clear that the patent system distorts the lifecycle. I think Bastiat identified different phases of innovation. You have R&Ds, and you have putting it into practice. So one thing you have is you have companies that have an R&D budget, and some of them could go to theoretical or abstract R&D. Some might go to stuff that would translate to practical sales, and they have a division. Well, when you have a patent system in place, there's no patents for the abstract stuff, but there's patents for the practical gizmos. So that puts a financial reason to give less resources to this and more to this. So it distorts the entire scientific industry, as does government funding of science, by the way. So if you got rid of that, you'd see it going back to a different level, how that would result, we don't know. But I don't think in general the product lifestyle, the invention lifecycle would be any different than it is now. It might be faster, it might be slower in some industries, but you would still have to develop a product, get it to market, and then keep innovating to stay ahead of your competitors who can copy what you're doing, like in the rest of the free market. Ash, go ahead. Okay. Ash asks, what's my view on digital property and their copyrights? If I purchased a digital song, MP3 file, share it with your friend, in the physical world we share books and CDs, but don't need to ask for them back in the digital world. Does this just go back to contracts? Well, my view is that, what did I read the other day, that someone said that the current way we're trying to do radio or streaming of music on the Internet, we're just basically trying to recreate what we're used to in the radio world on the Internet, even though it's a different medium. Or when you read some of these early apps on an iPad for newspapers or the websites for newspapers on computers, they're just trying to take the physical newspaper and put it on the electronic form, but they're not really taking advantage of the features. That's why things like Flipboard for iPad and some innovative magazine apps are getting attention because they're putting video in there, things like this. My point is that we sometimes get stuck in a certain model or way of looking at things. And yes, when you look at the physical world of books and things like this, publishers might not like it if you loan your book out, but they really can't stop it because you own the book usually. But if you could loan your friend the book and keep a copy yourself, then that would change their business model. But since you can't do that, they haven't figured out how to solve that problem. But that is what's possible in the MP3 domain, in digital products. And so they're trying to apply these old metaphors to it, and I think they're not going to work. By the way, there was recently a couple of cases, I mean just a month or two ago. I wrote about it on my blog. I'll check it here. Look at c4sif.org. Just search for the word libraries. That should find it for you. There was a decision recently which held that a doctrine of copyright law, which has been relied upon up until now to allow you to resell your book that you bought on Amazon, for example, as a used book or a library to re-lend it. In other words, when you buy a book from a publisher, you don't own the copyright, so you don't have the right to copy it. You only have the right to own that physical one copy. Why do you have the right to resell it? Why doesn't the second buyer have to pay some kind of royalty to the publisher or the author for use of the material because he didn't pay for it? Well, the doctrine is called the first sale doctrine, and that says that once you sell your book one time, you've exhausted the copyright in it, and you've already gotten paid that one time from the first guy, and then it's free from your copyright restrictions from now on. I mean, they can't copy, but they can sell that one book. Well, a recent decision said that if the book is bought from overseas, like let's say you have a library here that buys a book from some seller Amazon.co.uk, well, that first sale doesn't occur in America, so it doesn't trigger the first sale under U.S. copyright law. Therefore, we haven't seen the implications of this holding yet, but it could be that going forward it will be illegal under copyright law for a library to lend a book to anyone that was bought overseas or for a seller of a book on Amazon or eBay or whatever to sell a used book if it was not bought first in the U.S. Yes, it's amazing. This is a typical result of this whole IT mentality. So my view is that there is nothing whatsoever wrong with distributing, sharing, or copying information as a general matter. So we're actually lucky that it's good that we've reached an age where some things that were previously scarce, like books, now can be shared to infinity. I mean, the Mises.org site, for example, makes all this information free to potentially 7 million people. I mean, they can just copy it. It wouldn't cost anyone anything. It's knowledge that we're all better off the more people learn this knowledge and information. Now, I do agree that if you make a particular contract with a particular person not to do something, you could be liable for violating the contract. Now, I think that that's actually unlikely because, Ash, if they didn't make it free and you copied a book that you bought on Mises.org, well, they didn't make it free, but they made it available. If you got it somehow and you got the information, I don't see what's wrong with using information. What's wrong with passing out information? What's wrong with passing out to your friend? I mean, we view now people as heroes that copied some of the early Bibles and other early texts of Aristotle and others. They kept them from being lost. There's no telling what works have been lost will never ever recover because they only had a few copies and they just extinguished it and they weren't copied enough times. Copying is not a bad thing. It's a good thing. Learning is not a bad thing. This is all about learning, emulation, competition in the market. There's nothing wrong with competition. There's nothing wrong with learning and there's nothing wrong with emulating others. But my point was, let's suppose you had some publisher or some company like Amazon or Random House and they said, look, or some CD, some music seller, I don't know. And they said, look, you can buy this book from Amazon on the Kindle or you can buy it from us. You can download a PDF from us or you can download these MP3 songs from Madonna's latest album. But you have to sign this contract saying, I promise never to use this information in certain ways. And if I do, I might owe you millions of dollars. Now, who's going to sign such a contract? I mean, look, if I want a book, if I want a Madonna song and I've got to be obligated for millions of dollars of damages if I let my cousin borrow it or if he steals it from me, why would I sign that? I would just go buy a Beyonce album or something. I mean, there's a lot of competition. You know, if there's a book publisher that has terms like that, they're not going to get many customers. I mean, you have to be nice to your customers. You don't want to sue your customers and make them think, you know, for a $5 book or song, you're obligating yourself for your entire life savings if you mess up and use it the way they don't want you to use it. That's nonsense. People want to own these things. That's why the first sale doctrine applies, because when you buy a book from a publisher, you're not leasing it. You're not renting it. You're not borrowing it. You own the book. If I pay you $10 or $20 for your brand-new hard copy, I own the damn book. You know, that's how people look at it. And if you want me to just lease it or loan it, then I'm not only going to pay you $2 or $3 and then you get it back. I mean, so I think the business models that would require contracts would be unworkable, because people would balk at them. And even if they didn't, everyone else that doesn't agree to it is outside this contract, and they can do what they want with it. So you now have a small group of people that are your actual customers that you're penalizing the worst. So you're hurting the few people that actually are paying you money. It makes no sense. Ash says, do I think that MPAA and RIAA are dying monsters? Yes, but they might live a long time because they're propped up by the state and by state copyright law and by lobbying of congressmen. I mean, the Sonny Bono Copyright Extension Act in 1995, I think, which added 20 more years or so onto the copyright term because of lobbying by Disney to keep Mickey Mouse from entering the public domain for another 20 years, also called the Mickey Mouse Copyright Extension Act. You know, this is going to keep them around for a while, and they're getting more and more draconian ability to search people's computers. I mean, I think Apple, there's a story about the other day. Apple, one of their employees lost a new model iPhone in a bar, and they tracked it down with their Find iPhone feature to someone's apartment. And Apple, some Apple kind of quasi-thugs went to this guy's apartment with the police and basically ransacked his apartment looking for the phone. So the government steps in and helps these people that it's in bed with, that it gives these monopolies to. Excuse me, second, close this door. So yeah, I think they're dying. I think that torrenting and pirating and encryption and other ways people have of passing information around is going to get around. The government can't keep up with it, but they can impose a lot of damage along the way, and it can be selectively enforced. So you're going to see a lot of harsh punishments on people like Jami Thomas and others. You know, they might spend 10, 15 years in jail or pay $3 million fine while most college kids get away with this. So it's going to be more and more selectively enforced, which leads to, of course, the government using this selective enforcement of law to abuse people's rights and to make deals and make favors, et cetera. So I mentioned on this last slide here, I mean, I've kind of made it clear by now, but one thing we should realize is that we need to focus on the main features of patents that cause costs, impose costs on the economy and on people's lives and rights. We use the term, we use the scope, you're rid of injunctions. And when you hear people say we have to fix it, okay? Well, you can't fix it. You can make it less bad, but you're not going to nibble around the edges and fix it. And you hear people say, well, we need to get rid of software patents. Well, even if you do, we have regular patents left. We need to reign in patent rolls. Well, what about Apple and Microsoft and suing each other left and right or suing victims like Google and Android vendors? They're not trolls, but they're still causing even more harm because they're seeking an injunction, not just money. The problem is not that the patent office is a bureaucracy or that it's inefficient or that we have junk patents or bad patents or low-quality patents. Even if you made it perfect and even if they granted only patents they were supposed to, these patents are still used for any competitive purposes. Anthony Howard asks, what about this? Can I elaborate on this comment on the last slide about abolishing the new mercantilism? Well, I should have put a link in here. I have a blog post from a month or two ago on that same site, g4sf.org, about mercantilism and how if you look at the history of mercantilism, you had like the government of Great Britain, the crown issuing the horde of monopolies in the 1600s to all these cronies, like the playing card monopoly, others. And then they would actually help these guys enforce it so that the government agents would go with the agent of their monopolist to a competitor shop and search for business cards that were not stamped, stamped with the right approval, the right official seal or whatever. So the government grants these monopolies and then it uses its police power to help enforce them. And we're seeing the same thing now. We see, you know, like the example I just gave of Apple using government cops to accompany it to ransack some guy's apartment because he might have an iPhone 5, which is secret. And you have the Protect IP Act, like I mentioned. You have these warnings at the beginning of all these Hollywood movies saying that warning, the FBI is going to make it a crime and if you intentionally copy this, you might go to jail for 10, 15 years. They're using the state to surveil others, to search their others, to get subpoenas, to sue them, to threaten them, to put them in jail, to take their money, to keep their monopoly lucrative. And so that's the new mercantilism. I mean, we basically still have mercantilism. Patent and copyright law have kept alive a form of mercantilism. So that's what I'm talking about there. We need to get rid of that. Anyone else? Anything not clear in the presentation? I did skip over a few things, which were boring patent lawyer details. Anthony, could you post a link, maybe? Because they'll probably save that for the records of this webinar. Maybe you just put it in this chat window here if you don't mind cutting and pasting it. Anthony, also, the floor is open and we can talk about anything you guys want to talk about. Do you think that copyright law could one day force us to have an actual login for the Internet for more accountability and transparency? That's actually a really good question. The way it looks to me is that the Internet is relatively open right now, but the government is always trying to control the infrastructure of communication. That's why they co-opt education and the post office and the FCC and that's why they also the monetary system and other parts of life. But from what I've seen, the government uses as excuses to regulate the Internet two things, child pornography and gambling to some extent, but primarily child pornography and piracy. If they tried out the child porn court, who's going to be in favor of child pornography? Who's going to speak up in the sense of child pornography? No one. So that's a big card they use. And who's going to be in favor of theft or piracy, if they call it? No one. Well, some people are actually, but it's a good excuse me line for them to use. So I do think that in the name of preventing piracy and preventing child porn and other things like that, the government very well could require ISPs and other people, other aspects of the Internet. The control pooling, they could basically impose ID control, just like they're trying to impose a requirement to carry a national ID around in meat space all the time as well. So sure, that could happen. I hope it doesn't. You have a race between technology, which is fast and galloping fast, even though it's being dragged down by parasites, and the state trying to catch up to it, the wolves of the state. And so to my mind, it's just a race between can this speed, the pre-market speed, gain enough strength and speed to outrun the parasites that are nipping at its heels? And I don't know. I am hopeful that it can, because the government is evil, but it's fairly inept. It's a big bloody, it's a big hammer, but the pre-market has no upper bound in what we can produce if we're just given the chance to do it. So that's how I look at it. Ashes, how do I feel about the law revenue argument when someone is downloading music without paying for it? This was a big part of the debate a few years ago, but the damages couldn't be proven. Well, okay, so there's a couple parts to this. Number one, I would say this is a statutory question. It's a legal question. It's a question of how you interpret the existing positive law. And one reason copyright law is so terrible is it has what's called statutory damages. That is, as long as you have the right formalities in place, like you have a copyright registration or copyright notice, then you can assume a certain amount of damages per infringing incident, even if the owner of the copyright can't prove actual damages. So getting rid of statutory damages would be a big improvement, because then you'd have to prove actual damage, and that would be hard to prove, because this is not theft of a real thing. See, that's why I put these in there. Now, I actually have wondered and blogged about, I wonder why no one has made a sustained argument yet that the imposition of these statutory penalties are not a violation of the Eighth Amendment. The Eighth Amendment to the U.S. Constitution prohibits the federal government from imposing cruel or unusual punishments or excessive fines. Now, it seems to me that imposing $7,500, or maybe multiples of it, arbitrarily for copying one NB35 one time without any proof of any actual damages is an excessive fine, because it could be a million times the actual damage cost. I mean, isn't that cruel and unusual or excessive? So I think it's horrible. Second of all, well, the sweet things. The second, on an empirical matter, it's not clear at all that most content creators are harmed by copying. I think Corey Doctorow said in one of his articles that it might be a challenge to figure out how to make money if you're a content creator, like an artist or a novelist or a painter or whatever, or a musician. It might be hard to figure out how to make money in a world where copying your content is very easy, but he's never heard of anyone who made money from being obscure and being unknown and keeping his content under wraps. So in other words, there's no choice but to get yourself out there to get a name, and then you need to figure out how to make money off of it, and you're not going to make money by hurting people that copy it and that like you. I actually don't think there's good grounds to think that you do lose money from people copying your work. Now, there are some megastars like Madonna and others that might make less money from selling MP3s, although their studios probably make more than they do. But, you know, you have Rolling Stones and Madonna and Prince, people like this making $50 million a year just from selling tickets to their concerts, which they sell for that price because they're popular because people have listened to their music. Theoretically, they could give all their music away for free as a law leader to get people in the door for concerts. And finally, I would say for libertarian theory, you don't have a property right to money other people own. You don't have a property right to have customers or fans. So if you lose revenue, that's just too bad. I mean, if I have a small drug store that I mentioned earlier, and Walmart or Walgreens opens a big competitor next to me, I might lose revenue. So what? You don't have a right not to lose revenue because you don't own the revenue that you could have gotten from customers whose wives you don't own. Anthony says, are permanent royalties similar to permanent damages in a nuisance case? I'm not sure exactly what you're asking. If you want to elaborate, you can try. I'll try to grapple with that for a second, but royalties are never permanent that I'm aware of. They only last as long as the monopoly underlying grant lasts. So if a patent is being sued on and there's six years left, then the royalties would go for six years if you negotiate that. If you have a copyright and it lasts for 30 more years, then you can have 30, which is not permanent. In a nuisance case, I don't really know if there's a big similarity because I guess that could be permanent. Ash says, what are some examples of where there are no copyrights available? Clothing, card designs. Well, yeah, fashion design is a big one. Card design is one, except there was a case on one of my websites, one of my blog posts, where there was like a group of, I think it was Ford Car Enthusiasts. They had their little website and all these guys that loved their Ford cars and they were sharing pictures of their own cars and they got a cease and desist letter from Ford saying you're violating our copyright. I mean, it's insane. It's insane to me from a business point of view. I mean, you're hurting your most die-hard fans who are not hurting you at all. Now, as for clothing, the fashion industry has been large – well, there's other – how about perfume? I mean, have you ever gone to a drugstore and you've seen a knockoff bottle of Chanel or whatever, number five? And it's one-fifth the price and it smells usually almost identical because these guys have reverse engineered the formula, which is legal, and they recreated it with chemicals. Now, and the same thing with Tylenol and other drugs. Like Tylenol is $5 a bottle and generic Walgreens, acetaminophen or Provers, acetaminophen is $2 a bottle. I mean, it's half the price. Some people buy the cheaper one. Some people buy the one that's got the better name brand. The name brand helps command a lot because of reputation and similar things like uniformity and whatever. But if I wanted to give my wife a gift for our anniversary, I don't think I would give her the Walgreens smells just like Chanel number five, perfume. I might get the times are tough, but I want the real thing. I'll buy the real thing and I'll pay a premium for it. In the fashion of the industry, there's several bills being promoted to stop knockoffs. But there's actually reason to believe that knockoffs help the high fashion because it helps for high turnover. So they come out with a new design that's emulated by the others and by the Walgreens and the Walmarts and the lower end stores eventually. And that makes the high end design less fashionable, so the people that can afford that now want a new one to replace it. So it's always churning and there's nothing wrong with this kind of competition. One thing that's interesting I will mention here is that Anthony mentioned when you granted the right to commit a nuisance, they pay out an amount. Sometimes it's a one-time amount. Sometimes it's a continuing amount. Same thing with royalties for copyright or patents. Sometimes it's a one-time fee. Sometimes it's permanent. But anyway, here's one interesting thing about patent and copyright and trademark in fashion. There's no patent or copyright in fashion design. So if Chanel had a purse or a shoe or a dress, then another company could knock it off. So what they do is they put their trademark all over it. This is why Louis Vuitton purses have that on it. That's why Chanel purses have that little C logo all over it. They put their trademark into the design of the product, like the luggage or whatever, because trademark could be used to stop people from copying it, because then there's a trademark infringement. So they actually embed their trademark design into the product as a way to stop competition, because they can't rely on patent and copyright, so they find a way to rely on trademark. Well, my view, trademark is almost all illegitimate as well. In a free market, they wouldn't be able to do that. I mean, they'd be able to put it on there, but they wouldn't be able to stop someone else from making an identical dress or luggage that had the same design on it. As long as they didn't defraud a customer, what's wrong with it? They're just making something someone wants. So anyway, we're past time now. I'm happy to go further. If anyone has more questions, but if no one has any more questions, we can wrap it up in a few minutes, so you guys just let me know if you have more questions. Otherwise, John Dugan, how did I come to my position on IP? He doesn't know many IP lawyers who are willing to criticize their own rice bowl. Well, I was a libertarian when I became a patent lawyer, and that was 1992, let's say. And I had read Ayn Rand stuff in law school, and I remember in 88, 85, in law school and earlier, I always thought Ayn Rand's defense of patent and copyright was a little bit troubling. It didn't make a lot of sense. So I kind of scratched my head about it like, this is something wrong with her argument. And as I went to law school, and especially as I started practicing patent law in 92, 93, I started thinking more about it like, I need to figure this out. And I couldn't figure out a way to defend it. I assumed she was right, but I couldn't justify it, and I kept bludding up against other libertarian principles. And finally, I realized, wait a minute, that's because you can't justify this. It's a completely illegitimate deal. And I read some other people's stuff, which helped convince me, like Wendy Nakaroy and Benjamin Tucker and Tom Palmer and others have some good stuff on this. And finally, I went, oh, it's actually a bad idea. And then everything makes sense. So I started writing about it. And it was sort of an underground thing. No one really paid attention to it, even though I started writing on it in 1995, 94. But around, you know, that's when the internet started, and that's when people started thinking about this a lot harder. And then I turned around, I say around 2000, 2002, 2003, 2004, a lot of libertarians started realizing this thing is getting really out of hand with the internet. And they started looking at the issue more. And I had already written something on it, so it got more relevant and germane to the existing problems we were facing. And now it's become just a huge issue. I think IP is one of those top, say, six things wrong that the government does, and potentially one of the top two or three or four things that can use to control and to destroy symbolization going forward. So it's important that we get this right. Well, thank you. All right, I enjoyed it, everyone. Feel free to email me after if I don't answer all your questions. Ask for zeropay.com out there. Hmm, what's that about? I'll click it and see. Anyway, I'll check it out later. I enjoyed the webinar. Feel free to email me questions after, and I'll be happy to talk with any of you later. Good night. Have a good weekend, everybody.