REVISION: The Bankruptcy Partition
Many current bankruptcy debates—from critical vendor orders to the Supreme Court’s decision last year in Czyzewski v. Jevic Holding Corporation—begin with bankruptcy’s distributional rules and questions about how much discretion a judge should have in applying them. It is a mistake, however, to focus on distributional questions without first identifying the bankruptcy partition and ensuring it is properly policed. What appear to be distributional disputes are more often debates about the demarcation of the bankruptcy partition and the best way to police it.
Once the dynamics of establishing and policing the bankruptcy partition are taken into account, there is little room for departures from bankruptcy’s distributional rules. There might be a few rare cases in which maximizing the value of the estate requires it, but these inhabit an exceedingly narrow domain so small and so hard to navigate that they are sensibly handled with a per se rule that prohibits them.
REVISION: Access and the Public Domain
One of the constitutive notions of intellectual property is the public domain. These are the ideas, notions and works that are usable by all where no person can invoke a right to block use by another.
I am interested in the mechanics of accessing the public domain and the consequences of the choices that we make about the operational effectiveness of various tools available for controlling access to the public domain. That matters both for the extent of access but also importantly for the ...
New: The Scope and Implications of Stern v. Marshall, 131 S. Ct. (2011)
This paper discusses the possible meaning and effect of the Supreme Court’s recent decision in Stern v. Marshall, in which the Court held that the bankruptcy courts’ statutory authority to enter final judgments on certain counterclaims against creditors violates Article III of the Constitution. It was prepared by the authors as a report to the fall 2011 annual meeting of the National Bankruptcy Conference.
The Stern decision is enigmatic. While stressing the narrowness of the issue decided, ...
New: After Google Book Search: Rebooting the Digital Library
The rejection of the Google Book Search settlement means that we are at a point of rebooting how we design our digital library future. There were many criticisms of GBS and the settlement but perhaps chief among those was the risk that approval of the settlement would have locked in a single approach to digital libraries. Google would have received unique access to the so-called orphan works and that would have provided it what may have been a decisive advantage against digital library ...
New: The Razors-and-Blades Myth(s)
The razors-and-blades story offers a foundational understanding of a key area of economics and strategy: Invest in an installed base by selling the razor handles at low prices or even giving them away, then sell the razor blades at high prices to justify the prior investment. Large chunks of modern technological life - from VCRs and DVD players to video game systems like the Xbox and now ebook readers - seem to operate subject to the same dynamics of razors and blades.
At least on the paper, ...
New: Organizing Competition and Cooperation after American Needle
In American Needle, Inc. v. National Football League, in a unanimous decision by Justice Stevens, the U.S. Supreme Court concluded that the NFL’s licensing activities constituted concerted action subject to Section 1 inquiry under the Sherman Act, even though the actual licensing itself was done via a separate corporate entity. In so deciding, the Court laid to rest the notion that the NFL and similarly-organized sports leagues should be treated as a single entity wholly outside of Section 1 ...
New: Assessing Competition Issues in the Amended Google Book Search Settlement
Google takes products out of beta status slowly, even while it is making substantial improvements in the product. Objectors will see the amended settlement agreement as a mixed bag, with some finding almost nothing in the changes (privacy advocates and those who fear high prices for institutional subscriptions), while others will find their concerns addressed (foreign governments acting, one hopes, with the correct sense of the interests of foreign authors).
The amended settlement agreement ...
New: Easterbrook on Copyright
In this essay prepared in celebration of Judge Frank Easterbrook’s 25th year on the bench, I focus on what copyright students learn from him. Three of his dozen or so copyright opinions turn up repeatedly in copyright casebooks: Nash v. CBS, Inc.; Lee v. A.R.T. Co.; and ProCD, Inc. v. Zeidenberg. This is a surprising success rate for a judge from the copyright-starved 7th Circuit. Judge Easterbrook has an eye for fundamental questions, writes opinions that are brief while treating issues fully ...
REVISION: Antitrust and Innovation: Framing Baselines in the Google Book Search Settlement
The Google Book Search Settlement has received a great deal of attention. In response to opposition, the original settlement has been delayed and will now be resubmitted. In this brief paper, I address three points. First, I do a quick status update on competition issues in the case. Second, I turn to a key issue that has emerged in the commentary on the competition issues, namely, what is the right way to frame the competition policy baseline for assessing whether a new arrangement such as ...
REVISION: The Google Book Search Settlement: A New Orphan-Works Monopoly?
This paper considers the proposed settlement agreement between Google and the Authors Guild relating to Google Book Search. Google boldly launched Google Book Search in pursuing its goal of organizing the world’s information. Even though Google was sensitive to copyright values, the service relied on mass copying and thus Google undertook a substantial legal risk in setting up the service. That risk was realized with the lawsuits by the Authors Guild and the Association of American Publishers ...
REVISION: The Mediated Book
Text in hand, we have read books by candlelight, oil lamp and Edison's incandescent bulb, maybe even the occasional CFL. But even as light itself has changed, the book has remained constant. Until now. With the rise of Google Book Search and ebook readers like Amazon’s Kindle, we have entered the era of the mediated book. We will still browse and read books, but we will do so through a screen.
This is more than just a change in medium. Digital texts are inherently on-demand works, that is, ...
New: Online Advertising, Identity and Privacy
For individuals, the basic architecture of computing is changing. That is obviously about the device itself, with the desktop or laptop computer now being supplemented with other computing devices such as the smartphone and the netbook. That switch, coupled with ubiquitous wireless access, means that many people have access to computing power whenever and wherever.
The way in which we use these devices has changed. We have switched from the freestanding world of the desktop computer and the ...
REVISION: Competition and Privacy in Web 2.0 and the Cloud
With Web 2.0, we have once again changed how we use computers. That change has brought with it new intermediaries who sit at the crossroads of the matching and coordination that define how we use the Internet today. Those intermediaries - Google first and foremost - have access to extraordinarily detailed information about their customers. That information arises naturally from the very services provided. We will see a similar pattern as cloud computing becomes more important, and cloud ...
New: Take Two: Stare Decisis in Antitrust - The Per Se Rule Against Horizontal Price-Fixing
In this essay prepared for the American Bar Association's 56th Antitrust Law Spring Meeting, I consider two issues that pertain to the overall question of what antitrust doctrines are up for retirement. First, we can't consider that without understanding how the Supreme Court approaches stare decisis in antitrust. The Court's 5-4 decision in Leegin identified some of the fault lines on this issue. The Court has suggested that it should approach stare decisis differently in statutory areas from ...
New: Fair Use v. Fair Access
In this paper, I make four points.
1. The copyright act defines use rights, not access rights. That overstates slightly - especially with the Digital Millennium Copyright Act in the statute - but the core of copyright law addresses how works can be used assuming that legal access has been obtained. Other law addresses the circumstances under which works can be accessed.
2. Nothing in copyright itself suggests that use rights should trump access rights; indeed, our core access principles ...
REVISION: Twombly, Leegin and the Reshaping of Antitrust
This paper considers the four antitrust decisions in the Supreme Court's 2006 Term.
It offers brief discussions of Weyerhaeuser and Credit Suisse. Weyerhaeuser is a small, modest decision. The Court isn't likely to see another predatory bidding case soon and the Court chose to minimize doctrinal complexity by bringing predatory bidding analysis in sync with the Court's prior treatment of predatory pricing in Brooke Group. Credit Suisse too is minimally incremental. In concluding that ...
New: Pulling a Rabbi Out of His Hat: The Bankruptcy Magic of Dick Posner
This essay was written for a volume celebrating Judge Richard Posner's 25 years on the bench. The article considers his opinion in Bank of America v. Moglia, which addresses the status of rabbi trusts in bankruptcy. The rabbi trust is first and foremost a tax device, a way to ensure a contigent delayed payment and yet do so without incurring current tax income to the beneficiary of the trust. But the key condition that delays the receipt of income - namely that the assets of the trust remain ...
New: Antitrust and Regulation
Since the passage of the Interstate Commerce Act (1897) and the Sherman Act (1890), regulation and antitrust have operated as competing mechanisms to control competition. Regulation produced cross-subsidies and favors to special interests, but specified prices and rules of mandatory dealing. Antitrust promoted competition without favoring special interests, but couldn`t formulate rules for particular industries. The deregulation movement reflected the relative competencies of antitrust and ...
New: Of Pirates and Puffy Shirts: A Comment on the Piracy Paradox: Innovation and Intellectual Property i
This is a comment on Kal Raustiala & Christopher Sprigman, The Piracy Paradox: Innovation and Intellectual Property in Fashion Design, 92 Va. L. Rev. 1687 (2006).
The Piracy Paradox builds on the fun of fashion to undertake a serious exploration of whether we can sustain innovation without property rights. That is an important question, as copyright brings with it a real cost in blocking follow-on uses and a new fashion copyright would limit subsequent copying. We need to ask whether that ...
New: Review of Hovenkamp: 'The Antitrust Enterprise: Principle and Execution'
This is a review of Herbert Hovenkamp's book 'The Antitrust Enterprise: Principle and ...
New: Antitrust and Regulation
More than a century ago, the federal government started controlling competition, first railroads through the Interstate Commerce Act and then the general economy under the Sherman Act. The Commerce Act assigned primary responsibility to the first great federal agency, the Interstate Commerce Commission, while the Sherman Act relied for its implementation on federal courts of general jurisdiction. Since that time, there has been an ongoing struggle to formulate the appropriate policy for ...
REVISION: Who Should Regulate Entry into IPTV and Municipal Wireless?
We are at an unusual moment in telecommunications. We have two very live cases of entry: Internet protocol television (IPTV) and municipal wireless broadband. IPTV will create new competition with cable, satellite and over-the-air broadcast TV, promising lower prices and new services. Muni wireless makes it possible for local communities to add new broadband capabilities to compete with DSL and cable broadband.
Unsurprisingly given the newness of the services, there is substantial ...
New: Mistrust-Based Digital Rights Management
The powerful shift in copying technology over the last thirty years has destabilized how we produce copies and the economic arrangements associated with prior technologies. These technological changes have created a broad shift in the ability to make copies moving control away from producers towards consumers. As a consequence, these technologies have altered the practical enforceability of the rights that law assigns to copyright owners.
Digital rights management technologies are an effort ...
Entry Policy in Local Telecommunications: Iowa Utilities and Verizon
This paper offers legal and economic analysis of two recent Supreme Court decisions, AT&T Corporation v. Iowa Utilities Board and Verizon Communications v. FCC. The paper is written with two audiences in mind. For those unfamiliar with the cases, we offer what we hope is an accessible yet detailed account of the underlying policy issues raised by a legal regime that requires incumbent local telephone carriers to lease parts of their telephone networks to would-be rivals. To that end, we ...
Rewinding Sony: The Evolving Product, Phoning Home and the Duty of Ongoing Design
The emergence of distributed storage, machine intelligence and cheap communications has give rise to the networked product. These are products that can evolve even after versions of the product have been put into the hands of consumers. The most interesting consumer products of the day are networked products. This includes the natural successor to the VCR-whether the plain digital video recorder or the TiVo favored by the digerati-and the ubiquitous iPod and its less chic cousin MP3 players ...
Copyright and the DMCA: Market Locks and Technological Contracts
Copyright has emerged as a pliable tool, to be bent and shaped by firms and frequently with an eye towards disadvantaging competitors through the erection of entry barriers. The easy manner in which copyright arises makes it possible for firms to get copyrights and threaten competitors with costly infringement actions. This is the use of copyright as more than just defining property rights, the use of copyright in creating market locks. But we would paint with too broad a brush were we to ...
Unbundling Scope-of-Permission Goods: When Should We Invest in Reducing Entry Barriers?
Scope-of-permission goods are goods of arbitrary scope, where consumption of the good is non-rivalrous, where users can be excluded from consuming the good - through market organization, technology or law - and where increments to the good can be added to the good, once they are created, at zero marginal cost. Scope-of-permission goods naturally include pay TV, computer software, copyrighted works and licenses from collective right collectives such as ASCAP and BMI.
These goods have been ...
Cyber Security: Of Heterogeneity and Autarky
The wonder of the Internet is incredibly capable computers connected with each other under the control of individuals. For all of the reasons that we think that decentralization is a powerful force we have applauded the ability of individual users to set up websites and make their ideas available to others. But there is a dark side as well. Always - on connections, extra computing cycles and gigabytes of storage to burn mean that individual decisions can propagate throughout the network quickly.
The Digital Video Recorder: Unbundling Advertising and Content
Next time you turn on your television, actually watch the commercials and you will quickly see how poorly the economic model of TV is working. They put on a commercial for dog food, but you don't have a dog. Many of the commercials are for product categories that you do not purchase, and others are for products, such as cars or computers, that you use constantly but purchase only sporadically.
The digital video recorder (DVR) may change this dramatically. The DVR will allow us to unbundle ...
Understanding Statutory Bundles: Does the Sherman Act Come with the 1996 Telecommunications Act?
Three recent appellate decisions - Goldwasser, Trinko and Covad - have addressed the interplay of the 1996 Telecommunications Act and the antitrust laws. This area raises questions of both substantive law and standing. This essay focuses on standing and in particular the question of how the antitrust doctrine in Illinois Brick should apply to situations in which there is an alleged breach of an access duty owed by an incumbent local exchange carrier. That access duty might arise under the 1996 ...
From Edison to the Broadcast Flag: Mechanisms of Consent and Refusal and the Propertization of Copyr...
Encryption propertizes copyright. Prior to the rise of encryption, intellectual property wasn't really property. Instead, these rights consisted of rights to sue to block use or seek damages for after-the-fact use. Encryption makes possible before-the-fact limits on use of the sort that we associate with physical property. Copyrighted works are becoming real property in a way that will never happen for trademarks or patents.
This essay traces the role of consent and refusal for copyrighted ...
Copyright as Entry Policy: The Case of Digital Distribution
In this paper, I consider how copyright law influences entry in digital distribution of music and video. The subject encompasses past and current successes in distribution-cable TV and the VCR-current and recent controversies-Napster and the pending cases addressing its successors-as well as possible next steps in distribution, such as web radio, interactive music services and the digital video recorder.
Section I of the paper considers six ways that online distribution matters: 1. as a new ...
Pursuing a Remedy in Microsoft: The Declining Need for Centralized Coordination in a Networked World...
In this paper, I make a number of points about the Microsoft case itself and the next steps that should take place. In particular, I argue that:
- No Liability for Tying. Microsoft should not be found liable under the Sherman Act for tying Internet Explorer to Windows. In the pre-networked world, Windows played the central role in coordinating the sharing of software. Incorporating a browser would have been perfectly consistent with that role.
- The Drop in the Cost of Software ...
Regulating Network Industries: A Look at Intel
This paper examines the Federal Trade Commission's recent settlement with Intel. Evaluating the FTC's case against Intel turns on tricky issues regarding the dynamics of cross-licensing. These are essentially barter transactions, and we have only a weak understanding of when firms will turn to barter. Interfering with cross-licensing will make it more difficult for these transactions to take place, and to understand the importance of that, we need to have a better handle on the relative ...