US Trade Representative Report on Global IP Threats Focuses on China

On April 27, 2022, the Office of the United States Trade Representative (USTR) released the 2022 edition of its annual Special 301 Report (Report). The Report identifies 27 trading-partner nations where the threat to American Intellectual Property (IP) rights is particularly high.

Emphasizing that "[c]ombating … unfair trade policies will encourage domestic investment in the United States, foster American innovation and creativity, and increase economic security for American workers and families," the Report places seven countries – Argentina, Chile, China, India, Indonesia, Russia, and Venezuela – on a "Priority Watch List" and twenty others on a "Watch List."

Among other concerns, the Report focuses on counterfeits, both physical and digital; online and broadcast piracy; trade secret protections; and "indigenous innovation" policies.

China, given statements by government officials suggesting that its approach to IP "should serve the needs of domestic innovation-driven development" at the expense of foreign IP rights holders, receives the lion's share of the Report's attention. Forced technology transfers, onerous licensing terms, IP-centered hacking, counterfeiting, and bad-faith trademarks are just some of the issues specific to China that the Report discusses.

Ukraine, which appeared on the "Priority Watch List" in the 2021 Special 301 Report, is excluded from the 2022 Report in light of its "premeditated and unprovoked further invasion" by Russia earlier this year. Saudi Arabia, meanwhile, was removed from the list after implementing measures to improve its enforcement of IP rights.

The Report also targets the European Union's geographical indications (GI) policies, which can cause problems for certain U.S. trademark holders.

In a March 2022 post to the Free State Foundation's blog, I noted the release of a related USTR annual report, the Notorious Markets List, which "identifies illustrative examples of online and physical markets that reportedly engage in, facilitate, turn a blind eye to, or benefit from substantial copyright piracy and trademark counterfeiting."

2021 List of Notorious Piracy, Counterfeiting Markets Released

On February 17, 2022, the Office of the United States Trade Representative (USTR) released the eleventh edition of the Notorious Markets List (NML), its annual overview of the most glaring hotbeds, virtual and physical, for counterfeit goods and pirated content.

Officially titled the "2021 Review of Notorious Markets for Counterfeiting and Piracy," this most-recent NML provides a summary of markets "that reportedly engage in, facilitate, turn a blind eye to, or benefit from substantial piracy or counterfeiting."

The NML, which incorporates responses from the public to a Request for Comments published in the Federal Register in August of last year, is designed "to increase public awareness and help market operators and governments prioritize intellectual property enforcement efforts that protect American businesses and their workers."

(Incidentally, the NML is separate from, but related to, USTR's "Special 301 Report," a congressionally mandated yearly summary "of the global state of intellectual property (IP) rights protection and enforcement.")

The theft of copyrighted material is a serious criminal problem with massive financial implications for creative industries. Citing a U.S. Chamber of Commerce report, the NML notes that piracy "in 2019 cost the U.S. economy an estimated $29.2 billion in lost revenue." Accordingly, one of the goals of the NML is to "motivate appropriate action by the private sector and governments to reduce piracy and counterfeiting."

The 2021 edition of the NML highlights 42 online destinations and 35 geographic locations where the manufacture of counterfeit goods and the theft of copyrighted material run most rampant. The latter includes applications like Popcorn Time ("Known as the 'Netflix of piracy'") and websites such as ThePirateBay ("the most frequently visited bittorrent index site in the world").

In addition, the NML reports on enforcement-related developments, concluding that there have been "notable efforts" and "impressive results" in the ongoing fight to rein in online piracy enabled by Internet protocol television (IPTV) apps and physical illicit streaming devices (ISDs).

However, the NML also acknowledges commenters' serious concerns regarding the existence and continued evolution of what it describes as a "complex ecosystem" facilitating efforts to steal, and profit from, copyrighted content. One that includes "domain name registries and registrars, reverse proxy and other anonymization services, hosting providers, caching services, advertisers and advertisement placement networks, payment processors, social media platforms, and search engines."

A related development of heightened concern involves what the NML describes as "piracy-as-a-service" – that is, comprehensive wholesale offerings that make it even easier for a would-be pirate by providing all of the required tools: "website templates that facilitate the creation of streaming websites, databases of infringing content, dashboards that allow a pirate IPTV operator to oversee the infrastructure of their service, IPTV panels used for generating and distributing playlists of pirate IPTV channels, and hosting providers that specialize in servicing infringers."

U.S. Trade Representative Report Spotlights Rogue Piracy Websites and Devices

Online piracy deprives copyright owners of their exclusive rights to the proceeds of their creative works and causes billion-dollar damages to the U.S. economy each year. Identifying large-scale intellectual property piracy operations is an important part of combatting such harmful and unlawful activities. The U.S. Trade Representative's annual report on Notorious Markets focuses on online copyright piracy involving stream-ripping websites and illicit streaming devices. The report’s publication exerts pressure on foreign governments and private entities to curtail IP piracy in their vicinities. 

Released on January 10, the U.S. Trade Representative’s report for the year 2017 includes a “Notorious Markets List” intended to highlight “prominent and illustrative examples of online and physical marketplaces that reportedly engage in, facilitate, turn a blind eye to, or benefit from substantial [copyright] piracy and [trademark] counterfeiting.” According to the report’s press release: “Imports in counterfeit and pirated physical products is estimated at nearly half a trillion dollars.”Publication of the of Notorious Markets List is intended “to motivate appropriate action by owners, operators, and service providers in the private sector of these and similar markets, as well as governments, to reduce piracy and counterfeiting.” 

The Notorious Markets List identifies the stream-ripping websites that, without authorization, convert copyrighted music and video content from licensed streaming sites into files that are downloadable by Internet end users. The Notorious Markets List draws particular attention to online piracy sites funded by ad revenue. The report cites a whiteBULLET report of the top 5,000 IP-infringing website URLs in the U.S., European Union, and Australia, which found that “about 25-30% of advertising on websites posing an IP risk are from major brands.” The List specifically names piracy sites – or alleged piracy sites – operated by foreign entities and/or hosted in foreign nations, such as France, Russia, and Vietnam. 

Further, Internet end users seeking unauthorized access to copyrighted content can be harmed by online piracy. The report observed that online piracy sites “actively and surreptitiously install malware on users’ computers, commit advertisement fraud, and enable phishing scams that steal personal information, all to increase their unlawful profits.” And it cited a July 2016 Digital Citizens Alliance report that one-third of copyrighted content theft sites “expose consumers to malware and other risks.” 

The 2017 Notorious Markets Report also focused on the issue of illicit streaming devices (ISDs). Using piracy apps, ISDs stream or download pirated content from the Internet. According to the report, ISDs can be “fully loaded” at the time of sale with piracy-enabling capabilities or ISDs can be “combined with add-ons after purchase” to access pirated content. 

Under Section 106 of the Copyright Act, copyright owners of sound recordings, motion pictures, and other audiovisual works have exclusive rights over the distribution of their works. Copyright owners negotiate detailed licensing agreement for rights to stream or download copyrighted content to retail consumers. But ISD-enabled piracy violates the exclusive rights of copyright owners and also impairs their contract rights contained in licensing agreement terms of service. 

The 2017 Notorious Markets Report describes the economic consequences: “The growth of ISDs is a troubling threat to the pay TV and other content industries and undermines incentives for companies to improve services or offer a greater selection of content in more markets.” Citing findings published by Sandvine in November of 2017, the report states: “ISD piracy ecosystem, including unlawful device sellers and unlicensed video providers and video hosts, stands to bring in revenue of an estimated $840 million a year in North America alone, at a cost to the entertainment industry of roughly $4-5 billion a year.” Correctly, the report deems it “critical” for governments and private industries to fight threats from growing ISD piracy. 

On the good news side, the report explained why certain online piracy sites were removed from the prior year’s Notorious Markets List, thanks largely to civil and criminal enforcement efforts by cooperative foreign governments and industries. The U.S. Trade Representative rightly commended those overseas anti-piracy efforts. 

International engagement is essential to protecting the exclusive rights of U.S. copyright holders abroad. The U.S. Trade Representative performs a vital function in this regard. Hopefully, the 2017 Notorious Markets Report will prompt stronger enforcement efforts against copyright violations by stream-ripping sites, illicit streaming devices, and other piracy-enabling platforms in 2018.

Summer Reading: “Our Republican Constitution”

Regular readers know I don’t often do book reviews in this space, and, truth be told, this won’t be a full-fledged review either. But if you are looking for an important book to read during the summer reading season, I want to commend Randy Barnett’s just published “Our Republican Constitution – Securing the Liberty and Sovereignty of We the People.”

First, two “trigger warnings” of sorts. Our Republican Constitution is a serious, thought-provoking book, but not necessarily one you’d grab for a day at the beach if you usually look for the latest Dan Brown or James Patterson offering.

And please pay attention to the second warning. Mr. Barnett’s book is about two different visions concerning what our Constitution means. He calls these divergent visions the “Democratic Constitution” and the “Republican Constitution.” But, as he says, “I don’t intend these labels to be partisan.” If you read the book, you will see that this is true. Mr. Barnett is not referring to the current Democrat and Republican parties.

With those trigger warnings out of the way, what differentiates the two divergent constitutional visions? According to Mr. Barnett, those who favor the Republican Constitution view the “We the People” – the opening three words in the Constitution’s Preamble – as individuals, while those who favor the Democratic Constitution view “We the People” as a collective entity.

Those who favor a Democratic Constitution hold a conception of popular sovereignty that elevates majority will as the presumptive governing doctrine. So, in this view, “the only individual rights that are legally enforceable are a product of majoritarian will – whether the will of majorities in the legislature who create ordinary legal rights, or the will of majorities who ratified the Constitution and its amendments and created constitutional rights.” Therefore, Mr. Barnett concludes, “under a Democratic Constitution, first comes government and then come rights.” (Emphasis in the original.)

Under a Republican Constitution, the presumptive governing doctrine is reversed. Sovereignty resides in people as individuals. “We the People” is not a collective group but rather a collection of individuals. And, in the words of the Declaration of Independence, it is a “self-evident” truth that each individual is endowed “with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness.” As the Declaration goes on to say, “That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed.”

I don’t want to make Mr. Barnett’s case here and, in any event, I can’t do it in light of space limitations. But I will say that he marshals considerable evidence to show that our Founders incorporated into the Constitution’s language and its structure, including the Ninth and Tenth Amendments, the Declaration’s claim that individuals possess certain inalienable natural rights. Thus, Mr. Barnett asserts: “A Republican Constitution views the natural and inalienable rights of these joint and equal sovereign individuals as preceding the formation of governments, so first come rights and then comes government.” (Emphasis in the original.)

So now consider the core of the difference between the two constitutional visions: 

The Democratic Constitution – “first comes government and then come rights”

The Republican Constitution – “first come rights and then comes government”

Or put another way, the Democratic Constitution’s vision places much more emphasis on majoritarian rule at the expense of protecting individual rights, while the Republican Constitution places more emphasis on securing individual rights at the expense of giving force to the majority’s will.

In essence, Mr. Barnett argues, convincingly in my view, that the Founders’ primary concern when they met in Philadelphia in the summer of 1787 was to adopt a governing charter that would guard against the excesses of “pure democracy,” especially against violations of property rights, then prevailing in the States under the Articles of Confederation. This concern regarding “pure democracy” – or unconstrained majoritarian rule – was expressed this way by James Madison to Thomas Jefferson in a famous October 1788 letter:

“Wherever the real power in a Government lies, there is the danger of oppression. In our Governments the real power lies in the majority of the Community, and the invasion of private rights is chiefly to be apprehended, not from acts of Government contrary to the sense of its constituents, but from acts in which the Government is the mere instrument of the major number of the constituents.”

Hence, the adoption of a Republican Constitution that created a representative government, with separation of powers and checks and balances, a republic intended to protect individual rights against the power of the majority.

In a portion of the book addressing how the progressive vision of the Democratic Constitution has facilitated the rise of today’s massive administrative state, Mr. Barnett says this about Chevron deference: “[I]t has profoundly weakened the separation of powers that is supposed to secure the sovereignty of the people and their servants in government.” Regular readers know that I have expressed a similar view, most recently here.

A significant portion of Mr. Barnett’s book is devoted to showing the extent to which the Republican Constitution vision has been lost, the adverse consequences of such loss, especially with respect to loss of individual freedom, and how “We the People” can redeem the Republican Constitution. On the latter score, I’ll just add that I agree with Mr. Barnett’s suggestion that the first thing we need to do is understand our constitutional heritage. I’m less enamored of some of the structural changes he suggests, such as establishing term limits for members of Congress or replacing the now-defunct power of state legislatures to select a state’s senators with a new provision giving a majority of state legislatures representing a majority of the population the power to repeal any federal law or regulation.

But read the book and draw your own conclusions!

*     *     * 

Finally, here’s another important book for a summer read, one you can proudly display either while sitting in a beach chair or in your own musty, book-lined study: “The Constitutional Foundations of Intellectual Property – A Natural Rights Perspective”, co-authored by me and Seth Cooper, my Free State Foundation colleague. Our book draws on many of the same historical, philosophical, and jurisprudential sources as Randy Barnett’s in arguing that, by including the Intellectual Property Clause in the Constitution of 1787, the Founders intended to secure the natural right of authors and inventors to reap the rewards from the fruits of their labors. Like Mr. Barnett, we look to John Locke, James Madison, and Abraham Lincoln, among others, in support of our project in support of the protection of intellectual property rights.

Right now, the Constitutional Foundations of Intellectual Property is available here from Amazon at a deeply discounted price. This steep discount may not last for long.

Another TAG Effort to Combat Online Piracy

On June 9, 2016, the Trustworthy Accountability Group (TAG) announced that advertising agencies Interpublic and Omnicom as well as Google, Go Daddy, and Bayer Consumer Health have joined its voluntary initiative that is aimed at preventing ad placement on websites which facilitate the distribution of pirated content and/or the illegal dissemination of counterfeit goods. (See this February 2015 blog for more on TAG.)

The addition of these companies and advertising agencies to TAG’s ongoing initiative should be helpful in reducing the $2.4 billion that legitimate content creators and entrepreneurs lose to pirated websites each year. In 2014, ad-supported piracy generated $204 million in aggregate revenue according the Digital Citizen’s Alliance. Without the use of Google’s search engine facilitating as much distribution of illegal content, piracy loss should be meaningfully reduced. Google’s support, if implemented properly, should mean YouTube users will not be able to generate ad-supported revenue from pirated content.

It is necessary to address, and diminish, piracy and content theft through voluntary initiatives like TAG's that help ensure that content creators, artists, innovators, and marketers can earn a return on their creative works!

Four Reasons to Reject Piracy of Movies

If you haven't seen Rob Atkinson's response in HuffPo to a piece by Reason's Nick Gillespie defending, if not extolling, piracy of movies, then you really should. Rob's piece is titled, "No, Piracy Is Not the Sincerest Form of Flattery."

Rob makes these excellent points in response to Gillespie's wrong-headed defense movie piracy:

• "First, these films were pirated because they were popular, not the other way around."

•  "Second, Gillespie's claim that filmmakers rarely lose money to piracy is patently false."

•  "Third, Gillespie's argument that piracy helps keep movies circulating in the public 'long after the industry PR machine has shut down' ignores the bevy of legal alternatives that consumers have to easily find legal versions of just about any content they want."

• "Finally, one would expect the editor of a libertarian publication like Reason to not only respect the property rights of content holders, but also to respect the free market."

In support of this last point I was pleased, and grateful, that Rob referred to the new book, The Constitutional Foundations of Intellectual Property - A Natural Rights Perspective, co-authored by Seth Cooper and me. In our book, I think we demonstrate that, in large part, the Founders were motivated to include the Intellectual Property Clause in the Constitution to protect the fruits of the labors of authors and inventors and other creators -- which fruits, as a matter of natural right, become the property of those who labor to them.

One of our chief motivations in writing the book was to invite those who call themselves conservatives, libertarians, constitutionalists, or the like -- but, who, for whatever reason, don't respect IP rights -- to consider the reasons why the IP Clause is included in the Constitution and to respect intellectual property just like other forms of property. And surely not to dismiss the need to safeguard intellectual property just because it finds its way online.

I respect Nick Gillespie, I've read many of his works, and I share some of his views. But I certainly don't agree with his paean to piracy of IP, and I don't see how it is in any way compatible with a respect for property rights and a functioning free market.

Strong IP Protection Leads to Economic Growth and Innovation, Just as Our Founding Fathers Said – Part II

As I discussed in my last blog in this series, the Global Intellectual Property Center of the Chamber of Commerce held a conference last week to celebrate the launch of its Second Annual International IP Index, Charting the Course. The proposals included in the Index and in the presentations by conference panelists delivered the same unified message: Strong IP protection systems lead to economic growth and innovation.

Senator Orrin Hatch delivered a keynote presentation at the event. He focused on the importance of strong intellectual property protections like other panelists, but he was the only presenter to focus on the constitutional basis for intellectual property protection. Senator Hatch recognized that the strong IP system in the U.S., which leads the world in the latest Index, is firmly rooted in the beliefs of our Founding Fathers and is “woven throughout the fabric of our nation”:

Our Founding Fathers believed intellectual property to be so fundamental to America’s future prosperity that they explicitly granted Congress the constitutional authority to protect it … The fact is, strong intellectual property rights [are] a tool of economic growth, not an impediment. It is a simple truth – countries that strengthen their intellectual property rights regimes enjoy economic benefits. They attract more investment, more technology transfers, increased innovation, and, ultimately, more prosperity for their citizens. Yet, despite these fundamental truths, intellectual property protections around the globe are continually at risk.

Our Founding Fathers recognized the role that intellectual property protection would play in our future and they have been proven right. As our innovators continue to advance and compete globally, now, more than ever, the United States must heed the wisdom of our Founders and bring this lesson to the forefront of our trade policies. It is through strong protection of innovation that we developed as a nation, and it is through the protection of innovation that our nation will continue to thrive in the international arena.

While the value of strong IP protections may be gaining support in the U.S., there is still strong anti-IP sentiment both at home and abroad. Here in the U.S., some argue for weaker IP protections, and point to disruptive technologies which challenge traditional notions of content ownership and patentable innovation. These developments have indeed strained the existing IP framework, and action may be required to form a better IP framework for the digital age. The Index recognizes that the U.S. struggles in these areas, identifying issues like inconsistent applications of limitations and exceptions to copyrights and related rights and ambiguity concerning ISP obligation to respond to trademark holder notice of infringement as “key areas of weakness.”

Anti-IP sentiment is particularly strong abroad in many of the countries that ranked low on the GIPC’s Index. Those countries, like India and China, advocate for the free sharing of copyrightable or patentable works by arguing that doing so is for the “public good.” In fact, the opposite is true — IP protections create incentives for creation and innovation, which serve the public good. Elaine Wu, Attorney-Advisor at the U.S. Patent and Trademark Office and Michael Schlesinger, Counsel at the International Intellectual Property Alliance, particularly focused on the problem of anti-property rights rhetoric abroad. They recognized that government officials perpetuate this backwards perspective, because the voices of authors and inventors are not heard.

Anti-IP advocates should heed the message of Senator Hatch and recognize that strong IP rights established by the Founding Fathers have produced economic growth and innovation. Further, as FSF scholars have observed in Perspectives and blogs, James Madison’s theory that “the public good fully coincides … with the claims of individuals” should provide the foundation for IP protection frameworks. This statement from Federalist No. 43 expresses the idea that an IP system can serve the public good by meeting the public’s demand for information access, content sharing, and use of new inventions or products while also providing strong protection for authors’ and inventors’ rights.

In order to help other countries around the world improve their economies and the lives of their citizens, it is helpful to present facts and figures that demonstrate the positive effects of strong IP protection. And it is also important to recognize the constitutional roots of intellectual property protection. The Founding Fathers intended that one of the government’s primary purposes be to protect property rights. This protection for the works of authors and inventors has produced the positive economic impact discussed in the GIPC’s Index and by GIPC panelists.

As Senator Hatch urged, heeding the wisdom of our Founding Fathers by retaining a strong IP system will provide incentives for creation of all kinds of valuable works – ranging from literary works and music on the one hand to practical new products and services on the other. This, in turn, will fuel further innovation and economic development for generations to come.

Strong IP Protection Leads to Economic Growth and Innovation, Just as Our Founding Fathers Said – Part I

On January 29, the Global Intellectual Property Center of the Chamber of Commerce held a conference to celebrate the launch of its Second Annual International IP Index, Charting the Course. The Index provides an in-depth look at the IP environments of 25 countries, and offers proposals for improvement. Panelists at the GIPC event presented responses to the findings, as well as additional evidence on the impact of IP protection systems. The resounding message of the Index and panelists, based on empirical evidence in the Index and independent research, was that strong IP systems foster economic growth and development.

Senator Orrin Hatch took this message further, advocating for strong IP protection, but also recognizing that before evidence supported the theory of strong IP rights, the Founding Fathers explicitly provided protection for authors’ works as a founding principle of our nation. He credited this constitutional basis of intellectual property for leading the U.S. toward the strong IP environment in place today. In Part II of this blog on the GIPC event, I will discuss Senator Hatch’s comments and the constitutional foundations of intellectual property in further detail.

The Index ranks the IP environments of 25 countries that vary in market size, income level, and development. The Index uses 30 key metrics, which indicate whether an environment fosters growth and development and which provide a dynamic view of the strengths and weaknesses of each country’s IP protection system. The Index also includes proposals for improving economies, creating jobs, promoting innovation, ensuring safety, and providing access to creations and inventions through enhanced IP protections and supporting mechanisms.

The Index reports that most high-income economies, with some exceptions, have “robust national IP environments in place,” while the “weakest total national IP environments are in the lower-middle-income countries.” The Index ranks the U.S. first in the world in overall IP strength, and first in most other categories including Patents, Related Rights and Limitations, Copyrights, Related Rights and Limitations, Trademarks, Related Rights, and Limitations, and Trade Secrets and Market Access. The U.S. led the UK and France in all of these categories. The U.S., the UK, and France were equal in the Membership and Ratification of International Treaties category. The UK and France only out-ranked the U.S. in the Enforcement category, one of the weakest categories for all countries examined in the Index due to high rates of piracy worldwide.

The country with the weakest IP environment is India. This ranking was based on India’s continued use of compulsory licenses, patent revocations, and weak legislative and enforcement mechanisms. Other countries, like China, received low rankings due to their practice of conditioning market access on the forced sharing of protectable content, trade secrets, and sensitive technologies, despite its otherwise strong economic environment. Other countries that were among the lowest ranked on the Index include Indonesia, Vietnam, and Thailand.

Based on the Index findings and independent studies, the speakers at GIPC’s launch event delivered a unified response: Strong IP protection systems lead to strong economies, growth, and innovation. Panelists included members of Congress, government employees, interest group representatives, economists, and private industry stakeholders. Each advocated the importance of an empirical, fact-based analysis of an IP system’s impact, and presented evidence showing the indisputable link between strong IP protection and increases in innovative output, foreign direct investment, job creation, and other metrics indicative of economic growth and development.

For instance, Douglas Lippoldt, Senior Economist and Trade Policy Analyst at the Organisation for Economic Co-operation and Development (OECD) presented evidence demonstrating the link between strong patent protection and economic development. He found countries that increased their legal frameworks for patent protection after the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) experienced a clear increase in expenditure on research and development as a share of national GDP, in-flows of foreign direct investment, and increased output in creation and invention. He also noted an increase in foreign patent application filings, which indicated that increased patent protection attracted market entry.

Additionally, Michael Schlesinger, Counsel at the International IP Alliance and Aaron Brickman, Deputy Executive Director of SelectUSA, provided statistics proving the merits of the strong IP protection system in the U.S. Mr. Schlesinger noted that copyright-intensive industries grew by 4.73% in 2012 – more than double the growth in the rest of the U.S. economy. Those industries added $1 trillion to the U.S. economy in 2012, and employed 5.4 million workers. Further, those workers earned an estimated $85,000 on average, which is 33% higher than the average U.S. annual wage. Mr. Brickman stated that 1/3 of U.S. GDP is impacted by IP-intensive industries, and those industries are responsible for 1/3 of U.S. employment. He found that the U.S. IP framework is the reason the U.S. is the most attractive market for foreign direct investment, with approximately 1/3 of global research and development taking place in the U.S.

These numbers seem to clearly demonstrate that the U.S. IP environment leads the world, and that strong IP protections do indeed contribute to economic growth and innovation. However, Senator Orrin Hatch, Ranking Member of the Senate Committee on Finance, recognized that many economic and strategic competitors to the U.S. fail to understand that strong IP protections in the U.S. are to thank for much of its economic success. And, that the basis for protection of IP in the U.S. is the constitution. In his keynote address, Senator Hatch focused on the importance of strong intellectual property protections like other panelists, but he was the only presenter to recognize the role of the Founding Fathers in building the the U.S. system of intellectual property protection.

I will discuss Senator Hatch’s comments and the fundamental influence of the Founding Fathers on the U.S. intellectual property rights system in Part II of this blog series.  

Constitution Week 2013

Today is the last day of Constitution Week, a week that commenced with the celebration of Constitution Day on September 17^th.

I often try to take note of this celebration because, in my view, it is important for us, as citizens, to remind ourselves of our shared constitutional commitment.

I confess I was especially moved to write this year when I read the story about the Modesto Community College student in California who was prevented by campus administrators and the police from passing out copies of the Constitution on Constitution Day. He was told he could only distribute the Constitution in the school's tiny "free speech" zone and, then, only if the activity was scheduled several days in advance.

I understand that this is but one small example of many that could be cited that would make our Founders' heads shake in wonderment if they but knew. It is not news that campus speech codes and other forms of speech restrictions brought about by rigid adherence to political correctness fashions run right up against First Amendment free speech guarantees. But prohibiting a student from passing out copies of the Constitution on Constitution Day should make us stop and think.

Indeed, it calls to my mind the story, perhaps apocryphal, about Ben Franklin's remark when he was asked on the final day of the Constitutional Convention of 1787: "Well, Doctor, what have we got – a Republic or a Monarchy?" Franklin's response: "A Republic if you can keep it."

I do not doubt that we can keep it – as long as we, continually, strive to understand and remain true to an understanding of the Constitution that comports, as nearly as possible, to its original meaning and foundational principles, including the structural restraints imposed on government by the Constitution's separation of powers and the doctrine of limited, enumerated powers. And, of course, the explicit liberty guarantees in the Bill of Rights are crucial to securing our fundamental freedoms.

At the Free State Foundation, it is our goal, even amidst engaging in the sometimes nitty-gritty of today's debates about this policy or that, always to have in mind foundational constitutional principles. This is especially important for an organization that labors so heavily in fields cultivated – I should say "controlled" – by the Federal Communications Commission. This is because so much of what the FCC does in regulating communications and media companies, and now Internet providers, implicates constitutional rights.

Of course, the First Amendment's free speech guarantee comes readily to mind foremost. Our website is chock-full of papers, far too numerous even to begin to list here, that explain how various FCC actions implicate, if not violate, the free speech rights of companies – speakers, really – subject to various FCC regulatory mandates. Without delving into the substantive arguments here, I want only to suggest, in the spirit of Constitution Week, that the FCC commissioners would do well – consistent with their constitutional oaths – to consider anew whether certain existing regulations comport with the First Amendment's free speech guarantee. This can be done on a forward-looking basis without necessarily questioning whatever justifications may have been assumed to exist when the regulations were adopted.

For example, as D.C. Circuit Judge Brett Kavanaugh suggested in his concurring opinion in the Tennis Channel case decided last May, in today's competitive video marketplace, the FCC's program carriage requirements, adopted two decades ago in a then monopolistic environment, now likely are inconsistent with cable operators' First Amendment rights. I have suggested the same for many years, so I concur in Judge Kavanaugh's concurrence.

As another example, I have long contended, as I explained in this 2007 law review article, "Net Neutrality Mandates: Neutering the First Amendment in the Digital Age," that FCC regulations requiring Internet providers to carry content that they may wish not to carry violates the free speech rights of the Internet providers. In the Verizon v. FCC case now before the D.C. Circuit challenging the lawfulness of the FCC's net neutrality mandates, the Free State Foundation joined TechFreedom, the Cato Institute, and the Competitive Enterprise Institute in a brief arguing that the agency's net neutrality regulations violate the Internet providers' First Amendment rights.

To my mind, there is a fundamental problem with the FCC's approach in these and other cases in which the agency implements various access mandates and/or nondiscrimination prohibitions. The Commission, in effect, turns the First Amendment on its head. Simply put, the First Amendment is intended to prevent the government from interfering with the free speech of private individuals or entities; it is not intended to authorize the government to take measures that, however well-intentioned, are designed to equalize speech or enable more speech by one party or another.

As Chief Justice Roberts put the matter in the 2011 Arizona Free Enterprise Club case, citing the landmark Tornillo decision invalidating Florida's "right to reply" access statute, "this sort of 'beggar thy neighbor approach' to free speech – 'restrict[ing] the speech of some elements of our society in order to enhance the relative voice of others' – is 'wholly foreign to the First Amendment.'"

There is a fundamental difference between the ""beggar thy neighbor" understanding of the First Amendment too often adopted by the FCC which regulates speech in the name of equalizing access or preventing discrimination and a proper understanding which holds the First Amendment is a guarantee against government interference with private speech.

At the Free State Foundation, with due respect for the perspectives held in good faith by others, we will continue to advocate for what we consider to be a proper understanding of the First Amendment. And we will do the same, of course, with respect to other constitutional guarantees, such as the Fifth Amendment's due process and "takings" clauses which protect private property.

Finally, in closing, I want to take the opportunity afforded by Constitution Week to call your attention to the series of four "Perspectives from FSF Scholars" papers, authored by Seth Cooper and me, which explore foundational principles of intellectual property grounded in our constitutional system. The discussion in these papers ranges broadly from the natural rights, Lockean origin of intellectual property protection, to the significance of James Madison's little known "On Property" essay, to the even less well-known collaborative efforts of Madison and Noah Webster to secure IP rights in the federal Constitution and early state constitutions, and on to an explanation as to why the Founders' anti-monopoly and pro-IP rights protection views are not inconsistent.

If you are looking for some "extra credit" reading as Constitution Week draws to a close, you might want to sample these Perspectives:

·         The Constitutional Foundations of Intellectual Property 

·         Reasserting the Property Rights Source of IP 

·         Literary Property: Copyright's Constitutional History and Its Meaning for Today  

·         The Constitution's Approach to Copyright: Anti-Monopoly and Pro-Intellectual Property Rights