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1. The Western Innovators of the Mobile Revolution: The Data on Global Royalty Flows to U.S. and Europe and Why It Matters

Author:
Adam Mossoff
Publication Date:
01-2024
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
The mobile revolution has radically altered our world in ways that were imagined only as science fiction a mere thirty years ago. Western innovators launched this revolution in creating its foundational telecommunications technologies; thus, it is unsurprising that private companies in the United States and Europe receive payments for the use of their telecommunications technologies, which is compensation for the billions in investments and decades of research and development of these inventions. The majority of the commercial implementers—the companies that make and sell consumer products that use these telecommunications technologies like smartphones or connected cars—are in Asia. China in particular has an increasingly growing share of these implementers across all sectors of the global innovation economy. This explains in part China’s domestic industrial policies that seek to lower the royalties paid by its national companies like Huawei or Oppo. Evidence-based policymaking should guide U.S. and European laws and regulations. Data confirm the critical role of reliable and effective patent rights, the rule of law, and courts using due process to resolve disputes have been essential for Western innovators creating the modern world—and will drive the technologies of tomorrow in the internet of things (IoT) and artificial intelligence (AI).
Topic:
Science and Technology, Intellectual Property/Copyright, Innovation, and Telecommunications
Political Geography:
China, Europe, and United States of America

2. Why Overbroad State Library Ebook Licensing Bills Are Unconstitutional

Author:
Devlin Hartline
Publication Date:
10-2023
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
There has been a coordinated push over the past few years for states to enact legislation that would regulate the marketplace for licensing copyrighted ebooks to public libraries. The supporters of these bills argue that publishers offer ebook licenses that are too costly and restrictive, making it difficult for libraries to provide adequate access to their patrons. The gist of these complaints is that the market for digital ebooks should mirror the one for physical books, in which libraries pay the same price as everyone else and set their own rules for making loans. In essence, they want states to step in to remedy the perceived disparity with ebooks, which they blame on the allegedly abusive trade practices of publishers. But the reality is that publishers treat the two markets differently because they are fundamentally different, and there is nothing abusive about it. Moreover, publishers are merely doing what federal copyright law encourages them to do, and states are powerless to enact overbroad laws that would unconstitutionally punish them for doing so. While these concerns with the ebook licensing marketplace may be relatively new, the legal issues presented by the proposed state regulations to address them are not. Many states already have laws on copyright licensing in other contexts, and the extent of a state’s limited capacity to regulate in this area has been long-settled by the courts. Nevertheless, supporters of the new ebook licensing bills appear uninterested in the clear legal implications of their favored policy position. Shortly after the first such ebook law went into effect in Maryland, a federal district court struck it down as unconstitutional because it forced publishers to grant licenses. Other states have since moved forward with new ebook legislation based on the model text provided by Library Futures, a policy organization, that purports to solve the constitutional issue by merely dictating the terms of the licenses. However, Library Futures makes no real effort to defend the legality of its proposed legislation, and the truth is that it suffers the same constitutional defect. This policy memo explains how federal copyright law supersedes and limits state laws that regulate the licensing of copyrighted works. While states can validly target certain abusive conduct related to the manner in which copyright licenses are negotiated, federal law is clear that states cannot cross the line by dictating the terms of such licenses when they directly implicate the exclusive rights secured by the Copyright Act.
Topic:
Intellectual Property/Copyright, Domestic Policy, and Libraries
Political Geography:
North America and United States of America

3. Unreliable Data Have Infected the Policy Debates Over Drug Patents

Author:
Adam Mossoff
Publication Date:
01-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The COVID-19 pandemic has vividly brought to the public’s attention the key role of medical innovation in saving lives and increasing the quality of daily life. The pandemic has also precipitated an international debate over the role of patents and other intellectual property rights in the discovery, manufacture, and distribution of drugs and vaccines to patients. Even before COVID-19, there has been an ongoing policy debate in Washington, D.C., over drug prices and patents with congressional hearings, proposed legislation, and antitrust enforcement actions. The pandemic has thus made apparent what reliable data have already shown: poorly crafted legislation or antitrust enforcement actions could have a tremendous negative impact on the innovation economy in general and on healthcare specifically by undermining the incentives that drive the billions invested annually in the research and development of life-saving drugs and other medical treatments. Congress and regulators should engage in evidence-based policymaking on these important issues, which have far-reaching implications for economic growth and quality of life. This policy memo identifies a serious concern about the data in these discussions.
Topic:
Science and Technology, Intellectual Property/Copyright, Innovation, Data, and Pharmaceuticals
Political Geography:
North America and United States of America

4. State Right-to-Repair Laws Need to Respect Federal Copyright Laws: A Constitutional, Legal, and Policy Assessment

Author:
Devlin Hartline and Adam Mossoff
Publication Date:
08-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
Various states are considering laws that would mandate that producers of electronic devices provide consumers and repair shops with all the tools and know-how necessary to repair these devices. Proponents of these “right-to-repair laws” argue that consumers should be able to do whatever they want with their devices, whether a smartphone, a smart TV, or a gaming console. Right-to-repair advocates, however, ignore inconvenient facts. These state laws conflict with federal copyright law and are unconstitutional, and they are bad policy as well. First, as a simple legal matter, the proposed right-to-repair laws are unconstitutional. These laws mandate the disclosure and distribution of the code in the computer programs that make our devices work, such as operating systems, apps, and the “digital locks” that protect these computer programs from unauthorized access and copying. Federal copyright law protects all these computer programs and “preempts” any conflicting state laws under the Constitution. Second, state right-to-repair laws are wrong as a matter of policy. These laws upset the long-standing balance of rights implemented by federal copyright law. For over 200 years, Congress has enacted copyright laws to secure to authors and innovators the fruits of their creative labors. These laws have properly balanced the rights of creators, the rights of companies that produce and distribute their copyrighted works, and the rights of consumers and the public. As a result, federal copyright law has been a launching pad for the economic and cultural revolutions in books, movies, music, and now digital games and the internet of things. Everyone values their electronic devices because copyright law provides the legal foundation for today’s thriving digital marketplace. Consumers have access to an incredible selection of movies, music, games, and many other previously unimagined digital goods and services. The same is true for products that consumers have long used and that have become “smart” today, such as phones, TVs, automobiles, and other devices. Overbroad right-to-repair laws fail to acknowledge the legal rights and the underlying policies in federal copyright law that have made all this possible.
Topic:
Economics, Science and Technology, Intellectual Property/Copyright, and Innovation
Political Geography:
North America and United States of America

5. Filtering and Site Blocking: Necessary Reforms for the Digital Marketplace

Author:
Steven Tepp
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
Business models and technology have changed dramatically since the 1990s; nowhere more so than online. Those changes, alongside some key judicial decisions, have distorted the operation of the US copyright law provision specifically designed to address online copyright infringement. Today, even a platform that knows that 80 percent of what it hosts are unlicensed copyrighted works, it can be shielded from accountability by the safe harbors in the Copyright Act. Copyright owners are left to send millions of takedown requests with little actual effect on piracy. This, along with other factors, led the US Copyright Office to conclude that the cooperative environment the law was meant to create has not and will not be realized without amending the law. And while dozens of other countries have successfully adopted measures to address online infringement from beyond their borders, the United States has not acted to implement similar procedures.
Topic:
Intellectual Property/Copyright, Law, Reform, and Criminal Justice
Political Geography:
Global Focus

6. The Value of Cellular Technology

Author:
Urška Petrovčič and Kirti Gupta
Publication Date:
10-2021
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
Cellular technologies, such as those embodied in the third generation (3G), fourth generation (4G), and fifth generation (5G) of cellular standards, have provided the foundation for a thriving mobile ecosystem that has benefited consumers and businesses all over the world. In the past 20 years, the number of mobile connections has grown almost 10-fold, reaching an ever-growing percentage of the global population. In 2017, the number of mobile connections surpassed the number of people on the planet. In 2019, mobile technologies and services added $4.8 trillion of economic value to the global economy, and the mobile ecosystem employed (directly and indirectly) 30 million people. Although cellular technology has already transformed all facets of our society, the deployment of 5G will bring even broader and more radical changes. By connecting everything and everywhere, 5G will help us realize the full potential of connectivity and usher in the era of smart transportation, smart cities, smart factories, and smart homes. The new products and services enabled by 5G will change all aspects of our daily life, such as health care, energy, agriculture, automotive, manufacturing, and retail, among others. This will not only benefit consumers and businesses, but society as a whole. Cellular technologies are central to this revolution. Without advances in the cellular space, none of the economic and societal benefits we see in the connected world would be possible. Therefore, it is important to understand how cellular technologies are developed and deployed, and what impact they have on the economy and on society more broadly. It is also important to understand why fairly compensating cellular innovators is essential to maintain a sustainable system where new technologies can be developed and brought to consumers.
Topic:
Science and Technology, Intellectual Property/Copyright, Law, Criminal Justice, and 5G
Political Geography:
Global Focus

7. How IP Rights Keep Markets Free

Author:
Jonathan M. Barnett
Publication Date:
06-2021
Content Type:
Policy Brief
Institution:
Hudson Institute
Abstract:
It is elementary that secure protection of property rights is a necessary precondition for efficient markets that drive economic growth. Yet this principle is not always recognized in the case of markets for intangible goods. Rather, intellectual property rights are often characterized as a monopoly franchise that stands at odds with free-market competition. Following this view, IP rights at best provide a justifiable means to incentivize innovation but are prone to abuse by incumbents seeking to block entrants. This standard narrative overlooks an inconvenient fact. As I show in a new book, Innovators, Firms, and Markets: The Organizational Logic of Intellectual Property, incumbents and other large firms in US technology markets have regularly advocated against stronger forms of patent protection and, in certain industries, have resisted patent protection entirely. This lobbying strategy poses a puzzle: Why would dominant firms resist the opportunity to operate under the umbrella of a legal monopoly? This policy memo analyzes the counterintuitive IP policy preferences of large technology firms and, in resolving this apparent anomaly, shows that patents tend to enhance competitive intensity by enabling idea-rich but capital-poor innovators to challenge idea-poor but capital-rich incumbents. Contrary to widespread assumptions, IP rights are far closer to the familiar property rights that support tangible goods markets rather than the monopoly grant to which they are often (and misleadingly) analogized. These insights, which are based on over a century’s worth of US innovation history, raise significant concerns about the IP-skeptical trajectory that policymakers have pursued since the mid-2000s.
Topic:
Markets, Intellectual Property/Copyright, Law, and Criminal Justice
Political Geography:
Global Focus

8. Does China Really Dominate Global Innovation? The Impact of China’s Subsidized Patent Application System

Author:
Jonathan Putnam, Hieu Luu, and Ngoc Ngo
Publication Date:
03-2021
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
Over the past two decades, China’s economy has grown impressively, while its patented innovations have grown at an even higher rate. But this patent application trend should not simply be accepted at face value. The Chinese government has subsidized patent applications as part of its overall domestic industrial policy agenda, which underlies China’s claim to have “won” the global innovation race, especially in next-generation technologies like 5G or AI. Our study shows that high rates of patenting do not necessarily mean dominance, or even leadership, among the world’s innovation economies. China’s recent announcement that it plans to end subsidies for patent applications by 2025 perhaps acknowledges that its policy is no longer necessary or desirable. In any case, uncritical reports of China’s innovation dominance, overall or in prominent high-tech sectors, should be viewed skeptically, especially by policymakers.
Topic:
Intellectual Property/Copyright, Law, Economy, and Innovation
Political Geography:
China and Asia

9. A Legal Analysis of Making Copyrighted Works Available Online During the Coronavirus Crisis

Author:
Steven Tepp
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Hudson Institute
Abstract:
The Internet Archive (“IA”) began operation in 1996, at first making archival copies of websites, but soon offering those to the public and then expanding to other copyrighted works including books, sound recordings, audiovisual works, graphic arts (still images), and software, without regard to their copyright status and generally without licenses. It positions itself as an online version of a library and has offered free access to the materials it copies, albeit limiting users to one-for-one use of its copies: one copy may only be used by one account at a time.2 At the time of this writing, efforts to limit the spread of the coronavirus have resulted in “stay at home” orders in over forty states, covering more than ninety percent of the U.S. population.3 Similarly, educational institutions at all levels have closed their physical spaces and are trying to carry on via distance education. For many, including this author, the current situation was unimaginable only a couple of months ago. By any measure, this is an extreme set of circumstances.
Topic:
Intellectual Property/Copyright, Internet, Criminal Justice, and Coronavirus
Political Geography:
Global Focus