A Review of Ryan Calo’s “Code, Nudge, or Notice?”

In the intro lecture of our Regulation of Internet Communications class, we got to play Lessig’s “dot game,” brainstorming and categorizing solutions to the “kids drive too fast in my neighborhood” problem.  We came up with various options, including increasing police presence, posting signs with speeding fines, driver education, autonomous cars, speed bumps, vigilantism and the “fake deer”…  We then categorized our solutions into Lessig’s four regulatory constraints: architecture, the market, the law, and norms.

In this recent article, Ryan Calo adds a new element to Lessig’s “dot game,” inviting us to go one step further by providing a framework to assist in choosing among different regulatory interventions.  Calo’s mode of inquiry deviates from prior art (Lessig, Thaler & Sunstein etc.) in that he considers the overlaps among the different constraints, and argues that perhaps we shouldn’t get too caught up in the differences between code, nudging, and notice, as the nuances may not be as pronounced as they appear at first glance.  Calo further argues that “whether regulators employ code, nudge or notice, there is almost always the deeper choice between helping citizens and hindering them.”

In selecting among alternative interventions, Calo argues that policymakers ought to favor “facilitation” over “friction”, in particular where procedural safeguards are missing in action.  Calo defines “facilitation” as “helping citizens develop and consummate their intentions”… “helping people arrive at their preferred outcome.”  In contrast, he defines “friction” as “creating barriers – physical or otherwise – to the conduct citizens would otherwise carry out.”

What I wonder is – absent instances of shared interest among regulators and citizens – whether regulators would be motivated to adopt a facilitation approach, and risk that citizens may arrive at outcomes that are not in line with the regulators’ own interests.  The self interested nature of policymakers creates an incentive for them to apply at least some measure of manipulation to ensure that citizens arrive at outcomes that are consistent with their own interests.

Facilitation suggests a shift towards self-regulation, which may lead to an increased risk of regulatory capture. Under the facilitation model, citizens must be given access to information to make decisions.  Such information will likely come from industry, which is by nature self-interested.  Will government intervene to place limits on the information that industry may pass on to people?  If it does, then it is engaging in a subtle form of manipulation by selecting between the messages that people can receive (which moves us towards friction).

Calo’s analysis adds a new and exciting dimension to our familiar dot game scenario…   Anyone up for playing “dot game 2.0”?

On the occasion of the U.S.’s upcoming switch to the first-to-file patent system

On March 16th, 2013 the U.S. will be joining the ranks of the majority of countries by switching from the first-to-invent to the first-to-file patent system.  The change is part of a broader set of patent system reforms comprising the Leahy-Smith America Invents Act that was signed into law in 2011.

Under the outgoing first-to-invent system, patent protection is awarded to the party that first conceives of the invention and reduces it to practice (by filing a patent application or building a working prototype).  If one party (Inventor A) comes up with an invention but a second party (Inventor B) reduces it to practice before Inventor A does so, then Inventor A is still awarded the patent so long as reasonable diligence is exercised in reducing the invention to practice up to the date when Inventor B achieves reduction.

Under the new first-to-file system, patent rights are awarded to the party that is first to file a patent application.  In our earlier example, if Inventor B files a patent application for an invention that was earlier conceived of by Inventor A, then Inventor B will get the patent.

The first-to-file system reflects the bargain that the patent system is intended to strike by requiring public disclosure through the filing of a patent application in exchange for granting exclusive monopoly rights over the invention.  In contrast, under the first-to-invent system, it is possible for an inventor to develop an invention and sit on it until someone else comes along and files a patent application, and then come forward and receive patent rights based on the prior invention date.

All this is by way of saying, inventors get ready to start your engines and join the rest of the world in the race to the patent office.  U.S., welcome to the first-to-file system… What took you so long?

Photographer prevails in copyright dispute regarding ownership of content posted on Twitter

Earlier this month, a New York District Judge rendered a summary judgment in Agence France-Presse (AFP) v Daniel Morel, finding that both AFP and The Washington Post infringed Morel’s copyright by using photos Morel posted on Twitter without his permission.  The images under dispute were taken by Morel in the aftermath of the Haiti earthquake.  Within minutes after Morel uploaded the images to Twitter, Lisandro Suero copied and tweeted them claiming that he was the exclusive copyright owner.  AFP acquired the images from Suero and licensed them to Getty Images.  The photos were widely distributed through various news outlets including The Washington Post.  When alerted of the copyright violation by Morel’s counsel, AFP sought a declaration that it did not infringe Morel’s copyright.   Morel responded with a counter-suit alleging that the news outlets violated his copyright.

What is interesting about this case is that both AFP and Morel relied on Twitter’s terms of service to substantiate their positions.  In the case of AFP, it argued that Twitter’s terms operated as a license granting AFP (as a Twitter user) the right to use content uploaded by other users.  This argument relies on a portion of Twitter’s terms which states that Twitter “encourage[s] and permit[s] broad re-use of content.”  Morel also appealed to Twitter’s terms to argue that he retained copyright in his images.  The relevant provision states: “You retain your rights to any Content you submit, post or display on or through the Services.”  The Judge sided with Morel, finding that Twitter’s terms of service do not “clearly confer a right on other users to re-use copyrighted postings.”  The only license to user content is granted in favor of Twitter and its partners.

The debate over ownership in content uploaded to social media sites has similarities with the early infringement lawsuits involving open source software.  In the open source context, infringing parties similarly argued that once content was made available under open source licenses, it was effectively ceded to the public domain.  In those early cases, courts had to clarify that making software available under an open source license does not amount to a waiver of exclusive copyright.  Just as Jacobsen v Katzer and other early open source infringement rulings established that open source software is not a free-for-all, AFP v Morel serves as a critical decision putting commercial entities on notice that their use of content uploaded to social media sites must be consistent with the rights and limitations set out in the terms of service.  

The 3D printer could be our generation’s Gutenberg, if laws don’t get in the way

3D printing has been around for a few years, however recent technological advancements have propelled the technology (and its creators) toward fame.  MakerBot’s CEO and Co-founder Bre Pettis has been called a game changer by Time, and last October he shared the cover of Wired with MakerBot’s newest consumer model the Replicator 2, the caption stating: “This machine will change the world.” 

3D printing technology could certainly change the world – perhaps even with such transformative capacity as the Gutenberg printing press (the creation that played a critical role in the dissemination of knowledge leading to the Reformation and the Renaissance age).  At the very least, 3D printers could revolutionize manufacturing to an extent only rivaled by Henry Ford who developed the assembly line technique of mass production.  For instance, the Replicator 2 seeks to bring desktop manufacturing to the consumer market, making it possible for those of us without a technical background to make our own 3D products at home.

But unlike the Gutenberg press, today’s 3D printers face additional hurdles that may hamper the ability of the technology to achieve its full potential.  The Gutenberg press was created in the 15th century – it preceded (and spurred) the development of copyright law.  Prior to its conception, written works were reproduced through manual copying, which was laborious and expensive.  As a result, reproduction was quite limited, and authors did not profit substantially from their creations.  However, all of this changed with the development of the movable printing press – reproduction became efficient and profits from authorship increased. These changes also created ripe conditions for the rise of unauthorized copying, and as a result copyright law emerged to provide protections (and incentive) for authors.

While the Gutenberg press emerged in the absence of copyright law, today’s 3D printers must negotiate highly developed intellectual property regimes spanning copyright, patent, trademark and industrial design.  How these legal frameworks are developed to respond to 3D printing will doubtless impact the ability of the technology to achieve its full potential, determining whether 3D printing will change the world.

One of the problems that 3D printing poses to patent owners is that it makes unauthorized reproduction and use of patented devices increasingly easy.  At the same time, it is difficult for patent owners to identify individuals who are using 3D printers in their own homes to create and use unauthorized reproductions of patented devices.  One of the ways that the law could be developed to respond to this occurrence is through the expansion of the doctrine of contributory infringement.  This would allow patent owners to seek remedy from 3D printer manufacturers and online platforms that host infringing designs.  In the copyright context the application of such ISP liability notably led to the downfall of Napster.

Another response to the potential problems that 3D printing technology poses to the rights of owners could be the application of Digital Rights Management (DRM).  In the copyright realm, DRM enables rights holders to control access to and use of content.  For instance, DRM is typically applied by entities in the music and film industries.  With the help of digital locks, such entities can prevent users from creating copies of CDs and DVDs.  The problem with DRM and digital locks is that they can extend the protection offered to rights owners beyond what the law intended.  For instance, even where copyright law provides users with the right to make a backup copy of a CD, a digital lock could be used to prevent users from accessing this right, and consequently the rights of owners extend beyond the law’s intention.  This problem is compounded in countries like the US and Canada that prohibit the breaking of digital locks, even where the locks are broken to make non-infringing copies such as backup copies which are permitted as an exception to infringement.

It is possible that 3D printing could reach Gutenberg potential, but whether this will happen or not will depend in part on how intellectual property laws are applied to 3D printing.  As patent, copyright and other intellectual property frameworks develop to respond to the new challenges that 3D printing pose to rights owners, it is important to ensure that balance and innovation are not compromised.