Marginal Revolution writer and George Mason economics professor Alex Tabarrok argues for an end to software patents.
November 26, 2012
End software patents
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November 23, 2012
Google the latest whipping boy in Australia over taxation
Even if you scrupulously obey the multiple jurisdictional laws to legally minimize the amount of tax you pay, politicians can’t resist the opportunity to pillory you for not paying your “fair share”:
The Minister’s explanation of Google’s tax affairs is as follows:
“While the day-to-day dealings of Australian firms advertising on Google might be with Google Australia, under the fine print of contracts Australian firms sign with Google, they are actually buying their advertising from an Irish subsidiary of Google.
It is then argued that the source of this income — and therefore the taxing rights under our tax treaty — would be with Ireland rather than Australia. Despite Ireland’s relatively low company tax rate of 12.5 per cent, we have just started to build the sandwich.
The next step is to route a royalty payment from the Irish operating subsidiary of Google to a Dutch subsidiary of Google, which is then paid back to a second Irish holding company subsidiary of Google that is controlled in Bermuda, which has no corporate tax.
The first Irish subsidiary receives a tax deduction for the royalty payment to the Dutch subsidiary, substantially reducing the income subject to the 12.5 per cent Irish company tax rate.
Under Dutch law, and because EU member countries do not charge withholding taxes on transfers within the EU, the transfers to and from the Netherlands are essentially tax free.
And under Irish tax law, the second Irish resident subsidiary is not taxed on the royalty payment because it is controlled by managers elsewhere.
The profits from the sale of advertising to an Australian firm then sit in a tax-free jurisdiction — possibly indefinitely.”
Tax lawyers — especially those who work on multinational levels — don’t create these situations out of whole cloth: it’s the politicians and revenue ministries that set up and maintain the tax rules. Corporations are legally required to pay taxes (as are individuals), but corporations are also legally required to conduct themselves in ways that maximize the profits for their shareholders. Finding ways to legally pay tax at a lower rate is a requirement. That companies like Apple and Google are big enough to take advantage of the “loopholes” deliberately created by the tax authorities is not a reason to bash Apple or Google. They can only take advantage of “loopholes” because this or that government tried to rig the system in a particular way. Changing or threatening to change the rules retrospectively is a really good way to indicate to foreign business that you really don’t want them operating in your territory.
Update: Snigger.
@cstross “Double Irish Dutch Sandwich” sounds like something you shouldn’t risk looking up on Urban Dictionary.
— Chris Herborth (@taffer) November 23, 2012
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November 21, 2012
“Stop, criminal!”
Vague legal wording and fuzzy intent turn ordinary activities into crimes:
Are you reading this blog? If so, you are committing a crime under 18 USC 1030(a) (better known as the “Computer Fraud & Abuse Act” or “CFAA”). That’s because I did not explicitly authorize you to access this site, but you accessed it anyway. Your screen has a resolution of 1600×900. I know this, because (with malice aforethought) I clearly violated 18 USC 1030(a)(5)(A) by knowingly causing the transmission of JavaScript code to your browser to discover this information.
So we are all going to jail together.
That’s silly, you say, because that’s not what the law means. Well, how do you know what the law means? The law is so vague that it’s impossible to tell.
The CFAA was written in 1986. Back then, to access a computer, you had to have an explicit user account and password. It was therefore easy to tell whether access was authorized or not. But then the web happened, and we started accessing computers all over the world without explicit authorization.
So, without user accounts or other form of explicit authorization, how do we tell if access to a website is “authorized” or not?
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Jonathan Rauch defends “Being Offensive”
“We can’t trust anybody in authority to make smart decisions for us about what’s the acceptable point of view.” So says author and Brookings Institution scholar Jonathan Rauch in FIRE’s video, “In Defense of Being Offensive.” Rauch presents a stirring and convincing defense of pluralism over what he calls “purism,” arguing that minorities benefit more under a society that values pluralism, including the right to offend others. Rauch concludes: “Is it a dangerous situation when someone can shut down the search for truth by saying ‘Oh, that offends me’? Absolutely.”
H/T to Virginia Postrel for the link.
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November 17, 2012
A new low in patents?
Apple has patented the “page turn”:
If you want to know just how broken the patent system is, just look at patent D670,713, filed by Apple and approved this week by the United States Patent Office.
This design patent, titled, “Display screen or portion thereof with animated graphical user interface,” gives Apple the exclusive rights to the page turn in an e-reader application.
Yes, that’s right. Apple now owns the page turn. You know, as when you turn a page with your hand. An “interface” that has been around for hundreds of years in physical form. I swear I’ve seen similar animation in Disney or Warner Brothers cartoons.
(This is where readers are probably checking the URL of this article to make sure it’s The New York Times and not The Onion.)
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November 16, 2012
Waiting for the Feds to respond to legal marijuana in Colorado and Washington
Phillip Smith examines the changed situation in Colorado and Washington in the wake of the marijuana legalization votes and what the federal government may do:
While the legal possession — and in the case of Colorado, cultivation — provisions of the respective initiatives will go into effect in a matter of weeks (December 6 in Washington and no later than January 5 in Colorado), officials in both states have about a year to come up with regulations for commercial cultivation, processing, and distribution. That means the federal government also has some time to craft its response, and it sounds like it’s going to need it.
So far, the federal response has been muted. The White House has not commented, the Office of National Drug Control Policy has not commented, and the Department of Justice has limited its comments to observing that it will continue to enforce the federal Controlled Substances Act.
“My understanding is that Justice was completely taken aback by this and by the wide margin of passage,” said Eric Sterling, former counsel to the House Judiciary Committee and currently the executive director of the Criminal Justice Policy Foundation. “They believed this would be a repeat of 2010, and they are really kind of astonished because they understand that this is a big thing politically and a complicated problem legally. People are writing memos, thinking about the relationship between federal and state law, doctrines of preemption, and what might be permitted under the UN Single Convention on Narcotic Drugs.”
What is clear is that marijuana remains illegal under federal law. In theory an army of DEA agents could swoop down on every joint-smoker in Washington or pot-grower in Colorado and haul them off to federal court and thence to federal prison. But that would require either a huge shift in Justice Department resources or a huge increase in federal marijuana enforcement funding, or both, and neither seems likely. More likely is selective, exemplary enforcement aimed at commercial operations, said one former White House anti-drug official.
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November 15, 2012
The BBC’s 28 secret climate change advisors
The BBC has been prominent among media outlets for their relentless proclamations on the dangers of climate change. Despite the BBC’s charter requiring them to provide balanced coverage, in this particular area they have been cheerleaders for one particular message: that climate change is DOOM!
In 2006, the BBC convened a panel of climate change experts to advise them on the topic, and the corporation took the advice of that panel to heart and has been pushing the climate change = disaster meme ever since. Blogger Tony Newbery submitted a FOI request to find out who had been on the panel which had swung the BBC so far away from their charter, but his request was denied. Not just denied, but fought out in court at an estimated cost of £40,000 per day.
The BBC won in court, but the information was released by someone else:
Sadly for the BBC, another enterprising blogger called Maurizio Morabito unearthed the details anyway and published them on Monday via the website Watts Up With That?
So who were all these ‘best scientific experts’ who did so much to shape the BBC’s climate policy (and by extension, one fears, government policy too…)? Well, two were from Greenpeace; one was from Stop Climate Chaos; one was a CO2 reduction expert from BP; one was from Npower Renewables; one came from the left-leaning New Economics Foundation… Only five of those present could, in any way, be considered scientists with disciplines even vaguely relevant to ‘climate change’. And of these, every one had a track record of climate alarmism. No wonder the BBC tried so hard to keep the list of 28 a secret. Its claim that its policy change was based on the ‘best scientific’ expertise turns out to have been a massive lie.
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Human trafficking in the US
At the Foundation for Economic Education, Lewis Andrews explains how immigration reform will also help to combat the scourge of human trafficking:
Restrictive immigration policies have long been associated with a variety of economic problems including the diminished availability of foreign business and scientific talent, the inability to fill low-skilled agricultural and service jobs typically scorned by legal residents, and reduced access to the kind of entrepreneurial enthusiasm characteristic of those willing to risk their futures in another country.
Only recently has it become clear how restrictive immigration laws also produce harmful social consequences, particularly when it comes to the age-old scourge of human trafficking — the use of force and fraud to supply cheap labor and sexual services.
To understand these consequences, it is important to appreciate just how lucrative a branch of organized crime the modern slave trade has become. Efficient transportation, technological advances in both farming and factory work, and advances in communication have all combined to make the use of forced labor very cheap by historical measures.
Free the Slaves, a Washington, D.C.-based nonprofit, has calculated the return on the cost of an enslaved field worker in 1850s Alabama at just 5 percent, whereas today a trafficked farmhand can yield the owner anywhere from double digits to 800 percent. Similarly, an imprisoned prostitute shuttled around the boroughs of New York City in a van by a driver scheduling appointments on his cell phone can service as many as 40 customers in a single shift. As one researcher coldly but accurately put it, “People are a good commodity as they do not easily perish, but they can be transported over long distances and can be re-used and re-sold.”
The result, according to the United Nations Office on Drugs and Crime, is that 2.5 million victims, approximately 80 percent female and 50 percent under the age of 18, are being trafficked around the world at any given time. In 2005 the International Labor Organization in Geneva, Switzerland, estimated the annual revenues from this “industry” at $32 billion, or $13,000 per victim.
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November 13, 2012
Michael Geist on Canada’s new copyright law
If you’re not going to read the entire body of the law (and let’s face it, most of us would rather do just about anything other than that), here’s a thumbnail summary of what the new law says:
The good news is that the law now features a wide range of user-oriented provisions that legalize common activities. For example, time shifting, or the recording of television shows, is now legal under Canadian copyright after years of residing in a grey area. The law also legalizes format shifting, copying for private purposes, and the creation of backup copies. This will prove helpful for those seeking to digitize content, transfer content to portable devices, or create backups to guard against accidental deletion or data loss.
Canadians can also take greater advantage of fair dealing, which allows users to make use of excerpts or other portions of copyright works without the need for permission or payment. The scope of fair dealing has been expanded with the addition of three new purposes: education, satire, and parody.
Fair dealing now covers eight purposes (research, private study, news reporting, criticism, and review comprise the other five). When combined with the Supreme Court of Canada’s recent decisions that emphasized the importance of fair dealing as users’ rights, the law now features considerable flexibility that allows Canadians to make greater use of works without prior permission or fear of liability.
The law also includes a unique user generated content provision that establishes a legal safe harbour for creators of non-commercial user generated content such as remixed music, mashup videos, or home movies with commercial music in the background. The provision is often referred to as the “YouTube exception”, though it is not limited to videos.
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November 7, 2012
Scotland: sing an offensive song, go to prison
Kevin Rooney looks at the sad state of free speech (or should that be free singing?) in Scotland:
Imagine the scene: a young man is led away in handcuffs to begin a prison sentence as his mother is left crying in the courtroom. He is 19 years old, has a good job, has no previous convictions, and has never been in trouble before. These facts cut no ice with the judge, however, as the crime is judged so heinous that only a custodial sentence is deemed appropriate. The young man in question was found guilty of singing a song that mocked and ridiculed a religious leader and his followers.
So where might this shocking story originate? Was it Iran? Saudi Arabia? Afghanistan? Perhaps it was Russia, a variation of the Pussy Riot saga, without the worldwide publicity? No, the country in question is Scotland and the young man is a Rangers fan. He joined in with hundreds of his fellow football fans in singing ‘offensive songs’ which referred to the pope and the Vatican and called Celtic fans ‘Fenian bastards’.
Such songs are part and parcel of the time-honoured tradition of Rangers supporters. And I have yet to meet a Celtic fan who has been caused any harm or suffering by such colourful lyrics. Yet in sentencing Connor McGhie to three months in a young offenders’ institution, the judge stated that ‘the extent of the hatred [McGhie] showed took my breath away’. He went on: ‘Anybody who participates in this disgusting language must be stopped.’
Several things strike me about this court case. For a start, if Rangers fans singing rude songs about their arch rivals Celtic shocks this judge to the core, I can only assume he does not get out very much or knows little of life in Scotland. Not that his ignorance of football culture is a surprise — the chattering classes have always viewed football-related banter with contempt. But what is new about the current climate is that in Scotland, the middle-class distaste for the behaviour of football fans has become enshrined in law.
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November 4, 2012
Rethinking software patents
Software patents are becoming a clear and present danger to innovation:
The basic problem being that there are so many patents, covering so many things, that the system is in danger of eating itself like Ourobouros.
When Dan Ravicher of the Public Patent Foundation studied one large program (Linux, which is the kernel of the GNU/Linux operating system) in 2004, he found 283 U.S. patents that appeared to cover computing ideas implemented in the source code of that program. That same year, it was estimated that Linux was .25 percent of the whole GNU/Linux system. Multiplying 300 by 400 we get the order-of-magnitude estimate that the system as a whole was threatened by around 100,000 patents.
If half of those patents were eliminated as “bad quality” — i.e., mistakes of the patent system — it would not really change things. Whether 100,000 patents or 50,000, it’s the same disaster. This is why it’s a mistake to limit our criticism of software patents to just “patent trolls” or ”bad quality” patents. In this sense Apple, which isn’t a “troll” by the usual definition, is the most dangerous patent aggressor today. I don’t know whether Apple’s patents are “good quality,” but the better the patent’s “quality,” the more dangerous its threat.
It’s near impossible to develop new software when there are so many such patents out there. Further, even if you tried to get clearance (or signed up to licenses and so on) to use them it would be near impossible.And we do need to recall what the purpose of a patent system is. No, it isn’t to provide and income to those who create inventions. That’s only the proximate aim: the ultimate aim is to maximise the amount of invention and innovation.
The economics of patents accepts that there is a tradeoff here. Yes, we’d like people who come up with useful new things to make money. Because that incentivises people to work on coming up with interesting new things to all our benefit. However, we also want people to be able to create derivative innovations and inventions. If our protection of the original inventors is too strong then we limit this. What we want is a system that hits the sweet spot, of encouraging the maximum amount of both, original and derivative. The problem of course being that to encourage one we weaken the incentives to do the other, either way around.
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November 3, 2012
Contract law and brown M&Ms
What is it about Van Halen and their notorious demand for non-brown M&Ms in their contracts? It’s actually rather clever:
Take Van Halen, for example. On the surface, the group is famous not only for its music but also for stunts such as trashing green rooms over the presence of brown M&Ms, and it’s easy to write off such behavior as simply being symptomatic of a 1980’s rock diva mentality. In reality, however, the brown M&Ms served an important purpose from a contracting perspective.
Think about it- wouldn’t it be nice to have an easy way to observe whether your counterparty has paid attention to all of the details of a complicated contract? As it turns out, the brown M&Ms served exactly this function. [. . .]
Since Van Halen’s (long) tour rider stipulated M&Ms with the brown ones taken out, the group knew that they needed to double check a lot of safety items for the show if they saw brown M&Ms (or no M&Ms, for that matter) in the backstage area. They also knew that they could feel comfortable that the contract provisions had been fulfilled if they saw a bowl of M&Ms with the brown ones removed. (I’m pretty sure that trashing stuff was for some combined purpose of making the incident memorable and entertaining one’s self.) This is pretty smart, since it’s far more efficient to use this as a signal (the canary in the coal mine, in a way) rather than go around and check everything at each show. It’s even smarter that the signal was crafted in the fashion of typical rock star douchebaggery so as to not arouse suspicion.
October 30, 2012
Pushing for “medical marijuana” makes full legalization less likely
L. Neil Smith makes the point that supporters of medical marijuana may be missing:
What I do mind — and perhaps I am alone in this, who knows? — is weak and disingenuous politics with regard to drugs. It was the issue of “medical marijuana” that first got my goat this way. I don’t doubt for a microsecond that the weed makes life easier and longer for those suffering certain diseases, and I believe that those who would deny them that relief are little better than scavengers on the misery of others.
But observation — and my knowledge of history and human nature — suggests that the majority of those who advocate the legalization of pot “purely for medicinal purposes” do not require it for that reason. They simply want to slip the nose of their personal camel under the edge of the tent, and I find that approach sneaky, dishonest, and cowardly.
I believe that if they had spent the past fifty years pushing the Ninth Amendment right to roll up and smoke whatever frigging vegetable you wish, marijuana would be legal now, and there would not have been a “War On Drugs” handy for the psychopathetic enemies of liberty to transform into a War on Everything, including the American Productive Class.
I think we’ve seen the high point for medical marijuana. The proof of that lies in a current initiative to “Regulate Marijuana Like Alcohol”, on the ballot in my home state of Colorado this year. The title says it all, although the details could be gruesome, ending in a mess found in some states and all military bases, where the government runs the liquor stores (about as well as they run everything else). In the Air Force, when I was growing up, some officious snoops regularly examined the records of the store and your commanding officer would get a tattletale letter if they thought that you were buying too much booze.
Whatever that amounts to.
This is not a kind of progress any that real libertarian would recognize. The fact that advocates of the measure make a major selling point of taxing the stuff only makes it worse, both in principle and practice. First, by what right does anybody steal money from me when I choose to spend it on some things and not on others. Furthermore, when I was just entering college, a smoker could buy a pack of Marlboros out of a machine for 35 cents. Today, the price per pack is nudging five dollars, and only a small fraction of that is attributable to inflation.
Exactly the same thing will happen with marijuana.
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October 27, 2012
An argument against further publicizing the Jimmy Savile victims
At the Huffington Post, Brendan O’Neill points out that with Savile dead, the hue-and-cry to round up all the alleged victims and have them pour out their stories will not actually benefit anyone except the “theraputic industry”:
The victims themselves don’t get much out of it, since they are cajoled into reliving unpleasant things that happened decades ago. Worse, they’re publicly branded as damaged, as permanently scarred, despite the fact that many of them will have led full, interesting lives since that one time a dirty old man did something bad to them.
They are immortalised as one of Jimmy’s Victims, and in the process they are dehumanised, turned from rounded, complex individuals into simply sufferers.
Justice doesn’t benefit from these revelations, either, since Savile is dead and cannot be found guilty of anything. It is virtually impossible to prove beyond reasonable doubt that the allegations against him are true, because, in a civilised society at least, the dead cannot be put on trial. Which raises the question of why so many of the police’s resources are being pumped into gathering more and more Savile abuse stories.
And society as a whole doesn’t benefit from the open invitation to every person who had a bad encounter with Savile to reveal all. In fact, society, the big communal space we all inhabit, looks set to be the biggest loser in all this.
The Savile scandal will further dent social solidarity. The promotion of the idea that paedophiles lurk everywhere, that, in the words of the deputy children’s commissioner Sue Berelowitz, “There isn’t a town, village or hamlet in which children are not being sexually exploited”, will exacerbate today’s climate of suspicion and mistrust. The now widely accepted idea that there were “paedophile networks” at the Beeb, in the NHS, even around Parliament, will ratchet up already high levels of public cynicism towards institutions and the political sphere.
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October 25, 2012
“[W]e are now fully entered into a post-democratic era here in KanuckiHarperStan”
Paul “Inkless” Wells points out that the hyperventilation over the Supreme Court of Canada’s decision in the Etobicoke Centre election case is just a tad overblown:
There was some chatter on Twitter this morning, after the Supreme Court ruled to uphold the election results in Etobicoke Centre, to the effect that Stephen Harper has finally succeeded in stacking the top court with corrupt thugs and we are now fully entered into a post-democratic era here in KanuckiHarperStan. My hunch is that this overstates things.
First, this was actually the Harper government’s first good day at the Court in a while. The Supremes have more often been in the habit of handing Harper trouble, as with the Insite supervised-injection site case and Jim Flaherty’s dead-parrot project for a national securities regulator. In those highest of high-profile cases, Harper appointees concurred with their colleagues in unanimous judgments.
Today there was division, and it didn’t follow partisan lines neatly. (I’ll cut to the chase: I think it’s simplistic to presume a justice appointed by a given PM will consistently rule in ways that please that PM. This has simply never been the case in Canada, to the dismay of a succession of prime ministers.)
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