(This is regular posting. Acknowledgments: aim_here2002, Linonut.)
Q: Bzzzzt. What the fuck ... !? A: The context is property. Intangible intellectual property (rights granted under IP license). IP goods. Property in short. Q: Bzzzzt, but according to RMS, "intellectual property... is a mirage, which appears to have a coherent existence only because the term suggests it does." So bzzzzt, what the fuck ... !? A: Well, well, well. But according to one FTC commissioner (and an antitrust attorney), it is not quite a mirage. "One fundamental question in this area is whether intellectual property is like other property for purposes of antitrust analysis. In considering this question, it seems to me that we should keep in mind some obvious principles. First, intellectual property is property, that is to say, it belongs to someone who has the right to exclude others from using it without his or her consent. Second, intellectual property has attributes that distinguish it from personal property and real property -- that is why we have a different word for it. For example, the enforcement of an owner's exclusive right to use physical property may be accomplished more easily, as a practical matter, than enforcement of an exclusive intellectual property right. Antitrust enforcers should certainly remain open to considering new ideas about how the rights associated with intellectual property can and should be distinguished from the ownership of tangible property in the analysis of antitrust liability. But for now, it seems fair to say that for antitrust purposes, intellectual property is generally treated like other forms of property." Q: Bzzzzt. No, can't be. RMS says that "All intellectual property rights are just licenses granted by society because it was thought, rightly or wrongly, that society as a whole would benefit by granting them. But in any particular situation, we have to ask: are we really better off granting such license? What kind of act are we licensing a person to do?" A: Lunatic RMS is simply confusing reality with his dreams of the GNU Republic. Both in the GNU Manifesto (quoted above) and in the GNU GPL he's talking about legal regime in his wonderful GNU Republic (in a nearby alternative universe, his moronic dreams aside for a moment) where First Sale is nonexistent, IP is not property (it belongs to state), and where distributing software under any "license" other than the GPL (which is akin to a lottery or other permits from state, and hence it is, of course, not a contract or a property right), or "GPL compatible" license (but that's for extra regulation fee, I gather), is a felony under GNU law. But in this reality, intellectual property is property (see Stewart v. Abend, 495 U.S. 207, 219 (1990), Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984), etc.), and IP licenses are contracts (see citations in Wallace's brief, the link is below). (Side note) Apropos legal regime in the GNU Republic... GNUtians believe that taking two separate and independent computer program works (separate and independent under copyright law, according to the AFC test) and combining them together in a compilation (see 17 USC 101) creates a "derived work" (see the GNU Copyleft Act) akin to (quoting GNUtian Alan Mackenzie) "embryo which is derived from the egg and sperm." Accordingly, GNUtians believe that linking is akin to sex without condoms (and that it is not oral or anal). This issue might actually come up in Wallace case (after appeal) when Wallace will have an opportunity to invite defendants to elaborate on "derived from", "sections", and "intent is to exercise the right to control the distribution of derivative or collective works based on". (End of side note) Q: What price restrictions? A: Property price restrictions. Q: What 'price'? Define 'price'. A: Cost to obtain EXISTING property on buyer's side. Price is fixed at zero in the case of property locked in the GNU GPL pool (e.g. Guh-NÜ-slash-Linux, the GPL part of it). Q: The GPL allows charging fees for binaries, only source code must be available under the GPL at no charge. So what's the problem? A: You need to contact IBM's legal counsel and set them straight before they further embarrass themselves: "65. Among the "further restrictions" that the GPL and LGPL do not permit are royalties or licensing fees (Ex. 27 §§ 2, 3; Ex. 26 §§ 2, 4) (although fees can be collected for "the physical act of transferring a copy" of the code or for warranty protection). (Ex. 27 § 1; Ex. 26 § 1.) If modified works or machine- readable versions of GPL- or LGPL-licensed software are distributed, they must be licensed "at no charge to all third parties under the terms of this License." (Ex. 27 § 2 (emphasis added); Ex. 26 § 2; see also Ex. 27 § 3; Ex. 26 § 4.)" --- REDACTED MEMORANDUM IN SUPPORT OF IBM'S MOTION FOR PARTIAL SUMMARY JUDGMENT in SCO v. IBM (see Groklaw). Q: Doesn't Wallace understand that the GPL allows people to charge for installation, support and maintenance if they want to (and the customer is prepared to pay), just not for the software itself? How about razor and blades business model? A: It appears that Wallace does understand that "installation, support and maintenance" are not intellectual property and that the GPL has nothing to say about these things. He claims that the GPL price fixes the license fees for *intellectual property*. His claim is that "installation, support and maintenance" are a recoupment strategy, and that *intellectual property* is price fixed at predatory levels. These facts can be gleaned by reading his appeal brief. As for razor and blades business model, even Wikipedia admits that "... there may be suspicions of the existence of cartels and violation of antitrust legislation. In some cases, notably auto parts in the United States, legislation exists specifically to prevent this business model from existing." (en.wikipedia.org/wiki/Razor_and_blades_business_model) Wallace is on record claiming that "In the course of vending his competing operating system, the plaintiff has experienced firsthand the deleterious market effect of the GPL license when used by a cartel of competitors." So razor and blades argument misses the point. Q: Bzzzzt, but "marginal cost" ... so what the fuck ... !? A: The good being distributed under the GPL is Intellectual Property (rights under copyright and patent laws). The cost of creation of that good is not zero. As for "marginal cost"... "Professor John Duffy of GW Law School has published "The Marginal Cost Controversy in Intellectual Property" in the Winter 2004 issue of the University of Chicago Law Review. (Available through WestLaw with a credit card.) It is a useful piece. A common refrain of the copyleft is that the marginal cost of a digital copy of an intellectual product is zero, so, therefore, "economics teaches us" that it should be priced at zero. This is a fallacy, as discussed in Marginalized, akin to the logic of the ancient paradox that proves that Achilles can never catch the tortoise." (Go google it.) Q: A GPL coder is not compensated? A: That plus administration overhead, etc. Cost required to create NEW property (GPL derivative works, additions to GPL collective works) on seller's side. The GPL fixes the price below cost. Wallace is claiming antitrust injury from predatory pricing (pricing below cost) and says that the whole scheme is in violation of Sherman Act 1. Q: Okay, but how about explaining who Wallace is, who he's suing, what gives him the right to sue? (question from aim_here2002) A: Please visit <www.terekhov.de/Wallace-case.htm>. This is "de novo" review. Q: And the chances are... ? A: The chances are really good. Judge Young dismissed for "failure to allege anticompetitive effect". But Wallace has federal Judge Tinder on record. When Judge Tindere was not totally ``drunk'' (only partially, ``drunk'' in a sense of having a mental malfunction so to speak), he found that Plaintiffs Third Amended Complaint States a Claim Upon Which Relief can be Granted and that Plaintiffs Allegations Sufficiently Set Forth a Violation of the Rule of Reason (but, unfortunately, being in a partially drunk condition, he was fooled by the FSF to believe that Plaintiff Has Not Alleged Antitrust Injury). Judge Tinder ruled: "To establish a Section 1 claim under the rule of reason test, a plaintiff must prove that (1) that the defendants contracted, combined, or conspired among each other; (2) that the combination or conspiracy produced adverse, anti-competitive effects within relevant product and geographic markets; (3) that the objects of and the conduct pursuant to that contract or conspiracy were illegal; and (4) that the plaintiffs were injured as a proximate result of that conspiracy. Tunis Bros. Co. v. Ford Motor Co., 952 F.2d 715, 722 (3d Cir. 1991). In this case, it appears that Mr. Wallace has made the necessary allegations of FSFs unlawful contract and conduct. In his Third Amended Complaint, he specifically alleges that FSF conspired with others, including International Business Machines Corporation, Red Hat Inc. and Novell Inc., to control the price of available software within a defined market through the GPL. Primarily at issue in FSFs motion is whether Mr. Wallace has adequately alleged that the GPL had a resulting anticompetitive effect. [... reduction in IP output under GPL price-dumping conspiracy ...] This may be considered anticompetitive effect, and it certainly can be inferred from what Mr. Wallace alleges in his Third Amended Complaint. Therefore, this court finds that the Third Amended Complaint states a claim for violation of Section 1 of the Sherman Act, under the rule of reason doctrine." Q: What if Wallace loses on appeal as well? A: Then you might enjoy Wallace Reloaded (so to speak) featuring Schwarzenegger, I suppose. "The California Unfair Practices Act, Bus. & Prof. Code § 17043, prohibits selling a product below its cost for the purpose of injuring competitors or destroying competition. Bus. & Prof. Code § 17044 prohibits selling products as "loss leaders," which § 17030 defines as selling below cost for the purpose of inducing the purchase of other merchandise, misleading or deceiving purchasers, or diverting business from competitors. Cost is statutorily defined for production as including "the cost of raw materials, labor and all overhead expenses of the producer." Bus. & Prof. § 17026." This might enlighten you: "GNU will remove operating system software from the realm of competition. You will not be able to get an edge in this area, but neither will your competitors be able to get an edge over you. You and they will compete in other areas, while benefiting mutually in this one. If your business is selling an operating system, you will not like GNU, but that's tough on you. If your business is something else, GNU can save you from being pushed into the expensive business of selling operating systems." (www.gnu.org/gnu/manifesto.html) Q: Okay, what if the GPL falls as Wallace claims? A: Uh oh. To begin with, it will set the [L]GPL'd code free (will make it available for appropriation by Microsoft, etc.). Certain types of unlawful licensing arrangements (such as antitrust violations) are deemed misuse and render rights under patent and/or copyright unenforceable in court of law until the misuse is purged (and since it's pretty much impossible to purge the [L]GPL'd stuff from the net... you got it). Another rather interesting aspect is that if the GPL falls as Wallace claims, everyone (because of the Pinkerton Doctrine) who contributed GPL'd code that was used in commerce against a proprietary competitor will be subject to 15 USC 15: "(a) Amount of recovery; prejudgment interest Except as provided in subsection (b) of this section, any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorneys fee. The court may award under this section, pursuant to a motion by such person promptly made, simple interest on actual damages for the period beginning on the date of service of such persons pleading setting forth a claim under the antitrust laws and ending on the date of judgment, or for any shorter period therein, if the court finds that the award of such interest for such period is just in the circumstances. In determining whether an award of interest under this section for any period is just in the circumstances, the court shall ...". The GPL is a price-fixing (not monopolizing) claim. IBM, Red Hat etc. will owe Microsoft (for the last four years) for treble damages for the server market share that GNU/Linux has held (as Windows substitute... as for proprietary Unices... recall that "GNU is Not Unix"... <chuckles>). So it appears that, unfortunately, making money wise, Gates & Co. have been one step ahead of IBM ever since MS-DOS. regards, alexander. _______________________________________________ gnu-misc-discuss mailing list gnu-misc-discuss@gnu.org http://lists.gnu.org/mailman/listinfo/gnu-misc-discuss