April 25, 2014

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The Pizzaright Principle

Lately, lots of bogus arguments for copyright expansion have been floating around. A handy detector for bogus arguments is the Pizzaright Principle.

Pizzaright – the exclusive right to sell pizza – is a new kind of intellectual property right. Pizzaright law, if adopted, would make it illegal to make or serve a pizza without a license from the pizzaright owner.

Creating a pizzaright would be terrible policy, of course. We’re much better off letting the market decide who can make and sell pizza.

The Pizzaright Principle says that if you make an argument for expanding copyright or creating new kinds of intellectual property rights, and if your argument serves equally well as an argument for pizzaright, then your argument is defective. It proves too much. Whatever your argument is, it had better rest on some difference between pizzaright and the exclusive right you want to create.

Let’s apply the Pizzaright Principle to two well-known bogus arguments for intellectual property expansion.

Suppose Alice argues that extending the term of copyright is good, because it gives the copyright owner a revenue stream that can be invested in creating new works. She could equally well argue that pizzaright is good, because it gives the pizzaright owner a revenue stream that can be invested in creating new pizzas.

(The flaw in Alice’s argument is that the decision whether to invest in a new copyrighted work, or a new pizza, is rationally based only on the cost of the investment and the expected payoff. Making a transfer payment to the would-be investor doesn’t change his decision, assuming that capital markets are efficient.)

Suppose that Bob argues that the profitability of broadcasting may be about to decrease, so broadcasters should be given new intellectual property rights. He could equally well argue that if the pizza business has become less profitable, a pizzaright should be created.

(The flaw in Bob’s argument was the failure to show that the new right furthers the interests of society as a whole, as opposed to the narrow interests of the broadcasters or pizzamakers.)

The Pizzaright Principle is surprisingly useful. Try it out on the next IP expansion argument you hear.

Comments

  1. Seth Finkelstein says:

    Yes. This is a rebuttal to the simple-minded property-is-good argument, which is frequently seen and much-ranted.

    HOWEVER … it’s also got a weakness, in that what if pizza was deemed to be such an importance part of our society that the Constitution granted pizzarights, for a limited pie size (as well as hamburger-patents). And we had a system where pizzaright is supposed to be balanced by the doctrine of hors d’oeuvres., which allows one to serve appetizers as long as they consist of small bites.

    All in all, it’s again another iteration of what-is-property.

  2. Edward W. Felten says:

    The Constitution did not grant copyrights. All it said was that Congress had the power to grant copyrights, if Congress chose to do so.

    You might argue, I guess, that pizzaright would be unconstitutional because the Constitution does not empower Congress to grant pizzarights. But that’s not an argument that pizzaright is bad policy.

    The Pizzaright Principle is useful because pizzaright doesn’t carry the unexamined assumptions that are often built in to copyright arguments. The circular argument based on property (“it’s good because it’s property, and it’s property because it’s good”) is one, but there are others, too, such as the assumption that maximizing copyright owner revenue is the right policy goal.

    Even if your argument is valid, the Pizzaright Principle can help you sharpen it, by helping you strip away the unexamined assumptions and focus on how your argument is based on the unique attributes of creative works or inventions.

  3. Crosbie Fitch says:

    I’d worry about being hoist by your own petard if you’re not careful.

    Using the spuriousness of ‘Pizzaright’ to undermine expansion of IP can also be used to undermine IP itself, e.g. copyright.

    Copyright itself is spurious and has lost any incentivising benefit it may once have had.

  4. Ian says:

    This is brilliant. It makes me think of Disney’s evergreen argument for extending the copyright on Mickey Mouse: Mickey Mouse is key to our business. Of course, cheese pizza sells a lot of pizza for Domino’s; if they are not awarded a pizzaright to cheese pizza, they will lose money.

    I really like this. In general, it’s a form of the “reductio ad absurdum” principle that helps test to see whether any given argument has any backstop or limiting principle, which most of the pro-IP-expansion arguments do not.

  5. Ulrich Hobelmann says:

    Two, no, three, thumbs up for this!

    May the whole world stumble across this blog entry and give it some thought!

  6. Seth Finkelstein says:

    Sigh. I know, I was glossing that aspect to make the point briefly. To be very specific, with exact citation parody, if that helps:

    IF the Constitution had a clause which read:

    “The Congress shall have Power …”

    “To promote the Progress of Food and useful Eating, by securing for limited Sizes to Cooks and Chefs the exclusive Right to their respective Meals and Preparations”

    THEN, “pizzaright” just might actually be a part of our society.

    Intellectually, we’re working on a reply to the trivial property argument. I’m cautioning that rebutting the trivial property argument with a trivial NOT-property argument, while appealing to the tech mindset, is ultimately flawed because the copyright clause of the Constitution (which is how its reference even though the word “copyright” does not appear in it) is a tie-breaker between those two competing arguments.

  7. Pete J says:

    The flaw in Alice’s argument is that the decision whether to invest in a new copyrighted work, or a new pizza, is rationally based only on the cost of the investment and the expected payoff.

    Waitaminute. Long tails aside, how is it that longer term does not lead to an expectation of more payoff, assuming that, once the copyright (or pizzaright) expires, others swoop in and offer the work (pizza) for free.

    Also, the flaw in the pizzaright analogy is that after consuming a pizza, the pizza is gone (or at least no longer useful for its intended purpose); after “consuming” a work, it can still be used for its original purpose (or else it couldn’t be copied, right?)

  8. Edward W. Felten says:

    Pete J,

    The point of the pizzaright analogy is not to argue that all intellectual property is bad. The point is that an argument for IP-expansion must depend on some fact about creative works that is not true for pizza. The fact that creative works are still available after being “consumed”, but pizzas are not, is one such difference.

    Arguments based on incentives for future creation are generally more plausible than arguments that just ask for wealth transfers based on past creation. Lengthening the term of copyright, for works created in the future, may increase the incentive to make new works (though there are diminishing returns, probably far short of the current copyright term — see the economists’ amicus brief in the Eldred case); but increasing the term for already-created works cannot change the incentives of past creators.

  9. Robert Aiello says:

    Why is it that the word “incentive” appears no where on this page? We grant intellectual property rights to incent people to develop intangibles. An extension of rights to existing intagibles is wrong because the property already exists — hence no need for an incentive to create it. On the other hand, extending the term on new copyrights and patents may increase overall good by incenting the production of new intagibles if the incremental value of these intagibles is greater than the increased cost of the monopoly over all new intagibles. This is not an easy calculation, but at least it is conceptually clear.

    Alice is wrong because there is always money that will fund new research with an appropriate expected return. Bob is wrong because no one guarantees that an asset of any kind will be profitable forever.

    Pizzaright, howver, seemes to be a canard, as there are no clear intagibles, just a monopoly.

  10. Robert Aiello says:

    Apologies, the word “incentive” appeared in a posting while I was drafting mine.

  11. dmc says:

    Well, how about the pharmaceutical industry’s argument? (I don’t necessarily buy it, but I think the sheer volumes of money involved may make Alice’s case a tiny bit stronger.)

    I am drug company X. I claim
    1) Creating a new drug takes a lot of startup funding (including amortizing over failures).
    2) My existing drugs are coming off patent, and I’m about to lose a big revenue stream. With generic competition, my revenue stream will be so reduced that I won’t be able to afford to create new drugs (given 1)
    3) If I have to borrow money to create new drugs (given 2), the payoff on future drugs isn’t a big enough incentive with current patent limits

    Therefore
    4) I can only create new drugs if I can keep my existing revenue stream continues high and/or my future revenue stream is guaranteed for longer.

    Perhaps there is a difference between pizzaright, copyright and patent in this case, but I’m not sure I see it.

    The main difference I see between pizzaright and the other two is that I don’t see an element of risk in pizzaright. Creating new pizzas is not risky…you pretty much know the market for pizzas. If pizzaright was there for inventors of new *types* of pizzas, and the scope were limited to the new *types*, it would be much more analogous to copyright. As a pizza chef, I might choose to invest in various exotic cooking supplies, equipment and ingredients. If by virtue of such investment and my sheer creativity, I come up with an extraordinary new Shoe Leather style pizza, it seems reasonable that I be protected from Pizza Hut’s immediately snatching up and marketing my recipe. I wouldn’t expect Pizza Hut to get a license from me to produce pizza in general. I would expect it if they wanted to produce my Shoe Leather pizza. And with the proceeds, I would expect to defray the costs of my failed Soggy Corn Flakes style pizza experiments, as well as perfecting my new Better Leather style.

  12. Joe Williams says:

    I’m afraid the IP cartel would tell us that while pizza in general would qualify as an invention, and therefore fall under the patent system, any specific recipe or combination of toppings is an expression of ideas, and therefore copyrightable.

    The only reason pizza isn’t copyrighted is that it never has been. If it was invented today, it probably would be, just as if libraries were invented today, they’d no doubt be illegal. (Just look at the infringement!)

  13. Karl-Friedrich Lenz says:

    What makes you think that there are no Pizzarights? The fine search service at the US Patent Office lists 2916 patents and 4498 trademark records for the search term “pizza”.

    Amazon has 1305 pizza books, many of which are probably protected by copyright.

    Of course, your point is completely correct. If someone wants a monopoly right, it is not enough to point out that they would make some money from it. And that point is illustrated nicely with your idea.

  14. Marc Freedman, RazorPop says:

    Edward, well done. Today’s political culture embraces corporate profit at the expense of consumer and societal good. While politics and the balance of power may not change, at least we can call a spade a spade.

  15. Ean says:

    With regard to Disney -

    Let’s suppose that Disney’s copyright over Steam Boat Willy and other early Mickey Mouse works do expire – what happens then? Does copyright expiration over those works simply mean that persons are now allowed to distribute and sell only those specific works without having to obtain permission from Disney? Or are the effects of copyright expiration much broader than that? For example, would copyright expiration now allow anyone to create a Mickey Mouse cartoon or distribute and sell Mickey Mouse merchandise without Disney’s consent?

    (To frame the question more clearly – does the copyright rest only with the specific work or does it apply to the character as a whole?)

    Also, what about Disney’s trademark rights over the name and likeness of Mickey Mouse? Would the trademark right be sufficient to protect Disney’s business interests (i.e. preventing unauthorized persons from using the Mickey likeness in new products for profit)?

    Because Disney’s a functioning business entity whose most valuable property is its IP, Disney clearly has a legitimate interest in protecting its IP from other persons seeking to use it for financial gain. On the other hand, copyright extensions ad infinitum are clearly against the public interest.

    How do you find the balance?

  16. Dave says:

    It’s just too banal to even be wasting time on. Lobbying should simply get underway to abolish the ridiculous concept of “intellectual property” in the first place.

  17. Sean FWJ Fowler says:

    I don’t think you give enough detail on how pizzaright works.

    One would imagine that for a pizzaright to be granted to a creator, that creator would need to create a different kind of pizza. Say I invented a sauceless pizza that was cooked as a completely empty pizza (just the dough on a pizza pan) and then topped with cold bruschetta when it came out. It’s a novel idea, and I would imagine it deserves protection because the research and development involved in creating that pizza should be compensated. If other pizza shops make that pizza, they are just copying me and get the benefit of selling without the hindrance of development (Little Red Hen Theory).

    However, if I am granted a pizzaright for my pizza, I would expect it to be wielded against other pizza makers, not somebody’s mom or dad cooking up a pizza before a big game on Sunday. To be given the power to wield my pizzaright against every ma and pop regardless of commercial interest would go too far. That’s where your pizzaright principle gets it right. I can’t know — without conducting a warrantless search or launching an investigation without reasonable suspicion– whether someone is cooking my pizza or not, and so I am unable to prosecute the average citizen. However, I can prosecute Joe’s House of Pizza next door, because I see customers walking out with copies of my pizza. That’s where the line should be drawn in copyright too.

    Just because we can add all sorts of interesting technology to copyrighted content to see if someone is copying my work at home does not mean we should. If the pizza lobby pushed for legislation that would equip every new house built with a pizza analyzer and silent alarm signal for violators of pizzaright, would we pass it?

  18. Kevin says:

    I’m getting a bit confused here. In what way is the straw-man “pizzaright” different from any other “composition of matter” in existing patent law? If someone develops a new pizza recipe, that is (I presume) a novel composition of matter, and as such is patentable under today’s law.

    I think that Prof. Felten’s original discussion of “pizzaright” presupposes that the monopoly is being granted to art that is not novel; in other words, that the government is doling out monopoly rights to someone who has not created something new. If so, that is clearly not supported by the Constitution, which limits patents and copyrights to “Authors and Inventors.”

    The restriction on novelty is why we don’t see broad “pizzarights” being granted. There is so much published prior art in cookbooks that it would be incredibly difficult to draft patent claims narrowly enough to convince an examiner of novelty while keeping them broad enough to restrict competition effectively.

    Nevertheless, I wouldn’t be at all surprised to see some clever patent agent so obfuscate the claims as to fool an examiner into granting a broad patent over pizza, and then see the Federal Circuit refuse to consider prior art, presuming that the original examination was perfect. That mode of operation appears to be the current standard of patent law.

  19. Edward W. Felten says:

    The pizzaright doesn’t just apply to new kinds of pizza. The idea is that there is a single pizzaright, which controls the right to make or sell pizzas of any kind.

    If I own the pizzaright, and you invent a new kind of pizza, you still need my permission to make or sell your new pizza. Maybe we could make a deal…

  20. Sean FWJ Fowler says:

    Well, Felten gives two examples of the Pizzaright Principle at work. First, he discusses its application to length of protection, and then he discusses rights to increase profitability. While the length example is easy, I guess I imagine that the extension of rights to increase profitability would implicate efforts like the broadcast flag.

    To me, I don’t think he is necessarily questioning the originality of the work but the balance of interests. For every type of IP, there is a balance struck between the IP owners and the IP users. It seems to me that the latest attempts by the IP holders are an effort to try to change the balance in their favor.

    I believe the beauty of the Pizzaright Principle is that the elusive nature of intangibles is made clear by making the work in question tangible. IP was created to put intangibles on par with tangibles so that there continues to be an incentive to continue creating intangibles. Thus, the outer threshhold of allowable protection for intangibles should not exceed the protections afforded tangibles. I think Felten created the Pizzaright Principle to demonstrate the practical nature of such a limit.

    But, then again, only he knows for sure.

  21. Sean FWJ Fowler says:

    Mr. Felten, I fail to see the applicability of such a broad definition. While it is easy to think of instances where Pizzaright would sink an argument, what would be an example of an argument that would float on the Pizzaright Principle?

  22. karyse says:

    the discussion of granting of Pizza rights leaves out an important issue: the construction of a consumer “need” by showing that “everyone else is eating” shoeleather pizza.

    Major companies that want to protect some pizza idea (software idea) and be the sole providers of shoeleather pizza ultimately will cause the demise of the very thing that might have made them money.

    For example, say, a the first softdrink maker had gotten the sole license for putting bubbles in sugar water, we’d all still be drinking milk, tea, juice, or coffee — soda as an option at a meal would have disappeared and the company would have went bankrupt under the weight of the consumer belief that it is a dumb idea.

  23. Rick DeNatale says:

    Much as I think that something needs to be done about the rampant expansion of copyright, I’ve had a hard time following the pizzaright idea.

    On Sept 30, Ed Felten wrote:

    > The pizzaright doesn’t just apply to new kinds of pizza. The idea is that there is a single pizzaright, which
    > controls the right to make or sell pizzas of any kind.

    > If I own the pizzaright, and you invent a new kind of pizza, you still need my permission to make or sell
    > your new pizza. Maybe we could make a deal…

    This sounds exactly analogous to patents rather than copyrights. The following is based on my experience as an engineer and what I have been told by various corporate IP attorneys.

    Patents “teach” an invention and give the inventor the right to block others from using the invention without permission. Holding a patent by itself gives the inventor no absolute right to use his own invention, since it may require license to existing patents.

    A patent will contain a series of “claims” which range from very broad, such as “1. Dough formed into a short cylindrical form, topped with a variety of toppings and baked.” to more narrow such as “2. A pizza as described in claim 1, where the toppings include tomato sauce.” etc. It is actually the individual claims which must be defended in a patent infringment case, since it might be determined that the broader claims are invalid for various reasons such as a lack of novelty.

    Patents protect the ideas of inventors and allow the holder of the patent to prevent the use of those ideas in products or processes without license.

    Copyrights on the other hand protect a particular “expression” of ideas.

    There is a difference. Unfortunately it’s been getting blurrier. Many software patents have been granted lately which seem to me and others to very suspect as to originally of idea and more about expression.

    The Patent Office seems to have lost control over the software patent process, possbily due to the sheer volume of applications. I’ve personally seen examples of patents granted to different inventors which are obviously counter-infringing.

    The pizzright idea (which seems to be posed as an analogy to copyright) seems to be blurring copyrights in the opposite direction, confusing manufacture with copying.

    I still think that there is some value to patents and copyright of limited duration, IF we could get rid of some of the muddy waters which have developed.