Excuse us for not being impressed by the hypocrites’ complaints.  Every member of Congress attacking Apple does his or her best to take advantage of all tax breaks they can reasonably claim.  As do all of the reporters and pundits writing about Apple, and the various media organizations that publish them.

The biggest difference is that Apple is better at it and is protecting more income. 

What is happening in this country is that many politicians and the left increasingly see business profits as a “commons” that belong to everyone and should be used for the social good.  Companies that aggressively, and legally, protect what they can from the taxman are accused of being unpatriotic—by people who do exactly the same thing when it comes to their own finances.

Kentucky Senator Rand Paul had it exactly right at the hearing called to chastise Apple: “If anyone should be on trial here, it should be Congress."

As a general proposition, this year's report was no surprise.  The list of violators, of those who need to step up their efforts (to say the least), is fairly predictable.

China: "USTR reports grave concerns about misappropriation of trade secrets in China, and incremental progress on a few of China’s many other significant IPR and market access challenges"

Former Russia state, Ukraine: "USTR designates Ukraine a Priority Foreign Country (PFC) under the Special 301 statute due to severe deterioration of enforcement in the areas of government use of pirated software and piracy over the Internet, as well as denial of fair and equitable market access through the authorization and operation of copyright collecting societies"

Russia: Still dominant in peer to peer piracy, "Russia remains on the Priority Watch List in 2013 as a result of continued significant challenges to IPR protection, notably inadequate enforcement against the growing problem of online piracy."

Others are named as well, but these tend to be the countries that catch the attention of the public.
So, if the violators are fairly predictable before the report is released, what is the big deal?  The answer to that is easy.

The Special 301 report serves as an important tool for identifying and organizing the global challenges but also is a critical tool in the fight against organized piracy.  As I have noted in other posts, there are basically two groups who steal intellectual property. The first is a group typified by the person who really does not know they are doing anything wrong, or knowing it is do not engage in stealing broadly.  The second group is worse, organized criminal behavior often sponsored by nation states or by organized crime.  Calling out those countries that are a problem helps to focus the mind on this second, malicious group.

In turn then, the report provides some direction for growing U.S. intellectual property based exports, and thereby growing our economy.  Acknowledging and identifying the problem is always the first step to improving.

Municipalities have been doing this on purpose, largely at the urging of consultants, who suggest the delays at least in part as a way to extract concessions from the wireless companies. It’s been a big problem, with municipalities complaining to the wireless companies about poor service coverage and then at the same time unnecessarily delaying permits to address the problem.

IPI has written about this problem several times, and one of the solutions we suggested was that municipalities should be put on a shot clock and given only a limited amount of time that they could delay such applications.

Which the Federal Communications Commission (FCC) did.

Upon which action the City of Arlington, Texas, which is just about 30 miles from where I sit, challenged the regulation, claiming that the FCC didn’t have the authority to regulate how they approved applications for cellphone towers.

The case worked its way through the courts, and yesterday the Supreme Court found for the FCC. In other words, the FCC has the right to place such regulations upon municipalities.

It’s undoubtedly good for the economy and for the continued rollout of broadband that municipalities are on a time limit for such approvals.

Some, however, have pointed out that we should be concerned about bigger questions; namely, upon what basis can a regulatory agency simply claim authority that is not apparently clearly delegated to it.

As someone who believes in the rapid rollout of technology, I’m a fan of the FCC’s shot clock. But as a fan of limited government, I have to admit being troubled by not having clearly defined areas of regulatory reach.

And for those who follow the Court, it was an interesting decision because the conservatives were oddly split on the decision. Scalia and Thomas were in the majority siding with the FCC, while Alito, Roberts and Kennedy dissented.

The evidence thus far suggests that the Obama administration decided almost immediately to stand down and not send in forces to try to support the embassy under attack. And there has to be more there, since as of yet we've not been able to get a clear answer to who, exactly, was in the situation room that night and who made the decision. One person who clearly DOES know the answer, General Carter Ham, mysteriously decided to retire just a few years before his mandatory retirement date, and 18 months into a 3 year rotation.

Another military official who would have knowledge of the episode, Admiral Charles M. Gauoette, was also removed by the Pentagon around the same time.

I think we all want to hear more from General Ham and Admiral Gauoette. I think the decision process that led to our abandoning Americans in Benghazi is more important, or at least logically precedes, the cover-up scandal.

Meanwhile, the administration spent four days and twelve drafts deciding how they were going to spin Benghazi.

Covering their own tails was clearly a greater concern that covering the lives in Benghazi for which they were responsible.

What was interesting during the hearing was to hear at least one of the participants, Jon Baumgarten, admit that the Copyright Principles Project (CPP) was very much skewed toward the interests of those who see copyright as an obstacle, and skewed against the interests of creators and owners. Indeed, Mr. Baumgarten confessed that the CPP actually resulted in very little "consensus" at all, which called into question why the title of the hearing was “A Case Study for Consensus Building: The Copyright Principles Project.” Apparently the result of the case study was failure.

Later in the hearing Mr. Baumgarten made a particularly interesting comment that the technology community seems to think that anything that gets in their way should be cast aside (that's not a direct quote). It's an important point. Access to content has never meant that you could access anything you wanted anytime you wanted in any way you want without having to pay anything or lift a finger. Property rights are, at their core, the right to exclude. So if you weaken copyright sufficiently so that it never causes anyone any inconvenience, odds are you've weakened copyright such that it is no longer a real right at all, and no longer a protection to creators.

I found it interesting that, when each panelist was asked to mention their priorities for reform, not a single one mentioned term. Now, term may have some up later in the hearing, as I had to step away for a while, but no one mentioned it as one of their priorities.

It was great to hear several Members of Congress stating their appreciation for the importance of copyright. Early on one Member said that "Millions of Americans depend on copyright for their livelihoods," and it was great to hear this, since not one of the panelists spent any time acknowledging the importance of copyright to the U.S. economy. Again, I would have thought that should have been the focus of the first hearing.

Twitter traffic was slow to start but picked up during the hearing. @gigibsohn mostly simply tweeted out quotes from the panelists without expressing any opinion at all, though of course @mmasnick could be counted on to continually assert that the rights of the public should trump the rights of creators and owners. @future_of_music helpfully pointed out several times the lack of representation for creators, but also seemed very excited about weakening many creator rights. @illusionofmore pretty much reflected my skeptical take on the hearing and on the motives of many of the participants.

All-in-all, we learned that the Copyright Principles Project achieved almost no consensus at all, which confirms my opinion that this was a poor way to open up a copyright review process. Here's hoping that, before too long, hearings reflect the importance of the rights of creators, as well as getting the thoughts of creators about how the copyright system can be improved.

Because creators are not necessarily knee-jerk defenders of the status quo. Last April 26 I had the privilege of moderating a panel during Dallas' first ever World IP Day event. One of our panelists, Richard Kelly, a photographer, expressed some frustration with the way the current copyright system works for photographers, and clearly had some thoughts on ways that the system could be improved for both content creators like Richard, and for the customers who wish to access his content. Richard's a good example of the kind of folks Congress needs to hear from early on in this copyright review process.

This review is widely believed to have resulted from a speech given earlier this year by the Register of Copyrights, Maria Pallente. Soon after she testified before Mr. Goodlatte’s subcommittee outlining her thoughts in more detail.

For those of us who believe in intellectual property and copyright, there is obviously a concern that this review takes place in an intellectual climate where so much effort has been devoted to tearing down the idea that creators should be able to own and control and profit from their creations. Make no mistake—while some who call for copyright reform would be content once a handful of copyright modernizations were put into place, many copyright "reformers" would like to see the bulk of copyright protection go away, so that no obstacle remains between them and free access to anything they want, including the right to profit and build business models on top of free access to the creations of others.

It’s within this context that the first hearing is puzzling.  The title of the hearing is “A Case Study for Consensus Building: The Copyright Principles Project.”  Well, the Copyright Principles Project was, for the most part, a project of copyright skeptics, although there certainly were some actual copyright proponents who were part of the project for window dressing.

The troubling part of the title is the word “consensus.” As David Lowery put in an op/ed in Politico earlier this week, how could the Copyright Principles Project have reached anything approaching “consensus” when no creators were represented?

You’ll often see the word “stakeholders” used in projects like this. They claim, as the Copyright Principles Project claimed, to bring together “stakeholders”—those  with a vested interest in the outcome.

But any consensus on copyright that is worth the name has to include the most important stakeholders in the discussion—the creators themselves. Remember, copyright is a property right, and those who own the property, who hold the rights, are the most important stakeholders of all—not just lawyers and academics and appointed government bureaucrats. It’s the creators who must not only be in the room and represented, but must also be respected and elevated in the discussions. Yes, consumers and users are stakeholders as well. But far too often in these copyright “reform” discussions the attitude has been that users of the system are the primary stakeholders, and creators are a necessary and inconvenient evil.

Only in a process where the rights and privileges of creators are respected and, indeed, elevated, will anything approaching consensus on copyright be achieved.

So why, then, is the first hearing in what will certainly be a lengthy, multi-year process devoted to hearing from a project that entirely omitted the creators and owners of the property in question? At the very least, beginning like this unnecessarily raises the hackles of the creative community, which is probably a strategic mistake in a process that will be highly controversial to begin with.

Imagine if the committee were doing a hearing on the impact of, say, wetlands regulations, but didn't bother to hear from any property owners who had been affected by the regulations? A hearing populated only with bureaucrats and regulators? That would be considered an outrage.

Or, more pointedly, imagine if when they hold the hearing about the IRS discriminating against conservative and Tea Party groups, that they only heard from IRS bureaucrats, and didn't bother to invite any of the affected groups to testify? Again, an outrage.

The report can be found here (it's a 59 page PDF).

From the press release:

• USTR designates Ukraine a Priority Foreign Country (PFC) under the Special 301 statute due to severe deterioration of enforcement in the areas of government use of pirated software and piracy over the Internet, as well as denial of fair and equitable market access through the authorization and operation of copyright collecting societies;
• USTR reports grave concerns about misappropriation of trade secrets in China, and incremental progress on a few of China’s many other significant IPR and market access challenges;
• USTR adds Barbados, Bulgaria, Paraguay, and Trinidad and Tobago to the Watch List due to specific problems identified in the report;
• USTR announces that while El Salvador and Spain are not listed in the Report, USTR will conduct out-of-cycle reviews to assess progress on IPR challenges identified in this year’s reviews of those countries; 
• Canada moves from the Special 301 Priority Watch List to the Watch List in recognition of significant progress on copyright issues, while USTR continues to work with Canada to address several remaining IPR concerns; and
• Brunei Darussalam and Norway move off of the Special 301 Watch List.

And then, the very next day, we returned to Dallas to co-host Dallas' first ever World IP Day event.

We think World IP Day is important not only because of the very elemental importance of the intellectual property system and respect for the rights of creators and inventors, but also because it seems that almost any time intellectual property issues make their way into the news cycle, it's over something controversial or contentious. So World IP Day is an opportunity to back up and remind ourselves of the importance and function of IP systems in national economies, particularly with regard to the United States.

In Washington, we were delighted to have a terrific program. All of the video from the DC event is now posted on our website here, so you can check it out at your convenience. You may need to find a way to watch Professor Epstein's address at 3/4 speed if you want to try to comprehend it all in real time!

Our Dallas event was held in the new offices of the Dallas Regional Chamber at 500 N. Akard. It was a great first-time collaboration between the co-sponsoring organizations, and we look forward to building the World IP Day tradition in Dallas. Dallas will be home to one of the new USPTO regional offices, which at the very least is recognition of the amount of innovation that is happening in the Texas region.

Thanks to all who were part of our programs and to those who atttended!

Today, there's a guest post on the Patently-O blog by Benjamin Jackson, Senior Director of Legal Affairs at Myriad Genetics, where he makes his post-SCOTUS arguments.