The Abuse of Intellectual Property Law
1999 is shaping up to be a good year for lawyers. This fall saw the patent lawyers
out in force, with Priceline suing Expedia over Priceline's patented "name your own
price" business model, and Amazon suing Barnes and Noble for copying Amazon's "One-Click
Ordering." More recently, it's been the trademark lawyers, with Etoys convincing a
California court to issue a preliminary injunction against etoy.com, the Swiss art
site, because the etoy.com URL might "confuse" potential shoppers. Never mind that
etoy.com registered its URL years before Etoys existed: etoy has now been stripped of
its domain name without so much as a trial, and is only accessible at its IP address
(http://126.96.36.199:8080). Most recently, MIT's journal of electronic culture,
Leonardo, is being sued by a company called Transasia which has trademarked the name
"Leonardo" in France, and is demanding a million dollars in damages on the grounds that
search engines return links to the MIT journal, in violation of Transasia's trademark.
Lawsuits are threatening to dampen the dynamism of the internet because, even when
they are obviously spurious, they add so much to the cost of doing business that soon
amateurs and upstarts might not be able to afford to compete with anyone who can afford
The commercialization of the internet has been surprisingly good for amateurs and
upstarts up until now. A couple of college kids with a well-managed bookmark list become
Yahoo. A lone entrepreneur founds Amazon.com at a time when Barnes and Noble doesn't
even have a section called "internet" on its shelves, and now he's Time's Man of the
Year. A solo journalist triggers the second presidential impeachment in US history.
Over and over again, smart people with good ideas and not much else have challenged
the pre-wired establishment and won. The idea that the web is not a battle of the big
vs. the small but of the fast vs. the slow has become part of the web's mystique, and
big slow companies are being berated for not moving fast enough to keep up with their
net-savvy competition. These big companies would do anything to find a way to use what
they have -- resources -- to make up for what they lack -- drive -- and they may have
found an answer to their prayers in lawsuits.
Lawsuits offer a return to the days of the fight between the big and the small, a fight
the big players love. Ever since patents were expanded to include business models,
patents have been applied to all sorts of ridiculous things -- a patent on multimedia,
a patent on downloading music, a patent on using cookies to allow shoppers to buy with
one click. More recently, trademark law has become an equally fruitful arena for abuse.
Online, a company's URL is its business, and a trademark lawsuit which threatens a URL
threatens the companies' very existence. In an adversarial legal system, a company can
make as spurious an accusation as it likes if it knows its target can't afford a defense.
As odious as Amazon's suit of Barnes and Noble is, it's hard to shed any tears over
either of them. etoy and Leonardo, on the other hand, are both not-for-profits, and
defending what is rightfully theirs might bankrupt them. If etoy cannot afford the
necessary (and expensive) legal talent, the preliminary injunction stripping them of
their URL might as well be a final decision.
The definition of theft depends on the definition of property, and in an age when so
much wealth resides in intelligence, it's no wonder that those with access to the legal
system are trying to alter the definition of intellectual property in their favor. Even
Amazon, one of the upstarts just a few years ago, has lost so much faith in its ability
to innovate that it is now behaving like the very dinosaurs it challenged in the mid-90's.
It's also no surprise that both recent trademark cases -- etoy and Leonardo -- ran across
national borders. Judges are more likely to rule in favor of their fellow citizens and
against some far away organization, no matter what principle is at stake. The web, which
grew so quickly because there were so few barriers to entry, has created an almost
irresistible temptation to create legal barriers where no technological ones exist. If
this spate of foolish lawsuits continues -- and there is every indication that it will
-- the next few years will see a web where the law becomes a tool for the slow to retard
the fast and the big to stymie the small.