Soon football will return to America’s living rooms and countless fans will use the “pause” and “rewind” features of their various cable boxes while enjoying the game. Just a few years ago, pausing a live game or remotely recording something on your TV from your smartphone anywhere with wifi connection was unthinkable, and seeing a replay depended solely on the decisions of the broadcaster. But advances in technology allow us these small luxuries.
These advances did not just happen spontaneously, but were the result of serious work by inventors. Their work was rewarded with a number of patents, many of which are currently owned by TiVo, which is happy to license it’s technology to anyone willing to pay a fee, so that subscribers to almost any cable service can enjoy these features. The money TiVo gets from these licensing arrangements is its return on investment of time, effort, and money in developing the technology in the first place.
Comcast, one of the nation’s leading cable service providers, is unwilling to pay TiVo for a license to use this technology, but it is nevertheless continuing to use TiVo’s technology in its cable boxes that it imported from abroad. In response, TiVo brought a complaint before the International Trade Commission, an agency of the U.S. government charged with enforcing patent owner’s right to be an exclusive importer of patented goods.
If the Commission concludes that such right is being violated, it can order the Customs Service to block the importation of the offending products at the border.
Though the outcome is not yet final, the Commission has already ruled that TiVo’s patents are valid and that they are infringed by Comcast’s actions. Comcast is nevertheless arguing that the Commission should allow it to continue to import its cable boxes. The claim is that blocking the importation of the infringing cable boxes would be against the public interest, because it would prevent its subscribers from accessing the popular features on those cable boxes.
This is exactly backwards. The public benefits when it has access to a variety of technology at low prices. In Comcast’s view, though, it doesn’t matter how the public gets such access. On that view, whether the choices are provided through many people innovating and bringing their own wares to market, or whether they are the result of copying, it’s all the same. But that simply isn’t so.
If a patent holder can have its rights violated with little consequence to the infringer, its rights won’t be worth much. And what message will that send to the future innovators? They will be told, in no uncertain terms, that even if they come up with some invention that everyone wants, they will have little ability to actually reap the rewards of their hard labor. Few people will agree to invest their efforts and money under those conditions. In that world, technological progress would slow significantly, to the detriment of the rest of us.
There may well be cases when stopping the importation of infringing goods is against public interest. For example, if there is an epidemic and not enough drugs are available in the U.S., it would be wrong to prohibit bringing in the needed medicine from abroad. In that case, we would treat the disease first, and settle on payments afterwards.
The TiVo-Comcast dispute, on the other hand, is really a question of who should decide on the amount of money Comcast should pay for a license. TiVo’s position is that the license should be negotiated between the two companies as it is between TiVo and every other licensee. Comcast, on the other hand, appears to believe that it should be able to import its goods without hindrance and pay TiVo only whatever fee a Federal District Court decides to impose.
Imagine someone moving into your house and refusing to leave, agreeing to pay not the rent you were willing to negotiate, but only the rent that some government appointee decided was “fair.” Most of us would be aghast at this prospect, and rightly so because that is not how a market economy works. Government should not be setting prices between buyers and sellers. Instead, government should be ensuring that intellectual property rights are enforced and telling Comcast it cannot import ingraining goods into the United States unless and until it negotiates a proper license with TiVo.
The fundamental function of our government is to protect private property and let people buy, sell, rent, or otherwise transfer it on whatever terms they agree. The assured protection of the right to property and attendant freedom to sell it is what made America the economic powerhouse that it is. We weaken these guarantees at our own peril.
Gregory Dolin is co-director of the Center for Medicine and Law at the University of Baltimore School of Law.
Editor’s note: Comcast released the following statement in response to this oped: “This opinion piece involves allegations of fact that are in dispute and that are the subject of pending litigation before the International Trade Commission. Comcast has denied them in its filings in that case.”
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