Notes

Chapter 1

1. For a while, at least. When the bubble burst, Time Warner learned that it had sold itself into one of the worst mergers in history. The merged company soon dropped AOL from its name, to become Time Warner once again—though now with a new AOL division.

2. Robert Shiller, Irrational Exuberance, Princeton University Press, 2000.

3. John Cassidy, Dot.con, Harper Collins, 2002.

4. I coined the terms “New World” and “New Channel” to describe the para­digm shift in “From Investor Fantasy to Regulatory Nightmare: Bad Network Economics and the Internet’s Inevitable Monopolists,” Harvard Journal of Law and Technology, 16(1): 159-228, Fall 2002.

5. Id.

6. Thomas Friedman, “Amazon.you,” New York Times, February 26, 1999, Op Ed page, available at http://www.nytimes.com/library/opinion/friedman/ 022699frie.html, viewed April 22, 2003.

7. Id. (Emphasis in original).

8. Thomas Friedman, “KillingGoliath.com,” New York Times, March 3, 1999, Op Ed page, available at http://www.nytimes.com/library/opinion/friedman/ 030999frie.html, viewed April 22, 2003.

9. Id. (Capitalization in original).

10. Scott Rosenberg, “Amazon vs. the Ants,” Salon, March 10, 1999, available at http://www.salon.com/21st/rose/1999/03/10straight.html, viewed April 22, 2003.

11. Id.

12. Thomas Friedman, “Saga of an Online Pioneer,” New York Times, March 3, 2000, Op Ed page, available at http://www.nytimes.com/library/opinion/ friedman/030300frie.html, viewed April 22, 2003.

13. Id.

14. Scott Rosenberg, “Death of a David.com,” Salon, March 3, 2000, available at http://www.salon.com/tech/log/2000/03/03/friedman/, viewed April 22, 2003.

15. See, Hernando de Soto, The Mystery of Capital, Basic Books, 2000.

16. Purists may decry our efforts as vast oversimplifications that omit the myriad preconditions, exceptions, and caveats needed to ensure technical completeness.

Chapter 2

1. U.S. Const. Art. I § 8.

2. Eldred v. Ashcroft 123 S. Ct. 769 (2003).

3. Lessig described his personal take on the largely unsuccessful journey that he, eldred, and myriad well-wishes took through the courts in Free Culture, ch. 13 (Penguin Press, 2004).

4. In practice, most commercial software companies safeguard their software with quadruple protection, by adding terms of sale in a click-through or shrink­wrapped license above and beyond those already guaranteed by patent, copy­right, and trade-secret law. These licenses remain the subject of academic and practical controversy.

5. For this and related reasons, I joined the growing chorus suggesting that the current IP regime protecting software is inconsistent with the Constitution’s policy goals. See “Promoting Innovation in the Software Industry: A First Prin­ciples Approach to Intellectual Property Reform,” Boston University Journal of Science and Technology Law, 8: 75-156, 2002.

6. Lawrence Lessig, The Future of Ideas, Random House, 2001.

7. Lawrence Lessig, Code and Other Laws of Cyberspace, Basic Books, 1999.

8. Jessica Litman, Digital Copyright, Prometheus Books, 2001, pp. 11-14.

9. For two slants on this story, see http://www.eff.org/IP/DMCA/US_v_ Elcomsoft/us_v_elcomsoft_faq.html and http://www.adobe.com/aboutadobe/ pressroom/pressreleases/200108/elcomsoftqa.html.

10. For example, the Berman P2P Bill, a law proposed but not passed in 2002, would have exempted copyright owners from all civil and criminal penalties for any damages that they may have imposed on infringers in the course of trying to detect and correct the infringement of their copyrights by P2P users.

11. See e.g., Andrew Orlowski, “Elcomsoft not guilty—DoJ retreats from Moscow,” the Register, http://www.theregister.co.uk/content/55/28612.html, viewed August 20, 2003. Jury verdicts are notoriously hard to read, and unlike judges who decide opinions, juries are never required to explain their resason- ing. In this case, it seems likely that sympathy for the defendants, Adobe’s lost interest in the case, and general outrage about criminal copyright laws all played at least some role in the verdict—along with the standard technical argument about the nuances of IP law.

12. Siva Vaidhyanathan, Copyrights and Copywrongs, NYU Press, 2001.

13. Paul Goldstein, Copyright’s Highway, Stanford University Press, 2003 at 141.

14. For an excellent discussion of the history of software IP rights, see Robert P. Merges, Peter S. Menell, Mark A. Lemley, and Thomas M. Jorde, Intellectual Property in the New Technological Age, Aspen Law & Business, 1997, ch. 7.

15. Congress established the National Commission on New Technological Uses of Copyrighted Works (CONTU) in 1974. Congress followed CONTU’s recommendations in 1980 by extending copyright protection explicitly to cover software, notwithstanding the principle that “any idea, procedure, process, system, method of operation, concept, principle, or dis­covery” cannot be copyrighted. For a good general discussion of the CONTU report—and Commissioner Hersey’s spirited dissent—see Id. at 860-862.

16. See Diamond v. Diehr, 450 U.S. 175 (1981).

17. See In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994) (en banc).

18. See State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998).

19. See Amazon.com, Inc. v. Barnesandnoble.com, Inc., 73 F.Supp.2d 1228 (W.D.

20. See Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343 (Fed. Cir. 2001).

21. See Abramson, supra n. 5.

22. Pamela Samuelson, Randall Davis, Mitchell D. Kapor, and J. H. Reichman, A Manifesto Concerning the Legal Protection of Computer Programs, 94 Col. L. Rev. 2308, 2315 (1994) [hereinafter, Manifesto].

23. National Academy of Sciences, The Digital Dilemma, (2000) [hereinafter, Digital Dilemma].

24. Perhaps I should speak only for myself and defer to those who do already know exactly what the right answers are. But—in what may be my own pecu­liar form of arrogance—I prefer analysis to deference.

25. Julie E. Cohen and Mark A. Lemley, Patent Scope and Innovation in the Software Industry, 89 Cal. L. Rev. (2001).

26. Motion Picture Patents Co. v. Universal Film Manufacturing Co., 243 U.S. 502 (1917). For the sake of technical accuracy, the products at issue in this suit weren’t quite projectors and movies. The patent actually covered only part of the projector’s feeding mechanism, and the license restricted its use to certain categories of film. For the sake of illustrative storytelling, however, this distinc­tion is insignificant; the point and the effect remain unchanged by my woefully nonlegalistic literary license.

27. Also known as The Clansman and In the Clutches of the Ku Klux Klan. (1915). Directed by D. W. Griffith. At the time of the film’s release, both the NAACP and W. E. B. Du Bois condemned it as likely to inflame racial tensions. Some historians site the massive race riots that swept across the country in the next few years as proof that they were correct. Nevertheless—or perhaps in part because of its horrible impact—the film has assumed a unique place in American artistic and cultural history.

28. Brett Frischmann and Daniel Moylan, The Evolving Common Law Doc­trine of Copyright Misuse: A Unified Theory and Its Application to Software, 15 Berkeley Tech. L.J. 865 (Fall 2000).

29. See Lasercomb v.

30. See http://www.gnu.org/licenses/gpl.html. The GPL Frequently Asked Ques­tions are particularly helpful.

31. The best known of these licenses is probably the BSD license, originally developed for the Berkeley Software Distribution but subsequently adopted by many open-source developers. The BSD license allows anyone to copy and to use the source code; the only condition is that the new users must attribute the code’s original creators.

32. The Patent Bar is not a typical “bar.” Membership in the Patent Bar quali­fies people to work as patent examiners and to prepare patent applications. No formal legal training is required to take the Patent Bar, but a solid technical background is considered important. See http://www.uspto.gov/web/offices/ dcom/olia/oed/grb15oct03.pdf, viewed April 23, 2003.

33. Cass Sunstein, Republic.com, Princeton University Press, 2002.

34. Cohen, J. “A Right to Read Anonymously: A Closer Look at ‘Copyright Management’ in Cyberspace.” Connecticut Law Rev. 28, no. 4 (Summer 1996): 981-1039.

35. “The enumeration in the Constitution, of certain rights, shall not be con­strued to deny or disparage others retained by the people.” U.S. Const. Amend.

9. See also U.S. Const. Amends. 3, 4, 5, 14; Griswold v. Conn., 381 U.S. 479 (1965).

Chapter 3

1. Curiously enough, Coase didn’t coin the Coase theorem; George Stigler extracted it from some of Coase’s work. What’s more, Coase tended to view the theorem as a sideline, a useful idea that he introduced to help motivate econo­mists to study transaction costs. See, R. H. Coase, The Firm, the Market, and the Law, University of Chicago Press, 1988.

2. The Supreme Court discussed the legality of much oligopolist behavior in Brooke Group v.

3. At least under U.S. law. European Union law differs in some of its specifics, though not in any relevant manner.

4. George Stigler provided the classic discussion of this distinction among natural and artificial barriers in his groundbreaking IO work in the 1960s. See George J. Stigler, The Organization of Industry, at 70 (Irwin, 1968).

5. M. Mitchell Waldrop, Complexity: The Emerging Science at the Edge of Order and Chaos, Simon & Schuster, 1992.

6. W. Brian Arthur, “Positive Feedbacks in the Economy,” Scientific American, 262, 92-99, February 1990.

7. Id.

8. Waldrop, supra n. 5 at 39-40.

9. Id. at 35.

10. Arthur, supra n. 6 (emphasis added).

11. Id.

12. J. Rohlfs, “A Theory of Interdepndent Demand for a Communications Service,” Bell Journal of Economics and Management Science 5(1): 16-37 (Spring 1974).

13. Paul A. David, “Clio and the Economics of QWERTY,” American Economic Review, 75:332-337 (1985).

14. Michael L. Katz and Carl Shapiro, “Systems Competition and Network Effects,” Journal of Economic Perspectives 8(2): 93-115 (1984); Michael L. Katz and Carl Shapiro, “Network Externalities, Competition, and Compatibility.” American Economic Review 75(3): 424-440 (1985).

15. Liebowitz, S. J. and S. E. Margolis, “The Fable of the Keys,” Journal of Law and Economics 33: 1-26 (1990).

16. Matthew 25:29 (King James translation).

17. Rohlfs recently tried to disentangle the confusion. See J. H. Rohlfs, Band­wagon Effects in High-Technology Industries, MIT Press, 2001. I presented a more detailed explanation of the relationship between these two “sins” and the Internet investment bubble in “From Investor Fantasy to Regulatory Nightmare: Bad Network Economics and the Internet’s Inevitable Monopolists,” Harvard Journal of Law and Technology, 16(1): 159-228 (Fall 2002).

18. Generally credited to Bob Metcalfe, the inventor of the Ethernet and the founder of 3Com.

19. Robert H. Bork, The Antitrust Paradox, Basic Books, 1978.

20. See Eastman Kodak Co. v. Image Technical Services, Inc. 504 U.S. 451, 1992.

21. See Eastman Kodak, 504 U.S. 451, 1992 (Scalia, J., dissenting).

22. Not surprisingly, the advent of a new theory generated a fair amount of excitement within the antitrust community. A sizable collection of articles discuss the Kodak case and its broader implications. See e.g., Steven Salop, “Kodak as Post-Chicago Law and Economics,” Charles River Assoc. Persp. (1993); Carl Shapiro, Aftermarkets and Consumer Welfare: Making Sense of Kodak, 63 Antitrust L.J. 483 (1995); Benjamin Klein, Market Power in Antitrust: Economic Analysis after Kodak 3 Sup. Ct. Econ. Rev. 43 (1995); Steven C. Salop, The First Principles Approach to Antitrust, Kodak, and Antitrust at the Millennium 68 Antitrust L.J. 187 (2000); and Bruce D. Abramson, Analyzing Antitrust Analy­sis: The Roles of Fact and Economic Theory in Summary Judgment Adjudica­tion, Antitrust L.J. 303 (2001).

23. Carl Shapiro and Hal R. Varian, Information Rules, Harvard Business School Press, 1999.

24. Shapiro, as a former Deputy Assistant Attorney General for Economics in DOJ’s Antitrust Division, was well positioned to offer such a warning.

25. Clayton Christensen developed this theory in depth. See Clayton Christensen, The Innovators Dilemma (Harvard Business School Press, 1997).

26. Hush-a-Phone Corp. v. United States, 238 F.2d 266 (U.S. App. D.C., 1956).

27. Geoffrey A. Moore, Paul Johnson, and Tom Kippola, The Gorilla Game, revised edition, Harper Business, 1999; earlier version published 1998. The “Gorilla Game” outlined a strategy of investing broadly across a new technol­ogy, reasoning that when one or two of its early players emerged as winners, gains from those winners would dwarf losses from the others. Players who took the time to read the book would have discovered that its definition of “technol­ogy” explicitly excluded the Internet. Nevertheless, the hype surrounding The Gorilla Game could easily have misled investors; the book jacket covering the 1999 revised edition even announced: “New! Finding the Internet Gorilla.”

28. George Gilder, Telecosm: How Infinite Bandwidth will Revolutionize Our World, Free Press, 2000. Gilder proposed that the “telecosmic” revolution made bandwidth free, and sought companies whose technologies and marketing strate­gies seemed best positioned to take advantage of it. Gilder first publicized many of his ideas through his proprietary newsletter. See www.gildertech.com. After several of Gilder’s long-time picks began to appreciate rapidly, his acclaim spread into the investment community at large, where his devotees’ tendency to snap up stocks immediately upon his recommendation generated a price spike that even publications like the Washington Post and Business Week came to recog­nize as “the Gilder effect.” See e.g., Howard Kurz, “Letterman Does a Number on The N.Y. Times,” Washington Post, September 4, 2000 at C1; David Shook, “What Disclosure Could Do for George Gilder,” Business Week Online, May 24, 2000. Gilder had little if anything to say about Internet firms; he emphasized infrastructure. Telecosmic firms would build the Internet and collect the tolls as data flowed across it. He found this technology both exciting and promising. Pure plays attempting to commercialize content never garnered much of his interest. What his followers did with his theories, though, is another story entirely.

29. Christensen, supra n. 25. Clayton Christensen, a professor at Harvard Business School, studied a number of large (and once successful) companies that had been overtaken by upstart competitors—along with the upstarts. His analysis built on Joseph Schumpeter’s notion of “creative destruction;” he noticed that low-end start-ups often managed to surpass their larger, established rivals even though the incumbents had adopted sound business practices and reasonable strategic plans. He posited that their downfall was an almost inevitable consequence of the ways in which the entrants’ new technologies rendered the incumbents’ existing products and brands obsolete. Internet investors were intrigued. They saw the Internet as the ultimate disruptive technology—and were all too eager to apply Christensen’s theories to prove that brick-and-mortar firms couldn’t possibly transition to the New World. But that was their analysis; Christensen himself had little or nothing to say about Internet pure plays.

30. Stanley M. Besen and Joseph Farrell, Choosing How to Compete: Strategies and Tactics in Standardization, 8 Journal of Economic Perspectives 117.

31. Michael A. Cusumano and David B. Yoffie, Competing on Internet Time, The Free Press, 1998 at 4.

32. John del Vecchio and Mike Trigg, “What the Next Microsoft Will Look Like,” December 4, 2000, available at http://www.fool.com/news/2000/ msft001205.htm. Viewed November 5, 2001. The Motley Fool was and is a popular investment site. Other sources generalized the theory even further. Host- pulse.com, a glossary of Web-hosting terms, defined increasing returns as simply “[t]he idea that the more dominant a company becomes, the bigger its future advantage over competitors will be. http://www.hostpulse.com/app/tquo/ default.asp?quo=ht2&stitle=150. Viewed November 5, 2001.

33. Skeptics were hard to find at the time and even harder to track after the bubble deflated. But a few were out there—if you knew where to look for them. Aussie David Walker was among the best:

The Internet stock boom, huge though it now is, rests on one Big Theory: that in certain circumstances the Internet provides entrepreneurs with what econo­mists call increasing returns to scale. Get in early and get big, in other words, and the Internet will provide you with huge returns after, say, five years. The Big Internet Stock Theory is neither profound nor well developed.... Yet Internet investors seem determined to ignore all these rules:... Increasing return remains relatively rare, even on the Internet—but investors act as if it happens on every

Web site.... On the Internet, just about every stock reaps rewards for “learn­ing” well before they make any profit—in other words, before it’s clear that their learning is actually worth anything Investors seem determined to pretend

that expansion costs every Internet business nothing at all.... In their very brief history, Internet brands have shown themselves more volatile than most— HotBot, the cool search engine of 1998, has faded in the face of Google—yet investors assume the Internet brands of 1999 are here forever.... Investors in today’s Internet stock boom no longer feel the need to believe even the rather flaky economics of the Big Internet Stock Theory. Rather than investing in a theory, they’re simply investing in a word—Internet. They’re not so much Wired as Weird.... Venture capitalists flood the markets with new contenders for the Internet user’s dollar. And the competition between all these well-funded sites is making sure that none of them reach profit. Rather than increasing returns, today’s Internet stock boom is instead creating increasing losses.

“Internet Business Investors Now Ignore Even the Simplest Rules,” written Feb­ruary 1, 2000; text cited from modifications as of February 21, 2000, available at http://www.shorewalker.com/commerce/commerce72.html, viewed November 5, 2001.

34. See, del Vecchio and Trigg, supra n. 82:

Attempts to find the next Microsoft have reached legendary proportions, resem­bling such storied endeavors as the plight of the Mayflower and Armstrong’s journey to the moon. Rather than lead investors to believe that such a company exists, however, we’ve chosen to identify three key factors—controlling the value chain, dominant market share, and a tectonic shift in computing—that helped Microsoft achieve world domination. A company able to garner even one or two of the aforementioned metrics could be well on its way to creating significant shareholder wealth.

For a description of a conference for firms believing that they might be the next Microsoft, see “Is the Next Microsoft Out There?” July 2, 1998, available at http://www.cnn.com/TECH/computing/9807/02/startups.idg/, viewed November 5, 2001.

35. See, Gregory J. Werden, Network Effects and Conditions of Entry: Lessons from the Microsoft Case, at 69 Antitrust Law Journal 87: 88-89 (2001) (cita­tions omitted):

The potentially decisive impact of network effects is illustrated by the Microsoft case, in which network effects have been much commented upon........................................................ The dis­

trict court based its finding that Microsoft unlawfully maintained a monopoly on what it termed the “applications barrier to entry,” which it described as arising from a “positive network effect.”... Microsoft presents a fascinating case study, although its most important lesson may be that assessing conditions of entry in the presence of network effects is likely to be a complex and highly fact­intensive process. The mere presence of network effects does not imply anything important about conditions of entry.

Chapter 4

1. H. A. Simon, The Sciences of the Artificial, second ed., 1982, The MIT Press.

2. Id. at 131-132. Simon maintained most of this discussion in his second revi­sion, but he dropped his optimism about academic computer science. Instead, he pointed with pride to a unique interdisciplinary Design Research Center at Carnegie Mellon. H. A. Simon, The Sciences of the Artificial, third ed., The MIT Press, 1996, at 114.

3. And highlighting the difference between the French “informatique” and the English “computer science.”

4. Simon’s distinction between “natural” and “artificial” sciences leaves some topics typically categorized as “social” sciences in the natural column, where they rarely appear inside modern academia.

5. I retain a personal attachment to this challenge because one of my first research tasks in graduate school was to survey the history of computer chess, and many of the lessons that I learned from that survey worked their way into my dissertation. This just means that many people did interesting work on com­puter chess long before I showed up. In fact, much of the work on computer chess began before I was born. See B. Abramson, “Control Strategies for Two- Player Games,” ACM Computing Surveys 21(2), June 1989; B. Abramson, The Expected-Outcome Model of Two-Player Games, Pitman Publishing, 1991.

6. C. E. Shannon, “Programming a Computer for Playing Chess,” Philosophi­cal Magazine, 41: 256-275, 1950.

7. J. Von Neumann and O. Morgenstern, Theory of Games and Economic Behavior. Princeton University Press, 1944.

8. M. M. Botvinnik, Computers in Chess: Solving Inexact Search Problems (A. Brown, transl.) Springer-Verlag, 1984.

9. See, Hans J. Berliner and Carl Ebeling, “The SUPREM Architecture: A New Intelligent Paradigm,” Artificial Intelligence 28(1): 3-8 (1986); Hans J. Berliner, “New Hitech Computer Chess Success,” AI Magazine 9(2): 133 (1988).

10. See http://www.research.ibm.com/deepblue/.

11. “A Proposal for the Dartmouth Summer Research Project on Artificial Intelligence, Aug. 31, 1955,” available at http://www-formal.stanford.edu/jmc/ history/dartmouth/dartmouth.html, viewed November 2, 2002.

12. Id.

13. See John McCarthy and P. J. Hayes, “Some Philosophical Problems from the Standpoint of Artificial Intelligence,” in D. Michie, ed., Machine Intelligence 4, American Elsevier, New York, 1969.

14. See Peter Jackson, Introduction to Expert Systems, Addison Wesley, 1990 (second ed.). For a description of how some of these systems were able to rec­ommend decisions in uncertain, complex environments, see Keung-Chi Ng and Bruce Abramson, “Uncertainty Management in Expert Systems,” IEEE Expert, April 1990, 29-48.

15. The final blow to the rejection of probability theoretic reasoning came in the late 19 80s, when several statisticians, decision analysts, and computer scientists all converged to similar results at about the same time. They demon­strated both the practicality and the utility of representing uncertain information as networks of probabilities. See Peter Cheeseman, “An Inquiry into Computer Understanding,” Computational Intelligence 4(1): 58-66, 129-142, 1988; Ronald A. Howard and James E. Matheson, eds., The Principles and Applica­tions of Decision Analysis, Strategic Decisions Group, 1989; Stephan L. Lau- ritzen and David J. Spiegelhalter, “Local Computations with Probabilities on Graphical Structures and their Applications to Expert Systems,” J. Royal Statis­tical Society B, 50(2): 157-224, 1988; Judea Pearl, Probabilistic Reasoning in Intelligent Systems, Morgan Kaufmann, 1988.

16. Izhar Matzkevich and I presented a survey of these systems in “Decision Analytic Networks in Artificial Intelligence,” Management Science 41(1): 1-22, 1995.

17. The concepts underlying neural networks originated in Norbert Weiner’s classic work Cybernetics (The MIT Press, 1948). They remained the subject of various (mostly theoretical) studies for the next two decades, until Perceptrons, by Marvin Minsky and Seymour Papert (The MIT Press, 1972) demonstrated an entire class of problems to which these concepts were inapplicable. That dis­covery, coming on the heels of McCarthy and Hayes’s general warning against numeric reasoning, shunted the attention and funding of the research commu­nity in other directions. Interest began to pick up again in the early 1980s, with John Hopfield’s “Neural Networks and Physical Systems with Emergent Collec­tive Computational Properties” (in Proceedings of the National Academy of Sci­ences of the USA, 79: 2554-2588, 1982). The real excitement, though, began when Danny Hillis published his doctoral thesis, The Connection Machine (The MIT Press, 1989) and founded Thinking Machines, Inc., a supercomputer company.

18. Frederick P. Brooks, Jr., The Mythical Man-Month, anniversary ed., Addison Wesley, 1995 (first ed., 1975).

19. Id. at ch. 19.

20. The new application may, in turn, contain its own APIs to allow still more programs to run upon it. Programs whose communication with hardware must pass through a preexisting platform, but that nevertheless expose APIs to other programs, qualify as “middleware”; true applications communicate only with users, while middleware can behave like an application when dealing with users or a platform when dealing with other applications.

21. See e.g., http://www.zakon.org/robert/internet/timeline/ and http://www. internetindicators.com/. Both sites viewed January 23, 2002.

22. Tim Berners-Lee, Weaving the Web, Harper Business, 1999.

23. Jonathan Rosen, The Talmud and the Internet, Picador, 2001.

24. See e.g., http://www.breslov.com/talmud/talmud.htm.

25. Gopher, for example, was a popular, early text-based Internet browser orig­inally developed at the University of Minnesota as a campus-wide document­retrieval system—an application of obvious value to researchers, but of limited broad appeal. While Gopher had its fans, it also encountered some problems. The academic bent of most Internet users had made them accustomed to free access. When the university exercised the right to charge for Gopher’s use, a near boycott ensued. See, Chris Sherman, A Pre-Web Search Engine, Gopher Turns Ten. Searchday, available at http://searchenginewatch.com/searchday/article.php/ 2159211 (viewed March 29, 2004).

26. And the subject of Michael Lewis’s entertaining The New New Thing: A Silicon Valley Story, W. W. Norton & Co., 1999.

27. When Netscape formally announced that it was filing for an IPO June 23, 1995, its underwriter (Morgan Stanley) initially estimated a price of $12 to $14 a share. The IPO took place August 9, 1995—only sixteen months after the founding of the company, which had never turned a profit—with 5 million $28 shares. On the first day of trading, the stock opened at $71, traded as high as $74.75, and closed at $58.25. The stock exhibited extreme volatility, selling as high as $174 per share in early December 1995 before losing more than half its value over the next few months. For a review of Netscape’s early trading history as summarized for a business school case study, see http://www.stern.nyu.edu/ ~tucci/netscape/finbkgd.htm, viewed January 23, 2002.

28. Michael A. Cusumano and David B. Yoffie, Competing on Internet Time, The Free Press, 1998.

29. See http://www.corp.aol.com/whoweare/history.html.

30. See “Napster. The Players Speak Out. Lars Ulrich,” The American Prospect On-Line, available at http://www.prospect.org/controversy/napster/ulrich-l.html, viewed August 20, 2003.

31. See “Napster. The Players Speak Out. John Perry Barlow,” The American Prospect On-Line, available at http://www.prospect.org/controversy/napster/ barlow-j.html, viewed August 20, 2003.

32. See http://www.eff.org.

33. Fed Chairman Alan Greenspan coined the term “irrational exuberance” in December 1996. See “Remarks by Chairman Alan Greenspan at the Annual Dinner and Francis Boyer Lecture of The American Enterprise Institute for Public Policy Research,” Washington, D.C., December 5, 1996, available at http://www.federalreserve.gov/boarddocs/speeches/1996/19961205.htm, viewed October 31, 2001. By early 2000, even Greenspan appeared willing to forgive at least some of the irrationality and the exuberance:

What should be indisputable is that a number of new technologies that evolved largely from the cumulative innovations of the past half century have now begun to bring about awesome changes in the way goods and services are produced and, especially, in the way they are distributed to final users The exceptional

stock price volatility of most of the newer firms and, in the view of some, their outsized valuations, are indicative of the difficulties of divining from the many, the particular few of the newer technologies and operational models that will prevail in the decades ahead.

“Remarks by Chairman Alan Greenspan, Technology and the Economy,” before the Economic Club of New York, January 13, 2000, available at http://www.federalreserve.gov/boarddocs/speeches/2000/200001132.htm, viewed October 31, 2001. Professor Robert Shiller later adopted Greenspan’s phrase as the title of his book, Irrational Exuberance, Princeton University Press, March 2000.

34. Dan Goodin and Hane Lee, “Pixelon’s Golden-Tongued Salesman Busted,” The Industry Standard, April 13, 2000, http://www.thestandard.com/article/ 0,1902,14113,00.html:

Michael Fenne made a name for himself back in October when as head of Pixelon he orchestrated the most outrageous promotional event ever seen in the Internet Economy. To celebrate the streaming media company’s launch last fall, Fenne paid $12 million to stage a star-studded party in Las Vegas. This week, he was back in the news when Virginia authorities jailed him without bail, ending a four- year manhunt for one of the state’s most-wanted fugitives. David Kim Stanley, who under the name Michael Fenne persuaded investors to hand over at least $20 million to fund Pixelon, turned himself in Wednesday. In 1989, he pleaded guilty in Virginia to 24 counts of defrauding victims, many of them elderly parishioners at his father’s church. He also pleaded guilty to 31 similar charges in Tennessee Representatives from Pixelon’s investor, a Chicago brokerage

called Advanced Equities, were not available by press time to comment on the revelation that it had handed $20 million to a convicted felon.

See also, Joanna Glasner, “Perilous Fall of Pixelon,” Wired News, May 16, 2000. Available at http://www.wired.com/news/exec/0,1370,36243,00.html. Both sites viewed February 2, 2003.

35. See, Ebay, Inc. v. Bidder’s Edge, Inc., 100 F.Supp.2d 1058, (N.D.CA., 2000).

36. See e.g., Katrina Brooker, “The Nightmare before Christmas,” Business 2.0, January 2000; Paul Elias, “Is Jeff Bezos Father Christmas,” Red Herring, August 11, 2000; “Seven Internet Retailers Settle FTC Charges over Shipping Delays during 1999 Holiday Season,” Federal Trade Commission press release, July 26, 2000, available at http://www.ftc.gov/opa/2000/07/toolate.htm, viewed October 31, 2001.

37. This high-profile problem with fulfillment led many observers to reconsider e-commerce. They noted that in addition to potential problems with delivery deadlines, online retailers were at a serious disadvantage vis-a-vis their brick- and-mortar competitors when it came to returns and exchanges. For a detailed demonstration of the broad drop of Internet equity prices from their earlier highs, see “The Internet Wasteland,” in Anthony B. Perkins and Michael C. Perkins, The Internet Bubble, revised (Harper Business, 2001) at 289. Investors began to grasp that there was no such thing as “an Internet company,” and in particular that it was meaningless to think of a company as “an e-tailer.” Petstore.com and Pets.com, two sites devoted to the sale of pet food and pet supplies, were among the most anticipated Internet IPOs of 1999. Pets.com acquired Petstore.com in June 2000 and ceased retail operations before the year was out. In groceries, Webvan, once a highly visible and valuable pure play, acquired its once equally valuable rival, Homegrocer.com in early 2001. Four months later the merged firm went out of business. Albertsons, Wegman’s, and Tesco, on the other hand, introduced Internet presences to augment their supermarket chains, demonstrat­ing the viability of brick-and-click grocers.

38. Parties operating on “Internet time” rarely paid much attention to their con­tracting practices. Most Internet firms signed contracts drafted so poorly that litigation was inevitable. Nevertheless, few of these cases made it beyond proce­dural issues, as many of the parties ran out of the money to pursue their claims— or came to realize that the adverse party’s finances made them effectively judgment-proof. See e.g. Iballs, Inc. v. Wildbrain.com, Inc., 2001 U.S. Dist. LEXIS 13394, (S.D.N.Y. 2001) (Iballs sought to recover for unpaid services and expenses incurred in launching an Internet advertising campaign on Wild Brain’s behalf); About.com, Inc. v. Aptimus, Inc., 2001 U.S. Dist. LEXIS 6102, (S.D.N.Y. 2001) (Parties disagreed about the relationship among two potentially contra­dictory agreements); 900 Support, Inc. v. Microportal.com, Inc., 2001 U.S. Dist. LEXIS 8603 (D. Oregon 2001) (Plaintiff continued service to defendant, despite defendant’s failure to pay, because of representations by the defendant that its officers’ other corporations would make the payments); Paramount Brokers, Inc. v. Digital River, Inc. 126 F.Supp.2d 939 (D. Maryland 2000) (Plaintiff contended that defendant’s “letter of interest” constituted a binding exclusive agreement.).

39. Zefer Corp., a large, popular Internet-consulting and Web-development firm is a case in point. Zefer originally had planned to raise $50 million in its May 2000 IPO, then decided to reschedule for September 2000, but the IPO never happened. Zefer closed its doors and sold off its assets about a year after it gave up on going public. See, “It’s Official: Zefer Calls Off IPO,” September 19, 2000, available at http://www.internetnews.com/IAR/articleZ0,,2051_463951,00.html; David Apanovich, “Zefer Cuts 15 Percent of Workforce,” February 2, 2001, available at http://www.internetnews.com/IAR/article/0,,2001_577571,00.html; David Aponovich, “Zefer Closes Boston HQ,” September 6, 2001, available at http://www.internetnews.com/IAR/article/0,,12_879431,00.html. All sites viewed October 31, 2001.

40. See Perkins and Perkins, supra n. 37 at 207-209.

Chapter 5

1. See Ken Auletta, Wcjrld War 3.0, Random House, 2001, pp. 145-146.

2. Bill Gates, General Partner, Micro-Soft, “An Open Letter to Hobbyists,” February 3, 1976, first published in MITS Computer Notes, and now widely available on the Web. See e.g., http://www.bluemud.org/article/23189. See also, “Key Events in Microsoft History,” http://www.microsoft.com/msft/download/ keyevents.doc. Both sites viewed August 20, 2003.

3. Carl Shapiro and Hal R. Varian, Information Rules, Harvard Business School Press, 1999.

4. I discussed this idea in what was almost certainly too much detail in “Ana­lyzing Antitrust Analysis: The Roles of Fact and Economic Theory in Summary Judgment Adjudication,” Antitrust L.J. 303 (2001).

5. It also reaps huge profits from these two products. For the first quarter of its 2003 fiscal year (ending September 30, 2003), Microsoft reported that its divi­sion responsible for these two products earned about $4.88 billion in profits. Those earnings represented margins of about 86% for Windows and about 78% for Office. All other divisions lost money. See Microsoft Corporation’s form 10-Q for the period ending September 30, 2002. See also Joe Wilcox, “Office, Windows Cover Microsoft Losses,” CNET News.com, November 19, 2002, available at http://zdnet.com.com/2102-1104-966219.html, viewed August 20, 2003.

6. It’s hard to underestimate the importance of the Gates Foundation’s work to help find cures for diseases that impact primarily the poor and, of more imme­diate concern, to distribute preventative and palliative medication and promote heath education among the world’s poor. In many ways, Gates has stepped into a role callously abdicated by the world’s governments. And yet, an unfortunate cloud hangs over this work. In the words of New York Times columnist Nicholas Kristof, who had the privilege of accompanying the Gateses on one of their trips to Africa, “Mr. Gates’s achievements in public health are undermined by cyni­cism that all this is just a promotion for Microsoft. And frankly, the world needs AIDS and malaria vaccines more than it needs a new version of Windows. So Mr. Gates should think about moving full time to his foundation to concentrate on what he does best—fighting malaria and AIDS, and, yes, holding research consultations with Botswana prostitutes.” Nicholas Kristof, “Fighting the Fevers,” New York Times op-ed page, September 24, 2003.

7. Stan J. Liebowitz and Stephen E. Margolis, Winners, Losers, and Microsoft, revised ed. The Independent Institute, 2001.

8. Id. at 135-136.

9. See, Caldera v. Microsoft, 72 F.Supp.2d 1295, 1298 (D.Utah, 1999).

10. See Andrew Schulman, “The Caldera v. Microsoft Dossier,” available at http://www.oreillynet.com/pub/a/network/2000/02/07/schulman.html, viewed November 10, 2002.

11. Caldera, 72 F.Supp.2d 1295 n.1, citing Stan Miastkowski, “A Cure for What Ails DOS,” BYTE, Aug. 1990, at 107.

12. Id., citing Bill Machrone, “7th Annual Awards for Technical Excellence,” PC Magazine, Jan. 15, 1991, at 100.

13. Schulman, supra n. 10.

14. Id.

15. Id.

16. This test, known alternatively as the Altai test or as the abstraction­filtration-comparison test, was first articulated in Computer Associates Interna­tional v. Altai, Inc., 982 F.2d 693 (2d Cir. 1992). In under a decade, it gained broad acceptance, not only in U.S. courts, but also in Canada, the United Kingdom, and France. See Robert P. Merges, Peter S. Menell, Mark A. Lemley, and Thomas M. Jorde, Intellectual Property in the New Technological Age, Aspen Law & Business, 1997, at 889.

17. See Apple Computer, Inc. v. Microsoft Corp., 35 F.3d 1435 (9th Cir. 1994).

18. The Economist, “Giving the Invisible Hand a Helping Hand,” November 9, 2002, p. 14.

19. Michael A. Cusumano and David B. Yoffie, Computing on Internet Time, The Free Press, 1998.

20. David Bank, Breaking Windows, Free Press, 2001.

21. Dmitry Mehlhorn and I expanded on this idea in “The Fettered Liberty to Integrate: Legal Implications of Software Engineering,” Boston University Journal of Science and Technology Law, 2004.

22. Bank, supra n. 21 at 96.

23. “Sun,” Wired News Report, Feb. 1, 1999. http://www.wired.com/news/ business/0,1367,17645,00.html. Viewed November 14, 2002.

24. “Scott Says... ‘Kick Butt and Have Fun’ A candid interview with Scott McNealy, Sun’s CEO, Interviewed by Maureen Taylor, May 16, 1996.” http://www.sun.com/960601/cover/#toc8, viewed November 14, 2002.

25. United States v. Microsoft, 980 F.Supp. 537, 543 (D.D.C. 1997).

26. See Bank, supra n. 21 at 121.

27. Id. at 122.

28. Joel Brinkley and Steven Lohr, U.S. v. Microsoft, McGraw-Hill, 2001.

29. Auletta, supra n. 1.

30. United States v. Microsoft Corp., 65 F.Supp.2d 1 (D.D.C. 1999) [hereinafter MS-facts] at ψ 67.

31. Id. at Rights Protection in the People’s Republic of China,” in Clarissa Long, ed., Intellectual Property Rights in Emerging Markets, AEI Press, 2000.

29. Letter reproduced in translation at http://pimientolinux.com/peru2ms/ alt_ms_to_villanueva.html, viewed November 28, 2002. I corrected a few spelling and grammar errors in the translation.

30. Letter reproduced in translation at http://www.theregister.co.uk/content/4/ 25157.html, viewed November 28, 2002. I corrected a few spelling and grammar errors in the translation.

31. In fact, Congressman Villanueva was involved with the Free Software movement in Peru for several years prior to drafting his bill, and he credited various open-source organizations in both Peru and Argentina with supporting and enabling his efforts. See Richard Vernon and Don Marti, “An Interview with Dr. Edgar Villanueva,” Linux Journal, May 24, 2002. Available at http://www.linuxjournal.com/article.php?sid=6099, viewed July 28, 2004.

Chapter 7

1. Copyright law protects the property rights of lyricists, much as it does of all authors. Authors, myself included, who wish to quote more than a few lines of lyrics from well-known songs to enhance their own presentations, must secure the permission of the copyright owner or risk being sued for infringement. This requirement immediately imposes a potentially significant transaction cost on authors wishing to quote song lyrics, thereby deterring the practice. This deter­rence has an immediate negative effect on artists who would like to see their work quoted widely, but does make it possible for other artists, typically those who are already famous, to extract additional royalties from their work. Earlier drafts of this chapter excerpted quotes from several songs by several artists. The Grateful Dead and Tori Amos thoughtfully granted me permission to quote their work in mine, without imposing any conditions. To the extent that a citation in Digital Phoenix provides any promotional value, I encourage all readers to buy any and all Grateful Dead and Tori Amos albums. Other artists and the corpo­rate owners of their copyrights were less forthcoming, as is their right. Proffered conditions included initial fees ranging into the hundreds of dollars, grants to allow citation in only a fixed number of copies of this book, and the right to ferret through my accounting. These are all conditions that the copyright law allows copyright owners to request. Because I both respect their right to request these terms and consider these terms to be outrageous, I have chosen to omit all quotations from their songs. These omissions do not affect this book’s substance, but they do impoverish its presentation—at least in a minor way. The broad soci­etal effect of this phenomenon, however, is far from minor. For a good discus­sion of the ways that a “permissions culture” stymies cultural development, see Larry Lessig, Free Culture, (Penguin Press, 2004).

2. Though I suppose that folks in the financial services industry could also lay claim to the title of “first to be swallowed.”

3. The Grateful Dead, The Music Never Stopped. Words by John Barlow. Copy­right Ice Nine Publishing Company. Used with permission.

4. See Jessica Litman, Digital Copyright, Prometheus Books, 2001, for a suc­cinct review of this history.

5. Eldred v. Ashcroft 123 S. Ct. 769 (2003).

6. Eldred v. Ashcroft 123 S. Ct. 769 (2003) (Stevens, J. dissenting).

7. Sony v. Universal Studios, 464 U.S. 417 (1984).

8. For an excellent discussion of the fair use doctrine, see Robert P. Merges, Peter

S. Menell, Mark A. Lemley, and Thomas M. Jorde, Intellectual Property in the New Technological Age, Aspen Law & Business, 1997, at 458-506.

9. The Grateful Dead, Dire Wolf. Words by Robert Hunter. Copyright Ice Nine Publishing Company. Used with permission.

10. See Bruce Haring, Beyond the Charts, OTC Press, 2000, for a good review of the critical wave of events leading up to the advent of Napster. Haring pro­vides a terse, readable discussion of the way that the digital revolution crept up to take over the world of music. Unfortunately, he finished his book just a bit too early. It covers events only through 1998—and thus misses the Napster story entirely.

11. Id. at 44, citing RIAA President Hillary Rosen.

12. Tori Amos, Crucify. Words by Tori Amos. Copyright Sword and Stone Publishing, Inc. Quoted with permission.

13. Litman, supra n. 4.

14. Trevor Merriden, Irresistible Forces, Capstone, 2001 at 33.

15. Frustration and desperation can still prevail. In September 2003, the record companies launched a wave of lawsuits against known KaZaA users, mostly kids who downloaded music. Though parents lined up immediately to begin to settle for a few thousand dollars, the record companies know that they will never recoup their legal fees. The strategy is a scare tactic—though they may have to apply it relentlessly to have a long-term effect.

16. RIAA v. Diamond Multimedia Systems, Inc., 29 F.Supp.2d 624, (C.D.Ca., 1998).

17. Haring, supra n. 10 at 125.

18. Ecclesiastes 3:1-8. Adapted and set to music by Pete Seeger. Recorded by various artists.

19. In fact, that’s exactly what they started doing—though not for another four years under the auspices of Carey Sherman, Hillary Rosen’s successor as Central Scrutinizer.

20. Merriden, supra n. 15 at 8 and 15.

21. A&M Records v. Napster, 2000 U.S. Dist. LEXIS 6243, (N.D.Ca. 2000).

22. Merriden, supra n. 15 at 55-56 quoting attorney David Boies.

23. A&M Records v. Napster, 239 F.3d 1004 (9th Cir. 2001).

24. In late 2003, Roxio resuscitated the Napster brand name with a new service selling online music.

25. For a readable explanation of the music industries’ legal arguments, see Ian C. Ballon and Robert R. Begland, “Ninth Circuit Grokster Case Challenges the Applicability of Traditional Copyright Principles to Digital Media and the Inter­net,” Intellectual Property Today, 11(2): 32-36, February 2004. Ballon and Begland are attorneys who represent various trade associations and unions whose members own copyrights. The article is an adaptation of their amicus brief filed in the appeal of the Grokster case. Though, as expected, it makes primarily legal arguments, it nevertheless closes with a plea to policy considerations: “Unless reversed, the district court’s radical reformulation of the standards for third party copyright liability will serve to embolden and empower potential infringers and dramatically increase the costs of infringement to copyright owners and to the American economy.”

26. Universal City Studios v. Remierdes, 111 F.Supp.2d 294 (S.D.N.Y. 2000).

27. Universal City Studios v. Corley, 273 F.3d 429 (2nd Cir. 2001).

28. Lexmark International v. Static Control Components, No. 02-571-K5F (E.D. Ky. Dec. 30, 2002).

29. Chamberlain Group v. Skylink Technologies, Civ. No. 02-C-6376 (N.D. Ill. filed Sept. 6, 2002).

30. Lexmark Int’l, Inc. v. Static Control Components, 253 F.Supp.2d 943 (E.D. Ky. 2003).

31. Chamberlain Group, Inc. v. Skylink Techs., Inc., 292 F.Supp.2d 1040 (N.D.

Ill., 2003).

32. The appeals court decided both cases while this book was going to press. See the Epilogue for the stunning outcomes.

Chapter 8

1. Siva Vaidhyanathan, Copyrights and Copywrongs, NYU Press, 2001.

2. We already have unique rules applying to the protection of semicon­ductors and pharmaceuticals. The current debate centers on how many modified protective regimes we might need, what the best ways to effect those modifications might be, and whether or not existing laws are already flex­ible enough to accommodate industry-specific nuances without major legislative action. For one good discussion set in the context of patent law and policy, see Dan L. Burk and Mark A. Lemley, “Policy Levers in Patent Law,” Virginia Law Review, 89: 1575-1696, (2003). By and large, Burk and Lemley contend that existing patent laws are flexible enough to accommodate dif­ferent needs in different industries, and that widespread sui generis regimes are unnecessary.

3. I presented my first detailed attempt at such an analysis in “Promoting Inno­vation in the Software Industry: A First Principles Approach to Intellectual Prop­erty Reform,” Boston University Journal of Science and Technology Law, 8: 75-156, (2002).

4. MS-appeal, citing Appellant’s Opening Brief at 105 and In re Indep. Serv. Orgs. Antitrust Litig., 203 F.3d 1322,1325 (Fed. Cir. 2000).

5. See Douglas R. Hofstadter, Godel, Escher, Bach: An Eternal Golden Braid (Basic Books, 1979) for an in-depth discussion of the relationship between this classic example of Zen philosophy and scientific inquiries at the cutting edge of many different fields.

6. Even many open-source advocates recognize this distinction—though often grudgingly. The case for open source is strongest in infrastructure settings; the more esoteric the application, the weaker the case for opening the source. See “The Magic Cauldron,” in Raymond, supra n. 12.

7. Ms-facts at ψ 64.

8. Id. at simple travel tickets to complicated tourism “tickets” suggests an area in which the infomediary model may prove lucrative. For example, e-cruise—an apparent casualty of the dot-com bust—was conceived as an essentially infomediary model serving the cruise industry and its potential customers. See http://www.e -cruise.com, viewed August 20, 2003. More recently, the New Channel Maxbanx attempted to coordinate vacation rentals on the Outer Banks of North Carolina. See http://www.maxbanx.com, viewed August 20, 2003. Both represent tourism niches in which dispersed incomplete data can frustrate consumers seeking reli­able information about the availability and the variety of suitable offerings.

22. See http://www.britannica.com.

23. E-books also posed a different quandary to publishers. Authors typically sell certain rights to publishers in order to have their work published. Prior to the electronic age, most publishers contracted to obtain the rights to publish “in book form.” With the advent of both the Internet and handheld devices in the late 1990s, several prominent authors sold their e-book rights to new e-book publishers. Traditional publishers contended that e-books were books, and that they (not the authors) owned these rights. The court disagreed. See Random House, Inc. v. Rosetta Books, 150 F.Supp.2d 613 (S.D.N.Y. 2001).

24. The fragmentation of the porn industry illustrates the balkanization of read­ership that Cass Sunstein decried in Republic.com, Princeton University Press, 2002. The emergence of this profitable industry catering toward fetishists also highlights the danger of government regulation of Internet content. In 1996, Con­gress passed the Communications Decency Act (CDA), allegedly to protect chil­dren from online pornography. A nearly unanimous Supreme Court recognized that the CDA was simply censorship by a fancier name, and threw out most of its provisions. See Reno v. ACLU, 521 U.S. 844 (1997). The Court did, however, allow Congress to require adult sites to insist that all visitors prove that they are adults—say, by presenting a valid credit-card number. As a result, porn sites are now among the only places on the Web in which you have to check your credit card at the door. This practice enables impulse buying—a benefit of particular value to vendors of downloadable pictures. The net result of this attempted government censorship was thus to enhance the business prospects of online pornographers.

25. See New York Times Co., Inc., v. Tasini, 533 U.S. 483 (2001).

26. The Robinson-Patman Act, a populist holdover typically mischaracterized as an antitrust law, prohibits price discrimination in the sale of goods—subject to a very lengthy set of exceptions.

27. Paul Krugman, “What Price Fairness?” New York Times, October 4, 2000, for example, was far from complimentary about Amazon’s experiment with “dynamic pricing,” despite acknowledging that the practice was both economi­cally sound and likely to become widespread as the technology for gauging a consumer’s willingness to pay improved.

28. The shift in economic policies between the Clinton and Bush administrations is a case in point. President Bush entered office as a marvelous boom period was sliding into recession. By early 2001, few doubted that the United States needed a stimulative tax cut. The debates centered on which taxes we should cut, and by how much. Similarly, few doubted that the American economy remained structurally sound, and that it would eventually recover. Analyses that tie the Bush tax cuts of 2001 and 2003 to the fact of the subsequent recovery therefore miss the point. The question worth exploring is the relationship between the specifics of the Bush tax packages and the timing and character of the subse­quent recovery. A broader exploration might consider the relationship among the selection of supply-side cuts over true tax reform (i.e., reducing distortions, complexity, and rates), the various regulatory postures favoring sizable incum­bents over small entrants, the weakening of the dollar, the resurgence of protec­tionism, and the long period of sluggish job growth—all consistent with favoring incumbent lock-in over entrepreneurial growth.

29. Hayek, supra n. 9, p. 49 (emphasis added).

30. Id., pp. 56-58 (emphasis added).

31. Milton Friedman and Rose Friedman, Free to Choose, Harvest Books, 1990, p. 226.

32. With the possible exceptions of the military, sports, and parts of the enter­tainment industry.

Epilogue

1. In a classic Dutch auction, a seller offers a fixed number (say X) of identical items for sale, and agrees to accept bids throughout a fixed period. At the end of the allowed time, the seller sets the price for all of the items at the highest level at which all items will sell (i.e., the Xth highest bid), and assigns the items to all bidders who exceeded or met that price. Dutch auction IPOs are a bit more complicated, but follow this basic outline.

2. “Giving $75 Billion Back, with Plenty to Spare,” The Economist, July 23, 2004.

3. Jo Best, “Munich to Stick with Open Source,” C∣NET.com, June 17, 2004, avail­able at http://news.com.com/Munich+to+stick+with+open+source/2100-7344_ 3-5237356.html, viewed July 27, 2004.

4. See http://odfi.org/archives/2003_05.html#4, viewed July 27, 2004.

5. See Roger Parloff, “Gunning for Linux,” Fortune, May 5, 2004.

6. See “An Open-Source Shot in the Arm?” The Economist, June 10, 2004.

7. Lawrence Lessig described some of the early battles in Free Culture, Penguin Press, 2004.

8. MGM Studios, Inc. v. Grokster Ltd., 380 F.3d 1154 (9th Cir. 2004).

9. Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178 (Fed. Cir. 2004). By way of full and fair disclosure, I was a law clerk to the Hon. Arthur Gajarsa of the United States Court of Appeals for the Federal Circuit when that court heard and decided this matter.

10. Lexmark Int’l, Inc. v. Static Control Components, Inc., 387 F.3d 522 (6th Cir. 2004).

11. Discussions of the DMCA abound. The works of Lessig and Litman cited throughout this book are excellent examples of this genre. A simple Google search, however, will reveal numerous scholarly articles and even more numer­ous blog entries on the topic.

12. See http://thomas.loc.gov/cgi-bin/query, viewed July 28, 2004.

13. See e.g., Ted Bridis, “Lawmakers Approve Bill to Let Parents Strip Smut from Movies,” washingtonpost.com, July 21, 2004, available at http://www.washingtonpost.com/wp-dyn/articles/A2877-2004Jul21.html, viewed July 28, 2004.

14. See Hannah Arendt, The Origins of Totalitarianism, Harcourt, Inc., 1951.

15. Shimon Peres, The New Middle East, Henry Holt, 1993, p. 62.

16. Israel’s Supreme Court, sitting squarely at the front lines of this war yet retaining its ability to speak deliberatively, best articulated the key to our success: “This authority [to maintain security] must be properly balanced against the rights, needs, and interests of the local population. The law of war usually creates a delicate balance between two poles: military necessity on one hand and human­itarian considerations on the other.” H.C. 2056/04, Beit Sourik Village Council v. The Government of Israel (2004).

17. John Stuart Mill, On Liberty, Penguin Books, 1974, pp. 119-121 (first pub­lished 1859).