Wallace case FAQ for dummies v1.3

[Alexander Terekhov]

(This is regular posting. Acknowledgments: aim_here2002)


Q: What the fuck ... !?

A: The context is property. Intangible intellectual property (rights
granted under IP license). IP goods. Property in short.


Q: Gack, but according to RMS, "intellectual property... is a mirage, 
which appears to have a coherent existence only because the term 
suggests it does." So what the fuck ... !?

A: Well, well, well. But according to one FTC commissioner (and an 
antitrust attorney), it is not quite a mirage. "One fundamental 
question in this area is whether intellectual property is like 
other property for purposes of antitrust analysis. In considering 
this question, it seems to me that we should keep in mind some 
obvious principles. First, intellectual property is property, 
that is to say, it belongs to someone who has the right to 
exclude others from using it without his or her consent. Second, 
intellectual property has attributes that distinguish it from 
personal property and real property -- that is why we have a 
different word for it. For example, the enforcement of an owner's 
exclusive right to use physical property may be accomplished 
more easily, as a practical matter, than enforcement of an 
exclusive intellectual property right. Antitrust enforcers should 
certainly remain open to considering new ideas about how the 
rights associated with intellectual property can and should be 
distinguished from the ownership of tangible property in the 
analysis of antitrust liability. But for now, it seems fair to 
say that for antitrust purposes, intellectual property is 
generally treated like other forms of property. Let me add one 
qualifier to this general principle, which I hope is not too 
confusing. To the extent that intellectual property differs from 
other property, such as the duration of the property right, that 
difference is a fact that is considered along with all other 
facts in an antitrust analysis."


Q: What price restrictions?

A: Property price restrictions.


Q: What 'price'? Define 'price'.

A: Cost to obtain EXISTING property on buyer's side. Price is fixed 
at zero in the case of property locked in the GNU GPL pool (e.g. Guh-
NÜ-slash-Linux, the GPL part of it).


Q: A GPL coder is not compensated?

A: That plus administration overhead, etc. Cost required to create 
NEW property (GPL derivative works, additions to GPL collective 
works) on seller's side. The GPL fixes the price below cost. 
Wallace is claiming antitrust injury from predatory pricing 
(pricing below cost) and says that the whole scheme is in 
violation of Sherman Act 1.


Q: Okay, but how about explaining who Wallace is, who he's suing, 
what gives him the right to sue? (question from aim_here2002)

A: Please visit <www.terekhov.de/Wallace-case.htm>. This is "de 
novo" review.


Q: What if Wallace loses on appeal as well? 

A: Then you might enjoy Wallace Reloaded (so to speak) featuring 
   Schwarzenegger, I suppose. "The California Unfair Practices Act, 
   Bus. & Prof. Code § 17043, prohibits selling a product below its 
   cost for the purpose of injuring competitors or destroying 
   competition. Bus. & Prof. Code § 17044 prohibits selling 
   products as "loss leaders," which § 17030 defines as selling 
   below cost for the purpose of inducing the purchase of other 
   merchandise, misleading or deceiving purchasers, or diverting 
   business from competitors. Cost is statutorily defined for 
   production as including "the cost of raw materials, labor and 
   all overhead expenses of the producer." Bus. & Prof. § 17026."


"GNU will remove operating system software from the realm of
competition. You will not be able to get an edge in this area, but
neither will your competitors be able to get an edge over you. You
and they will compete in other areas, while benefiting mutually in
this one. If your business is selling an operating system, you
will not like GNU, but that's tough on you. If your business is
something else, GNU can save you from being pushed into the
expensive business of selling operating systems." 

                                 -- www.gnu.org/gnu/manifesto.html

regards,
alexander.