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home | Tea Party Economist | Bill Gross and the Copyright Fairy

Bill Gross and the Copyright Fairy

Gary North - February 02, 2013
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I want to write an article on an article that Bill Gross wrote.

Mr. Gross runs the world's largest bond investing fund. He is famous in the investment community. Recently, he wrote a very important article. It had a catchy title. I would like to share it with you. Unfortunately, I am not allowed to. At the end of the article, in bold face type, we read this:

No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Pacific Investment Management Company LLC, 840 Newport Center Drive, Newport Beach, CA 92660, 800-387-4626. ©2013, PIMCO.

I would provide a link to this important article, but I have not cleared this with Mr. Gross.

I find it fascinating that Mr. Gross takes time every month out of his busy schedule, which involves managing several billion dollars' worth of clients' money. He does this in order to be read. Then he places a major restriction on anyone actually telling others about what he has written.

I picked up the phone and called an old friend of mine. I would tell you his name, but he is a lawyer specializing in copyright. He will not allow me to mention his name unless I get written permission. He refuses to give it. I therefore will give only his initials: CF. That stands for Copyright Fairy.

This is not a verbatim transcript. I am not allowed to quote him verbatim. This is my version of what he said.

GN: CF, I am wondering about Bill Gross's copyright restriction. Can you shed any light on it?

CF: Of course. It's standard boilerplate. I have it in a Word text file. Every copyright lawyer does.

GN: What do you charge clients to use it?

CF: I charge $5,000. But newcomers charge as little as $1,000.

GN; You mean to tell me that someone pays you $5,000 to insert this short clause at the end of his article?

CF: You bet.

GN: But why?

CF: To scare off anyone who would steal a client's ideas or words.

GN: But it's not possible to get a court to convict someone who summarizes someone else's ideas.

CF: You know that. I know that. But clients are dumber than dirt when it comes to legal issues. So they pay me $5,000.

GN: I'm in the wrong business.

CF: You sometimes let Lew Rockwell run your articles for free. You surely are in the wrong business.

GN: But people read my articles on his site.

CF: But you don't get paid.

GN: But I want people to read my articles.

CF: Then don't expect to be paid.

GN: Don't your clients want people to read what they write?

CF: Of course.

GN: Then why do they pay you $5,000 to insert that prohibition?

CF: To protect themselves.

GN: From what?

CF: Lawsuits.

GN: Lawsuits from what?

CF: From lawyers who sue them on behalf of clients.

GN: On what grounds?

CF: On the grounds that some jury might convict and impose a really big penalty.

GN: A penalty for what?

CF: For damages.

GN: Damages for what?

CF: For whatever a lawyer can convince the jury of.

GN: So, if the writer inserts your $5,000 prohibition at the end of all articles, he won't get sued?

CF: He can always get sued. But the bold-faced prohibition sends a message.

GN: What message?

CF: That the writer has hired a high-powered lawyer.

GN: How does a plaintiff's lawyer know this?

CF: Because the prohibition says this: "Caution. Yes, this author is dumber than dirt, judicially speaking. He wants people to read his articles, but then refuses to let readers refer to these articles without first contacting his legal department. Cognitive dissonance? Big time! But he has enough money to pay a lawyer to provide a boilerplate prohibition. Any lawyer smart enough to con an author into paying for this is one smart cookie. Don't mess with him. You'll lose."

GN: So it's a kind of insurance policy.

CF: Yes.

GN: But is the clause enforceable?

CF: At some price.

GN: You are starting to sound like an economist.

CF: It's the other way around.

GN: What do you mean?

CF: Modern economics came out of law schools. Mises got his degree in law. So did Hayek. Back then, there were no economics departments.

GN: So, you mean economists sound like lawyers.

CF: The clever ones do. Look at R. H. Coase. Look at Gary Becker. They won back-to-back Nobel prizes. Why?

GN: Because they sound like lawyers?

CF. Exactly. You have written about this. They think that judges are like God. Judges have something equivalent to omniscience, they teach. And what are judges?

GN: Lawyers with the power to have you fined, jailed, or executed.

CF: Correct.

GN: But can an author afford to hire a lawyer to enforce the prohibition?

CF: Probably not. But Gross can.

GN: But I see Gross quoted all over the Internet within hours after he posts an article.

CF: So do I.

GN: Has he ever sued anyone for copyright infringement?

CF: I have never heard that he has.

GN: Then why did he ever start inserting this prohibition into his articles?

CF: Because his legal department told him to.

GN: But he wants to be quoted.

CF: Of course he does. Why else would he write?

GN: So, his lawyer told him to insert the prohibition even though Gross has no intention of enforcing it.

CF: Probably.

GN: Then why did he post it?

CF: I told you. To avoid getting sued.

GN: But he has a great legal department.

CF: Correct. That's why the department told him he had to insert the prohibition.

GN: But he's in charge, not his legal department!

CF: You are showing signs of premature senility.

GN: You mean he isn't in charge of his legal department?

CF: That is exactly what I mean.

GN: You mean Bill Gross, a zillionaire, plays "yes, sir" to a lawyer on his staff, despite the fact that the clause makes him look like an idiot?

CF: You catch on fast.

GN: So, the prohibition clause is not designed to keep people from quoting him.

CF: Correct.

GN: Because he won't sue anyone for quoting him.

CF: He will sue only if his legal staff has nothing pressing to do.

GN: So, I can safely quote from his article.

CF: Not if you publish a transcript of our conversation.

GN: What has publishing this have to do with anything?

CF: Because it would make Gross look like a helpless tool of his lawyers.

GN: But if your analysis is correct, that's what he is.

CF: That's why you might get sued if you refer to one of his articles.

GN: So, let me summarize. Bill Gross is a rich man who spends hours each month to write an article that he wants people to read. Then he inserts a prohibition that implies a threat to anyone who quotes it. No one pays any attention. They quote it. He does not sue.

CF: That's about it.

GN: But that makes Gross look like an idiot.

CF: Not at all. He is just a very rich man whose life is controlled by lawyers.

GN: Then a person might as well not get rich.

CF: Rich people never seem to figure this out until they are so rich that they have to hire lawyers.

GN: You make the practice of law sound like a protection racket.

CF: Again, you have things backward.

GN: Are you saying that the protection racket is modeled on the legal profession?

CF: You catch on fast.

GN: Thanks for your time.

CF: Call me any time. You'll get my bill. It's payable within 30 days.

GN: You're billing me? An old friend?


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