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Kinsella on Liberty Podcast, Episode 308.
This is my appearance on John Stossel’s Fox Business News show, Stossel, back on Jan. 30, 2015. I just realized I had never put it here in my podcast feed, so here it is. The full episode is streamed below (I recommend also my friend David Koepsell’s segment); my audio clip is included in this podcast episode. Discussed further in KOL171 | With Albert Lu Discussing Stossel and IP.
Grok shownotes and transcript below.
From: Stossel Show on Intellectual Property
***
A few weeks ago I was invited to appear on an upcoming episode of John Stossel’s Fox Business News show, Stossel. I flew to New York last Wednesday for a Thursday taping; the show will air this Friday, Jan. 30. I had a great time. Had dinner with several local libertarian friends (David Kramer, Isaac Bergmann, Evan Isaac, etc.) and my long-time friend Jack Criss, who joined me on the trip. Spent a while seeing New York, with my friend Dante Bayona as a helpful guide. New York was cold, but we still enjoyed it. (Pix from the trip below.)
The taping on Thursday went well—I was nervous but think I did okay. There were five guests altogether. The first segment was a debate between anti-IP anarchist David Koepsell and a conventional IP 
attorney; then a magician who was upset about people “stealing” his magic tricks; then me; then Chris Sprigman, about whom I’ve written before. I was a little leery that this was kind of a setup or something, but Stossel and the Fox News staff could not have been nicer or more professional. My impression is Stossel is leaning our way, as indicated in his Reason post, which quote me and Koepsell and criticizes IP (Owning Ideas—An Outdated Idea?; see also his column Owning Ideas). As far as I know this is the first time IP has been examined in such a major, national forum, and from a principled, and radical, free market perspective. Kudos to Stossel.
More on Stossel’s show here. The episode airs 9pm EST this Friday night, Jan. 30, on Fox Business, and apparently re-airs on Fox News Channel Sunday night.
***
Grok summary:
Show Notes: KOL308 | Stossel: It’s My Idea! (2015) with Stephan Kinsella and Guests
Introduction to Intellectual Property and Piracy Concerns [0:01–1:00]
John Stossel opens the episode by addressing the issue of piracy, noting that The Wolf of Wall Street was the most illegally downloaded movie in 2014, highlighting Hollywood’s and musicians’ struggles with unauthorized copying. He explains that U.S. law grants creators exclusive rights to songs, books, movies, and paintings to foster innovation through a limited period of exclusivity. Stossel illustrates this with a clip from a gangster movie where Denzel Washington’s character defends his drug brand “Blue Magic” as a trademark, emphasizing the value of brand identity. He introduces the debate by questioning whether watching his show on YouTube constitutes stealing, setting the stage for a discussion on intellectual property (IP) with guests including David Koepsell, Lawrence Suskind, Rick Lax, Stephan Kinsella, Chris Sprigman, and Doug Stanhope.
The Role of IP in Encouraging Innovation [1:00–3:13]
Stossel frames the historical significance of ideas, crediting innovations like the printing press and electricity for improving billions of lives. He poses the problem: why invest years in creating if others can copy the idea and undercut prices? Using a light bulb invention example from filmmaker Kirby Ferguson, he argues that without recouping development costs, creators may be discouraged. Stossel explains that copyrights and patents were introduced to address this by granting temporary exclusivity—copyrights for media, patents for inventions. He notes the extension of copyright terms over time, from 28 years in 1831 to the author’s life plus 70 years by 1998, which David Koepsell criticizes as excessive, advocating for the abolition of all IP rights, while Lawrence Suskind, an IP attorney, defends their necessity.
Debating Copyrights and Moral Rights [3:13–11:22]
The first segment features a debate between David Koepsell, who opposes IP, and Lawrence Suskind, who supports it. Koepsell argues that creators like Shakespeare thrived without copyright, profiting through reputation and performances, as ideas are non-scarce and IP laws stifle free expression. Suskind counters that creators have a moral right to protect their work, akin to a farmer’s right to land, and cites Shakespeare’s harsh measures against play pirates. Koepsell highlights software developers opting out of IP, relying on brand strength, while Suskind defends pharmaceutical patents due to high R&D costs. The discussion touches on music copyright issues, referencing George Harrison’s $1.5 million lawsuit for “subconsciously” copying “He’s So Fine” in “My Sweet Lord.” Stossel critiques Disney’s lobbying to extend copyrights for works like Snow White, which Koepsell calls cronyism, noting that public domain stories are exploited while new works are locked up until 2032.
Magicians and Protecting Trade Secrets [11:22–18:14]
Stossel introduces magician Rick Lax, who discusses how magicians protect their tricks without relying on IP laws. Lax shares how a Russian individual profited by selling the secret to his “Vertigo” trick, prompting him to create a fake exposure video to mislead copycats. He explains that patenting a trick reveals its mechanism, so magicians avoid it, relying instead on community norms. Lax recounts the case of Valentino, a Vegas magician ostracized for revealing secrets on TV, and contrasts this with Teller’s rare success in copyrighting a trick’s choreography, winning $155,000 against a Belgian copycat. Lax compares magicians’ secrecy to trade secrets like Coca-Cola’s formula, which remain protected without registration, though stealing such secrets is a federal crime, as seen in a case involving Pepsi and the FBI.
Internet Piracy and Libertarian Perspectives on IP [18:14–24:07]
Stephan Kinsella, author of Against Intellectual Property, joins Stossel to argue that IP laws censor free speech and hinder learning, copying, and remixing—key to human progress. He rejects the term “piracy,” asserting that copying ideas doesn’t deprive creators, as seen in widespread internet sharing. Kinsella, a libertarian, argues that patents and copyrights, unlike perpetual property rights, expire (patents after 17 years, copyrights much later), proving they are state-granted monopolies, not true property rights, as detailed in The Problem with Intellectual Property. Stossel admits he’s pleased when his show is shared online but worries about Fox’s funding without IP protection. Kinsella counters that popularity from copying boosts creators’ fame, and alternative revenue streams like ticket sales or YouTube channels suffice, citing the defeat of SOPA legislation as a win against internet surveillance.
The Fashion Industry and the Benefits of Knockoffs [24:07–32:20]
Chris Sprigman, co-author of The Knockoff Economy, discusses how the fashion industry thrives without copyright protection. Stossel showcases undercover footage of counterfeit Louis Vuitton bags sold in Chinatown for $200, far below the $1,000–$25,000 originals. Sprigman argues that knockoffs democratize fashion, allowing stylish looks for less without harming luxury brands, whose wealthy customers seek status and exclusive experiences. He explains that copying signals trends, fueling a fashion cycle that benefits the industry, as noted in his C4SIF posts. Sprigman dismisses claims that counterfeiting funds crime or costs jobs, calling International Chamber of Commerce figures baseless, though he acknowledges risks in pharmaceuticals and airplane parts. He cites Charles Dickens’ success in America, where lack of copyright for foreign authors led to cheap books, boosting literacy and Dickens’ lecture tour earnings, as discussed in Freakonomics: Does Copyright Make Books Disappear?.
Comedians and Self-Regulation Against Joke Stealing [32:20–36:53]
Doug Stanhope, a libertarian comedian, explains how comedians self-regulate against joke stealing without government intervention. He notes that open mic performers caught stealing are publicly shamed and ostracized. Stanhope recounts how Robin Williams and Milton Berle were labeled joke stealers, with Williams facing physical confrontations and payments. He discusses Louis C.K.’s gracious handling of Dane Cook’s alleged theft, contrasted with Joe Rogan’s public call-out of Carlos Mencia, which ruined Mencia’s career. Stanhope emphasizes that comedy’s community norms effectively deter theft, aligning with Kinsella’s view in Defamation as a Type of Intellectual Property that reputation-based systems, not state laws, can govern creative industries.
Copyright, Parody, and Final Thoughts [36:53–41:06]
Stossel highlights the absurdity of IP laws, noting that singing “Happy Birthday” on air could cost Fox millions due to Warner Music’s ownership, despite minor alterations failing to bypass copyright. He explains that parody is a legal exception, allowing mockery of works, as seen in clips mimicking his show. Stossel notes international IP violations, like China’s “Sunbucks” coffee or “Crust” toothpaste, reflecting weak enforcement abroad. He references Thomas Jefferson’s view that ideas, like candlelight, can be shared without loss, though Jefferson supported limited IP terms. Stossel concludes ambivalently, acknowledging libertarian arguments against IP from Kinsella and others but defending some IP laws, as they incentivize his books and Fox’s show. He suggests creativity flourishes when ideas are free, echoing Matt Ridley’s metaphor of ideas “having sex” to birth better ones, but remains concerned about funding creative production without IP.
Transcript:
Introduction to Intellectual Property and Piracy [0:01–1:00]
Timestamp: 0:01
John Stossel: The Wolf of Wall Street was downloaded illegally more than any other movie. Piracy, that’s where Hollywood has a really big problem. Musicians have a problem too. I don’t want to talk about leaks; it freaks me out. America grants certain rights to creators of songs, books, movies, paintings. The idea is to encourage the creation and proliferation of new ideas by providing a brief and limited period of exclusivity. Even drug dealers understand the value of that. “That’s a brand name, like Pepsi. That’s a brand name. What, you want to change the name on it?” If he doesn’t change the name, the lawyers may come. “I’m an intellectual property attorney, and you have stolen my client’s melody. You can be sued and found liable for monetary damages.” And yet, some of you watch my show on YouTube. That’s stealing. And that’s our show tonight. [Applause]
The Importance of Ideas and the Role of IP [1:00–3:13]
Timestamp: 1:00
John Stossel: And now, ideas can change the world. For most of human history, people suffered in miserable poverty, mainly because no one had thought of better ways to do things. Then suddenly, in just the last few hundred years, some new ideas made life better for billions—things like running water, the printing press, the steam engine, electricity, now the internet. We want people to keep coming up with new ideas. But there’s a problem. Why would you bother to spend years inventing something if other people could just steal your idea? They make the money; you might not. Let’s say a guy invents a better light bulb. His price needs to cover not just the manufacturing cost but also the cost of inventing the thing in the first place. Now let’s say a competitor starts manufacturing a competing copy. The competitor doesn’t need to cover those development costs, so his version can be cheaper. The bottom line: original creators can’t compete with the price of copies. That’s a video made by filmmaker Kirby Ferguson. If original creations can’t compete with copies, inventors will invent fewer things. What could be done to address that unfair imbalance? In the United States, the introduction of copyrights and patents was intended to address this imbalance. Copyrights covered media; patents covered inventions. Both aim to encourage the creation and proliferation of new ideas by providing a brief and limited period of exclusivity. A period where no one else could copy your work. Brief? How brief? I wrote this book. How long until you can copy it? That time limit has changed over the years: first in 1831, from 28 years to 42 years; then again in 1909, to 56 years; in 1976, to the lifetime of the author plus 50 years; and in 1998, to the lifetime of the author plus 70 years. My lifetime plus 70 years. That seems long. And it’s wrong, says David Koepsell. In fact, he says no one should be able to own an idea as property, and we should just get rid of all copyrights and patents.
Debate: Copyrights, Patents, and Moral Rights [3:13–11:22]
Timestamp: 3:13
John Stossel: No, that’s crazy, says Lawrence Suskind, who’s an intellectual property lawyer, and I assume most people agree with him. So, David, let’s start with you. I mean, no copyright, no trademark? Why would I write this if you could just rip it off? Why did Shakespeare write all those plays? He did, before there was copyright.
Timestamp: 3:27
David Koepsell: Why did he profit through putting his name on plays that were actually retellings of old stories? Well, because you can make money.
Timestamp: 3:33
John Stossel: Lawrence, why—you know, Shakespeare did it without copyright.
Timestamp: 3:39
Lawrence Suskind: They may not have had a copyright statute at the time, but people who pirated other people’s plays were dealt with harshly. Shakespeare, he would go after these people, sometimes try to shut down the theater.
Timestamp: 3:52
John Stossel: There was copying, and that was wrong? That’s—if there was no law, how could he shut the theater down?
Timestamp: 4:00
Lawrence Suskind: John, you just go beat them up.
Timestamp: 4:07
John Stossel: You have phrased this solely in terms of utilitarianism. Why will people do something if they don’t get rewarded? It’s also a moral issue, John.
Timestamp: 4:15
Lawrence Suskind: Someone who creates something has a moral right to protect what he has created, just as a farmer has a right to land that he has mixed his labor with. This is a natural rights issue, John.
Timestamp: 4:27
David Koepsell: The rights that are natural are those that are founded in the nature of property being scarce. So, when I hold something, it is to the exclusion of someone else. Ideas are not like that, and when we have laws that allow me to monopolize the expression of an idea, it necessarily inhibits somebody else’s free expression.
Timestamp: 4:45
John Stossel: What about something that’s both an idea and a physical thing, like a new drug? It costs these drug companies a billion dollars to get it through government. If somebody could just copy it, they wouldn’t do it.
Timestamp: 4:52
David Koepsell: Pharmaceuticals are a special problem because there’s a great deal of regulation already built up with the research and development of the drugs. You have to go through clinical trials. But we see in other fields, like software, where the R&D costs are much lower and coming down all the time, that people are actually opting out of the copyright and patent system.
Timestamp: 5:10
John Stossel: How do they make money?
Timestamp: 5:17
David Koepsell: They make money by the strength of their name and by the strength of their product. They do it like other competitive products on the marketplace do, by making a good product and selling it and competing with others, as the free market is supposed to work.
Timestamp: 5:24
John Stossel: Well, it’s not always clear how modern life could work without copyrights and trademarks. But there is at least one area of life where government does not enforce trademarks: illegal drugs. And yet, intellectual property still exists. In this gangster movie, Denzel Washington is upset that Cuba Gooding has watered down Denzel’s dope, which is called Blue Magic.
Timestamp: 5:42
[Clip from movie]: That’s a brand name, like Pepsi. That’s a brand name. They know that, even if they don’t know me any more than they know the chairman of General Mills. When you chop my dope down 1, 2, 3, 4, 5% and then you call it Blue Magic, that is trademark infringement. What, you want me to change the name on it? I would have to insist that you change the name. Fine, my man, I’ll call it Red Magic.
Timestamp: 6:14
John Stossel: So, David, is that how it’s supposed to work? He’ll persuade people?
Timestamp: 6:20
David Koepsel: Yeah, look, if somebody wants to come along and copy Shakespeare’s plays and market them as their own, “Stossel’s Hamlet,” well, you’ve now got to deal with a couple of problems. One is, the audience is going to know you didn’t write it. You’re ripping off Shakespeare, and you’ve lost your reputation. But these reputational issues work in the private market. You don’t need a government to come in and enforce them.
Timestamp: 6:38
John Stossel: What about music? I often try to use music on this program, but sometimes I’m told, “You can’t use that; we don’t have the right.” Actor Nick Offerman did this parody of how the music copyright system works.
Timestamp: 6:52
[Clip with Nick Offerman]: Not opinion! Stop the audio! Shut it down now! Why? Who the hell are you? I’m an intellectual property attorney, and you have stolen my client’s melody.
Timestamp: 7:07
John Stossel: Lawrence, that’s what you do now?
Timestamp: 7:13
Lawrence Suskind: I do that kind of thing in court, not in someone’s workshop.
Timestamp: 7:19
John Stossel: To you, these laws are reasonable, clear enough for most people?
Timestamp: 7:24
Lawrence Suskind: Well, like all laws, they require tailoring from time to time. Reasonable people can disagree, for example, on how long the term of a copyright should be.
Timestamp: 7:34
John Stossel: The rules are confusing, and they often open people up to lawsuits. Here’s one example: in 1981, George Harrison lost a $1.5 million case for subconsciously copying the doo-wop hit “He’s So Fine” in his ballad “My Sweet Lord.” Subconsciously copying? You kidding me?
Timestamp: 7:48
Lawrence Suskind: You know, in that case, he admitted he had made a mistake, and he tried to settle it before it went to trial. The tune was well-known. He said it was subconscious, but whether it was or wasn’t, he did not have a right to use someone else’s tune. The fact that he was a great creative person in his own right didn’t give him the right to infringe on other people’s creative products.
Timestamp: 8:08
John Stossel: And how would they make money if anybody could just copy any song?
Timestamp: 8:19
David Koepsell: They are making money through doing what they’ve been doing for ages, by doing performances, by hoping that people will buy their products. And in fact, they do. You know, I live in Mexico City, and I can walk out my door, go 200 yards, and buy a pirated copy of anything I want. And yet, box office receipts in Mexico City go up every year. Why? Because the people who can afford to go to theaters, the people who can afford to buy the original products, choose to.
Timestamp: 8:46
John Stossel: You know, that’s all well and good if you have a famous entertainer, say a Lady Gaga or Tony Bennett. But how does an entertainer become famous in the first place?
Timestamp: 8:52
Lawrence Suskind: The reason people will pay money to go and see one of their performances is because intellectual property law allowed them to become famous in the first place.
Timestamp: 9:05
David Koepsell: I don’t think that’s necessarily true. You see a lot of independent performers now making money through doing live gigs at smaller venues and then becoming famous there, too. It’s not always copyright law that enables that. Sometimes it’s also making good music.
Timestamp: 9:18
John Stossel: Let’s assume copyright protection is a good thing. What’s not a good thing is that special interest groups then lobby politicians to tilt the law in their favor. And my former employer, Disney, did that, even after making big bucks from stories like Pinocchio that they got for free. Stories like Snow White, Pinocchio, and Alice in Wonderland were all taken from the public domain. But when it came time for the copyright of Disney’s early films to expire, they lobbied to have the term of copyright extended, extended from 75 years to 95 years. Snow White, their first movie, would now be free to copy if they hadn’t gotten their special deal. But now they control Snow White until the year 2032.
Timestamp: 10:05
John Stossel: Lawrence, that’s not right.
Timestamp: 10:12
Lawrence Suskind: And I don’t know that, you know, 70 years after my death, I should own this thing. They don’t have the right to the story for 95 years. What they have a right to is their expression of it. The story of Snow White is an ancient German myth, and anybody—you, I—can make a cartoon where she’s singing, and you can do a story of any kind you want that involves a bitter queen, a mirror, a poison apple, just as Leonard Bernstein—
Timestamp: 10:36
John Stossel: Just as Shakespeare, to get back to Shakespeare for a minute, could not have sued Leonard Bernstein and Stephen Sondheim for coming up with West Side Story, which is the same basic story as Romeo and Juliet.
Timestamp: 10:52
David Koepsell: And you would argue that this is the big business cronyism scam to get it extended for so long?
Timestamp: 11:06
John Stossel: Yeah, and just because they’re not necessarily going to win in court, it doesn’t mean they’re not going to use their, you know, phalanx of lawyers to scare people.
Timestamp: 11:16
David Koepsell: Of course, that’s exactly what happens. And that happens in the patent industry, too.
Timestamp: 11:22
John Stossel: Thank you, David, Lawrence, to join this debate. Please follow me on Twitter at fbnstossel and use that hashtag #ID, or like my Facebook page so you can post on my wall.
Magicians and Trade Secrets [11:22–18:14]
Timestamp: 11:22
John Stossel: Coming up, how some magicians manage to protect their trade secrets without suing people, and what I do about people who rip me off. Welcome to 2020. I’m John Stossel. I’m John Stossel. Give me a break! You want a break? You’re going to get a break. I’m going to give you a break right now. [Music] [Applause] [Music] What if you’re a magician and you come up with a cool new magic trick? You might patent your trick, but then the secret would be out there. So, how does a magician protect his creative work? In a moment, I’ll ask this magician.
Timestamp: 12:18
John Stossel: My name is Rick Lax. Welcome to Vertigo. Rick Lax invented this trick where a deck of cards seems to float in the air. Soon, someone in Russia showed the trick on the internet and was trying to make money by selling the secret behind it.
Timestamp: 12:40
John Stossel: Rick Lax joins us now. So, this Russian guy ripped you off?
Timestamp: 12:45
Rick Lax: He sure did, and he made some money doing it.
Timestamp: 12:48
John Stossel: How did he make money?
Timestamp: 12:50
Rick Lax: He charged people for this video that he made explaining how to do my trick.
Timestamp: 12:53
John Stossel: So, to protect his Vertigo trick, Rick put on a disguise and made this fake exposure video which claims his anti-gravity trick is done with tape.
Timestamp: 12:58
[Clip from Rick Lax’s video]: First thing, right there, you see that tape?
Timestamp: 13:05
John Stossel: Then, at the end of this video, he takes off his disguise and explains that he was conning you.
Timestamp: 13:12
[Clip from Rick Lax’s video]: It’s a secret to Vertigo. You’re not going to find it here.
Timestamp: 13:19
John Stossel: You’re not going to find it here or really anywhere on YouTube. I don’t think if you really want to learn how to do it, you do have to get the DVD.
Timestamp: 13:27
Rick Lax: So, you make—try to make some money selling DVDs explaining it?
Timestamp: 13:41
John Stossel: That’s right.
Timestamp: 13:46
Rick Lax: And I made that video not ‘cause I wanted to, but because I had to. Over 50,000 people watched that video alone, my fake exposure video, where it started off where, if you’re watching, you’re a magician, and you think you’re going to get the secret for free. So, you watch along the video, and you say, “Oh, is it done with tape?” And it’s not really done with tape. And then, at the end, it’s me, and you find out, “Oh, this really isn’t how it’s done.” But I can see that there is a demand for these exposure videos because 50,000 people watched mine. And if, right now, if you were to Google “Rick Lax how to do Vertigo,” you would find hundreds of videos with tens of thousands of hits. And some of them will be real exposure videos—those are videos where the magicians really tell you how it’s done—and some of them will be fake ones, like the one you just saw.
Timestamp: 14:14
John Stossel: So, why don’t you try to go to government—copyright, patent, some trademark, something—and, yeah, own it, sue people who do it?
Timestamp: 14:32
Rick Lax: It’s really hard for us magicians to do that. If we want to patent a magic trick, in some cases we can, if there’s a special device that lets us do the trick, we can take out a patent. But patents are publicly searchable, so everyone’s going to know how it’s done. So, we don’t like that.
Timestamp: 14:45
John Stossel: Here’s a magician in a mask who reveals secrets behind magic tricks and puts them out.
Timestamp: 14:58
[Clip of masked magician]: Great one, two, three—presto, scarves are gone.
Timestamp: 15:04
John Stossel: How did he do it? What you don’t see is that the scarves are hooked to a short piece of fishing line. He had a whole TV show doing this. But you say that the community of magicians, without getting law involved, punished him?
Timestamp: 15:15
Rick Lax: Yeah, we exercised him from the community. He was a Vegas magician named Valentino, and you will not see him performing anywhere, getting as much work anymore.
Timestamp: 15:29
John Stossel: No? Definitely not?
Timestamp: 15:36
Rick Lax: ‘Cause no one wants to associate with him. Once you share the secrets with the layman, we’re nervous to share our secrets with you because we’re afraid that you’re going to turn around, share it with everyone else.
Timestamp: 15:42
John Stossel: So, in some ways, you guys are like Coca-Cola. You have a trade secret that you don’t want to write down for people to steal, just want to keep it secret.
Timestamp: 15:54
Rick Lax: And Coca-Cola has done that. Thomas’s English Muffins, Kentucky Fried Chicken, WD-40, Google search algorithm—none of this is legally registered anywhere.
Timestamp: 16:01
John Stossel: That’s right. And the reason they don’t legally register it is because patents and copyrights, those only work for a limited period of time. But when you keep something a trade secret, you can keep it a trade secret for a hundred years. And Coca-Cola has done that.
Timestamp: 16:16
John Stossel: Some people allegedly did steal the secret, and they went to Pepsi with it. Pepsi went to the FBI and told Coke.
Timestamp: 16:26
Rick Lax: That’s right. And these people got punished. I don’t know if they realized it going into it, but stealing a trade secret like that, it is not just a civil infraction; this is now a federal crime. And so, they got in some real trouble for doing that.
Timestamp: 16:40
John Stossel: The rare magician who did copyright a routine was Teller, of Penn and Teller. He has a trick where he cuts the shadow of a rose and somehow makes the actual rose petals fall. He registered this act with the U.S. Copyright Office 30 years ago. Recently, someone in Belgium posted a video of that trick that he called “The Rose and Her Shadow.” I don’t know if he grabbed it from the Copyright Office, but he offered to reveal the secret behind it for $3,000. Teller sued him, and as you said last year, he won $155,000. So, that’s a reason to copyright.
Timestamp: 17:18
Rick Lax: Yeah, except for right now, Teller might be the exception rather than the rule. Because even in the ruling, the judge said, “I’m going to give this one to you, but, you know, you can’t really copyright a magic trick. I’m only going to give it to you because the choreography surrounding the trick, that you can have a copyright on the pantomime that accompanies the trick.” So, now us magicians, we’re trying to figure out, how broad is this ruling? Is it only going to apply to Teller because there was so much choreography in his trick, or might it apply to the rest of us, too? We don’t know.
Timestamp: 17:50
John Stossel: But it appears you can patent the stick, but not the trick.
Timestamp: 17:56
Rick Lax: We’ll go with that.
Timestamp: 18:01
John Stossel: Thank you, Rick. Coming up, we go undercover to buy counterfeit merchandise. Will we get caught? [Music] [Applause] [Music]
The Internet, Music, and Piracy [18:14–24:07]
Timestamp: 18:14
John Stossel: Have you listened to music on the internet without paying for it? Lots of people do. This upsets musicians like Taylor Swift. “It freaks me out. I’ll have a meltdown on the show.” Still, college students download music all the time. But there’s a name for what they’re doing. It’s called downloading songs off the internet illegally. And sometimes, the music makers take action. Boston University student Joel Tenenbaum copied 30 songs and shared them on the web. The Recording Industry Association sued him, and a jury ordered him to pay $675,000—$22,500 for each song he downloaded. And that’s not right, says the author of Against Intellectual Property, Stephan Kinsella.
Timestamp: 19:00
John Stossel: Why is it not right?
Timestamp: 19:05
Stephan Kinsella: The internet has given us a tool to learn, to copy. This is what humans have been doing for thousands of years. This is how society advances and how humanity grows. Copyright law basically censors free speech, prevents people from saying what they want to say, from copying, from learning, from sharing, from remixing.
Timestamp: 19:18
John Stossel: Without it, people will say and mix and produce less.
Timestamp: 19:23
Stephan Kinsella: That is actually not true. Today, we have piracy that’s widespread, and most people don’t make a dime from their works. Most people want their ideas to get out there. You know, the danger to artists and to people who want to get their name out there is obscurity; it’s not piracy. Piracy is a compliment.
Timestamp: 19:40
John Stossel: So, I should just be allowed to pirate movies off the internet?
Timestamp: 19:46
Stephan Kinsella: Well, I think piracy is the wrong term, just like the idea—the term “stealing” is the wrong term. When you copy information, you’re not taking anything from anyone. You’re copying their ideas; they still have them. Piracy is what people used to do when they would raid ships and take things.
Timestamp: 19:53
John Stossel: That’s a good point. And the movie industry complains about digital piracy all the time. The Wolf of Wall Street was downloaded illegally more than any other movie in 2014. Other films making the list include Frozen, RoboCop, Gravity, and The Hobbit. Piracy, that’s where Hollywood has a really big problem. And they see eye to eye with so many conservatives. Conservatives, you know, respect private property. You don’t respect private property.
Timestamp: 20:24
Stephan Kinsella: It’s true, it’s not being stolen but being copied. Well, actually, I believe in private property as a libertarian, more strongly than even most conservatives. And that is actually why I think patent law and copyrights are a bad idea. In fact, patents expire after 17 years, roughly; copyrights expire after a long time later, as you know, that already. Property rights don’t expire, so it’s clear that patents and copyrights are not property.
Timestamp: 20:49
John Stossel: Patents and copyrights are not property rights. Let’s make this personal. I’m frankly sometimes happy when I see that my show is all over the internet ‘cause my goal is to get the ideas out. But it’s a conflict because I also know that, why would Fox pay me to do the show if they didn’t own it and get to make money from it? You who steal this show by watching it in places like YouTube may not think about the costs that go to making the show happen. It’s not just my salary. I have seven producers who do research, book the guests, have editors who cut the video. There’s a makeup person, hair stylist, the studio, stage manager, the director, cost of the car service that picks up the guests like you, Stephan. How would it happen if they couldn’t own the show, protect it?
Timestamp: 21:40
Stephan Kinsella: Well, you certainly should have the right to have—it’s moral for people to give attribution, credit, right? When, if a YouTube video is taken, there’s nothing wrong with saying, “Hey, it’s wrong for you to not tell where it came from.” Copying is a different matter altogether. When you put information out there, you should be complimented by the fact that people are copying your show. It shows that you’re popular, shows they want to hear your ideas. The more copies that are made, the more popular you are. Movie studios make money from selling tickets now. They can make money from selling DVDs. They can sell money from rentals. On YouTube, it has its own channel.
Timestamp: 22:16
John Stossel: They put up this warning video.
Timestamp: 22:23
[Clip from YouTube warning video]: Everybody’s really been looking forward to the new video from Lumpy and the Lump Pets. Russell’s a huge fan. But YouTube warns him, “Hey, Russell, you didn’t create that video. You just copied someone else’s content. You can be sued and found liable for monetary damages.”
Timestamp: 22:36
John Stossel: If YouTube finds you’re a repeat offender, you’ll get banned for life.
Timestamp: 22:42
Stephan Kinsella: So, sounds like you get punished if people complain that you’re stealing stuff.
Timestamp: 22:48
John Stossel: You will. And it’s even getting worse there.
Timestamp: 22:55
Stephan Kinsella: One of the dangers of copyright, John, is that it’s used by the state to regulate the internet. In fact, you know, the SOPA legislation was defeated a couple of years ago, which would have tried to stop piracy by imposing all kinds of surveillance on the internet and internet service providers. Recently, they have agreed, under government pressure, to adopt this sort of “six strikes and you’re out” rule, which is like a private out-of-the-court system with no due process, which could get you banned from the internet for life.
Timestamp: 23:18
John Stossel: Not from the internet, it’d get you banned from YouTube.
Timestamp: 23:24
Stephan Kinsella: No, from the internet. But has it ever happened?
Timestamp: 23:31
John Stossel: Not yet, but these rules are pretty new. It’s a danger.
Timestamp: 23:36
John Stossel: So, you’re a patent lawyer. You’re basically arguing—trying to argue yourself out of a job, right?
Timestamp: 23:42
Stephan Kinsella: Just like an oncologist is trying to cure cancer and put himself out of a job, or a drug—an attorney who works for the ACLU or defends people against the hideous drug war is hoping to end the drug war, and he wouldn’t, you know, maybe he’d have to find honest work then.
Timestamp: 23:49
John Stossel: Good for you. Thank you, Stephan. For those of you who’d like to legally watch shows of mine that maybe you missed, Fox Business does put them on the web two weeks after we air. You can get to the website by going to johns.com.
Timestamp: 24:01
John Stossel: Coming up, why it would cost me big if I sing “Happy Birthday” on this show. And next, we go undercover to try to buy some counterfeit goods. [Music] [Applause] [Music]
The Fashion Industry and Knockoffs [24:07–32:20]
Timestamp: 24:07
John Stossel: Of all the industries I’ve covered as a consumer reporter, I think one of the biggest ripoffs is fashion. This dress sells for $1,200. These shoes, $1,400. This purse is priced at $2,500. Are you kidding me? Who pays that amount of money for a purse? I can walk outside my apartment and buy a bag that looks like that for 20 bucks. And actually, this one is a high-end knockoff. It cost us $200. We got it when we went shopping with hidden cameras. Watch.
Timestamp: 25:03
John Stossel: Lanvin boots. Producer Ricky Ratliff bought that bag here in Chinatown, where people sell all kinds of counterfeit merchandise.
Timestamp: 25:10
[Clip from hidden camera]: Everything is it—real? Yeah. Open. Ray-Ban, Prada, Gucci. What do you need?
Timestamp: 25:22
John Stossel: He claimed he was selling authentic stuff. “I’m going to give you a bag of P.”
Timestamp: 25:28
[Clip from hidden camera]: Which one you want?
Timestamp: 25:30
John Stossel: Some people admitted that their products weren’t the real thing.
Timestamp: 25:36
[Clip from hidden camera]: Copy.
Timestamp: 25:38
John Stossel: One hustler said, if we want the real quality brand-name stuff, we need to follow him and meet with this woman in McDonald’s.
Timestamp: 25:42
[Clip from hidden camera]: Louis Vuitton.
Timestamp: 25:48
John Stossel: On her phone, she showed my producer a bunch of supposedly authentic Louis Vuitton bags, which she said she would sell for just $200.
Timestamp: 25:55
[Clip from hidden camera]: What do I pay? You cash?
Timestamp: 26:02
John Stossel: Later. And 15 minutes later, back on the street, the bag appeared.
Timestamp: 26:07
[Clip from hidden camera]: Thank you. $200. Here’s my Louis Vuitton.
Timestamp: 26:15
John Stossel: And that’s how I got this. The counterfeit fashion industry is big business. Chris Sprigman knows about that. He wrote The Knockoff Economy: How Imitation Sparks Innovation.
Timestamp: 26:21
John Stossel: That makes it sound like this illegal activity is a good thing.
Timestamp: 26:26
Chris Sprigman: Well, there’s some good that comes out of it. The presence of knockoffs democratizes fashion. It allows people in the U.S. to look good, to look stylish—people who can’t afford to pay $1,000 for the real Louis Vuitton bag. By the way, that’s one of the cheapest bags they sell, and that’s $1,000. They sell bags that are $25,000 on the Louis Vuitton website. So, knockoffs do democratize the availability of these items.
Timestamp: 26:50
John Stossel: Now, it would be bad if it hurt the branded companies, if it deprived them of customers that they would otherwise have.
Timestamp: 26:56
Chris Sprigman: And I can tell you that virtually nobody who buys the fake bag for $200 down on Canal Street—and that’s a pretty good fake; most fakes are cheaper than that; that’s a pretty well-done fake—nobody buying those bags is going to buy the $1,000 original or the $25,000 luxe Louis Vuitton bags.
Timestamp: 27:07
John Stossel: You make it sound like the high-price companies are all in on the scam. They know this is going to happen.
Timestamp: 27:13
Chris Sprigman: They’re not getting any money from the knockoff bag, but they’re not being harmed, either. So, the people who are in the market for the real Louis Vuitton, who have all that cash to burn, they’re still going to go out because they want the status that the real Louis Vuitton confers, and they want the shopping experience of the wonderful Louis Vuitton flagship store and how it pampers them. This is what they want; this is what they get. The knockoff has no discernible effect on the behavior of those folks, and those are the folks that Louis Vuitton really cares about.
Timestamp: 27:41
John Stossel: One blogger wrote that cheap stores like Forever 21, Urban Outfitters, that they have knockoffs do not allow for the creativity of the original creator to be acknowledged.
Timestamp: 27:57
Chris Sprigman: I think if you look out there into the world and actually see how the fashion industry works, over the last 50 years, since the end of World War II, the fashion industry in the U.S. has boomed, pretty much uninterruptedly boomed, all that time knockoffs have been legal. So, copying actually in the United States helps the fashion industry. It helps, for example, to signal to people that a trend has occurred. When a fashion is widely copied, it tells us there’s a trend. We buy into the trend because we want to be in fashion—more information for people. And so, they buy into the trend. Now, when there’s too much copying, it signals to people that the trend is starting to be over. It’s overdone. The fashion-forward among us jump off, and we jump on to the new trend that copying is starting to set.
Timestamp: 28:34
Chris Sprigman: There’s a fashion cycle. Copying helps fuel it. So, this is good for the fashion industry, it’s good for consumers, it’s good for us all, even the fashion-backward like me.
Timestamp: 28:48
John Stossel: Well, the fashion-backward benefit as well. You know, the price of clothing really hasn’t gone up in the last quarter century. It stayed about the same, except for the price of clothing at the very top—that Louis Vuitton stuff, the Prada stuff—that is rocketing upward. So, the rich are paying more; the rest of us are getting more for less.
Timestamp: 28:59
John Stossel: U.S. Customs Service, always eager to make themselves more important, they say the black market for fake handbags, shoes, and purses funds other crime rings, and it’s a big threat to people. More than a billion dollars in counterfeits are seized by Customs and Border Protection annually, as federal agents crack down on what some here call the crime of the century.
Timestamp: 29:12
John Stossel: With the explosion of the internet, right now, you can buy anything that appears to be legitimate. You think you have a small savings, you think you’re getting the real product at a discounted price, only to find out that it’s a counterfeit.
Timestamp: 29:30
John Stossel: The crime of the century, they call it.
Timestamp: 29:43
Chris Sprigman: Well, I’m not sure it’s the crime of the century. And more than that, I think it’s true, just true in the world, that organized crime has its finger in every pie in which they can make money, be it legal or illegal. I think if we want to get after organized crime, we should get after organized crime. The counterfeiting issue is more or less a red herring.
Timestamp: 29:54
John Stossel: The International Chamber of Commerce claims two and a half million jobs are lost because of fake products.
Timestamp: 30:00
Chris Sprigman: The International Chamber of Commerce figures on counterfeiting are worth approximately zero, and there’s just no basis for them. Now, they keep repeating them as if they’re a fact, and the government, unfortunately—FBI and other agencies of the government—have picked them up as if they’re fact. That doesn’t make them true. There’s a lot of good that’s created. There’s a lot of people in business, small business people, who are making money, and they wouldn’t be otherwise. So, I think in terms of its total economic effect, it’s a wash.
Timestamp: 30:27
John Stossel: You do, though, agree that if it comes to things like pharmaceutical drugs or airplane parts, this is a real threat?
Timestamp: 30:35
Chris Sprigman: God, yes. I mean, I don’t want airplanes crashing because of fake parts. I don’t want people dying because of fake drugs. We’re just talking fashion, cosmetics.
Timestamp: 30:46
John Stossel: Yeah, nobody ever died because of a fake handbag.
Timestamp: 30:53
Chris Sprigman: And I will note that a lot of the government’s efforts in this area are directed not at airplanes and pharmaceuticals, but at handbags.
Timestamp: 30:58
John Stossel: Finally, Chris says another surprising way to expand your brain and think about the knockoff economy is to think about Charles Dickens. Did you read A Christmas Carol or Great Expectations or Tale of Two Cities? These books have sold millions of copies, and yet, at the time, booksellers in America were not required to pay Dickens a dime.
Timestamp: 31:05
John Stossel: When the United States itself was a developing economy, it refused to sign treaties and had no protection for foreign creators. Charles Dickens famously complained about America’s bustling book piracy market, calling it a horrible thing that scoundrel booksellers should grow rich.
Timestamp: 31:29
John Stossel: And yet, you say he still made out?
Timestamp: 31:36
Chris Sprigman: Dickens made out. When Dickens visited the United States on a lecture tour, he played to these standing-room-only crowds. People paid a lot of money to see him—the equivalent of millions of dollars in today’s currency—because they were able to buy cheap books, read cheap books. They wanted to go, pay, fell in love with him. So, they went to see him. And at his death, a significant portion of his estate came from that trip to America. In that period, America became one of the most literate nations on Earth, and it became literate in part because books were cheap. Books being cheap actually helped us develop to be the world power that we are today. And that came from the absence of copyright.
Timestamp: 32:13
John Stossel: Thank you, Chris Sprigman. Coming up, who owns a joke? How do comedians deal with joke stealers? And how do I deal with people who steal my brand? Welcome to 2020. I’m John Stossel. [Music] [Applause] [Music]
Comedians and Joke Stealing [32:20–36:53]
Timestamp: 32:20
John Stossel: Have you heard this joke? Why is six afraid of seven? Because seven ate nine. Get it? He ate nine. I didn’t make that up. We all repeat jokes we’ve heard before. Does that make me a joke stealer? I guess so. I don’t even know who thought up most of the jokes I tell. So, what does this mean for professional comedians? What do they do if someone steals their jokes? Comedian Doug Stanhope says comedians just work this out. I ask him about this ‘cause he’s a libertarian. Here’s a sample of his work.
Timestamp: 33:07
[Clip of Doug Stanhope]: They say if you give a man a fish, he’ll eat for a day. But if you teach a man to fish, then he’s got to get a fishing license. And you couldn’t even cook the fish ‘cause you needed a permit for an open flame. And then the health department is going to start asking you a lot of questions about where are you going to dump the scales and the guts.
Timestamp: 33:30
John Stossel: As I said, a libertarian comedian. Doug joins us now.
Timestamp: 33:42
John Stossel: You don’t need government to protect your jokes?
Timestamp: 33:49
Doug Stanhope: So, yeah, no, no. Comedy’s a really good self-regulating art form. If you go to open mic and you want to try to get into this business, if you’re stealing someone’s jokes, you are going to be outed and publicly shamed and run out of town.
Timestamp: 34:01
John Stossel: And yet, Robin Williams was known as a joke stealer.
Timestamp: 34:08
Doug Stanhope: Huge, yeah, yeah. Milton Berle and Robin Williams are probably the two legendary—they weren’t run out of town.
Timestamp: 34:13
John Stossel: No, they’re the anomaly that slipped through the cracks.
Timestamp: 34:20
Doug Stanhope: There’s legendary stories from The Comedy Store in L.A. about Robin Williams coming into the showroom, and someone would put him up against the wall by the throat, and his manager would write a check for stealing jokes. But, yeah, there’s very few that get through, and they’re labeled. People wouldn’t go on stage when Robin Williams was in the room after he got branded with that scarlet letter of joke thief.
Timestamp: 34:40
John Stossel: In 2006, comedian Dane Cook was accused of stealing jokes from comedian Louis C.K., and Louis kindly invited Cook on Louis’s TV show to joke about it.
Timestamp: 34:54
[Clip from Louis C.K.’s show]: Here’s Cook: “2006 was the greatest year of my entire life. I had a double platinum comedy album, first one ever to exist. That should have been, like, my triumph. And I enjoyed it, Louis, for maybe two months—two months before it started to suck. Because everything I read about me was about how I stole jokes from you, which I didn’t.”
Timestamp: 35:13
Louis C.K.: I kind of think you did.
Timestamp: 35:19
John Stossel: So, Louis C.K. has him on his own show.
Timestamp: 35:26
Doug Stanhope: Yeah, now Louis C.K. is a gentleman, and he’s always been above the fray in these things. A lot of people did gang up on Dane Cook on that one, and Louie handled it like a sportsman. He didn’t antagonize it; he didn’t fan the flames.
Timestamp: 35:43
John Stossel: And when he did have Dane Cook on that show, I thought it was brilliant on both sides. Some comedians do lose work ‘cause they’re accused of stealing jokes. Joe Rogan went on stage to interrupt a routine by Carlos Mencia and accused Mencia of stealing jokes from many other comedians.
Timestamp: 35:55
[Clip of Joe Rogan]: He had to end the show by saying, “Carlos Mencia, it—someone steals a riff from a song.” That’s the news constantly. It’s easy to say you steal. I could say you steal, but I don’t.
Timestamp: 36:08
John Stossel: Mencia found it tougher to get work after that.
Timestamp: 36:14
Doug Stanhope: That pretty much destroyed him. Mencia was on the top of his game at that point. He was at a Comedy Central show; he was selling out theaters all over the country. And almost immediately after that went viral, it destroyed his career. He—it brought him down to my level. That’s how bad. If I’m doing the Wednesday, he’s doing the Thursday at the same rotten club.
Timestamp: 36:38
John Stossel: Well, thank you, Doug Stanhope. We’ll now raise you up to higher levels.
Timestamp: 36:46
John Stossel: Coming up, have you brushed your teeth with Crest toothpaste? Do you use Arm & Hammer baking soda? Do you buy coffee at Starbucks coffee shops? I’ll explain when we come back. [Music] [Applause] [Music]
Copyright, Parody, and International IP Issues [36:53–41:06]
Timestamp: 36:53
John Stossel: Happy birthday to you. Ha, I can’t sing the rest of the song. If I did, it would cost Fox lots of money because the rights to “Happy Birthday” are owned by Warner Music. Sheesh. They bought the rights in 1998, and now people pay them about $2 million a year to use the song in movies and TV shows. Intellectual property laws have teeth. One guy thinks he can get around the law by changing small things. He made this YouTube clip, which has been watched half a million times.
Timestamp: 37:52
[Clip of altered “Happy Birthday”]: Happy birthday to you.
Timestamp: 37:57
John Stossel: Cute, but lawyers tell me that probably does not make this video legal. One thing, though, that does make copying legal is parody. If you take someone’s work but change it to make a joke about it, that’s not a copyright violation. And that’s good for intellectual freedom, but not such a good thing for people like me, ‘cause people make videos like these.
Timestamp: 38:10
[Clip of parody]: Welcome to 2020. I’m John Stossel. I’m John Stossel. Give me a break! You want a break? You’re going to get a break. I’m going to give you a break right now.
Timestamp: 38:25
John Stossel: Stupid. And there’s nothing I can do about that. And there’s practically nothing any of us can do about intellectual property violations in other countries. In China, lots of merchants copy—or should I say steal—and mangle recognizable American brands. They think they’ll give their products credibility. So, various stores will sell you Sunbucks coffee, Tide laundry soap, something called Unbelievable This Is Not Butter, Arm & Hammer baking soda. And if you’re hungry for fast food, you can get King Burger or this takeoff on Kentucky Fried Chicken, but instead of the Colonel, President Obama apparently fries the birds. And after you’ve done all that eating, you can brush your teeth with Crest toothpaste. That’s what happens in China.
Timestamp: 39:18
John Stossel: In America, Thomas Jefferson once opposed copyright laws. “Ideas are like candlelight,” he wrote. “He who receives an idea from me receives instruction himself without lessening mine. He receives light without darkening me.” It’s a good point. Jefferson later backed off that a bit. He said he just opposed the old English standard, which was ownership forever, and he did support a limited ownership of ideas, maybe 14 years.
Timestamp: 39:51
John Stossel: I don’t know where the line should be, but when ideas are free, creativity blossoms. I like how journalist Matt Ridley put it, that ideas have sex with each other, and then they give birth to new, often better ideas. That helps us all. Some libertarians on my show tonight said it would be better if America had no copyright or trademark protection, and they made some good points. But I have to wonder, would I have written these books if publishers hadn’t offered me money? I doubt it. They gave me money only because they knew that no one was allowed to just copy the book. I also assume I get paid by Fox only because you cable subscribers and advertisers pay for this program. Maybe I do this for nothing. I like doing it, maybe. But I wouldn’t work as hard, and I balk at paying for the cameras and all the expensive things that go into making TV. So, I’m glad we have some intellectual property laws. That’s our show. See you next week. [Music] [Applause] [Music]
