Talk:Lecture 2

Lecture 2 Discussion

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Open Source Impact On Research

I was wondering what sort of impact the open source movement had on research and development in the IT world? It seems to me that the IT culture of sharing tools and resources in an "open" environment may be a factor of increasing technology advances even with little money spent on Research and Development. I would think this would not be the case with other industries; perhaps because other industries can’t produce these tools at “zero cost”. I understand that many "open source" projects have been funded by industry, and university alike, but it is also my perception, maybe it is a misperception that a large number of private individuals contribute to the open source community. It would be interesting to see information to prove or disprove this theory, and to see in the future if the open source culture will continue to grow or if it will give way to perhaps a more standard economic model.

Are you considering pieces of open-source software to be "technology advances" themselves, or are you focusing on how open-source tools and libraries make it easier to write new software? Are you using "technology advance" in a narrow sense that includes only clever things like rsync and bayesian spam filtering, or does any improvement over competing software constitute a technology advance? I believe that proprietary, hidden-source software is a more recent phenomenon than open-source software. By the way, I am one of those "private individuals" who contributes to open-source software (specifically, Mozilla and Firefox). --Jesse Ruderman

SMM: We'll try to get to this stuff on Open Source night. For now, it's interesting to note that many goods -- like drugs -- have substantial information content, so the OS game ought to work almost as well in other places. To some extent it does, only we fail to notice. See the Eric Von Hippel reading. But it's also worth thinking about how to stretch the model.

Why individuals participate is a great empirical question, you might want to think about this as a paper topic.

It's true that open software is older, but that was natural since it grew up in a government labs/university world.

Finally, I'm not sure about the distinction you're making on technology. There's an interesting question whether OS needs some buggy program as a nucleus to get started with. In that sense, it might be less fundamental. For most purposes, I'd say "an advance is an advance." If OS does any kind of advance well, that's good to know!

TedZ: personally, I've contributed to several Open Source projects. I have two reasons: first (and primarily), it looks good on your resume. In another case, I made some fairly significant contributions to an open-source game physics engine because I was so annoyed at them having some stuff _wrong_ that I just had to go in and fix it. I just couldn't bear to have a bad meme propogate.

Matching royalties instead of fixed subsidies

In lecture, we saw how subsidies supplementing patent royalties can cause desirable research to happen. The research is desirable because v - c > 0, but it doesn't happen without help because πv - c < 0. (π is the fraction of value that the patent holder can receive in royalties.) As we can see from the graphs on page 3 of the slides, subsidies fund some useless projects (v - c < 0) unless the funder requires matching payments, and more importantly, subsidies fail to fund some expensive research where v - c is small but positive. I have an idea that seems to solve both of these problems: promise to match patent royalties paid by other companies at a fixed ratio. If the funder estimates π correctly and chooses the ratio m such that (1+m)π = 1, then projects will procede when and only when v - c > 0. --Jesse Ruderman

Avichal 14:39, 8 Oct 2004 (PDT) I found this idea quite interesting. Now I confess, I'm in IT, and my knowledge about Economy is shaky at best. But the idea seems intriguing, ofcourse there is the standard problem of observability - apart from judging that (v - c)>0, sponsor would also have to judge π. And there is the problem from the innovator side, that since the matching occurs 'ex post', there has to be significant assurance that the sponsor would not renege.

Avichal 08:07, 9 Oct 2004 (PDT) After thinking a bit further on this, I think I see one problem. How will the price be determined? And price and π are inter-related.

The incentive mechanism draws away the natural forces in the market which self-regulate it. If I hold a patent on , say a business process. I wouldn't sell it for too high, since very few people would buy it. I wouldn't sell it for too low since I would not make enough profit. However if I am going to be incented based on π then I may not care, and I may set the price really high. Since I know I will be incented by the sponsor instead.

Maybe this is simply a long way of stating that it is difficult to observe, and decide these values (π, v - c) 'ex ante'. But still since the incentive mechanism may affect the price and hence π, it may make it overly difficult for it to be adopted.

SMM: I think you've identified the main issues. The dirty secret in all this is knowing when Π is too low. If you just match all patent royalties in the economy, then you provide a windfall for projects that the patent system would encourage anyhow. This invites wasteful patent races and anyhow displeases the taxpayers. What you'd like to do is kick in some money for projects that won't be done otherwise, but then you have to figure out who really needs the extra money and who is lying to you.

WA State education and Classification of Research

Avichal 14:54, 8 Oct 2004 (PDT) I browsed through the slides which we could not cover (and I would encourage others to do so, if they haven't already), and the data presented about the state of education in WA state was alarming, to say the least. Actually, I must say, the tone of the whole lecture was a bit like a 'prophecy of doom'. But really if you look at the statistics, you do wonder, "How the hell have we managed to stay afloat so far?"

Coming back to WA state, the data basically shows that we have been importing talent from elsewhere to fill the jobs created in WA state (uh..thanks Microsoft for doing that almost single-handedly).

To jump on another topic, we discussed how research in DARPA Cyber Security research being classified and it's impacts. Now I don't remember the source (uh..my fading memory :-)), probably in the Asprey book, but there was something about Non-residents not being able to work on federally-funded university research projects (presumably the ones related to specific fields). Well, I think that would be catastrophic - given what I just learnt from the last slide (#113) that "roughly half of the Ph.D.s in engineering and computer science were awarded to non-residents"

Diwaker 21:53, 9 Oct 2004 (PDT): Just to add to your point about non-residents and federal funding -- most of the graduate fellowships (atleast in computer science), both federal and otherwise are not available to non-residents. Many a times this deprives non-resident students of funding, thus (potentially) impacting innovation in the long run (an extreme example would be where a talented student has to quit studies). I'm not sure if data exists to make a case in either direction.

Who Wins the Research Debate, Republicans or Democrats?

Okay, so now let's get a little bit controversial. In honor of an important election coming up in 3 1/2 weeks, I'd like to get opinions on which party people think typically makes a greater impact on university research. In class we spoke about issues which I think will continue to haunt us no matter which party is in power, but I also found a comment made in one of the readings for this week to be surprising. The comment stated that republicans typically prefer to fund basic research while democrats prefer to fund research for the "next big product." To me it seems like basic research is the goal of university researchers and this would point at researchers preferring republican candidates. However, I typically get the impression from the media that a great majority of university professors are democrats. Is this apparent inconsistency because professors have more important political concerns then what type of research is promoted, because the media is giving me the wrong impression, or because while republicans prefer basic research and democrats prefer researching the next big product the republican funding is still far less than democratic funding? --Jeff West (UW)

[John Spaith:] I think the key point, as you suggest above, is that professors have more important political concerns than just their funding. I'll add the proviso that they must think the Democrats will still put $$ into their pockets. If they think the $ will get cut off and their jobs are at stake, they may turn to the party they may not agree with on other issues. A good example is a former boss who came to the US as a physist to work on the (now canceled) particle accelerator down in Texas. Economically he was a hard-core Republican, socially he was a hard-core Democrat. This seems to point to him being a Libertarian, except that he wanted the government to massively fund stuff like particle accelerators. So up until Iraq he backed the Republicans. Also the company he and I work for had some anti-trust headaches back in 2000 and Bush was (rightly I think) viewed as more friendly. But this again is having the gun put to your head (research cut off, having your company sliced into 200 pieces by the Feds) that makes you favor one party of the other.

Assuming your research $ is reasonably secure with either party in charge, then you're going to vote along your other beliefs. I once had a PoliSci prof who had pictures of Fidel Castro and Khadaffi in his office. I imagine that even if Bush came out with a check for 5 million dollars and offered to give this prof a back rub, the prof would still would vote Nader. The rest of academia has a similiar (though not so extreme) leftward slant. I believe Knuth wrote something like over %90 of his collegues in CS were athiests or agnostics. If you look at 2000 Presidential elections, how this works out is pretty clear. 2/3 of people who go to church every week voted Bush, 2/3 who didn't voted Gore.

[Damon May:] It's pretty tough to figure out where, exactly, the candidates and their parties stand on discretionary spending on research. Consider this statements from georgewbush.com:

"The President commits 13.5 percent of the total discretionary spending to research and development – the highest level in 37 years."

Of course, as we know, the vast majority of that increase went to the life sciences; but at any rate, this statement on his website seems to portray him as a pretty science-friendly guy. What about this statement from the second debate, then?

"Non-homeland, non-defense discretionary spending was raising at 15 percent a year when I got into office. And today it's less than 1 percent, because we're working together to try to bring this deficit under control."

So he's made a marginal increase in the slice of the pie that goes to R&D... but he's slowed the growth of the pie by 93%.

That would be a very dangerous statement to make in front of a group of research scientists, whose livelihood depends on that spending! But when speaking in front of the nation, research takes a backseat to defense.

As for Kerry, we know that "The Kerry-Edwards plan will restore the discretionary spending caps of the 1990s to ensure that spending - outside of education and security - does not grow faster than inflation" (johnkerry.com). Again, "discretionary spending" seems to be almost a dirty word, with connotations of waste. And again, security is paramount. But I haven't been able to track down many details about how he plans to manage R&D funds, except for the repeated broad statement that he will "invest more in research and development". Has anyone else had more luck?

Bush has a record, so we have some idea of what he'll do to research spending in the future; but the issue is so far down on both candidates' list of priorities that it's hard to know exactly where they stand.

[Joanna Muench:] But research is about more than money coming in. As we've been discussing in class, the product of research is knowledge, and deriving value requires that knowledge be broadly disseminated. The Bush administration's tendency to quash dissenting views does not endear them to researchers in any number of disciplines, notably earth sciences and life sciences. Back in June, 5000 scientists and engineers wrote an open letter to Bush denouncing his misuse of scientific research in estabilishing public policy. Bush demoted the Presidential Science Advisor position to a level that no longer participates Cabinet meetings. Advisory panels are carefully selected to match administration beliefs. A friend of mine was approached by the Bush administration for a position on an advisory panel on Artic research, but turned down when she failed the global climate change litmus test. Almost all the Artic oceanographers failed that one (I believe they found someone with an MS who is not a principle investigator). What is the value of research that is stifled?

Some related articles

Industry And Academia Weigh In:

In December, the Council on Competitiveness -- an organization of CEOs, university presidents, and labor leaders -- will release the recommendations from its yearlong National Innovation Initiative. The report seeks to identify key steps the U.S. should take to keep its leading role as an innovator in the global economy.

Panel: Kerry would take new approach to tech issues:

On the outlook by both the presidential candidate on tech issues.

Diwaker 22:44, 9 Oct 2004 (PDT)

Rights for NBA scores on pagers - what if?

I'm an engineer, not a policy wonk, so bear with me. In class we learned about the Hearst VS AP case that said that you couldn't protect facts unless someone taking those facts would "destroy" the underlying service. In the case about the NBA trying to block the scores of games being broadcast on pagers without them taking a cut of the $$, the quite reasonable claim is that those scores being broadcast would not destroy the NBA and hence it's OK.

OK - suppose that I founded SpaithCO Limited and in 2003 I gave the NBA a wad of cash to have exclusive rights to sell those scores on pagers. (Pretend the real life court case never happened.) Then some heavy weight (say Moto) in 2004 comes along and doesn't want to play ball with SpaithCO. If Motorola can broadcast out NBA scores without paying SpaithCO, then SpaithCO's wise and handsome CEO could argue that his company would be destroyed by Moto's action. Never mind what happens to the NBA.

Does SpaithCO have a claim here? I've been speculating and I believe it depends on whether the NBA had a right to *exclusively* sell this information to SpaithCO for this use in the first place. I'm thinking the answer is no or the NBA would've pulled something like this already to get at least a little $$ out of some SpaithCO. Can anyone out there shed some more light on this? The idea of some underlying service being "destroyed" really seems like a grey area in many cases.

[Author: John Spaith]

SMM: First off, this is a great discussion. You're asking exactly the right questions and the Morris case is a wonderful example.

My reaction to SpaithCO is that you're right to ask whether the NBA has any rights to sell in the first place. But I would sharpen it a bit by asking if the NBA *should* have such rights in principle. Lawyers have to deal with what is, but we have the luxury of considering alternatives.

Now the way I answered that question in class is the way the Supreme Court answered the question back in the INS case in 1919. Would the activity disappear? Notice that this is *not* the same question as "Would SpaithCO disappear?" If we hand out monopoly rights, that's always going to be a good deal for the individual recipients. But that doesn't mean that society should countenance the trade or should agree to put up with DWL, etc. So the rough and ready answer is that property rights -- the right to fence off scores and sell "exclusive rights" -- sounds like a bad idea.

Final point: I'm still saying this in a sloppy way. The underlying thought is "well, the NBA makes a lot of money on its core business and it will go on having games no matter what I do about pager scores." But what I'm really talking about is the patent reward, ((Π)v-c). You can imagine that in some cases the NBA might need to be able to sell its scores to keep the whole operation running. So when I say that the NBA doesn't need this property right, I'm really revisiting the question of whether ((Π)v-c) can be too large. Excessive rewards mean DWL and crazy behavior like races. There's a good argument for setting ((Π)v-c) > 0, but we don't want ((Π)v-c) >> 0.

--Jackr 22:32, 6 Oct 2004 (PDT) To me this sounds like the Cable Company phone directory case also mentioned in class, just with the addition of money being paid to get the initial information. It would seem the NBA managed to sell something it never really owned. Of course, I'm just an engineer as well.

SMM: My reaction when I have my public policy hat on is that we can make up the property rules, particularly in the cyberworld where our hardwired beliefs about private ownership -- which have to do with anthropology at least as much as law -- are somewhat attenuated and up for grabs. The question to focus on is whether creating a property right will do anything to make the economy (not just the participating firms) wealthier.

And enough with the "just an engineer" stuff already! It reminds me of Sam Ervin claiming to be a "country lawyer." :)

-- [apardoe] I believe that the NBA issue stems from the Supreme Court's decision not to hear the PGA vs Morris Communications appeal ( http://www.law.com/jsp/article.jsp?id=1071719761758 ). The PGA is able to protect golf tournament scores and statistics because they are a private company producing this IP (the scores) on private property and license this information to spectators and news organizations. This is to say that the tournament scores are in fact company trade secrets developed at great cost.

My assumption is that the NBA has never "owned" basketball game scores and statistics because they produce this IP on public property. If they are able to align their efforts closely enough with the PGA's IP development process they may be able to protect their IP in the same way that the PGA is able to do so. I can't imagine a basketball team buying a stadium (as opposed to buying a stadium-funding election) but there's gotta be a loophole. [/apardoe]

SMM: The Morris case is very interesting and also near to my current research interests. Thanks for finding it. If you read the district court opinion, they say what you do: PGA doesn't need IP to have "appropriability" because they can fence the place off physically. After that, it's a trade secret and they can make deals about it as long as the whole world hasn't seen the information on TV.

The district court also says that the NBA "free riding" test is a "higher standard" that PGA doesn't have to meet. Instead, PGA can control the information until it has "reaped the full benefit possible from its investment." This sounds innocuous, but from a policy standpoint letting PGA get "full benefit possible" sounds like a huge reward -- i.e., (v-c) on steroids. I suspect that when new cases come before the court we'll find out that the judge's statement is hyperbole.

The appeal court opinion is also interesting. They agree that the PGA's info is a "proprietary product" -- a shadowy distinction, since it creates property rights that Congress never voted for -- but then they go on to worry about free riding anyhow. You might think (heck, I *do* think) that the most natural way to analyse free riding would be under the intellectual property laws, but they've already refused to do that. So what they do instead is argue from cases which say that the Sherman Act is interested in efficient markets and "efficiency" includes the right to control free riding. Like the district court, their concept of free riding is not even remotely similar to the copyright rule which says that mere "sweat of the brow" cannot be protected. They know this is a problem but answer -- somewhat legalistically -- "Gee, that's copyright and we're talking about antitrust here."

That's a pretty good legal answer (not perfect, lawyers like to say "that's a distinction without a difference") but what should disturb us from a policy standpoint is that the policy answer to free riding should be the same no matter what legal rubric we ask the question under. In the long, long, long view what's going on here is that the English Parliament tried to draw a line between "good monopolies" (intellectual property) and "bad monopolies" (Sherman Act) in 1624. You'd think that judges would have untangled the mess by now, but in fact there's been remarkably little progress. I think this is a kind of experimental proof that the division has very deep conceptual problems.

I have pasted a copy of the Morris Circuit Court opinion below. I always recommend reading cases to students, because you soon discover that you don't need three years of law school to get a sense of what's going on. BTW, you can find the text of just about any recent case for free if you are willing to register at http://www.lexisone.com/

BACKGROUND ON THE MORRIS CASE:

MORRIS COMMUNICATIONS CORP., a Georgia Corporation, Plaintiff-Appellant, versus PGA TOUR, INC., Defendant-Appellee.

Nos. 03-10226, 03-11502

UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

364 F.3d 1288; 2004 U.S. App. LEXIS 5915; 70 U.S.P.Q.2D (BNA) 1446; 2004-1 Trade Cas. (CCH) P74,350; 32 Media L. Rep. 1513; 17 Fla. L. Weekly Fed. C 368

March 31, 2004, Decided March 31, 2004, Filed

SUBSEQUENT HISTORY: Rehearing, en banc, denied by Morris Communs. Corp. v. PGA Tour, 2004 U.S. App. LEXIS 19644 (11th Cir., May 28, 2004) Motion granted by, US Supreme Court certiorari denied by Morris Commun. Co. v. Pga Tour, 2004 U.S. LEXIS 6257 (U.S., Oct. 4, 2004)

PRIOR HISTORY: [**1] Appeals from the United States District Court for the Middle District of Florida. D. C. Docket Nos. 00-01128 CV-J-20-HTS, 00-01128 CV-3-J-20HTS. Harvey E. Schlesinger, Judge. Morris Communs. Corp. v. PGA Tour, Inc., 235 F. Supp. 2d 1269, 2002 U.S. Dist. LEXIS 25854 (M.D. Fla., 2002)

DISPOSITION: Affirmed.

COUNSEL: For Morris, Communications Corp, Appellant (03-10226-CC): Borucke, David Clark, Holland & Knight, LLP, Tampa, FL. Gabel, George D. Jr., Holland & Knight, LLP, Jacksonville, FL. Hoffman, Jerome W., Holland & Knight, Tallahassee, FL. Conner, Timothy J., Holland & Knight, LLP, Jacksonville, FL. Brannock, Steven L., HOLLAND & KNIGHT, TAMPA, FL.

For PGA Tour, Inc., Appellee (03-10226-CC): Mishkin, Jeffrey A., Skadden, Arps, Slate, Meagher & Flom, LLP, New York, NY. Riley, James M., Rogers, Towers, Bailey, Jones & Gay, Jacksonville, FL. Vermut, Richard Stuart, Rogers, Towers, Bailey, Jones & Gay, P.A., Jackson, FL. Russell, Cristine M., Rogers, Towers, Bailey, Jones & Gay, Jacksonville, FL.

For Newspaper Association of America, Amicus (03-10226-CC): Hart, Jonathan David, Dow, Lohnes & Albertson, Washington, DC.

JUDGES: Before EDMONDSON, Chief Judge, DUBINA and COX, Circuit Judges.

[*1290]  DUBINA, Circuit Judge:

Plaintiff-Appellant, Morris Communications Corp. ("Morris"), brought suit against Defendant-Appellee PGA TOUR, Inc. ("PGA"), alleging that PGA violated section 2 of the Sherman Act, codified at 15 U.S.C. § 2, by monopolizing the markets for (1) the publication of compiled real-time golf scores on the internet, and (2) the sale, or syndication of those scores. In addition, Morris alleged that PGA further violated section 2 of the Sherman Act by refusing to deal with Morris. The district court granted summary judgment in favor of PGA because it found, inter alia, that PGA had a valid business justification for its actions. For the reasons that follow, we affirm the judgment of the district court.

I. BACKGROUND

A. Facts

Morris is a media company that publishes print and electronic newspapers. PGA is the sponsor of a series of professional golf tournaments throughout North America [**2] known as the PGA Tour. In order to provide golf scores during its tournaments, PGA has developed a Real-Time Scoring System ("RTSS") that allows PGA to monitor the play around the entire golf course. RTSS is an elaborate electronic relay scoring system that relies on state-of-the-art computer technology and equipment as well as dozens of trained workers and volunteers.

RTSS works as follows. During a PGA golf tournament, volunteers known as walking scorers follow each group of golfers on the course and tabulate the scores of each player at the end of each hole [*1291] played. The scores are then collected by other volunteers, known as hole reporters, located at each of the eighteen greens on the golf course, who relay the scoring information to a remote production truck staffed by PGA personnel. The scores of all participating golfers are then processed at the remote production truck and transmitted to PGA's website, www.pgatour.com, as real-time golf scores, which are scores that are transmitted electronically nearly contemporaneously to their actual occurrence on the golf course. At the same time, the compiled scores are also transmitted to an on-site media center where members of the media [**3] are able to access the scores. The same information is also transmitted to various electronic leaderboards located throughout the golf course. As their name suggests, the leaderboards typically show only the top ten or fifteen players' scores.

The nature of a PGA golf tournament makes it impossible for one person to physically follow all the players at once. First, the average golf course spans approximately 150 acres and various golfers play numerous holes simultaneously. In addition, the PGA does not allow its invitees to use cell phones and hand-held devices on the course because such devices might disrupt play. Therefore, the only source of compiled golf scores for all tournament players is RTSS. Likewise, the only physical location at which to obtain compiled golf scores is the media center.

In order for media organizations to have access to the PGA media center, they must obtain free press credentials from PGA. To obtain these credentials, all media organizations must agree to follow PGA's terms and conditions, including PGA's On-Line Service Regulations ("OLSR"). The OLSR require media organizations to delay publication on their internet websites of scoring information obtained [**4] by RTSS until the earliest of (1) thirty minutes after the actual occurrence of the shot n1 or (2) such information has become legally available in the public domain, i.e. after the scores are posted on PGA's official website, www.pgatour.com. n2 In addition, the OLSR prohibit credentialed media

organizations from selling, or syndicating, compiled scoring information obtained in the media center to non-credentialed third-party internet website publishers without first buying a license to do so from PGA. n3

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n1 Prior to 1999, credentialed members of the media could view scores in the media center and then re-key them directly into their own computers for transmission to their company's Internet servers. The result was that competitors of pgatour.com, including Morris, were able to publish real-time scores on their web sites as fast as or possibly faster than pgatour.com. Beginning in January 1999, shortly after the PGA Tour entered into an exclusive syndication contract with USA Today, it instituted [OLSR] applicable to all credentialed media invitees. Around the same time, Morris began publishing scores from PGA Tour tournaments on its web sites and selling them to third parties, and Morris appears to have been the PGA Tour's only major competitor in the syndication market.

Morris Communications Corp. v. PGA Tour, Inc., 235 F. Supp. 2d 1269, 1274 (M.D. Fla. 2002). The version of the OLSR at issue here was instituted in January 2000. [**5]

n2 PGA agreed that once the golf scores are posted on its website, they are in the public domain. Id. at 1275 n.9.

n3 "No scoring information may be used by, sold, given, distributed or otherwise transferred to, any party other than the Credentialed Site in any manner whatsoever, without the prior written consent of PGA TOUR." [R. Vol. 1 at Tab 1, Exh. 4.]

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Morris contends that, as a result of the OLSR, PGA is the only entity able to publish and sell real-time golf scores. Thus, Morris continues, PGA has an unfair advantage in the publication and syndication [*1292] of the scores. PGA counters that it adopted the OLSR to preserve the value of its investment in creating and developing RTSS and to promote the competitiveness of its own website.

Based on the allegedly illegal OLSR, Morris filed suit against PGA, asserting four antitrust claims: (1) monopolization of the internet markets, (2) unlawful refusal to deal, (3) monopoly leveraging, and (4) attempted monopolization of the internet markets. n4

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n4 Morris also alleged violations of Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. Ann. § 501.201 et seq., and tortious interference with contract. Morris has not appealed the district court's grant of summary judgment in favor of PGA on these claims.

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B. Procedural History

After extensive pre-trial discovery, the parties filed cross-motions for summary judgment on each claim. The district court granted PGA's motion for summary judgment, finding that PGA had a valid business justification for its OLSR because the OLSR prevented Morris from free-riding on PGA's investment in its costly RTSS. Accordingly, the district court found that PGA had not violated the antitrust laws even if it operated a monopoly and refused to deal with Morris. n5

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n5 The district court did not, however, find that PGA had unlawfully monopolized or refused to deal. To the contrary, the district court found that Morris failed to prove a § 2 claim of monopolization as a matter of law, Morris Communications, 235 F. Supp. 2d at 1283; that the media center was not an essential facility, id. at 1285; that PGA did not have unlawful intent to harm competition or a competitor, id. at 1284, and thus did not unlawfully refuse to deal with Morris, id. at 1285-86, engage in unlawful monopoly leveraging, id. at 1286, or unlawfully attempt to monopolize, id.

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Subsequent to the granting of summary judgment in favor of PGA, Morris filed a Rule 60 motion for relief from judgment on the ground that, following the issuance of judgment in favor of PGA, PGA adopted new terms of service ("TOS") regarding www.pgatour.com in further violation of § 2 of the Sherman Act. The new TOS prohibit anyone from using the information displayed on www.pgatour.com for a commercial purpose without first buying a license from PGA. The district court denied the motion, finding that the new TOS were beyond the scope of the instant lawsuit, which addressed only PGA's media credentialing regulations and the OLSR. Accordingly, the district court found that Morris's challenge to the new TOS would be more aptly addressed in a separate lawsuit.

Morris timely and separately appealed the adverse summary judgment and Rule 60 orders. This court consolidated the two appeals.

II. STANDARDS OF REVIEW

This court reviews de novo whether the district court correctly granted summary judgment in favor of PGA on all counts, applying the same standard that governed the district court. Levinson v. Reliance Standard Life Ins. Co., 245 F.3d 1321, 1325 (11th Cir. 2001). [**8]

This court reviews whether the district court correctly denied Morris's Rule 60 motion for abuse of discretion. See Bivens Gardens Office Bldg., Inc. v. Barnett Banks of Fla., Inc., 140 F.3d 898, 905 (11th Cir. 1998).

III. ANALYSIS

Before discussing the antitrust issues in this case, it is important to note what this case is not about. Contrary to the arguments of Morris and its amici curiae, this case is not about copyright law, n6 the Constitution, [*1293] the First Amendment, n7 or freedom of the press in news reporting. This case is a straight-forward antitrust case involving a product and a defendant's assertion of a valid business justification as its defense to anticompetitive actions, if any. Also important to note is that this case is being decided based upon the facts presented, not a hypothetical situation, no matter how probable its actualization. n8 Accordingly, the only real issue before us is whether PGA's restrictions and prohibitions regarding Morris's ability to sell compiled real-time golf scores to third parties violates § 2 of the Sherman Act. We do not address Morris's right of access to and internal dissemination of compiled [**9] real-time golf-scores, as permitted by the PGA. n9

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n6 The arguments of Morris and its amici, who are various media organizations, entities, and associations, focus largely on irrelevant copyright law and argue that facts, such as golf scores, and compilations of facts are generally not a proper subject for copyright protection. While this assertion is a correct statement of law, it has no bearing on whether the golf scores and compilation of golf scores are the proprietary product of PGA's RTSS. At oral argument, Morris conceded that this is not a copyright case.

n7 In its argument for summary judgment in the district court, Morris stated that "this case is not a First Amendment case . . . it's an antitrust case." [R. Vol. 10 at pp. 8-9.]

n8 As the district court stated at the hearing on the cross-motions for summary judgment, "all that this court is interested in is the issues that you people bring to it. We're not making advisory opinions. And we don't change the facts. The facts are what the facts are. And what [we] rule on today may be a lot different than the case the two of you are involved in tomorrow." [R. Vol. 10 at p. 106.] [**10]

n9 At the hearing regarding the preliminary injunction, the district court asked counsel for PGA if PGA would permit "Morris . . . to disseminate this information to its companies, its various news companies, not charging them anything, just disseminating it"? Counsel for PGA responded:

There's no problem because that to us is news coverage, and . . . we eagerly, eagerly invite and want the press to do their function, their normal function of gathering and disseminating the news, and because it's so important to us to have them do that, we told Morris a year ago that we would allow them in the media center to sit there and re-key right from there into their own website and any of their related companies as a matter of news coverage, they could have those real-time scores right away for free. . . . The problem comes in only when Morris wishes to go into another business, which they label the news syndication business. . . . It is not the business of gathering and disseminating news. It is the business of selling a commercially valuable product that we have developed and paid for and we ought to be the ones to sell that.

[R. Vol. 8 at pp. 34-36.]

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A. Monopolization n10

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n10 Morris challenges the district court's resolution of its monopolization and attempt to monopolize claims. For the purposes of this case, the elements of the two offenses differ in only one material respect: attempt to monopolize requires specific intent to achieve monopoly power. See Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456, 113 S. Ct. 884, 890-91, 122 L. Ed. 2d 247 (1993) ("To demonstrate attempted monopolization a plaintiff must prove (1) that the defendant has engaged in predatory or anticompetitive conduct with (2) a specific intent to monopolize and (3) a dangerous probability of achieving monopoly power."). Therefore, the attempt claim in this case is more difficult to maintain and prove. Because Morris does not withstand summary judgment on its monopolization claim, it cannot maintain its attempt claim. Accordingly, we decline to discuss the attempt claim further.

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Section 2 of the Sherman Act provides that "every person who shall monopolize, [**12] or attempt to monopolize, . . . any part of the trade or commerce among the several States, . . . shall be deemed guilty of a felony. . . ." 15 U.S.C. § 2. The offense of monopoly under § 2 of the Sherman Act has two elements: (1) the possession of monopoly power in the relevant [*1294] market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident." United States v. Grinnell Corp., 384 U.S. 563, 570-71, 86 S. Ct. 1698, 1704, 16 L. Ed. 2d 778 (1966).

The first element, monopoly power, is the power to control prices in or to exclude competition from the relevant market. United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 391, 76 S. Ct. 994, 1005, 100 L. Ed. 1264 (1956). The second element requires predatory or exclusionary acts or practices that have the effect of preventing or excluding competition within the relevant market. See United States v. Microsoft, 346 U.S. App. D.C. 330, 253 F.3d 34, 58 (D.C. Cir. 2001). In order for a practice to be exclusionary, "it must harm the competitive [**13]  process and thereby harm consumers." Id. "Harm to one or more competitors will not suffice" for a § 2 violation. Id.; see also Consultants & Designers, Inc. v. Butler Serv. Group, Inc., 720 F.2d 1553, 1562 (11th Cir. 1983) ("The relevant inquiry is not whether [a company's] present attempt to exclude adversely impacts competition but rather whether its acquisition of the power to exclude competitors had a sufficiently adverse impact on competition to constitute a [Sherman Act] violation.").

B. Refusal to Deal n11

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n11 Morris challenges the district court's resolution of its refusal to deal and monopoly leveraging claims. For purposes of this case, the elements of the two claims are sufficiently similar to warrant only one discussion. See Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 157 L. Ed. 2d 823, 124 S. Ct. 872, 883 n.4 (2004) ("Leveraging presupposes anticompetitive conduct, which in this case could only be the refusal-to-deal claim we have rejected.").

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Two theories exist upon which to predicate a unilateral refusal to deal claim: (1) the intent test and (2) the essential facility test. Mid-Texas Communications Sys., Inc. v. AT&T, 615 F.2d 1372, 1387 n.12 (5th Cir. 1980). n12 Under the intent test, it is unlawful for a monopolist to maintain or extend its monopoly power by intentionally engaging in conduct that unnecessarily excludes competitors and impairs competition. See id. at 1388; see also Eastman Kodak Co. v. S. Photo Materials Co., 273 U.S. 359, 47 S. Ct. 400, 71 L. Ed. 684 (1927).

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n12 In Bonner v. City of Prichard, 661 F.2d 1206, 1207-09 (11th Cir. 1981) (en banc), this court adopted as binding precedent all Fifth Circuit decisions issued prior to October 1, 1981.

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Under the essential facility test, a company that has exclusive control over a facility essential to effective competition may not deny potential competitors access to that facility on reasonable terms and conditions if [**15] to do so would create or maintain monopoly power in the relevant market. Covad Communications Co. v. BellSouth Corp., 299 F.3d 1272, 1285 (11th Cir. 2002), cert. granted and judgment vacated on other grounds, 124 S. Ct. 1143, 157 L. Ed. 2d 1040 (2004); MCI Communications Corp. v. AT&T, 708 F.2d 1081, 1132-33 (7th Cir. 1983); see also Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 157 L. Ed. 2d 823, 124 S. Ct. 872, 881 (2004) ("The indispensable requirement for invoking the doctrine is the unavailability of access to the 'essential facilities'; where access exists, the doctrine serves no purpose."). The plaintiff has the burden of proving that the defendant controls an essential facility that cannot be practically or economically duplicated. See Covad Communications, 299 F.3d at 1285.

 In the absence of any purpose to create or maintain a monopoly, however, a  [*1295]  company may deal or refuse to deal with whomever it pleases. Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 601-02, 105 S. Ct. 2847, 2857, 86 L. Ed. 2d 467 (1985) (quoting United States v. Colgate & Co., 250 U.S. 300, 307, 39 S. Ct. 465, 468, 63 L. Ed. 992, 1919 Dec. Comm'r Pat. 460 (1919)). [**16]  Even a company with monopoly power has no general duty to cooperate with its business rivals and may refuse to deal with them if valid business reasons exist for such refusal. See Mid-Texas Communications, 615 F.2d at 1388.

Ordinarily, when determining whether a defendant has violated § 2 of the Sherman Act, we first determine the relevant market and then decide whether the defendant possessed monopoly power in that market. In this case, however, we do not pursue such an inquiry because we agree with the district court that even if PGA possessed monopoly power in the relevant market, Morris's § 2 claims cannot prevail because PGA has a valid business justification for its actions. Therefore, even if PGA is monopolistic, and even if PGA refused to deal with Morris, it has not violated § 2 of the Sherman Act.

C. Valid Business Justification as a Defense

"The Sherman Act is . . . the 'Magna Carta of free enterprise,' but it does not give judges carte blanche to insist that a monopolist alter its way of doing business whenever some other approach might yield greater competition." Verizon Communications, 124 S. Ct. at 883 (internal quotations [**17] omitted). To the contrary, "Section 2 of the Sherman Act . . . seeks merely to prevent unlawful monopolization" and unlawful refusals to deal. Id.

Unlawful monopoly power requires anticompetitive conduct, which is "conduct without a legitimate business purpose that makes sense only because it eliminates competition." Gen. Indus. Corp. v. Hartz Mountain Corp., 810 F.2d 795, 804 (8th Cir. 1987); see also, LePage's Inc. v. 3M324 F.3d 141, 153-54 (3rd Cir. 2003) (discussing Conwood Co., L.P. v. United States Tobacco Co., 290 F.3d 768 (6th Cir. 2002), cert. denied, 537 U.S. 1148, 154 L. Ed. 2d 850, 123 S. Ct. 876 (2003)). Likewise, refusal to deal that is designed to protect or further the legitimate business purposes of a defendant does not violate the antitrust laws, even if that refusal injures competition. See Aspen Skiing, 472 U.S. at 604, 105 S. Ct. at 2858; see also NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 137, 119 S. Ct. 493, 499, 142 L. Ed. 2d 510 (1998) (citing Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 225, 113 S. Ct. 2578, 2589, 125 L. Ed. 2d 168 (1993)), [**18]  for the proposition that "even an act of pure malice by one business competitor against another does not, without more, state a claim under the federal antitrust laws"); United States Football League v. National Football League, 842 F.2d 1335, 1360 (2d Cir. 1988) (concluding that no § 2 liability existed where network's actions were based on desire "to obtain $ 736 million in rights fees, not to exclude competitors").

Once the defendant has met its burden to show its valid business justification, the burden shifts to the plaintiff to show that the proffered business justification is pretextual. See U.S. Anchor Mfg., Inc. v. Rule Indus., Inc., 7 F.3d 986, 1002 (11th Cir. 1993); see also Image Technical Servs., Inc. v. Eastman Kodak Co., 125 F.3d 1195, 1212 (9th Cir. 1997).

In this case, PGA met its business justification burden by showing that it seeks to prevent Morris from "free-riding" on PGA's RTSS technology. See Cont'l T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 55, 97 S. Ct. 2549, 2560, 53 L. Ed. 2d 568 (1977) (stating that prevention of "free-riding" by competitors is a legitimate business [*1296] purpose); [**19] Consultants & Designers, 720 F.2d at 1559 (concluding that defendant "had a legitimate interest in protecting from opportunistic appropriation its investment in acquiring the information necessary to carry on its business"). To achieve its business purpose, PGA has refused to grant Morris access to PGA tournaments unless Morris agrees not to sell the product of PGA's proprietary RTSS - compiled real-time golf scores - to noncredentialed third-party internet publishers. Morris responds that it has a right to sell such product notwithstanding that RTSS was developed and paid for, and is operated by, PGA. n13 We disagree with Morris. The compiled real-time golf scores acquired through RTSS are not a product that Morris has a right to sell because they are a derivative product of RTSS, which PGA owns exclusively. n14 We agree with the district court that PGA "has a right to sell or license its product, championship golf, and its derivative product, [compiled] golf scores, on the Internet in the same way the [PGA] currently sells its rights to television broadcasting stations." Morris Communication Corp. v. PGA Tour, Inc., 235 F. Supp. 2d 1269, 1282 (M.D. Fla. 2002). [**20]

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n13 Morris also argues that PGA is not allowed to put restrictions on the dissemination of the compiled golf scores once they reach the media center because PGA did not previously put any restrictions on their dissemination. This argument is unpersuasive. PGA has a right to control its property interest in its RTSS and the compiled golf scores, which are the product of RTSS, regardless of its past practices. As the district court stated: "what [PGA] say[s] the delay should be and what delay [PGA] can legally impose are two different things perhaps." [R. Vol. 10 at p. 104.] The lack of prior restrictions is merely indicative of PGA's symbiotic relationship with the media.

n14 Morris stated in the district court that it was "not disputing that [PGA] may have a property right." [R. Vol. 10 at p. 93.] As counsel for PGA stated at the hearing on the preliminary injunction: "without this elaborate, comprehensive system there wouldn't be real-time scores that Morris would like to sell to third parties. It just wouldn't be there because these don't exist in the air." [R. Vol. 8 at p. 31.]

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If Morris wishes to sell PGA's product, it must first purchase it from PGA. See Consultants & Designers, 720 F.2d at 1559 (explaining that plaintiff did not have the right to abrogate defendant's property interest). Section 2 of the Sherman Act does not require PGA to give its product freely to its competitors. See Seagood Trading Corp. v. Jerrico, Inc., 924 F.2d 1555, 1573 (11th Cir. 1991) (stating that it "is not a function of the antitrust laws" to equip plaintiffs with defendants' competitive advantages). PGA is willing to sell its product to its competitors, including Morris, thereby allowing credentialed media organizations like Morris to syndicate compiled real-time golf scores after paying a licensing fee to PGA. Accordingly, we conclude from the record that PGA has satisfied its burden to show a valid business justification.

D. Business Justification Is Not Pretextual

Because PGA has met its burden of showing that its asserted business justification is valid, the burden shifts to Morris to allege facts that support an inference that the proffered justification is merely pretextual, thereby establishing genuine issues of material [**22] fact. U.S. Anchor Mfg., 7 F.3d at 1002; see also Image Technical Servs., 125 F.3d at 1212. Morris argues that PGA's only justification for its refusal to deal with Morris on Morris's terms is economic and such sole motivation is not a valid business justification; thus, PGA's justification is pretextual. See LePage's, 324 F.3d at 163 ("Defendant's assertion that it acted in furtherance of its economic interests does not constitute the type of [*1297] business justification that is an acceptable defense to § 2 monopolization.").

Morris supports its argument with a series of cases which are fundamentally distinguishable from this case. In the cases upon which Morris relies, the plaintiffs alleging antitrust violations had created with their own work and efforts, or purchased with their own money, their very own products that defendants prohibited them from selling. See, e.g., Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 485, 112 S. Ct. 2072, 2092, 119 L. Ed. 2d 265 (1992) (plaintiffs "invest substantially . . . in parts inventory"); Aspen Skiing, 472 U.S. at 587-88, 105 S. Ct. at 2850 [**23] (plaintiff developed and maintained its own competitive ski resort and ski packages); Lorain Journal Co. v. United States, 342 U.S. 143, 149-50, 72 S. Ct. 181, 184-85, 96 L. Ed. 162 (1951) (injured competitor trying to sell its radio air time for advertisements); Int'l News Serv. v. Associated Press, 248 U.S. 215, 221, 39 S. Ct. 68, 69, 63 L. Ed. 211 (1918) (plaintiff "gathers in all parts of the world, by means of various instrumentalities of its own, by exchange with its members, and by other appropriate means, news and intelligence of current and recent events of interest to newspaper readers"); LePage's, 324 F.3d at 144 (plaintiff selling its own transparent tape); Microsoft Corp., 253 F.3d at 63 (injured competitors deterred from selling their own computers and browsers); Nat'l Basketball Ass'n v. Motorola, Inc., 105 F.3d 841, 854 (2d Cir. 1997) (analyzing free-riding issues and noting that plaintiff did not free-ride because it used its own efforts to conduct business); U.S. Anchor Mfg., 7 F.3d at 990 (plaintiff manufactures and supplies anchors); Trans Sport, Inc. v. Starter Sportswear, Inc., 964 F.2d 186, 187 (2d Cir. 1992) [**24] (plaintiffs purchased product from defendants).

Morris refers to this distinction as PGA's "sweat of the brow" defense and correctly states that it is not a defense in a copyright case. Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 359-60, 111 S. Ct. 1282, 1295, 113 L. Ed. 2d 358 (1991) (concluding that "sweat of the brow" is no defense in a copyright case). [Appellant Br. at 53-55.] This well-established rule of copyright law is irrelevant, however, in this antitrust case. The "sweat of the brow" product, to which Morris (and the district court) refer, is no different than, for example, the interconnection services in Verizon Communications, 124 S. Ct. at 876, the job shoppers in Consultants & Designers, 720 F.2d at 1555, and the sports jackets in Starter Sportswear, 964 F.2d at 187.

Moreover, even if we overlook the fundamental and dispositive distinction between this case and the cases cited by Morris, the case law supports summary judgment in favor of PGA. See Verizon Communications, 124 S. Ct. at 879 ("Aspen Skiing is at or near the outer boundary of § 2 liability"); [**25] Aspen Skiing, 472 U.S. at 593-94, 105 S. Ct. at 2852-53 (defendant refused to accommodate and cooperate with plaintiff, refused to sell its product to plaintiff, and acted contrary to its own economic interests in order to eliminate plaintiff); Otter Tail Power Co. v. United States, 410 U.S. 366, 370-72, 93 S. Ct. 1022, 1026-27, 35 L. Ed. 2d 359 (1973) (defendant was already in the business of selling a service to certain customers and refused to sell the same service to certain other customers); Lorain Journal, 342 U.S. at 148-49, 72 S. Ct. at 183-84 (defendant refused to sell to plaintiff in violation of the Sherman Act); Starter Sportswear, 964 F.2d at 189-91 (holding, in a factually analogous case, that defendant had valid business justification for refusal to deal); Fishman v. Estate of Wirtz, 807 F.2d 520, 562 (7th Cir. 1986) (holding defendant liable under § 2 for refusing to lease Chicago Stadium to plaintiff).

[*1298]  The relevant law supports our conclusion that Morris's argument is unavailing and does not show that PGA's business justification is pretextual. The prevention [**26]  of free-riding, which is an inherently economic motivation, provides a valid business justification on the facts presented here. Accordingly, Morris has not raised any issues of material fact and summary judgment in favor of PGA was proper. See Int'l Rys. of Cent. Am. v. United Brands Co., 532 F.2d 231, 239-40 (2d Cir.), cert. denied, 429 U.S. 835, 50 L. Ed. 2d 100, 97 S. Ct. 101 (1976) (stating that proof of a company's reasonable steps to preserve its business interests does not, without more, raise a genuine issue of material fact under § 2).

E. Morris's Rule 60(b) motion

Relief pursuant to Rule 60(b)(2) is appropriate only if the moving party offers newly discovered evidence that could alter the outcome of the trial. See Wilson v. Thompson, 638 F.2d 801, 804 (11th Cir. 1981); Fed. R. Civ. Pro. 60(b)(2). Because we review the district court's decision for abuse of discretion, "it is not enough that a grant of the motion might have been permissible or warranted." Fackelman v. Bell, 564 F.2d 734, 736 (5th Cir. 1977). After reviewing the record, we conclude that the district court [**27] did not err in finding that the new TOS evidence would have failed to alter the outcome of the trial in light of PGA's valid business justification for its regulations. Accordingly, we hold the district court did not abuse its discretion when it denied the Rule 60 motion.

IV. CONCLUSION

Contrary to Morris's argument regarding copyright law, this case is not about copyright and the district court did not find the golf scores to be trade secrets. n15 The district court correctly found that a company - even a monopolist company - that expends time and money to create a valuable product does not violate the antitrust laws when it declines to provide that product to its competitors for free. PGA has accommodated Morris at every step along the way, has agreed to sell its product to Morris, and has acted appropriately to protect its economic interests and investments. Yet Morris demands that it be given access to the product of PGA's proprietary RTSS, without compensating PGA, so that Morris can then sell that product to others for a fee. That is the classic example of "free-riding," the prevention of which, under antitrust law, constitutes a legitimate pro-competitive reason [**28] for imposing a restriction. For the foregoing reasons, we affirm the district court's grant of summary judgment in favor of PGA and the district court's order denying Morris's Rule 60(b) motion.

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n15 "The [PGA]'s property right does not come from copyright law, as copyright law does not protect factual information, like golf scores." Morris Communications, 235 F. Supp. 2d at 1281.

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AFFIRMED.