March 2007

Given the sudden rush of interest on patent reform, with two excellent pieces today referencing Irwin Jacobs’ recent talk here at Heritage, I thought I’d provide a link so you can see it for yourself.

Enjoy.

The patent system “has overall worked very well in encouraging innovation and, particularly in our case, in allowing us to grow to a significant company,” remarked Qualcomm co-founder Irwin Mark Jacobs at the Heritage Foundation last week. To many, the patent system works too well. Our present system awarded a patent for a garbage bag that looks like a pumpkin, for example. Someone else patented a method for swinging on a swing. Jacobs acknowledges patent quality is critical and wants Congress to allow the Patent & Trademark Office to retain all of its user fees, but warns that other reforms could have unintended consequences.

Besides ending the diversion of some $90 million in PTO fees to fund other government programs, the chairman of the House subcommittee responsible for intellectual property, Rep. Howard L. Berman (D-CA), also wants to “improve patent quality, deter abusive practices by unscrupulous patent holders, and provide meaningful, low-cost alternatives to litigation for challenging patent validity.”

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In my latest column on GigaOM, I speak to the meteoric rise of “patent reform” as an issue for Washington lobbyists. As Tim Lee points out in his latest entry, it isn’t always clear that patents=innovation. Irony note: it is Verizon — not Vonage – that is a member of the Coalition for Patent Fairness, which aims to reduce the burdens of patent litigation:

When Democrats took control of Congress last election, the lobbyists for all the big technology and telecom companies in Washington pulled out their wish lists, ripped them up, and re-arranged their legislative priorities.

Gone was the push for sweeping telecommunications legislation, hemispheric-wide free-trade agreements and limitations on Internet taxes. Only a Republican Congress and White House could agree upon those.

A new priority has emerged: overhauling the nation’s patent system. Seemingly out of nowhere, it is suddenly all the talk of Washington’s political-corporate machinations.

Links to this Drug Enforcement Administration page are traversing the blogosphere, along with instructions not to submit phony tips.

Submitting phony tips would be improper and unwise, especially if you are doing so from an IP address than can be linked back to you. You wouldn’t want to interfere with the federal government’s ever-growing usurpation of state power and its ever-more-thorough meddling in people’s business.

A very sensible video editorial from Walt Mossberg:

I agree with Mossberg that we need “a law written from the perspective of the consumer and the internet, rather than strictly from the perspective of the copyright holders.” But I think Mossberg is lumping together two things that it might be better to keep clearly distinct: the DMCA’s anti-circumvention language, and its notice-and-takedown provisions. As I’ve said repeatedly on this site, I think the former are bad news from almost every perspective and should be repealed. But I don’t think the latter is so terrible, and I haven’t seen anyone propose an alternative that I can get excited about. Clearly, if copyright is going to mean anything, Viacom has to have some cause of action when people upload non-trivial amounts of its copyrighted materials onto YouTube. For all of their flaws, the notice-and-takedown provisions seem to strike a pretty good balance. I would be hesitant to start lobbying Congress to re-consider that part of the DMCA before we have a clear idea of what ought to replace it.

TLF’s Adam Thierer yesterday posted about the “Other America” — the part that just doesn’t give a hoot about broadband. But get ready for another shocker: there are also some that don’t care about over-the-air television.

This was pointed out by the ever-quotable Gary Shapiro — chief of the Consumers Electronics Association — at a DC policy forum yesterday. Citing a CEA survey on how people will handle the DTV transition, he argued that consumers would make informed decisions about the DTV transition, with some buying new sets, some getting converter boxes.

“Others”, he added, “frankly, don’t care. You know, not everyone really wants free over-the-air broadcasting in their home,” Shapiro said. Its not just that 85 percent of viewers have cable or satellite service. Quite a few are quite happy with video games and DVDs, he explained. (according to Communications Daily).

Leave it to Shapiro to point out that the Emperor has no rabbit ears. In Washington circles, over-the-air TV is treated like a basic human need, like air itself. For weeks now, policymakers have been in a tizzy over the potential public reaction when analog signals are turned off in February 2009. (With the NAB even fretting over “disenfranchised” television sets.)

Certainly some people will care when the transition takes place — but the reaction will likely be less than the DC echo-chamber expects.

“There is fear-mongering going on and, frankly, this has become a political issue,” Shapiro said. “It is easy to go to government and say, ‘We need more money for something’. But the question is, is it really needed?”

It may be time to stop pushing that DTV panic button. And to put down that shovelful of money.

REAL ID, the Race Card

by on March 27, 2007

I testified in Congress yesterday, at a hearing on the REAL ID Act in the Senate Homeland Security and Governmental Affairs Committee’s Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia.  My testimony is here.

An issue that I sought to highlight comes from studying the REAL ID regulations carefully: The standard that the Department of Homeland Security selected for the 2D bar code that would go on REAL ID compliant cards includes race/ethnicity as one of the data elements. 

DHS does not specifically require inclusion of this information, but states are likely to adopt the entire standard.  Thus, starting in May 2008, many Americans may be carrying nationally uniform cards that include race or ethnicity in machine-readable formats – available for scanning and collection by anyone with a bar code reader.   Government agencies and corporations may affiliate racial and ethnic data more closely than ever with information about our travels through the economy and society.

This was not intended by the authors of the REAL ID Act, nor was it intended by the regulation writers at the Department of Homeland Security.  The Belgian colonial government in 1930s Rwanda had no intention to facilitate the 1994 genocide in that country either, but its inclusion of group identity in ID cards had that result all the same.

The woman in the image below, believed to be a genocide victim, is categorized as a Tutsi just below her photograph.  Her name is not seen, as it appears on the first page of this folio-style ID document.  The names of her four children, though, are written in on the page opposite the photo.

The lessons of history are available to us. The chance of something like this happening in the United States is blessedly small, but it is worth taking every possible step to avoid this risk, given an always-uncertain future.  In a society that strives for a color-blind ideal, the federal government should have no part in creating a system that could be used to track people based on race. 

 photo by Jerry Fowler, USHMM

Cross-posted from Cato@Liberty

From Greg Costikyan of Manifesto Games, on DRM and information. From the “creators are getting screwed” genre, but makes some interesting points regarding the need of creators for DRM even if the intermediaries (distributors, marketers) are taken out of the game.

The “creators are getting screwed” genre is a subset of the larger argument that takes the form of “__A___ is doing it all wrong, they just need to __B__,” where A=some person with substantial experience in an immensely complex field (a football coach or the entire recording industry, for example) and B=some simple alternative arrangement that comes to mind in casual conversation. It is usually not nearly that simple, as I suspect Greg has the savvy to recognize (particularly since he notes that his own gameco that is more generous with artists, is operating in the red). Dollars do not lie around on sidewalks for long.

Mike Masnick warns that the future of VoIP is in jeopardy:

You have to wonder how many times fans of the patent system have to repeat the mantra that “patents encourage innovation” before they can actually believe it. There continues to be new evidence on nearly a daily basis of patents doing the exact opposite that it’s hard to believe the patent system retains as many supporters as it does. The latest is that a ton of patent holders are preparing to sue over various VoIP-related patents, following the news of Verizon’s big win over Vonage for VoIP patents. The problem, of course, is that tons of companies (some big, some small) all claim patents on various aspects of VoIP — creating the very definition of the “patent thicket.” That is, there are so many patents around the very concept of VoIP that no one company can actually afford to offer a VoIP service, since the cost to license all the patents is simply too prohibitive. Expect plenty more lawsuits in the near future as this all comes out in court. The big players will use their patents to keep out competition, and the small players will use the patents to try to create an NTP-style lottery ticket. The lawyers will all win — but consumers who just want to use VoIP will lose big time. What’s wrong with letting companies simply compete in the marketplace and letting the natural forces of competition encourage innovation? Instead, we get patent holders trying to hold back competition and hold back innovation.

I think critics of the patent system need to be careful about over-stating our case. I don’t think software patents will destroy the VoIP industry. Rather, they will serve as a steady drag on the industry, raising the cost of doing business and forcing innovative upstarts to spend their money hiring lawyers rather than engineers. This will, in turn, tilt the playing field to Verizon’s benefit.

Most likely the result will be that small, entrepreneurial firms will be squeezed out of the market, leaving a bifurcated market between large, deep-pocketed incumbents on the one hand, and decentralized open source projects and overseas firms on the other. Tech-savvy Americans will have no trouble finding and installing innovative VoIP solutions, but for the vast bulk of Americans, they’ll have to use whatever Verizon and other patent-heavy firms choose to dish out. (It’s an interesting question what will happen to firms like Skype, Apple, AOL, and Google that offer “pure Internet” voice calling and have not, to date, made a significant dent on the telephone market)

What this case makes crystal clear is that there’s no appreciable connection between which innovating and getting patents. No one would argue that Verizon has been more innovative than Vonage in the VoIP market, yet because Verizon has spent more money filling for patents in recent years, Vonage is placed in the ridiculous position of paying Verizon for the privilege of using Verizon’s “inventions.”

In yesterday’s Wall Street Journal, Cyren Call Chairman Morgan O’Brien and Frontline Wireless Chairman Janice Obuchowski each had a letter to the editor responding to my March 13th op-ed about first responder communications. I’d like to take up just a few sentences to respond.

O’Brien writes that I “audaciously misrepresent[ed]” Cyren Call’s proposal, but does not point out what that misrepresentation was. So, I can’t answer. Obuchoski, on the other hand, does point out a misstatement about Frontline’s plan. She writes,

[Brito] misstates that the plan would build “an interoperable network over spectrum purchased at auction; but Frontline wants the FCC to restrict that spectrum to public safety use.” Frontline will offer commercial service in the spectrum won at auction and provide public safety with pre-emptible access during emergencies to this commercial spectrum to provide additional capacity during peak periods of crisis when first responders’ communications requirements spike. This spectrum would remain in commercial use at all other times.

The thing is, I have always fully understood that the Frontline proposal would share he spectrum with public safety and commercial users. The error was introduced by a WSJ edit made after the last version of the op-ed that I approved the evening before it was published. (I don’t blame the WSJ; they were probably just editing for length or style.)

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