Every week, I look at a software patent that’s been in the news. You can see previous installments in the series here. In this week’s software patent adventure, Arbitron has sued competitor IPSOS for violating its patents on its “technologies” relating to collecting audience data from TV viewers and radio listeners. As Arbitron’s press release puts it:
Steve Morris, president and chief executive officer of Arbitron, said, “As a leading innovator of electronic audience measurement technology, we welcome competition as a way to foster the growth of the market. However, we must take action against companies that attempt to profit from our innovation by infringing Arbitron’s patents on the technology that we have worked so long and at such expense to develop. We have invested significant financial and other resources during the last 15 years in the development and testing of our PPM System and we will work aggressively to protect our investment and our intellectual property.”
I put “technology” in scare quotes because I think the word tends to be an obstacle to clear thinking when it comes to patent issues. Here is one of the three patents in question. It covers:
A method and apparatus for automatically identifying a program broadcast by a radio station or by a television channel, or recorded on a medium, by adding an inaudible encoded message to the sound signal of the program, the message identifying the broadcasting channel or station, the program, and/or the exact date.
How does it do this?
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While looking for this week’s software patent, I came across this story about about Transmeta’s lawsuit against Intel:
Transmeta was the first company to emphasise that power consumption was going to be a major headache for chip and computer makers. It claimed that its Crusoe processors would be able to run the same software as Intel chips, but gobble up less electricity, thus leading to longer battery life.
Although the company landed early deals with Sony and Fujitsu when Crusoe arrived in 2000, it did not live up to its goals. Crusoe’s performance was middling, and Transmeta had several problems getting new versions out the door. Deals with Toshiba and others evaporated.
The chipmaker then went through several rounds of layoffs and changed its chief executive three times before refashioning itself into an intellectual property firm last year.
I wonder if “intellectual property firm” is a euphemism for “patent troll.”
It’s really quite a sad story. Transmeta was an innovative company with some amazing technology. As near as I can tell, they were crippled by poor execution and some bad business decisions. It’s too bad that this will be the final chapter of their corporate history.
On Monday, October 9th, Sen. Joe Lieberman (D-CT) delivered a major address about Internet content and online child safety that was intended to serve as a sort of call-to-arms for policymakers, parents and industry to get more serious about the issue.
In his wide-ranging remarks, Lieberman bemoaned the relentless pace of technological change and how the Internet and digital media technologies were making it increasingly difficult for parents to protect children from objectionable material or, worse yet, child predators. “The Internet is a wondrous, revolutionary medium,” Lieberman said. “But there is too often a thin line between the awe-inspiring and the simply awful, and with each new technological breakthrough, it seems that the opportunities for our children to fall into that awful gap grow greater and graver.”
In this essay, I will dissect Sen. Lieberman’s manifesto and provide a detailed response to his assertions and proposals. I feel this is necessary because his address touches on many of the major themes and proposals that are framing the debate over Internet regulation that is taking place in America today.
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Last week I was in New York City for a hearing on ticket scalping (I prefer the nice term “reselling”) and the impact scalping (resale) laws have on online businesses like eBay, StubHub and RazorGator. My colleague, Steve DelBianco, testified at what turned out to be an interesting hearing on what’s really best for the consumer (see his blog post on this). I’m happy to say that most agreed that a free market for secondary sales of tickets is in a consumer’s best interest.
Gone are the days of having to go to the event and purchase a ticket from some gruff, shady character. Sites like eBay and StubHub offer a safe (and often guaranteed) experience for buying and selling tickets. But in case you haven’t noticed, venues and teams will often prevent these resales–just look at the small type language on the back of your ticket next time you’re at a Yankees game (which, thankfully, won’t be until next year!). The Yankees have already “evicted” 10 or so season ticket holders because they resold their tickets (mostly on eBay). These restrictions are on single-game tickets as well.
So here’s where the libertarian in me is somewhat conflicted. The ticket is legally a license, so it is a contract that I willfully entered into. If the Yankees want me to only use THEIR approved exchange to resell my ticket, I agreed to that. BUT, don’t most people assume their ticket is personal property, to give or sell to whomever at whatever price? Perhaps this is a property rights issue.
Regardless, here is the testimony that my organization presented last week. And if you’re really interested in how corrupt the entertainment and Broadway ticket sales market is in NYC (something that an open and transparent online market would help), check out this Spitzer report.
Matt Yglesias posts an email he got from minority leader Pelosi:
House Democratic Leader Nancy Pelosi, the Democratic leadership, and senior members of the Ways and Means Committee sent a letter to President Bush today calling for immediate action to promote and safeguard American intellectual property (IP) around the world. The Democrats made the case that cracking down on piracy and theft of American IP is critical to restoring economic growth, creating jobs and shrinking the trade deficit.
His analysis of this is exactly right:
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Several places today I’ve read paeans to Tower Records which is going out of business.
An example here on DCist struck me because the author recalls her first Tower purchase, Radiohead’s The Bends. First purchase – Radiohead?! I’m getting old.
Though the write-ups I’ve seen sound the obligatory notes of sadness, there is an underlying current of inevitability – even appreciation – that a record store should find its way to oblivion. Without creative destruction, we would not have innovation. So, so long, Tower.
The first purchase I recall making at Tower – yes, age forces a retreat to what I recall – was the Dead Kennedys’ In God We Trust, Inc., purchased at the Tower in Mountain View across from the San Antonio mall. A great record. (And I assume a great CD, MP3, etc.)
How ’bout some Tower reminiscences in the comments? Who can beat the DKs for a first purchase?
From Lake Tahoe a thought: If shrinking the size of government proves a problem, perhaps one can continue to grow the private sector so that the state is comparatively small? One must take care that the state does not grow in ways that make private growth impossible. Beware unfunded entitlements…
And links to my synopses of Carver Mead’s talk, information on optical computing, discussion of talks by Steve Forbes and John Rutledge, and a discussion of distributed computing. Oh, and Peter Huber.
John Batelle has a great interview with EFF’s Fred Von Lohmann, where he discusses the legal implications of Google’s YouTube acquisition:
YouTube has already been sued (by LA New Service), so Google is essentially buying that lawsuit. But I don’t think that’s a problem–frankly, precedent set against YouTube will likely exert strong influence over the entire video hosting industry. So, in essence, Google is just getting more direct control over a lawsuit that is important for its existing and future business. And when it comes to lawsuits, Google has top-drawer talent (both in-house and in outside law firms), strategic vision, and a stellar track record. Google’s executives (like AOL’s and Yahoo’s before them) understand that shaping the legal precedents is a critical part of their business.
And it’s important to consider who are the people suing YouTube. I’ve thought for some time that the first lawsuits against YouTube (and other video hosting services) will be from small copyright owners (like LA News Service), not from major media companies. That’s good news for YouTube (and Google). Small timers tend to lack the resources to bring top-drawer legal talent to bear in these fights. As a result, they often lose, creating useful precedents for the Google’s of the world. In fact, Google has already been successful in securing good precedents against unsophisticated opponents who thought that they could squeeze a quick settlement out of Google (Field v. Google, Parker v. Google). What the small-timers don’t appreciate is that Google would much rather spend money on setting a good precedent than on settling.
I think there’s another factor that’s likely to lessen the legal peril for Google: a judge may perceive Google as too big and important to fail.
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EFF links to a New York Times article on a Department of Homeland Security program to “let the government monitor negative opinions of the United States or its leaders in newspapers and other publications overseas.” The EFF’s Marcia Hofmann thinks that it “could affect the willingness of journalists to report negative information or controversial opinions about the United States, and otherwise chill online speech protected by the First Amendment.”
My reaction is rather different: the program strikes me as being somewhere between harmless and silly. They’re just taking publicly available stories and running them through text analysis software in an effort to gauge how “hostile” they are. It’s not obvious that this software will be able to do anything that a team of human analysts couldn’t. In fact, in the short term, at least, the human analysts are likely to be substantially better, as natural language processing technology is far from prime time.
Even if I’m wrong and this turns out to be an incredibly powerful tool for monitoring foreign media, I don’t see how it would be a threat to free speech. This is foreign media we’re talking about, so DHS couldn’t censor them if they wanted to. And all the information they’re using is available to the general public, so I don’t see any serious privacy implications. We can debate whether it’s worth the $2.3 million price tag, but this doesn’t seem like a program that civil libertarians should be upset about.
Here’s one more example of startups and intellectual property: this summer, a startup company called Kiko decided to throw in the towel, and they did it by putting the company’s assets up for auction on eBay. The shareware site Tucows bought it for $258,100. What’s most interesting about this is that the sale occurred in a very public manner, and the winning bidders have described in detail why they bought it. For the purposes of my discussion about startups and IP, I think this is the most interesting part of their analysis:
It was clear from their posts and such that Justin and Emmett were no longer passionate about the calendar space and were excited to do something else. They felt, and we agree, that this was worth much more with them along for the ride. Probably by a factor of ten. It would have then attracted a completely different type of buyer. We would not have paid that premium for the people. Not that they aren’t worth it. Just that our financial calculus was different. This probably kept some of the natural buyers out of the process.
We also did not need a huge base of retail users. They are nice and we will provide them with a great home but if this had been much of a success outside of Mike’s 53,651 it probably would have attracted more financial buyers or domainers and the price might have ended up more than we were willing to pay. It is worth noting here (and we also talk more about this in the podcast) that there was clearly interest in the domain name and the traffic. We will certainly monetize that as it is a space we know well, but we also may choose to sell the name off as it is not core for us. Either way it is another place where we, more than most/all other buyers who would be interested in the calendar functionality, will be uniquely able to take advantage of the assets.
This is interesting because this gives us a rare opportunity to guage the value of a company’s bare code without the staff, customers, and other assets that usually accompany it. Both Kiko’s founders and Tucows seem to believe that the code is valuable–$258,100 is obviously not pocket change–but that a functioning company is worth an order of magnitude more.
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