A few links to discussions of the current patent reform legislation:
From Matt Buchanan’s Promote the Progress; cheaper iPods, fewer cures?
Robert Armitage on how the courts have beaten Congress to the punch.
And a quote from Robert Cresanti, now with Ocean Tomo:
“[Ocean Tomo] will still proceed with the exchange (even if pending Congressional reforms pass), but many patents may be devalued.”, he warned. “Our hope is the Senate will come around to the same conclusion we have – that there is no pressing need for reform in light of what the courts and USPTO have done.”, he added.
Over at Techdirt, I’ve been discussing a great paper on how the magic industry thrives without patent or trade secret protection. The paper is similar to Raustiala and Sprigman’s widely discussed “piracy paradox” paper, which sought to explain how the fashion industry thrives without copyright.
Jacob Grier, a friend and sometime professional magician, had a great post last week on the paper that I thought was worth highlighting:
My impression is that the most creative magicians invent because they love the art, want to improve their acts, and seek acclaim from other magicians. Copying is a problem, but not, as far as I know, one that’s significantly driving out innovators.
An ongoing and bitter dispute between two high profile gaff makers provides a telling example of how creative magicians deal with theft. The props in question are difficult and expensive to create, but once developed they can be reverse engineered. The more established of the two craftsmen has alleged that the other has copied many of his original designs. But he’s not giving up. This is what he had to say about the conflict on a magicians’ forum:
“Now some good things have come out of all this. I think that the feud/competition has actually increased my business by a rather large margin. And the competition has certainly been a catalyst for me to improve my products. That is good for the consumer, and also I have developed more pride in my work over the course. However, I really have to shake my head when I see these blatant copies of nearly everything I do. Not only that, [his] prices are substantially higher than mine, and I feel that I can safely say that I am putting a lot more time into making stuff than he is. Now I am getting advice to increase my prices to match his. Some think that higher prices mean better product, at least to those that aren’t in the know.”
This strikes me as the typical response of a truly creative individual for whom making money off of his ideas is just one of many motivations.
Read the whole thing.
Ars reports on an especially egregious case of patent trolling:
The patent, titled “Automatic message interpretation and routing system,” is unsurprisingly general. It was filed in 1998 and awarded to a company called Brightware, Inc. in 2002, and it basically describes an autoresponder. “The method for automatically interpreting an electronic message may also include the step of retrieving one or more predetermined responses corresponding to the interpretation of the electronic message from a repository for automatic delivery to the source,” reads the patent.
Polaris accuses Google of “actively inducing infringement” on the patent and contributing to the infringement of others by implementing its own automatic e-mail responder within the company. Amazon, Borders, AOL, and all of the other named defendants are accused of the same. “As a result of these Defendants’ infringement of the ‘947 Patent, Polaris has suffered monetary damages in an amount not yet determined, and will continue to suffer damages in the future unless Defendants’ infringing activities are enjoined by this Court,” reads the complaint seen by Ars Technica.
This is ridiculous. Auto-responders have been a common feature of email systems for decades. Here is a Usenet message from 1985 that mentions Sendmail’s “vacation” feature, which provided that functionality. Here is anther guy in 1985 who didn’t have access to sendmail so he wrote his own auto-responder. Both of those programs perform the “step” of “retrieving one or more predetermined responses corresponding to the interpretation of the electronic message from a repository for automatic delivery to the source.”
Those took me 5 minutes to find. It looks like prior art to me (presumably you could find documentation from the relevant version of sendmail detailing its features if the descriptions in these postings are sufficient). So why isn’t there a quick and easy way for Google to get this patent invalidated (or at least the lawsuit dismissed) before thousands of dollars are wasted on lawyering?
When economists draw graphs to describe monopolies, they typically represent both average revenue (i.e., price) and aggregate demand with a single line. Why? Because they assume that, by dint of revealed preference theory, sales of a good reveal the demand for it, and that a monopolist, by definition, alone satisfies the demand for a particular good. See figure one, below.
I question, though, whether that sort of graph does an adequate job of describing the sorts of monopolies protected by copyrights and patents. Because the law does not protect them perfectly, those sorts of “intellectual privilege” (the term I advocate in lieu of “intellectual property”) suffer unremunerated uses. Some such uses happen through infringement, such as street corner sales of pirated DVDs. Others happen by dint of special legislative exceptions, such as the unlicensed public performances of musical works allowed to certain small commercial retail establishments.
Continue reading →
A great Hayek quote from Law, Legislation, and Liberty:
The understanding that “good fences make good neighbours”, that is, that men can use their own knowledge in the pursuit of their own ends without colliding with each other only if clear boundaries can be drawn between their respective domains of free action, is the basis on which all known civilisation has grown. Property, in the wide sense in which it is used to include not only material things, but (as John Locke defined it) the “life, liberty and estates” of every individual, is the only solution men have yet discovered to the problem of reconciling individual freedom with the absence of conflict. Law, liberty, and property are an inseparable trinity. There can be no law in the sense of universal rules of conduct which does not determine boundaries of the domains of freedom by laying down rules that enable each to ascertain where he is free to act. (Hayek 1973, 1:107)
Property rights are essential to a free society. But “property rights” without clear boundaries aren’t property rights at all, they’re an affront to the rule of law.
Alex Wexelblat wrote last week that company policies forbidding their employees from looking at patents is a result of incompetence by those companies lawyers, but Mike Masnick explains that companies actually have a very good reason:
What’s most likely happening is that the lawyers know that you get treble damages if you can prove willful infringement, and you do that by showing that the infringer knew of the patent. So, the way you avoid that is you don’t look at any patents. This is exactly the opposite of what the patent system is supposed to be about. In fact, many patent system defenders insist that “public disclosure” is the key benefit of the patent system — but that’s a complete myth. David Levine and Michele Boldrin have already shown why patents are unlikely to increase the disclosure of inventions (because the only people who will disclose are those who know their “invention” would become public no matter what, otherwise they’re better off keeping it secret), while other reports point out that patent attorneys are increasingly focused on filing vague patents that can cover lots of things, without actually disclosing anything useful. Now we can add this growing fear of willful infringement to the reasons that public disclosure isn’t what it’s cracked up to be — and, in fact, may be hurting innovation by forcing those knowledgeable in a space to ignore the state of the art to avoid the possibility of huge fines for willful infringement.
The fact that companies have these policies is one of the clearest bits of evidence that the patent system has become little more than an elaborate and expensive game of “gotcha.” If the patent system were working the way it’s supposed to, companies would be encouraging employees to keep tabs on the patents in their field to make sure they don’t infringe any of them. However, companies appear to believe that it’s virtually impossible to avoid infringing patents, probably because there are so many of them and they tend to be so vague. So instead, companies just assume they’re going to infringe and put in place policies that will minimize their legal exposure.
I’m at a loss to see how this system is benefitting anyone other than patent lawyers. The standard theory is that patents promote the spread of new inventions by giving inventors the confidence they can disclose their inventions without having them ripped off. But if companies are forbidding their employees from looking at the patents being disclosed, it’s awfully hard to see how that theory could be right.
In the interests of full disclosure, I should note that the Show-Me Institute, where I was employed until recently, has added Cindy Brinkley, the president of AT&T Missouri, to its board of directors. I think it’s important that people in the business of public policy advocacy be transparent about how they make a living, so I thought I’d share a few details about my recent and future sources of income.
Continue reading →
Ars reports that Teleflex is beginning to have a real impact on the outcome of software patent litigation:
Friskit filed a patent infringement lawsuit against RealNetworks in 2003 that sought over $70 million in damages. In a ruling issued last week, Judge William W. Schwarzer granted Realnetworks’ motion for summary judgment, citing “Real’s clear and convincing evidence of obviousness.”
Judge Schwarzer cited the Supreme Court’s decision on KSR v. Teleflex in his opinion. “Two principles from the Supreme Court’s recent opinion in KSR Int’l Co. v. Teleflex Inc. guide the analysis of whether sufficient difference exists between the prior art and Friskit’s claims to render the patents nonobvious,” he wrote. The first of those is patents that rearrange old elements to create a new—but obvious—combination. The second comes from situations where a person of “ordinary skill” pursues known options, and the result is the product of “ordinary skill and common sense.”
“All of the individual features of Friskit’s patents which allow a user to easily search for and listen to streaming media existed in the prior art,” noted the judge, who went on to cite a number of media player
Good for Judge Schwarzer. This bodes well for Vonage.
Mark Blafkin is confused about my analogy between eminent domain and software patents, which probably means I didn’t explain the analogy very clearly. So let me see if I can be more explicit.
The way modern “redevelopment” projects work is that a large developer will go to a city and say “We would like to develop a new shopping mall/office park/apartment complex/whatever in such-and-such a neighborhood. But we’re only willing to do so if you give us control over all development within that neighborhood. We don’t want to worry about some other company building something in the neighborhood that we didn’t plan for.”
The city will then scrutinize the application, go through some legal technicalities such as declaring the neighborhood to be “blighted” (which, with enough ingenuity almost any neighborhood can be), and then sign a contract with the developer that essentially gives the developer a monopoly on development in the area. Any property owners who refuse to go along with the developer’s plans are removed using eminent domain.
Now, a company like Verizon will go to the patent office and say, in effect, “We would like to develop a new VoIP application. But we’re only willing to do so if you give us control over all development of VoIP applications like ours. We don’t want to worry about some other company building a competing product that we didn’t plan for.”
Continue reading →
My blogging has been light the last couple of weeks because I’m busy finishing up a big study on eminent domain abuse in Missouri, which will be published by the Show-Me Institute. Obviously, most of that isn’t going to be relevant to a tech policy blog, but I have noticed an interesting parallel between the eminent domain debate and the software patent debate.
A bit of background: cities in Missouri (and in other states) have gotten used to a “clear cutting” style of real estate development in which the city council will declare an entire neighborhood “blighted” or in need of redevelopment, and then put out bids for a comprehensive re-development plan. Large developers submit re-development plans with price tags in the tens or hundreds of millions of dollars specifying which properties will be demolished, what will be built in their place, and what kinds of tenants will be sought for the new buildings. Once a plan has been selected, the city will employ the power of eminent domain to help the chose developer seize the property of anyone who refuses to sell voluntarily (and “voluntarily” is a bit of a misnomer when property owners know their land will be taken whether they like it or not). Then the developer will bulldoze most of the old neighborhood and replace it with a shopping mall, condos, or whatever else was specified in the re-development plan.
Almost all of the redevelopment plans cities pursue are done this way. City officials are absolutely horrified at the thought of letting just anyone buy property in the development area and make improvements. After all, everyone knows that without a “master plan,” neighborhoods would descend into chaos. Besides, what incentive would a big developer have to start a major development project if some other guy could open a competing business down the street?
Continue reading →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.