Interoperability is a topic that has long been of interest to me. How networks, platforms, and devices work with each other–or sometimes fail to–is an important engineering, business, and policy issue. Back in 2012, I spilled out over 5,000 words on the topic when reviewing John Palfrey and Urs Gasser’s excellent book, Interop: The Promise and Perils of Highly Interconnected Systems.

I’ve always struggled with the interoperability issues, however, and often avoided them became of the sheer complexity of it all. Some interesting recent essays by sci-fi author and digital activist Cory Doctorow remind me that I need to get back on top of the issue. His latest essay is a call-to-arms in favor of what he calls “adversarial interoperability.” “[T]hat’s when you create a new product or service that plugs into the existing ones without the permission of the companies that make them,” he says. “Think of third-party printer ink, alternative app stores, or independent repair shops that use compatible parts from rival manufacturers to fix your car or your phone or your tractor.”

Doctorow is a vociferous defender of expanded digital access rights of many flavors and his latest essays on interoperability expand upon his previous advocacy for open access and a general freedom to tinker. He does much of this work with the Electronic Frontier Foundation (EFF), which shares his commitment to expanded digital access and interoperability rights in various contexts.

I’m in league with Doctorow and EFF on some of these things, but also find myself thinking they go much too far in other ways. At root, their work and advocacy raise a profound question: should there be any general right to exclude on digital platforms? Although he doesn’t always come right out and say it, Doctorow’s work often seems like an outright rejection of any sort of property rights in networks or platforms. Generally speaking, he does not want the law to recognize any right for tech platforms to exclude using digital fences of any sort.

Where to Draw the Lines?

As someone who has authored a book about the importance of permissionless innovation, I need to be able to answer questions about where these lines between open versus closed systems are drawn. Definitions and framing matter, however. I use “permissionless innovation” as a descriptor for one possible policy disposition when considering where legal and regulatory defaults should be set. Another conception of permissionless innovation is more of an engineering ideal; a general freedom to connect, tinker, modify, etc. (I speak more about these conceptions in my latest book, Evasive Entrepreneurs.) Of course, someone advocating permissionless innovation as a policy default will sometimes be confronted with the question of what the law should say when someone behaves in an “evasive” fashion in the latter conception of permissionless innovation.

Doctorow would generally answer that question by saying that law should not be rigged to favor exclusion through laws like the DMCA (and specifically the law’s anti- circumvention provisions), Computer Fraud and Abuse Act, patent law, and various other rules and laws. “[T]he current crop of Big Tech companies has secured laws, regulations, and court decisions that have dramatically restricted adversarial interoperability.”

Generally speaking, I agree. I’m not a fan of technocratic laws or regulations that seek to micro-manage interoperability and which stack the deck in favor of exclusionary conduct with steep penalties for evasion. But does that mean adversarial interoperability should be permitted in all cases? Should there exist any sort of common law presumption one way or the other when a user or competitor seeks access to an existing private platform or device?

Specifics matter here and I don’t have time to get into all the case studies that Doctorow goes through. Some are no-brainers, like the infamous Lexmark case involving refillable printer ink cartridges. Other cases are far more complicated, at least for me. Does Epic, creator of Fortnite, have a right of adversarial interoperability that it can exercise against Apple and their AppStore? As Dirk Auer suggests in a new essay, this episode looks more like a straightforward pricing dispute. Epic is making it out to be much more than that, suggesting Apple is guilty of unfair and exclusionary practices that require a legal remedy.

Why not take that logic further and just say Apple’s App Store us tantamount to a natural monopoly or digital essential facility that Epic and everyone else is entitled to on whatever terms they want? For that matter, why not apply the same logic to Epic’s Fortnite platform or even its Unreal Engine? Does every other gaming developer have a right to piggyback on the juggernaut that Epic has built?

This gets to the core question about Doctorow’s concept of adversarial interoperability: Exactly what should common law and the courts say platform owners make access rights a simple pricing matter and say: “You pay or you are out.” Like Doctorow and EFF, I don’t want Apple to benefit from any special favors from laws like DMCA. Where we differ is that I would still leave the door open for Apple to exercise various other common law contractual rights or property rights in court.

I suspect Doctorow would deny any such claims by Apple or anyone else. If so, I would like to see him spell out in more precise terms exactly what Apple’s property rights and contractual rights are in this instance. Or, again, should we just treat the App Store as a digital commons with unfettered open access rights for developers? If so, would Apple be required to still manage the resource once it is a quasi-commons?

I think that would end miserably, but would like to hear Doctorow’s preferred approach before saying more. I suspect a lot rides on the distinction between “open” verses “proprietary” standards, but compared to Doctorow and EFF, I am willing to embrace a world of both open and proprietary systems, and many hybrids in between. I don’t want the law favoring one type over the other, but that means I need to endorse a generalized property right for digital operators such that they can still exclude others (even in the absence of artificial regulatory rights like DMCA creates). Again, I suspect Doctorow would reject that standard, preferring a generalized right of access, even if that means the platforms become de facto commons.

More Radical Steps

Elsewhere, Doctorow has said is that some of these questions would be better addressed through more aggressive antitrust regulation. Mere data portability or mandatory interoperability isn’t enough for him. “Data portability is important,” Doctorow says, “but it is no substitute for the ability to have ongoing access to a service that you’re in the process of migrating away from.”

In his latest online book on “How to Destroy Surveillance Capitalism,” Doctorow suggests that it is time to “make Big Tech small again” through an “anti-monopoly ecology movement.” That “means bans on mergers between large companies, on big companies acquiring nascent competitors, and on platform companies competing directly with the companies that rely on the platforms.” And he desires a host of other remedies.

So, here we have the convergence of interoperability policy and antitrust policy, with a layer of property confiscation layered on top apparently. “Now it’s up to us to seize the means of computation, putting that electronic nervous system under democratic, accountable control,” he insists in his latest manifesto.

What’s funny about this is that Doctorow begins most of his essays by pointing out all the ways that politics is the problem when it comes to access issues, only to end by suggesting that a lot more political meddling is the required solution. He repeatedly laments how large tech players have so often been able to convince lawmakers and regulators to pass special laws or regulations that work to their favor. Yet, in his We-Can-Build-A-Better-Bureaucrat model of things, all those old problems will apparently disappear when we get the right people in power and get rid of those nefarious capitalist schemers.

Thus, what really animates Doctorow’s advocacy for adversarial interoperability is a deep suspicion of free market capitalism and property rights in particular. In this worldview, interoperability really just becomes a Trojan Horse meant to help bring down the entire capitalist order. Am I exaggerating? “As to why things are so screwed up? Capitalism.” Those are his exact words from the conclusion of his latest book.

Adversarial Innovation & Evolutionary Interop

Still, Doctorow raises many legitimate issues about interconnection and digital access rights. But we need a better approach to work though these questions than the one he suggests.

In my lengthy review of the Palfrey and Gasser Interop book, I tried to sketch out an alternative framework for thinking seriously about these issues. I referred to my preferred approach as “experimental interoperability” or “evolutionary interoperability.” I described this as the theory that ongoing marketplace experimentation with technical standards, modes of information production and dissemination, and interoperable information systems, is almost always preferable to the artificial foreclosure of this dynamic process through state action. The former allows for better learning and coping mechanisms to develop while also incentivizing the spontaneous, natural evolution of the market and market responses.

Adversarial interoperability is important, but not nearly as important as adversarial innovation and facilities-based competition. Stated differently, access rights to existing systems is an important value, but the incentives we have in place to encourage entirely new systems is what really matters most. At some point, a generalized right of access to existing systems discourages the sort of platform-building that could help give rise to the sort of creative destruction we have seen at work repeatedly in the past and that we still need today. Taken too far, adversarial interoperability threatens to undermine this goal. Why seek to build a better alternative platform if you can just endlessly free ride off someone else’s by force of law?

Thus, I prefer to work at the margins and think through how to balance these competing claims of access / interoperability rights versus contractual / property rights. My take will be too utilitarian for not only Doctorow but also for some libertarians, who want clear answers to all these questions based upon their preferred natural law-oriented constructions of rights. The problem with that approach is that it leads to all-or-nothing extremes (complete digital property rights, or virtually none) and that approach is fundamentally unworkable and destructive. We need to work harder about how to balance these rights and values in pro-competitive, pro-innovation fashion.

There is No Such Thing as Optimal Interoperability

In sum, there is no such thing as “optimal interoperablity.” Sometimes proprietary or “closed” systems will offer the public features and options that they will find preferable to “open” ones.  “There are many reasons why consumers might prefer ‘closed’ systems – even when they have to pay a premium for them,” argues Dirk Auer in a separate essay. It could be greater convenience, security, or other things. Palfrey and Gasser correctly noted in their book that, “the state is rarely in a position to call a winner among competing technologies” (p. 174). Moreover, they concluded:

“Lawmakers need to keep in view the limits of their own effectiveness when it comes to accomplishing optimal levels of interoperability. Case studies of government intervention, especially where complex information technologies are involved, show that states tend to be ill suited to determine on their own what specific technology will be the best option for the future (p. 175)

A thousand amens to that! The law should not artificially foreclose experimentation with many different types of platforms, standards, devices and the interoperability that exists among them.

I am speaking on a panel tomorrow at the Dirksen Senate Office Building at an R Street Institute event on patent reform. Here’s R Street’s description:

The patent reform debate has been painted as one of inventors vs. patent troll victims. Yet these two don’t have to be enemies. We can protect intellectual property, and stomp out patent trolls. If you’re just tuning in, patent trolls are entities that hoard overly broad patents, but do not use them to make goods or services, or advance a useful secondary market. While there’s a place for patent enforcement, these guys take it way too far. These entities maliciously threaten small businesses, inventors, and consumers, causing tens of billions in economic damage each year. Since litigation costs millions of dollars, businesses are forced to settle even when the claim against them is spurious. Fortunately, with growing awareness and support, the patent trolls’ lucrative racket is in jeopardy. With Obama’s patent troll task force, the passage of the Innovation Act in the House, state legislation tackling demand letters, and further action in the courts, we appear to be closer than ever to achieving real reform. Please join us for a lunch and panel discussion of the nature of the patent troll problem, the industries it affects, and the policy solutions being considered. Featuring: Zach Graves, Director of Digital Marketing & Policy Analyst, R Street Institute (Moderator) Eli Dourado, Research Fellow, Mercatus Center Whitaker L. Askew, Vice President, American Gaming Association Robin Cook, Assistant General Counsel for Special Projects, Credit Union National Association Julie Hopkins, Partner, Tydings & Rosenberg LLP

The festivities begin at noon. The event is open to the public, and you can register here.

Gordon Crovitz has an excellent column in today’s Wall Street Journal in which he accurately diagnoses the root cause of our patent litigation problem: the Federal Circuit’s support for extensive patenting in software.

Today’s patent mess can be traced to a miscalculation by Jimmy Carter, who thought granting more patents would help overcome economic stagnation. In 1979, his Domestic Policy Review on Industrial Innovation proposed a new Federal Circuit Court of Appeals, which Congress created in 1982. Its first judge explained: “The court was formed for one need, to recover the value of the patent system as an incentive to industry.” The country got more patents—at what has turned out to be a huge cost. The number of patents has quadrupled, to more than 275,000 a year. But the Federal Circuit approved patents for software, which now account for most of the patents granted in the U.S.—and for most of the litigation. Patent trolls buy up vague software patents and demand legal settlements from technology companies. Instead of encouraging innovation, patent law has become a burden on entrepreneurs, especially startups without teams of patent lawyers.

I was pleased that Crovitz cites my new paper with Alex Tabarrok:

A system of property rights is flawed if no one can know what’s protected. That’s what happens when the government grants 20-year patents for vague software ideas in exchange for making the innovation public. In a recent academic paper, George Mason researchers Eli Dourado and Alex Tabarrok argued that the system of “broad and fuzzy” software patents “reduces the potency of search and defeats one of the key arguments for patents, the dissemination of information about innovation.”

Current legislation in Congress makes changes to patent trial procedure in an effort to reduce the harm caused by patent trolling. But if we really want to solve the trolling problem once and for all, and to generally have a healthy and innovative patent system, we need to get at the problem of low-quality patents, especially in software. The best way to do that is to abolish the Federal Circuit, which has consistently undermined limits on patentable subject matter.

The Hill is reporting that Rep. Goodlatte, under pressure from “companies like Microsoft, IBM and Apple,” is planning to drop the provision in his patent reform bill that expands the Covered Business Method (CBM) program. Mike Masnick also has commentary.

Julie Samuels explains CBM review:

The “Covered Business Method Review” (CBM) was first introduced in 2011’s America Invents Act. It created, for a limited time, an additional avenue of patent review at the Patent Office. Unfortunately, as drafted, it really was only intended to apply to patents that deal with financial institutions. CBM is a good program. First, we have long favored the use of Patent Office procedure to challenge patents; it is much cheaper and much quicker than going to court. Second, it allows for more ways to challenge patents than other types of Patent Office review—making it a more robust procedure that promises to knock out more improvidently granted patents. Third, it automatically puts concurrent patent litigation between the parties on hold. Putting ongoing litigation on hold is no small thing. Patent litigation often costs each side well into the millions of dollars, while CBMs cost just a fraction of that. This means that more people will be in a position to challenge bad patents and fight back against the trolls who wield those patents.

The original Goodlatte bill would have expanded CBM review to patents beyond the financial sector.

From a public choice perspective, it is unsurprising that finance would have better patent law than the rest of the economy: finance is a concentrated industry that can go up politically against and offset another concentrated industry, the patent bar. But non-finance covered business method patents are asserted against all kinds of companies, for practices as banal as retrieving data from a database (not joking: “A method of retrieving information from a database record having plural fields“) or selling things online (“An apparatus to market and/or sell goods and/or services over an electronic network“). The fact that the victims of these patent assertions are dispersed throughout the economy means that they are not organized enough to effectively oppose the patent interests that are lobbying against the CBM program expansion.

Still, it is very disappointing that Rep. Goodlatte is caving to such lobbying. I already thought that his bill did not go far enough; now it goes even less far.

Last week, the FTC proposed to use its Section 6(b) power to investigate patent trolls. Its clear from the agency’s comment request that what they’re really interested in examining is the practice of patent privateering.

For The Umlaut, I wrote an article explaining what patent privateering is and how it upsets the fragile state of affairs in the software industry.

Because patent trolls are non-practicing, they are not subject to threats of counter-suit and mutually assured destruction. Because they are not members of any SSOs, they do not have any obligation to license on a FRAND basis; standard-essential patents can be transferred to privateers and then asserted against all users of the standard. And because the transfer of patents to patent trolls is often done through various shell companies or other shadowy means, the defendant and the public often cannot know on which practicing software company’s behalf the privateer is working. This means the defendant cannot retaliate through countersuits or a public relations offensive.

I think that understanding how patent privateering actually works and how it disrupts companies’ attempts to innovate makes one much more sympathetic to simply abolishing software patents outright. Given that the practice is  not widely understood, the FTC could add value by simply disseminating information about it to a wider audience. I don’t think that the FTC has the authority to regulate patent enforcement, since patent rights are explicitly authorized by Congress, but they can and should send Congress the message that software patents are being used to stifle innovation, not promote it.

The new discussion draft from Rep. Goodlatte is now circulating publicly. Here is a good summary from the EFF of what the legislation would do:

• Heightened Pleading: Requiring a patent holder to provide basic details (such as which patents and claims are at issue, as well as exactly what products allegedly infringe and how) when it files a lawsuit.
• Fee shifting: Requiring the loser in a patent case to pay attorney’s fees and costs. This would make it harder for trolls to use the extraordinary expense of patent litigation to force a settlement.
• Transparency: The draft includes strong language requiring patent trolls to reveal the parties that would actually benefit from the litigation (called the real party in interest).
• Joinder: If the plaintiff is a shell-company patent troll, the defendant could require the real party in interest to join the litigation. Even better, a prevailing defendant could collect attorney’s fees from the real party in interest if the patent troll can’t or won’t pay.
• Staying customer suits: Requiring courts to stay patent litigation against customers when there is parallel litigation against the manufacturer.
• Discovery reform: Shutting down expensive and often harassing discovery until the court has interpreted the patent. This should make it easier for defendants to dispose of frivolous cases early before the legal fees and court costs really add up.
• Post-grant review: The bill expands an important avenue to challenge a patent’s validity at the Patent Office (known as the transitional program for covered business method patents). While this procedure is still too expensive for many of the trolls’ smaller targets, we support efforts to make it easier to knock out bad patents.

These are excellent steps forward in the fight against patent trolls, but I’m still hoping for more. The explosion in patent litigation, both troll and non-troll, is due to the astonishing increase in the number of software patents. Software patents now make up over half of all patents! Software patents are more likely to be litigated than other kinds of patents, including four times more likely than a chemical patent.

Given the extent to which the problems with our patent system are caused by software patents, it is unfortunate that none of the patent reform bills under consideration in this Congress contemplate simply excluding software from the set of patentable subject matter. By all means, slay the trolls. But also go after the source of their power.

Nobel laureate Gary Becker and I are on the same page. He says patent terms should be short:

Major reforms to reduce these unproductive opportunities would include lowering typical patent length and the scope of innovations that are eligible for patents. The current patent length of 20 years (longer for drug companies) from the date of filing for a patent can be cut in half without greatly discouraging innovation. One obvious advantage of cutting patent length in half is that the economic cost from the temporary monopoly power given to patent holders would be made much more temporary. In addition, a shorter patent length gives patent holders less of an effective head start in developing follow on patents that can greatly extend the effective length of an original patent.

More importantly, he says we should carve out particularly troublesome areas, like software, from the patent system:

Today, the Obama administration announced 5 executive actions it is taking and 7 legislative proposals it is making to address the problem of patent trolls. While these are incremental steps in the right direction, they are still pretty weak sauce. The reforms could alleviate some of the litigation pressure on Silicon Valley firms, but there’s a long way to go if we want to have a patent system that maximized innovation.

The proposals aim to reduce anonymity in patent litigation, improve review at the USPTO, give more protection to downstream users, and improve standards at the International Trade Commission, a venue which has been gamed by patent plaintiffs. These are all steps worth taking. But they’re not enough. The White House’s press release quotes the president as saying that “our efforts at patent reform [i.e. the America Invents Act, passed in 2011] only went about halfway to where we need to go.” Presumably the White House believes these steps will take us the rest of the way there.

But the problem with computer-enabled patents isn’t merely that they result in a lot of opportunistic litigation, though they do. The problem is that almost every new idea is actually pretty obvious, in the sense that it is “invented” at the same time by lots of companies that are innovating in the same space. Granting patents in a field where everyone is innovating in the same way at the same time is a recipe for slowing down, not speeding up, innovation. Instead of just getting on with the process of building great new products, companies have to file for patents, assemble patent portfolios, license patents from competitors who “invented” certain software techniques a few months earlier, deal with litigation, and so on. A device like a smartphone requires thousands of patents to be filed, licensed, or litigated.

If we really want to speed up innovation, we need to take bolder steps. New Zealand recently abolished software patents by declaring that software is not an invention at all. It would be terrific if the White House would get behind that kind of bold thinking. In the meantime, we’ll have to watch closely as the Obama administration’s executive actions are implemented and its legislative recommendations move through Congress. I hope for the best, but for now I’m not too impressed.

Alex Tabarrok, author of the ebook Launching The Innovation Renaissance: A New Path to Bring Smart Ideas to Market Fast discusses America’s declining growth rate in total factor productivity, what this means for the future of innovation, and what can be done to improve the situation.

Accroding to Tabarrok, patents, which were designed to promote the progress of science and the useful arts, have instead become weapons in a war for competitive advantage with innovation as collateral damage. College, once a foundation for innovation, has been oversold. And regulations, passed with the best of intentions, have spread like kudzu and now impede progress to everyone’s detriment. Tabarrok outs forth simple reforms in each of these areas and also explains the role immigration plays in innovation and national productivity.

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Related Links

• Launching The Innovation Renaissance: A New Path to Bring Smart Ideas to Market Fast, Tabarrok
• VIDEO: Innovations in Most Fields Are Not Patented, Tabarrok
• VIDEO: End Software Patents, Tabarrok
• Patent Policy on the Back of a Napkin, Tabarrok

The US Patent and Trademark office is starting to recognize that it has a software patent problem and is soliciting suggestions for how to improve software patent quality. A number of parties such as Google and EFF have filed comments.

I am on record against the idea patenting software at all. I think it is too difficult for programmers, as they are writing code, to constantly check to see if they are violating existing software patents, which are not, after all, easy to identify. Furthermore, any complex piece of software is likely to violate hundreds of patents owned by competitors, which makes license negotiation costly and not straightforward.

However, given that the abolition of software patents seems unlikely in the medium term, there are some good suggestions in the Google and EFF briefs. They both note that the software patents granted to date have been overbroad, equivalent to patenting headache medicine in general rather than patenting a particular molecule for use as a headache drug.

This argument highlights one significant problem with patent systems generally, that they depend on extremely high-quality review of patent applications to function effectively. If we’re going to have patents for software, or anything else, we need to take the review process seriously. Consequently, I would favor whatever increase in patent application fees is necessary to ensure that the quality of review is rock solid. Give USPTO the resources it needs to comply with existing patent law, which seems to preclude such overbroad patents. Simply applying patent law consistently would reduce some of the problems with software patents.

Higher fees would also function as a Pigovian tax on patenting, disincentivizing patent protection for minor innovations. This is desirable because the licensing cost of these minor innovations is likely to exceed the social benefits the patents generate, if any.

While it remains preferable to undertake major patent reform, many of the steps proposed by Google and EFF are good marginal policy improvements. I hope the USPTO considers these proposals carefully.

Joshua Gans, professor of Strategic Management at the University of Toronto’s Rotman School of Management and author of the new book Information Wants to be Shared, discusses modern media economics, including how books, movies, music, and news will be supported in the future.

Gans argues that sharing enhances most information’s value. He also explains that the business models of traditional media companies, gatekeepers who have relied on scarcity and control, have collapsed in the face of new technologies. Equally important, he argues that sharing can revive moribund, threatened industries even as he examines platforms that have, almost accidentally, thrived in this new environment.

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Related Links

• Information Wants to be Shared, Gans
• Is There a Market for Ideas?, Gans and Scott Stern
• The Product Market and the Market for ‘Ideas’: Commercialization Strategies for Technology Entrepreneurs, Gans and Stern
• The Impact of Uncertain Intellectual Property Rights on the Market for Ideas: Evidence from Patent Grant Delays, Gans, Stern, and David H. Hsu

Last week I attended an event on software patents at GW Law School. The event made me uncomfortable because it was—as one would expect at a law school event—dominated by lawyers. The concerns of the legal academics, practitioners, and lobbyists participating in the round table discussion were very different from those one would expect for a policy audience. For example, the participants agreed that there is no elegant way to partition software patents from other patents under current law and that current Supreme Court jurisprudence is unsophisticated, relying on the wrong sections of the U.S. Code.

Missing from the discussion was the single most important fact about patents: that they are negatively correlated with economic growth.

It is pretty easy to eyeball this relationship using data from the USPTO on number of patents granted and from the BLS on real GDP per capita.

Patent grants have exploded in the past two decades or so, and real GDP per capita growth has declined over the same period. Now, patent proponents can argue (rightly) that correlation is not causation—growth could have been  even worse over the past few decades had we not had strong patent protection. But correlation is correlated with causation, so proponents of strong patent laws should have to explicitly make that argument using real evidence.

In addition to U.S. time-series data, we can examine the international cross-sectional evidence. As Petra Moser concludes in her recent JEP article:

Overall, the weight of the existing historical evidence suggests that patent policies, which grant strong intellectual property rights to early generations of inventors, may discourage innovation. On the contrary, policies that encourage the diffusion of ideas and modify patent laws to facilitate entry and encourage competition may be an effective mechanism to encourage innovation.

Taken together, absent some additional evidence from patent proponents, this time-series and cross-sectional evidence suggests we are on the wrong side of the Tabarrok Curve.

If there is any evidence that software patents in particular have a positive effect on innovation or growth, I have yet to see it. Here’s hoping proponents of the current system will take up the challenge and respond with such evidence. But if they do not, then we should abolish software patents even if it means adopting some relatively bizarre legal formulations as the lawyers fear.

While there is evidence that patents encourage investment in industries like pharmaceuticals and materials science, their effect on many other industries is markedly negative. In the computing, software, and Internet space, patents represent a serious barrier to innovation, as companies who need to assemble a huge number of licenses are subject to the holdout problem, and as incumbent or has-been firms use patents as weapons against more innovative upstarts. In some cases, these firms deliberately transfer patents to entities known as “trolls,” who exist solely for the purpose of suing the competition.

In theory, it is possible for firms to contract around these problems on a bilateral basis—as a basic reading of Coase suggests, because patents are inefficient in the tech industry, there exists in principle a bargain in which any two firms could agree to ignore patent law. The problem, of course, is the transaction costs. Transaction costs don’t merely add up in the tech industry; they multiply, because of holdout considerations and all the strategic maneuvering associated with firms competing on multiple margins.

I was thrilled, therefore, to see that Google is taking steps to solve this problem. They are proposing to set up a pool which would cross-license their patents to any other firms willing to reciprocate. All members of the pool would receive licenses to all of the patents in the pool. Unlike other existing patent pools, they seem to be interested in achieving the broadest possible participation, and it is being created purely for defensive purposes, not to receive a competitive advantage over firms excluded from the pool.

The proposal is still in a relatively early stage—they are still seeking feedback about which of four licenses the pool should use, which have different features such as permanence of licenses (“sticky” vs. “non-sticky”) and whether firms would be required to license their entire portfolio. For what it’s worth, I hope they choose the Sticky DPL, which seems like the most aggressive of the licenses in terms of taking weapons off the table.

An excellent feature of the pool, particularly if the participants decide to go with the Sticky DPL, is that it would feature very strong network effects. If several firms license their entire patent portfolios to the pool, then that strongly increases the incentive of other firms to join the pool. There is an intriguing tension here between the stated aim of the pool and the incentives pool members have to force other firms to join—by suing non-pool members who infringe on the pool’s patents, they can increase the membership of the pool. I do not strongly oppose this, but I imagine that there will be some philosophical discussion about whether such actions would be right.

Another wrinkle is that firms might transfer several crucial patents to trolls right before they join the pool (keeping a license for themselves, of course). More generally, they may look for legal ways to reap the benefits of the pool while continuing to use trolls to skirmish with their competitors.

But nevertheless, this is an encouraging development that I hope succeeds. If, as I strongly suspect, we are on the wrong side of the Tabarrok curve, the creation of a large cross-licensing pool could increase further the dynamism of our most dynamic industry.

Ronald A. Cass, Dean Emeritus of Boston University School of Law, discusses his new book, Laws of Creation: Property Rights in the World of Ideas, which he co-authored with Boston University colleague Keith Hylton. Written as a primer for understanding intellectual property law and a defense of intellectual property, Laws of Creation explains the basis of IP and its justification. 

According to Cass, not all would-be reformers share a similar guiding philosophy, distinguishing between those who support property rights but nevertheless have specific critiques of the intellectual property system as it currently stands, and reformers who do not see a place for property.

Cass explains that the current intellectual property system is neither wholly good nor wholly bad, but is a matter of weighing tradeoffs. On the whole, he argues, intellectual property benefits society. Cass also argues that intellectual property law in the U.S. is still more functional than that in other countries, such as Italy, and that, while it would benefit from some reform, it is fundamentally a workable system.

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Related Links

• Laws of Creation: Property Rights in the World of Ideas, Cass and Hylton
• Property Rights Systems and the Rule of Law, Cass
• Tom W. Bell on Laws of Creation, Antitrust & Competition Policy Blog
• Book Talk: Law of Creation: Property Rights in the World of Ideas, The Cato Institute

Brookings has a new report out by Jonathan Rothwell, José Lobo, Deborah Strumsky, and Mark Muro that “examines the importance of patents as a measure of invention to economic growth and explores why some areas are more inventive than others.” (p. 4) Since I doubt that non-molecule patents have a substantial effect on growth, I was curious to examine the paper’s methodology. So I skimmed through the study, which referred me to a technical appendix, which referred me to the authors’ working paper on SSRN.

The authors are basically regressing log output per worker on 10-year-lagged measures of patenting in a fixed effects model using metropolitan areas in the United States.

Continue reading on elidourado.com…

I don’t have a great deal to add to coverage of last week’s big patent story, which concerned the filing of a complaint by Microsoft co-founder Paul Allen against major technology companies including Apple, Google, Facebook and Yahoo. Diane Searcey of The Wall Street Journal , Tom Krazit at CNET News.com, and Mike Masnick on Techdirt pretty much lay out as much as is known so far.

But given the notoriety of the case and the scope of its claims (the Journal, or at least its headline writer, has declared an all-out “patent war”), it seems like a good opportunity to dispel some common myths about the patent system and its discontents.

And then I want to offer one completely unfounded theory about what is really going on that no one yet has suggested. Which is: Paul Allen is out to become the greatest champion that patent reform will ever know.

The Interval Patents

First, a few facts. In the mid 1990’s, Allen co-founded Interval Research, an effort to replicate Xerox’s Palo Alto Research Center (PARC) without the company politics that made it impossible for any of the brilliant inventions developed there to achieve commercial success—at least not by Xerox, in any case. (The other co-founder, David Liddle, was a former PARC scientist.)

Paul Allen intended Interval to do research the “right” way, and was quoted shortly before Interval was closed down as saying his goal was to produce world class research and development (R&D), with an emphasis on “less R and more D.” The company was founded in 1992, and shut down in 2000.

Interval, it turned out, produced a good deal of R and very little D. And now the R is generating an alternative and increasingly popular kind of D, taking the form of new patent litigation. Here, the litigation involves some pretty basic aspects of digital life.

One of the patents at issue, for example, is U.S. Pat. No. 6,263,507, which describes the claimed invention as a “Browser for use in Navigating a Body of Information.” Originally filed in 1996, the application was granted in 2001.

As the title suggests, the claimed invention is broadly defined, and the details implicate many aspects of core technologies of search, browsing, graphical user interface—pretty much everything. Below is a diagram showing a news browser from the application, which speaks for itself.

The Patent System, De Jure and De Facto

As I’ve been at pains to point out in prior posts on patents, the system in its current state of dysfunction encourages broad—perhaps ridiculously broad—applications. Worse, the lack of relevant expertise and the pressures of productivity on patent examiners results in many bad patents (perhaps many many) being granted.

The result has been the creation of a shadow patent examination process through litigation. The grant of a patent is no longer the final step, in other words. The de facto examination really takes place when the holder tries to enforce the patent against an alleged infringer, and the defendant claims invalidity of the patent as a defense. When such cases go to trial, which they rarely do, a jury of laymen are then tasked with doing the work avoided by the patent examiner.

In effect, the patent office has outsourced its job to the judiciary and in particular to a jury of non-experts. If nothing else, that is a feature of the modern system that absolutely no one is happy with, or in any event that no one can justify.

It also needs to be emphasized that patent infringement (as opposed to copyright infringement), need not and indeed rarely does include any suggestion of “theft” or other hint of immoral conduct. Most patent infringers do not copy the work of another inventor—they create their own innovation independently, often completely unaware of the existence of the relevant patents or pending applications. The broader the patents that are granted, of course, the more likely coincidental or seemingly “innocent” infringements are to occur. From a legal standpoint, however, ignorance of existing patents is no defense.

In that important respect, the difference between patent and copyright is significant. A copyright is a monopoly only on the particular expression of an idea. Margaret Mitchell gets a copyright for the uniquely creative elements of “Gone with the Wind,” not for the general idea of telling the story of 19^th century Southern life through the device of a particular woman and her plantation.

And if by some miracle a second author wrote a nearly identical work (the theoretical room full of monkeys and typewriters, e.g.) and could prove no awareness with Mitchell’s novel, there would be no infringement.

A patent, on the other hand, is a monopoly on an idea, and is protected regardless of how someone else arrives at the same idea.

That difference explains why the requirements for a patent are so much more burdensome than for copyright, and why a patent lasts a relatively short amount of time (unlike copyright, Congress has generally resisted industry calls for greater and longer protection). Because a patent protects an idea however arrived at, its potential constraint on future invention is great. So there are important limits baked into system to keep all but the most novel inventions out of its protection.

First, patents last only 20 years from the date of filing (copyright today lasts roughly 100 years). So in this case Patent No. 6,263,507 will expire in 2016 (though later-claimed enhancements will last longer). After 2016, anyone can forever after duplicate the invention without paying any royalty to Interval.

Indeed one of the requirements of receiving a patent is that the claimant must provide sufficient detail in the application to provide a usable specification for the public to make free use of once the patent expires. So not only does the idea become part of the public domain, the inventor must a priori assist the public in making full use of it.

Other important limits require that valid patents only apply for inventions that are truly novel and not mere enhancements to existing inventions already in the public domain. The invention must be “non-obvious,” and must be clearly distinguished from earlier inventions (“prior art”).

What are Patents Good For, and For Whom?

Unfortunately, as noted above, the application of these and other limits are increasingly being left to the byzantine maneuverings of strategic litigation, negotiations, patent pools, defensive patents, patent trolls and, in extreme cases, judge and jury.

That was surely not the intent of the creators of the system. But given how wasteful and dangerous patents now seem, it’s worth remembering why we have them in the first place. In principle, the goal of the patent system is to encourage investment in new innovations that will contribute (perhaps greatly) to the overall social and economic good of a nation.

How does society benefit from giving a monopoly to an individual inventor? The answer has to do with perceived if not real incentives. Inventors, individually or in large corporations, may toil for years without generating any revenue from their efforts—it could be all R and no D, in other words, and the D may only come if at all at the end of a long and circuitous route.

Once—if–a marketable product or service results from all that research, however, inventors may find themselves unable to recover their investment. A potential competitor need not repeat the research, but may simply buy the resulting product, reverse engineer it, and start producing its own equivalent offering, perhaps immediately.

Having made no investment, the new competitors have no research investment to recover, and so can offer identical products at a much lower price. The inventor must pro rate the cost of research into the price of the product or service; the competitor does not. Without patent, the inventor could be quickly forced out of the market she invented.

Beyond questions of “fairness” in such a result, the nation as a whole would lose out, even though for the particular product or service we would get a cheaper price, or get a cheaper price sooner. Because, in the long term, without some reasonable time period to recover research costs without fear of undercutting competitors, only the most idealistic inventors would continue to invent.

Fewer inventions mean slower progress for civilization overall. Governments might have to fund research directly, with no hope of having the expertise to evaluate good from bad proposals.

Hence, the powerful but limited monopoly protection of patents—a necessary evil, or so it has been understood.

Nitpicking the Definition of “Patent Troll”

That, at least, is the theory. But the practice has mutated into something very different. The generosity of the Patent Office and the high cost of litigation have created new opportunities in the last quarter-century or so to game the system.

The most obnoxious variation is companies who do no research or development of any kind, but who simply buy up large blocks of patents from desperate or bankrupt patent holders. They then threaten to assert these patents against companies actually producing products, hoping not to stop their efforts but to extract a royalty from then in the form of a license for a potentially infringed patent.

These companies are referred to as patent trolls, perhaps in reference to an old Norwegian folk tale of the “Three Billy Goats Gruff.” In the story, three goats must outsmart a troll who lives under a bridge they must cross to find food. The troll lies in wait and eats all who try to use the bridge. So the image of the “patent” troll suggests an entity that tries to extract a toll for the use of something they didn’t build but have simply staked a claim to on the basis of superior strength and fortunate location.

So I take some issue with Mike Masnick and Mark Lemley’s characterizations of Paul Allen as a newly-revealed patent troll. It is true that Interval never developed any products from its patented inventions and, one presumes, won’t in the future.

But unlike a “classic” patent troll (to quote Mark Lemley), Allen did invest substantial amounts of money in research–the kind of research the patent system is intended to protect and, if necessary, make enforceable through litigation.

That is not to say that I approve of the lawsuit, or even that I understand why Allen has brought it. I’ve made only a cursory review of the claimed inventions, and while certainly broad and seemingly the subject of earlier invention, I can’t say with any confidence that they ought not to have been issued and therefore would ultimately be found invalid at a hypothetical trial.

(I should also say I’m not even sure we need a patent system, or rather that we need the one we now have, whose costs have long ago greatly outpaced its social benefits. That’s a different discussion and, given Congress’s wilting response to patent reform for the last decade, mostly an academic one.)

Paul Allen’s Misdirection?

But if the patents are valid and if the defendants have infringed them (very big and complicated ifs, mind you), there’s nothing “disgusting” (to quote Mike Masnick) about a decision by Allen to enforce them. Paul Allen is presumably not in dire need of recovering the estimated $100 million he invested in Interval, but if the system is to work, the viability of enforcement must remain. And given the high cost today of litigating these claims, it may only be people with deep pockets who are still able to keep up the necessary threat of infringement claims.

A real determination of the merits of the patents and the claimed infringements would require the development of a voluminous record. Which is to say that neither Allen nor the defendants ought to feel especially confident of their position at this opening stage of litigation. Indeed, the complaint itself is entirely pro forma, making only the most basic allegations necessary to initiate a patent infringement suit. No suggestion of intentional or willful infringement is alleged.

Without knowing for certain, it’s safe to say that the purpose of the litigation is not to stop any of the defendants from offering the products and services claimed to infringe on Interval patents but, for better or worse or most likely both, to extract royalties and other licensing terms from them on behalf of Interval.

So the mystery isn’t so much whether the patents are valid or whether the defendants, knowingly or otherwise, infringed them. The mystery is why Allen is suing, and why he has waited so long to do so.

There’s no penalty to waiting, of course, so long as the term of the patents hasn’t expired. Rather, the longer a patent holder waits the more time the infringer can establish its products and, therefore, the more royalties available for the patent holder to extract. On the other hand, if you wait too long, the infringer’s products may fail and the infringer may go broke.

That explanation for why Interval has dropped this bomb when it has may be that simple. But something tells me there’s something else going on. Patent litigation is an elaborate chess game, and it feels like this is a move deep inside a very long-running duel. There’s a great deal that’s broken about the patent system. I’m just not sure yet whether this lawsuit is Exhibit A.

What other answer is possible? Here’s at least one crazy possibility (there are crazier ones, but this one at least is plausible). Maybe Allen is not the world’s most famous patent troll. Maybe he’s out to become the world’s most famous patent reformer. Maybe he doesn’t want so much to win as to publicize how dangerous his patents are.

Perhaps in asserting these patents, with their potential to unsettle so much of what is taken as settled business practices in the digital economy, he hopes to force leading tech companies and Congress to acknowledge that the system is broken and fix it. If he wins, or even if he just wears down the other side, perhaps he’ll demand not financial tribute but actual reform of a system that gives patent holders like him the power to disrupt digital life.

If so, it’s a dangerous gambit. On the other hand, it’s hard to see how the patent system could get much worse than it already is.

There’s a great deal that’s broken about the patent system. I’m just not sure yet whether this lawsuit is Exhibit A.

Over at Convergences I ponder a version of Mark Lemley’s argument to the effect that confusing patents tied up in administrative disputes are in effect the same as no patents. I write:

I recently read “Patenting Nanotechnology” by law prof Mark Lemley. Excitement about (and fear of) nanotechnology seems to be waning rather than waxing. The article nonetheless includes a curiously paradoxical line of argument about intellectual property that I think is worth setting out in detail. Presently there is some concern that there are already too many overlapping nanotechnology patents, and/or too many nanotechnology patents that cover basic research concepts as opposed to actual useful products. A number of observers have warned that these patents could interfere with ongoing nanotechnology research. This is a familiar theme over the past couple decades of patent scholarship. Of course, patents (with all their warts) were around during the nineteenth and twentieth centuries, too, when a lot of important advances were made in technology. All kinds of things from sewing machines to radios were developed, and it all worked out okay in spite of much patent nonsense being involved. Now, here is where Mark comes up with a twist on the familiar arguments. To help make his paper about nanotechnology more interesting, he seems to want to build up the case that nanotechnology is different from earlier technologies, so that the patent system might cause problems for nano that they did not cause for earlier technologies. So he goes through each earlier technology in some detail, and argues that in each case, in effect, for each of these key earlier technologies, patent protection was in effect non-existent. In the case of sewing machines, for example, the patents were tied up in litigation; in the case of radio, WWI intervened and the patents were taken over by the government. Therefore, he argues, nanotechnology will be the first important technology that is in effect actually protected by patents. He goes on to conclude that there is no reason to worry about this yet. This conclusion seems sensible enough. So… what?

With his argument that previous key technologies were in effect devoid of patent protection as a practical measure, even though they were patented, well, he’s created a mythical monster, the worm who eats his own tail. I don’t think he fully realizes this, so I will play with the idea a little bit.

For the results of my exploration, kindly visit Convergences.

The deadline for filing amicus briefs in support of the Federal Circuit’s attempt to trim back business method patents in Bilski passed on October 2. Many briefs have been filed, and much fuss has been made in the tech community, for business method patents are linked to the problem of software patents. Many software patents, such as Amazon’s 1-click order patent, are for business methods.

If the courts ultimately trim back business method patents, will this take some of the pressure off both tech and the patent system? Not as much as many in the tech community or the patent community would hope, for reasons I examine below. Patent reform is now being driven by business constituencies, and these constituencies are not good at all at working on big picture institutional problems. There, in short, is a not-seeing-forest-for trees problem.

Business method patents as such involve processes related to market research, loans, billing, underwriting, and so on.  Software patents are just that, patents on software–perhaps software built into hardware, perhaps stand-alone software intended to run on any computer. In a nutshell, problems have arisen with these patents. Such patents are hard to define. There are many of them, perhaps too many. Large producer firms become a target of patent owners, some of whom seem to buy up patents mainly to litigate them.

Some caveats: These problems are not unique to software or business methods; they also arise with biotech, nanotech, bioinformatics, and so on. The problem is one of degree, not of kind. And no one has shown conclusively that business method or software patents are harmful on balance; several studies of software patents suggest that the good and bad balances out, or that software patents are a weak positive.  Nevertheless, there are problems, and solutions are being sought.

Many solutions look, as does Bilkski, to subject matter limits and to sectoral reforms–getting rid of software or business method patents, or tailoring the law just for them. Another type of solution is more general, affecting the patent system as a whole, like changes to the presumption of patent validity.

Sectoral and subject matter reforms can get traction inside the Beltway. This approach promises gain with no pain; if software and business method patents just go away, pharma and biotech are unscathed, and might not bother to oppose the changes.

Note, though, that getting rid of business method patents (the best line of argument is probably that these are ultimately, like a piece of music or a book, playing to a human and not to a machine audience) does not necessarily get rid of software patents. Software’s main purpose is to make a machine do something involving electricity and optics and such; whatever the literary qualities of source code it makes little sense to distinguish it from object code (nor would doing so get programmers off the hook if all they did was produce source code… they would simply face liablity for contributory patent infringement as opposed to liability for direct infringement, on the same principle that the maker of a drug that turns into a patented product in the patient’s stomach faces liability for contributory infringement).

Furthermore, any sectoral approaches leave biotech, nanotech, and technologies beyond out in the cold, which makes no sense from a policy standpoint. It also might tend to be obsolete rather quickly, like the chip mask laws. Sectoral differences can come and go. For the moment, pharma clearly needs patents because it has big up-front research costs and must recoup those. But this might change… if medicines were tailor-made for individual DNA, for example, expensive clinical trials would look quite different and might become nearly obsolete. Software could change, biotech could change, nanotech could change, finance could change.

More generally, finding sensible rules to limit patentable subject matter is likely to be an uphill battle.  Most economic studies find that the patent system as a whole is a positive for both developed and, generally, for developing countries, though for some sectors (software) a more weak positive than others. So one doesn’t necessarily want to default it to “off” for new technology. A law intended to cover new technology by its nature cannot always describe exactly what that technology should or should not look like in advance.  A sectoral approach is doomed to make rules by hindsight, a particularly unsatisfactory outlook for forward-looking innovation. The law needs to be general… and a general law is likely to catch a lot of borderline stuff.

The better approaches to reform therefore are big picture changes that look at how to improve the system as a whole. These include adding more courts to hear patent appeals (so the Federal Circuit has someone to talk to); increasing the use of fee shifting in the patent system (or the legal system more generally) so that defendants are more willing to litigate strong cases; and rolling back the presumption of patent validity. But companies for which the patent system is a positive now are opposed to any change.

The better, more general, approach is therefore doomed, for the present, to take a back seat to fussing over whether or not an idea is too abstract to be useful; exactly what a patentable “process” is; whether source code should be treated like object code; whether code running in a machine is different from code merely being transmitted, and other arcane inquries, the results of which are unlikely to prove durable.

Having no dog in this fight, I can only watch it all unfold, and reserve the right to change my mind about any of these after reading the next 100 studies.

Further Reading:

“Patents and Innovation: Friends or Foes,” by Francois Leveque and Yann Meniere.

“Defining Software Patents – A Research Field Guide,” by Anne Layne-Farrar.

Josh Lerner and Feng Zhu, “What is the Impact of Software Patent Shifts?:  Evidence from Lotus v. Borland.”

Martin Campbell-Kelly, “Not All Bad: A Historical Perspective on Software Patents,” Michigan Telecommunications and Technology Law Review, Vol. 11.

Iain Cockburn, Megan MacGarvie, “Entry, Exit and Patenting in the Software Industry.”

Anne Layne-Farrar and others, “Do Companies that Patent More Today Have Higher Revenues Tomorrow?”

Ben Klemens, whose work I’ve praised in this space in the past, has a new essay up that I found a little bit aggravating. It’s on the perennial question of whether it makes sense to describe patents and copyrights as property. I’ve been a critic of the term “intellectual property” for a few years. Ben’s on the other side.

What I disliked most about Ben’s piece was the condescending tone he takes toward property rights activists (like me). Klemens has little patience for property rights activists whose websites have “lots of clip art of flags and eagles,” and who are under the delusion that the holders of property rights have some kind of moral claim against government interference with those rights. Klemens also critiques neoclassical scholars who “will try to trip you up into thinking that society is built around natural, objective property rights rather than social construction.” Klemens concludes by arguing that “Sure, IP law is artificial, but physical property law is equally artificial; we’re just so used to it that we’ve forgotten.”

Now look, on some level this is indisputably correct. God doesn’t strike trespassers down with lightning; property rights are defined and enforced by fallible human beings. The problem is that Klemens argument proves too much. The same reasoning can undermine any moral or legal rights. On some level a woman’s right not to be raped is a “social construction,” but I don’t think that in any way diminishes the strong moral claim that each and every woman has not to be raped, regardless of what the rest of us regard as “socially optimal.”

The crack about the eagles and American flags seems to imply that only ignorant rubes believe that property rights could have a moral dimension. Sophisticated thinkers know that property rights exist by the grace of the legislature, and so if the government decides that the “socially optimal allocation of rights” involves taking your house and giving it to a wealthy developer so he can build a shopping mall, that’s too bad for you but it doesn’t raise any more profound moral issues.

The problem with this is that it completely ignores how our actual system of property rights came into being. Ben’s right that most people have forgotten how we got our modern system of property rights, but the things we’ve forgotten are almost precisely the opposite of what he imagines them to be. Traditional property rights are not and never have been the creation of governments. Indeed, government efforts to create new property systems from whole cloth tend to be abject failures. People ignore them, and the government lacks the resources to impose them on an unwilling population. This is the situation you saw on the American frontier during the 19th century, and it’s the situation you see today in many third-world countries with dysfunctional property systems. The formal property rules were and are radically out of step with the informal property rules that actually govern the day-to-day lives of ordinary people.

In contrast, successful systems of property rights tend to emerge spontaneously from the bottom up, and are simply recognized and reinforced by the government. Over time, consensus emerges among neighbors about who owns what and what people may do with their properties. The job of the courts and the legislature isn’t so much to decide who owns what (ordinary people already know that) but simply to record and ratify the already-existing social consensus and handle disputes at the margin.

To bring things back to the patent and copyright debates, I think the right lesson from the analogy to physical property rights is exactly the opposite of the legal positivism Ben seems to be defending. In reality, legislatures have very limited powers to impose property-like systems on an unwilling populace. When a property-like legal regime is widely ignored or evaded (think software patents or peer-to-peer file sharing) that’s a strong signal that the legislature needs to re-write the law to make it work “with the grain” of peoples’ existing attitudes and expectations.

In contrast, when the formal law is well-aligned with peoples’ expectations, it tends to attract the passionate support of ordinary citizens—the kind of people who like to adorn their websites with clip art of eagles and American flags. It’s not a coincidence that there are thousands of passionate property rights activists who are mobilizing against eminent domain and asset forfeiture, but surpassingly few pro-copyright or pro-patent activists who are mobilizing against fair use and the Bilski decision. (Patrick Ross doesn’t count.) Traditional property rights are an organic legal institution that emerge spontaneously from peoples’ day-to-day interactions. Software patents are an invention of the patent bar that has been vigorously rejected by rank and file software developers. I think it’s both philosophically misguided and rhetorically counterproductive to equate the two.

My piece about the U.S. Chamber of Commerce event last Friday on U.S. intellectual property attachés giving a report, and taking a hard line, on the enforcement of U.S. intellectual property, overseas, is now live on ip-watch.org.

Here’s the first couple of paragraphs:

WASHINGTON, DC – Nations ranging from Brazil to Brunei to Russia are failing to properly protect the intellectual property assets of US companies and others, and international organisations are not doing enough to stop it, seven IP attachés to the US Foreign and Commercial Service lamented recently.

Meanwhile, an industry group issued detailed recommendations for the incoming Obama administration’s changes to the US Patent and Trademark Office.

The problems in other nations extend from Brazil’s failure to issue patents for commercially significant inventions by US inventors, to an almost-complete piracy-based economy in Brunei, to an only-modest drop in the rate of Russian piracy from 65 percent to 58 percent.

The attachés, speaking at an event organised by the US Chamber of Commerce and its recently beefed-up Global Intellectual Property Center (GIPC), blasted the record of familiar intellectual property trouble zones like Brunei, Thailand and Russia.

But the problems extend to the attitudes and omissions of major trading partners like Brazil, India and even well-developed European nations, said the attachés.

[more at http://www.ip-watch.org/weblog/index.php?p=1387….]

I attended the Federal Trade Commission hearing about the state of intellectual property on Friday, and wrote a piece about the event, “With US Patent Overhaul Dead, Agencies Ponder Changes As Industry Debates Role Of ‘Trolls’.”

The piece appeared in ip-watch.org, the excellent Geneva-based publication run by my friend and former colleague William New. Those of you who aren’t familiar yet with ip-watch.org should definitely begin following it: it’s a must-read for practitioners, advocates and activists concerned about all forms of intellectual property.

Arts+Labs, a new coalition “committed to a better, safer internet that works for both artists and consumers,” has written up Friday’s Cato Institute book forum on The Crime of Reason on their ArtLab blog. Author Robert B. Laughlin of Stanford University will present his book, then we’ll have comments from Tom Sydnor of the Progress and Freedom Foundation.

I’ve gotten a glimpse at the slides Dr. Laughlin will be using, and this Nobel laureate in physics also turns out to be something of an artist.

Join us Friday to learn what this drawing is all about.

If you find the title of this post provocative, you’ll be interested in a Cato Institute book forum on Friday, October 10th.

In The Crime of Reason, Nobel laureate in physics Robert Laughlin argues that intellectual property laws and government security demands threaten the development of new knowledge. Without change, we risk bequeathing our heirs a world where knowledge is criminalized and our intellectual tradition of unfettered inquiry is lost.

The event should be a fascinating inquiry into the role of information and information rules in our society. Thomas Syndor of the Progress & Freedom Foundation will comment. I’ll be your humble moderator. It’s noon on Friday, October 10th, at the Cato Institute, 1000 Massachusetts Avenue, NW, Washington, D.C. Luncheon to follow.

You can register for the event here.