≡ Menu

From the Washington Post:

Where are the jobs? Ask the patent trolls.

By , Published: May 7

President Obama has been touting patents as a way to create jobs and increase U.S. competitiveness. “These are jobs and businesses of the future just waiting to be created,” he said of patent applications last September, “somewhere in that stack of applications could be the next technological breakthrough, the next miracle drug, the next idea that will launch the next Fortune 500 company.”The President is mistaken—at least when it comes to the patent system as it relates to software patents. These patents—and the patent system—aren’t creating innovation, they are inhibiting it and, by extension, job creation. Why? Because the breakthroughs aren’t in the patents, they are in the way ideas are commercialized and marketed. Because of flaws in the patent system and government leaders’ misunderstandings, there is an arms race of sorts happening in the tech industry that is sapping billions out of the economy and crushing technology startups. This system is enriching patent trolls—companies that buy patents in order to extort money from innovators. These trolls are like a modern day mafia. Given this, I argue software patents need to be eliminated or curtailed.

Read more>>

(h/t Gary Chartier)

Unfortunately, but unsurprisingly, the author misdiagnoses the problem, given his mainstream but non-principled, non-radical, utilitarian approach. The problem is not software patents, or patent trolls, or even “bad” or low-quality patents. The solution is not patent reform, or reducing the term of or even getting rid of “software patents.” The problem is the good patents—”legitimate,” hiqh-quality, unassailable patents granted not to patent trolls (“non-practicing entities”) but to practicing entities who use these patents and the force of law to squelch competition.

Share
{ 3 comments }

I was interviewed yesterday by Redmond Weissenberger, Director of the Ludwig von Mises Institute of Canada. We had a long-ranging discussion of intellectual property and libertarian theory, including a discussion about exactly how Ayn Rand and other libertarians got off track on this issue, in part because of flaws regarding “labor” and “creationism” in Locke’s original homesteading argument; inconsistencies between Rand’s support for IP and her recognition that production means rearranging existing property; and also the different roles of scarce means and knowledge in the praxeological structure of human action. (For more on these issues, see my blog posts Locke on IP; Mises, Rothbard, and Rand on Creation, Production, and ‘Rearranging’, Hume on Intellectual Property and the Problematic “Labor” Metaphor, Rand on IP, Owning “Values”, and ‘Rearrangement Rights’, and The Patent Defense League and Defensive Patent Pooling, and my article “Intellectual Freedom and Learning Versus Patent and Copyright.”)

The video is below; audio file is here (69MB). (Trivia: I used my iPad, running the Skype app, for this interview. More stable and better camera than a MacBook.)

[TLS]
[now podcast at KOL165]

Share
{ 1 comment }

I don’t know anyone who says we don’t need patent reform. We need to address various problems, they say–junk or low-quality patents, patent trolls, and the like. But as I noted in Gigaom: Can big data fix a broken system for software patents?,

The problem is not trolls, overbroad patents, junk patents, inept patent examiners, software patents, etc. The problem is the very idea of patents.

Or as I observe in Slate’s Farhad Manjoo: Use Crowdsourcing to Improve Patents and Kill Patent Trolls:

bad patents versus good patents has nothing to do with the patent troll “problem”. This alleged “problem” is a result of the fact that there is no requirement to use the invention your patent covers, or even to produce a working model of it. There is no working, use, or reduction to practice requirement. The patent statute requires that the claimed invention be novel, and non-obvious, and also have “utility”–i.e., that it function. But the latter is just assumed, except in rare cases where it appears to the Examiner that something impossible like a perpetual motion machine is being claimed. Filing a written description of an invention substitutes for the requirement to reduce the invention to practice–it’s called a “constructive reduction to practice.” Given this: improving patent quality has nothing whatsoever to do with the “troll” problem. Even if you get rid of the 58% crap patents, the remaining 42% “high quality” patents will still be granted to patentees, some of which are not using the claimed invention. There is no reason a patent troll cannot own and use a “high quality” patent! So what is Manjoo talking about?

Or in The Patent Defense League and Defensive Patent Pooling:

patent trolls usually just want money. So they just serve as a kind of tax. But competitors often want to get an injunction to shut down the product lines of their competitors. Having to pay a “tax” to a troll is usually less of an existential threat to a company than is the patent injunction threat from a competitor.

In other words, the problem is not low-quality patents, or “bad” patents, or patents enforced by trolls–so-called non-practicing entities (NPEs). The real problem is good patents enforced by practicing entities.1 Even if you get rid of all “bad” patents, all software patents, all trolls, all business method patents–the fundamental problem remains: companies can acquire patents that they can use to squelch competition.

Yes, patent trolls (NPEs) are in several respects better than “practicing entities.” As noted in CE-Oh no he didn’t!: Tony Fadell calls Honeywell out on patent claims:

Smart thermostats might not be the cut-throat world of litigation like, say, mobile phones, but that doesn’t mean the odd feather doesn’t get ruffled from time to time. Nest CEO, Tony Fadell, is understandably protective of his company’s product, so when competitor Honeywell laid a stack of patent infringement claims at his door, unsurprisingly he was none too pleased. How displeased? Well, enough for him to drop this clanger: “Honeywell is worse than a patent troll.” Then going on to quantify with “They’re trying to strangle us, and we’re not going to allow that to happen.” We think that makes his feelings on the matter pretty clear. Well, when you’ve been SVP of Apple’s iPod division, it’s easy to see how patience with such things might wear thin.

A patent troll would merely ask Nest for a fee–like a polite mafia extorter, or Lysander Spooner’s highwayman, who does not pretend he is helping you and, after taking his cut, largely leaves you alone. But Honeywell, a Nest competitor, will do what they can to obliterate the competition posed by Nest. We see examples of this kind of patent-extortion every day. (And copyright too: Stupidity Of Licensing Demands Means The Wrecking Crew Can’t Help Sell More Music With Documentary.) So: Trolls are not the problem.2 Complaints about trolls3 are confused. The problem is the patent system itself.

  1. I was reminded of this when Domenic Scarcella in an episode of Haman Nature mentioned that it was the “good cops” not the “bad cops” who murdered Jesus. See HN 65. Of course, the analogy only goes so far because Christians presumably think it’s a good think Jesus was murdered, as I tweeted here. For more Scarcella, see Hn 113. []
  2. See my Patent Trolls and Empirical Thinking; Patent Law, State Courts, and Free Speech: The Case of Troll Tracker. []
  3. Andy Kessler, WSJ, Patent Trolls vs. Progress. []
Share
{ 3 comments }

Destructive Creation

In my post Leveraging IP, I noted how various technology, markets, and products are made needlessly complex in order to take advantage of various IP law–copyright, patent, trademark–so that the seller can use state law to quash competition. For example, Omega puts a copyright-protected logo on the back of a watch to prevent arbitrage (when it’s bought by Costco for a lower price in Paraguay and then imported into the US to be sold at a lower price than the much higher US retail price, it’s copyright infringement since a quirk in the law says that due to the import from another country the standard copyright “first sale doctrine” doesn’t apply); clothes and purses and luggage have trademarked symbols made part of the design itself to prevent what would otherwise be legal “knockoffs” (i.e. competition); and laser printer manufacturers build in complicated mating but patentable circuits into the printer cartridges to prevent generics from making laser printer cartridges that can be used with a name-brand laser printer. This reduces the natural standardization and interoperability tendencies that would normally prevail on the market, and increases cost and complexity unnecessarily. A more recent example is found in How Intellectual Property Destroyed Men’s Shaving.

So, one thing IP does is to push companies to engage in needless innovation and product complexity just so they can take advantage of anti-competitive IP monopolies. In a sense, in a reverse of the idea of Marxist notion of “creative destruction,” what IP leads to is destructive creation.

The problem is that if you point out that IP is leading to unnecessary “innovation” many people will think you are admitting that IP does give rise to more innovation and that you are crazy for opposing improved products. But what is happening is that IP imposes huge net costs on the economy, and reducing overall innovation. IP distorts and skews innovation; it gives rise to trivial innovations or monopolies on innovations that would have arisen even without IP; it causes companies to needlessly complicate and add cost to products just so they can impose an even higher monopoly price on them.1

  1. Software Industry Needs 2 Million Patent Attorneys and $2.7 trillion per year to avoid infringing software patents; Costs of the Patent System Revisited. []
Share
{ 1 comment }

In my post Patent Lawyers Who Oppose Patent Law, I include in my list “Daniel Ravicher, Executive Director of the Public Patent Foundation (PUBPAT) and Legal Director of Software Freedom Law Center, and also a registered patent attorney, appears to be opposed to patents or at the very least has serious reservations.”

Here is a recent Google tech talk on problems with patents and some solutions, followed by an older talk. I would disagree with Ravicher that the problem with the patent system is low quality patents. The problem is high quality patents–patents that are not obtained by trolls, patents that are perfectly valid over the prior art, and that the patentee can use to stop competitors from competing with them. Still, it’s an illuminating talk with a lot of good information on the way the patent system (doesn’t) work.

Share
{ 0 comments }

How Intellectual Property Destroyed Men’s Shaving

h/t Jeff Tucker:

How Intellectual Property Destroyed Men’s Shaving | Callum Makkai
Well over a century ago, a salesman named King Gillette patented the design for his safety razor and went on to found the Gillette Safety Razor Company. His invention made him wealthy as American men rushed to buy his razor blades.

Read more>>

Update: See Mike Masnick’s post Do You Owe Your Crappy Shave To Patents?

See also my discussion, in Leveraging IP, of how manufacturers intentionally complicate products (such as laser printer or inkjet cartridges) just so that they can patent them so they can prevent competition; or Omega’s adding of a copyrighted logo to a watch back on purpose just to prevent import-arbitrage.

Share
{ 0 comments }

Forbes: Apple (Mostly) Isn’t to Blame for the Patent Mess

From Tim Lee writing at Forbes:

Apple (Mostly) Isn’t to Blame for the Patent Mess

Way back in October, I wrote a post for Forbes arguing that it’s a good thing that Google“stole” some key user-interface concepts from the iPhone and incorporated them into Android. Users benefit from this kind of copying because without it it would be impossible to buy a smartphone that incorporated the best features from across the industry.I was planning to do a follow-up post exploring the flip-side of this question: whether Apple “stole” ideas from previous innovators. That wound up being a much bigger project that I ultimately pitched to Ars Technica and finally published here on Thursday. I encourage you to read the whole piece, but to sum up: many of the key innovations we associate with Apple—capacitive multi-touch screens, gestures like “pinch to zoom,” touchscreen-only phones—were pioneered by other companies or researchers long before Apple brought them to the commercial market.

The story sparked a lot of discussion among Ars readers. We’re already over 500 comments with no signs of slowing down. I’ve been fairly disappointed with the response. A lot of Apple fans seem to be interpreting the piece as an anti-Apple hit piece, which wasn’t the point of the piece at all. The iPhone was indisputably a major advance over the mobile devices that existed previously, and I didn’t mean to minimize the accomplishments of those who created it.

Rather, the point of the piece was to point out the degree to which even for a revolutionary product like the iPhone, the process of innovation is incremental and cumulative. For many consumers (including me) the iPhone interface Steve Jobs showed off in January 2007 was unlike anything we’d ever seen. It’s not hard to imagine that the US Patent Office could grant Apple a patent on “the iPhone” and demand that competitors get permission before copying it.

The problem is that once you have the full context, it’s surprisingly difficult to draw a line between ideas Apple “invented” and already-existing ideas that Apple merely put to use in a new context. For example, NYU’s Jeff Han demonstrated a set of sophisticated multi-touch applications at a 2006 TED Talk. Apple’s genius was largely to recognize that these same multi-touch gestures could be usefully translated to the form-factor of a cell phone. So was Apple’s application of Han’s techniques to the cell phone context a new invention or just a relatively obvious translation of Han’s work to a new form factor?

Read more>>

For more on Apple, including its hypocrisy:

Apple years ago: Steve Jobs: “We have always been shameless about stealing great ideas”

Apple now: Tim Cook: “We just want people to invent their own stuff.”

Share
{ 0 comments }

physical property rights and GDPIn the post A Picture Is Worth A 1000 Words, Americans for Tax Reform posts the graph at right, which shows a positive relationship between physical property rights and GDP per capita. That is: the stronger are property rights in scarce resources, the more prosperity there is. Basic free market economics. ATR writes:

The picture on the [right] proves it [the importance of private property rights] once and for all.

The Property Rights Alliance, an affiliate of Americans for Tax Reform, annually releases the International Property Rights Index (IPRI), an annual report sponsored by 54 organizations that tracks property rights around the world. It has found that that countries that protect their physical and intellectual property enjoy a GDP per capita up to nine times greater than those without legal protection.

Private property rights really are the only way forward.

Note how ATR combines physical property and IP together even though the very graph they use to illustrate this contention has the word “physical” right there in the very title.

As for the Property Rights Alliance, it no doubt does maintain that both physical and IP rights are important–it labels itself as “The Advocate for Physical and Intellectual Property Rights Around the World.” And it does have  an annual index that ranks countries based on how strongly they protect both physical and IP rights.  But so what? Correlation is not causation. PRA on its site has a post up “New Study Confirms IP’s Importance“–but as I discussed previously, in USPTO/Commerce Dept. Distortions: “IP Contributes $5 Trillion and 40 Million Jobs to Economy”, this study does not establish this at all. It only shows that industries that use IP generate jobs and wealth. It is equally true that industries that are subject to federal and state taxes and regulations generate jobs and wealth, but it would be wrong to attribute this to the taxes and regulations. Rather, these companies generate wealth despite state taxes, regulations, and IP.

The assumption that stronger or more IP rights generates wealth is just wrong; in fact IP imposes huge cost on the economy and reduces and distorts innovation and artistic creation. See, e.g., Yet Another Study Finds Patents Do Not Encourage Innovation; Software Industry Needs 2 Million Patent Attorneys and $2.7 trillion per year to avoid infringing software patents; Costs of the Patent System Revisited.

Share
{ 1 comment }

From Reason:

Science Fiction Publisher Liberates Its E-Books

| April 24, 2012

Tor/Forge, the rather libertarian science fiction publishing house I profiled in “Tor’s World Without Death or Taxes,” has decided to eliminate digital rights management from their e-books: […]

Other recent news:

Science Fiction Publisher Liberates Its E-Books

See also The wealthiest university on Earth can’t afford its academic journal subscriptions:

Yes, you read that right. According to a memorandum issued last week by Harvard Library’s Faculty Advisory Council, the cost of its peer-reviewed journal subscriptions has become prohibitively expensive.

What does it say about the world of academic publishing, the accessibility of knowledge, and the flow of information when the richest academic institution on the planet cannot afford to continue paying for its peer-reviewed journal subscriptions?

And see Glyn Moody’s Techdirt post: Open Access And The Art Of Contract Hacking:

Open Access continues to gain momentum, as more and more researchers seek to make their work freely available online. One way of doing that is by modifying the contract that academic publishers routinely send to potential authors, inserting a clause that allows digital copies to be distributed.

That’s been working quite well, but some publishers are starting to object, as Freedom To Tinker blogger Andrew Appel discovered recently (link found via BoingBoing.) The Association of Computing Machinery, which claims to be “the world’s largest educational and scientific computing society“, sent him an email that stated it “does not accept copyright Addenda that exceed the liberal rights retained by authors under ACM’s Copyright Policy and the exclusive grant of copyright to ACM as publisher”.

But Appel has come up with a neat idea for getting round this block: […]

Update: See Duke Scholars Join Boycott Against Elsevier; Even Harvard Can’t Afford Subscriptions To Academic Journals; Pushes For Open Access.

Share
{ 2 comments }

More outrageous copyright censorship. From Falkvinge.net. For more on the issue of patent and copyright being monopolies, see my post Are Patents “Monopolies”?

The Spanish copyright monopoly lobby Promusicae has filed lawsuit against the reputable Spanish professor Enrique Dans for “soiling their honor”, and demand €20,000 in damages.

They are filing lawsuit against Professor Dans for pointing out in passing that the copyright monopoly lobby is just that – a monopoly, using monopolistic practices, something that is well established in dictionaries and even in legislation.

This is so outrageous, I don’t know where to begin. Every time you think the copyright monopoly lobby has sunk as morally low as humanly possible, they come up with new ways to surprise you. They’re actually filing a lawsuit against a professor for stating that they’re using monopolistic practices – when they’re a legislated monopoly? They’re filing a lawsuit with the obvious purpose of inciting fear of criticizing them? This goes right into the list of “worst of the copyright industry”, along with how the copyright industry uses child pornography to induce censorship laws.

The matter concerns this blog post (in Spanish), point six, where Professor Dans points out that the copyright industry is using illegal monopolistic practices to control the music we hear on the radio (something the copyright industry has indeed been convicted of doing as a regular practice, along with illegal price fixing). Professor Dans writes more about the lawsuit on his own blog (also in Spanish). This completely infuriates me.

First, to introduce Enrique Dans, he’s one of the good guys in Spain and was instrumental in the uprising against Ley Sinde. That piece of U.S. mail-order legislation eventually passed, but far from as silently as the copyright monopoly lobby would have liked.

Second, Promusicae, the antagonist here, has sued ISPs to get access to subscriber data behind IP addresses that not even the Police may access. Yes, you read that right: this private monopoly lobby is so full of entitlement that they think they should have greater powers to violate citizens’ privacy than a country’s police force. (They lost, in a landmark precedent ruling, but not before having appealed all the way to the European Court of Justice, Europe’s highest court.)

Third, this is so obviously a lawsuit intended to chill criticism, to stifle free speech, and to scare the public from speaking out against corporate bullies, that anti-SLAPP legislation may need to come to Europe along with the U.S. mail-order monopoly legislation and its deceptive copyright lobby. (When U.S. lobbies act like this on their own soil, they are struck down in bolts of lightning, and deservedly so.)

Fourth, how can these morons at Promusicae possibly fail to understand that the inevitable effect of this abusive lawsuit would be not only the world’s spotlight on the monopolistic practices that Professor Dans points out, but also on their abusive and repulsive behavior?

Enrique Dans has over 150,000 followers on Twitter. How could these nutcases possibly believe they would have the privilege of interpretation here?

Every time you think the copyright monopoly lobby must have run out of ammo shooting itself in the feet, they reload.

Fifth, from a legal standpoint, I can’t say where Professor Dans stands: being right and prevailing in court are two different things. Money speaks and it is quite possible to out-lawyer somebody even if you don’t have a shred of legal ground in civil proceedings like these. If I were judging, the case would be easy – obviously, Professor Dans hasn’t soiled the honor of Promusicae, as they don’t have any to begin with.

But regardless, he will now have to spend time and resources defending himself in court against one of the most filthy, shameless, honorless lobby that roams. Promusicae and their ilk need to be shut down: it’s not just that they don’t have any honor, but they’re a monopolistic parasite on the productive and creative elements of society. Now, they’ve added the fact that they don’t pull any punches when it comes to trading free speech for bottom lines. There’s no end to my total despise for these corporate bullies. Seeing news like this, my reaction is something like “fuck them hard with a ten-foot chainsaw, preferably from parliament”.

Sixth, perhaps what amazes me most is that the public backlash to this kind of behavior is as predictable as a grandfather clock. How can the copyright monopoly lobby’s lawyers live in so completely disconnected an ivory tower, that they thought it was a good idea to file lawsuit against a reputable professor for claiming they’re a monopoly, using monopolistic practices – when this fact is not only well-established to the point of being in dictionaries, but even legislated? What kind of survivability would such a parasitic misantropic business have in the wild, if it were not protected by obsolete laws?

I really don’t know what to say.

After seeing this shockingly disgusting behavior, I’m very happy I didn’t end up in the copyright monopoly lobby. On the other hand, I probably wouldn’t have been a good fit for a place like Promusicae anyway. My parents weren’t siblings.

Share
{ 0 comments }

Free Pirate Party Book: The Case for Copyright Reform

The book The Case for Copyright Reform, by By Pirate MEP Christian Engström & Rick Falkvinge, is now online. Falkvinge is great and the book has some good arguments against the current copyright system. The case it makes is marred by lack of coherent principle, however:

“The Pirate Party does not want to abolish copyright; we want to reform it. We want to keep copyright for commercial purposes, but we want to set all non-commercial copying and use free.”

Of course copyright needs to be completely abolished. And there is nothing wrong with commercial use, money, or profit, as American left-copyright abolitionist Nina Paley notes. Still, this book is pushing in the right direction: less copyright.

Share
{ 0 comments }

USPTO 5 trillion propagandaThe website of the USPTO this morning is triumphantly proclaiming that “IP Contributes $5 Trillion and 40 Million Jobs to Economy.” This is pure Intellectual Properganda. The link is to a US Commerce Department report “Showing Intellectual Property-Intensive Industries Contribute $5 Trillion, 40 Million Jobs to US Economy”. The USPTO says “A new report demonstrates intellectual property is widely used in the economy and the industries that use it most intensively account for a large share of economic activity for jobs, new products and services, and the prospect of longer and better lives.”

Got that? Not IP–but IP-intensive industries. That is, the private companies in certain industries generate $5 trillion and 40 million jobs–and yes, they happen to use IP since the state inflicts this system on them. How bad is this logic? Sure, IP is widely used. Companies have no choice but to waste billions of dollars acquiring patents to use for defensive reasons, which helps them form oligopolies that reduce competition, innovation, consumer welfare, and prosperity.1

Yes, they “use” IP. And they also pay taxes and are subject to a host of unconstitutional federal regulations. Just because an industry subject to and regulated by IP (and other regulations) generates $5T does not show that IP itself contributes $5T to the economy. This is such obvious propaganda. In fact, IP imposes huge costs on the economy and these industries–likely on the order of hundreds of billions of dollars a year, or more,2 plus the devastating financial costs of copyright, not to mention the police state being foisted on us in the name of copyright.3

This argument makes the mistake of equating correlation with causation, just as similar arguments for IP do, such as: Postwar Japan prospered because it had a patent system; countries with the most IP are the most prosperous; America’s prosperity and growth since its inception is due to its patent and copyright systems.

If the USPTO and Commerce Dept. are stooping to such strained arguments in favor of IP, maybe it’s a sign that they know they are on the ropes–and also of how desperate they are, how little real ammunition they really have.

Add this to the list of Absurd Arguments for IP.

Update: Related Techdirt posts by Mike Masnick:

See also Maggie Wittlin, Lisa Larrimore Ouellette & Gregory N. Mandel, “What Causes Polarization on IP Policy“, citing this post:

“Polarization over IP evidence is seen over even an elementary question: Does IP protection provide a net contribution to the U.S. economy? For example, after a report from the U.S. Patent & Trademark Office (“USPTO”) concluded that the most IP-intensive industries contributed $5 trillion and forty million jobs to the U.S. economy in 2010,28 these figures were both touted as a signal of IP’s economic importance29 and derided as misleading.30 One response even claimed that the study “actually suggested that IP-intensive industries are having a decreasing impact on the U.S. economy.”31 The report itself stated that it “does not contain policy recommendations and is not intended to directly advance particular policy issues,”32 but it has been wielded to support contradictory positions in the IP policy wars.33

31 Innovation in America: The Role of Copyrights, Hearings Before the Subcomm. on Courts, Intellectual Property, and the Internet of the H. Comm. on the Judiciary, 113th Cong. 15 (2013) (statement of the Computer & Communications Industry Association) [See docs here, to-wit: Hearing Record: Hearing Transcript [PDF]]

32 ECON. & STATISTICS ADMIN. & U.S. PATENT & TRADEMARK OFFICE, supra note 28, at vi.

33 See also Ouellette, Patent Experimentalism, …at 121 & nn. 228-30 (discussing the report and suggesting that the USPTO is not the best source for new IP evidence due to perceived bias).”

 

  1. Controls breed controls, Monopolies breed monopolies; Nortel Patents Sold for $4.5 Billion to Consortium Which Includes Apple; Apple vs. Microsoft: Which Benefits more from Intellectual Property?; Patent Cross-Licensing Creates Barriers to Entry. []
  2. See, e.g., Software Industry Needs 2 Million Patent Attorneys and $2.7 trillion per year to avoid infringing software patents; Costs of the Patent System Revisited. []
  3. Patent vs. Copyright: Which is Worse?; The Ominous PROTECT IP Act and the End of Internet Freedom; Masnick on the Horrible PROTECT IP Act: The Coming IPolice State; ACTA, Executive Agreements, and the Bricker Amendment; As Countries Sign ACTA, Many Finally Admit Their Copyright Laws Will Need To Change; US, EU, Canada, Japan, Australia & Others To Sign ACTA This Weekend, Despite Legal Concerns; SOPA and Section 1201: A Frightening Combination. []
Share
{ 13 comments }

Reason.TV: Too Much Copyright

Reason.tv has a nice 9-minute video with Tom Bell (one of the handful of IP attorneys to publicly oppose IP1 ) and Ben Huh, both skeptical of copyright, and an MPAA flunky, discussing the merits of copyright. My main disagreement is the background presumption that copyright was “intended to” and “used to” promote the creation of creative works: “Copyright exists to “promote the useful arts” according to the Constitution. But is it still doing that?” That is not its purpose, and it certainly was never its effect. But Huh and especially Bell are very good here, as is Reason.TV for highlighting this.

For more on the great work of Tom Bell in opposition to IP:

  1. See Patent Lawyers Who Oppose Patent Law. []
Share
{ 4 comments }

Doug French: From Innovation to Rent Seeking

Good article from Doug French at Mises Daily:

From Innovation to Rent Seeking

Mises Daily: Wednesday, April 18, 2012 by

It’s often thought that the technology sector is the least regulated and therefore has been the most productive during the past couple of decades. Famously, Bill Gates had no interest in politics. “In the beginning, Microsoft tried to ignore the powerful political forces arrayed against it, hunkering down in Redmond, Washington, to focus on its core businesses,” William F. Shugart wrote in the Freeman. Of course, the Department of Justice snapped Mr. Gates to attention.

And while Mark Zuckerberg says he doesn’t like to vote, since hiring Sheryl Sandberg, who served in the Clinton administration, Facebook’s DC presence has increased, and President Obama himself stopped by the FB office.

The news of AOL’s patent sale to Microsoft reminds us that there is plenty of government force channeling money toward the coffers of the big tech companies. It’s not all warm and fuzzy corporate slogans, cool workplaces, and upscale company cafeterias in Silicon Valley.

Battalions of intellectual-property (IP) lawyers keep constant watch over the government-erected barriers and monopoly privileges that lock up ideas and create corporate value out of thin air.

AOL is considered so old school, kids snicker if they see someone with an aol.com email address. In 2001, old-school media giant Time Warner consolidated with American Online (AOL), the Internet and email provider of the people, for a whopping $111 billion. However, eight years later, the CEO of Time Warner, Jeff Bewkes, announced that the marriage of AOL and Time Warner was dissolved.

Last year, AOL bought the Huffington Post for $315 million or reportedly five times revenues: the multiple to profits being unknown, as there were none.

But Microsoft had $1 billion burning a hole in its pocket, and AOL had 800 patents it didn’t need; a deal was made, and AOL shareholders loved it. However, this is no aberration. Steve Lohr writes for the New York Times,

The lofty price — $1.3 million a patent — reflects the crucial role that patents are increasingly playing in the business and legal strategies of the world’s major technology companies, including Microsoft, Apple, Google, Samsung and HTC.

Patents that can be applied to both smartphones and tablet computers, which use much the same technology, are valued assets and feared weapons, as the market for those devices booms. Companies are battling in the marketplace and in courtrooms around the world, where patent claims and counterclaims are filed almost daily.

The AOL-Microsoft deal is just a continuation of the red-hot patent market. Last April, Novell sold 880 patents to a consortium of companies, including Microsoft and Apple, for $450 million.

Two months later Apple, RIM, Sony, and others bought 6,000 patents from Nortel Networks for $4.5 billion.

Last August, Google paid $12.5 billion for Motorola Mobility and its 17,000 patents.

Read more>>

Share
{ 0 comments }