Following up on Stephen Spear's post on the District judge's ruling against the attempts by the U.S. Patent Office to reign in firms trying to apply for large numbers of patents at once -

The full court decision can be found here [PDF file]. [h/t: CourtHouseNews.com]

While the ruling contains a lot of legalese, the judge also manages to describe in great detail (and relatively simple language) the process involved in patent applications - and why the current system allows firms with large financial and legal resources to get away with murder in the patent realm by being able to outlast the patent office and wear it down. Definitely worth a read.

The end results of the ruling are indeed tragic. However, I have to admit that the judge may have a point when he says that the proposed changes need to come form Congress itself - not from the whims of unelected and unaccountable administrative officials (even though these particular whims are very much welcome). If you give too much lawmaking power to administrators, the day will come when the pendulum swings the other way after pro-monopolist workers come to dominate the Patent Office. But since Congress is frequently bought off by the patent lobby, that leaves the future landscape rather bleak. Hopefully the Supreme Court will continue its attempts at patent reform by enlarging the very incremental steps they have undertook thus far.

There was good news and bad news on the patent front today.

The bad news was a ruling by District Judge James Cacheris permanently enjoining the USPTO from implementing proposed rules that would have made it significantly more difficult for firms or individuals to obtain apply for large numbers of patents. These rules would also have limited the number of continuations a patent applicant could request to 3. Both of these rules are viewed by IP reformers as important changes that would make it more difficult for patent trolls to operate. The limit on continuations would significantly reduce the incidence of submarine patents.

Of course, the patent bar and their lobbyists are overjoyed with the news.

On the good news front, via Janis Fraser's article in Genetic Engineering and Biotechnology News, the USPTO has issued a ruling on the obviousness of genes that reverts to a previously used criterion, based on the Supreme Court's ruling last year on the general issue of the obviousness defense against infringement. The old criteria for when a gene was obvious was whether there were existing procedures for cloning it. In 1995, the Court of Appeals for the Federal Circuit changed the rules by adding the criterion that the nucleotide sequence of the gene be "predictable" based on current science. Since these sequences are almost always unpredictable, this raised the bar on the obviousness defese significantly.

The Supreme Court's 2007 ruling in the KSR v. Teleflex case (which involved the question of whether reinventing a car gas pedal was obvious or not) raised a number of very broad issues regarding the obviousness defense, and it is these issues that have led the USPTO to reinstate the old rules on when a gene is obvious, despite the CAFC's '95 ruling. Whether the rule change sticks remains to be seen.

Copyright lawyers! The controversial anti-Quran documentary of Dutch lawmaker Geert Wilders was published without amendments despite copious outrage in the Muslim world, but copyright lawyers make the impossible happen: images of the infamous Allah cartoon will have to be edited out.

This documentary raises all sorts of questions, but in the context of this blog, it raises a particular one. This is a documentary, would it not fall under fair use to show a cartoon directly linked to the topic at hand?

Via Kevin Drum, the excerpt below from a story by Shannon Brownlee in the Washington Post describes how the pharmaceutical industry creates "diseases" in order to increase sales of their patented drugs.

Condition branders use "information" about medical conditions to forge links between disease and treatment in the minds of both patients and doctors. If they have a drug but no condition, they will simply invent a disease.

....One of the best examples is "osteopenia," a diagnosis that millions of women my age are given every year.....Before the 1990s, doctors decided that you had osteoporosis if you were elderly and you broke a bone. When the pharmaceutical company Merck came up with its anti-bone-loss durg Fosamax, it wanted a broader market than just elderly fracture patients. The solution? The company helped fund a panel of medical experts to create diagnostic criteria for osteoporosis so that a diagnosis could be made before the patient actually broke a bone.

The panel's first step was to define "normal" bone density as that of the average 30-year-old woman. Next, the experts chose as their cutoff for osteoporosis a statistical point that was slightly below the bone density of their normal 30-year-old a definition they admitted was "somewhat arbitrary." Finally, they came up with a completely new disease osteopenia for bone density that fell somewhere between that normal 30-year-old and their arbitrary definition of osteoporosis.

Voila 30 percent of post-menopausal women suddenly had a disease that needed to be treated early in order to prevent a problem hip fracture that wouldn't occur for many years, if ever. According to the new guidelines, millions more women now had osteopenia, which their doctors needed to watch like hawks so that their patients could be treated once they progressed to osteoporosis. Merck then took the added step of helping doctors buy DEXA scanners, X-ray machines needed to scan your bones to get that all-important diagnosis.

Monopoly corrupts. Absolute monopoly corrupts absolutely.

There was an interesting story that ran this morning on NPR (transcript here) about the fact that despite all of the secrecy surrounding the Manhattan Project, the U.S. Government was secretly patenting the various components of the first atomic bombs and related nuclear technology. This was done apparently to ensure that the U.S. Government would have monopoly control over nuclear technology after the war (as opposed to those pesky scientist actually creating the technology), despite the fact that the process of filing for a patent could itself pose a security risk. To quote the article

Even during the war, some people feared the patent project might backfire. They worried that spies might be able to figure out that the United States was developing a bomb by trying to submit their own patent applications. Outsiders who filed patent applications on related topics got a note back saying their patent had been stamped secret, a clue that the government deemed the topic sensitive.

No spies ever figured this out, though.

Timothy Lee at Ars Technica reminds us that the Patent Reform Act of 2007 is being debated behind closed doors in the Senate, after already passing in the House link here. He concludes that the bill is of little help compared to the long list of problems with patent law as currently experienced by business. And not even the modest proposals under consideration seem likely to go much farther, given the seemingly balanced alignment of business forces on opposing sides who see their interests hurt by one aspect of the legislation or another. Lee seems to think that the Supreme Court may be the most likely source of important changes.

Read the post for the details. But reconciling the differences on the opposing sides seems no solution to the monopolies that current patent law has created, at enormous cost to the consumer and imperceptible increases in innovation. We have simply failed to create real anger among the public who have been taught for generations that patents embedded in the constitution are good for them.

PoET has started a website to get instructors to take price into account when assigning textbooks link here. Their high prices have been the subject of this website on a number of occasions, but our preferred solution has been to get authors to post the books on a website and allow them to be downloaded.

PoET makes several points, starting with the fact that instructors have no incentive to take price into consideration and that their publishers do not advertise their prices or even make them easily accessible. With prices of basic texts running at more than $150 a copy, it is not a trivial cost for the student. By posting prices, the website would encourage some competition among providers.

We are happy that someone else is looking at the problem but still like our solution better.

I just ran across the website of an old exhibition (which is still ready for new exhibits) that stretches then limits of copyrights and trademarks. illegal-art.org may not necessarily be pleasing to the eye, but it is full of courageous, and even brazen attempts to use or abuse copyrighted and trademarked material, with plenty of lawyer stories. Enjoy the three eared Mickey Mouse, the Iowa prof who trademarked "Freedom of Expression" and sent a cease-and-desist letter to himself, and much more.

Writing in the Washington Post, Kim Hart notes that Imeem.com has made a go of its music sharing business by illegally sharing copyrighted music and building up a substantial following so that one copyright owner, Warner Music, decided to buy a piece of Imeem and make its entire catalog available for streaming (not downloading) link here. Warner found it an inexpensive way to advertise and increase demand for downloads. It also shared in Imeem's revenue from advertising on its website.

Part of Imeem's attraction is its role as "an online community where millions of fans and artists discover new music, videos, and photos, and share their tastes with friends." Hart reports that companies wishing to follow Imeem's illegal path are less likely to displace those first to market and to encounter more serious opposition from copyright owners who can look to increasingly expensive enforcement.

For example, "Sonific, an online service that allows users to stream music to blogs or personal Web pages, is trying to strike licensing deals with large record labels to expand its music library, which now has about 250,000 tracks from smaller, independent labels. But Gerd Leonhard, the site's founder, said it cannot get the interest of labels because of its relatively small pool of 100,000 users."

My first reaction to this story is that the web made copyright irrelevant. But in the end, we still have the problem that copyright gives the first or early to market suppliers an enormous advantage, for which the consumer pays. It effectively limits competition.

Economic Logic has had this week a series of posts on free goods, including some of my favorites. I frequently listen to Pandora, an incredible internet radio that learns what to play from your preferences, for free. Also, I do all my work with open source software (perl could have been added) and open source operating systems, the only exception being Matlab. Finally, Economic Logic mentions RePEc, that I use all the time as well...

The provision of goods for free tends to lead to monopolies, but as they cannot extract any rent, for once it is not bad.