He apparently thinks some of us here at this site are spoiled children and 'morons'. He makes the classic mistake of equating IP protections with "private property" - failing to distinguish between fungible IP and tangible/scarce real property without offering a cogent argument as to why they should be treated the same.

Strix.org has a response to Mr. Malone.

John Dvorak has a must read article on the DIGG controversy (and the larger problem of the legal community's response to the digital era). [Hat-tip: Instapundit]

Meanwhile, I received an unintentionally humorous PR release from Spence publishing regarding the Digg situation - likening copyright disputes to 'soul tarnishing' Internet porn. Some of these people are really desperate...

For immediate release May 4, 2007

Revealing copyrighted information: No better than publishing porn? Expert says the Internet fuels our ‘anything goes' culture

The millions of teens who gave away the secret copy protection numbers on HD-DVDs on Digg.com this week were bad enough. The website's founder, however, went further by arguing that unlawfully revealing secret codes that will cost Americans millions is a "right of free speech." But Silicon Valley expert MICHAEL S. MALONE says disclosing copyrighted information is no better than publishing porn online both exploit the law, hurt others, and tarnish the soul.

Michael Malone, author of Bill & Dave: How Hewlett and Packard Built the World's Greatest Company, believes it's time for website founders the so-called "police force" of the Internet to stand up for what is honest and true.

"Mike Malone is to Silicon Valley what George Orwell was to the Spanish Civil War."

Paul A. Gigot, editor, Wall Street Journal

Questions for Michael S. Malone:

▪ Why did the Digg.com fiasco occur? What now?

▪ Technology affects almost everything these days even how candidates campaign for president. What did Bill Hewlett and Dave Packard have to do with this trend?

▪ Why do you call Hewlett-Packard the "world's greatest company"?

▪ We're hearing good things about Mark Hurd. Can he really bring HP back to the old days?

CREDENTIALS: Michael S. Malone writes a weekly column for ABC. He hosted an award-winning TV show on PBS for eight years and writes about business topics for the New York Times, Forbes, and the Wall Street Journal.

Availability: California and via telephone

The Washington Post's Alan Sipress writes about a new development in valuing intellectual property link here. The notion is that the total market value of a company less the value of its tangible assets reflects the value of its patents, copyrights, trademarks, and trade secrets.

This formulation was arrived at from calculations showing that the market value of companies increasingly reflects their intangible assets. Using the market value of the S&P 500 Index and the accounting value of their tangible assets, an investment research firm called Ocean Tomo estimated that intangibles have gone from 17 percent of total market value in 1975 to 80 percent in 2005. Behind this is the notion that the value of tangibles has gone down through offshoring of goods and services. The article also notes that a stock index based on intellectual capital called the Claymore/Ocean Tomo Patent ETF is traded on the American Stock Exchange.

Comment: Nothing is said about the overall level of the stock market in determining intellectual property values. I suppose it would be possible to factor that in. In any case, the new notion is that the heart of our economy is intellectual capital. This economist would like to see some attempt to estimate total factor productivity in the market value of companies to reflect their differential ability to add value.

Steven Pearlstein writes in the Washington Post today link here (Skip down to the second item in the article)

"Patent Law Comes Back to Earth: For years now, patent law has been a case study in what happens when a specialized bar and specialized magistrates get hold of an area of economic activity. Now the Supreme Court has stepped in to restore patent law to its original purpose, rewarding and encouraging innovation, not stifling it. The unanimous decision will make it harder to obtain and defend patents for obvious "innovations". ... It overturns decades of precedents that any reasonable person ... would have known had outlived their usefulness...."

Barack Obama's web site reports a letter sent to Democratic National Committee (DNC) Chairman Howard Dean urging the DNC to make the video from any Democratic Presidential debate publicly available after the debate for free and without restriction under a Creative Commons license.

"I am a strong believer in the importance of copyright, especially in a digital age", he writes, "But there is no reason that this particular class of content needs the protection". Unfortunately, Obama does not seem to hold any unconventional views on copyright.

In the interest of neutral reportage, I would like to ask the following:

Do we wish to live in a society where it is unlawful to simply type out the following sequence of letters and numbers?

09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0 09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0 09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0 09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0 09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0 09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0

I suspect not. But I'd welcome other thoughts in the interests of objective journalism.

[Boing-Boing has more.]

After reading this article, I have a newfound respect for the art of the guys who hold advertising signs on street corners.

White is part of the competitive world of "human directionals," an industry term for people who twirl signs outside restaurants, barbershops and new real estate subdivisions.

Street corner advertising on human billboards has existed for centuries, but Southern California where the weather allows sign spinners to work year-round has endowed the job with style.

Local spinners have cooked up hundreds of moves. There's the Helicopter, in which a spinner does a backbend on one hand while spinning a sign above his head. In the Blender, a spinner twirls the sign behind his back. Spanking the Horse gets the most attention. The spinner puts the sign between his legs, slaps his own behind and giddy-ups.

Thanks to growing demand, the business has turned cutthroat. There's a frenzy of talent poaching. Spinners battle one another for plum assignments and the promise of wage hikes. Some of the more prominent compete for bragging rights by posting videos on YouTube and Google Video, complete with trash talking. One YouTube comment reads, "i don't know if you stole my tricks or i just do them better."

But the limits of my respect ended when I got to this section in the article -

Aarrow keeps dozens of moves in a "trick-tionary," which only a handful of people have seen, said co-founder Mike Kenny. The company records spinners' movements and sends them in batches to the U.S. Patent and Trademark Office. "We have to take our intellectual property pretty seriously," he said.

Got that folks? Even after the latest Supreme Court patent smackdown, the IP legal culture still fosters the idea that you can monopolize the way you twirl a piece of cardboard around your body. If try to do that yourself, you will be sued by the patent holder of this stunning new invention that pushes the boundaries of human progress.

Ah yes, we certainly need to "take our intellectual property seriously" don't we? Things like this will certainly help the public to do just that.

From Michael Barclay via the SCOTUS blog:

This decision makes it far easier to invalidate patents based on obviousness. Thus, this is the most important patent case of the last 20 years, and perhaps since the passage of the 1952 Patent Act. Virtually every litigated patent case includes an assertion of obviousness - and ones that might not have included that defense up until now are more likely to do so. The PTO examines every patent application for obviousness. KSR v. Teleflex will thus have an enormous impact on both the prosecution and litigation aspects of patent practice.

Here here. It is sad when the Supreme Court has to essentially issue a ruling on what the word "obvious" means. But at least they got it right. I would suggest that people start searching through all of the bogus patents out there, find a way to get standing in court, and start issuing challenges.

via Slashdot. The U.S. Supreme Court - about which we have often been critical on this blog - came through in a big way today. The Circuit Court - which is notorious for its lax standards in determining whether a patent is valid - had the test it uses for "obviousness" overruled.

"Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress," Justice Anthony Kennedy wrote for the court.

A brief account can be found here. Note that the companies arguing against the Circuit court are the ones that innovate; those arguing with the Circuit court are those that don't. This alone should say something about the state of patent law. Hopefully the ruling will cut down on the vast number of frivolous and/or blackmail patent lawsuits. The article doesn't mention this, but the ruling was unanimous, which is good news as well.

There was also a useful but unrelated ruling cutting down on the use of lawsuits on exports.

Is the patent system broken? You be the judge. Here is a case of several examples of prior art that were not caught by the Patent and Trademark Office and are now giving rise to a patent suit by Verizon against Vonage, closing it down for a period and threatening it over the long run link here. Even with the evidence, Verizon's patent will need to be declared invalid, a procedure that may take a long time and cost Vonage money it doesn't have and business it is now unlikely to get.