In response to the Recording Industry Association of America's lawsuit against it last month, the LimeWire file-sharing company filed a counterclaim this week. It charges association members with "anticompetitive practices, restraint of trade, tortuous interference and other claims (info.riaalawsuits.us)."

The New York Times article (link here) cites the RIAA claims but also spells out LimeWire's that the association has refused to work with LimeWire to allow sharing of noncopyrighted files and to send users who wanted copyrighted works to legal sites like iTunes. Instead, it wants Limewire and any other file sharers to partner with iMesh, which Limewire suggests, is controlled by the RIAA members. “LimeWire cites the recording industry's relationship with iMesh, a file-sharing service it sued, but which is now essentially working at the industry's behest, operating a fee-based downloading service.”

From the New York Times via Slashdot: IBM has decided to adopt a more open procedure of patenting.

The move by I.B.M. does carry business risks. Patents typically take three or four years after filing to be approved by the patent office. Companies often try to keep patent applications private for as long as possible, to try to hide their technical intentions from rivals.

"Competitors will know years ahead in some cases what fields we're working on," said John Kelly, senior vice president for technology and intellectual property at I.B.M. "We've decided we'll take that risk and seek our competitive advantage elsewhere."

You mean they plan to make money by competing? How unusual. Perhaps the company is run by engineers and not lawyers?

Yahoo reports (link here) that the World Association of Newspapers is spearheading an initiative to create the “Automated Content Access Protocol” and enforce the terms under which search engines access on line and printed content. Newspapers and magazines are said to be particularly concerned about the loss of income to the internet, either from subscriptions or advertising.

"What is required is a standardized way of describing the permissions which apply to a Web site or Web page so that it can be decoded by a dumb machine without the help of an expensive lawyer."

"In one example of how ACAP would work, a newspaper publisher could grant search engines permission to index its site, but specify that only select ones display articles for a limited time after paying a royalty."

The dilemma for ACAP's members is that they benefit from search engines which create traffic to their sites. The solution for some has been to deny access to whole articles unless a fee is paid or the reader is also a subscriber.

A work in progress.

The Washington Post reports that Oprah Winfrey's lawyers are threatening to sue retired school teacher Patrick Crowe for copyright and trademark infringements because he uses her picture in his website running her for president (link here).

At one level, this is silly. But it does raise a serious question. Does she own the copyright on her image? I don't believe I own mine or you, yours. She is a public figure. Paparazzi take and sell photos of celebrities all the time. The lawyers may rather believe they can scare Crowe into taking down the picture, using the threat of big legal costs.

The New York Times has a fascinating article about Marshall, Texas, which seems to be a prime location for venue-shopping patent trolls. Your are a couple paragraphs from the article. Then I will make the connection with Texas Instruments, by providing an extract from my book, Steal This Idea.

Creswell, Julie. 2006. "So Small a Town, So Many Patent Suits." New York Times (24 September). "In Marshall, an oft-told joke is that the passage of tort reform was when many local lawyers made the trip from P.I. to I.P. -- that is, they moved out of personal injury and into intellectual property." "The testing of Marshall as a patent battleground began nearly two decades ago, when Texas Instruments, which has its headquarters in Dallas, embarked on an aggressive strategy to make rivals license its patents. If a company would not capitulate or at least negotiate, a Texas Instruments team of lawyers would drag it to court -- increasingly, down the road to the uncluttered courtrooms of Marshall."

"What's behind the rush to file patent lawsuits here? A combination of quick trials and plaintiff-friendly juries, many lawyers say. Patent cases are heard faster in Marshall than in many other courts [a quirk of a local judge, sort of a speed trap for intellectual property]. And while only a small number of cases make it to trial -- roughly 5 percent -- patent holders win 78 percent of the time, compared with an average of 59 percent nationwide, according to LegalMetric, a company that tracks patent litigation."

Here's the extract. Notice the connection with Texas Instruments:

The history of the semiconductor industry exemplifies this trend toward changing the legal structure to aid firms in gaining a competitive advantage from intellectual property rights rather than from developing an edge in productive capabilities. As late as 1981, Roger S. Borovoy, vice-president and chief counsel for Intel Corporation, declared, "In the electronics industry, patents are of no value whatsoever in spurring research and development" (Anon. 1981). A recent study published by the Philadelphia branch of the Federal Reserve System describes the dramatic transition that came soon after Mr. Borovoy's evaluation of the importance of the patent system to his industry: Within the U.S. semiconductor industry, reverse-engineering was a well-established practice. But by the late 1970s, American firms objected to similar behavior by Japanese firms when they began to increase their market share in the more standardized products, such as computer memory chips. The level of competition eventually became so intense that, by the mid 1980s, most American companies abandoned these segments entirely. When it became clear they could no longer dominate Japanese firms on the basis of production technology alone, American firms attempted to consolidate their comparative advantage in research and development. To do this, they would have to find ways of reducing their competitors' ability to reverse-engineer their products. To that end, American companies began to lobby Congress to increase intellectual property protection for their semiconductor designs. In 1984, Congress created a new form of intellectual property right, called mask rights, especially tailored to address the needs articulated by the industry. [Hunt 1999, pp. 19-20] During this period, both Texas Instruments and National Semiconductor were both tottering on the verge of bankruptcy. Irving Rappaport, former vice-president and associate general counsel for intellectual property at National Semiconductor recalled: 'I'm not exaggerating when I tell you that National Semiconductor was only weeks away from bankruptcy in late 1990 .... All the papers had been signed before it was decided to continue the business and give licensing a more aggressive push. And without a doubt, patent fees bought us valuable time in which to complete our restructuring process. For a while there, in fact, three-quarters of our revenues came from patent licenses." [Rivette and Kline 2000, pp. 125-26] Texas Instruments struck first. Typically license fees ran about 1 percent of revenues. In 1987, Texas Instruments raised its royalties on chips to 5 percent (Dwyer et al 1989, p. 79). The company filed a suit against one Korean and eight Japanese semiconductor companies, accusing them of infringing semiconductor patents. The settlements yielded the company more than $600 million in payments, according to a 1990 report. The company became so aggressive in seeking royalties that by 1992 it earned $391 million in royalties, compared to an operating income of only $274 million (Warshofsky 1994, p. 111). In effect, these companies are beginning to transform the semiconductor industry from a manufacturing industry to a service industry, just as the postindustrial utopians would have them do it. According to one industry insider, James Koford of LSI Logic, "Silicon Valley and Route 128 are worlds of intellectual property, not capital equipment and production. Most of the employees of U.S. high technology live in southeast Asia" (cited in Kenney and Florida 1990, p. 237).

That ends the extract.

Finally, the article has a statement from the chief patent counsel for Time Warner, complaining about the expense of intellectual property litigation. Yeah. Right. Time Warner wants to cut back on intellectual property litigation.

"Companies spent 32 percent more on outside counsel for intellectual property litigation in 2003 than in the previous year, Chuck Fish, the chief patent counsel for Time Warner, told the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property earlier this year. Spending for all other litigation rose a mere 1 percent during that time, Mr. Fish said."

The New York Times has a fascinating article about Marshall, Texas, which seems to be a prime location for venue-shopping patent trolls. Your are a couple paragraphs from the article. Then I will make the connection with Texas Instruments, by providing an extract from my book, Steal This Idea.

Creswell, Julie. 2006. "So Small a Town, So Many Patent Suits." New York Times (24 September). "In Marshall, an oft-told joke is that the passage of tort reform was when many local lawyers made the trip from P.I. to I.P. -- that is, they moved out of personal injury and into intellectual property." "The testing of Marshall as a patent battleground began nearly two decades ago, when Texas Instruments, which has its headquarters in Dallas, embarked on an aggressive strategy to make rivals license its patents. If a company would not capitulate or at least negotiate, a Texas Instruments team of lawyers would drag it to court -- increasingly, down the road to the uncluttered courtrooms of Marshall."

"What's behind the rush to file patent lawsuits here? A combination of quick trials and plaintiff-friendly juries, many lawyers say. Patent cases are heard faster in Marshall than in many other courts [a quirk of a local judge, sort of a speed trap for intellectual property]. And while only a small number of cases make it to trial -- roughly 5 percent -- patent holders win 78 percent of the time, compared with an average of 59 percent nationwide, according to LegalMetric, a company that tracks patent litigation."

Here's the extract. Notice the connection with Texas Instruments:

The history of the semiconductor industry exemplifies this trend toward changing the legal structure to aid firms in gaining a competitive advantage from intellectual property rights rather than from developing an edge in productive capabilities. As late as 1981, Roger S. Borovoy, vice-president and chief counsel for Intel Corporation, declared, "In the electronics industry, patents are of no value whatsoever in spurring research and development" (Anon. 1981). A recent study published by the Philadelphia branch of the Federal Reserve System describes the dramatic transition that came soon after Mr. Borovoy's evaluation of the importance of the patent system to his industry: Within the U.S. semiconductor industry, reverse-engineering was a well-established practice. But by the late 1970s, American firms objected to similar behavior by Japanese firms when they began to increase their market share in the more standardized products, such as computer memory chips. The level of competition eventually became so intense that, by the mid 1980s, most American companies abandoned these segments entirely. When it became clear they could no longer dominate Japanese firms on the basis of production technology alone, American firms attempted to consolidate their comparative advantage in research and development. To do this, they would have to find ways of reducing their competitors' ability to reverse-engineer their products. To that end, American companies began to lobby Congress to increase intellectual property protection for their semiconductor designs. In 1984, Congress created a new form of intellectual property right, called mask rights, especially tailored to address the needs articulated by the industry. [Hunt 1999, pp. 19-20] During this period, both Texas Instruments and National Semiconductor were both tottering on the verge of bankruptcy. Irving Rappaport, former vice-president and associate general counsel for intellectual property at National Semiconductor recalled: 'I'm not exaggerating when I tell you that National Semiconductor was only weeks away from bankruptcy in late 1990 .... All the papers had been signed before it was decided to continue the business and give licensing a more aggressive push. And without a doubt, patent fees bought us valuable time in which to complete our restructuring process. For a while there, in fact, three-quarters of our revenues came from patent licenses." [Rivette and Kline 2000, pp. 125-26] Texas Instruments struck first. Typically license fees ran about 1 percent of revenues. In 1987, Texas Instruments raised its royalties on chips to 5 percent (Dwyer et al 1989, p. 79). The company filed a suit against one Korean and eight Japanese semiconductor companies, accusing them of infringing semiconductor patents. The settlements yielded the company more than $600 million in payments, according to a 1990 report. The company became so aggressive in seeking royalties that by 1992 it earned $391 million in royalties, compared to an operating income of only $274 million (Warshofsky 1994, p. 111). In effect, these companies are beginning to transform the semiconductor industry from a manufacturing industry to a service industry, just as the postindustrial utopians would have them do it. According to one industry insider, James Koford of LSI Logic, "Silicon Valley and Route 128 are worlds of intellectual property, not capital equipment and production. Most of the employees of U.S. high technology live in southeast Asia" (cited in Kenney and Florida 1990, p. 237).

That ends the extract.

Finally, the article has a statement from the chief patent counsel for Time Warner, complaining about the expense of intellectual property litigation. Yeah. Right. Time Warner wants to cut back on intellectual property litigation.

"Companies spent 32 percent more on outside counsel for intellectual property litigation in 2003 than in the previous year, Chuck Fish, the chief patent counsel for Time Warner, told the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property earlier this year. Spending for all other litigation rose a mere 1 percent during that time, Mr. Fish said."

The New York Times carries this brief but laughable story asserting the sculptor's intellectual property rights extending to pictures of one of his statues (link here). How far can this go? Or is it just for publicity?

“Sculptor Files Lawsuit Against Wal-Mart The sculptor who created a 7,000-pound charging bull sculpture that has become a favorite tourist photo stop at the foot of Broadway has filed suit in federal court in Manhattan against Wal-Mart, complaining that it is selling lithographs of his work without his permission. Arturo Di Modica, who made the sculpture with his own money as a tribute to America's rebound from the 1987 stock market crash, also sued several other companies for what he described as unauthorized use of his work, including North Fork Bank, which has used an image of the bull in a television advertising campaign, the lawsuit said. In the dead of the night in December 1989, Mr. Di Modica used a truck and crane to bequeath the fierce-looking sculpture illegally to the Wall Street area, plunking it down near the New York Stock Exchange. It was hauled away but was later returned by the city's Parks Department and installed in nearby Bowling Green, where it has remained. In 1998 Mr. Di Modica registered the bull with the United States Copyright Office. For many years he has sought to recoup his costs for the work by selling it to someone who will agree to leave it where it now stands. John Simley, a spokesman for Wal-Mart, said the company had not yet been served with papers in the case and would wait to comment. RANDY KENNEDY”

In a curious claim of violation of intellectual property rights, students at a McLean Virginia high school say that their essays are submitted to a company, Turnitin, to compare against a 22 million document database for plagiarism. The essays are then added to the company's database to compare to new essays, giving rise to the claim of violation (Washington post - link here).

It looks as if the students will lose, as the school with the protesting students is requiring them to surrender their claim in order to receive a grade.

Some legal minds are quoted as supporting this student view. That suggests how far claims of property can be stretched.

The Economist has a nice story on changes in Europes financial markets (link here). In essence, the Markets in Financial Instruments Directive will create a single EU-wide trading place in stocks and other financial instruments. It requires the member states to harmonize their laws and allow qualified firms in one EU member state to compete in all the others. It will also promote greater transparency and allow the use of off-exchange trading. The deadline for the new individual-state enabling legislation is the new year, but it is doubtful whether all will make it.

Another step on the way to a more competitive world market in financial instruments

Searcey, Dionne. 2006. "Sewing and Suing Aren't a Happy Mix For Embroiderers." Wall Street Journal (14 September): p. A 1.

"Janet Ebert, a longtime embroidery hobbyist, logged onto the Internet last year and found images of flowers and cuddly animals. Altering them with special software on her home computer, she created versions of the designs that she stitched on quilts for her five grandchildren. She used a computerized Singer embroidery machine, and sold some of the designs online for about $2 each. A few weeks later, a courier appeared on Ms. Ebert's front porch in House Springs, Mo., with legal papers informing her that she was being sued. The complaint said she had violated copyright law and that some of the designs she had sold belonged to embroidery company Action Tapes Inc., in Dallas." "Sewing and design companies are engaging in piracy disputes similar to those waged by the music, movie and fashion businesses. Some buyers and sellers of designs are confused about the copyright issues buzzing around the honey bees and sunsets they stitch on quilts and clothing."

"Embroiderers used to buy patterns of angels, flowers or other designs published by sewing companies at five-and-dime shops. They would iron the outlines of the designs onto fabric and stitch around them by hand, creating unique, colorful patches on clothing and blankets. Today, many buy digital forms of the designs from sewing company Web sites that offer downloads or disks. The designs are then executed by computerized sewing machines, costing as much as $7,000, that sew the images onto fabric."

"Fed up with such practices, the Embroidery Software Protection Coalition, a small group of sewing companies including Action Tapes, Great Notions Inc., Pfaff American Sales and others, aggressively began pursuing legal action against hundreds of embroidery buffs. Nearly 1,500 have been sent menacing letters on stationery stamped with the coalition's logo -- a stitched-looking letter "C" with a needle and thread attached -- that threaten them with steep fines and court judgments for buying counterfeit embroidery designs. Some of the letters tell the buyers the coalition will back off any legal action if they pay fees for their "past wrongful conduct"."

"Dozens of embroiderers took to online sewing forums to anonymously complain about the coalition's efforts, accusing the coalition of shaking down innocent sewers. In turn, the coalition in June sent a subpoena to Yahoo Inc., which hosts one embroidery forum, to find the identities of sewers such as "suelikessewingtoo" and "nanaanniesews" so it can consider suing them for defamation, according to the coalition."

"In its legal filings, it likened some of the stitchers' online screeds to "terrorist activities" and accuses them of posting slanderous statements "that marched across the Internet bulletin boards and chat groups similar to Hitler's march across Europe"."

"Gary Gardner, president of the coalition, says his group sometimes has no choice but to get tough, even with the little old ladies everyone agrees constitute the largest demographic of embroiderers. "Although they're a grandma, they're not a nice grandma," Mr. Gardner says. "Some of them are outright vicious, even when we point out to them what they're doing is illegal"." "The coalition has a team of investigators who troll online auctioneers such as eBay for obvious counterfeiters offering batches of thousands of designs for low prices."

"When the companies catch counterfeiters, some hand over names of their buyers as part of a legal settlement. In June, Sue Schultz, an embroiderer in Florida, received a letter from the coalition telling her some designs of trucks and cars her husband purchased for her in December 2005 were counterfeit. "We were shocked," Ms. Schultz says. "My stomach was completely upset." When she phoned the coalition, she says, lawyers told her to send a $300 check to make amends. The coalition acknowledges that it sometimes resorts to such demands. Unsure of the legitimacy of the operation, Ms. Schultz did nothing, though she says she now buys designs exclusively from established sellers." "Ms. Schultz and others have complained on Internet forums about the letters that they say amount to a shakedown. Two of them have enlisted the help of an Internet privacy group called the Electronic Frontier Foundation to quash the subpoena sent to Yahoo, aiming to protect anonymity online and citing First Amendment concerns."

"The coalition has since withdrawn the subpoena, but attorney Carole Faulkner says she is working on a new, narrower subpoena and still has plans to sue some forum members for defamation. Corynne McSherry, an attorney for the Electronic Frontier Foundation, says the coalition's "shotgun approach is aimed not at redressing defamation, but at intimidating those who have sought to raise public awareness of its ham-fisted tactics." She says she is pleased the subpoena was withdrawn. Yahoo declined to comment."