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Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.





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ITC Allows Apple Imports That Violate Samsung Patents

The blog, Public Knowledge, argues that the International Trade Commission should consider the public interest in reaching regulatory decisions on patents. The Obama has so decreed when it overruled an ITC case and permitted imports of Apple phones that it had found to violate duly recognized patents of other companies, in this case foreign firms link here.

When I look at the mess in the whole patent system, I see a world of oligopolies and monopolies built on patents, supposedly designed to encourage innovation, but instead creating a self-perpetuating means to paralyze innovation.

I would do away with the whole system of patents, but that isn't going to happen. Too many huge companies have a vested interest in the existing highly profitable system. Instead, those of my persuasion must examine whether the legal change making importation illegal under a finding of public interest is a good thing, rather than allowing the competing imports and slowing Apple's ability to go on coining money. To put it differently, isn't allowing the imports in the public interest? In this case, the big American company was the winner. Who lost?

Cable and TV Networks Fee Fight Fallout--- Who Pays? The Public

Public Knowledge has a couple of pieces up on the fight between CBS and Time Warner Cable over TWC's payment for the right to rebroadcast broadcasts and then charge the public link here and link here. CBS has already been amply rewarded through advertising on its over the air broadcasts free use of the public airwaves. But in the current fight, it wants still more money. Congress set this up in 1992 legislation which allowed the networks to charge for retransmission permission of its broadcasts.

CBS has the right to charge for its retransmission consent but the law stipulates that the fees must be reasonable. However, left to themselves the parties have self-interest to decide what is reasonable. The 1992 law gives the FCC the power to intervene on what is reasonable link here but it has so far avoided taking a position.

CBS has now upped its pressure and limited its over-the-air broadcasts in some areas served by TWC. The public pays in lost services and will pay again with higher charges.

Competition now; But in the Future?

Competition for cable-television providers looks safe at least for a time, as the result of two copyright suits link here. In one, Aereo TV captures from antennas and delivers regular programming via the internet for a monthly fee; this allows the subscriber to record the programs playing them back when he wants. In the other, the satellite Dish provider offered a service, Hopper, which allowed the customer to eliminate ads on home recorded programs. Neither service allows the broadcaster to charge for its programs since the courts ruled that they could not use copyright to enforce payment.

The crucial court decisions found that it was the customer who made the recording so copyright was not violated.

As the Times article points out, unless the two interlopers pay, the broadcasters can and now are likely to retaliate by ceasing to broadcast over the air and providing cable service only.

In judging the result of these cases, once again copyright appears to reduce competition and raise prices to consumers. But its ostensible purpose, to reward the creator of the program to induce new creativity, is largely avoided--if that ever happened, it was long in the past.

Redistributing TV Material Without the Ads Is Legal

Here is one for the books; you may record copyrighted material and play it back without the ads, because dumping the ads is covered by fair use link here. Fox TV, the plaintiff, saw it was losing revenue when others downloaded and redistributed its on-line material without the ads. Dish, the TV redistributor, made a good business out of doing so and charging subscriptions from its customers. Its successful defense will no doubt attract others into the redistribution business.

Public Knowledge announces a Patent Reform Project

I'm late with this but Public Knowledge announced two weeks ago that it was starting a Patent Reform Project link here. Given that we are surrounded with an incredibly expensive and inefficient and now corrupt (with the presence of the patent trolls' extortion) system, it is important for the informed and interested to weigh in.

One cannot be terribly optimistic about the outcome, but to leave the system to the big money and personally interested is to give up. We can do better. Given our democratic system, compromise is essential so one almost never gets all his wishes. But the critics have been making a dent in the unthinking belief that intellectual property was property like physical goods or land and that it always encouraged innovation and thus human progress. It is a right with characteristics like real property, created by law and law can be changed. Now is the time to change it.

Weigh in, please.

Another Big Patent Troll Assessed

The New York Times went after another big patent troll yesterday, the second in less than a week link here. This one is called Intellectual Ventures. It seems to be a spinoff from Microsoft, a major patent holder, as it is run by Microsoft's former chief technology officer, Nathan Myhrvold. Its origin may raise the question as to how much business it does with Microsoft and whether it profits in some way from the new enterprise.

Another reason for the article is the announcement that "This summer, the Federal Trade Commission is expected to begin a sweeping investigation of the patent system after the agency's chairwoman, Edith Ramirez, urged a crackdown link here. She has singled out a particular kind of miscreant, one that engages in 'a variety of aggressive litigation tactics,' including hiding behind shell companies when it sues." Although not part of the article, it is worth reading as a description of what the FTC is thinking.

Most of the article is a description of what Intellectual Ventures has been up to and what a toll it has levied on the cost of doing business in a world that fosters both patents and patent-trolls.

How the Most Successful Patent Troll Does It

The New York Times goes after patent trolls in a long review in the Sunday paper link here. Its author, David Segal, thinks he has found the worst offender, Erich Spangenberg, whose company, IPNav, even has a classy website, link here on which it claims to have "Monetized to date: $610,549,103" and makes its sales pitch to existing and prospective clients.

It is at the top of the list of patent trolls, ranked according to the number of defendants added to their suits from 2008-2012. The total number of patent infringement suits (in litigation?) has jumped from 2304 in 2009 to 4731 in 2012. One estimate of the costs of these suits was 29 billion in 2011. Only $6 billion went to inventors, with the balance going to lawyers and the trolls themselves as expenses and profits.

The article has a lot of details on how IPNAV operates, some of which have gotten it in trouble with the law, but so far it has escaped using lots of money and legal talent. But the bottom line is that it is a huge tax on innovation and on consumers with no redeeming features. The question is how long the U.S. or the patent system survives.

Another bad patent--guaranteeing more litigation

Bad patents are an old story, but they keep getting worse. This one is granted for "displaying pictures of athletes on the fields on which their sport is played" link here.

Timothy, in whose name the story is posted at Slashdot.org, sends you to the patent itself, a master piece of overblown legalism and hucksterism link here. Google, to which the patent is granted, should be deeply ashamed. Timothy comments, "Just about anyone that's familiar with sports has seen position and depth charts, in which athletes are portrayed on the athletic fields their sport is played on."

Does the decline in total factor productivity explain the drop in innovation?

In a long post, Mike Masnick calls attention to an e-book by Alex Tabarrok which focuses on the decline in total factor productivity as a measure of the drop in innovation link here. This has occurred despite the huge increase in the number of patents. He concludes that the patent system is broken and suggests some fixes like a mix of patents, some short-term and easy to get and others, long-term and less likely to be granted. Read and ponder.

And then think about the political and economic power of those who oppose such reforms.

Les patent trolls ne sont pas toujours des officines

Bilan takes them on...if you read French.

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