We rarely get the chance to make the case for protecting any form of intellectual property. Here is one from Mike Masnick at Techdirt. The Korean cell phone maker, LG, is peddling a phone called Black Cherry very close to RIM's BlackBerry link here. If people are as mindless about shopping for named goods as I, they could easily confuse them. That is the bottom-line case for trademarking--it's protection for the buyer.

We don't often write about trademarks, but here is a case of some modest interest. An online video joint-venture fiddled around for some time and finally came up with the name, Hulu link here and here. It is a strange choice, as it conveys nothing to me. Then an online custom book publishing company called Lulu sued for trademark infringement because the name was too similar. Does that strike you as confusing? Still, strange things happen with IP. One conjecture is the companies will pursue the case for all the media attention it draws. In any case, another lawyers' delight.

It seems that 25% of the population of Los Angeles County consists of "thieves" (at least as some would describe it).

Sample money quotes from the article -

[O]ne in four people in Los Angeles County knowingly bought, copied or downloaded illegal goods in the last year, according to a Gallup Organization survey commissioned by the U.S. Chamber of Commerce and scheduled to be released today.

Although previous studies have documented piracy's toll on the Los Angeles economy, the U.S. Chamber report is the first to focus on the attitudes and behavior of consumers here who knowingly buy fake goods, including bootleg movies, illegally copied CDs, knockoff handbags and counterfeit auto parts.

"The study confirmed what we already knew: That the buying of these products is widespread and is viewed as a victimless crime," said Caroline Joiner, executive director of the chamber's global anti-counterfeiting and piracy initiative.

The 25% piracy rate of Los Angeles County residents surveyed in May and June was slightly higher than the 20% nationwide rate the chamber found last year.

…

Justin Hughes, a law professor and piracy expert at Cardozo School of Law in New York, said Los Angeles might have a higher rate of counterfeiting than other cities because of the high volume of goods flowing through the ports of Los Angeles and Long Beach. But, he added, the latest data reflect broad consumer behavior.

"Most Americans do understand copyright and trademark laws, but it's a bit like speeding laws," Hughes said. "We know they are there, and they're a good thing, but we usually find ourselves going five to 10 miles over the speed limit."

In terms of trying to objectively describe the way many currently perceive their relationship with intellectual property, Professor Hughes' "speed limit" analogy seems to be a fair one. However, it leaves out a crucial component - the direct relationship between the perceived fairness/appropriateness of the law and the incidence of those who will ignore it.

For instance, let us assume that a federally mandated speed limit was increased to 80 mph in the U.S. Would people still continue to go "five to 10 miles over the speed limit"? Surely many would, but it is fair to assume that the overall amount of speeding scofflaws would drastically increase decrease as the overall speed limit increases - and vice versa. If the federally mandated speed limit was instead capped at only 45 mph, then surely the incidence of speeding would increase (not just in terms of the overall number of drivers who would ignore the law, but also in terms of the level of contempt for it. Speeders would likely start averaging 10 to 15 miles over the speed limit, instead of the more casual 5 to 10). They may continue to speed more often and with more vigor, even though they might end up confessing to pollsters that on a purely abstract level, a stricter enforcement of speed limits would be a good thing for society.

There would be a simple reason for this dynamic - many people of perfectly good character would inherently perceive a 45-mile-an-hour speed limit as an abuse of federal authority that would hamper our quality of life well out of proportion to any potential social good such as safety/environmental concerns or energy conservation. Obviously, the definition of a fair and proper speed limit is partially dictated by the state of technology and infrastructure (i.e., the conditions of our road and highway systems, how advanced current automobile engineering and safety features are in any given era, etc.).

So let's bring the analogy back to intellectual property. If we were to analogize the strictness of current intellectual property laws to the speed limit, what would the federally enforced speed limit be today?

I'd argue that it is only about 35-miles-per-hour; a quite unreasonable restriction that hampers human progress to a level far out of proportion to any potential goods that IP legal schemes might have to offer. This too is partially dictated by the current state of our technology and infrastructure (i.e., the Internet, digital technology, how communication has evolved with new media, etc.). That is real the reason why more and more people are simply choosing to ignore the current state of the law and are rightfully guilt free about the situation.

But none of this is preventing the L.A. establishment from lining up to do the bidding of the IP lobby. As the Daily News reports -

The findings were expected to be discussed at the Westin Bonaventure hotel in downtown Los Angeles this morning at a U.S. Chamber of Commerce workshop expected to be attended by several legislators, city council members and local officials, including Mayor Antonio Villaraigosa and City Attorney Rocky Delgadillo.

You don't suppose that the "workshop" might convince local legislatures to help fight for sensible IP reform, do you? Nah. Didn't think so. We all know how these "workshops" play out and what the real goals are here: Creating an even harsher IP environment in order to hang on to the status quo business models for politically connected businesses. One that may very well turn an even higher percentage of the population into "thieves" and "pirates" in their eyes.

Matt Yglesias pokes into another small absurdity in IP, reporting that defense contractors hold copyrights on weapons designs used by toy replica makers and collects fees for their use link here. Now Congress is going to get involved as one Congressman proposes that design copyrights be owned by the government which paid for the weapon designs and receive the toy makers' fees. For me, there is a bit of confusion here in whether it is a copyright, a trademark, or a design patent that is owned. But there seems to be no doubt that a license is available for a fee and it ought to be the taxpayer who benefits.

South Korea has announced that it has created "a private fund as a weapon to protect Korean intellectual property rights overseas" link here. It will "profit from filing suits against foreign companies accused of infringing Korean trademarks and patents." The fund has partnered with a research institute created by the Ministry of Science and Technology, to act as its proxy in overseas patent suits. The Ministry will receive half of any royalties and private investors, the balance. Currently the research institute has wireless technology patents that it thinks are being infringed overseas by cell phone makers Motorola, Sanyo, Nokia, Sony Ericsson, and Siemens; by wireless service providers Verizon, Sprint, and Cingular and by chip makers Qualcomm and Freescale Semiconductor.

The news article suggests that this is a way to fight back against US patent trolls. It particularly refers to Inter Digital, a U.S. company, which filed a lawsuit of more than US$300 million against Samsung Electronics and LG Electronics for allegedly violating patent rights.

Comment: This may be a response to the Free Trade Agreement recently negotiated with the US which extends IPR to Korea as well as the aggressive behavior of US patent trolls. Consider this the creation of a "national" troll--it creates a troll to beat one.

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.

I missed this when it first came out. The US Patent and Trademark Office reports it has issued its first patent under an accelerated procedure link here. The Office writes that the first patent under its accelerated examination program that began in August 2006, for a printer ink gauge, was filed with the USPTO on September 29, 2006, and was awarded to Brother International, Ltd. on March 13, 2007. Average review time for applications in the ink cartridge technology area is 25.4 months. This patent issued in 6 months, a time savings of 18 months for the patent holder.

To be eligible for accelerated examination, applicants are required to provide specific information, known as an examiner support document, so the USPTO can issue a final decision by the examiner within 12 months on whether their application for a patent will be granted.

Inventions that are new, useful, non-obvious, and accompanied by a written description disclosing how to make and use it, are presumed to be patentable. To reject an application, the USPTO must show that the invention is obvious or not new ("prior art").

Normally, applicants have to disclose to the USPTO relevant prior art of which they are aware but are not required to search for it. For accelerated examination, they must search for prior art, submit all prior art that is closest to their invention, and explain what the prior art teaches and how their invention is different.

They must state how their invention is useful and show how the written description supports the claimed invention. Only a limited number of claims is allowed in each application and the time for responding to most USPTO communications is shortened.

This and the peer review process (recently described here) presumably will improve the quality of patents issued. However, there is a good bit of skepticism among those of us at Against Monopoly who see the USPTO as overwhelmed and under the strong influence of existing patent holders and big business.

Keep an eye peeled.

Some investment advice: when a companies main business is filing lawsuits - sell short. Apparently the stitching on the pocket of your jeans is a trademark. Who knew.

The University of Alabama has sued a local artist for making a nice business from painting pictures of the university football team from photographs and selling them as paintings, photos thereof, and as logos on coffee mugs and other things. The university claims he violated the university's trademark rights, particularly its “famous crimson and white color scheme.” (link to article here)

The Times article (front page, yet!) makes clear how cloudy the law is here. Some courts have “tried to balance the rights of the owners of intellectual property against that of free expression. The cases, which involve a variety of legal theories, generally turn on whether consumers are apt to be confused about who produced the works in question and on whether artists managed to add something meaningful to the bare facts.”

Read the rest. Here we go again.

Charles Lane writes in the Washington Post on who makes patent law (Washington Post link here). He gives pride of place to the Solicitor General, representing the Patent and Trademark Office, who is invited by the Supreme Court, feeling its own lack of expertise. The competition is the specialty court for patent and trademark law established by Congress in 1982, the U.S. Court of Appeals for the Federal Circuit. In the 10 Supreme Court patent cases in which the solicitor general has participated since 1995, he always won.

Lane provides a current example, KSR International v. Teleflex, where the issue is the proper meaning of "obvious" in patent law, e.g., an extension on a vehicle's accerator to accomodate short people. Read the article for the details. Lane opines that the Solicitor General leans toward limiting the meaning of new and non-obvious.

Not exactly earth shaking.